"Knowledge 2000" - Conference on the Knowledge Driven Economy
Case Studies
Creativity; innovation ; use of technology
Speaker: Sharon Reed, Managing Director, FrameStore Group
Case Study
I am delighted to have this opportunity this morning to talk to you about the company I've founded - Framestore, because Framestore represents the knowledge economy in action.
Our story, as you've heard is about how we've grown, on the back of our collective growing skills and expertise, from 5 to nearly 200 people, if I included our sister company CSC, who create movie effects, of which I am also Chief Executive.
I believe it is an important part of my role to foster the kind of environment which encourages personal growth in each individual in the company from the runner or receptionist to the main board Director. Because what I've experienced is that personal growth is reflected in business growth for the company. This is the culture to which Framestore owes it success and I'd like to start by showing you what we do for a living.
(VIDEO SHOWN)
Now back in 1986 when we founded Framestore, digital technology was in its infancy and Framestore and CSC have been part of the revolution which makes it possible to create the kind of images I'm showing you today.
The vision that my colleagues and I had was that by using the new digital techniques we could create a new form of television, and we have. Our vision is epitomised in the series Walking with Dinosaurs which I am going to use as my case studies this morning.
In the late 1980s we could handle only 80 seconds of video with our new monster computer, a British device from a company called Quantel. It took up 4 racks which were 7 feet tall. Obviously the same equipment today is much smaller and much much more powerful. People were always telling us that our market would be eroded because computers would get smaller and cheaper and people would buy them for their desk-top and create their own digital effects.
This age has now arrived; - that is now possible - but as we anticipated ideas have grown more and more ambitious and what's at a premium is our knowledge and our experience.
Framestore and CSC own between them about £15 million worth of computer equipment and our clients hire it from us with an operator, hourly, daily or weekly.
It would be very easy to portray us as an equipment hire company, but take a look at this.
(VIDEO SHOWN)
Now the last person you saw there was my colleague Mike McGhee who founded Framestore with me 2 years after graduating as a graphic designer. Mike's career has developed alongside digital technology and as his expertise grew we were able to develop business around him.
Some of the skills that are premium in the UK at the moment are providing digital effects supervision on shoots. Something Mike has learned through his years in the business.
Mike has now won an Emmy in 1997 for his work on the Odessey for American television station NBC and he was visual effects supervisor on Walking with Dinosaurs.
Mike has a particular interest in training. Television is a relatively new industry. We don't have a body of skilled labour in digital effects to recruit from, so training is of vital importance to us. We recruit between 5 and 10 new graduates a year between the 2 companies, and Mike focuses, when he's not away in the sun playing at being dinosaur, on passing his skills on to our junior digital effects artists and we have in fact trained Mike to run internal training course.
Someone else you saw was another key individual, Mike Milne, our Director of Computer Animation. When one day in 1997 a producer walked in off the street and said he wanted to make a documentary series about the life of dinosaurs, Mike saw this as a major career opportunity and I as a major business opportunity.
But he and I knew that it would be a challenge. We knew that we would be working with a science department budget for example. By comparison a film like Disney's Dinosaurs, which is going to hit your cinema screens soon, probably had a hundred or so animators that worked for 2 or 3 years on a budget of over $200 million to create 120 minutes of film drama. The BBC budget for the six part series totalled $10 million, the largest ever budget for a science programme.
Within our budget we decided we could afford a team of 12 animators and about 15 digital effects artists and supervisors and we had to create 180 minutes of television in 18 months.
We knew that we would have to apply all of our experience and ingenuity to make it possible but we were convinced that we would have a major hit on our hands if we could pull it off. Now I would like you to take a look at a commercial.
(VIDEO SHOWN)
Like the Prime Minister I'm not endorsing this product and I'm sure you are wondering what this has got to do with dinosaurs. Well we had to look at ways that we could innovate to enhance productivity. When the animator creating this commercial was up against his deadline, he made an important discovery, which was that he was able to write a programme that enabled him to do the animation. ie to make the movements of the character, with very blocky simple shapes which means that it is very quick for the computer to do. And when he rendered the final images, made the final images that you see there, he could put into those images the amazing detail that you've seen for the torso of the bodybuilder, his six-pack and his biceps.
Mike Milne realised that we could apply the same technique to animate our dinosaurs and not only would that make us more productive but it would make the dinosaurs more realistic. So we employed a computer programmer and he wrote this programme as a proper tool which we could install on all of the computers. And it formed the foundation of the project.
We've been one of the first companies in the world to pioneer this technique and we regularly have difficulties of recruiting in a new industry. But not only that, our industry in the UK is raided regularly by the movie industry in America.
The majority of Mike Milne's peers are working in Hollywood where the sun shines more than it does here. So there is not yet a sizeable community of experienced computer animators in the UK for us to recruit from, so Mike set about the task of dividing the work into different tasks which required a high level of talent but in a narrow area. We came across a relatively new computer animation course at a college in Wales and we recruited 4 of their graduates as we thought so well of them.
We hired 2 graduates of a new six month computer animation course set up by the guild of animators. It is called The London Animation School and it has funding from Focus Central London.
We recruited 3 talented animators from the computer games industry, in fact Virgil was one of the people you saw earlier. They knew nothing about television. We hired one of the people who demonstrated our animation software package to us. We trained him to create the digital creatures within the computer and we hired an illustrator with an enthusiasm for dinosaurs to paint the skins. Finally we found 2 experienced computer animators and they worked with Mike Milne on the technical task of putting the animations together. So this inexperienced but very talented team began the task of bringing the dinosaurs to life.
Now we were determined that our dinosaurs would move as realistically as if they had really been filmed 165 million years ago. We looked for brilliant animators and then we enhanced their skills further with coaching from the same Welsh college that I mentioned earlier.
