Employee-centric HR at NatWest

00:03 – Lucy Adams (Host)
Welcome to HR Disrupted with me, lucy Adams. Each episode will explore innovative approaches for leaders and HR professionals and challenge the status quo with inspiring but practical people strategies. So if you’re looking for fresh ideas, tips and our take on the latest HR trends, subscribe wherever you get your podcasts. So there is lots of buzz around employee experience right now, but sadly, I think that sometimes the shift from HR to employee experience is not much more than just changing the label. However, there are some HR teams out there who are really doing things differently and using employee experience to act as a kind of game changer for HR to really drive change and do things in a very different way, and today I’m going to be talking to somebody from one of those teams, and so I’m really delighted to welcome Catherine O’Callaghan, who is Head of People Transformation at NatWest. Hello, catherine, hello, thank you very much for having me, Lucy.

01:15
Oh, it’s a real pleasure. Now I do like to dive. Before I dive into talking about what you, the amazing stuff you’ve been doing with NatWest, with you and your team, I want to find out a little bit about you and your journey. So how did you get into this, how did you get into HR and how did you find yourself doing this transformation role at NatWest? Perhaps tell us a little bit about that.

01:39 – Katharine O’Callaghan (Guest)
So I have worked in HR all of my career and indeed I joined NatWest, as was 20 something years ago, on their graduate training program into the HR scheme, and I have been fortunate enough to work in so many different types of HR jobs, whether that’s HR consultants, involved in acquisitions, or business partner jobs involved in acquisitions, or business partner jobs, head of HR jobs, partnering businesses and thinking about the business strategy and how HR contributes to it. I’ve done specialist roles, but the jobs that I’ve enjoyed the most have been about transformation, whether that’s transforming a business or that’s been transforming ourselves, and I had been involved in a programme previously to transform part of the HR function, so when an opportunity came up again to lead the transformation of the function, I really jumped at that chance.

02:34 – Lucy Adams (Host)
And it’s hard, isn’t it? I think that HR for HR is one of the toughest roles in the HR profession. It’s that kind of physician heal myself, isn’t it? You know, we’re perhaps very good at telling people how they need to be doing it differently, possibly less good at taking that criticism for ourselves, and we’re going to no doubt find out about some of the wins and challenges that you’ve had, but talk to me about what exactly it is that you’ve been doing, because it’s quite broad, isn’t it? It’s not just a small little initiative. It’s actually impacted the whole of the HR team, hasn’t it?

03:11 – Katharine O’Callaghan (Guest)
And what we have done has impacted all of those.

03:31 – Lucy Adams (Host)
So our entire function now 60% of that is aligned around a colleague goal and journey model. So what prompted?

03:41 – Katharine O’Callaghan (Guest)
thinking that you needed to do HR differently. And what led you to the model that you’ve got today? Well, our hypothesis has been that, in order to attract and retain the skills and capabilities that we need for the future, for our business strategy, that we needed to provide as good a colleague experience that all of us experience on a day-to-day basis as customers of other organisations. We needed it to feel like 2024 inside the organisation, not maybe 2014 as it might feel. So we knew that that was becoming a non-negotiable in the war for talent.

04:15
So, and what we did was our customer facing businesses had already adopted a goal and journey model where they take data on customer behavior, what they like, what they dislike about their experiences, and they pull in specialists and they look at how they can transform that experience. And we we had that example of it working from a customer perspective. So we thought, well, why wouldn’t it also work with colleagues? It’s still still humans, it’s still still seeing people, and we could see lots of benefits from applying sort of human-centered design thinking to applying agile ways of of working, to be able to flex, to emerging priorities. So all of those things sort of came together and we realized that one of the things that we needed to do to transform was to move to a colleague goal and journey model.

05:11 – Lucy Adams (Host)
I think it’s really exciting because you know, we see so often that what we’re trying to do with our customers is, you know, change how they feel, change the experience, change the experience, improve the experience. We’re trying to retain their custom, we’re trying to increase brand loyalty and in many ways they’re exactly the same things that we’re trying to do with our own people and yet somehow it’s easier to articulate and do with our customers than it is for our own employees. So it’s fascinating that you actually your inspiration came from the customer journey, from the NatWest Bank customers, and you’ve applied that to your people and you call it the colleague goals and journeys. So can you, just for the benefit of listeners and a bit for me, just explain what that actually means in practice? Sure?

