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Frazer Jones Chronicle 2015

The Talent & Culture Series

GLOBAL HR SEARCH & RECRUITMENT

2 FRAZER JONES CHRONICLE 2015 @FrazerJonesHR

Introduction & Thanks

Welcome

2015 has so far been an incredible year! In 2014 we highlighted the increase in organisations globally driving new talent initiatives, attraction and retention being a top priority.

It’s exciting to see that this has continued in 2015, talent, engagement, development, technology and globalisation are key topics for the HR community. Technology and data have had a huge impact on how people work and how we measure output and performance.

Culturally organisations are changing quicker now than at any other time in history and this new world requires innovation in the people agenda. This is HR’s greatest challenge and its golden opportunity. 2015 and 2016 is about bold leadership, developing great leaders and putting talent and culture at the top of the agenda!

Best wishes

Darren WentworthPartner, Frazer JonesT: +44 (0)20 7415 2815E: [email protected]

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From the Editor

Our clients have highlighted over the last 6 months their renewed focus on Talent challenges as organisations return to growth and invest more in this critical area of HR. As businesses look to maximise the effectiveness of their workforce HR is increasingly expected to help shape and develop organisational culture to achieve business objectives. More so now than ever business leaders are awakening to the importance of focusing on people and not just numbers and the role HR experts can play in nurturing this invaluable asset. This edition of the Frazer Jones Chronicle is focused on Talent and Culture, with articles from HR professionals and thought leaders from around the world. I would like to take this opportunity to thank all of the contributors and I hope you take away a small lesson, renewed vigour for current challenges or changed view on the obstacles ahead of you.

Enjoy this edition!

Brad LawChronicle EditorHead of European Search Frazer Jones T: +44 (0)20 7415 2815E: [email protected]

3/company/frazer-jones THE TALENT & CULTURE SERIES

Contents

Kim Schmidt, Director People and Culture & Ian Herman, National Managing Partner, Grant Thornton Australia

Cultural transformation drives competitive edge for Grant Thornton AustraliaPage 4

Daniel Gallo, Group HR Director, Manchester Airport Group

Talent considerations in M&A scenariosPage 8

Ashley Harshak, Partner, Telos Partners

Culture as a competitive differentiatorPage 11

Gary Sagar, Head of Talent Management, Amgen

Structuring talent development and measuring ROIPage 16

Niko Veenstra, CHRO, Eneco Energy

Agility as a measure for succession management and job rotation Page 18

Michael Schulz, SVP HR, Petrofac

Maintaining an entrepreneurial spirit through rapid growthPage 21

Felicitas von Kyaw, Business Area Customers & Solutions, Vattenfall

Developing an agile organisation and talent in a changing industry Page 24

George Tan, Regional Director of Group Human Resources, AIA

East meets West. Why we shouldn’t put too much focus on managing cultural differencesPage 26

Charlotte Sweeney

The key steps to creating a diverse and inclusive culturePage 28

Frazer Jones Global Management Team

ContactsPage 31


Kim Schmidt Director People and Culture Grant Thornton (GT)

Cultural transformation drives competitive edge for Grant Thornton Australia

This has been in no small part due to a cultural transformation, underpinned by turning a previously inwardly focused partnership, into a highly engaged, highly focussed team that is now (literally) singing from the same hymn book.

The agenda for change

Ian Herman, National Managing Partner, Strategic Performance and Engagement, has been a Partner with Grant Thornton (GT) for the best part of 8 years. When he joined the firm, Ian said the professional services sector in Australia was strong. Clients’ needs were localised and as such, professional services firms took a similar approach to client delivery. Internal operations were also managed at a local level and the pathway to Partnership was about the amount of work sold individually. Ian says the market has changed and clients now demand a more integrated approach nationally, or globally.

Kim Schmidt joined GT Australia as Director of People and Culture in August, 2012. She accepted the role, sold on the firm’s clear growth agenda. Yet upon joining, Kim quickly discovered that at a time when the market was demanding a unified, integrated approach,

the firm was considerably inwardly focussed. There were a number of contributing factors:

• The firm was grappling with the transition from a state-based to a national firm (and in particular the indifferent commitment levels of Partners to fall in line);

• The ongoing integration of 2 smaller firms whose employees were used to a more agile environment and were up for change;

• A recent merger with (parts of) BDO, another mid-tier consultancy firm. Whilst this doubled revenue and headcount of the expanded firm, it threw two previously fierce competitors together overnight.

Kim recounted that the sum of these factors led to a culture whose personality would be best described as ‘introverted’, with a lack of confidence among Partners in the firm’s ability to change/be different, let alone aspire to be something great. There was also a sense below Partner level that there was little opportunity for progression and hence no real aspiration toward a future in the business, as if the ‘local book’ (ie. clients and

Ian HermanNational Managing Partner Grant Thornton (GT)

Grant Thornton Australia thinks, acts and feels like a very different firm these days than it did 5 to 6 years ago. It has moved from a federated firm, with a localised (state-based) approach to the external market, to ‘one firm’ nationally, now collaborating across geographies and practice areas, to deliver integrated, client centric solutions that is creating a demonstrable competitive advantage in the Australian marketplace.


revenue within respective states) did not justify the appointment of additional Partners, there were no development opportunities.

Kim gave a wry smile when she recounted her early discussions with Partners about talent management. With GT and BDO’s Sydney and Melbourne offices coming together, there was no clarity on what potential Partner talent the organisation had. Kim added it was even more challenging “further down the line”. Each office had their own processes regarding promotions and frequently when the firm had a vacancy, they would go to the external market. No real surprise then, that an engagement survey completed just prior to the BDO merger delivered a pretty ordinary score.

Added to Kim’s challenge was the fact that the People and Culture function within the firm was not taken seriously. It was seen more as a support area that would “run some programs” and reactively facilitate promotions, mobility and recruitment, rather than as a strategic, enabling function.

Ian added that there were further challenges in the business. Whilst the merger with BDO’s Melbourne and Sydney offices was definitely in line with GT’s growth strategy, it happened very quickly, which had a significant impact on day-to-day business. Ian, an ex-AFL footballer, likened it to throwing together two arch enemies and asking them to become teammates overnight. Both firms had different ways of doing things (with varying views on which were better) and the former BDO Partners were not necessarily bought into the firm’s future strategy, as they had not been involved in its creation. Kim added that there were further tensions coming from GT’s Board related to under-performance in top line revenue, as well as timelines around

when synergies and associated efficiencies from the merger would be achieved. This had a knock-on impact on Partner remuneration. Even after structural and systems changes had been addressed as part of the integration of the previous two entities, there was still a feeling that the firm was not meeting its financial potential and there were significant concerns around retention of their people and their clients, in particular clients of the merged BDO practice.

Plan of attack

“Don’t focus only on performance, seek to understand what’s happening in the culture that supports or hinders the performance”

With a burning platform for change, Kim set about designing a plan to engage the Partnership group, as “to achieve sustainable transformational change you have to build belief”. Kim indicated that for GT to achieve its business strategy, Partners needed to collectively believe in the firm’s direction and understand their contribution in making it happen.

Kim’s past experience taught her that “leadership drives culture and performance”, though not to focus only on performance, but rather to understand what’s happening in the culture that supports or hinders performance and also the critical role leadership plays in creating the culture. Therefore the collective engagement and alignment of GT’s whole Partnership group around the culture change journey was an essential component in its success. (cont.)


