In kicking off the 2017 CEO Talent Summit, former Procter & Gamble CEO A.G. Lafley made a comment that resonated with business leaders gathered for two days of discussions on developing a strategic human resources advantage.
“When I joined P&G in the mid-’70s they selected me,” he said. “When you hire today, the candidates are selecting you at least as much as you are selecting them. And then every few months, every few years, they are reselecting you.”
That fundamental shift is just one of several drivers reshaping the way companies approach hiring, nurturing, developing and retaining talent. It’s increasingly apparent that, in order to build and maintain an effective workforce in today’s intense war for talent, companies need to understand and address these 5 themes.
1. DIGITAL TRANSFORMATION IS CHANGING EXPECTATIONS ON BOTH SIDES OF THE TALENT EQUATION—EMPLOYER AND EMPLOYEE. The same technological advancements upending business models—the Internet of Things, mobile commerce, robotics and additive manufacturing—are also reshaping the kind of workforce today’s companies need in order to adapt and evolve. As John Minor, president and chief investment officer at JobsOhio, pointed out, “There’s a big disconnect between the skill sets that workers have today and the skill sets that are needed by companies. That’s an enormous challenge in the workforce today.”
The demands that digitally savvy employees make on employers are, in turn, redefining the employment equation, noted Carolyn Tastad, P&G’s group president, North America. “Digital transformation is changing our expectations of what we need from our employees, and it’s also changing the expectations that the new talent base has of us,” she said.
“This is the hardest part about digital,” agreed Sylvia Metayer, CEO of corporate services worldwide at Sodexo, a global food services and facilities management company with 500,000 employees around the world. “The talent that will enable us to have a different business model and to go out to market differently is not the talent we have now. We have to be able to bring in people who are very technology-oriented. And that means we have to be able to compete with startups for talent.”
At the same time, retrofitting these elements into established companies with hierarchical structures is a challenge many companies are struggling to navigate. “To reach out to that talent set, you have to be completely transparent,” explained Metayer. “As a very hierarchical organization, that level of transparency is not one we are used to.”
2. PURPOSE CAN PLAY A POWERFUL ROLE IN ATTRACTING AND ENGAGING TALENT. Popular perception holds that younger workers place a premium on purpose when it comes to choosing employers—proactively seeking out jobs where they can feel that they’re contributing something worthwhile. Business leaders, however, reported that purpose actually holds broad appeal. Employees, regardless of demographics and across all industries, are increasingly attracted to companies where they can feel that they are doing meaningful work—and tend to stay longer and perform better when that’s the case.
Bruce Pfau, Ph.D., KPMG’s vice chair of human resources and communications, experienced this when his company invited workers to participate in an online initiative by sharing their “higher purpose at work” stories. The response was enthusiastic, with 10,000 stories submitted in the first three weeks alone, a number that swelled to 42,000 in the months following. “We thought the responses would come from our younger workers, but when we actually looked at them we found that 50 percent were coming from people over age 35,” he reported. “It turned out everyone wants to have a sense of meaning and impact from their work, not just millennials.”
Sealed Air addressed the engagement issue head on by asking employees to think about why the company was in business and what it really provides to its customers. “You can’t imagine how many answers I got about what and how rather than why,” she said. “It was interesting to start the conversation and, little by little, begin reimagining the businesses we serve. Are we cleaning your hospital or are we saving lives by reducing the risk of infection? Are we cleaning restaurant kitchens or are we helping them keep people healthy by preventing food poisoning?” Coupled with other initiatives, the conversation helped Sealed Air boost engagement from 50 percent to 76 percent over the ensuing three years, Kadri asserted.
3. TRADITIONAL WORKSPACES AND WORK METHODS NEED TO BE RECONSIDERED. Beyond purpose, employees increasingly want more control of when, where and how they work—and companies offering such flexibility find it easier to hire and retain top talent. That’s proved the case for Watt Global Media, where CEO Greg Watt adopted a Results Only Work Environment (ROWE) that entirely eliminated the need for any of its employees to come into the office—ever. “It’s about equal parts autonomy and accountability,” he explained. “It comes from the concept that work is not where you go, it’s what you do.”
Watt said that “treating people like adults” by performance goal-setting and providing ongoing feedback that “manages the work not the people” has led to greater productivity, as well as improvements in recruitment and retention. “Our top line has gone up every year since we implemented it, and our operating margins are the best we’ve ever had in the history of the company,” he said.
While less dramatic, P&G has also revisited some of its approaches to nurturing talent, noted Mark Biegger, chief human resources officer at P&G, who said that the company has dialed back on its tradition of moving employees into new businesses and new locations every few years. A decade ago, it wasn’t unusual for the head of a business unit to be moved over to manage a completely different business unit in a different country. “In the past we probably overdid that,” he explained. “One of the things we’re trying to do now is balance that out a bit more. People are staying in assignments for a bit longer and, if they are changing, they stay within the same business area so that they’re building mastery over time.”
