CHIEF PEOPLE OFFICER, FINANCIAL SERVICES COMPENSATION SCHEME (FSCS)
Almost uniquely in the financial sector, the FSCS emerged from the flames of the financial catastrophe with its reputation enhanced. As the media frenzy frightened customers into queuing up around the corner, desperate to extract their hard-earned money out of collapsing banks, it was the FSCS that stood up to the plate. However, it soon became clear internally the sheer scale of the task ahead would be overwhelming.
David tell us about your early life and why you decided on a career in HR?
I was born in Chiswick and was schooled and grew up in west London, and then I went to Aberdeen University, where I studied English language and Literature. And if at this point you’re expecting to hear that my fledgling HR career commenced, you’re going to be disappointed. I was a singer in a piano bar and then had an opportunity to move to America, where I lived for five years, during which time I was in three different Broadway musicals. I had a US agent and my ambition was to try and make this last – that was plan A. After a lean period, I realised a plan B would be wise, and I went back to the UK, to live with my parents in Sunbury on Thames. Now in my late twenties I went to work for McVities in nearby Staines and my first role was in supply chain management, managing the relationship with the factories. If it was a world of cream crackers and digestive biscuits you wanted, this was the place to be, and I loved it. Then a secondment opportunity came along, which was to fill a post in HR, and I took the role and almost immediately felt a strong pull towards a career in people management. I stayed at McVities for a further year, and then I came across an opportunity with a tech start-up company called Net IQ. I was the eighth employee to join and now the company is part of a group that employs 12,000 people in 40 countries. In my four years there, the company expanded into ten countries, so as a learning curve in HR, this had it all. Net IQ brought on Jim Docherty, previously of Microsoft and widely-considered one of the early pioneers of the world of IT we know today. I was still relatively inexperienced, but had the grand title of Assistant Director of HR Administration for Europe, Middle East and Africa reporting to the Senior Vice-President of HR in the States.
In terms of actual HR, I was left to work it out as I went along, but what this role taught me was, that nothing is insurmountable, and although the pay was not great, we were given shares at 11 cents and, as we were acquiring companies at pace – Mission Critical Software and Web Trends to name but two – the M&A activity was frenetic. So I was developing in HR and the shares were accruing – now in my early 30s – and carrying out very senior activity with limited experience. Then, quite suddenly, I found myself redundant, as the business went off on a new trajectory, requiring a set of people with different perspectives, to take the business to a new level. I kind of understood and accepted that, but what to do next? I wasn’t certain. With not very much experience in relative terms, but having been a Director, I applied for director level roles, and initially was a bit mystified as to why I wasn’t landing C-suite level roles – it was a case of “welcome to the real world”. I took an interim job at Timberland – real back-to-basics work, rewriting policies, authoring a new staff handbook and running payroll. And so I carried on with interim roles, including applying for one with the Department of Work and Pensions. I was interviewed by Kevin White, the then HR Director of the DWP, and it was the worst interview I’ve ever had when, 30 minutes in, Kevin suddenly said; “let’s just stop the interview!” Adding, “look, let’s have a coffee and a chat about your career”. That was very thoughtful, and it turned out to be the best career advice I’d ever had – “what do you really enjoy, what is your ambition”? Rather than trying to shoehorn myself into a role, he suggested I really take time to choose, and to look at my experience set so far and assess strengths and weaknesses, which is an incredibly lovely and generous thing to do. These were crashingly fundamental questions for a Wednesday morning, but he was spot on in his analysis that, while it looked like a stellar career trajectory on my CV with a grand job title, any recruiter worth their salt would uncover a limited bandwidth of experience. He then advised that, if I could afford it, I should take a step down and look for a more structured HR role, preferably in a public/not-for-profit organisation undergoing a lot of change.
A few weeks later, flicking through the recruitment sections, there was a whole page devoted to the Metropolitan Housing Trust Group, which was recruiting for an entire HR team. I applied and joined as a HR adviser, and in three years became Head of HR for London. It was a hugely under-resourced HR function – three people supporting about 1,000 staff over multiple locations across London and the UK. It had a very litigious culture and was heavily unionised. The way that the HR function had previously operated was to say “no” to everything. Nothing was ever resolved, and line managers were left to their own devices. For the first 18 months, I was embroiled in legacy employee relations issues, bullying, harassment cases and disciplinary issues – it was non-stop. I eventually became a manager of a team and then, in a further restructure, looked after HR for London. I spent the next ten years in social housing and, to say that it was the ultimate grounding – for somebody whom had skipped the light fantastic in their career – would be an understatement. It was the nitty-gritty of humanity and had no fancy job titles. I was managing staff and dealing with residents who had committed suicide, people that had passed away, our staff being shot at during a crack house eviction – it was a very demanding environment. Three and a half years in, I moved to Shepherd’s Bush Housing Group, initially as Head of HR and in the six and a half years, I became Group Director of Business Support, my first HR Director role. During this time, we went on a massive transformation, and I had responsibility for the entire infrastructure, for IT and for all support functions. So, I really earned my HR stripes and followed Kevin’s very profound advice. This was the first time I was responsible for strategy, and I’m immensely proud to say we went from a failing organisation, to being a Gold Investors in People Champion and a Sunday Times Top 100 employer.