Kim said “we acknowledged that the level of change required was significant and that organisations don’t change, people do, organisations don’t determine culture, people do and professional services only grow if the people do”.

So it is with this mindset that Kim set about a very individual approach, working office by office and Partner by Partner, with GT’s CEO in attendance, to unpack each Partner’s motivations, including:

• why they joined the firm;

• what their journey had been;

• what they believed the culture currently was;

• their vision for the future;

• what they perceived the gaps to be; and

• how they would go about closing these gaps.

Kim indicated that this process helped Partners realise that they had a lot in common, which built a strong connection for them. In addition, they engaged with the firm’s future leadership group seeking their insights and perspectives to capture what was important to them in their thinking.

Subsequent workshops and conferences were conducted with all Partners to create an agreement on the culture which would support the firm’s strategic ambition. From this work they developed a set of core behaviours that would underpin this culture. The introduction of GT’s ‘Signature Behaviours’ followed, which resonated with people in terms of what could be done. These core behaviours, such as empowering, collaborative and courageous, were applied in leadership and management processes including the annual business planning and performance reviews. Ian indicated that this mind-set shift amongst Partners is building a belief that “together they can be stronger and deliver a distinct service”. This more trans-centric approach has led to GT engaging with clients differently, offering a more integrated approach to how they can support clients to grow.

To underpin a more collaborative environment, GT’s CEO and the senior leadership team also agreed to revisit the Partners’ remuneration model. This was previously individually based and hence, did not encourage the critically important need for collaboration. The revised model saw Partners’ incentives move to team-based performance.

Kim indicated that GT’s culture change is key to fulfilling its commitment to its people, its clients and the community. She added that “we are leading differently and to do that we are doing things differently”. To reinforce this commitment and different approach, in July this year, 130 Partners will be working together in Cambodia to build houses for a significantly disadvantaged community. This initiative is demonstrating GT’s desire to do something extraordinary together. Kim added “this environment will challenge us as individuals, and bring to life our seven signature behaviours. Working together on this project, side-by-side, sharing this experience, we’ll develop a deeper understanding of each other and we believe our work will build a better future, not only for the families we will support, but also a better future for GT Australia, enabling our people and our clients to unlock their potential for growth”.

Re-positioning HR as a value-adding

Ian credits Kim with playing a key role in the quantum shift in culture and performance at GT. He indicated that having someone from outside the firm and indeed, outside the professional services sector, has brought new thinking and a different approach, unencumbered by previous/traditional approaches and processes. “Kim was able to create the necessary tension to break down inherent views. By unpacking issues at a personal level with all the Partners, she was able to ensure they would be change-ready and able to appreciate that for the company to grow, individual people needed to grow”. Ian added that Kim was able to demonstrate her understanding of business drivers and “didn’t talk HR speak”. In what was previously a very conservative culture, Ian said that Kim adopted some “out of normal” experiences to breakdown cultural norms, beliefs and attitudes and encourage Partners to be brave and start imagining a


different future. Talk of Partners singing, dancing, juggling, climbing mountains and sharing stories was all part of this journey!

GT has also instigated a more structured, strategic approach to Talent. This has included the creation of an Annual Talent Day, where all Senior Leaders come together to plan talent requirements, identify their current talent gaps, discuss how to develop existing talent and what talent they need to acquire externally. Other initiatives include the creation of diversity targets, and increasing involvement, empowerment and appointment to leadership roles of younger Partners, ensuring diverse views are at the decision making table. In addition to increasing innovation this is creating strong leadership succession for the future.

Ian and the rest of the Partnership Group now see its People and Culture function as a strategic advantage and differentiator in the national marketplace.

So how would the business describe the transformation?

As a key business stakeholder intimately involved in the transition, Ian stated that the past 2 years has been transformational beyond expectations. He said that the business has shifted from being a pretty challenging environment where so many people previously did not see a future in the business, to one now littered with passionate, engaged, high potential people. Ian adds that there is supporting evidence just in what he is seeing and hearing in the business on a regular basis. He referenced a member of GT’s IT Division recently winning a national award, following nominations from a number of Partners. Ian indicated that such recognition of a central corporate function would never have occurred previously. Further, that Senior Partners are now sharing their business and personal stories, with many handing over key client relationships, in the interest of assisting in the development of Junior Partners. Kim added that there is a real degree of belief now amongst both the Partnership Group and the business more broadly, that GT can and is doing things differently. All Partners are currently engaged in developing

the firm’s 2020 Strategy, which is expected to deliver an ambitious and exciting 5 year roadmap to which Partners are committed and engaged to deliver.

In addition to these internal indicators, Kim and Ian indicated that they have had positive recognition from clients that GT is operating differently, adding that the firm’s financial performance suggests that it is delivering to expectations.

What lessons would you share with other organisations looking to embark on a similar journey?

“Keep an open mind and be less formulae. Don’t set the pace, but rather let the firm set the pace.”

Kim indicated that working with GT has been exciting and exceeded her expectations in terms of the significant shift that has occurred in people’s thinking and behaviour. She encourages others to not limit expectations about what can be achieved when you have senior leaders on board. “It changes everything. Leadership and especially the CEO is the key”. She suggests the first step is to get as many of your leaders open to going on the journey even when the destination is not always clear.

From a People and Culture perspective, Kim counsels against making assumptions and thinking you have to have all the answers. “Be open to learning from colleagues outside of People and Culture. Keep an open mind, challenge your own thinking and be less formulae. Don’t think you have to set the pace of change. Find the right rhythm, learn when to push and when to pull back and take your cue from the environment”. Ian adds from a business stakeholder’s perspective, to be prepared to put yourself out there and go on the journey yourself, rather than directing others to do it. The old adage, “the more you give, you more you get”, rings true for Ian, as does adopting a relationship approach to leadership.


Daniel GalloGroup HR DirectorManchester Airport Group

Talent considerations in M&A scenarios

M&A activity has returned in abundance to the market as companies continue to seek avenues for growth and confidence in the market returns. All too often during due diligence and the integration stage, emphasis is placed on the more tangible elements of a merger. For example, financial information, headcount and geographic presence, system compatibility and patents/trademarks. All too often culture and talent are overlooked. Daimler and Chrysler is probably the most well-known example of a merger failing due to a lack of due diligence on cultural alignment. It is reported the HP and Compaq merger resulted in a combined $13bn loss in market capitalisation, as HP’s engineering-driven culture based on consensus clashed dramatically with Compaq’s sales-driven approach. The importance of talent and culture have since proven their importance but are still frequently ignored, often with dramatic consequences.

Daniel’s story…...Daniel joined Manchester Airport Group (MAG) three years ago at a time when the business’s ambition was taking off (no pun intended). The organisation had been successful but was not capitalising on all the opportunities within its reach. Their strategy to turn this around was simple - “Be bigger and better!” The ‘Bigger’ element, i.e. growth, would be achieved both organically and through acquisition and the ‘Better’ through efficiency and improvement initiatives. To be ‘Bigger’, the organisation knew it would have to re-orientate itself in order to have a strong platform from which to acquire. The organisation focused towards becoming more agile and adopting a more aggressive

approach to growth and healthy appetite for risk - an organisation faster in its execution and its decision making. In February 2013, having achieved this change, MAG acquired Stansted Airport for £1.5billion.

