#2: Steve Carpenter - Season 1, Episode 2 - Talent is Everywhere!
About The Episode
In this episode, meet Steve Carpenter, who shares his stories about the link between talent development and culture – how companies must develop talent from within to protect the culture that made them successful, while also bringing in new people to maximize potential.
Talent is Everywhere is a podcast for people leaders and HR teams who are passionate about education in the workplace to develop all workers.
We explore ideas on how to keep talent and how to develop talent in order to create the virtuous circle that builds strong businesses.
We’ll interview leaders to hear their experiences of how they invested in people.
I think I think people businesses are generally better at the tools and giving very tangible skills to the manager, quite to a lesser extent. But I think that’s not too difficult. It’s quite easy to just put a load of managers through that type of training.
Hi, I’m Sylvie Milverton, CEO of Lynx Educate. This is “Talent is Everywhere”. We’re here to talk about how to keep talent and how to develop talent in order to build a strong business. We’ll interview leaders to hear their best experiences of how they invested in people.
Hi, Steve. Great to have you on our podcast. As I always say, the best part of having a startup is getting to meet interesting people. And I’m especially looking forward to hearing your stories because you can approach it from a couple of sides who’ve been obviously deep inside companies with known brands. You know, Krispy Kreme, Cafe Nero. You know, and now with your role as an external consultant with your own venture, Three59, helping HR Professionals move from operational to strategic leadership. You know, when you’re planning this, you sort of framed up for me how you think about companies being successful and less successful in their people development strategies.
So maybe we can start with that. How you see the extremes of how companies often approach these challenges.
Yeah. Hi. So it’s great to be here. Thank you for inviting me. And yes, I think, you know, the conversation we had was I spend spent most of my career in, I guess what I’d call scale-up businesses or businesses have just come through that scale-up phase.
They’ve been successful startups and they’re now beginning to grow quite quickly and they’re trying to navigate their way through this. How do we move from this? All hands on deck while your sleeves up get the job done? Because that’s what startups have to do to be much more structured, much more organized, and much more professional. And I’ve seen businesses take two routes. Both have their weaknesses and I’ve seen some businesses fail on those. So I think the first one is really that classic one of the startups has a lot of loyalty to the people who got there in the early days. I think you know what it’s like. So we don’t know where where people are. They get stuck in.
The founder feels really loyal towards them, but the risk is that those people quite quickly run out of steam. And when the organization gets to a certain size, they’re limited in experience or skills or, you know, just what it takes to get it to the next level of growth. And then the other side is the businesses have tried to compensate for that by buying the talent since they’ve gone out to larger businesses and they’ve looked for another new marketing director, a new HR director or someone who’s worked for a much bigger organization, and they brought in the skills and knowledge.
Then you start to see it creaking because the culture starts to be put under pressure and the heart and soul of what’s made the business successful in the first place starts to crumble a bit. And often you’ll lose some of those loyal people as well who feel they’ve been passed over for promotion. So there seems to be two extremes that happen in those growth phases. Both have their weaknesses. Now unfortunately there have been businesses that have suffered from one or the other of those at some points in my career.
And do you think it’s you know, do you think it’s the root cause of that? You know, from an overall leadership perspective, do you think it’s, you know, not understanding the important role that people development and human resources takes in these kinds of businesses
This is an interesting one now. I think there’s definitely something around that are mostly founder-led organizations, so typically the founder hasn’t been through that journey themselves. So they don’t know what they don’t know. And there’s a lot of focus on what’s this week, what’s this month, how do we deliver this year’s performance. So the the kind of forward thinking is lacking both in terms of time and energy, but also in just the experience of the leader. The founder often becomes the CEO, incredibly passionate.
It’s really important that they’re at the helm still, but they lack some of those more traditional strategic approaches to people. You know HR, often as an example, seen as a very operational, responsive department rather than a real partner that’s helped grow the business and that’s just the lack of exposure to it, I think.
Right. And so if we’re thinking so, obviously there’s like a better sort of middle ground where we would ideally be, you know, anticipating the growth needs, looking at the current employees, you know, thinking about how to build them into the next role. How do you think about that, you know, middle option and what are some examples of where you’ve seen it successful?
Yeah, I think I’ve been fortunate. I’ve seen both sides of that equation kind of fail, but also some organizations that have been successful and I’ve been part of helping them be successful as well in in a couple of cases. I think the middle ground is you’ve got to protect your culture and the heart and soul of what’s made you successful.