When we were faced with the challenge of creating herds of dinosaurs, we found that good animators can work much faster and animate every creature by hand than by using any behavioural software package in the computer. But where we were able to harness the power of the computer to improve our productivity further was for example, by writing mathematical expressions which create the secondary animation which you'll have seen in the tail flick and the neck wobble of the Diplodocus for example.
We applied the same level of ingenuity to the way we managed and budgeted the projects. Our first major television drama project was Gulliver's Travels in 1995 and we knew then that if we were to deliver long projects on time and on budget, not to mention making a profit, we would need very careful project management.
With nothing available in the market place off the shelf, we decided to employ a database programmer and invest in proprietary database to manage our projects.
These are now the foundation of our project management, have a web front end so they cross our varied computer platforms and form part of our intranet. We had invested heavily in ICT systems. We are using an extranet as a way of communicating effectively with our clients in particular foreign clients and our intranet is a major technical reference and training vehicle.
I keep coming back to training because training effectively and quickly is the foundation of our capability to expand with our market. Especially because of the drain of some of our brightest talent to the States. We therefore value our relationships with universities from whom we can recruit talented graduates. We encourage our experienced staff to act as visiting lecturers or external examiners.
Other university relationships are more formal still and at the computer film company for example, we are collaborating with the University of Derby on a DTI funded digi-Imax project. This will result in a new generation Imax film scanner and we hope this may be a saleable product for us.
So growing a business around the increasing skills of individuals has been effective for Framestore but it only works if you can retain the majority of your skilled workforce over a sufficient period of time.
What retains people? At the most senior level, a share of ownership has been important for us and we're lucky to have an entrepreneurial environment which has allowed us to make some ownership available to very talented people during the first 10 years of our development.
I can't talk about staff retention without mentioning we pay high salaries. We ensure frequent increases for talented juniors as their skills increase or we lose them.
But I come back to providing the right culture where everyone feels that they count in the business, that they are listened to, and that they are encouraged to grow their skills and move up the organisation.
I want to leave you with a last look at our dinosaurs recreated for us through a mixture of artistic talent, ingenuity, computer technology and good old fashioned hard work.
Walking with Dinosaurs has achieved sales to over 100 countries world-wide and audiences totalling 100 million viewers.
It was a partnership between our science community, a public service broadcaster and Framestore's leading edge computer animation. Three areas of knowledge in which the UK is world class.
(VIDEO SHOWN)
Framestore
"It isn't enough for FrameStore to be a niche player now. Technology is moving fast and we want to partner the many talented people who create and manage images for all types of screens - television, cinema and computer. We know we have a culture that is exciting, innovative and fun, and this will determine how FrameStore grows." (Sharon Reed)
The company has doubled in size and profits in each of the last three year periods and is now one of the most successful of its kind in the world.
Today the enlarged group’s clients include leading broadcasters in the UK and USA (NBC, CNN, Discovery and ABC), Hollywood film studios (Paramount, Warner Brothers, Columbia, Dreamworks, Fox, Disney and Universal) as well as major advertising agencies.
Recent highlights include "Walking with Dinosaurs" for the BBC, "Notting Hill" for Polygram, "Sleepy Hollow" for Paramount, "The Beach" for Fox and "Guinness Surfer" for AMV.
In December 1999 FrameStore’s "Walking with Dinosaurs" and CFC’s Guinness "Surfer" commercial were selected as Millennium Products and featured at a presentation led by the Prime Minister.
FrameStore has won 4 Primetime Emmy Awards for "Outstanding Visual Effects" in 1996, 1997, 1998 and 1999. In addition The Computer Film Co has been given two Technical and Scientific Academy Awards (Oscars) in 1996 and 1998.
Global Competition
Speaker: Eric Newton, Managing Direcor, John Heathcoat & Company Limited
Case Study
Good afternoon everyone. Listening to Digby Jones' description of an overweight, middle-aged and balding taxi driver makes me think I may have missed my vocation. I'll see him about my tip later.
John Heathcote and company are textile manufacturers. Textile manufacture is genuinely regarded by the media as a sunset industry. However, we have been in the textile business for 190 years and we are determined to stop the sun from setting on us.
John Heathcote himself was a lace maker who invented the first mechanical lace machine. He set up a factory to manufacture bobbinet lace in 1808 near Loughbrough but the factory was subsequently destroyed by the Luddites.
Heathcote moved down to Devon in 1816 to the site the company still occupies. John Heathcote was a great innovator and it is this innovative theme which we try to encourage in the company today and which we firmly believe is essential to making our way in a much changed business environment.
Business today is becoming global at a frightening rate and non more so than textile manufacture. The press has recently been full of stories of major retailers sourcing more garments from abroad and of the imminent demise of the UK textile manufacturing industry.
Many countries start on the road to industrialisation by first establishing a textile industry and these days with modern machinery the learning curve is relatively short. These countries can then quickly become competitive and present a challenge to the established industries of the western world.
We now have to operate on a global basis both in sales and in purchasing and meet the full force of global competition.
So how do we in the UK with our higher wages and generally higher standard of living plus higher energy and environmental costs compete with products from these emerging economies.
What have we to offer that these other countries cannot? The answer has to be in our innovative skills and the production skills of our workforce. We have to produce fabrics both for apparel and industrial uses, which have a degree of difficulty and innovation, which cannot be matched by our competitors.
We are having to upgrade our information and knowledge gathering skills, our sales skills, our production skills as well as increasing the amount of innovative research and development we are carrying out within the company. We must also be a company which our customers see as environmentally sound enough to be a suitable partner.