The Stansted Airport Acquisition MAG officially acquired Stansted on 28th Feb 2013. The operation was a great compliment to the company’s portfolio following years of under investment and operating below full capacity it represented a significant growth opportunity. Like most large airports, Stansted is effectively a small town; with its own grid, transport infrastructure and tens of thousands of people working on site. Stansted had been up for sale for almost five years which had left employees somewhat ‘bored and bruised’, with a general wariness in the employee population and a lack of vision on future direction. Upon the acquisition completing, M.A.G immediately began to implement a turnaround programme at the airport which in addition to seeing £250 million being invested in improving facilities for passengers and airline customers, also included overhauling the culture.

How to do due diligence on Talent & CultureThis is ambiguous and always varies. When acquiring a business, information on talent can be gleaned from recent talent reviews, assessments and speaking informally to incumbents. Reviewing the structure of an organisation can also infer a lot about the culture of the organisation. Certain structures convey more of a structured or command and control approach; others highlight a

Who is Manchester Airport Group?M.A.G currently serves over 48 million passengers through its ownership and operation of Manchester, London Stansted, East Midlands and Bournemouth airports.

The business is privately managed on behalf of its shareholders with IFM Investors owning 35.5%, Manchester City Council also 35.5%, and the 9 Greater Manchester Councils of Bolton, Bury, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan owning the remaining 29%.

If listed today the organisation would be a FTSE 100 business. The ‘airport’ business is a complex one covering aspects such as assets, infrastructure, buildings, customer services, retail, 24/7 operations, all with a significant proportion of services delivered through third parties.

M.A.G has only recently begun to turn its attention overseas and appointed Rosemarie Andolino to the newly created role of Chief Executive Officer and President of M.A.G U.S. She will oversee the development of M.A.G’s airport services business in North America. M.A.G U.S will work with airports to develop and operate terminal and retail solutions, passenger lounges and car parking facilities.

Daniel Gallo, Group People Strategy Director at Manchester Airport Group, talks to us about the impact of an acquisition on culture and how to manage the subsequent integration to retain and develop talent.


decentralised and autonomous workforce. At the final stages of the acquisition, the organisation being acquired will almost always deliver a presentation on their organisation as part of the sales process. Here, who is and isn’t present, the information that isn’t shared and how information is presented can reveal a lot more about the talent in the business and culture of the business than the actual information provided. Access to data can understandably be restricted; therefore gaining access to multiple data points can be invaluable. Regardless of the insight gained, it is important to maintain a sceptical view as the actual state of talent and culture can be surprisingly different when full access post-acquisition is gained.

MAG’s approach to integrating Stansted The CEO, Charlie Cornish, very much treated the acquisition as a merger in terms of their mind-set and approach. The organisation was very vigilant about maintaining all that was good about Stansted and sought to support and develop key talent in the business to make the necessary changes for improvement, as opposed to inserting their own management team entirely. As part of their integration strategy they only allowed a small core team of MAG leaders and specialists on site full time in the first 6 months. This avoided swathes of people descending on the new asset, full of good intentions, but inadvertently putting risk and inconsistency into a well-considered integration plan. The first 90 days post acquisition were spent heavily communicating with employees, educating them about MAG’s visions and plans and listening to employee and leader feedback. MAG as an organisation has a

strong focus on communications but it is important to note this is two way communication. Daniel points out that the best way to get a feel for the challenges and culture is to speak to those involved. In the end, however, when evaluating, managing and changing culture, the biggest carriers of culture are leaders!

The lessons learned When acquired, integrating and changing the new organisation’s culture and composition of talent can take three to five years, it’s a long journey. It’s important to maintain the ‘good’ elements of the company’s culture during this period. Daniel had the following advice which is true for both readying an organisation to acquire and integrating an acquisition.

Don’t change a business but make it better - some may argue this is semantics, but this is a state of mind and therefore impacts the subsequent approach and actions. If you focus on the good that exists and set about enhancing the organisation in this respect in harmony with other initiatives, your likelihood of success increases dramatically.

To do the above you first need to understand the business. An organisational effectiveness review can be very helpful in understanding key strengths, high performers, business critical positions and talent gaps.


Know where the organisation is going, the vision, and what key drivers will get it there. Ensuring Talent and broader HR initiatives are aligned with these drivers is critical to maintaining the culture and retaining key talent.

Ensure there is a change management process in place. Attempting to significantly change the culture of a business can push it breaking point. To ensure your talent isn’t bearing all the stress a strong change management process can make this transition manageable.

Considerations post acquisition The element that has the highest impact on culture during an integration and the hardest to control is the leadership element. It sets the ‘tone’ in the business, communicates the vision and translates macro variables into something that the organisation’s people can respond to. It’s important post

acquisition to ensure that a formal process is in place to evaluate talent regularly, identify high potential (not just high performers) and benchmark this talent against the external market. From his experience, Daniel highlighted how important it is to correctly position talent assessment as a development tool and not a ‘test’. Assessment results should be integrated into formal development plans and used for training and secondment opportunity selection.

You shouldn’t just seek to understand the culture of a target acquisition to ensure the integration doesn’t fail. You should instead seek to understand the culture to ensure integration is a success but to also harness the immense power the culture can provide. Correctly doing so can truly make the whole more valuable than the sum of its parts.

How to get integration right

• Get as much information as possible during due diligence, but don’t take this as absolute - it’s an indicator

• Keep an open mind until you actually own the acquired and can have a real look

• Quickly identify people who are counterproductive to the desired culture. Deal with them quickly and fairly

• Educate and communicate, so the future story can be shared and employees can act as ambassadors for change

• Wait to see how talent performs over a 6-12month period. When acquired defensive behaviours kick in and what you see may not be the real talent when in a more settled state


Culture as a Competitive Differentiator

Since the financial crisis broke in 2008 it has not been hard to find articles pointing the finger of blame at ‘corporate culture’ in the banking sector as the source of much that went wrong. Rather than pursuing the argument that corporate culture is the source of all that is wrong with modern corporates, we want to present an alternative view.

Since the financial crisis broke in 2008 it has not been hard to find articles pointing the finger of blame at ‘corporate culture’ in the banking sector as the source of much that went wrong “Banking’s toxic culture ‘will take generation to clean up’, says report”. (The Guardian, November 26, 2014). In recent years ‘corporate culture’ has been under scrutiny in other industries too; in oil and gas, “Deepwater Horizon forced culture change on oil and gas industry” (Financial Times, September 30, 2013); the automotive sector, “Why did GM take so long to respond to deadly defect? Corporate culture may hold answer” (The Washington Post, March 30, 2014); and also in consulting “In Scandal’s Wake, McKinsey Seeks Culture Shift” (New York Times, January 11, 2014).

Rather than pursuing the argument that corporate culture is the source of all that is wrong with modern corporates, we want to present an alternative view. Although we do not dispute that in some cases organisational culture can drag down a business, we have also seen how corporate culture, at its best, can be a source of differentiation and competitive advantage.

What is corporate culture? And why does it matter?By corporate culture, we mean ‘how do we do things around here?’ This refers to the language used, the way decisions are made, how work is planned and undertaken, even how people dress and deal with conflict. Primarily, it relates to the patterns of behaviours people display that represent the way people in the organisation ‘think’ and ‘feel’ (see diagram 1).