That’s really, really important because as soon as you give that away, you never getting that back. But you do need to build in the capability to grow to the next phase. And I think the key then becomes strategic development. It sounds a bit sounds a bit too highfalutin, but it is thinking about developing people for the future earlier than most startups or scale-up businesses think they need to.
I think it’s a lot of learn as you go. You can build the skills as you go, but at some point, if that business can take a pause and look at its senior people, you know, heads of function, and think how do I turn a “Head of” into a “Director of” or a more, you know, “Chief People Officer” or a “Chief Marketing Officer” before I need to?
They can then go. And that takes a very deliberate pose and plan to build those capabilities. But what you’re retaining is obviously the loyalty, but also that the heart and soul and the cultural parts of the business that once that’s gone, you’re never going to pull that back in the box again afterward. So I think it’s it’s having a people strategy of people development strategy earlier than you think you’re going to need it.
And when you talk about culture and, retaining it, I think about this a lot, trying to, you know, have a framework for hiring people. What I try to do is, establish the values of our company. And then the first screen is, “Are you aligned with the values?”, and then you start getting it is somebody who wants the job, do they get it? Do they have the capacity to do it? How can we help them?
And so when you’re talking about, you know, once you’ve lost the culture, it’s gone. Do you mean that, certain people align with values and that if you’ve brought too many wrong people and you lose your culture, or is it the opposite of there are certain people that are really representing the culture and you must retain them, like concretely, how do you how do you relate that to people?
I think it’s turning the culture into something a bit more tangible. It does start with the values and that needs to be aligned to the mission and the type of the organization you want to be. But the culture comes through in how you do things, your process of doing business, you know, are you a business that is happy for a lot of autonomy and people to make decisions in the moment because that is appropriate for your business?
Well, are you a business that likes have process and system and the right levels of signoff, neither is right nor wrong is appropriate for the business. But what I’ve seen with smaller businesses where it’s very autonomous to a degree, not fly by the seat of your pants, but make decisions quickly, be agile, and move forward, who then bring in people from larger corporations. They’ll often bring in people who have the only way they know how to do things is the large business way of doing it.
So the first thing they do is put in processes and systems that rub against the way of doing things in the organization. And so when I’m talking about culture, it’s not so much about values because I think a lot of people can align and that’s quite easy to spot, but it’s how you execute those values, how you put them into practice on the ground that is really, really important to move from being on sort of a low administrative burden business to a high one or vice versa because that’s where it starts. It starts to break down.
And then how do you think about the idea that you do have to anticipate development needs? I mean, so obviously in a perfect world, when someone has time to sit down with everyone and really think like, what’s your career path? Where are you developing? But, concretely, like let’s say a scale-up of 50 people with 100 people, that you’re going to, need to grow by, double digits of 50% the next year. Concretely, what is it? Is it enrolling people in programs? Is it giving access to learning? Like what? Like maybe you have an example, from a somewhere else where you’ve been, where you were able to see a pretty successful way of thinking about building that talent pipeline.
I think a good example is when I was a Hotel Chocolat it was a private business, but it was getting ready to IPO. So still quite small, but getting ready to move in to kind of be a bit more of a grown-up organization. Very, very successful, fantastic brand, fantastic product. And the operation ran really, really well. But there were a number of things that needed to be different for investors in the city to take the business seriously. So there’s a lot of work going on in the background in all functions, finance, the manufacturing processes, but from a people’s point of view, the focus was very heavily on leadership capability because being a small startup business growing very, very quickly.
What it had was a lot of kind of specialists who worked in quite siloed ways. So everyone was very good at what they did and the leaders of those functions were very focused on doing the best thing. Patrick Lynch Tony actually describes this as being like a team of people where you’re just adding up the scores and hoping that the scores give you the wind in the spokes rather than working as a real team across it.
So moving people from that is from that vertical leadership of functional leadership into a more horizontal leadership. So the investment in people was firstly put into how to develop that leadership capability for those leaders because then the plan was so that would sort of flow down through the organization as it grew. So I think that was a really good example.
So the effort was who are the most influential leaders in the business? How do we move them from being just the marketing head or just the HR head or just the manufacturing head to being a business leader who had a specialism and that wasn’t to shape the program, but it was a combined program of taking leaders through to the next level. What it also did was create an environment or start to create an environment of actually learning is important to this business because you need to start from the top. If your leaders don’t believe in learning, then why should the rest of your organization? So it set the set of stall out for the rest of the business too.