06:03 – Katharine O’Callaghan (Guest)
so each of we I mean we debated there was many different ways we could cut each of the goals at a top level, but broadly we’ve gone with ones that are aligned to an employee life cycle.

06:14
So from you know, joining the bank right through to leaving the bank is broadly how we’ve, how we’ve cut the goals up.

06:20
And within each goal we’ve then looked at what are the various journeys that a colleague would go through, or what are the various experiences, and so we have got what we call our goal and journey taxonomy, which is our, our picture of what all of those experiences are, how they’re cut up into each of our journeys, and so each goal lead will have a couple of journey managers who are responsible for those experiences. They really run those experiences end to end. So they’re responsible for thinking about what that experience. You know what those experiences are, what the services we provide, and they deliver the operational service to deliver those. But they also think about what do we need to do to do to make them better, what are our colleagues telling us, what’s working, what’s not, and so they’re really responsible for sort of running that experience as well as changing it, and so really, those a goal or a journey would be something like joining the bank, and it would be everything to do with you being hired, signing the paperwork, doing youring.

07:24 – Lucy Adams (Host)
Would that be a kind of classic goal and journey that you’d be looking at?

07:29 – Katharine O’Callaghan (Guest)
Yeah, so definitely, and it would so in that instance of joining the bank. It would be even before potential colleagues start the bank. It would be at the point where you’ve got candidates applying, so it is responsible and clearly in sort of more traditional HR functions, you can draw parallels for some of the goals with things like if you’ve had recruitment or you’ve you know you. There’s quite common things that you can draw parallels with, or learning and development. But it’s really looking at it from an experience lens, so that for some places there was a really obvious alignment with what we had previously and in other situations we were creating teams from scratch because we’d never really thought about a chunk of the experience in that way.

08:15 – Lucy Adams (Host)
So it’s taken up from an example of one of those where perhaps the normal boundaries that would be, as you say, in the usual HR structure of the talent acquisition or hiring team or the performance team or the business generalists, could you give me an example of where you almost had to create a team from scratch?

08:36 – Katharine O’Callaghan (Guest)
Well, the one that we’ve that we’ve done the most on is onboarding. So, whilst onboarding is a you know, it’s a well-known activity and every organization has to do it. We hire thousands of colleagues a year. We didn’t have one single person having responsibility for what’s the onboarding experience like what’s working, what’s not, and that’s not just a people experience that’s, you know, that covers technology. When you’re thinking about colleagues starting and giving them access to new systems, it’s about access to property. You know it’s quite an end to end experience. So the creation of someone that had that responsibility for looking at onboarding to end was brand new for us, and so that’s a new area that we’re looking at through fresh pair of eyes and lots of opportunities there.

09:26 – Lucy Adams (Host)
And I think I think you’re absolutely right. For me, onboarding is one of the most neglected areas of the employee lifecycle and when you think about the impact that it has on you, you know those moments that matter, your experience of joining an organisation, those first few days, weeks and months are so vitally important and yet we often kind of give it to somebody or just get on with it. You know, there’s your manual, there’s your paperwork. You know we don’t tend to think about how are they feeling through this? It’s more things we’ve got to get them to do. Somebody who’s responsible for that goal and that journey is thinking about from before they even start through to when they are actually kind of have gone through the whole onboarding experience and, as you say, linking up with technology and workplace and line managers and really thinking about how that person is going to feel and get off to the best possible start you make a really good point here.

10:24 – Katharine O’Callaghan (Guest)
It’s not just about the colleague that’s joining. It’s actually looking at this through the lens of personas. So it’s the new person that’s joining, but it’s also thinking about the role the manager plays in that and what support and what’s the experience for them. And often they carry the burden of not knowing what they should be doing and they can see how their new joiners not got the kit that they need to do their job or um. So it’s also thinking about the experience the manager has and how can we make that easier? So it’s it’s looking at sort of the two personas in that instance has really helped us, you know, redefine what’s what’s important.