For example in one entrepreneurial organisation we worked with, processes and structures were not well formed and people came together as needed to promote and push new ideas; people were given a lot of freedom and flexibility to get things done. In contrast, in a large engineering company, not only were things more formal and structured, people placed great emphasis on engineering know-how and prowess, and discussions without at least one engineer in the room rarely took place. Regardless of the organisation, there will be a multitude of cultures at play, such as national, divisional or functional cultures. Nevertheless, in all of the organisations we have worked with there tend to be some sets of behaviours that are common (to a greater or lesser extent) across

Ashley HarshakPartnerTelos Partners Ashley Harshak is a partner at Telos Partners, a strategic change consultancy, and focuses on organisational culture, leadership effectiveness and change management.

With contribution from Tanya Petzer & Melissa Middleton Tanya Petzer & Melissa Middleton are culture strategists at EYT, a South African based consultancy, focused on organisational culture and the integrated talent management architecture that sustains culture.


the business and this is the corporate culture we are referring to.

The importance of corporate or organisational culture is that it can either enable the business to function or act as a barrier. As the management guru Peter Drucker argued, culture eats strategy for breakfast. A view that is supported by John Kotter’s and James Heskitt’s in-depth long-term study demonstrated that corporate culture has a significant impact on a firm’s long-term economic performance. Business executives generally seem to agree with this too. A survey undertaken by Strategy& in 2013 on culture and change, found that 84% of respondents felt their organisation’s culture was critical to business success, with 60% saying that culture is more important than strategy or their operating model. Yet despite this, our experience has been that when a firm seeks to transform, the focus of executives is on adapting their strategy or operating model, and culture is often ignored.

Culture as a strategic assetNothing distinguishes an organisation like its culture. Take two businesses in the same industry and, despite the commonalities, you just need to wander around their facilities and you will experience different behaviours and ways of thinking about what they do, and how they do it. Culture is one of the very few things that no competitor can copy. Whereas a competitor can copy your strategy, business model and even your products and services, copying your culture is not possible.

It is fascinating to discuss culture with CEOs. We have found that they will be happy to tell you how unique their culture is. Such was the conversation with one CEO of a large global marketing company, who felt that what truly differentiated his organisation from any of the competitors was the people he hired and the way they behaved towards each other, their clients and their suppliers.

One of the best examples of using corporate culture as a strategic asset is Ikea, the Swedish based global furniture retailer. Its proposition is to offer a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. The company recruits people based primarily around values and behaviours, playing down skills, academic credentials or experience. There is even a culture quiz on its website to test potential recruits’ suitability. The organisation’s way of working is very decentralised but given this focus on values and behaviours it can remain quite a flat organisation and avoid bureaucracy. As Peter Agnefjall, the current CEO, noted in an interview with the Financial Times in 2012 “Every company needs something that glues it together . . . [for] Ikea it’s our culture. If we share the same values and the same vision we can put more trust in people working in the organisation”.

Adapting and evolving corporate cultureCorporate culture can be an asset. It can also be a hard thing to change and if you seek to tackle it head on, in all likelihood you will fail. Carly Fiorina, HP’s CEO from 1999 to 2005, found this out the hard way. Carly, the first outsider appointed to this position, took

on HP’s culture, the fabled ‘HP Way’ and in the end lost – pushed out by descendants of the Hewlett family.

A firm’s corporate culture does not stand still, but can and does evolve. However, rarely is it a managed process. There are five things a company needs to do if it wants to use its culture for competitive advantage:

1. Understand and measure your culture

2. Identify the behaviours you need

3. Recruit, develop and retain the right people – focus on behaviours

4. Take advantage of real life role models

5. Lead by example

1. Understand and measure your culture It is always amazing to see how excited senior executives get when they sit down and discuss their organisational culture. Although these conversations do capture the spirit of their culture they rarely capture the complete picture. Organisations that take the time to understand their culture find the insights helpful in being able to play to their organisational strengths, but also in explaining many of the challenges they face.

Typically most of the information needed to provide a complete picture is already there. It exists in customer feedback, employee surveys and strategic documentation. This should be supplemented with interviews and focus groups from across the organisation as well as conversations with customers and suppliers (see diagram 2).

A robust picture, informed by multiple data-sources is important to help leaders understand the reality on the ground in terms of people living the organisation’s purpose and values, as well as the reality of the ‘mindset’ and ‘behaviours’ that are actually dominant in the business (see diagram 3). This picture allows executives to understand what behaviours they need to encourage and which ones need to be mitigated. In one organisation, there was a dawning realisation that people’s willingness to ‘follow orders’ meant that it had a real strength in execution, but its lack of ‘questioning’ behaviours meant that its people would happily execute silly requests without a second thought.

2. Identify the behaviours you needThe discussion that takes place around the existing culture by its nature tends to bring to the fore the behaviours that are missing. This is not about finding the many behaviours that leadership want to see demonstrated but rather the three or four that they feel can make the difference.

This requires open, mature and facilitated conversations around the executive table. Executives discuss what behaviours are required and what those behaviours might mean in different


Diagram 1. Source: EYT, adapted from “Organization Culture & Leadership” E. H. Schein, Jossey-Bass, 2010

the language we use

how we plan and organise

how we handle conflict

how we lead how we dress

How we do things around here

It’s how people in the organisation think, feel and behave

Diagram 2.

Customers• Customer feedback• Net Promoter Scores• Workshops & interview

Organisation• Strategic plan• Code of conduct• Policies & procedures• Branding guidelines

People• Engagement surveys• Focus groups• Workshops & interviews

Inputs Outputs

Insights to connect the

aspirations of the organisation’s

core ideology with what stakeholders

want

4

3

2

1

Behaviours

Mindset

Values

Purpose

Latent(not visible)

Latent(visible) Expression of purpose, values and mindset

Shared perspective that determines responses and interpretations

Principles that guide decision making and actions

Deep and lasting reason for our existence

Diagram 3. Source: EYT “The Culture Code”


parts of the organisation, as well as what they mean for them. For instance, behaviours that demonstrate accountability manifest themselves differently at the C-Suite than they do in a call centre. In recent years, we have participated in lots of conversations in search of behaviours that will promote collaboration, innovation, accountability and continuous improvement. What this means in practice will differ according to each organisation and its starting point.

3. Recruit, develop and retain the right peopleHaving determined the desired behaviours for the organisation, the challenge is how to have them adopted. It is essential that these behaviours are integrated into your organisation’s people model. From the way people are recruited, to the way they are developed, through to how people are retained. Measuring the demonstration of behaviours can help reinforce their importance, setting clear expectations and allowing people who live the behaviours to be recognised in a credible and consistent way. Measuring behaviours allows leaders real knowledge about areas of strength and also ensures that development activities focus on specific areas.

At one organisation we worked with, a global engineering company, a widespread engagement exercise was adopted to help flesh out the behaviours and what they meant. This resulted in a behavioural competency matrix being designed, which the organisation is now integrating into its performance management processes. Another organisation took a phased approach to implementation; a subsequent employee survey found that those areas that had adopted the behavioural approach had significantly higher levels of engagement than those areas not yet exposed.

As with Ikea, we would strongly advocate using the desired behaviours as a means to recruit. This key lever tends to be under-utilised, all the more so given it is harder for people to change behaviours than to develop skills.

