Operational context
Covering several industries, Tesco has a varied geographical footprint and operates under several brands (including Booker and One Stop). Given the complexity of business operations, Tesco is keen to provide colleagues with a consistent employee experience, regardless of business area. In this case study, employee experience is referred to as ‘colleague experience’, as termed by the organisation.
Eleanor Winder, Head of People Operating Model, explains that colleague experience was a strong driving force for change: “We are working together across Tesco to build a great place to work for all, and colleague experience is at the heart of this. How do we make sure that our colleagues across the business have a consistent experience, no matter where they work?”
Drivers for transforming the HR model
Tesco wanted an operating model that enables the business to be future-fit, is responsive to the rapidly changing world of work and provides a consistent colleague experience. This included addressing current workforce needs, while building in more flexibility to respond quickly to changing priorities.
There was a desire to move from a UK-centric model to a more ‘group-led’ approach, which considered the diverse needs of the group, and brought a larger focus on local market requirements.
What they did
The HR operating model was designed by the people leadership team using design principles and maturity models to establish the current state and future aspirations of the people function. Tesco applied these design principles across their model to ensure accountability and to measure progress.
Through this change, Tesco aimed to improve the efficiency and impact of the People Team by:
- investing in specialist roles aligned to strategic priorities
- removing duplication across the model
- planning and re-prioritising the people team resources
- encouraging more self-service through digital enablement, giving colleagues access to people services at all times.
The new structure
Eleanor Winder stressed that: “The operating model isn’t just the way the team is structured; it’s having one aligned ‘people plan’ and the technology enablement that goes with that. It’s the insight that drives the thinking. It’s the skills that we need in the future.”
The new operating model has four pillars as shown in Figure 1. For the previous Ulrich+ model see McKinsey research for futher details.
To transform the operating model, the people function made the following changes:
- A strategic partnering team was created: This team is responsible for shaping people solutions, providing strategic insight, and is focused on priorities that drive the business forward (including culture, capability, talent, EDI and future workforce). This was a deliberate shift from more generalist and operational partnering, to partnering more strategically with business leaders. While the number of ‘people partners’ was reduced, Tesco invested in new roles across the team including in Project, Change, Communications, Talent Partnering and Colleague Relations.
- ‘Practices of expertise’ teams were established: These replaced the previous Centres of Expertise by bringing together expertise from across the People team (eg a Talent and Capability PoE) and shifting from being UK-centric to a ‘group-led’ model through greater collaboration with local markets.
- A new ‘People Change’ team was set up: This was to build new capabilities to lead change through the specialisms of strategy and planning, programmes and projects, and change and communications, alongside people data. This ensured that expert communication and change skills were available within the people function.
- ‘People Services’ were brought together: This team is focused on delivering consistent colleague experiences, from point of hire through to retirement, driving business value through efficiency, continuous improvement, cost focus and compliance.
- Consolidating HR roles across functions: To enable more consistency, reduce duplication and improve colleague experience, colleagues in ‘People’ roles across the business were brought together within the People Team.
- Increasing self-serve and digital enablement: Self-serve is a key part of the operating model with less reliance on people partner support. “Future skills partners were appointed to encourage self-service and build capability on the usage of new HR technology, while line managers were upskilled on key people processes and where to go for help”.
Timeline
Tesco has taken a staggered approach to introducing and stabilising the model across its markets. The design and development of the new operating model has been iterative (see Figure 2). Tesco recognises that the model will continue to evolve and mature over time in response to changing market and business requirements.
Enablers
There were several key enablers to ensure the model was implemented and continues to embed effectively:
1. Leveraging internal skills and knowledge within the business: The people function drew on the organisation’s skills and knowledge by partnering with other internal teams, such as the customer insights team. These skills helped the people function to understand colleagues’ sentiment throughout the transformation (for example, what they think and feel about working at Tesco).
