Podcast | Competency vs Culture: Striking the Right Balance for Your Business with Simon Drake of Hitachi Solutions Europe

Written by Dave Seddon on 19 Jun, 2023

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Transcript

Dave: Hi, and a very warm welcome to the changemaker podcast series, where we talk with individuals and businesses about the challenges they face when they're going through change and transformation. 

My name is David Seddon, and I'm very excited today to be joined by Simon Drake, EVP and UK General Manager at Hitachi Solutions Europe, a global consultancy, working in a combination of both public and private sectors, who do a lot of digital transformation within organisations, including things like ERP and CRM implementation, change management, data science and also analytics. They've recently celebrated their 10-year milestone and have experienced significant growth over the last few years. And it's about that growth and the impact that growth has had on recruitment and retention that I want to talk to Simon about today.

So to set the context, it may be useful to share a little bit about your role and what that encompasses within the business. 

Simon: So, the title of General Manager perhaps means different things within different industries and across different organisations. From a Hitachi perspective, it's a pretty accurate description. So how we choose to measure the overall performance of the country as a whole sits with myself. And that includes everything from sales through to HR policy, through to the quality of client delivery, and of course, the financials that sit underpinning all of those things. 

So a lot of my time is really spent assessing where I can do the most good at a particular point, or over a longer period of time. So some of it is very strategic, and some of it is much more hands-on, and actually, that variety is very enjoyable. 

Dave: So I’ve noticed you've been with the business for around 10 years, and you've probably seen quite a significant growth over this period. What do you think have been the key components to that huge success?

Simon: I think that focus and consistency are probably the two. It's the people having consistent sets of behaviours, ethics, trust and respect. Without sounding too preachy, if you can bring that right team together, and stay consistent, look as best as you can to hire people - not as robots but with those same core beliefs - you can teach the technology, you can teach a project methodology, you can teach a sales approach, but it's very, very hard to engender those core, humanistic elements from scratch. Especially with experienced hires, and a lot of our hires are.

Dave: And if you were to really refine down, what would you say the business's greatest assets are?

Simon: Well, the greatest assets are the people. And then I think without shouting out too much, Hitachi’s culture itself allows us to operate very distant from Tokyo, it allows us to operate in this fashion, you know, it allows us to make the entrepreneurial decisions to move forward within certain guidelines, without a massive command or control structure. 

So, there isn't a Hitachi guidebook from Tokyo that says, “This is the type of person you might hire”. I mean, there are some excellent traits. There are some things we'd like to do faster. But overall, it allows us to run the business in a way that we see fit. 

And that in itself is an asset; knowing that you'll be well-backed while being able to make autonomous decisions at a local level and build a team that you think is right for the job. And then, of course, proof in the pudding is whether you can deliver the business results that they're looking for. You know, there's no doubt if we'd set this culture up, and it hadn't delivered what Hitachi wanted, then there would have been changes, but happily, it's worked out well.

Dave: And I remember one of the things I think you shared with me previously, and it was almost a bit of a throwaway comment, but you said: “Happy people make happy customers.” And how do you think that actually manifests itself? 

Simon: So we're a professional services business that develops solutions and outcomes for customers. What we're looking for is customers that have got a good understanding of the results they want, and we try to understand from them very early on, what does good mean, what is it financially, operationally, and so on. And that's really simple, because happy customers pay their bills on time, they buy more things, and they recommend you to other people. 

But right in the middle is, you can't do that without exceptionally talented, motivated, happy, supported staff that are comfortable going the extra mile - and they need to, because these are tough projects. So there are always hurdles, there are always choppy waters, but you need them to feel that they're supported, so they can make innovative leaps and ideas without fear of censure. They may not always be right, but they've got to feel that they can be creative.

And if you're in an organisation where you have lots of unhappy customers who are not going to buy any more you won’t feel there's a future because you don't feel the company is sustainable. So those two are sort of symbiotic in our view. 

And then the third pillar is back to if we hit the reasonable KPIs that our owners want us to hit, then those three things just happen, and they are their intrinsic, but the middle bit is the people. You can't achieve the first one without the right people. And you certainly can't achieve the third one without the right people. We have high standards, we expect high performance.

