Executive Vice President of Human Resources, Capital One Financial Corp.
When Dennis Liberson joined Capital One's human resources department six years ago, there was no obvious HR system in place. The company had just been spun off from a small bank, and the prevailing view on development was quite simple: The best way to meet future people-needs is to hire the right people in the first place.
Into this mix add the beginning of an extremely tight labor market coupled with explosive growth for Capital One, and you get some idea of the HR challenge. So the fact that the Falls Church, Va.-based company has captured the top spot on Training magazine's inaugural Top 50 list (see page 57), and for three consecutive years has been ranked by Fortune magazine as one of the "Best Companies To Work For," says a great deal about Liberson's response to that challenge.
Having arrived at Capital One from Burger King Corp., Liberson had to build from the ground up. "When I first joined Capital One, we didn't do much training and development. In fact, we didn't do a lot of HR management in general." Back then, Liberson says, Capital One, which uses technology to deliver customized financial products to 33 million customers (credit cards to you and me), had a "hire smart" philosophy that originated with CEO Rich Fairbank and coo Nigel Morris, who both came from the field of strategy consulting. "Strategy consultants focus first and foremost on hiring the right people," explains Liberson. "Then they manage people's careers so that the people who take on broader responsibilities succeed and become partners; people who don't get transitioned out of the organization." It's what Liberson calls "Darwinism at work."
Waiting for the cream to rise may have been a prudent strategy except for one thing: Capital One's phenomenal annual average growth rate of 40 percent. So Liberson and his small team of HR specialists set out to transform the HR function. They began, he says, by asking three important questions: "Where are we now, where are we going, and what do we need to get there?"
In response, Liberson developed solutions that would identify employees familiar with Capital One's business methodology and then turn them into leaders. "We had to identify people who can not only lead large groups, but who also possess the background of actually internalizing the business methodology we use," he explains.
Identification was only the first part?building an infrastructure designed around employee development was next. Consequently, Liberson and his team developed a universal competency model, one that outlined the required skills future Capital One leaders would need to master as they progressed through their careers.
Then came the essential skills-gap question: What strategies or programs were required to make sure employees could meet the demands of the competency model as well as the demands of a booming business?
The answer was a series of initiatives that evolved over several years?touching every part of the business. But one key element remains: Capital One still hires smart. With core competencies that require the best analytical capabilities, direct marketing know-how and risk management, Capital One recruits a lot of "right-brained" individuals, oftentimes fresh from college campuses. "We look for people who have exceptional math skills," says Liberson, "but we have to develop a different set of skills to lead people?mostly behavioral learning as opposed to academic learning."
Regardless of whether they are behavioral or academic based, Capital One's development plans rely heavily on a culture that supports growth. Philosophically, Liberson puts it this way: "If people feel like they can't take personal development risks because failure will forever taint them, they won?t. They'll retreat into a world that is comfortable, and that's a world in which people don't grow."
Therefore, everyone must be open to feedback and change, Liberson says. "That's the key to creating a true culture of growth and development. Like any life-change group, people have to first say, "My name is , and I am ... ." They have to take ownership of the commitment, and we must provide the resources."
Capital One expects and demands a lot from people, Liberson says, but he acknowledges that the expectation works both ways. "We have a lot of ambitious people here," he explains. "The gap in thinking between a Generation Xer and where I would have been at the same point in my career sometimes blows my mind." Capital One's GenX employees often have strong opinions on how quickly they should progress and what the company owes them in terms of developmental resources, feedback and so on.
Managing these expectations has enabled Capital One to hold its own in the war for talent. "We know from our survey analysis," says Liberson, "that our developmental programs are a strong reason why people come here and stay here."
With an almost insatiable demand for smart people?and smart people know a seller's market when they see one?Capital One could easily have gone the way of others and offered booty-laden compensation packages to attract the large numbers of people it needed. But "that is not our way," as Liberson quite simply puts it. "We won't buy people in our recruiting process. We're not going to pay somebody 50 or 100 percent more than they're making elsewhere just to get them here because we think that ultimately, this will not take our culture where we want it to go."
Liberson's stance against mercenary grads has paid off. In the face of perhaps the tightest labor market the United States has witnessed, and despite recruiting at the top of the academic tree, Capital One has successfully engineered a workforce growth from 2,000 to 20,000 in just six short years.
And there's no room for complacency in the Capital One HR department. Like similar departments around the globe, Liberson and his team hold monthly meetings to talk about talent requirements and developmental needs. But Capital One also performs three-year analyses because, as Liberson explains, "the numbers get really big when you're growing at 40 percent annually. If you look at our future talent requirements, we have a real gap. But compared to other organizations that I've been in, you'd think we were loaded with talented people."
Keeping the talent pool stocked is a challenge that doesn't ease over time, says Liberson. "When I look at our current population, take 1.4 and cube it to account for our three-year growth strategy, I swallow hard and say "where do we find all these people?""
This level of growth cannot be achieved if the organization remains static, says Liberson. "I have learned that there are certain inflection points where you have to manage yourself differently. I think we have an inflection point now that says in order for us to maintain and build upon the success of the past, we have to learn new ways to remain small and nimble in a big-company body."
Changing the structure is a first step, according to Liberson, and it must be followed by new behaviors. "I just did a reorganization in HR, and I know I have to get out of people's way and let them do their jobs differently."
It's a process that Liberson knows must extend to every one of the 20,000 Capital One associates, at least those with ambitions to progress through the organization. "We're going to develop people and, because of that," Liberson says, "their jobs will grow and they'll take on more. But to take on more responsibility, everyone also has to do less and push more down."
That's where planned, structured development becomes essential, and with that, Liberson has helped Capital One succeed through six years of rapid growth. "The challenge now," he says, "is to continually reinvent our management as we go forward."
-Martin Delahoussaye is managing editor of Training. email@example.com
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