Date: 28/09/12 Duration: 00:25:41
This podcast is an interview with Stephen Dando about his career progression and the interesting challenges that faced him. Currently at Thomson Reuters, Stephen is about to join Bain Capital in America. However, Stephen's career started in training at United Distillers, a part of Guinness which proved to be a perfect beginning and fitted in with Stephen's ideal role - people development
Philippa Lamb: Human Resources offers a very wide and varied range of career opportunities and with that in mind from time to time in the Podcast Series we focus on the career path taken by a senior practitioner who’s become synonymous with a particular specialism. This time I'm joined by Stephen Dando. An award winning HR with nearly 30 years in the business Stephen is best known for overseeing mergers, big mergers. The ‘Integrator’ as he’s come to be known is currently chief HR officer at the news and financial information giant Thomson Reuters but he's now on the brink of a move to Bain Capital in the US which will see him tackling very different challenges and dividing his time between London and Boston.
Well look Stephen thanks for joining us. Your career has included stints at some of the largest companies in the UK hasn’t it? I mean Thomson Reuters, before that Guinness, which merged with Grand Met to become Diageo and of course the BBC. It seems like a seamlessly planned career has it been? Are you a planner?
Stephen Dando: I am a bit of a planner but not really in terms of my career I don't think. So I would say there's been more luck and good fortune in some of those names. I had a sort of sense of where it was good to start a career in HR, I started in the car industry but that was probably about as planned as it got really.
PL: And from there I suppose what sounds like the big break to me was when you were offered a job in, it was training and development wasn't it, with United Distillers which was part of Guinness?
SD: Yes they had been planning to hire me into a generalist HR role and at the last minute the newly appointed HR director there asked to see me to kind of, I suppose, rubber stamp the appointment almost and we got chatting and after a while he said, “Why are you coming to do this job I've got a much better idea.” He pointed me off at this training and development job.
PL: But presumably you didn’t know much about training and development at that stage did you?
SD: I knew very little about training and development.
PL: Was that not a problem?
SD: Well I wondered whether it was a problem, but his attitude which I kind of admire, first of all he understood that the reason that I wanted to join United Distillers was to be in a company that really cared about development and people development and that was something I had been missing and I think for him the ideal was somebody who was passionate about people development, who had a good generalist HR background and who was, as he saw it, unencumbered with lots of ideas and baggage and experience, he preferred the idea of somebody who could come to it fresh with new ideas and who was going to get a lot out of learning something new.
PL: Then we come to the first merger you ever saw don’t we because Guinness got together with Grand Met to become Diageo. Tell me about that. It was big wasn't it?
SD: It was. It was then, I think I'm right in saying, the biggest merger in British corporate history at the time the deal was done.
PL: How many people are we talking about?
SD: I mean tens of thousands and I was lucky in the sense that I had been doing as the management development what we would now tend to refer to as talent, the management development job for United Distillers which was one of the two divisions of Guinness and for various reasons which were really mostly down to good fortune, I ended up going into the group talent job for Diageo and it was a great time to be doing that job because here we were putting the two companies together, lots of issues both about people going into key jobs, so a very interesting time, but also, and I think more profound in a sense was the need to create the architecture for building talent for the new group because both companies had a tradition of talent development and the question was how were we going to bring all that together and create one Diageo way of building talent.
PL: And presumably you were learning on your feet there were you not having tackled anything quite like that before?
SD: I was learning on my feet in the sense I’d never been through an integration on that kind of scale I mean that was a completely new experience and I think, I'm a great believer that the first time you got through a really big scale integration it’s a massive amount of learning. So yes that was completely new.
PL: What were the big challenges, the big unexpected challenges perhaps I should ask?
SD: Well I think as you've rightly pointed out if it’s the first time you've been through a large scale merger frankly it’s all a bit uncharted territory, but I think getting to understand a whole new group of people and a slightly different culture, some might say a very different culture, but a different culture and understanding how to bring the two together I mean it’s a complex task but it’s one of those things you just get on with. I mean there's a huge number of people all kind of scratching their heads at the same time trying to figure out some pretty complex issues. It’s very hard work but it’s also very stimulating and enjoyable.
PL: And all in a blaze of publicity, I remember the press coverage at the time it was huge.
SD: It was a big deal, you know, a lot of people were talking about it. I think mostly we were just sort of trying to get to grips with the size of the thing and the many issues that we needed to resolve along the way.
PL: How long did you stay at Diageo after that because you moved to the BBC then, didn’t you?
SD: So it was 2001 that the BBC opportunity came along.
PL: Why did you move then? What prompted the move? Did you feel that you’d learnt as much as you could there?
