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Janine Milne

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Talent Spot: Simon Linares, group HR director at Telefonica Digital


When Telefónica Digital launched last year, group HR director Simon Linares had the daunting but exciting prospect of helping to create a very different organisational culture from that of its parent company.

Its parent, Telefónica, is the Spanish owner of mobile operator O2, of which Linares was formerly group HR director too.
But his new role required a very different approach. To compete effectively in the digital marketplace, the new company needed to think and act like a start-up, seeking out new markets and acting swiftly.

“We’ve been given enormous freedom and scope and permission to be quite radical and, therefore, able to set up an HR function that would probably be quite untenable in O2,” Linares points out.

But luckily he has been able to call not only on a wealth of HR experience to help meet the challenge, but also extensive commercial experience. “I guess I’ve had two careers,” he says. “When I left school, after a brief spell in banking, I realised that what I wanted to do was sales.”

As a result, Linares spent about 12 years in frontline sales roles at big companies such as tobacco company Rothmans, brewery Watney Mann and Lloyds Banking Group‘s Black Horse motor loan unit, before deciding on a complete gear shift.

“I was driving home one day and thinking about what I really enjoyed in my job and I realised that it was coaching the team reporting to me. There were 700 people below them, but it was coaching that team that I enjoyed,” he says.

This revelation led Linares to join United Distillers, taking on a role with far more of a training and development focus. Over time, he took on broader and broader roles within the HR space and, in 1994, moved to drinks firm, Diageo, becoming HR director for Iberia.

The post was based in Madrid and he was responsible for critical company initiatives such as developing its reward systems and revamping organisational culture in Spain, Portugal and the Canaries.
New developments
After Spain, however, Linares took on the role of HR director for the African region, but this time, he was based in London as it was easier to fly from there to different parts of Africa.
“I loved dropping into different cultures and the challenge of trying to understand how they work. It makes you realise there are no rights or wrongs, just different ways of doing things,” he observes. “What’s normal practice in Spain or Thailand won’t necessarily work elsewhere.”

Because Linares was already at a senior level when he moved into HR and had been through a number of management development courses, he didn’t opt to take any formal HR qualifications.

“In an organisation like Diageo or Telefónica Digital, it’s about fast-moving change, so it’s important to understand the business and how it works,” he explains. “You have to know how the company makes money. Otherwise, what’s the point of having a talent management strategy or reward system if you don’t understand that?”

Although Linares wasn’t actively looking to move from Diageo, when the opportunity arose in 2008 to work for O2 as its group HR director, it became more of a question of why he wouldn’t go.

And he doesn’t regret his decision. “It’s been fantastic”, he enthuses. O2 at that time had just been bought by Telefónica, which was in the process of becoming a more integrated international company rather than a number of different business units operating across Europe.

But last year, the opportunity arose to be part of the team that set up a new business division, which was intended to respond to new developments at more the speed of a young tech start-up than an established telecoms firm.

There were a number of reasons why it was felt that the company had to be a totally separate unit, however. Firstly, it was acknowledged that the maturity of the mobile market meant that neither O2 nor its rivals was going to experience the same sales growth as they had over the last five to 10 years.
Despite the growth in data traffic, revenues were unlikely to set the market alight in the same way that calls and texts had done, not least because telecoms firms were now competing with technology companies such as Google, which offered a lot of services for free.

Secondly, it was felt to be important that the company worked in a different way from that of traditional telecoms firms.

New culture
They tended to develop products and services with the so-called ‘five nines’ in mind: that is, only releasing offerings to a single market such as the UK when they were 99.999% perfect in order to see how they went, before launching them elsewhere on a country-by-country basis.
But the likes of Google handle the situation very differently. They release beta versions globally that are only 80%-ready and ask for feedback from users to ensure that they get the remaining 20% right.
Therefore, the aim was to have Telefonica Digital take a leaf out of Google’s book and, unencumbered by traditional development rules, find new and innovative ways of working.

The firm is in an enviable position, however, in that it has the agility of a start-up, but the solid financial backing of a big corporate.

But it is enormous for a ‘start-up’, employing 6,000 people in 17 countries who target an array of different markets such as media, financial services and cloud computing – in fact, all of the areas that don’t sit very naturally within Telefónica’s core business.

To get to this point, however, the first job of the HR function was to set the business agenda and establish how the organisation intended to differentiate itself in order to ensure that it employed the right people.

“I know everyone says that, but this is the type of business where you may have four or five people in a garage creating a billion-pound business, and that’s what’s uniquely different about Digital,” Linares attests.

And the concept had a huge impact on the HR strategy. Rather than trying to hire a number of engineers with specific skills, the company decided that it needed to take a far more individualistic approach to its candidate selection and reward processes.

The people who moved over from O2 also had to fit into a new culture. This meant getting used to the idea that they may not have a permanent desk of their own and that there was no job grading system – there was just the board and everyone else.
New identity
“The whole HR focus is around ‘are we creating a culture of high-performing people?’” Linares explains.

To reflect the organisation’s fast pace, he has also changed the way that performance management is handled. Rather than working to annual key performance indicators, targets are reset every few months instead.

“Every four months, people have to come up with three things that they must deliver. Even in the second four months, these things can be completely different from the first four,” Linares says.

Similarly, the way that people are rewarded is also very different to O2. “If you can just say ‘all of those people at this level will get this reward’, then that makes it really easy,” he explains. “But if you look at anyone who has made individual contributions to the company, you have to look closely and have interesting conversations with people.”

This is especially true if people have contributed in indirect ways that do not directly contribute to the bottom line, Linares adds.

Another way that the firm has sought to forge its own identity, meanwhile, is to run its operations from W1 in the heart of London rather than join the cluster of IT and telecoms firms inhabiting the M4 corridor.

And taking this tack has had the advantage of helping it attract staff from all over London. Over the last six months, the company has hired more than 350 external candidates across all areas of the business.
As Linares points out: “If you want people to work in a creative and energising environment, there’s nowhere else quite like W1. Moving Telefónica Digital to London was a huge statement, particularly in a recession.”

As it begins its second year, however, Linares’ aim is to identify and apply best practice across all geographies and is using a Software-as-a-Service-based HR system from Workday to help standardise HR practices worldwide.

But he is also keen to refine the focus as to the kind of organisation that it is trying to be and find ways to embed some of the innovations to date.
And finally…
Who do you admire most and why?
Nelson Mandela. He is an example of influence over power and he changed the world from a locked cell in Robben Island.
What’s the best piece of advice that you’ve ever received?
Trust your instincts.
What’s your most hated buzzword?
Global – I prefer multinational.
How do you relax?
Working out, socialising, and my daughter keeps me busy too.