Jennifer Pierce & Sandra Murray-Leduc—Hudson's Bay Company: Building retail talent in one of the world's oldest, continually operating companies

Steve

Hi, this is Steve Hunt with People Performance Radio. This week we spoke with Jennifer Pierce and Sandra Murray-Leduc from Hudson's Bay Company, which is, interesting fact, one of the three oldest companies in the world, 339 year old retail company, but is a company, as you'll learn in this interview, that has attracted some very cutting edge talent management techniques, and talking about the challenges in retail, about getting people to see retail as a career, operating obviously in the economic climate within margins, how there's going to be some creative techniques for developing the talent they need to be successful in a highly competitive, low margin, very people-focused business. So let's listen to Jennifer Pierce and Sandra Murray-Leduc from Hudson's Bay Company.

Hi, this is Steve Hunt with People Performance Radio. This week we're talking with Jennifer Pierce, who's the Vice President of Talent Management at Hudson's Bay Company, and Sandra Murray-Leduc, who's the National Succession and Performance Manager for Hudson's Bay Company. So Jennifer and Sandra, thank you so much for appearing on People Performance Radio.

Jennnifer

Thanks for having us.

Steve

So just to start, can you tell us a little bit about what your role is at Hudson's Bay Company, and for those of us in the sunny United States who may not be familiar with your company, talk a little bit about what Hudson's Bay does?

Jennnifer

It's Jennifer, Steve. The Hudson's Bay Company is one of the three living companies around the globe that is over 300 years old. We were established by a declaration of the King of England in 1670 as a retail operation, and so we are currently 339 years old. We have four banners, or four types of stores, that are inside our organization: one is called The Bay, which is much akin to a Macy's in the States; we have a Zellers brand which is a mass brand which is more akin to a Wal-Mart; we have a Home Outfitters, which is more akin to a Bed, Bath and Beyond;, and we have a Fields banner that is a hybrid of a dollar and general merchandise store, so price points of under $20 per se, and that comprises about 70,000 associated across Canada from coast to coast. We have over 600 retail locations, and my responsibilities in the talent management function are to steer our succession, performance management, executive development, learning, e-learning, change management, organizational design and engagement work on behalf of the organization, with specific focus on our top 27,000 executives.

Sandra

And it's Sandra here, and I have two particular mandates out of Jennifer's portfolio, and that is specifically succession and performance, so on the succession front, making sure we have tools and processes in place and practices throughout the business to identify, build and nurture our talent, make sure we have a robust leadership pipeline, and on the performance management front obviously to have tools and processes in place that help us build and maintain a high performance culture, so we get the best out of our people.

The other piece that I did not speak about is, in July of 2008, we were purchased by a private organization who also owns the Lord & Taylor brand in the US, and while we do not have responsibilities for the talent management in the US, we are partnering with our US partners in many of the talent management areas, and it's very exciting for us to work with them.

Steve

Great, so I think that's so cool, 339 years old, that's pretty amazing. When you look at the work that Hudson's Bay Company's doing, both in retail, maybe also just a reflection of a company with that sort of history —are there any unique challenges or opportunities that you face when it comes to managing talent that reflect the industry you're in, or maybe the history of the company?

Steve

It's Jennifer again, I'll start and then Sandra will add in. I would say that our primary challenge is promoting retail as a career, and promoting HBC as a modern retail entity. For the last half a dozen years, we have been promoting the employee value proposition as unlimited possibilities, and showing our associates who join us generally at Christmas time or holiday season in a part-time way, and continue to work with us through their university or college time, that they can have a robust, awesome career in retail that offers them the same compensation, offers them the same different opportunities that a Kraft or a P & G or a Great-West Life, an insurance company or banking company, could offer them, but retail in and of itself is not necessarily seen as a professional career, and I think this is somewhat different in Canada than it is in the US as we understand it, and our work is to refresh our employee value proposition, as we have now separated our banners, and there's four distinct banners. We're doing less cross-sharing of executives across the banners, which we have done over the last half dozen years, and now we need to continue the unlimited possibilities within each banner, and make sure that that message is getting out that there is career development, compensation, and a great legacy to leave to Hudson's Bay Company in the future.

Steve

I think that's an interesting comment on that decision about whether or not we want to share talent across the different banners —do you have an opinion on the strengths and weaknesses versus going one approach and the other, and how much of a difference is there in terms of what drives success in the different banners? —is it really, somebody who's successful at any retail organization, will they be successful across retail, or are you finding that there really are banner-specific competencies?

Sandra

We've just started to do the work, and get more laser-focused on not only our external customer, but our internal associates, so we've been doing work to specifically identify, what do you need to be a super retailer in mass versus what is it going to look like for The Bay, which is more high scale departments, so there are differences, and cross-banner movement, while it's been part of our employee value proposition, going forward I think we will definitely be putting it through that lens of, where does it make sense based on what it is that we're looking to develop and build here.