Yeah. Now that’s really interesting. And I’m wondering, it’s interesting because we know like learning is important. Like no one’s going to argue that it’s that it isn’t. But if we go back to some of the examples that you had that, didn’t work, I’m sure if we talked at the time to the CEO, he or she would have said, of course, learning is important. Of course, people are at the center of what we do. But you know what? Why not? Like, why didn’t it work? What? I mean, or perhaps I’m wrong. Perhaps the person wouldn’t agree with that statement.
So I can think of two organizations that I’ve worked with on this topic, and they both went in different directions. One became over-corporate and one fought against it and struggled as it grew because it didn’t have the right environment to grow properly. I think the latter was a “No, learning is not as important, let’s just sell as much as we can, we’ll make some money, and then where we invest that in selling more.”. So it was more, it was a very narrow view and that that was more your latter approach. I think the former was more probably just a lack of hindsight and I was involved in these businesses after the events.
I’m kind of unpicking it afterwards rather than having gone through the whole journey. So some of the speculation, but I think they they were successful. They didn’t see the need to be different in the future. They thought their success was almost keep doing what we’re doing and we’ll keep on being successful, but not appreciating that both the environment that they were operating in and the size of the business would conspire against them to say, No, the world’s changing, you need to do things differently.
So there was development, and there was training put in place, but it was very much about maintaining the status quo rather than accepting that the world will be different in the future and therefore we need to adapt to it before that happens.
Now that makes sense. And I spent a lot of time thinking about like types of learning like that. There’s some kind of learning that’s like, day-to-day knowledge transfer, like just information has to get into the brains of people so they can do their job. And then there’s some sort of secondary type of learning, which is, we call it deep skilling or career development or talent development, which is, to move people, on into that next way.
And my sense is that companies overinvest in the first kind and then forget to invest in the second time. And a lot of it, I think, is because they think that only the most senior people need those really, deeper or more developed skills. But probably in the example, you say if those companies had thought of those kinds of skills for some percentage of everybody, it would drastically change the culture and the capabilities of that company.
It’s interesting that because I hear a lot when I speak to L&D people about the is it the 70-20-10 model of learning. You know, 70% is on the job, 20% is kind of self-taught, I think. And 10% is kind of more formal, structured learning and is often used as a way to push back managers who say we want training courses and it seems kind of almost a defense mechanism and I don’t know how accurate or scientific the 70-20-10 is, but it feels to me, from what you’re saying, is that 10% does need more attention and maybe more deliberate focus.
It doesn’t need to be all of the training, but there needs to be an element of what does the unknown future hold for you and what would you need to have in your armory in readiness for it? As opposed to how do you just be good at your job or what your current job now? And the world’s moving at a rate of knots now. I mean, this year has been super scary with AI developing, and if people aren’t thinking about two years down the road, they’re going to get left behind very, very quickly. I guess they probably always have been.
Yeah, you’re right. And that’s so interesting. You talk about that 70-20-10 because that actually drives me a bit bonkers because it makes it sound like 10% is important. But if we flip it and imagine a company of 100 people now what if ten got one? Two had an amazing, amazing course to become a manager. Three were like learning how to apply AI on the job. The other two are learning new sales and new negotiation skills and the other ones like becoming a digital marketer.
Like you’ve just completely transformed your company. Like 10% is a massive number. In fact you would probably be fine with 5%. Yeah. And so that sort of 70-20-10. Yeah, I agree with you. It’s sort of yeah, it diminishes. And you know, another thing I want to ask you about, you’ve often told me and I learned a lot from this, that, the most important thing is managers like the way to maintain and motivate people is really investing in managers.
And I feel like managers are the ones suffering the most. They have so much paperwork, they have so much responsibility. Yeah, I would love to hear like how should we do it. How should we invest in managers and especially managers who are like in these frontline customer facing jobs? Like what is your recommendation?
Oh this middle manager piece. Yeah, I was told this when I was at Caffe Nero. I was introduced to this concept when I was a HR at Caffe Nero it was around the time that Clinton was, was president in the States and he had that famous it’s the economy stupid line. And we, we adopted the it’s the manager, stupid. You know, if there’s a problem in a store and we worked in retail at the time, if there’s a problem in the store, 95% of it will be linked to the manager.
And it is a very successful store. 95% will be the manager. We just need to get our heads around that. And that’s not always meaning that the manager themselves is the problem. It could be that they’ve not been trained well or developed well. They’re not being led or motivated appropriately or supported. So but that was the hub of everything. And I think in this middle manager role is it’s squeezed because there’s so much pressure on them from the top to deliver.
