Beth Amato is CHRO of United Technologies Corporation (UTC), a $57 billion manufacturer of aerospace and building equipment. UTC is one of those companies that has replaced a static performance management system with a dynamic, interactive one. As part of the system, team leaders meet one-on-one with their staffers at least three times a year. What gets discussed in those meetings gets summarized in a single-page document stored in an HR analytics program designed by Workday, an enterprise cloud-software company. Amato wants these get-togethers to be about much more than mere performance evaluation. “People want to improve their careers,” she says, “and these meetings make sure they get the training they need. The No. 1 reason employees leave the company is not pay but whether they have a good relationship with their supervisor and whether they feel they have the ability to advance their career.”
Training can’t be a sideline enterprise at a talent-driven company. Just as important, training can’t be limited to your critical 2 percent. Skills obsolescence is a reality for everyone everywhere, from the factory floor to your office. The pace of technological change is so furious that the process of upgrading the capability of your people needs to be built into the daily fabric of your organization. CFOs must grasp this, so they can set budgets to allow for it. In fact, the G3 should know how much is being spent on training and development, what specifically it’s being spent on, and what the company is getting in return for its investment. It helps to build a scorecard to measure how relevant and effective these initiatives are to your company’s goals. Think of the analogy to capital deployment. Unlike factories, trucks, and advertising campaigns, people appreciate in value. Investments in training are strategic bets on your most valuable assets.
Targeted precisely, training can enable talent in different ways. Pfizer CFO Frank D’Amelio is one of those finance leaders who speaks the language of his CHRO. “As CFO,” he says, “one of my major roles is to maximize the deployment of capital. And I want to be clear—I don’t limit that to financial capital. It’s all capital, including human.” Pfizer spends more on training than when D’Amelio arrived from Alcatel-Lucent a decade ago, and the CFO fully supports the increase. “We have four strategic imperatives,” he explains. “One is to foster an ‘OWN-IT’ culture: ‘O’ as in ‘own the business.’ ‘W’ means ‘win in the marketplace.’ ‘N’ means ‘no jerks.’ ‘I’ is ‘impact the business.’ ‘T’ is ‘trusting people.’ All training reinforces that ‘own-it’ culture. We’re training with head, heart, and guts.” The result: Training that helps build a talent-friendly culture, a crucial factor in attracting and retaining the best and the brightest.
At GE, training keeps talent up to speed technologically. CHRO Susan Peters knows trends such as the Internet of Things, cybersecurity, and data mining will touch every job in the company. Part of her job, she explains, is to keep GE competitive by making sure its people learn how to operate in a digital world. “You need a culture across the entire spectrum that understands digital,” she says. “That means technical capabilities, but it also requires a shift in mindset. Both require lots of training.” GE now blends digital content into the courses offered at its Crotonville leadership institute and around the world. A “Digital Bootcamp” for the company’s top 700 executives was over-subscribed. GE has even taught coding to its audit staff. “The key is to spread the digital teaching throughout the organization,” she says.
AT&T CEO Randall Stephenson spends some $250 million a year training his more than 260,000 employees. Back in 2011, he and CHRO Bill Blase realized that the staff lacked two critical things: a knowledge of where the company was headed, and the increasingly specialized skills needed to get there. They’ve addressed both problems with a systematic training and development program called Workforce 2020.
Workforce 2020 is built around software that’s accessible to any employee. Workers can log on to learn what skills the company believes will be critical in the next five years, and what training is available to develop those skills. Blase and Stephenson knew that hands-on help is also invaluable to staffers trying to prepare themselves for the future, so they created “role-based training,” which allows staffers to sit down face-to-face with managers around the company to get advice on the skills they need to move into possibly new and different areas. Working closely with HR, employees develop a clear sense of which skills they need to develop.
Once they settle on the kind of training they’d like, employees can sign up for an enormous range of offerings through Workforce 2020. The transformation series, for example, features 90-minute Webinars on new technologies, products, marketing trends, and more. AT&T has partnered with Udacity, an e-learning company, to offer specialized classes in topics such as cybersecurity and the Internet of Things. AT&T will even pay for employees to get their Master’s degrees online, from schools such as Georgia Tech and the University of Oklahoma.
“This isn’t a one-off exercise,” says Blase. His HR department works closely with leaders in the company’s technology-operations group to be sure AT&T is always offering training in the most important technologies of tomorrow. “The HR and tech people see this as a continuous process,” he says. “It’s baked into the way we do business.”
At most companies, little effort is put into measuring the effect of the training offered employees. Not so at AT&T. Blase and his HR team created a data-analytics dashboard that focuses on four key measures: awareness, participation, engagement, and competency. The dashboard gives Blase, and Stephenson, a rich portrait of AT&T’s evolving workforce. Looking at the results from 2015 and 2016, Blase reports that the company has trained more than 80,000 workers, engagement is up, and the company is hiring fewer outsiders, since staffers who have completed the training can fill challenging new roles. There’s even a nice little side benefit: “Word is spreading that, ‘if I do the training, it will help my career.’”
Excerpt from “Talent Wins: The New Playbook for Putting People First” by Ram Charan, Dominic Barton, and Dennis Carey. (Reprinted by permission of Harvard Business Review Press. Copyright 2018. All rights reserved.).
Ram Charan is a business adviser, author, teacher, and speaker, who for over 40 years has been working with CEOs, boards, and executives of the world’s top companies. Formerly on the faculties of Harvard Business School and Northwestern University, he is the author of 25 books that have sold more than 2 million copies and have been published in more than a dozen languages, including the best-selling “Execution,” “Confronting Reality,” and “The Attacker’s Advantage.” In addition to advising and coaching leaders, Charan serves on a number of boards.
Dominic Barton is the global managing partner of McKinsey & Company. Since joining the firm in 1986, he has advised clients in a range of industries, including banking, consumer goods, high tech, and industrial. Before becoming global managing director, he was McKinsey’s chairman in Asia from 2004 to 2009, based in Shanghai, and led McKinsey’s office in Korea from 2000 to 2004. Barton leads McKinsey’s work on the future of capitalism, long-term value creation, and the role of business leadership in society. He has authored more than 80 articles on capitalism, leadership, financial market development, Asia, history, and the issues and opportunities facing global and Asian markets. He is the coauthor of three books, including “Reimagining Capitalism.”
Dennis Carey, Ph.D., is a vice chairman of Korn Ferry, where he recruits board directors, CEOs, and their direct reports. He has placed and assessed some of the most successful CEOs and directors for more than 75 leading companies in the Fortune 500. He founded several forums for chairmen, CEOs, and C-suite executives, including The Prium, the CEO Academy, and Academies for CFOs and CHROs of America’s best-managed enterprises. He has published four books and more than 50 refereed journal articles. His most recent book, “Boards That Lead,” coauthored with Ram Charan and Mike Useem, was cited as book of the year by Directors & Boards Magazine. Carey also teaches corporate governance at the Wharton School of the University of Pennsylvania. He has served on both public and private technology boards.
