A high performing workplace with engaged employees is critical to the success of any business. According to a FastTrack360 poll, over seven in 10 executives cite employee engagement as central to business performance whilst a separate Gallup study highlights a profitability boost for companies with better workforce engagement. Yet there appears to be a general high-performance misstep of sorts. Many businesses are seemingly not fostering a collective of ready-to-drive-high-performance employees – Gallup’s State of the Global Workforce report found that 85% of employees are not actively engaged – leaving serious questions about how many organisations realise the potential of their employees in order to drive the business forward.
One business taking the performance-engagement dynamic seriously is McLaren Racing. Recognising that, in recent years, business performance wasn’t quite where it needed it to be, the famous racing team made tracks to get onto ‘recovery road’ as Daniel Gallo, Director of People & Culture at the organisation, exclusively tells HR Grapevine. This included transformation for both HR and the business – with a focus on the clarity of the latter’s purpose. This transformation would re-examine organisational effectiveness and the business culture, as well as how McLaren’s people engage with, and experience, work at the organisation in order to drive the holy grail that is high performance.
Daniel explains: “From me coming here and why my role was created – it was a brand-new role – the focus on people and culture was a very clear indicator that my boss [Chief Executive Zak Brown] understood that part of that recovery and fundamental to that recovery was us really focussing on who we were as an organisation, and to be very clear about who we wanted to become.”
Recognised for its sporting history, the McLaren brand is intrinsically linked to high performance, therefore it’s no surprise that the business is concerned with making both the organisation itself, and the individuals within it, work at a high level. It therefore makes sense that culture and output are aligned in their purpose (a crucial part of McLaren’s transformation). “Culture is important in any organisation, so McLaren is no different to any other business in that respect. But I think certainly since I came into the sport sector, what becomes really noticeable is when you talk about culture in a high-performance context,” he explains. “When what your purpose is sport, which you play out on a global stage, week after week in front of billions of people, the culture that you create within that organisation has a very immediate impact on performance.”
To get the business and culture back where it needed to be, Daniel explains that a purposeful three-pronged transformational strategy was conceived. It included looking at organisational effectiveness and whether it was set up in an optimal way to deliver what McLaren is trying to do, which is to return to a championship winning F1 team; driving a cultural transformation, designed to improve human performance and re-imagine how the business supported employee’s health and welfare in order to drive performance, which included having a heightened focus on employee mental health; and, lastly, creating an improved employee experience in terms of ensuring every staff member was as engaged as possible by focussing on their development and rewarding them for their hard work. “A lot of what we do is focused on performance on the track, but in order to deliver that performance on the track, this workforce is the one that is accountable for actually delivering that performance. So, you really have to make sure that the culture you have back in the base, as we call it here, is really finely tuned and is focussing on the right things,” he adds.
As part of this transformation, HR also had to change. No longer known as the human resources team, Daniel heads up the company’s people team where 14 staff members are tasked with all manner of things from employee experience to developing in-house tech. He tells me that this rename was deliberate in order to make sure the people team were able to take the lead when it came to implementing changes which could benefit the company’s employees. “We are the people team and that was a deliberate reposition about ensuring that we invested in ourselves as a department, because if we’re not set up in the right way, with the right resources, the right capabilities and the right structure, then how can we do all of this other stuff that I’m talking about on behalf of the organisation.”
Daniel believes that the investment in the people team, which included spend on technology and the structure of the department, was crucial to support its 800+ staff in order to launch new initiatives, such as McLaren’s drive to boost the company’s culture and better explain the employee purpose. “There has been quite a lot of investment made within the people team which I think shows the seriousness of McLaren in this. They’re showing there’s a team behind this and we’ve also got the resources available to bring some of this stuff to life. Because as I’ve learnt in my 20-year career, you can try and do it on a shoestring, but it doesn’t really work,” he shares.
“You get so far but there comes a point where if the intent is real you have to invest. And we took the view that our workforce is worth it – it sounds like a L’Oréal advert – but our workforce is worth it as they’re critical to our future success.”
With transformation for both the business and HR, is McLaren now performing as it wants to be? Daniel believes so, and that answer has been delivered to him through both qualitative and qualitative data. Surveying the workforce, the people team found that after implementing changes the employee base were 40% clearer on the vision and purpose of the business strategy - this question was one that McLaren considered to be one of their biggest challenges. Similarly, overall engagement went up by double digits but according to Daniel, the people strategy isn’t the only reason for this uptick, with leadership a crucial facet in improved engagement and performance.
As Daniel sees it the company’s executives play a crucial role in embodying the way that the business communicates with employees. “As execs we spend quite a lot of time out on the floor. That’s something we do naturally, but it’s something we are committed around being visible and there’s no better indicator or temperature check to how you’re doing than just walking the floor, speaking to your people and engaging with them,” he says.
Whilst Daniel perceives that leadership engagement with the workforce has been crucial to improvements he also believes the manner in which HR holds itself and engages with the business is also crucial. According to McLaren’s People Director it’s crucial that HR has a seat at the top table if any business hopes to be a success. “If an organisation is deadly serious about the importance and the performance of its workforce, then HR has to sit at that top table,” he explains.
Yet, from Daniel’s experience, for HR to get to that position the HR leader must operate as a business leader first and an HR specialist second to be able to influence the business and deliver their own agenda. “I sit quite firmly that HR needs a seat at the table but that has to be sponsored by the chief exec and HR needs to earn its right to be sat there as well. I think that’s really important; it can’t just be an expectation. When you’re in that top seat you need to operate and think like a business leader first and an HR specialist second. You need to be able to engage and contribute on the full organisational agenda and not just be limited to people,” he explains.
For McLaren a large part of the business is carried out on a racetrack for millions of fans to witness and enjoy, but it’s how this performance pans out which can greatly impact the employees, Daniel shares. As such, Daniel believes that the plans which are currently in place will reinforce and boost the company’s relationship it has with its employees. “With us it’s making sure that every single person feels connected to what our purpose is and our purpose is to race cars – that’s fundamentally why we exist. And so we are doing quite a major overhaul of all of those areas to make sure that that contract and the relationship we have with our employees is one that is really productive, where people feel loyal to us and a real advocacy there. To keep them and retain them so they perform at a higher level as well.”
And he’s not resting on his laurels. “It’s [McLaren’s transformation] far from a job done as we’re right at the start of our journey,” he explains. Yet, positive feedback, from surveys and in workforce engagement, show they’re on the right track. “That for me is an early indicator from our people that they like the direction we’re taking and they’re onboard.”