Jennifer

I think our results would be mixed at best, and it's likely more unique to the person's ability to shape-shift, and I would say to you, and I don't have data in front of me to support this guess, that ultimately the cross-banner pollenation was not overly successful. It was in certain circumstances, but to Sandra's point, I think what we have found is there really are distinct capabilities in a mass versus a department store versus a speciality versus a dollar price point organization, and where there are promotion opportunities, we will continue to look at the availability of talent across the house, and I think you will see more career progression within a banner.

Sandra

Just to give you an example, if you think of our Zellers banner, which is a mass retailer, operators are about being action junkies, and efficient; whereas in The Bay, it's the look and feel and the environment of the store, the events theme, the clientelle, so very different in terms of focus.

Jennifer

Although what I will say, Steve, just to underpin all of this, is a common leadership profile, so at the core we do believe in Hudson's Bay Company that all leaders need to walk and talk a particular set of values and a particular set of competencies. Where we're getting sharper now is understanding how those play out in each distinct banner, and we're focusing in on that, and specific job families, to help us make that grounded in accountabilities and what the jobs are about.

Steve

So that makes sense, there's some core values, no matter where you are in the organization, it's sort of how you manifest at some of the operational things, are really going to be differing depending on whether you need that sort of action junkie, or I don't know what The Bay company would be —style junkie?

Sandra

Right, yes.

Steve

Let's go back, what I heard that was really interesting that you said earlier, you said one of your challenges is trying to get people to realize that retail is a great career, and when you're looking at that, what are you doing to try to get people to stop and say, this temporary job could be a job that I could make a lifelong career out of —how do you entice them, how do you get their attention? And does it differ, depending on whether or not you're a Zellers or The Bay? —do you use different strategies, I'm curious, because I've heard other retailers struggle at the same thing, I'm curious if you've found things that really seem to be working in that area?

Jennifer

Well, what we have done, and we're still fairly new at this as we get sharper in understanding how to take advantage of our internal talent. There's a traditional hierarchy pyramid with the peak at the top, and the flat at the bottom. We've inverted our pyramid with the flat at the top and the peak at the bottom to let us know that, as we attract at the external marketplace, that raw associate, that new associate, we need to be in modern places, I talked about being 339 years old, so we have to be recruiting in a fresh, fantastic way, and so using the various social media networks or using virtual sites on our intranet, so how do you stay modern? And then we've got a group of associates who are with us, and we have just introduced a program that we're calling “Rising Star”, which will be a self-directed program that, one, shows people to your point across the house, so it doesn't matter which banner you're in, that there is a career path, so first of all just immersing them in the possibilities of careers in retail, so whether it's legal, whether it's finance, IT, logistics, human resources, store operations, marketing, whatever the job families are in any company, they exist in a retail organization, so simply ensuring that our Rising Stars understand that there are over 5,000 positions in job families across our house, so that's one.

Two, we then have our store managers or our store teams identify these high-performing associates, and we label them as a Rising Star. We then tap them on the shoulder to have a career conversation with them to say, have you ever thought about a career in retail? You seem to be demonstrating a lot of the natural skills that we're looking for with joy, and of course we want engaged associates from the beginning. So after they manage their self-directed path, which is basically a virtual learning using our online system, they then would be potentially ready for our Future Executive program, and that takes, let's call it right now, we've got 33 people in our Future Executive program, it's a nine month program, we've recently changed it, that takes our high-performing sales managers and supervisors who are showing leadership potential, and we put them through a program for nine months, that when they graduate that, within the next 24 months it is expected that they would land in one of our mission-critical positions, so that would be, for example, buying or store operations is our two core functions.

After that, they fall into our typical succession management and performance management process, which we create talent maps against various mission-critical businesses or various opportunities, we take a look at, are they ready for a promotion or are they ready for a lateral move, or are they masters in the area that they're in. We also again continue with the career conversations, so we understand what motivates them, where they want to go, and as we look at promotions across the house, we've got that centralized such that we can take advantage of our data across our banners, and tap people on the shoulders, and show them that the possibilities in retail that they saw as a Rising Star actually do come to fruition, and we've been very very successful at the management director level, we're now taking it down to the Rising Star associate level.

Steve

Wow, so it sounds like, if I could paraphrase it, what you've done is, one, you've created a process to really advertise to people the opportunities in retail, so to get their attention, that wow, maybe there is something here, and then you've really to some degree taken succession management almost down to the hourly level, perhaps the hourly level in terms of having the managers identify these Rising Stars, and I think the really cool thing is it sounds like you've built the whole process to say, if we find someone who has potential, we have a process we can track them onto, and so we can grab them and start moving them into the organization as opposed to leaving it to chance, it sounds like you're a lot more pro-active in going out and finding those people and getting them on an escalator to the top, as it were —is that fair?

Jennifer

Yes, that's a good recap of what we're trying to really operationalize and put rigor around.

Steve

So, in the current downturn, are you seeing any changes in terms of people's attitudes about retail as a career? Are you finding more people approaching you, maybe a more diverse population of potential candidates than you saw before —has it affected your succession and staffing strategies at all?