11:02 – Lucy Adams (Host)
Fascinating Continuing with this kind of goals and journeys concept and and you mentioned that around 60 percent of the HR team are now aligned to these various goals and journeys. How has that gone down? As I mean, you mentioned, in some cases it’s changed people job, people’s jobs, quite considerably, but it also must bring with it a different mindset that they, that they, need to bring with them. Has it? Has it gone down well?

11:33 – Katharine O’Callaghan (Guest)
set that they that they need to bring with them. Has it? Has it gone down well? So I mean, in general, people were really excited. I think clearly, before you get to the point of making structural change, people know it’s coming and there’s a level of nervousness, but after we were able to talk about what this actually meant, we were able to align people to opportunities and generally people have really been responsive to it. They’ve been really excited and some of the teams had already started dabbling in agile ways of working or thinking about things differently and and there was really sort of untapped pockets of potential in in some teams and generally people have responded really well.

12:11
However, this is a ultimately now a cultural change and this is going to take time.

12:16
So a lot of what we’ve focused on this year has been about investing in training, and we’ve had um people that have been out coaching the journey teams to talk to them about design thinking, showing them how to map out and do sort of service blueprinting and look at your data, um, and sort of training them in agile ways of working or or thinking. But it’s culture change, so this is hard and it takes time and some people have taken to it and they’re flying, and it was like this was always meant to be. Other people are coming at it that they’re still sort of coming at it from a frame of being an HR subject matter expertise. They might have been a part of a centre of expertise previously and they’re used to thinking about things more in a product way rather than it being colleague centred. So this is a big shift and we didn’t want it to feel about it as loss of a profession, because this is not. This is just about evolving how we can be even better HR professionals. So I think it’s going to take time.

13:22 – Lucy Adams (Host)
Yeah, that kind of the danger or the challenge that some people might feel if they’re they’ve been wedded to doing a certain area of expertise in a particular way and suddenly they’re being challenged on that by people that they might think, well, what do they know about it? And, of course, what you’re saying is it’s coming, the data and insight is coming from employees and managers themselves.

13:48 – Katharine O’Callaghan (Guest)
Yeah, and I think many HR teams face the problem of HR teams producing lots of great stuff that managers and colleagues never have a time to actually look at or read, and it can be all really good stuff and I think the challenge a lot of us have got is clearing out that stuff so that you get cut through on the things that make the most difference and that colleague and managers really need and I make the most difference and that colleague and managers really need and I think the way you do that is by starting with the data so what, what they’re telling you and you you focus on solving those problems. So that’s a real shift.

14:23 – Lucy Adams (Host)
How do you get to that data? You know what is it colleague voice type forums? Or is it pulse survey data? Or is it a combination of a variety of sources?

14:35 – Katharine O’Callaghan (Guest)
um in our discovery phase. There’s lots of sources of data that we’ll go out and do so. We’ll have an annual um twice annual opinion survey. We have pulse surveys um that run out across the bank and we’ll sometimes ask specific um questions. So we touched on onboarding.

14:54
So one of the things we would have done in the discovery phase is we will have highlighted a number of colleagues that joined the bank in a set period of time. We’d have gone out with a bespoke questionnaire for them to get specific data. But one of the things that we’re working on at the moment is how do we consistently measure colleague experience so that, as and when you’re in a moment, you’ve just you’re a recruiting manager, you’ve just filled the job instantly there’s a pop-up to ask you for your feedback on what that experience was like. So that the colleague goal and journey teams are getting that consent continual, always on um data that comes through from from colleagues. But we equally need to do it in a thoughtful way so that we’re not irritating people, because every time they do something we’re asking for feedback.

15:39 – Lucy Adams (Host)
You kind of want to get feedback as often as you can without annoying people. Yeah, and getting that balance right isn’t always easy, is it?

15:46 – Katharine O’Callaghan (Guest)
so it’s. So we’re going to have to learn and we’re going to have to experiment. I mean, experimentation is something that, as a bank, you know we’re talking a lot about internally, but definitely something that we’re doing as a function to really think about. Well, let’s have a goal within a safe set of boundaries. Let’s try it with a small group. Let’s see what happens. If that didn’t work, what can we learn from it and how could we do something differently? So definitely take that mindset in.

