Hiring people with the right attitude is the most important action a failing business can take, David Smith, former people and IT director at Asda, told an audience of HR specialists in London earlier this month.

Speaking at the Human Resources Forum, Smith told of his experience at Asda, where he helped turn around the retail giant’s fortunes by what he termed “seven principles of what it takes to make a failing business work”.

His first point in his “action agenda”, he said, was that Asda began hiring for attitude. “Recruitment is quite polarising,” he said. “You can switch people on or off through the new people you’re hiring.” He explained: “Current staff will either say, of your new hire, ’who’s that? She’s great’ or ’who hired him? He’s rubbish’.”

The next principle was communication. “It’s very important to make everyone in the organisation feel in the loop,” he said. Next was listening. “If a business really listens then you improve your employee engagement,” Smith said. “In leadership, you can easily get above the clouds and not know what’s happening on the ground.”

Leadership was another principle to challenge. “Command and control leadership is not very motivating,” Smith said, and he urged the audience to change the leaders in the organisation who weren’t appropriate.

His fifth principle, which he admitted wasn’t a popular subject, was to “push talent and remove under achievers”. “It’s very British to avoid dealing with under performers,” he admitted, “but it’s necessary, though, to create holes in which to move people up.”

He believed pay wasn’t the most important motivational tool for employees. “Often employees are just wanting the leadership to say thank you,” he said. And his final principle was around community. “Give people permission to have fun,” he concluded. These principles led to Asda being voted one of the best places to work for five years running in The Sunday Times survey.