4. Take advantage of real life role modelsThe fascinating observation about organisations, is that if you look for them you will always find people who are demonstrating the behaviours that you desire. The next step is to spread those behaviours through socialisation techniques, as colleagues will learn and adopt successful behaviours from others and spread them further – a viral change approach.

In one organisation, the leadership wanted to spread motivating behaviours that would drive performance. At one site we identified a group of 8-10 frontline employees who were superb at getting colleagues to adopt new ways of working. This group of ‘master motivators’ would meet informally. They identified important improvement opportunities and with top level management went about having these ideas adopted across their site. Their improvements were soon readily incorporated not just at their site, but through the grapevine they were invited to other sites to

help with adopting new ideas. The impact on performance was much quicker than otherwise would have been the case and was significant.

5. Lead by exampleNo discussion of how to evolve a culture is complete without discussing leadership. Without doubt leaders need to bring to life the behaviours they want to see. The key to success is senior people acting authentically.

A good example of this is General Alfred ‘Al’ Gray, who served as the 29th commandant of the US Marine Corp. Appointed at a low point in the Corp’s history, Al Gray had the distinction of joining the Marines as a private and rising to four star general. His behaviours were driven by the belief that the Corps had to go back to its roots. He is the only commandant whose official portrait shows him in military fatigues as opposed to dress uniform and he would visit bases without his insignia or name tags on display. An important ingredient in Gray’s success was the degree to which he was seen by Marines as ‘looking out for them’ and demonstrating what he expected through his personal actions. Gray inspired a remarkable degree of loyalty, not least among the junior officer and enlisted ranks.

In conclusionAn organisation’s culture can either be a source of strength, or a barrier that pulls the organisation down. Given the difficulty in trying to challenge your organisation’s culture the secret is to find the strengths and competitive advantages embedded within it and build on these. Fighting your culture can be a long tough battle and the chances of coming out victorious at the other end are slim.

As cultures evolve over time, the challenge is to make the most out of your culture and ensure it adapts in a way that lines up with your business strategy and operating model. To do that effectively, the focus needs to be on behaviours. Identify a small number of behaviours that express and reinforce your desired organisational culture. Use these behaviours to recruit, develop and retain people, remembering it is easier to build people’s skills than change their behaviours. Find the role models in your organisation who demonstrate your desired behaviours. Encourage these people to experiment and network with others. Then, make sure senior leaders are onside, own and role model the behaviours. Remember, people judge the leadership not by what they say but rather what they do. Clarity of the behaviours you desire to see in your organisation enables you to measure the existence of these and to deliberately manage “how we do things around here”.

Culture is the vital ingredient in the success of any business; it is too important for you not to make the most of it.

John P. Kotter & James L. Heskitt, “Corporate Culture and Performance”, The Free Press, 1992.

Richard Milne, “Against the grain”, Financial Times, Wednesday November 14, 2012.


“Culture is the vital ingredient in the success of any business; it is too important for you not to make the most of it”.Ashley Harshak, Telos Partners


Structuring Talent Development and Measuring ROI

When Gary first moved into the European Head of Talent position the function was decentralised and countries were left to drive their own development curriculum as they saw fit. Such structures can prove costly for developed organisations where duplication and lost synergies add up. Training was paid for centrally and attendance was open to almost any who wished to partake.

Understanding the critical capabilities that drive performance and support career growth Gary made some sweeping changes. After engaging with the business to understand what actions would be the most valuable and helpful he went about identifying items that would initially get the best return. He subsequently made three key changes.

• “Pay-for-it-yourself” philosophy – payment for training and development is made by the user (division) not centrally i.e. zero budget all charge back

• Formal participation – participation is based on being part of a formal development plan

• Measurement – performance is measured prior and post to training by the trainee’s manager and is reported back to the business. This method is called the “7 Squared” method which combines 7 behavioural assessment criteria and a 7 point rating of performance scale

The change in payment for many Talent leaders and organisations could be viewed as controversial with critics asking, “Isn’t this risky?…What if the business doesn’t want to pay for Learning services anymore and/or channel the funds to other activities? What if the function is handicapped by a decreasing number of those willing to engage with it, as they are now given a choice? What if subsequently the function eventually ceases to exist?” Dramatic perhaps but valid questions and risks Gary admits do exist. However, such risks are necessary to shift to the Learning function and the business to both taking accountability for what is delivered and ensuring there is a return on investment. The pressure on the learning function to deliver a great service ensures this happens and when this is achieved word spreads in the organisation and marketing of the ‘service’, and therefore use of the function, takes care of itself.

Gary views participants being able to demonstrate what they have learned as being critical to the process. So when someone is nominated, before they go on one of the programs, they are measured by their Manager on seven behavioural outcomes that are relevant to that skill or capability that is being taught. Managers also stipulate their expectations post training and submit this assessment and expectation as part of the process. 90 days after the program/training the trainee is assessed by their Manager to

Gary SagarHead of Talent ManagementAmgen

Who is Amgen?A global NASDAQ listed biopharmaceutical business headquartered in California with approx. 18,000 employees and revenues in excess of $20bn

Europe employs 3,500 employees across 26 countries with regional headquarters in Zug, Switzerland.

Gary Sagar, Head of European Talent at Amgen, talks about developing the philosophy for creating a Learning

organisation in Europe, measuring the value and reflecting on the lessons learned three years later.


evaluate these seven behaviours again. Within Amgen on average there is a 20% to 25% increase in performance based on manager assessment. A great metric to share with the business!

What about the ability of the managers to deliver an accurate assessment at both stages you ask? All new managers on joining or on promotion go through a two day “This is what we expect” program. They are taught and tested on basic processes, how to deliver performance assessments and how to set clarity with team members.

If you’re thinking of making the journeyHow to make the ‘Pay-for-it-yourself’ philosophical shift? Talk business, stakeholders are interested in expenditure and ROI! By establishing a clear picture on the state of learning such as cost, attendance and illustrating no clear measure on return it is easier to convey what could be achieved with a different model. At Amgen the VP of HR for Europe was a program sponsor which provided a direct communication channel with the regional management committee on program progress. Gary then engaged with country HR Directors to educate in-country managers. Having historically held a country HR leadership position Gary knew all too well what stakeholders wanted and said “There are two key lessons I learned from having been the HR Director for UK & Ireland. Listen to the business and don’t forget to measure! Knowing the value of what you have achieved makes it easier to essentially market the value your function and it becomes a lot easier to do even more”.

How long does it take to create such a program? At Amgen the first curriculum was built in six months with a procurement process running concurrently to secure external vendors for outsourced elements of the programs. The new program and process launched in nine months and has been established for almost three years now. The management development program runs at 102% capacity and has a strong internal brand in the business. A key factor in implementation timelines is deciding on the in-sourced and out-sourced blend. At Amgen only soft skills like negotiation and project management are outsourced and it follows a “Teach Leadership yourself” approach where all Leadership training is run by people who are Leaders within the business themselves.

What about the program content? As with many great development programs it is not heavily teaching based but doing based. The program provides a safe environment where participants can engage with paid actors in ‘real-life’ scenarios to put into practice the lessons taught.

How to make sure managers are effective assessors? This in part starts with hiring the right leaders but Gary admits this is a longer term strategy within this process. Key is the compulsory induction and training all new hires and those promoted get. They are all trained on the “7 Squared” method and how to create a development plan for team members to in effect improve their job performance. There is also a strong framework in place in terms

of guidance notes and on rating performance based on the 7 point scale. Assessment criteria are very specific and observable behaviours seen in practice.