Dave: And you will have seen businesses that just concentrate on the bottom line profitability and actually, you end up losing profits as well, because you're not looking after your people and you're not looking after your customers. So I think it's a sense of balance, but it's about focusing on those things which are really important. And profit is important, but I think it comes naturally if you've got a great solution for great people with great clients.

Simon: Yeah, and if it's your only metric of success, then you know, forgive me, but it's pretty short term and it always catches up. There's always that snowball of short-termism because you're not looking at those other facets. And eventually, customers will tire or staff will tire, or normally, both.

Dave: One of the things I wanted to ask you as well is, especially given your role, in your opinion, how important is it to be proud of what you deliver to the customer?

Simon: It's really high up there. I think there is a satisfied position, which is that we did a good job in difficult circumstances. It's terrific. It's a great objective. But yes, that sense of pride is what carries people on to the next piece, it's what makes people recommend us as an organisation to others, because they're proud of what they're allowed to achieve, the types of customers we pick to work with - which is an interesting topic in itself - and then what their teammates have delivered as well.

We always look as best we can to celebrate that success and make people feel proud, even sometimes when we haven't even finished. Because sometimes you just get to a point and go, there's another six months of this and you've got to be so proud of the fact that you've got two-thirds of the way through it and it's still on track, and we should stop and celebrate that we shouldn't wait six months.

Dave: Yeah, really good point. And actually, you've mentioned it a couple of times before about developing the right culture. So how would you describe that culture at Hitachi?

Simon: It's around collaboration. And trust is a big one because it's trusting other people but also trusting that you can speak your mind. As briefly alluded to earlier, that's very open at Hitachi. You know, nobody in our organisation has or ever will have an office. And in truth, we lose some customers because, in our mind, we tell them the truth. And we may not be right, but our belief is that something is achievable in a certain time, within a certain budget, with a certain technology set or whatever all those criteria may be, and if that doesn't meet whatever their demands or desires are, and we genuinely don't believe we can achieve them, then we'll walk away. 

So trust is an interesting one in that you can trust us when we tell you that's not possible. It is an interesting message we have to give across, and we go back to the consistency there, that's been us all the way through; tell the customer the truth as best as we can ascertain it with the information we have available at the time. 

So I have to give those caveats because we're not perfect, we make mistakes. But we won't do it knowingly. And I think there's a sense of trust across the business. And if we find the right customer that buys into that partnership piece, then they like our culture as well, which again, isn't every customer, we're not for everybody. And that gives it the maximum chance of success.

Dave: Yeah, but I think the very fact that you've mentioned that you will walk away from businesses is a good testimony of what you guys are about as well. And that often leads to a better team culture. I've certainly seen organisations in the past where it's all about you sell it, and then worry about how you're going to deliver it.

I guess, leading on to that culture piece you mentioned earlier on, how much do the Japanese influence culture within your business?

Simon: I think the number one element of Japanese culture that helps us the most is that they take a long-term view. And they understand that great things can happen that you couldn't predict, you know, a customer can suddenly say, “Hey, fantastic, we've been hugely successful. And we'd like to do more in a way that perhaps wasn't forecastable.” They also understand that there were dips and bumps along the way, and that long-termism gives us space to breathe as a management team and then apply those principles.

Dave: Well, I think that long-term view depends a lot on your cultural aspects which you've talked about earlier on as well. 

Now, I want to go into more of the recruitment stuff. So how would you build that culture and those values into your interview process?

Simon: There are a few elements there. You already mentioned that internal referrals are terrific, because people who are here know what it's like, and if they think somebody else would enjoy it, that's a great start. But equally, their own reputation is on the line to a degree, so they're going to want to invite people to take a look that they have a degree of trust and belief in as well. So that's all great. 

If we look at our sources of new joiners, we, like anybody in our industry, will use agencies to help us. Making sure that those agencies really understand our culture is the first step. And that requires effort and investment, but in our experience and belief, it pays off. So if you view them as an extension of your own organisation, rather than a third party working to a bunch of metrics, you're likely to get better results, they're likely to filter better, and take the right message out. And in fact, we do get that feedback. It's always brilliant in a final interview to go, “I spoke to the recruiter, I've spoken to other people and I’m speaking to yourselves, and actually, the story has been the same all the way through.” 