There’s a ton of people challenges when they’re trying to lead to manage their team and they have the least amount of, I guess, flexibility and freedom to do anything about it. Their reliance on above and below and probably certainly my experience in retail, so many have been over-promoted and there’s there’s been a bit of a sink-or-swim mindset in the organizations that I’ve been exposed to.
So if you were going to say, I’ve got a budget of X, but I’ve got far too many people to develop, I would say invest the majority of it with the middle managers, because that’s where the real impact is going to be. People at the top, they’ve got that because they’re successful and they’re probably going to carry on being successful in their own measure. The people at the frontline will benefit from having a better manager. If you can invest development and other things into a middle manager, I think it’s the biggest bang for your buck, the biggest leverage.
Interesting. And so what kinds of things would you recommend, like a manager, like coaching or people skills or also even just practical skills like using tools or analysis, all that.
I think people, businesses are generally better at the tools and giving very tangible skills to the manager, quite to a lesser extent. But I think that’s not too difficult. It’s quite easy to just put a load of managers through that type of training. I think coaching would be fantastic and I think whether it’s the 1 to 1 coaching, group coaching is taking on a much bigger role in business nowadays or even online coaching I think it is really pushing forward.
There’s a lot of AI stuff coming out now, isn’t there, in terms of in terms of coaching. So it’d be interesting to see where that goes. But I think anything that helps the manager’s soft skills is I’m not I just hate that phrase, but it’s because they’re so powerful. But it’s the ability to manage themselves as individuals. It’s the ability to manage teams, the ability to manage upwards.
I think they’re the the bits that would make the biggest difference to managers and where I’ve seen that. So go back to Hotel Chocolat again. We saw a lot of great impact from that sort of approach by focusing on that population. If you are in retail hospitality, where you have the classic structure of a site manager, an area manager, and then the support office or head office, I would go area manager, issue number one priority, and you site manager, issue number two priority.
Everyone else will benefit from that as a kind of trickle-down or other some sort of other effect. They would be my two biggest areas.
Hmm, that makes sense. And, maybe you can also share your own story and how you were supported like when you were at T.G.I. Fridays and Pret A Manger that you went from some, frontline roles and then marketing and HR. You maybe just tell that story and also how you were supported in those organizations to develop yourself, to be able to grow.
Sure. I mean, I’ve been so lucky, Sylvie. I think in some respects I’ve landed in some places where I’ve been too lucky and it’s made me a bit kind of rose-tinted glasses to the rest of the world. So I started my hospitality career with TGI Fridays just as a bartender, and someone came along and asked me to go and work in marketing for a year. And the reason they did is they wanted somebody within the organization who knew the brands, who knew the business, and they were happy to invest or accommodate my total lack of marketing experience.
And it was just a blast. Had a brilliant time. Got to learn a lot. Probably the biggest lesson was I didn’t want to be in marketing for the rest of my life, which was a good learning, but actually the exposure was just was just incredible. I then went back into restaurant management and having spent a really good time there, but a lot of credit to the Fridays leadership at the time of saying take internal people and put them forward.
And then like a lot of the Fridays people at the time, moved over to Pret A Manger in the very early days, I think we had about 35 or 40 sites at the time, so much, much smaller than it is now. And I was there for about six months and someone came to me and said, We need someone to do recruitment.
We don’t have any internal recruitment. Can you do that for us? And again, they were taking an operator and saying, we know you don’t have classic recruitment skills, but we think you can add more value because of your experience within the organization, and that six months in recruitment has turned into, a 25-year career in HR. I didn’t even know what HR stood for when I first made that step. So I’ve come. I’ve learned that now. But some have come a long way since.
And I just think full credit to both Fridays and Pret and I wasn’t the only one. Lots of people benefited from that, too, saying a good person. They’ve got an understanding of the organization. They know the culture. We can find a way to compensate for their lack of knowledge in that particular topic because that’s trainable. That’s something that they can learn. So yeah, I love it. Unfortunately, as I moved through my career, I realized that they were quite good relative to a lot of other businesses. So it’s been a good template for me to try and implement in the businesses I’ve worked in.
Yeah. Now that’s amazing. And that’s I mean, that’s totally my inspiration for starting Lynx, but it feels it’s so obvious and so good. And I guess the conditions that allowed that was leadership who realized that you know, back to your first point, the culture, the kind of company, the way we do things here, the kind of people, the kind of work ethic that’s pretty hard to keep rebuilding.