So, how are we coping with these challenges? First and foremost we need a skilled and enthusiastic workforce with good employee relations. We are working hard to ensure that staff and employees at all levels are trained in the skills required of them.
We recruit on a regular basis from the universities, but take only sufficient numbers to ensure that we can offer those we employ a satisfactory career path. There can be nothing more demoralising than joining a company from university only to find that there is no logical way of progressing your career.
We are also more than happy to take employees who, for whatever reason, have not gone to university, but who exhibit flair and enthusiasm in their jobs and train them to a level to enable them to take senior managerial posts. Very often these people are the real strength of the company, since they know the company's processes and methods in their entirety, having started in a junior post and worked their way up.
We train to NVQ level 3 in-house and then on to part-time courses at Midland textile universities together with management training at Exeter university and at specialist training establishments elsewhere.
We are unionised with the Transport and General Workers Union and are happy to encourage new recruits to join. We enjoy good relations with the union which we regard as essential if we are to succeed in the 21st Century. We must move forward in partnership and this means telling our workforce what we are about and seeking their advice and help. We have to work together.
In 1984 when the company was the subject of a management buyout we had a workforce of around 550. Today we have a similar number of employees but our turnover has tripled and our profitability with it, the majority of which has been reinvested in state of the art machinery and new projects.
For the future, this will not be sufficient to keep us in business. We have found ourselves in a global market rather sooner than we had anticipated, but we did foresee a number of years ago a decrease in the share of the domestic market which would be available to us and that we would have to counter by increasing our export capability.
We have therefore been building up an export sales force over a number of years. It is of little use trying to sell globally if the only language you have to offer is English. We have recruited and trained sales persons speaking French, German, Spanish, Italian and Danish, many of them native to the countries to which they are selling.
We've also ensured that we have similar linguistic skills on the sales desks so that if a customer telephones, sends a fax or e-mails us he can do so in his native language.
Direct sales efforts, agent representation and participation in over 15 textile exhibitions a year has taken our export sales from a little of 20% to 50% of our total turnover within the last 6 years.
One of the essential components in the running of a successful business is to be producing articles that the customer really needs. For this reason we employ a technologist within each sales division and it is their job to liaise with our customers, to get to know the requirements for their business and to oversee any joint projects which may result.
Visiting customers, whether it is for apparel or industrial use, with a bag of samples is not longer acceptable. We have to offer speciality products engineered to their needs.
Selling speciality fabrics on a global basis requires production to a high level of quality. Customers who are paying premium prices demand premium quality and this is what we must deliver. To this end we have a central quality control manager who responds directly to the Managing Director and divisional quality controllers who maintain close contact with our customers.
The quality controllers are responsible to the company quality control manager rather than their divisional director, thus ensuring that there is no subverting of quality for commercial expediency.
The company is registered to ISO 9001 and is currently looking to register parts of the company to the automotive standard QS 9000.
We have set up our own in-house research unit to pursue specific projects and to help in problem solving for our customers. It is manned by highly qualified staff, many of whom have spent all their working lives in textiles subsequent to leaving university.
The Research and Development Unit carries out prime research programmes with a number of our customers including the Ministry of Defence and the Ministry of Agriculture, Fisheries and Food.
We cannot hope to carry all the skills necessary for the many projects we need to investigate and therefore we co-operate with the local universities, in our case mainly Exeter and Plymouth. We are however, prepared to go further afield for specialist knowledge which may not be available locally.
Relations with the universities got off to a slow start but with government and industry's encouragement we are starting to see some real advances as a result of this co-operation.
Knowledge is power and up to date knowledge is essential to the running of the global business. We have to make certain that the information is transmitted rapidly and effective round our company. To this end we have installed a network so that the company intranet and e-mail facilities are available to all our staff members.
The need for knowledge of advances in technology, awareness of our customers and the need to search for new markets has led us to appoint a graduate to research these areas and identify new opportunities and applications for our fabrics. Considerable use is made of the Internet, on-line databases and resources of the British Library, all of which contain a wealth of useful information.
In common with many industries we have set up our own comprehensive website.
Much discussion is presently taking place regarding the benefits of e-commerce. We are at present exploring the opportunities available to us as a company for carrying out business on the Internet. These will be thoroughly evaluated before further steps are taken in this direction. We need to be certain of our facts before we proceed further.
Converting ourselves into a specialist textile unit has meant that we can no longer rely on long runs of the same fabric and the productivity advantages that go with this type of production. Smaller runs result in less efficient production however hard we work on shortening turnaround times and decreasing working progress.
We must therefore look elsewhere for further efficiency improvements. We do this by targeting areas where we believe cost benefits can accrue. As large energy users, for example, we have targeted energy on a side basis using a small committee under the Chairmanship of the Managing Director. Over a period of years we have reduced our energy bill from 8% of turnover to 2%. Well worth the trouble. Last year, after several years of careful study, we installed 1MWatt of co-generation. We were able to fully utilise on a 100% basis all the electricity, steam and water the unit can provide resulting in savings of £169,000 per annum.
We've also targeted waste using a similar committee and found that much of the waste we were putting to landfill can be separated and sold. The project to do this paid for itself in 8 months. An additional spin-off has been that we have isolated and quantified the different types of waste allowing us to target the much larger prize of reducing the quantity of waste at source.
No company can operate globally these days without having paid attention to its environmental performance. As a potentially polluting industry discharging into one of the finest rivers in the South West we have taken our environmental responsibilities very seriously. We were among the first companies to effectively decolourise our dye house waste, and the first to use biological aerated filters on the dye house effort.
We are continuously improving our treatment unit and recently installed a state of the art dissolved air flotation unit. The company is registered to ISO 14001, the environmental standard, and produces an annual report on its environmental performance which is available to the general public and which is also published on our website. We have to be seen to be an environmentally sound company, our more enlightened customers demand it.