2. Developing core skills within the people function: The people leadership team has identified five core skills relevant to all people professionals within the people function. These include:
- ‘group-wide lens’ (for example, understanding and considering broader context, collective goals, needs, relationships and dynamics of the group markets and businesses)
- commercial acumen
- data and insight-led leadership
- technology and digital skills
- strategic business partnering.
Each member of the people team has been invited to complete a diagnostic to identify their strength and development areas. Learning programmes are being developed within each of the core skill areas.
3. Understanding and inspiring careers in the new model: To showcase future career opportunities, Tesco produced a podcast-style series of conversations focusing on career pathways in the People Team at Tesco.
4. Developing leaders and new ways of operating: Significant time was spent developing team cohesion and clarifying roles and responsibilities. When the model launched initially, there was a focus on engagement across the business to develop teams’ understanding of the new operating model. Line managers received essential training on talent and learning, and a refresh on self-serve tools, managing resourcing requirements and where to go for HR support.
5. Using ‘Big Room Planning’ to embed the new operating model: This enabled key stakeholders to meet in person and agree priorities for the year ahead. This method of agile planning brings all relevant teams together to align on shared priorities and agree how they will achieve strategic goals on a quarterly basis.
Challenge areas
Given the complexity and scale of this transformation, there have been challenges during the process:
- The diverse range of colleagues and cultures across the Group has meant a complex environment with differing capability needs.
- Different levels of technology maturity across the Group means there is complexity in seeking consistent experience and gathering consistent data.
- Other business functions have different operating models, which has led to a need to coordinate with multiple stakeholders in local markets to adapt to local decision-making processes.
To address these challenges, Tesco held workshops to gain insight around deploying the model across different markets. This highlighted the need for a deeper understanding of the Group and key considerations to develop new propositions. As a result, a series of discovery sessions was developed for the people team, to build awareness of the different businesses and geographies across Tesco. More recently, a market toolkit was developed to build more understanding of the nuances, differences and similarities of the different markets in the group.
Eleanor Winder points out: “Our markets have slightly different needs, so we needed to be comfortable that, while we have an ambition, it can't be a ‘one-size-fits-all’ perfect match. We’ve had to find a pragmatic way through to achieve our desired maturity.”
Outcomes
As Tesco is currently embedding the model and running post-implementation reviews, early metrics are being monitored. However, some overall successes of the new model include:
- an aligned group people plan with agreed outcomes and clarity on group versus local market priorities
- incorporation of more local market expertise and knowledge into projects
- a people portfolio that allows for comparison and assessment of outcomes and contributions to the people strategy and priorities
- streamlined, simpler and more cohesive people communications and colleague messaging, focusing on moments that matter with minimal local market adaptation
- an increase in key engagement metrics in the people team across the Group, especially in terms of ‘a great place to work’ and being ‘happy with the career choices available’ which both increased by three points in the most recent engagement survey.
Continuous review and improvement
Post-implementation reviews are scheduled six to 12 months after each team change has been implemented. These help celebrate what is working well, but also result in actions such as feedback to colleagues and targeted working groups to facilitate any necessary improvements.
Top tips for a successful transformation
- Build a shared understanding of goals and required outcomes from day one: Address challenges immediately and ensure continual dialogue.
- Communicate accountabilities and boundaries between the different teams: Ensure that discussions around ways of working and the operating model are frequent, rather than shared once and never revisited.
- Define essential future skills: Focus on developing these skills across the people function.
- Coach and develop leaders: Tesco has a programme to develop ‘digital advocacy’ so that leaders feel competent to self-serve using technology.
- Continually evolve your model: ‘Fail fast’, reiterate and move forward. Be realistic about the pace of change which the organisation can absorb.
“The world around us, the business, social constructs and technology continue to evolve, so we need to constantly look ahead. There's no sitting back and thinking that we've made it - and that can be challenging in terms of feeling a sense of progress and yet knowing that there's always more to do.” Eleanor Winder, Head of People Operating Model.