So getting that right, and then making it a default part of any interview is key. So, what kind of culture are you looking for? What kind of culture do you enjoy? What aspects of other working cultures have you really liked? And actually, what aspects perhaps have you seen elsewhere, without naming names, that you’ve disliked? And then we can take that information and map that against how it is here. 

Dave: You must do a lot of interviews as part of your role, so how soon into the process do you think you can recognise whether someone's not right for your business?

Simon: So there's a little difference whether it's remote or face-to-face. I'm a huge believer In face-to-face, you can read so much more. And Teams, of course, over the last few years, or whatever you use, has become a key part of any interviewing process. 

Sometimes it can be literally seconds. We had a sales candidate a few months back who came in, and we asked them to introduce themselves and they pulled a bunch of triggers around what they thought was essential to be a salesperson. And they pretty much missed every single mark that we would look for. Again, very well presented, very experienced, clearly been successful elsewhere, knew the technologies we operated in, but you could just see if they landed, it would be disastrous. 

Now, we did give them some recovery options during the interview. Had they been badly briefed? Did they not understand our culture enough from the prior interviews and they thought those were the answers even if it wasn't really them? So we did ask a range of questions just to double-check whether they thought that was the right thing to do even though they didn't really believe it. But it turned out they did really believe it. And it was well, sorry, it's just not going to work. So that was literally seconds.

Dave: So even despite some of the hints, the candidate still kind of progressed down that route?

Simon: You do question somebody's sales ability there. They're just not listening. But yeah, that was literally seconds. 

Sometimes, you've got to test the distinct competency, so we might have one of our lower EQ people interview somebody for the specific competencies in the skill set we're looking for, but also, we have a subset of people that have a higher EQ and cultural level, that are going to be able to look for those behaviours and those instincts of people. We very, very rarely now make an offer to somebody which is accepted, and they join, and two or three months in, we realise we've made a mistake.

Dave: One of the things I find is interviews are very false environments, both for the candidate and for the business themselves. Very few people have been trained in interviews. So you get two dynamics; you get a candidate who comes along really nervous, with often a client that is a bit nervous and not sure what to ask, and then you churn through a number of questions and expect to get something great at the end of it. 

I really like the fact that you actually pull people into the business that are just as much about the cultural fit as it is about the competency of it. And clearly, you've got to test on the competency bit, can they do the job?

So I was going to ask, how much is it about cultural fit versus competency fit?

Simon: I guess a really succinct answer would be, we'd never veto somebody on lack of skills or experience, but we'd absolutely veto somebody on lack of cultural fit. So I possibly couldn't give a percentage. That's the best answer I could give.

Dave: And the other bit I was going to ask was, over the years, have you built a process that you take people through? Or does it change for different types of roles?

Simon: I think we have refined it over time. A lot of this was born out of necessity. In a way, there’s always been high competition for good people. In the particular segment we're in, the Microsoft Dynamics talent pool where we started is a fairly small one compared to some of the other large vendors for a whole bunch of historical reasons. So we've had to learn to be quick. You know, we can't have an eight-stage interview process, because halfway through somebody will just say, ‘Look, I've joined somebody else’. So we can't be doing that. 

We've learned from some mistakes, as you should do, and now, however people find their way to us, we generally trust that the early filter has been done. And if I look at it across all of the functions, it's pretty much a, get that early cultural affinity done, then there'll be a quick sanity check on competency and skills, and that's probably it at that point. That's probably going to define at what level you start within the organisation. 

So if there's a great cultural fit and experience early on, I mean, it's 80:20 this, there will be that competency check, where do we think you really sit with your experience and skills vis-à-vis what we already have? You know, if you bring somebody in at a higher level than the six people who've been here for four years, they’ll go, ‘Hang on, that person knows less than me what's going on?’ So we look to avoid that. 