Finally, we maintain a consistently high level investment which is all financed from the profit. We have no debt. One of the advantages of being a closed company is that we can be prepared to take risks with our investment in order to stay ahead. We cannot always opt for the safe and certain project, we have to back our own skills and market knowledge.
This is a thumbnail sketch of the efforts we have made at John Heathcote to become a company which cannot only survive but thrive in the new global economy. The aim is to create a dynamic company which has the enthusiastic co-operation of the whole workforce and which is not resistant to change at any level.
We have made a start but I'm well aware that there is still much to do. There will no doubt be some tears on the way but we are determined to remain a force in the global textile industry of the 21st century
John Heathcoat & Company Limited.
John Heathcoat and Company Limited is a privately owned textile manufacturing company based on the banks of the River Exe in Tiverton, Devon. Established since 1808 the Company has seen many changes within its industry, but has managed to succeed as a leading producer of high technology textiles by keeping abreast of changes in technology, and utilising these developments to their best advantage.
The result is an annual turnover of over £37 million (of which almost one half is exported to more than 55 countries world-wide), and an enviable product range of quality fabrics and nets. As weavers, knitters, dyers and finishers, John Heathcoat can supply textiles to meet most requirements. These include applications such as fashion apparel, automotive transmission belting, corporate and protective uniforms, air bags, parachutes and cot mattresses (to name just a few).
The backbone of the company’s success lies with its 525 employees. Together they succeed in providing a wealth of technical knowledge and experience, sound management ability and quality operational skills essential within an industry as demanding and globally competitive as textiles is today.
The company’s commitment to quality is exemplified by its accreditation to ISO 9001. It was also the first textile company in the UK, with its own dyeing and finishing plant to achieve accreditation to the Environmental Standard ISO 14001.
Development of Key Skills in the Workplace
Speakers: Richrd Holroyd, Head of Training, HSBC and Cathy Tinston
Case Study
Good afternoon. HSBC fully recognises the importance of the knowledge driven economy and I'd like to share with you two very clear ways in which it has taken a lead.
First, using technology and innovation to provide choice to customers enables them to access financial services through a variety of channels - face to face in branches, over the telephone, including the use of mobile phones, through the PC and Internet (in fact in the summer we will be providing a global Internet banking services reflecting the international coverage of HSBC with offices in 82 countries) and also through the medium of television.
We were of course pioneers in telephone banking through the innovation of First Direct the first and highly successful 24hr telephone bank. Only last week we launched FirstDirect.com, moving First Direct into Internet banking.
More recently we have launched TV banking in partnership with others. The importance here is choice, and in keeping with out community banking strategy we will continue to serve our customers in branches recognising that many of our customers prefer to bank in this way.
Our branches may well look different, in fact they already are with several in supermarkets and shopping malls and in the future they are likely to incorporate cyber cafes and advice centres.
We have also taken the lead by increasing the skills and knowledge of our people and we've done this for the following reasons - to enhance the quality of life for our employees and their employability. Through that we are providing our people with the skills that enable them to provide a better experience for our customers and over the past few years we certainly invested considerably in customer service training. We are now seeing the payback from that. We are also providing greater shareholder value, important to our strategy and also supporting the Government's drive to increase the competitiveness of the UK and of Europe.
For some years we have recognised within HSBC the need to create a learning culture. A culture where training is no longer something done to you, but something that an individual and the organisation share responsibility for, and again the emphasis is on choice.
We still provide traditional training courses. They are still in high demand and we will continue to provide them, but in addition we now have 150 multi-media learning centres around the country, including some in our European offices, and these are backed up by our own learning resource library, which we call LEAP. It is a lending library of over 1,500 different videos, books, audiotapes and CD ROMS. Most of this training is job related designed to help employees to do their current job better, or to prepare them for a new job or process etc.
I now wish to share with you a project that we have embarked on in partnership with the financial services union UNIFI. A project which provides learning opportunities beyond job related training. I personally feel very enthusiastic about the whole concept of lifelong learning and this is shared by HSBC. I believe that people have potential that goes way beyond the limits of their own self belief. People tend to put a ceiling on how far they believe they can go and that is a limiting factor to them achieving their full potential.
I see providing opportunities for lifelong learning beyond job related training as a way to unlock that potential to demonstrate to people what they can achieve.
All this however needs to go beyond the rhetoric and into action. That's why I was very pleased when UNIFI approached us a few months ago to see if we would wish to join them for a partnership project for our people in Manchester, and as this is taking place in Manchester maybe the writers of Coronation Street might like to take note.
Manchester was chosen because HSBC employs around 2,000 people there in a great variety of functions and roles. Obviously in branches but we also have 2 processing centre's there, a cash centre, the bank stationery department and also an international trade services office.
This mix of people reflects our diversity policy, we have people from very different backgrounds working in Manchester. Many of these people have undertaken very little learning apart from their job related training since leaving school and I wonder how many of us today have really taken on any structured learning within the last 2 years.
I think its fair to say that HSBC and UNIFI have not always seen eye to eye on everything, but on this particular project we certainly are working in partnership. It is forging a better relationship and the right relationship between the bank and the union.
We both believe in lifelong learning and in this project we certainly share a common agenda and a common purpose. I would now like to hand over to Cathy Tinston, UNIFI's North West Regional Organiser who's been a driving force behind this project and who's going to tell you more about what I consider a very exciting project and about the absolutely brilliant response we've had to date.
Thank you Richard. I want to follow that introduction by outlining the union perspective in this partnership in respect of the learning agenda, the benefits to union members and the particular project we've just embarked upon.