Tell us about your next career move?
I took time to review where I had been; IT, housing… biscuits, and I applied for the role of Head of HR and Organisational Development at FSCS, with some element of a calling. I’d previously applied for the job once before and not landed it, but this time, I really felt prepared and, without artistic license or embellishment, my CV really shouted that I was well and truly qualified for the job. Apart from the very obvious fact that I had no financial services experience. This was the stalling point of my first attempt, but now I believed that I was in the frame from an experience perspective, and that recruitment had moved on from its pigeon-holing approach. Having failed once, I was in two minds, but my agency convinced me that I was a strong candidate. I applied at the end of 2012, and started at the FSCS early 2013.
What is the scope of the FSCS, explain how it operates and tell us about your early experiences in the post?
It’s fair to say that of all the financial institutions, FSCS came out of the financial crisis with its reputation enhanced, not diminished. But it’s equally fair to say that, in the wake of the crash, it wasn’t widely-known that the FSCS was protecting people’s finances, however nobody was actually prepared for what happened next, people queuing outside banks and cash dispensers, desperate to save their money from disappearing. Also, in the wake of it all and with hugely-damaging revelations coming out in the media, there was a very big realisation internally that we would be servicing and processing huge volumes of claims, and we quickly needed to increase resourcing. We had to decide quickly whether we could resource in-house and train, or whether we needed to outsource. Before my time, the Board had decided that outsourcing was the most appropriate strategy, as it would enable the operation to contract and grow in a more flexible way. Now we were faced with unprecedented activity, I was about to super-test that decision in a high stress environment. There was also a lot more operational complexity and red tape back then, caused by the fact that the FSCS – created in 2001 – was an amalgam of eight existing organisations. There was still work to be done to simplify operations into one cohesive organisation. FSCS is unique internationally for the scope of the protection it provides and is the world’s first compensation scheme for such a wide range of regulated financial products. When I came into the business, I was amazed to find that between 2001 and 2014, attrition had been at just one percent – nobody ever left – so whilst the organisation was built on a base of real expertise and knowledge it was very inward looking. So, from my perspective, having been brought in to move the organisation forward, there was a good deal of positives – the reputation and the expertise – as well as negatives, which were legacy issues and a seemingly introverted outlook in a world that increasingly requires transparency and openness. Practically the first thing that was said to me was that FSCS is “unique”, I suppose it is in some ways but not all, and it’s not a description I like or find useful. In the Financial Services Market Act, the actual statutory definition is we are; “the Government’s insurer of last resort”, in truth, we sounded a bit like the nuclear button. But my main concern was the lack of new ideas and fresh perspectives, to help shape our operations – that had to change.
Technology has moved so rapidly lately, it's actually shocking to hear that an organisation of this scale was manually reliant only a couple of years ago.
Yes, here was an organisation that was totally data-driven, culturally quite risk averse and process heavy, and so it was a culmination of influences that led to this situation of digital lag and a lack of forward-thinking. So, I spent the first three months interviewing every manager in the organisation and I asked them three questions: “Tell me about you and your time at FSCS”; “what do you think the major challenges are?” and the $64,000 question; “what do you want me to do?” I listened, I processed and then I went back to the Board and said: “In terms of strategy, we need to reorganise”. This was met with a certain amount of incredulity, as this was an organisation that had somehow managed to avoid organisational development. The legacy issues had resulted from input here and there and, as is so often the case, there was a lack of cohesion. Unperturbed, I carried out some more investigation. I spent a lot of time talking to front-line staff about the implementation of the outsourcing model that happened in 2010 and 2011 and this was still etched painfully in people’s memories. So, with a body of evidence, I set out my strategy.
It really shows how low turnover is not always a good thing, it can cause stagnation and lag.