16:15 – Lucy Adams (Host)
So one of the if you were going to call out perhaps one of the areas that you’ve seen really change as a result of having this much more employee centered, driven by employee and line manager data and insight, if you were going to call out one of the key moments that matter or as you call it, you know the goals and journeys which would you say has perhaps changed the most as a result of taking this more employee-centred approach, well, our pioneer goal was perform.

16:49 – Katharine O’Callaghan (Guest)
So that has been looking at how we transform how we do performance management and that has been looking at how we transform how we do performance management and and that has been really important connected to the bank’s strategy and our focus on on customers.

17:01
So that has seen the biggest shift and we we’re an organization that’s really considered in terms of how we manage risk.

17:07
We have a lot of guardrails and processes around how we manage performance and some of these approaches were really well established over many, many years and they’ve been in place for a long time, so it’s been hard to unpick and you know question well, why do we, why do we do it like that? And so one of the first things that that team did was they went out and they got data. So there was over 6 000 colleagues that they talked to from across the bank, over 100 000 data points of colleagues telling them what they loved and what they didn’t love about our performance management approach, and that really led to completely bespoke design based on their feedback, really tailoring it to what colleagues were telling us. What was also different about this approach is, rather than behind sort of closed doors, really working out right. What are we going to do? What are we going to change? Having it all beautifully mapped out, the team took an agile because that would take years.

18:08 – Lucy Adams (Host)
As you can imagine, isn’t it? You know you kind of. I wouldn’t have launched anything unless I’d got it absolutely perfect. I’d have all my FAQs written, all my scripts for managers, and then you’d go out with it, whereas you were taking a much more. What test and learn type approach well.

18:23 – Katharine O’Callaghan (Guest)
So so what the team actually did was they they split it into four chunks, so they focused first of all on goal setting. So actually, um, the preparation at the end of last year was getting leaders ready for goal setting, and so that has been what we focused on over the first couple of months of this year making sure there’s really really good dialogue between a manager and a colleague about what are stretching goals. It’s not just what your job is, but how do we stretch you. And then what would be great goals for development is, but how do we stretch you, and then what would be great goals for development. And then the next phase was then moving into how do you get into really good quality one-to-one conversations.

18:57
So we’ve kind of sort of bitten off bite-sized chunks, um, as we’ve gone, and so we’ve sort of said to lead leaders come with us on the journey, we’re going to talk to you about goals, and then we’ll come back in three months and we’ll talk to you about this. And it’s been amazing how the business have really responded well to well. You’re working with us really quickly. We get that. You’ll just. I mean, everybody wants to know the so what at the end of the year about. What does that actually mean? Um, but that has been a very different way for from delivery, so I think that’s a really good example of how we’ve done that in an agile way.

19:30 – Lucy Adams (Host)
It’s also kind of sprints.

19:33 – Katharine O’Callaghan (Guest)
Yeah, it’s also allowed us to look at, for the first part, what’s worked, what response, you know. How did leaders respond to the approach we took for training or, you know, role modelling? Did that work or not work? And how do we want to adjust things in the next sort of chunk that we did?

19:52 – Lucy Adams (Host)
sort of chunk that we did. So, um, what were the uh, what was the feedback and the data that you were getting from those hundreds and hundreds of data points about performance management that needed to change in their view?

19:59 – Katharine O’Callaghan (Guest)
so so one of the the big things we’ve moved away from is performance ratings.

20:03 – Lucy Adams (Host)
So I definitely think you know that that old debate that I think um lots of organizations are having and that, yeah, many are finally waking up to the fact that it doesn’t actually help improve performance or motivate people does it, and it was also about, um, the length of time it took to do what’s seen as being the admin versus actually the balance being on the good quality conversations.

20:30 – Katharine O’Callaghan (Guest)
And so that’s what we’re doing is we’re rebalancing it sort of much more admin-like, much more focused on the good conversations, the development, and less on allocating a performance rating.