UNIFI is also committed to lifelong learning. We want our members to recognise that learning doesn't end when they leave school, college or university. We actually see it as a method of improving our member's security of employment.
Our slogan 'Changing Minds, Changing Work' is very much based on broadening the traditional union approach to include not only bargaining protection and information but to open new horizons for our member's.
UNIFI has a diverse education programme for members which aims to meet their aspirations. When asked they tell us they want computer courses of any kind and personal development courses, which are always over subscribed.
In a world where job interviews, whether for new or promoted positions, are decided by criteria based interview, where redundancy selection depends on future skill requirements of that company, and where appraisals greatly influence pay and reward, our union members realise that the best way their union can equip them for that future is to offer courses covering assertiveness techniques, effective communication and self advocacy.
Learning partnerships are important in sharing the responsibility of training between the union, the employer, regional agencies and FE providers.
The union because they offer learning opportunities to members which gives them confidence and adds to their employability.
The employer, as it helps them to achieve their training agendas and focus on relevant skills. It also develops a belief that training and development is crucial to both the business and the staff.
The Regional Agencies to help them to deliver their skills strategy and to the text in the workplace development plans that they've been working on.
This project is the first initiative within the new learning partnership and Richard's quite right - we don't agree on everything. But in the learning partnership we have found a way of working together and this is a first initiative between UNIFI and HSBC and it is a unique and ambitious lifelong learning project.
So why did we choose this project? Our industry is ever changing. Many staff joined the bank thinking it was a job for life. That isn't the cast any longer, but there are things we can do to soften that realisation. We can increase their confidence in their own future by giving them qualifications to add to their CV. Qualifications with a direct link to employability. This makes them more valuable to their employer and more confident about facing a future with another employer should they have to.
Many of our members feel they give a lifetime commitment to their job but cannot then demonstrate the skills that they have developed in that job. This initiative of delivering transferable, demonstrable qualifications in key skills will tackle those fears.
The six key skills are
At the same time as offering these benefits to the employee this initiative gives value to the employer. Key skills will help develop their staff to meet a whole range of current demands, the rapid change in information technology, addressing any skill gaps in the work force and it will widen participation by the whole of the workforce.
It will aid recruitment retention in large centres where turnover can be a challenge. It will help tackle resistance to change and it'll help staff to embrace new skill challenges which will then develop their flexibility.
Participants on the project will be offered the opportunity to achieve a European computer driving licence in information technology, an NVQ level 2 or 3 in the other 5 key skill areas.
The partners in the project are the learner who's central to all of the partners, UNIFI, HSBC, Mancat College in Manchester City Centre, and TUC North West Bargaining for Skills.
So what are the aims of the project? Our first aim is to create support for lifelong learning. We need to switch people on to learning. This initiative will help lift traditional barriers that people have in returning to learning, for instance, entering a college campus or getting started on a learning plan which isn't too ambitious and is achievable.
Our aim is for the participants to want to continue their own learning after this project is over both inside and outside of the workplace.
The second aim is to promote the importance of key skills. From September, all 16-19 year olds embarking on a college course will have key skills as a component of that course, whatever the course is.
We shouldn't ignore those in work, they would feel left behind and even more fearful about their future.
The third aim is to identify key skills need in a target group. As a pilot we choose to work with a group of 30-50 staff. We though this would be a manageable number and before launching the scheme we really weren't sure we could find 30 committed enthusiastic staff to participate. You saw the figures earlier about how many people are reluctant to return to learning.
To ensure maximum opportunities for staff to learn of the project we produced a joint leaflet which went to all 2,000 staff in Manchester and just the production of the leaflet was actually quite a new initiative for the bank and the union.
We offered all staff who were interested the opportunity of attending briefings delivered in their workplace by a joint team of union and employer and there is no doubt that the union's involvement was an added attraction and offered further credibility to the project.
There were no barriers to participation this was a pilot in the true sense that we genuinely wanted a real cross section. Before we finished all the briefings we were already over subscribed. At the closing date we had 138 applications for the increased number of 70 places. This is three times what we expected but does very graphically demonstrate the need and the hunger that's out there for this type of training.
The applications range from a warehouse operative in the bank's stationery store to a deputy area manager who is of senior management grade and the applications cover all jobs, all age ranges, all working patterns and all work places.
To return to the project aims. Our next aim is to establish in-house key skill assessors. We are already training six key assessors, three bank trainers and three UNIFI reps who will also offer learning support to the participants. These assessors will work individually with participants to provide guidance and mentoring and we are also encouraging the learners to 'buddy up' and offer peers support to other learners in their workgroup. This will be the most supportive, positive learning experience that they are ever likely to encounter.
The next aim is through assessments develop learning plans for the training. HSBC is allowing every participant 35 hours of paid work time to attend the courses. This is irrespective of whether they work full time or part time. The learners will though be devoting at least that amount of time themselves to their learning and flexibility is the major factor in this project. We will offer the training modules at a variety of times so that all participants can access the learning. The assessors will then produce an individual learning plan which will timetable their courses to suit their need and their particular skill gap.
If unforeseen problems occur, such as a bereavement or a long illness, we will reschedule their learning. Nobody need drop out and nobody will fail.
The next aim is to increase the take up of individual learning accounts and establish a collective learning fund to match and meet the learning need and this is where we come to funding. We have tried to maximise all available funding. Individual learning accounts will be opened, with an individual contribution of £25 per participant, and we are also asking participants to pay £5 a month to the collective learning fund. It is important for participants to contribute both time and money into their own learning. It is obvious that it is only a token amount but nevertheless it makes them stakeholders in their own learning future.
HSBC will deposit a substantial sum, known in the union as Cathy's Wad, to the collective learning fund to top up all the learning costs. Because it is a major element and because it is clean money we are exploring whether we can fund match this amount with European monies which will help us with sustainability after the pilot project is over.
