When you first decide to run a business, your responsibilities are to both yourself and your business. When your venture starts to really grow, you take on another major responsibility, and that’s to your staff. It’s not just you anymore, it’s your team on the payroll, and their families too that you’re looking after. The decisions that you make from this point onwards have a knock-on effect on real people. If you’re going to employ, or have already made the move, our leadership article in June’s newsletter is a must read. It reveals which qualities those with responsibility for others should express: Compassion, self-awareness, ability to ditch your ego for instance. Losing sight of these qualities has consequences. Mike Ashley of Sports Direct and Sir Phillip Green, ex-BHS owner, could tell you that.
Let’s start with Sports Direct. If you’ve kept one eye on the news you may have heard about some of the dreadful HR practices that were being employed at Sports Direct. Facing MPs last week, Mike Ashley was asked to explain the Victorian-esque working conditions staff were subjected to: dishing out heavy fines for small offences and creating a culture within which one employee gave birth in the loos! When a retail billionaire admits to paying, in some cases, below the minimum wage (due to lengthy security checks), they can expect a roasting in the morning papers. Turns out not all news is good news; especially for Sports Direct which saw shares plummet once its poor HR practices were revealed.
Since then, Mike Ashley has decided to do something about this. He has committed to changing work practices at Sports Direct for the better, ensuring pay obligations are met, and trying to move more staff from zero-hour to full time contracts. The same can’t be said for Sir Phillip Green whose sloping shoulders are causing uproar as 11,000 staff face an uncertain future at 88-year-old BHS – currently in administration. The issue dragging Sir Phillip’s name through the dirt surrounds the BHS company pension scheme. It’s all about who picks up what share of the bill, Sir Phillip or the Pension Protection Fund. He sold the firm for £1 back in March 2015 but had taken £400m out of the business during his stewardship (all tax free through his wife and a tax haven in Monaco), and then jumped ship right before BHS sank. Many observers have little sympathy. Should the taxpayer pick up the bill? You may be able to see why Sir Phillip’s knighthood is now in doubt…
Admittedly, these are big companies with billion pound decisions to make, but the principle is the same no matter how big you are. Good HR, strong leadership and a focus on looking after the people you employ will help you avoid going through anything like the above. Think John Lewis with its companywide bonuses, great employee relations and even holiday centres it runs for staff; when you consider the effect this has on performance, as well as to the brand, it surely pays for itself.