When new people came in, they were often just unable to penetrate the organisation to identify the problems, my predecessor being one of them. So, I needed to go right back to the basics. My main learning from front-line staff was that they had no assessment centre methodology, they just interviewed anybody and put everybody at risk. So, my plan was to cease with interviews and introduce a proper assessment centre and psychometric exercises. Because of that, we generated 45 percent turnover. For example, in terms of call centre staff, we went off site and recorded every call. Each had a scorecard, a bit like Pop Idol, and we introduced a fast and efficient grading system that provided us with the best call staff recruits at the same time, rather than the laborious and time-consuming face-to-face interviews. It was this type of thought process and organisational change that had been seriously missing, until now.
In dispelling some of the myths that had arrested the organisation’s development, we shone a light on the knowledge and capability within the organisation and revealed that a combination of outsourcing legacy, a culture of not sharing knowledge, and capability walking out the door, was at the core of the problem. But rapidly, we were able to recruit new candidates who were introducing new ideas and, crucially, were receptive to change and progress. Next, we needed to address the issue of the claimants who now we call “customers”. We had what was known as “a claimant treatment strategy” which to me sounded like we were hosing them down in the car park. Before, the culture was that this was a statutory agency and the notion of outstanding service and customer experience was not central to its thinking. It was more about output rather than outcome and we were not always thinking about the impact of our work. That was something of a paradox because, one of the central cultural pillars was that our people felt deeply connected to the social purpose of the FSCS. Clearly, the way the service operated was not supporting that integrity.
In terms of leadership and your own HR plans?
How have these changed to reflect and support the ambitions of the organisational strategy? We restructured the executive team in 2016 and brought in a new Chairman in 2018 and our new Chief Executive, Caroline Rainbird, joins soon. From a HR perspective, there is literally nothing that we haven’t changed and we’re just coming to the end of our current people strategy, which is aligned to our five-year vision. We’ve changed the organisational values, reward system, and we’ve created an employee value proposition. We’ve introduced a new approach to performance management and we now have a talent management programme, and of course our approach to recruitment and assessment is entirely different and in step with resourcing requirements. In short, it is a radically changed environment and, in 2016, when we won the HR Team of the Year award at the HR Excellence Awards, the judges couldn’t believe the scale and speed of the change we had implemented. Awards are one thing, and we’ve notched up quite a few, but the reality is, today, FSCS is delivering its best-ever performance. We are now turning around a third of claims in five days which is something that we physically thought impossible in 2013. We are able to attract good people into the organisation, with energy and excitement, which has created a compelling vibrancy and connection – and demographically, I’m excited we still also have people who have been here for 20 plus years – imparting their knowledge and skills on younger cohorts, and vice-versa. The confidence that exudes and the sense of purpose is inspirational! Clarity of purpose and direction is the most important thing you can do for your people. Once, the organisation was held back by a complicated and confusing organisational narrative, but now there is greater transparency and the momentum for continuous change and improvement is in our DNA.
There have been improvements in the financial services, and in its relationship with the sector – the FSCS has played its part – but from what we see in the media, there are icebergs ahead. How are you preparing to meet these incoming challenges?
Pension freedoms and pension liberalisation has driven a dramatic increase in SIPP-related claims. It’s the single biggest piece of work that we now do outside of general insurance – something like a 20 percent volume increase in the last 12 months. So, for customers, the landscape for financial services product is more complicated, and they have high expectations for the service that they receive. For us, our service is not simply about speed, it’s about empathy and understanding of individual customer needs and our strategy is that we want to deliver outstanding customer experience. What underpins that is the quality of our training and development, and an increase in technical capability. We now have in our leadership team Lila Pleban, who was previously in digital marketing at BT, making strides for us in digital technology and typifying the need to bring people in with new ideas. Plus, we’re becoming more prominent on social media and posting on Instagram, and really growing in confidence for tech change – which before was simply not in the mindset – but is now standard and an absolute expectation. We must be visible, we need to know what the trends are, and we need to increasingly put FSCS on the map as a brand, in an increasingly complex consumer sector, that is a reliable, customer-caring force for good. We have our place firmly set in the financial services ecosystem and whilst I think in the past, the organisation had quite a binary view of its obligation and “statutory duties”, today there is a much more compelling reason for our existence, as a customer service.
Because of the changing landscape, we feel that, aside from protecting customers which has always been central to our cause, we want to promote more widely our protection of non-deposit-related products, particularly pensions and general insurance. We are also increasingly demonstrating that we can use the intelligence that we gather, to prevent future failure, ultimately reducing the cost and ongoing disruption in the financial sector. Up until now, those have been slightly outside of our remit, but increasingly that pivotal role between the financial services sector, the regulators and our customers is where FSCS has a natural fit. We’re here to fuel financial confidence. But what was interesting in developing the new strategy for the next three years, was the really positive feedback that we received from the industry itself: That’s a strong platform to build on so we can truly deliver on our priorities to prepare, protect, promote and prevent into the 2020s.