The Challenges and Opportunities Of Preparing The Next-Gen Leader

The Power of Purpose
For Steve Collis, CEO of AmerisourceBergen, moving toward a purpose-driven culture helped align employees behind what might well have been a tricky transition for the company, which has been working toward combining its specialty pharmaceutical and wholesale businesses. “Our purpose is honoring our responsibility to create healthier futures,” he explained. “That’s a very powerful message in the company and one that I think our teams are responding to.”

Having defined values can serve as a touchstone for employees of companies navigating transformation, noted several business leaders. Faced with ramping up from 3,000 people to about 16,000 in 10 years, Gulfstream Aerospace invested two years in developing leadership and technical training programs geared toward maintaining the culture that had helped to drive the company’s success during the ramp-up process.

“We were worried we were going to lose that customer intimacy culture that we had spent 40 years building,” explained Mark Burns, president. “The training taught people how they should behave day to day interacting with each other, as well as with the customer. It was so successful for the manager-level-and-above employees that we rolled it out to every employee.”

Respecting and rewarding employee initiative also goes a long way toward getting employees onboard with transformative strategies. “Nobody wants to be told what
to do everyday,” noted Tom Quinlan III, who says empowering employees helped him lead R.R. Donnelley through a reorganization that broke the company into three separate public entities, one of them LSC Communications, which he now helms. “Personally, I wanted to work in an organization where I get up in the morning, come in and make a difference—and I think we created that. If we hadn’t, I don’t think we would have gone on.”

“ “Our purpose is honoring our responsibility to create healthier futures. “That’s a very powerful message in the company and one that I think our teams are responding to.”

Bridging Generation Gaps
A culture viewed as outmoded and rigid can be a hindrance for established companies seeking to hire young, technically skilled workers. Alan Masarek, CEO of Vonage, pointed out an often-faced dilemma: the very companies that most need to attract young talent to transform face an uphill battle because they’re viewed as dated and out of touch.

Tasked with shifting Vonage’s focus from residential communications to business communications in pursuit of growth, Masarek found it difficult to attract new talent to replace employees who were ill-equipped for the journey. “We’re based in New Jersey, not viewed as particularly innovative and have a hierarchical top-down management—all things millennials hate,” he noted. “We’ve been trying to make the company a destination workplace, and doing it in the midst of a transformation, which is interesting because, when you go through a transformation you get hammered on social media on sites like Glassdoor.”

Creating growth and development programs helped, as did taking a bigger role in the hiring process. “I started signing off on every new hire,” he reported. “A lot of people from the old world of Vonage don’t know what ‘great’ looks like, and that’s a problem if they’re going to be hiring for the next generation.”

Like UPS and Vonage, AdvanSix CEO Erin Kane also needs to jump-start talent development at the resins and chemical company she’s been leading since it spun out of Honeywell in 2016. “I’m blessed with the privilege to celebrate employees with 30-plus-year anniversaries, but I also recognize that I need to bring the next generation workforce into the organization. We will face significant retirements in the years to come,” she said. “If you go into one of our plants, they’ll tell you it takes three to five years to train an A operator, who then may be ready to become a frontline supervisor in seven to 10 years. But I don’t have 10 years to train my next workforce for the future.”

In addition to the need to speed up the development process, Kane is focused on employee engagement among her workforce, approximately 55 percent of which is union-represented employees. “As a leadership team, we are focused on building a culture that is performance driven and employee centered. With the spin we asked ourselves, ‘How do we enable a culture that will inspire 110 percent performance from those who we need to come to work enabled and connected to what we need to safely achieve, day in and out?’” The answer is a work in progress and built on a foundational principle of continuous improvement. For example, Kane started by simplifying legacy operating systems, principles and behaviors to be “fit for purpose,” and is working toward instilling them at AdvanSix.

Defining values that employees can align themselves behind was a common theme among CEOs who shared their transformational journeys, noted Ted Bililies, managing director of AlixPartners. “Providing a set of behaviors or values, making that blueprint simple enough that it could be put on the back of a card and having financial and non-financial rewards for that seems like a very big theme,” he said. “Being consistent in your values and the way you behave and over-communicating those principles and values gives employees a kind of North Star that keeps companies steady.”

Ultimately, responsibility for not only adopting values but ensuring that they become part of a company’s DNA falls to the CEO, added Fred Hassan, managing director at Warburg Pincus. “A culture really is the reflection of senior leadership, it’s really the CEO and the top management team,” he said. “If they truly develop a culture of expecting the best and giving your best and role model that themselves, it’s amazing how much productivity gets unleashed and how a company can change and evolve.”