The remainder of the project costs is coming from a bid made on the Government Union Learning Fund the ULF, and I should have asked David Blunkett whether we've got the money this morning.
It is important to stress that this project could not be delivered by any one partner on their own. The unique funding mechanisms to us are only there because of the learning partnership we've entered into.
To return to our last project aim which is to increase the use of HSBC learning centres. Our first aim is to create support for lifelong learning and our last aim is to offer a key tool in helping people to continue their learning. Dave Eaver, the Innovative Head of North West Bargaining for Skills is already started to talk to FE providers about Internet or CD ROM based distance learning courses with direct links between colleges and workplaces to further break down the barriers for learner returners. HSBC own learning centres will be ideally placed for taking advantage of this initiative.
I want to end with a quote from one member of staff who attended a briefing that we've just completed.
"All my life I've been waiting for something like this", this is Linda Dunbar from Salford University branch, "I joined the bank many years ago with no exams at all. I want to go on this project because I want to go home to my kids and say, look I've got a certificate as well", and I know that this project won't fail her.
HSBC Bank plc
HSBC Bank plc is one of the UK’s leading banks, offering a comprehensive range of financial services to over 7 million personal and business customers.
The bank has over 1,670 branches on high streets throughout the UK, but is also a leading provider of direct banking services. HSBC pioneered virtual banking through First Direct, the UK’s leading 24-hour telephone bank, and is now expanding into other virtual channels, such as mobile phone, TV and internet banking. The bank’s strategy is to allow customers to contact the bank at a time and place of their choosing.
A part of the HSBC Group - which has over 5,000 offices in 82 countries and territories - the bank also offers customers unrivalled access to an international banking network./p>
UNIFI
UNIFI is one of the largest white collar unions in Britain, and the largest specialist finance union in Europe, if not the world, representing around 200,000 finance sector staff across industry. UNIFI is not affiliated to any political party.
Never before has effective trade union representation been so vital for people working in the industry. We live in fast changing times. Growing competition, telephone and PC banking, job insecurity, performance related pay, amalgamation and take-over - the list is endless.
UNIFI provides members with free legal advice, individual and collective representation, a network of equality services. Our affiliations to the TUC and other bodies provides UNIFI with the ability to have an input into public policy decisions which affect our members’ working lives.
UNIFI provide members with access to a wide range of educational courses free of charge. Working hard to ensure more and more members learn new skills, attain valuable qualifications and get support from their employers. A number of courses are run in partnership with employers.
UNIFI’S commitment to education ensures that as many members as possible can obtain the training they want. Accessibility to courses is a continuing feature, with courses being run locally, and provision of childcare, information in braille and large print, and signers for our deaf members.
Working in partnership to Attain Common Goals
Speakers: Pat Macdonald, Human Resources Manager, Littlewoods and Val Pugh, National Officer, USDAW (Littlewoods)
Case Study
Good afternoon. In an attempt to position our organisation to succeed in the environment described here today, Littlewoods has for the past 18 months been undergoing radical change. Positioning the business appropriately is essential and I'll provide you with a flavour of the direction Littlewoods intends to take later on in this presentation.
The impact of such radical change on employees can be unpalatable and unpleasant but a necessity if we are to rise to those challenges. Re-engineering, redundancy, re-deploy, re-training, multi-skilling, outsourcing and flexibility are all issues that we have faced and will continue to face.
Getting the people aspect of this change wrong can be the difference between success and failure. We firmly believe that the business partnership agreement that we've recently negotiated with our recognised trade unions USDAW SATER and GMB Apex will enable us to deliver the people's strategy that in turn will enable us to achieve our vision.
The next couple of slides will just give you a bit of a flavour for the size of our organisation and the nature of the services that we provide.
Littlewoods is one of the UK's leading retail businesses, we are the second largest home shopping company, second only to GUS, we are the third largest clothing retailer and we are the sixth largest non food retailer and across all of those businesses, we have 27,000 employees.
Our group sales are in excess of £2 billion and our group retail operating profit is £122 million.
Some of you may be familiar with the home shopping catalogues but what we have at the moment are two main home shopping books. They are very similar products behind the front cover of each of those books but distinctly different pricing structures. One book favours the traditional home shopping terms offer approach and the other has a pricing structure more in line with the high street but also with an interest free option.
In terms of the outlets for our products there are 112 stores on the high street and 163 Index stores, 63 of which are based inside the high street stores themselves.
In addition we've used our skills and expertise to establish very valuable partnerships. SHOP, which is the equivalent to QVC on television shopping, incorporates Granada expertise in television and Littlewoods expertise in terms of product and operational infrastructure.
DIAL, the DIAL joint venture combines the brands of Arcadia and once again the home shopping infrastructure of Littlewoods.
Our latest joint venture is with the Woolwich which enable us to broaden the range of financial services products we already provide to our customers.
Here is what looks to be a very complex slide, but hopefully if you get an opportunity to review it a little later on it will become more coherent in terms of the rest of the presentation.
In the past our company was divisionalised and several different businesses were run independently so home shopping was run separately from the high street stores, was also run separately then from the Index stores.
Going forwards Littlewoods would be one single integrated business but serving our customers in as many different ways as possible. A multi-channel customer focus is at the heart of our efforts and we'll seek to find new and innovative ways to meet both the individual and specific needs of our customers. The synergies in relation to this strategy are obvious as we see several head office infrastructures and two warehousing distribution and returns operations all merge into one. As mentioned earlier the people consequences of this change are enormous.