But what’s actually fairly easy to do is find motivated people and train them with pretty tangible skills, whether it’s leadership management or other things. So now that’s a totally inspiring story. And in fact, when you hear it like that, it feels replicable. Like it feels like, listen, the companies can and should put this sort of thing in place. And again, how many people were working at bartenders at TGI Fridays? Right. It’s probably lots. And maybe some percentage of them would be the ones that could have followed the path that you did. Not all of them, but the fact that you say many, that’s created that amazing culture and talent pipeline.
It was great actually, and when I worked at Krispy Kreme, my last role as after six years in the CEO, there was an ex Fridays manager who I worked with. He was quite junior when I first met him in Fridays and we spent many a time reminiscing over the numbers of people that Fridays kind of hired as fairly junior roles and now are very, very successful in their careers. And they all put Fridays down as the key reason for unlocking that. And I think Pret was a very similar example. So it pays massive dividends for the individuals and obviously the business benefits from it as well.
I love that story. Plus, I loved when I was in high school, TGI Fridays was like our go-to hang-out place of, hamburgers and chocolate sundaes or whatever. So little did I know that I was such a and I can admire them as an employer and have nostalgia for my high school outings. So I want to ask you a few other things. One is so now in your Three59 so when you’re working with HR Professionals. What are the kinds of projects or you know what? How do you like all this experience you have from Krispy Kreme and all your other jobs? How are you applying that when you’re working with clients today?
And so the thing I’ve been focused on most over the past few months and pushing heavily into next year is helping HR Leaders in sort of small or scale-up businesses similar to the ones I joined and become more strategic and help them start to get ahead of the thinking curve. I think this what I found personally and from a lot of people I’ve spoken to in the last year is HR is seen very much as an operational function that’s there to do processes pick up the pieces when things go wrong, help people out who need support.
Larger organizations get the kind of the strategic forward-thinking parts of HR. But smaller businesses tend to miss that or think it’s something for further down the road. So what I’m spending a lot of my time now doing is working with Heads of HR or HR managers and helping them develop that capability so that they can move from “How do I fix today’s problem?” to “How can I prevent tomorrow’s problem for me from being a problem in the first place?”. It’s not big, complex strategy. It’s relatively simplistic, which is right for these businesses. So I’m not pretending that I’m going to deliver it for a 10,000-employee company.
But certainly, if you’ve got 200, 500 people in your business, you need to think strategically to a certain extent as an HR Professional. And that’s the role I’m trying to play for a lot of these people at the moment.
Yeah. that’s amazing. You know, I feel like we’re in the right line of work because it’s like the bar is so low. There’s so much work to do that the return, the benefit of it is massive because it’s you’re right, so operational. And listen, our company is smaller than that. And even I spend a lot of time thinking about roles and org structure. And that was one of the things I learned quickly. It’s like things that I thought I didn’t have to think about yet at all.
In fact, I spend a huge amount of my time and it’s the correct time. But so I can imagine with 500 people that having support for thinking, yeah, is great. Yeah. And so then a last thing maybe I know you like books and you read a lot. Maybe. Do you have a book reco that you could give to listeners?
Yes. I kind of knew this question was coming, so I’m going to go for two. Is that cheating?
Yeah, that’s fine. Two is great.
One goes back to the start of my self-development focus and it goes back to Fridays. And I had this. I had loads of amazing managers by this one brilliant manager, a guy called Mark in Fridays in Kingston upon Thames, which is where I first started. And he introduced me to Stephen Covey’s “The 7 Habits of Highly Effective People”. And it’s just effectively become my Bible for life, both in terms of work and life. It’s just the most amazing, timeless book for how to think about things in just incredible. So if you haven’t read it or somebody hasn’t read it and listening to this, I really encourage you to read The Seven Habits.
On a more sort of recent note and again, I got introduced to this a few years ago, but I’ve paid a lot more attention to it in the last year as I’ve set up on my own, is a book called “The Strategy Book” by an author called Max McKeown. And he has and it’s not people strategy per se, it’s strategy in general. And he’s taken a very complex topic of strategy and made it very accessible or very pragmatic for people. So if you are thinking about I need to be more strategic, I would suggest going and getting his book because yeah, it’s just fantastic.
Great, great recommendations, which we will link to in the notes. Well, thanks for this. It’s been great, Steve catching up and we’re recording this before the holidays, so I wish you well over Christmas and the New Year has been great to have this conversation.
Fantastic, and have a great Christmas yourself!
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