Amgen is a great example of a business that has leveraged the value from the effective positioning of its Learning service and continued measurement. As organisations across industries simultaneously evaluate Learning spend and increase expectations on results, the ability to measure ROI and have the business as a fighting advocate is fast becoming essential.

Some of the lessons learned in making the shift

Drive accountability for development to staff and managers – it is their performance and their career

Seek to understand and spend time on this early on – Visit every country, listen to ideas, meet business and HR stakeholders and gather evidence on their issues, concerns and prioritise well. You cannot do it all at once

Bring it all together in a compelling case for change – identify the pain points and inefficiencies using business language such as cost, capacity, quality and performance. Then set out a long term phased plan for implementation with clear KPI’s and follow up on these regularly


The enormous change in the energy world also requires change in leadership. Both managing this industry wide transformation and driving high performance a needs to be managed simultaneously.

Management Development is only as good as the succession results it delivers. Eneco Group came to the conclusion that their Management Development practices did not take into account the changing landscape and did not yield enough success. They therefore took a step back to determine what had to change…

High Performance ≠ High PotentialOne of the challenges with succession management/management development that many companies face is the detection of high potentials (HiPo’s). Who has the potential to grow (quickly) and should be invested in heavily to improve readiness for the next step(s) in the leadership pipeline?

A classic challenge in this is the blurred view we have between performance and potential. Performance can quite easily be observed and a lot peers/managers observe the same. Potential though is far more difficult to observe in daily behavior and the views on this vary significantly within an organization. Often both are mixed up and as performance is seen consistently and widely, high potentials are identified among the most high performing employees. A profound discussion with those who select the high potentials in an organisation is absolutely necessary to address this misconception.

Academically correct, but practically deficientA well-known tool to more objectively measure potential is by using competency frameworks. Employees are scanned against a higher level of competency; if they show sufficient behavior of a higher level of competency, then they can be considered high potentials. Within the Eneco

Niko VeenstraCHROEneco Group

Agility as a measure for succession management and job rotation

The Eneco Group is an integrated Sustainable Energy Company including sustainable energy production (Wind/Solar/Bio/Hydro), distribution (energy-grid), sales, engineering and trade offering comprehensive solutions for, and together with, more than 2 million customers and partners. Major brands include Eneco, Joulz, Stedin, Oxxio and Ecofys, with a turnover circa $5bn and 7,000 employees in 10 Business Units across main operations in the Netherlands, and further operations in Belgium, UK, France and Germany.

“Sustainable energy for everyone” is the Group’s mission. Their vision is that this will happen in a decentralised world where consumers also become producers, customers become partners and together they realise the transition to a fully sustainable energy supply. This major transition in the energy world is already in full swing and the theme is a disruptor for many companies. The old energy model is dead – the new model is evolving and it’s one which requires continuous innovation and adaptations within the Eneco Group.


Group, they had great competency frameworks. Beautifully crafted, academically correct, but practically deficient as we can see them in many companies. The challenge is often the complexity. Within the Eneco Group there were 3 frameworks (each 7 pages) and additionally they had 3 culture frameworks (also extremely important). This was all for good historic reasons, but ultimately, the frameworks did not help to create a significant business impact (improve identification or support development) and simply the term “competency framework” had developed into a term that sent shivers down the spines of business managers.

If it doesn’t fit on one page scrap itEneco decided that they had to radically simplify the competency framework and as the aversion to the topic internally was considerable, they even went as far as deciding on a new name: Eneco Group Qualities. The biggest change was that they decided that impact was far more important than perfection and therefore simplicity was the priority. Everything that is important has to fit on one page (and it has to be readable)!

They succeeded in the challenge and now have a one page Qualities framework for the whole Group including all leadership pipeline levels, competencies and culture values. It is roughly correct and is now widely used for talent identification, performance management, development and recruitment. The most important

result - it is embraced by managers, it is used by managers and it has impact in the business.

The missing link – learning agilityDealing with only the complexity of frameworks was not enough to help in the improvement which was needed for identifying high potentials within Eneco Group. After reviewing numerous state of the art tools and methodologies it was realised “Learning Agility” was the missing link. In an increasinly complex and fast changing world, we cannot rely on fixed frameworks of roles. We need to look at the ability to learn new things fast in new roles which may know nothing about today.

You have to stop and ask yourself, “What do you expect from somebody with a certain degree of potential?” Funnily enough, potential by itself has little business value. It is what you do with it that matters. In line with this Eneco Group reshaped the definition and came to this definition. “A high potential is a person, who on the basis of good performance (what+how) and high learning agility, when transferred to a higher level, will show high performance within 1 year. It’s important to note that this definition does not imply that the person has to be ready within one year (that is the readiness, which can vary), but once moved up, will show high performance fast. This is therefore a far more business/results-centric definition.


Easy online measurement of Learning AgilityLearning agility can be measured quite accurately. Eneco Group utilises an online learning agility scan developed by their partner HFM (the HFMTalentIndex) which considers 3 areas and draws a result based on 5 dimensions of learning agility. The 3 areas are: personality, motivations and behavior. The latter can be self-assessed, but a 360 scan can be included utilised. The outcome consists of five dimensions: People Agility, Results Agility, Change Agility, Mental Agility and Self-awareness. Self-awareness has a prominent position and can most easily determine the score and also be most easily developed. The underlying components and resulting dimensions are too complex for general practical use, but the overall indicator “learning agility” from Eneco Group’s experience, is an excellent indicator for high potential identification.

Initially Eneco Group tested the use of this new indicator while still relying on the regular (and simplified) competency framework, 360’s and competency based interviews. The outcome was impressive and showed an extremely high correlation. Furthermore it helped in addressing the earlier mentioned challenge in noting the difference between high performers and high potentials. In discussions, Eneco Group identified potential HiPo’s who simply were not stretched or visible enough within the business. They also learned that some identified HiPo’s did not have as much potential as initially thought and were simply repeating the same high profile “trick” in various roles and in fact showed too little learning capability. With these positive experiences, Learning Agility has become THE measure for defining internal HiPo candidate pool. Of course, one should never rely on one data point only, but in the calibration discussions, it is present prominently.

Learning Agility as a talent acquisition toolEneco Group also decided that a further simplified version of the Learning Agility Scan was to be used for all recruitment activities from a certain grade and up. It has showed to have a significant positive impact in this realm as well. It helps the business to add another dimension to the interviews and other assessments and is especially useful in determining whether the candidate is a performer or a performer with potential.

Learning Agility for internal mobility

Internal mobility is for many companies as much an opportunity as it is a risk. We want employees to move around within the organisation, advance their development by going through different experiences, and to a certain degree, force mobility to improve employability (internal/external). As the world is continuously changing, bars are raised and workforce needs vary continuously. The risk is however, that we move somebody into a new role that doesn’t perform quickly enough. The flipside is not allowing somebody into a new position because they lack a key experience but ironically have the learning agility to quickly transition and progress in this role. As with Management Development (where learning agility is needed to move mostly vertically through the leadership pipeline), we can use Learning Agility to test whether employees can move horizontally. The application of Learning Agility is not restricted to management levels – the ability to develop and learn is relevant for everybody. Also, here the core of the Learning Agility will be

the self-awareness. We all have seen the studies where 80% of us feel that we are above average and 70% of us feel that we can do a better job than our boss. Somehow this is embedded in our DNA and all of us need to be aware of this flaw in our human design.