So how will we deliver this strategy? We will already have a database that is in excess of 9 million customers. We are a major high street network. We have a major high street network in prime locations and we have a sophisticated home shopping infrastructure which includes call centres, credit facilities, payment and collection facilities, warehouses, return centres and deliver fleet. This is all underpinned with a wide range of branded merchandise and of course comprehensive operating systems.
In addition, in terms of securing our future we are making significant investment in e-commerce.
Most importantly we have always enjoyed a healthy relationship with our trade unions but our agreements, in addition to being more than 20 years, old reflected the old organisation structure.
So why did we change? I think that the change is obvious bearing in mind what I've told you about the integrated strategy for our organisation. Integrating our organisation, as I've described, meant that a change in the nature of the relationship between ourselves and the trade unions, USDAW and GMB was inevitable.
Simply changing the structure to reflect the new business would, with hindsight, have been a much easier option. However, we took a conscious decision to more radically review and change the face of employer relations in Littlewoods.
Business partnership as a vehicle was supported by the Government and offered as a potential solution by USDAW. So almost a year ago now, and with the full endorsement of Barry Gibson our Chief Executive and Bill Connor the General Secretary of USDAW we commenced discussions.
I would now like to hand over to my colleague from USDAW Val Pugh, who is a national officer and who is someone I have worked very closely with on this project.
What we had was 19 bargaining groups and 19 sets of pay negotiations. Actually when we started off it was interesting because we started off with 16 and then found we've got three that were hidden away that came out of the woodwork so we ended up with 19 separate bargaining groups which we had to consider.
The old structures had worked very well for our members and for the company over many years but increasing they've become pay focused and there was very little time to discuss the other issues.
There was also a lot of time wasted arguing at these different groups the same aims and objectives, so we were arguing for a long time to achieve the same thing and both sides spent an inordinate amount of time changing decisions or attempting to change decisions that had been made elsewhere. Clearly the company had changed, you've seen that from what Pat's been telling you, and it was necessary that we changed our structures or we as a union would become less relevant.
So why business partnership? Well there have been many occasions over the last 9 months when I think many of us thought "why did we enter on to this" because the word partnership itself brings about opposition from many people especially on our side for many of our members.
I guess that over that period of time once or twice we thought it might have been easier to have done what we were doing if we hadn't used the word partnership. And of course on occasions, both sides have actually said to me and to other people dealing with the partnership "how can we have a partnership with those people" Of course they would be referring to an individual manager that was not very good at what he did or one of our angry reps, and clearly the word partnership then sounded out of context for them. What we have had to say is that this partnership concept is a major initiative for USDAW and we have to be prepared to take the risks.
We have to have confidence in what we are trying to achieve. We as a union have gone forward with partnership and we have a great belief that this hopefully will be the way for the future.
Being involved in the decision making takes courage. Working for business success may involve us in unpleasant decisions and there will be a need for us all to understand the other-sides problems. Clearly it is going to take us time, both sides, to build the trust that is needed and I think we all recognise that there are some difficult times ahead.
Here are the words, fairly short, that took us some time to come to. If you can imagine we had a working party, with representatives from both sides, senior management, lay reps and senior officers as trade union. We had to come up with a vision and the vision was that creation in partnership of the UK's most admired consumer business, a dynamic and successful company achieving and sustaining world-class performance and excellence in all activities. With the reward and benefits of success being shared fairly across the partnership.
These words took us some time produce. These words had to meet the company's vision and our members aspirations.
And then we came to the principles of partnership. These principles are the foundation stones of our partnerships. The principles which had to be robust and we had to remember that there cannot be a robust building without foundation stones.
The obvious message to our members was that there cannot be security of employment unless the business is successful. This might seem an obvious message but in the past it was 1) not necessarily a message that the trade unions were prepared to voice or 2) make the centre of their agenda.
Trade unions now have a wider agenda which we wish to bring to the bargaining table. We are no longer simply reactive but proactive and involved. Maximum trade union organisation will help us to deliver for our members and make the principles for the partnership come alive.
How then do we communicate the words to the wider audience. Well as some of us need pictures and I don't mean cartoons necessarily. So what we did was we constructed a building. And this is our building. The foundation stones are what we believe, the pillars are what we do and the vision is what we achieve, the vision the words that I've already read out to you.
What we believe is, and what we've believed in during all our discussions, is that we have more areas where we have unity of interest than areas of conflict. Partnership is about expanding on the areas where there is unity of interest. The change of philosophy means working with management not being confrontational and coming up with a common solution.
New demands from retailing means that our members are frequently required to cover hours, 7 days a week, 24hrs a day. But our members need leisure time to meet the family, to meet the family needs, to meet their leisure needs and in the partnership we are developing family friendly policies and our members are already benefiting from the fact that we have back dated in the partnership parental leave for any employee with a child under 5.
Training is inherent throughout the partnership, throughout all of the pillars that you see there everything we discussed. We always came back to training being an essential part of what we were doing.
Skills flexibility - our members will benefit from the enhanced training. Partnership goes further than just in time training, it offers cross training, multi-skilling and lifelong learning, giving our members transportable skills.
A highly motivated workforce who's commitment and flexibility gives them a greater security of employment. We, as a trade union, have to have the confidence of the workforce, so within the partnership it is necessary for the company to support independent trade union organisation.
Within the partnership the union needs to be challenging but not compliant. The trade union brings its own perspective to the decision making process. That is recognised by the company and is valued.
Here we have the new structure. You'll recall that we had 19 bargaining groups and the core now denotes the partnership board. The partnership board will determine those terms and policies applicable to all employees regardless of status.
This meets Barry Gibson's single status vision. The only difference between employees in Littlewoods ultimately will be their pay.