“We found that we made mistakes when we changed too many factors—a new business unit, a new geography, a new level—all at once,” added Laura Mattimore, VP of global talent at P&G. “Instead of bouncing people around, now we try to build sequentially.”
Over the past 10 years, P&G also made a big investment in building a talent-planning data infrastructure that informs career planning for all of its employees around the world. “We literally have a talent profile that brings together everything the company knows about every person in the organization,” explained Biegger. “Their assignment and compensation history, what categories they’ve worked on, what markets they’ve worked in, who all their previous managers and mentors have been—it’s all there. That reporting capability gives us easy access to the data we need to make decisions. You really can’t do good talent planning without pretty good data.”
P&G uses mentoring programs to encourage collaboration among its multigenerational workforce and to help bring experienced workers up to speed on new technologies. “We do reverse mentoring, matching new people coming in with skill sets they’ve developed organically with those within who have a deep knowledge base,” P&G’s Tastad said. “Unleashing the best of both is something we try to be intentional about.”
Sodexo also found mentoring helpful, noted Metayer. “We are not a tech company but we need to be able to bring in people who are very tech-oriented in order to compete at a time when our business model is under attack by startups,” she said. “At the same time, we have a generation that is retiring and that generation has knowledge of a different type.” The company’s intergenerational mentoring program brings people from different generations, different levels and different teams together in a learning forum.
5. CULTIVATING “INTREPRENEURIAL” THINKING IS A NEW IMPERATIVE. Gone are the days when large, long-established companies could count on deeply ingrained processes vetted over time to carry them into the future. Yet that is exactly what most large organizations do, noted Michael Arena, chief talent officer at General Motors. “We grow up these enormous entities, we lock them in, we structure them, we build processes, rigor and procedures,” he said. “And then ultimately, we cannot respond when the market dictates it.” (For more from Michael Arena, click here.)
Hoping to maintain a competitive edge with incremental improvements is a dangerous game these days, agreed Alan Masarek, CEO of Vonage. “Leaders used to be able to see a competitive threat 10 years out, but today you can’t see where it will come from. It could be three guys and a dog that give you a competitive problem. So we just have to run these companies in a more agile, innovative way.”
The concept of continual innovation works for Sydney Finkelstein, professor at Dartmouth College’s Tuck School of Business and author of Superbosses: How Exceptional Leaders Master the Flow of Talent. “To create a company whose entire purpose is to survive is not exactly an exciting idea,” he said. “I think a more powerful metaphor is ‘built to change.’” Finkelstein noted that leaders who excel at developing talent—superbosses—are those who seek out ways to energize, motivate and unleash the creativity of employees.
Kadri sees encouraging millennial employees to pilot new ideas as a way to evolve. “The millennials want to take risks and we need that,” she said. “We need to adapt. It’s up to us to unlearn and relearn and adapt to them rather than the other way around.”
Yet, encouraging innovation, and the risks it invariably entails, can be difficult for companies like P&G, noted CEO David Taylor, who added that freeing employees to think and act like entrepreneurs represents a huge shift for a $76 billion global company. Once a process is well-established, a company—and, by extension, its employees—loses the capacity for change, behavior Taylor likens to that of a circus elephant. “Sometimes a chained elephant will fight the chain for a while, but then, if you cut the chain, he will still stay within that circle,” he explains. “If you have processes that encumber people for an extended period of time, then when you change the process they’re like that elephant—nothing changes.”
To overcome the self-imposed confinement P&G was exhibiting when Taylor took the helm a year ago, he began traveling the globe to work directly with people on the front lines in the markets P&G serves. Visiting more than 20 countries in 12 months, Taylor spent time in the company’s plants and with junior employees out in the field. “When I fly to Russia, all the people between me and the junior person I meet with in the plant won’t be there—that’s the best way to get a real feel for the business, through the tone and directness of the individuals,” he said. “Part of what leaders have to do is not get overwhelmed by their title and experience and instead recognize that those closest to the consumer and the plants have the insights you need to really make the best decisions.”
A 36-year veteran of the company, Taylor is convinced that it’s only by proactively nudging employees to question and challenge existing processes and share their ideas freely that a large company like P&G can become more agile and innovative. “We ask people, ‘If you owned the company what would you do?’” he explained. “‘If you started this business across the street, would you do things this way?’ As a leader you have to create the environment that gives people the courage to step out and make the future different than the past.”
Sidebar: P&G’s Innovation Initiatives