Gamma Communications (GAMA): Culture Deteriorating?

One sign that a company might have a great culture could be its inclusion in a list such as the “Sunday Times 100 Best Companies to Work For”. Prior to 2018 Gamma Communications consistently placed in the top 50 of this list, each time achieving a 2 star accreditation.

In 2018 there was a change of leadership at Gamma, and perhaps a change in culture. In that year, the company failed to achieve its usual 2 star accreditation, dropping down to 1 star, and that year’s Annual Report didn’t disclose the list placing that was achieved - but did restate the position it had achieved in the previous year.

In 2019 the company again achieved a 1 star accreditation and disclosed that it had placed 87th in the list. The 2020 Annual Report does not mention the “Sunday Times 100 Best Companies to Work For” list at all.

The table below summarises Gamma’s slide down the Sunday Times list:

gama-tbl-10pt-1611

There is also a change in messaging in the latest Annual Reports. Here are the headlines from the Social Governance sections of the last few reports. See if you can spot the change:

Year Social Governance Section Headline
2015 “An engaging culture, central to our business”
2016 “People Power”
2017/18 “Celebrating the power of people”
2019 “Gamma takes the welfare of its stakeholders very seriously”
2020 “Gamma has established processes to consider the welfare of all of its stakeholders systematically”

In addition, the Social Governance sections of the reports from 2015 - 2018 all open with the same people focused line:

Our culture has been instrumental in the growth and success of the business to date.

Compare with 2019’s opening line:

We … focus on working with our stakeholders… We identify these as our customers, suppliers and our people.

That’s customers first, then suppliers, then people.

The 2020 report does say that during the year the company launched a new set of values, introduced a new employee engagement tool (called Gamma Pulse) and has “created a senior leaders engagement working group to help drive change and actions in the business”.

From the outside we can’t be sure if there really has been any change in the company’s internal culture, but that’s the perception I got from reading the Annual Reports.

Gamma currently has market leading positions in the UK cloud communications market, and company culture would very likely have played a part in helping it to achieve that success.
The company is now expanding into Europe through acquisition. Maintaining a good company culture will, in my view, continue to be important in providing the competitive edge it needs to repeat its UK success in its new target markets. Awaiting the 2021 Annual Report with interest.

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Hi MIA

Super work!

Years ago I thought directors of quoted companies were just like lightbulbs --when one began to dim you simply put another one in. But then I learnt first hand (and the hard way!) at a former employer that when a long-time boss leaves, the culture can change quickly and employee motivation can suffer.

Pretty sure the lack of ‘Sunday Times 100 Best Companies to Work For’ mentions and the management change is connected. Indeed, somebody deliberated decided to revise the SG section opening line. I think small changes such as that can potentially alert investors to underlying business shifts that have yet to filter through into the numbers.

GAMA’s former boss was in charge from 2004, so a good 14 year stint, which suggests he was a good manager – and probably the Sunday Times award signalled one reason for that success. I note GAMA’s new boss was not an internal appointment.

Maynard

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Hi,

Looking on Glassdoor, most of the complainants are talking pay rather than anything else. I struggle with this because why take a job or keep it if it doesn’t pay your worth?

Sunday Times Best Companies - from experience there can be pressure put on employees to get a good result.

On the other hand I see what you are saying. One of the Gardners (Motley Fool) likened it to having some of the crew rowing the wrong way on a boat. How do you compete with a crew all rowing in the same direction?

Until it shows up in the figures I guess I am staying put though…

Gamma Communications PLC(GAMA) - fundamentals

Regards
Ben

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Hi MIA,

Having had a chance to look at the 2020 annual report, there is a lot going on regarding employee engagement:

Gamma people
Employee engagement
Employee engagement is fundamental to Gamma’s success
at retaining highly motivated employees and contributes to the
achievement of our strategic objectives.
By engaging with employees, we want to give them a voice to
create a culture in which every employee can thrive. We want our
people to bring their best selves to the working environment which
should be a place where they feel safe, they belong, and they matter.
With the majority of Gamma’s employees working remotely during
the pandemic, engaging with staff, understanding how they were
feeling and giving them a voice was a high priority.
We implemented a new engagement tool in 2020, the Gamma
Pulse, with an Engagement Channel which is a resource tool for
managers and employees. The Gamma Pulse ensured we could
engage with employees in real time, which gave us quicker insights
to enable us to implement actions and communicate results back
to the business more efficiently.
In July we ran a COVID-19 survey to find out how our employees
were, how they were feeling, whether they had the right equipment
to do their role effectively and how we could help support them.
We had an 81% participation rate with over 6,000 comments.
In August we ran a further survey to gain feedback into new ways
of working and again received a high participation rate of 82%.
For both surveys we were able to communicate results and turn
actions around quickly.
In October our regular surveys became quarterly and our Gamma
Pulse enabled us to react to real-time feedback in an effective
manner. We had an 80% participation rate with nearly 9,000
comments. Our results were communicated via an employee
webinar and email communication.
We have created a senior leaders engagement working group to
help drive change and actions in the business and to ensure we
have a consistent approach. Engagement remains a key driver
of our people agenda.

This makes me wonder if because Gamma now has a different engagement tool, Gamma Pulse, (which reports in real time rather than retrospectively on an annual basis+6 months) why the company need to go to the effort of completing The Sunday Times Best Companies surveys when the data fed back from it is effectively out of date?

This is especially true for the future, as Best Companies is splitting from The Sunday Times next year, which limits it’s use as a promotion and retention tool.

Regards,

Ben

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