SD: Yeah, that's a good question, you know, I think I was beginning to feel that there wasn't going to be the right next step for me there, that's just a natural thing, a point that is often reached and I was approached about the BBC job and I went to meet the somewhat unforgettable Greg Dyke.
PL: A big character.
SD: A big character.
PL: Head man at the BBC at the time.
SD: Yeah well he'd been there for I think, I don't know nine months or 12 months perhaps, long enough to know what the challenge was all about and his vision and his ambition for the BBC was very compelling.
PL: Now you were there I think it was Director of People was the job wasn't it 2001, for about five years am I right in saying at the BBC?
PL: And it was leadership, you introduced the leadership programme.
SD: I was HR director so I had responsibility for all things related to HR and the people on the organisational side of life at the BBC, the leadership development programme that you’re referring to was one particular initiative as part of a big culture change that we were going through that Greg Dyke had initiated called ‘Making it Happen’, one of the things we did as part of that was to launch a leadership development initiative which was probably bigger in scale than anything we had done before.
PL: Was it very different being at the BBC from Diageo? Was the culture entirely different?
PL: In what way?
SD: In lots of ways, I mean the BBC obviously is a publicly funded organisation, it’s full of talented people who care passionately about the ethos of public service broadcasting and the BBC’s core purposes.
PL: And as you say Greg Dyke was a very big personality, he was in full flow at the time wanting to get things very, very changed at the BBC, it was a tricky time as well because this was the time of the David Kelly scandal, the Hutton Report, all sorts of difficulties, it must have been a very challenging time to be there.
SD: So the Hutton crisis came probably about three years after I joined the BBC. So we had the ‘Making it Happen’ culture change initiative in full flow by then which was a very energising change programme, I mean that really drew hugely on the sort of commitment and energy that people who worked there felt for the BBC and the appetite for positive change and it was really about driving creative renewal and a lot of very positive things to do with what fuels the BBC if you like and you’re right, the Hutton crisis came along sort of halfway through that and was, of course, a major issue.
PL: And the organisation came very much in for massive criticism, became very entrenched and dug down and that must have been tricky you were heading people then?
SD: Yes I think most people would say it was the biggest crisis the BBC had ever faced, has ever faced, it resulted in pretty profound and unplanned change at the top of the organisation, first the resignation of Gavin Davies, the Chairman, and shortly after that, literally within 24 hours the departure of Greg Dyke as Director General. That's a pretty dramatic moment for any organisation to lose the top two people.
PL: Pretty dramatic for you too I would imagine?
SD: Pretty dramatic for me too.
PL: How did you deal with that?
SD: You’re dealing with a sort of multi-dimensional thing, I mean first of all the whole organisation is massively in the spotlight, emotions are running very high, people at the BBC cared a great deal about Greg Dyke as a leader, he was very popular and was in the middle of a change programme that was gaining traction if you like. So the first challenge we had was thousands of our people taking to the streets to protest about what had happened because the Hutton verdict had been delivered but not everyone, I think it’s fair to say, agreed with that verdict and that became clear in the days that followed, public opinion I think was quite divided about it. So it was a pretty tumultuous time.
PL: So as the man in charge of HR there what did you have to do at that moment in practical terms because you had an organisation as you say in a tremendous state of flux?
SD: It’s a period of crisis and you have to do what feels appropriate and there's no rule book or guide that can help you through that. And the first thing we did was to convene the extended leadership group of the BBC which is a group of, I don't know, 150 top executives in the BBC. We got them together in a room to talk about what had just happened and what it meant for the organisation and to begin a dialogue about what that suggested for the leadership that we all needed to bring to help settle the organisation down and move forward. Normally an event on that scale at the BBC would take months of preparation and scripting and planning and the high production values of the BBC and here we were getting this group together at a moment’s notice and it was a very emotional event actually.
PL: I mean everyone had to behave like a corporate at that point didn’t they?
SD: I’m sure that's right and perhaps that was challenging for some people, I don't know, but I think people followed their instincts. There was a tremendous kind of sense of coming together and needing to understand and make sense of what had happened and to begin to get a kind of collective sense about what was now important and how to move forward and all eyes were on this group and it was, I think, fair to describe as a very important leadership moment for that whole group.
PL: Let’s move on to another merger experience then the whole Thomson Reuters experience, tell me about that.
SD: Well I joined Reuters PLC in 2006 and ten months after I joined we announced the Thomson Reuters’ deal under which it was proposed that the Thomson Corporation would acquire Reuters and we took about, I don't know, the best part of a year, ten months or something, going through the planning and importantly the regulatory approvals for that deal and in the early part of 2008 we completed the deal and brought the two companies together.
PL: I mean this was what, nearly a £9bn merger, it was enormous wasn't it?
SD: It’s a huge deal, two very large companies coming together with some important differences and a lot of complementarity, one of which was that the Thomson Corporation, I mean a very successful and sizeable business but quite US- centric, Reuters was a smaller business but had a much more international footprint. So it was quite interesting bringing the two together.
PL: It’s what, about 32,000 Thomson staff, about half as many Reuters: big cultural differences. Was that the big difficulty, or the big challenge?
SD: Well I think you always have that challenge. I mean, there's a complexity in any integration on that scale, you've just got a very large number of sub-projects if you like, I mean streams of complex activity, everything to do with rationalising customer facing activities, strategies, systems, processes, people-related issues, designing the organisation, articulating the culture, it’s absolutely all there and culture difference is part of that you’re always bringing two cultures together in some way. I would argue that the differences in culture there were convergent, in other words you could see a way to start to fuse the best of the two cultures to create a much more powerful culture for the new company going forward and that was part of the job. That, I believe, is a job that takes, on this scale, anything between probably five to seven years, so I think that job is still not fully completed.
PL: I mean, as you say it’s a long haul is there actually a limit to how far HR can go regardless of effort and input towards binding together culturally disparate organisations? Do you have to accept that ultimately there will be gaps?
SD: First of all I think HR has got a hugely important role to play in that, but I mean this is an issue for all of the senior executives of a business; everyone has to own the issue of shaping the company and the culture that is going to support the business and its growth.
Is there a limit to how far you can go? Well I don't really think there is actually, but I think there's a limit to how fast you can go and I think when you’re integrating two businesses on that scale there are things you can accomplish very quickly and you set aggressive timescales to get lots of important things done but there are other things that are on a longer timeframe and the deep cultural integration of two businesses just doesn’t happen overnight, it takes time and all sorts of things have to be built and created and aligned for you to be able to say that that job is done. I think it’s very far down the tracks now and is in the latter stages of being completed but it takes, I mean that’s, you know, already many years.
PL: And you put a lot of work in to that organisation around talent.
PL: That seemed to become very much at the heart of your strategy for the combined group?
SD: It was. I mean one of the benefits we had of this ten month period that I was describing to you where we’d announced the deal but the deal had not closed and we were going through various approvals, that can be quite a frustrating period of time but the upside is that it gives you the chance, if you seize it, to think through certain things really well, things that you’re allowed to talk about at that stage which are, if you like, not commercially off limits. Right in that domain are things like the organisational issues, the culture, the vision and values that you want to create for the business. We did a lot of that work during that period. So as we thought through what do we want this combined company to be all about the executive team at the time identified three standout priorities if you like, three core activities that would come to define the new company.
One was something we called Strategy and Capital Allocation, which is obviously getting clear about the direction of the company, the strategy and making sure that the capital resources were allocated exactly in line with that and some companies are very good at that, others less so. We wanted to be outstanding at that. Secondly, was innovation and thirdly, in no particular order, was talent and what we said was that these were going to be parts of the company’s new signature, these were things that would truly define it and part of my job as HR director of the company was to make sure that talent wasn't just something for the talent team, but that talent was really part of the mission of the whole of the HR function and it’s a very energising mandate, you know, people find that, I think, really quite inspiring.
PL: I mean talent of course naturally leads to the question of reward and I think it’s fair to say you did run into some problems in about 2009 didn’t you, the staff rejected a pay offer where 50% of the deal was performance-related? I think the argument at the time was they felt it was unfair, because their managers were actually eligible for big bonuses, 20 to 30% bonuses. Is there a danger, if you go too far down the performance-related pay road that you send the message that if you’re not talented enough to become senior you’re not valued?
SD: Well, I think that danger is always there. I mean I would just say that what you refer to in the context of an organisation employing many tens of thousands of employees was a relatively small group. So I wouldn’t want that to be seen as something…
PL: No understood but it raises an interesting question doesn’t it?
SD: …it wasn’t a company-wide issue that's really my point. But back to the main theme, yes I think as you articulate a talent strategy and as you develop reward plans and other things it’s very important to be both concentrating on the people whose careers, if you like, are moving in a highly progressive direction but also making sure that there is very strong acknowledgement and recognition for people who are making a big contribution but may be on a slightly different track and all companies wrestle with this: all organisations wrestle with this.
PL: Well by its very nature it’s elitist isn’t it?
SD: Well that’s right you’re in a sense trying to articulate two sets of messages at the same time and I don't think they’re mutually exclusive, I think you have to wrestle with the challenge of articulating a sort of more nuanced message and it’s true that most organisations are pretty determined to identify people who they are going to proactively develop in a particular way, who they regard as their strongest talent but that is not at all to say that the contribution made by many others is not extremely important and this is part of the complexity of managing a big organisation successfully.