20:44 – Lucy Adams (Host)
And I think you know, know, asking yourself the question what’s the primary purpose here of our performance management? Is it to improve motivation and performance, or is it to allocate reward? You know, and, and I think you know, 99, 99 people out of 100 will say well, it’s about improving performance and motivation, isn’t it? So you then kind of gives you that legitimacy to question why are we doing it the way we’re doing, um, which is all around gearing it towards um, allocating somebody a number so we can give them their end of year pay increase or or bonus? Um, fascinating. We’re running out of time, unfortunately, catherine, but I just wanted to pick up finally, well, two things really. I want to ask you kind of what’s next, but I just wanted to pick up on the point around the digital aspect, because, as I understand it, um dialing up the digital aspect of um, the employee experience, was part of the ambition, uh, part of your transformation objectives as well. So how have you done that?

21:47 – Katharine O’Callaghan (Guest)
We’ve probably done it in two ways. The first way has been we have a chatbot called Ask Archie and that chatbot is the entry point for colleagues for any type of query, whether it’s a people query, whether it’s you know your disk doesn’t work, or you know there’s something wrong with your technology. So it’s that first point.

22:07 – Lucy Adams (Host)
So it’s a proper like concierge service, regardless of and again blurring those boundaries between HR and the other other disciplines.

22:16 – Katharine O’Callaghan (Guest)
Yeah, so for back office. So we all have something different for our customer facing staff, but for all of those types of queries, yeah, that would be our entry point. So one of the things that we’ve really done is worked really closely with that team and the goal teams to be making sure that, as and when they’re transforming and changing, we’re keeping Archie up to date and that Archie’s got the relevant content. And we’ve focused on trying to answer queries at first point. So whenever possible, if we can get Archie to be able to answer queries at first point, so whenever possible, if we can get Archie to be able to answer the questions, we will. And one of the things we’ve been doing is we’ve been experimenting with generative AI. So we have looked at, in a really contained area to do with family friendly policies, how could we get Archie actually to have generative EI built in, and we were able to find that our containment rates went up from 50 something percent to early 70s. Now the containment rates are about you asking a question and how many times that Archie was able to answer. So that is something we’re now starting to roll out across a number of small, really defined areas. But that’s ultimately improving our colleague experience, because a query, a colleague’s got a question, they can go in and chat with Archie and they can tell them when and when and that’s that’s sort of available 24 7, you know, because it’s always on. So that’s definitely an area that we’ve been looking at how we can experiment with with technology.

23:44
The other area we’ve done that we’ve been looking at how we can experiment with technology. The other area we’ve done is we’ve been looking at our technology systems and how can we simplify and maybe strip out some of the complexity that we’ve put in place because of our policies or our processes or ways of doing something. So it might be a bit more of a boring area, but an area that we focused on is our supervisory organisation structure. So the hierarchy structure and because of certain rules that we built in it meant that if you were a manager and you had to make changes to your team structure, it had to go through various levels of approvals before it happened. Well, one of the things we did was we took all of the approvals out and actually, as a manager, you’re now empowered. If you need to change the structure of your team to reflect what’s there, you need to create a position that’s there. You can go in and you can do it yourself.

24:38 – Lucy Adams (Host)
So it’s trying to strip out some of that complexity that we’ve built into our system and also stripping out some of that HR ownership of things which we worry that if we let it go then perhaps there’ll be chaos. But actually trusting managers to manage, I think in my experience nearly always pays off, yeah, yeah, with support and guidance and coaching and challenge and all of those good things, but starting from a position that actually managers want to do the right thing, I think is very helpful. So what’s next? What’s the next part of the journey?

25:10 – Katharine O’Callaghan (Guest)
So I still think the next 12 months are going to be focused on embedding, so really building the skills and capabilities and the goal and journey teams. I think there’s a lot more we can do with technology. So really looking at what are the really important moments that we offer to colleagues and really making sure that they can access human support. So you know, unfortunately, sadly, if we have a colleague that dies while they’re in employment with us, then actually quickly being able to access through to a human team that can actually help a manager through that, whereas in other situations actually digitising if we don’t actually need a manager through that, whereas in other situations actually digitizing if we don’t actually need a human to be there. So we’re really looking at how we evolve our technology architecture as well as continuing to embed the new ways of working.

25:58 – Lucy Adams (Host)
Catherine, thank you so much for joining me today. It’s fascinating to hear what you’re doing, and I know that there’s tons that we weren’t able to cover in this podcast. You’ll have to come back. You’ll have to come back in a year or so and let us know how it’s all going. Thank you very much for having me. Oh, bye for now bye.