And then we'll have a final generalist, I guess, interview with myself or one of the other senior management team, just to double check that cultural and behavioural piece. And we have a bit of a rule of thumb that it probably takes a couple of years for somebody to really embed and for everybody to feel comfortable in our organisation. And I don't mean just generally happy and well looked after - because that should be from day one, and we've put a lot into our induction process to help with that - but it's more knowing what you can and can't say in a particular situation, knowing when you should ask for help, knowing how we present ourselves to clients, and tell the truth, even if it's painful, and ask for support and don't try and hide things. All of those things take a couple of years for people to reach that great equilibrium point of feeling properly part of the business. Some people are quicker than others, and there’s a lot of investment from the individual and a lot of investment for ourselves. So it's worth that early time across the business to get it right for the individual as much as for ourselves.

Dave: And what about things like the increase in hybrid working or four-day weeks? Are people wanting more flexibility built into their roles? Or is that something which you've done for a long time anyway, irrespective of the market?

Simon: Probably more the latter in truth. We only have one office, and we couldn't accommodate all of our employees in one office anyway. The majority of our people have been home-based from day one. Again, that was a bit of a necessity, because we only had a tiny office when we started.

Dave: But you were ahead of your time even then.

Simon: Yeah, I'd love to claim credit for that but we didn't have much choice. But I mean, the bulk of our time, we expect people to be out with our customers driven by the customers' needs. But sometimes we have to say, look, we need you to be on-site for that, otherwise, it won't be as effective. So I've not personally seen a big difference.

Dave: It’s one thing recruiting in a difficult environment, but it's another, I think, almost bigger challenge retaining those people in a very competitive environment.

So you've got them in, it's now about sort of keeping them. Just wondering how you retain your staff?

Simon: The HR team has done an excellent job maturing our career planning and development policies. We've got some structures and processes in there that people really appreciate, whether they've come from a huge corporate or more mid-sized business, we're always refining it. 

It strikes a good balance between owning your own future and people supporting you, and also giving you a bit of a nudge and a prod now and again to make sure you are thinking ahead and not allowing yourself to stagnate in any way. So if people are happy and enjoying themselves, and they're having a bit of fun now and again, most of the time they can cope with the difficult stuff. 

So 85% of our workforce are our billable consultants working on billable clients of whatever shape, size or form. So if they feel that the organisation has their best interests at heart, one, because that's a good ethic to have, two, because that's the right setup. Finding good people and retaining them is tough, so now we're just trying to make it good in a way that helps our team, helps the customer and doesn't cause us too much business pain. That is it really, I don't think there's any more magic than that. Have a good way to allow people to progress, stick to your principles and let people have a voice when they need it.

Dave: I mean, one of the things I've noticed as well, is you do quite a lot of charitable work and giving back. Do you think those things are an important part of the cultural aspect and making people feel a bit more like part of that family?

Simon: Yeah, so we've always been, I think, supportive of charities or allowing people to volunteer for a particular time. But we hadn't, I suppose, until a couple of years ago really formalised it. In truth, we might have had a chosen charity of the year or whatever, but it wasn't quite as formalised and we hadn’t done that until we'd reached this scale and the mass where it was the appropriate thing to do. 

And I've seen a lot of positive reactions from that. So yes, I do think people appreciate when an organisation is looking to do that. Because of that, we do a lot of public sector work. And that's now a central part of what we do, and again, that is a good thing, as long as it's sustainable to a degree. 

You know, we have a public sector client that we have to commit a certain amount of time per year to planting trees. And I think that's terrific. And the staff feedback shows it’s becoming more important and part of what they look for in a company. So it's good for the end recipient. And it's good for people as well.

Dave: And how do you think you're going to retain that family business as you get bigger and bigger?

Simon: Actually, I was going to ask you, Dave, how do we do it? Joking aside, it's ensuring that the management team - and we're not hierarchical but you have to have some degree of structure otherwise, it's just chaos - stays consistent with everything we've discussed. And if we do that, then I think we'll have as good a future as we've had progress so far. That takes effort, but we've identified it. We're investing in management teams, not just in this country, but also in our talent hubs in other countries in Europe, and looking to replicate the same training and the same core beliefs and ethics. And I think if we do that, then anybody that joins, wherever they join, will be hearing the same message. And if it's a message that they like, then hopefully they'll stay.

Dave: No, I think it's a great message. And I think you've shared some brilliant insight today as well. Thank you ever so much for your time and your openness. Really appreciate it.

Simon: Thank you, Dave.