MANAGEMENT : Doing it the Logica Way

Roger Trapp reports on a successful British computer company that knows how to make the most of its greatest asset - its staff

By any lights, the computer company Logica is a success story. Just by still being around as an independent 25 years after it was founded makes it so. After all, many of the British rivals set up at about the same time have been sucked into much larger, often foreign, organisations. But that is not to say that recent years have not seen some of the lustre worn off.

Jim McKenna, the group personnel director, who arrived 18 months ago from GEC-Marconi with the new managing director and chief executive, Martin Read, points out that the company quoted since 1983 had seen growth slow and profitability slip.

It will come as little surprise to GEC watchers that Dr Read has used the disciplines acquired at his old company to tackle the latter. Results for the six months to 31 December 1994 show earnings per share up 42 per cent and profits ahead nearly as much, at £7.2m on a turnover rising 15 per cent to £122m. But few would expect that he and his senior colleagues see an important lever for the former in the sort of "touchy-feely" initiative that would be unlikely to see the light of day in Lord Weinstock's organisation.

There is nothing particularly original about the name of this programme, the Logica Way. ICL, the British computer company now owned by Fujitsu of Japan, has a "way" of its own, meaning a code of principles designed to demonstrate the "way we do things around here". In addition, Hewlett- Packard of the US is notorious for inculcating the thinking of its founders among its worldwide staff. But Mr McKenna is convinced the project can help the company achieve a significantadvantage over its rivals in the intensely competitive markets in which it operates.

"You look at the cost structures, but you also look at how to expand the company and at the behaviours that affect it. You've got to look at all three at the same time to push it forward," he explains, adding that it is no good thinking each can be dealt with in separate phases.

Bearing in mind that in a service industry the only real assets "go home at night", the new management team decided that the company's ability to move these human resources around the world to where they were needed was of critical importance.

Clients such as Ford or Reuters were not unduly concerned about where the expertise was coming from; they just wanted it to be of the same standard, whether the work was being done in Britain or the Far East. Similarly, a bank that wanted to install a trading floor (one of Logica's specialities) in London would probably like to use the same team when it repeated the exercise in New York or Frankfurt.

But to enable the company to meet such demands required changing a culture that had led to the setting up of what one insider calls "lots of mini- Logica UKs" around the world. Instead, it is seeking to create an atmosphere in which all 3,600 personnel spread among 17 countries feel that they work for a single organisation.

"We're trying to integrate the company far more effectively than we've done in the past," says Mr McKenna. "The customer should just see Logica rather than, say, Logica UK or Logica Switzerland."

But he admits that it is quite difficult telling managers in overseas offices that they do not just have the people in that territory at their disposal but can also call upon all 3,600 around the world. He also acknowledges that there will inevitably be conflicts when certain specialist teams will be required to be in two places at once.

But he suggests that the company's reward system for managers - under which a part of the bonus is governed by their ability to be good "corporate citizens" helps to demonstrate the importance the senior executives are attaching to the concept.

Help is also on the way on the practical side with the building of a "resource management system" - basically, a database listing all the skills and abilities acquired by the organisation's staff. It is designed to tell managers who is doing what where and when they will become available for another task.

Mr McKenna and his team are also seeking to emphasise the increasingly global nature of the business through changes to the remuneration system. Since the Logica Way was rolled out three to four months ago, all staff transferred to foreign operations are made subject to the same terms and conditions as those they are working alongside. This not only makes commercial sense for the company, it also reduces the chances of resentments building up among staff in the host countries, he says.

Though it can lead to effective cuts in pay - particularly when Americans come to Britain - Mr McKenna prefers not to see it that way. The important thing is earning power, he adds.

Though he is anxious to do away with the idea that foreign postings are a way of acquiring nest eggs - as has been the case with many companies in the past - Mr McKenna still sees a strong demand for overseas postings. With a workforce where - thanks to a recruitment policy that has brought upwards of 150 new graduates into the company every year, even through the recession - the average age is about 28, Logica sees providing foreign travel as an important factor in persuading ambitious and talented staff to stay. If they know where this fits into their career development, so much the better.

Not that conventional training in management skills and the technical ability which is the company's lifeblood has been neglected. Both areas have seen budgets raised, and there is close monitoring, Mr McKenna says, to ensure that the money is being spent. But though the courses are typically international in make-up, to reinforce the global aspirations, not all the training is formal. Extensive use is also being made of coaching and giving guidance to managers faced with dealing with the increasingly harsh business environment.

Mr McKenna insists that, while the Logica Way includes a vision and something that looks like a mission statement, it is no passing fad. "It will be an ongoing process. We hope it will be ingrained as a way of life," he says.

He also stresses that there is a strong commercial element to it. Pointing out that success depended on the ability to satisfy simultaneously the demands of shareholders, staff, customers and industry partners, he says the ultimate judgement on the worth of the programme will come in sustained growth.

"We've got to achieve predictability that shareholders know they'll get a return this year, next year and the year after."

Many companies' senior executives are spending a lot of time debating how best to achieve that, he adds. But Logica is unusual in spreading the discussion to the mass of the workforce because it acknowledges that everybody has an important contact with the customer.

"The real benefit will come from a snowball rolling down the hill with everybody on board."

Have you tried new the Independent Digital Edition apps?
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Life and Style
techCould new invention save millions in healthcare bills?
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Jermain Defoe got loads of custard
Latest stories from i100
iJobs Job Widget
iJobs Student

Trainee Recruitment Consultant - IT

£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

Early Years Foundation Stage Primary Teacher in Lytham St.Annes

£80 - £90 per day: Randstad Education Preston: Early Years and Foundation Stag...

KS1 Primary Teacher Jobs in Blackpool

£80 - £90 per day: Randstad Education Preston: KS1 Primary Teacher Jobs in Bla...

Supply Primary Teacher Jobs in Blackpool

£80 - £90 per day: Randstad Education Preston: Supply Primary Teacher Jobs in ...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf