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Interview with Karen Caddick, group director of human resources, Punch Taverns 05/10/2009

As the pub industry faces Challenges from the current tough economic climate and the smoking ban, Ellie Rich from Michael Page Executive Search speaks to Karen Caddick, group director of Human Resources for Punch Taverns about the changes she has put in place since joining the business in 2006

Interview with Karen Caddick, group director of human resources, Punch Taverns

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  1. About Punch Taverns
  2. What issues are facing the pub industry currently?
  3. What was the business like when you joined?
  4. How has it evolved since?
  5. How would you describe the culture at Punch?
  6. What changes have you put in place?
  7. How has the Ulrich Model worked for Punch?
  8. What made you become a HR professional?
  9. What do you look for when recruiting & CIPD views?
  10. Career history

About Punch Taverns

Punch Taverns is the UK’s leading pub company with over 8,300 leased and managed outlets. They have around 18,000 employees across the UK and at their Head Office in Burton. They have 75 within the HR team who are structured in the Ulrich model with HR Business Partners and centres of excellence.

What issues are facing the pub industry currently?

There are many issues facing the industry at present. The smoking ban two years ago significantly changed the climate. We lost some smokers from our customer base, but it also brought an opportunity with a shift in the customer demographic. Increasing numbers of women and children are coming back to pubs who were maybe put off pre-smoking ban. Consumer confidence has also fallen with the recession, however food has become a good growth opportunity in the industry. We are also dealing with many legislative pressures including an increasing focus on alcohol, the associated health risks, cost to the NHS, a more vocal ‘health lobby’ and a focus on the leased ‘tie’ model. All of these things have led to a climate of intense change in the industry.

The current economic downturn impacts on both our leased and managed pubs and we are working hard to support our lessees to be competitive and improve their offering to enable them to compete. Support for lessees is incredibly important - it’s a partnership and we are working hard to provide much needed support. Equally in our managed pubs, being price competitive is incredibly important through these difficult times and so we’re working hard to ensure we have compelling offers for our guests. The great British Pub is an important part of our cultural heritage and it is incredibly resilient!

What was the business like when you joined?

When I joined in September 2006, the share price had increased rapidly and was upwards of £10. We were right on the cusp of becoming a FTSE 100 company. The business had grown rapidly through acquisition after acquisition, the most recent of which was the acquisition of Spirit. Spirit’s offices were two miles down the road, but it might as well have been hours away because the companies did not feel integrated. The culture at the time was entrepreneurial with people very focused on the next acquisition, this is where the excitement came from in the company.

How has it evolved since?

It has changed a great deal. What we really needed to do was move the culture from being focused on acquisition, to being focused on great operational performance. There was also a need to ensure we had an organisation structure and ways of working that supported what we had become - a large organisation with 21,000 people.

We realised many synergies by pulling together our central functions to cover both the leased and managed divisions and through this we also started to build our ‘Punch’ culture. The organisation now feels like an integrated organisation with two divisions that share support and which benefit from sharing learning and expertise. We’ve heavily focused on building our leadership team to support this cultural change, and this has really paid off in terms of keeping our teams focused. The culture is much more focused on operational performance, excellence in guest experience and providing a great partnership experience for our leased partners.

We have been through a fair amount of downsizing over the last few years with the sale of over 900 pubs to Admiral and a couple of cost reduction exercises. We have also gone through a process of consulting with our pub teams on their terms and conditions.

Previously, we had 27 different sets of terms and conditions in our managed division, we now have one. So the organisation has been through a lot of change. We have, however, kept our teams fully involved and despite the amount of change in the business and the adverse external climate, morale has been sustained through a focused effort by our wider leadership team supported by HR.

How would you describe the culture at Punch?

Punch is a very ‘human’ and ‘down to earth’ business. It knows what it wants and we employ people who are really passionate about the product. It is very easy to get things done because it is an open culture and you can talk to anyone. The CEO is incredibly accessible to staff  and he has played a key role in maintaining morale and retaining great talent through a difficult few years.

What changes have you put in place?

In the first six weeks, I spent time getting to know the team and understanding the organisation. I presented my findings to the Board and that became the basis of the HR strategy, which I have evolved since with huge involvement from my team. I identified the need for a higher calibre leadership team within HR and have made changes including restructuring and also hiring some new people. I have worked with the team to unlock their potential; before I joined they weren’t really operating as an integrated HR function. We now have team meetings and I have regular one-to-ones with all of the function. I always ask them ‘what would you change to improve things in the business?’ which allows me to find out problems and help fix them.

I now have a brilliant team, some people have developed hugely and I’m really proud of them all. We have had a big focus on a number of key areas including improving our leadership capability and rapidly improving calibre in the business as well as saving the business money. We’ve been very successful and our HR strategy has added significant and recognised value to the business. We are recognised as being a very commercial function. We have recently had to put in place a pay freeze but we have made sure that, despite difficult trading, people still have a reasonable bonus opportunity skewed to reward high performers. This has helped us to maintain morale. We have earned
our credibility as HR business partners.

How has the Ulrich Model worked for Punch?

I believe the Ulrich model works well if you have strong commercial HR bsiness prtners who have a genuine relationship wth their line counterparts. We have worked to achieve this and
we regularly get fantastic feedback from our colleagues across the business. We were even voted best support function by our managed operators.

What made you become a HR professional?

I started my career as a graduate trainee in Royal & Sun Alliance and was always very quick to share my views on how things could improve! As a result, I was encouraged to join the Business Process Re-engineering Project in Liverpool, my home town. I enjoyed the people elements of the change project and started studying my CIPD, which I loved. I had a great tutor, Malcolm Martin, who I am still in touch with, and enjoyed the opportunity to network. I realised HR was the career for me and I have never looked back.

What do you look for when recruiting & CIPD views?

For me it was great. It really helped me in my job, and gave me the theory to decide HR was the route I wanted to pursue. I think being CIPD qualified shows commitment to the profession. I think it is less relevant for someone who has a proven track record in HR because they can demonstrate their ability and commitment through their achievements.

I look for commercial people who would share the values of the organisation. Our values are; Pride, Respect, One Team, Understanding and Do it once do it right. Out of these, I believe respect is the most important. I look for people who have done their homework and researched the organisation; it shocks me how many people don’t do this. I also look for pragmatic people.

Who do you respect in HR?

Imelda Walsh, HR director at Sainsbury’s. Stephen Taylor is also someone I rate highly, he is now at Camelot, he was a great mentor for me. I worked with both at Barclays, both say it as it is!

Career history

Punch Taverns – Group Director of HR
2005-2006:    Financial Times – Global HR Director
2003-2005:    Channel 5 – Head of HR
Barclays Bank Plc – Head of ER & HR
Policy & Practice
Royal & Sun Alliance – Graduate Trainee
& Operational roles, progressing to
Head of HR More Than
Masters in American Studies – Glasgow University
ACII Chartered Insurer
Ellie Rich, Michael Page Executive Search

Ellie Rich, Michael Page Executive Search