Jennifer

It hasn't affected the succession work, and I don't know that we would know enough to be able to say that we've got people from a variety of industries now looking at retail as a profession, I don't think that we feel accomplished enough in our data to answer that question point blank. We certainly have impact at our associate and executive level with respect to the environment, of course they see our results daily, and with that we rise to highs and lows; they certainly feel the change in investment strategy against development, so for example, as we talked just a moment ago, we have a Future Executive program, and it's the past it's been a centrally-funded program, and I would hazard to say, with a significant budget, that allowed us the opportunity to bring the people into our home office area across the country, which is Toronto, for four weeks a year, which was at significant cost, and then we were able to leverage external resources in their training program, as well as internal resources and on-the-job learning. As we entered into the budget cycle last fall, and certainly the US economy was shifting, and because our owners are American, they became very interested in opportunities to save money, and while Canada at the time wasn't presenting the same issues that the US was from an economic perspective, they wanted to ensure that they weren't going to be caught off guard, and I quite frankly think that worked to our favor.

With that challenge, the budget moved to zero, and we had the opportunity to say, don't lose the program —we don't want to lose the pipeline, and so Sandra and some of our colleagues in the executive development area created a program that we now affectionally call the “Decentralized Future Executive program”, which basically says, we'll take 33 store operations, high-po sales managers, they will continue in their existing jobs, being paid to do their existing work, so they're no longer on a centralized payroll, and they will be given time off of the floor, and it works out to about half a day per week to do centralized assignments, and so we've been able to keep the quality of the program, but we've also been able to pay for the program in a different format.

Funnily enough, we had more candidates come to the forefront, because what we found was that the store manager felt they weren't going to lose their high-po performer, they were going to be able to keep them, and develop them —that performer wasn't going to be moved off into a central assignment and be lost to that store, so we have found it to be a win-win, we're early on, so we need to continue to monitor the quality of delivery, but we are very hopeful, and looking forward to seeing how this progresses for us.

Steve

Wow, that's a a great example, sort of the necessity is the mother of invention there. I like that, as you see these budget crunches, just because your budget's been cut doesn't mean you have to get rid of programs, rethink how you can do them for less, and then in this example you've provided, by saying, let's take the central university concept and distribute it, you're actually getting better quality of talent, because it's maybe perhaps more accessible and less threatening to managers about having to give up their people —that's a very powerful story.

I guess, getting towards the end of our interview here, the last question I have is, when you look at what Hudson's Bay Company does well, or maybe retail in general, and you think about, on People Performance Radio we have people listening from all different industries —what do you think is something other industries can learn from retail, given the types of challenges and the nature of the work you've been doing, and that you're an organization that's been around a long time, retail industry's very large —what could other industries learn from retail that you think, you know, this is something we do particularly well and other industries may not?

Sandra

Sandra here, I'll just start it and looking at it through the lens of our talent management, and I guess nearing the HR contribution and partnership with the business, but we're a people business, and I think what's happened in the years that I've been here is a real focus and recognition that it's people before strategy to a certain extent, your people are going to drive your strategy, and if we look at our people processes through HR, whether it be succession planning, or work in the engagement arena, it's really been focused on, let's listen to our people, let's get the pulse on the people, their aspirations, their capability to do more, and let's make sure that that gets on the business agenda, so it's the people side of the business equation that I think we've been able to bring to the forefront, and it's helped us in terms of retaining our talent through five very tumultuous years in terms of going from public to private, new owner, again new owner, and we've been able to ride that tide, I believe, in a good way, with a lot of storms along the way, thanks to some of the rigor in our people processes.

Steve

That's a great example, I love that idea, so retail really is a people business, and I've done a lot of work in retail too, and so much of the success of your company is driven by what an hourly employee out in a store thousands of miles from corporate is doing in a five minute interaction with a customer —how can you influence that? —and that's not going to come from a CEO strategy, it's going to come from treatment of people.

Sandra

Most management processes as well have really shifted in the last year, and this is I guess the healthy tension in where you have to move from discipline action junkie to actual conversations with people, and we've really shifted that performance management to be about dialog and regular check ins with people versus filling out forms, and that's had an impact and we've felt that in the last year.

Steve

How often do people, are managers expected to have formal performance discussions and career discussions with their employees?

Jennifer

Well, on the talent review, we tend to do that on a yearly basis across levels and functional areas, but within the performance management discipline, we look to have at least quarterly check ins, which is timed with our business result at the end of each quarter, so it's a nice tie-in, the business and the people, and let's marry the two together.

Steve

That's great, it's definitely not just an annual thing. Well, thank you so much for appearing on People Performance Radio, Jennifer and Sandra, this has been fascinating, I've learned a lot, really enjoyed the conversation, and so thank you again for appearing on the show.

Jennifer

Great, thanks, it's been a pleasure.

Sandra

Thank you.

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