Eneco Group decided recently to start using the Learning Agility Scan for internal mobility as well. A key element is how high the bar should be set. Set too high and mobility will be too restricted whereas set too low and the internal move will not yield success for the employer and employee. We do not have an answer to this question yet. But as with everything in transformative environments, we take the leap and embark on this journey and learn and tweak as we progress.

The need for agile HR practices To change quickly an organisation needs HR to review the support its practices provide and Management Development is a key area. Many other practices within the Eneco Group have been adjusted to create the most impact on its transformative journey. Best practices are always a reflection of circumstances and the organisation believes in “best impact on strategy realisation” as key-criteria for changes in HR. Agile HR practices are required (both in form and content) to further boost organisational change and ensure a business is best positioned to both survive and strive is this fast changing world.

Change AgilityResults Agility

People AgilityMental Agility

Self-awareness

Learning Agility Components


With many markets enjoying growth, whether organic or acquisitive, developing an effective organisation whilst maintaining the positive elements of an entrepreneurial culture will always be a challenge that leaders need to rise to... …

Petrofac is a UK FTSE listed company providing services to the international oil and gas industry. With revenues in excess of US$6 billion, today the business employs approximately 20,000 permanent employees. The company consists of two divisions, the core business - Engineering, Construction, Operation and Maintenance - delivering design, building and maintenance of oil and gas facilities and the Integrated Energy Services division providing mainly subsurface and field development capabilities as well as training services. Petrofac is a project based business, with core projects often delivered over a number of years and worth billions of dollars. Over the years, many project opportunities have become increasingly large in size and complex in nature as our customers seek to optimise their capital investment.

Established in 1981, with its roots initially in Texas, the business has always been underpinned by a very strong entrepreneurial culture and clear view on ownership and responsibility; an almost owner-manager philosophy and mind-set. Fast-forward 34 years. The organisation has continued to grow, and maintaining the culture and “way of doing things” along with the ability to retain and attract talent with an entrepreneurial spirit has become a key component of the business and HR strategy.

Michael SchulzSVP HRPetrofac Michael Schulz, SVP HR at Petrofac talks about maintaining the power of an entrepreneurial spirit when becoming a global corporation, the impact of the downturn in the Oil & Gas industry and trends in talent management

Maintaining an entrepreneurial spirit through rapid growth


Entrepreneurial spirit is a mind-set. It’s an attitude and approach to thinking that actively seeks out change as a business opportunity, rather than waiting to adapt to it. It embraces critical questioning, innovation and continuous improvement but most importantly it’s about seeing things at a macro level and thinking and acting like a business owner yet at the same time being ‘obsessed’ about flawless execution. This is where the value of an entrepreneurial spirit can really provide great value within an organisation. As an organisation grows in complexity the desire and need to manage and mitigate risk more closely arises such that the need to introduce more policy and process comes into existence. In such scenarios the entrepreneurial culture that has helped the organisation to get to its current size can feel threatened and the organisation must actively seek ways to maintain it or choose to do away with this culture. Several years ago Petrofac was growing by more than 2,000 employees per annum and the challenge to maintain the culture became all too obvious.

To tackle this challenge, the organisation embraced the issues as opposed to fighting them as many growing businesses might be inclined to do. Whilst growth meant an increase in caution and process, it also bought with it energy, more business, more resources and excitement in the business that they looked to amplify and galvanise. Those who had played key entrepreneurial roles in the business’ growth were and are positioned in key roles to support the preservation of this very special culture. To capitalise on its growth and encourage an entrepreneurial spirit, the organisation diversified through its geographies and product offering, which provided rewarding returns.

To maintain core values and the ‘DNA’ of a business during significant growth, an organisation needs to keep a watchful eye

and focus on internal talent development as opposed to a heavy reliance on external hires. This keeps, embeds and spreads those values, allowing the business to maintain the very fabric of where it has come from. When progressing through this phase there may be some friction between historic employees and new hires. External hires bring a new perspective and fresh ideas but can face resistance when trying to bring this to bear. Creating an environment that allows for communication and collaboration is key in easing any such friction.

“Culture is a big component of employee retention”

To help in the shift to developing talent internally, Petrofac has established a virtual academy which is founded on the principle of continuous learning, from entry to executive level. It is developing a much stronger capability demand planning framework that helps predict manpower requirements. For instance, its development of graduate hires from the UK to the Middle East, India and Asia is now better aligned with the longer term project nature of the business. This allows the organisation to, although not yet with 100% accuracy, identify the need for management and technical talent with several years warning. One of the key lessons learned in utilising a predictive talent development framework is the need to standardise the organisation’s delivery model as much as possible, so that talent can be deployed more easily and the creation of new roles for every project doesn’t create too much of a slowdown. Collaboration was a specific focus in Petrofac last year. Workshops were held under this banner, pulse meetings were


conducted, as well as evaluations of the upsides and downsides of the organisation’s culture and levels of engagement. A review of how information flowed in the organisation was undertaken to identify and remove roadblocks and encourage communication. Board diversity and diversity in the wider business is a key development area for the organisation.

The downturn in the O&G market Due to the volatility and particularly the lower oil price environment, this has had an inevitable impact on investment. Across the sector and particularly so in areas where a higher price is needed to support the viability of projects, there have been redundancies and restructuring. This has proved beneficial to Petrofac from a talent perspective. In this atmosphere, Michael has noted how the market is shifting from an employee driven market to an employer driven one, which has helped with retaining key talent. Petrofac’s overall staff turnover remains somewhat below industry average and the organisation has a strong employer brand in its space. With the broader industry struggling, additional available talent in the market has helped both in terms of available hires but has also eased the pressure on talent acquisition in some of the company’s key geographies. Many organisations struggle to shift (relocate or reposition) talent internally, rather than losing it, which is an area in which Petrofac aims to be ahead of its competitors. Historically, the sector has not been renowned for a differentiated Human Capital Strategy in this space.

Talent management trends Michael has noticed in industry During his career, Michael has noticed an increased focus on the identification of high potentials in organisations and the tools and methods to do so. Organisations are changing faster in today’s market and knowing who your HiPo’s are when you might have to let people go or focus on retention is business critical. Organisations are realising this and doing more to have processes and tools in place to do so. More broadly speaking, Michael sees a lot of businesses reviewing their organisational effectiveness (specifically management layers and spans of control) and moving some operations to low cost locations.

We operate increasingly in an age where global corporations do not dominate the market for decades and new players appear overnight, taking market share with them. One of the most perilous things an organisation can do is not take any calculated risks. Building and maintaining an entrepreneurial spirit can have amazing effects not just on profitability. From a human capital perspective it can increase engagement, retention and productivity. Allowing a culture of complacency and not supporting innovators restricts risk taking and can limit growth. Whilst we are forced to change as we grow, organisations that remember to maintain and amplify an entrepreneurial spirit potentially have a competitive advantage in an increasingly resource challenged landscape. People love to have the freedom to act, albeit within clearly defined frameworks and parameters, and they appreciate seeing their contributions deliver results for their clients and helping their organisation to stay ahead of the competition.