An example of this so far, is the fact that all senior management have lost the use of their company cars. They have had their company cars taken away. Also the offices within Littlewoods have disappeared. If you visit Littlewoods main offices you will see that everyone works in open plan including Barry Gibson, including Pat herself, everyone can see everyone else and the move is obvious for every employee to see within Littlewoods in terms of the single status.
It also moves towards the trade unions objectives of fairness and equality. The partnership groups, which are the groups that are along the bottom of the core, will still have control over those terms and conditions which apply to their part of the business.
Developing responsibility to the partnership groups enables problem solving at the lowest possible level and helps each group retain its own identity. The new structures are meant to be user friendly and allow for flexibility and we hope obviously that that's going to work all the way down the line once we can get that into practice.
And so we look at the benefits, well the obvious benefit certainly for many employers would be that it looks more efficient since we've moved 19 bargaining groups down to 1.
Now what I would have to say is there is no doubt that heavy resources in time and money are essential to the success of the partnership and that has been the case throughout. The drawing up of the partnership to make these kind of changes requires major commitment from both sides.
Trade unions will need to be convinced that they will seriously be involved in the process of decision making before they give up long fought for negotiating structures. So if we are going to make the kind of changes that we've made in Littlewoods, which I think most people would agree is fundamental, then clearly we are going to have to believe that we are involved in the decision making at the highest level in the company.
Harmonising the core terms, will remove we believe, feelings of dissatisfaction amongst employees and we see that as major to the work that we will be doing over the next 2 years.
The flexibility which will benefit the business and the flexibility which benefits our members in terms of the fact that flexibility clearly, in this day and age where they are looking at 7 day working, needs to be able to make changes quickly and needs their workforce to be responsive to that. And that takes a great deal of understanding on the part of their employees and our members in meeting those changes, in being prepared to make those changes, and of course, we in return expect the company to consider our members in terms of the kind of flexibility they need in terms of looking after their family - women with children and the different needs of families today. We have seen an awful lot of that in Littlewoods and I have to say that we can quote, particularly in the core centres, where there are literally hundreds of different types of shifts, which prove the kind of flexibility the company is prepared to offer to our members, which is of great benefit to those members.
So the ability to respond quickly from the trade union is built into the partnership structures and essential to the well being of the company. Better communication more transparent decision-making, which will stop, we hope, our members and Littlewoods employees from feeling like mushrooms. Better understanding of the business decisions, is all key to how we see the partnership becoming successful.
Better trade union representatives, trade union representatives who can take part in the business decisions, who understand the needs of the business and who are able to make meaningful contributions, will be essential to the well being of the partnership.
Better trained workforce, without a doubt, will make a difference and everything we've heard today. It will go towards convincing us that it is essential that workforces, whether they are warehouse workers or computer operators are better trained and have skills that will equip them not only to work well within that company but if necessary to work elsewhere within the same company or to move on if necessary. I think Littlewoods takes that part of its commitment very seriously and we look forward to developing the training and lifelong learning programme that we have with Littlewoods.
Respect between managers and trade union reps plays a heavy part in what we've discussed in building the partnership principles. The respect between us will need to be there, will need to grow and develop at all levels, in order that everyone feels part of the new philosophy within the business and the changes that we as a trade union are hoping to make within the company and within our own trade union and working with the company.
So the real benefits of the partnership will be a successful business that our members are proud to work for.
So where do we move on then? In the next steps we have already signed an agreement. Last October Bill Connor and Barry Gibson signed off the heads of agreement. We had overwhelming endorsement of the partnership with 80% of our members turning out to vote 3-1 in favour of the partnership.
We are currently involved in board elections, so our members are currently putting themselves forward for election around the country and by the end of March we hope we can sit down to our first meeting with our lay members and Littlewoods directors in order that we can move meaningfully forward in terms of improving the terms and conditions for our members and hopefully improving the business.
Littlewoods
The retail and leisure group started by Sir John Moores in 1923, now employs some 27,000 people, half of whom are based in the North West.
Littlewoods is Britain’s second largest home shopping retailer and has a substantial high street presence of over 240 stores. Since 1998, the Group’s retail operations have been brought together, to create a single and powerful multi-channel retail business.
Partnerships are a key element of Littlewoods’ development strategy. Joint ventures are under way with Arcadia to develop niche catalogues, and with Granada on SHOP! The Home Shopping TV Channel. A joint venture with Woolwich now also offers our customers a one-stop shop for selected financial services.
Littlewoods Leisure runs the largest football pool in the world and Bet Direct - a new telephone sports betting service offering customers the convenience of betting from the comfort of their own armchair.
In the year to 30 April 1999, the Group’s turnover was £2,227m and profits before tax were £144.5m.
Last year, Littlewoods and its employees together made community contributions of nearly £2m. The Football Trust and the Foundation for Sport and the Arts each received £6.1m from Littlewoods Pools.
USDAW
Union of Shop Distributive and Allied Workers
USDAW has a membership of c310,000 and is the sixth largest union in the UK. It represents employees mainly in retail, but has sizeable membership in wholesale, food manufacturing, mail order, distribution, milk, and is the only union which operates solely in the private sector.
Typical occupations range from shop assistants to shop supervisors and managers, clerks, drivers, operatives, process workers, rounds staff and warehouse workers.
The union negotiates on an industry wide basis, a national company specific basis and at local level depending on the employer and the agreement with that employer.
Last year it signed a groundbreaking Partnership Agreement with the UK’s No. 1 retailer Tesco. This will see both sides working more closely in a spirit of mutual respect, encouraging dialogue to take the company forward. Usdaw has nearly 100,000 members at Tesco.
In 1998 it recovered in excess of £11.9 million for its members in compensation for industrial injuries or tribunal cases. The membership is around 60% female and 40% male and the union has eight geographic divisions covering England, Wales, Scotland and Northern Ireland.
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