PL: Well this leads us very neatly to the move you’re making in the New Year to Bain Capital, because you’re going there, I think, as operating partner. You'll be dividing your time between London and Boston, this role as far as I can see it’s all about talent management isn’t it, recruiting and developing talent at the most senior levels? Interesting.
SD: It is interesting. You’re right that the focus is going to be on management team talent across the portfolio, so this is not a role that's focusing internally on these issues within the firm, but rather into the portfolio. And I think this is one of their blueprint priorities, they’re very keen to build and develop their capabilities in assessing, identifying and developing best talent across their whole portfolio because they recognise that having the very best people in each part of the portfolio is obviously a key lever for creating value and so my role is going to be to help to build that capability within the firm.
PL: Well obviously you are joining Bain at a rather tricky time aren’t you because I think as some people may know and others won't, it’s at something at the centre of a firestorm of political controversy at the moment isn’t it, because of course it was founded by Mitt Romney, the Republican presidential candidate, and is taking a lot of, well press flack, would probably be a gentle way of putting it right now. But setting aside the rights and wrongs of that do you feel that's going to present you with difficulties when you get into your role there because this is a big story in the US right now isn’t it?
SD: I really don’t think so actually, I think that's in the nature of elections, I think that these things come and go, you know, when you’re at this stage in an election campaign what the different candidates have done in different stages of their career is an issue of public interest.
PL: Yeah but they’re running a TV campaign saying that Bain Capital is asset strippers, I mean this is a big story.
SD: Look, you know, I think that is the nature of the political process you will have a very lively debate like that going on and I think if we had the same issues playing out in a UK election you’d see the same sort of things. I think that people understand that that's politics and this election won't run forever.
PL: It’s still a bit of a knack of arriving at organisations when they’re about to step into, well if not a crisis, an interesting time.
SD: It’s an interesting time but I'm sure people are not overly distracted by that.
PL: Now you've been an HR leader for decades now, I'm sorry to kind of press the point but it is a long time, what would you say thinking in the broadest terms, what would you say are the key skills that you have that have stood you in best stead so far?
SD: Well that's a hard question. I think first of all, particularly if you’re in a commercial business it’s understanding the underlying business model, knowing what makes the organisation work, understanding the strategy of the company because I think people and organisation plans and strategies don’t exist in a vacuum they have to be relevant, they have to be reinforcing and supporting what an organisation is trying to achieve. So that's just fundamental. I think all great HR people need to start by being deeply immersed in the business of their organisation.
PL: Is HR getting better at this? It’s talked about an enormous amount, do you feel generally that HR’s are getting their arms around that concept?
SD: Yes I do I think the direction of travel is right. I think most people understand that that's an essential starting point. Some people may be better at that than others but I think if you look at most successful HR people or successful HR functions you will find that that is a factor, that a lot of the key people there in the HR function are embedded in the business, have a deep understanding of the company, of the organisation and this is relevant whether you’re in the private sector or the public sector it doesn’t really matter. So that's where I would start. I’d then say really, deeply understanding your organisation, so I'm really building on that earlier point and developing and designing strategies and solutions that are highly relevant to the challenges it faces. The distinction I'm drawing is between sort of cookie cutter approaches, you know, you see a lot of people who go to conferences and events and they’re kind of cruising around trying to pick up the latest idea that they can just transplant into their organisation. Now I've nothing against getting out there and finding out about good ideas of course, but you really need to contextualise things, you really need to understand what is going to work in your organisation and that's a lot about understanding the people, the strategic context, the culture and then being able to use judgement to craft approaches and solutions that work.
PL: And creativity.
SD: And creativity absolutely and of course a lot of other things that go along with that in terms of being able to articulate a vision, being able to build credibility with senior line teams, and with of course the chief executive, but also to inspire an HR function. I mean it’s really important that people feel that they’re in an organisation where they can do their best work and where the function and its role is valued and seen as really creating value longer term.
PL: Now you left university back in 1984 didn’t you, tail end of a recession, here we are again.
SD: Here we are again.
PL: Good choice? Glad you went into HR?
SD: Yeah I've never regretted that for a minute. There was a time in my late 20s when I began to wonder whether I would spend my whole career in HR and I felt instinctively drawn to the business world, I knew that I was interested in the people side of business but I also thought it was possible that I may broaden my base and move into other disciplines or general management potentially but in the event I found myself fortunately in companies that seemed to have endless interesting challenges and whenever I might have thought of lifting my head and doing something different there was something else to get my teeth into. So here we are I've stayed with it.
PL: Well thanks very much for talking to us. Best of luck with the new move.
SD: Thank you very much