Ways to develop and maintain an entrepreneurial culture

Think like an owner Empower employees to make decisions and simplify the decision-making processes. Coach and mentor employees to take hold of the reins and train line managers to develop their people.

Position the spirit you have and hire the spirit you want Ensure key cultural ambassadors are positioned in key and critical roles to promote the desired culture and values. Most importantly ensure new hires possess the qualities and characteristics that support if not amplify the culture and values in the business.

Collaborate and communicate As companies grow communication becomes more complex and silos can develop that can inhibit collaboration. Organisations needs to be proactive in their internal communication and have leaders encourage collaboration across divisions, departments and geographies, sometimes even corridors!

Manage the rules to a minimum Whilst growth brings with it the need for more structure, a bloated bureaucracy stifles entrepreneurship and innovation. Simplify rules and encourage employees to think about those rules and what they mean, not just blindly following them.

Set an entrepreneurial example As with most elements of a company culture, the entrepreneurial spirit has to come from the top. We can’t expect employees to have a healthy appetite for risk, openness to ideas and desire to innovate if their managers don’t. So, in equal measures, focus your development efforts and investment on executive and senior management.


The energy landscape is undergoing massive changes. Recent news that went viral from Elon Musk of Tesla regarding the production of a home battery for energy storage, has only amplified change in an already very fast changing industry.

Felicitas von Kyaw, VP of HR for the Vattenfall Customer & Solutions Business Area, which services Vattenfall’s customers and develops smart solutions for customers’ energy needs, talked to us about how they are tackling changing market demands internally with regards to organisational agility and talent in this turbulent environment. “The transformation of the traditional energy companies is a demanding journey requiring an intense amount of energy, continuous efforts and most of all - “new ways” of working. The energy landscape is changing on the supply as well as on the demand side, putting tremendous requirements on us as a market player.”

Vattenfall has driven significant changes to introduce flatter structures and new (more agile) ways of working that allow it to respond more flexibly and quickly to market changes. Felicitas explained that an agile organisation is not just about structural changes but is foremost about the following:

• Customer focus - to be responsive to changing customer demands and needs and see things through the eyes and mind of the customer

• Agility - to increase flexibility, doing more “trial and error” and “fast failure”

• Speed - to adapt to the new pace of

change by increasing pace and ability to move

• Co-Creation - to foster collaboration and new ways of developing solutions between functions for example marketing and IT

• Culture - to have the “right” mind-set and behaviours supporting the digital journey

Correspondingly, the requirements on talent profiles are changing. As an example, Vattenfall sees a relevant shift towards digital competencies within its sales, marketing and customer services organisation. Mastering the (digital) channel mix, ensuring online access to customers or allowing for well-targeted digital campaigns are some of the new challenges.

The industry is reviewing how it can work more effectively. Whilst Vattenfall, like many others in the industry, has had to let go of some employees as it restructured the organisation, it has also concurrently invested in developing its talent and stepping up to the required shift in competencies. Felicitas implemented a Digital Academy to drive enablement and know how within the sales and marketing community towards online sales and marketing, big data and business intelligence.

Felicitas von KyawBusiness Area Customers & SolutionsVattenfall

Developing an agile organisation and talent in a changing industry

Vattenfall is a pan European Swedish-owned energy generator and distributor operating pre-dominantly in Nordics, United Kingdom and Continental Europe (e.g. Germany, The Netherlands). The business has a turnover of almost 50mln SEK with more than 30,000 employees and is one of the largest wind power developers and operators in Europe.


Felicitas says there is always room for talent development, even in difficult and particularly in changing times. A key task of talent management in a changing business landscape is to organise skill and competency shifts. For organisations that are confronted with changing industry dynamics and restructuring / downsizing scenarios these difficult situations present a wake-up call and can offer opportunities as things start to move. Developing individuals and retaining talents that embrace change is crucial from an employers´ perspective, yet also the employee must individually make the decision to remain part of the challenge or to leave.

Felicitas points out it is a two way street between the employee and organisation: whereas the organisation owns the responsibility to recognise talent and enhance development opportunities the employee needs to seize the opportunities. Talent management helps to identify potential and performance yet the talent and career development remains an individual perspective and responsibility.

Felicitas’s personal talent management and development

philosophy centres around three thoughts: “Stay curious and courageous and take ownership of your own development”. It is refreshing to see an HR professional like Felicitas and an organisation like Vattenfall taking a realistic view on how it adapts to a changing industry.

As the Greek philosopher Heraclitus said; “Change is the only constant in life” and much like Felicitas’s personal talent philosophy, those organisations that accept this norm and embrace practices to become more agile are those that are more likely to prosper.


When Western companies with global operations evaluate their talent and culture challenges across the Asia-Pacific region, they usually attempt to identify differences between the West and East. They then try to manage these and the potential culture clashes that can occur. George Tan and AIA take a slightly different approach that is paying dividends in the organisation.

Instead of focusing on the differences, George believes in focusing instead on the similarities. An admittedly simple and perhaps obvious change in approach, but one that many ignore. It is a change that shifts the focus from amplifying how these two cultures aren’t the same to amplifying shared goals and objectives and subsequently improving workforce effectiveness.

George began his career as an industrial psychologist and moved into HR in the 1990’s. This was at a time when assessments were at a new-found peak in Asia and organisations were investing heavily to ensure new hires were better understood and aligned to corporate needs. George quickly learned that there was little point in focusing on the differences. There will always be differences and some of these will always be difficult to overcome. However, there tend to be more similarities and focusing on these can be far more effective in achieving the results that the organisations are aspiring to.

This raises the question of what similarities there are between the East and West. Quite simply, we are all human and as human beings we strive for high self-esteem,

we all want a level of achievement and success in various aspects of life. In a work context, organisations can unite employees from different cultures through three key elements; shared mind-set, goals and clarity in role and responsibilities. This sense of unity can be achieved if employees have an understanding of their organisation’s place in the market, world and society and their role in contributing to the organisation’s success. For employees, clarity in what to do and how to do it, as well as a clear understanding of how their performance contributes to something larger than themselves are key factors in creating fulfilment in the workplace.

Uniting cultures through similarities is about having a clear picture of the organisation’s aspirations and establishing expectations of each employee. The organisation needs a clear vision, to set strategic priorities based on this and then to communicate these on a clear and consistent basis. Communication in this case refers to translating the macro into the micro for the employee. It is communicating what is required from employees and how they can achieve this. This communication sets shared mindset and expectations.

George TanRegional Director of Group Human ResourcesAIA

East Meets West Why we shouldn’t put too much focus on managing cultural differences

AIA is the largest independent publicly listed pan-Asian life insurance group represented in 18 geographical markets, with 21,000 employees and more than $160bn of assets.

Established in Shanghai almost 100 years ago its listing in 2010 was the largest IPO ever in the insurance sector.

AIA share price is up 128% from IPO price and outperformed Hang Seng index by 120%.

George Tan is a Regional Director of Group Human Resources, responsible for human capital strategy design and execution, leadership development, HR transformation and governance.


AIA’s leadership has embraced this mentality and has invested a significant amount of time and resources to embed a culture focused on this approach. The organisation has focused on developing a high performance culture that emphasises care and respect, and that is built on the basis of AIA’s Operating Philosophy. “Doing the right thing, in the right way, with the right people, and the results will come”, This also acts as a guide to discuss and solve problems. AIA was listed in Hong Kong in 2010 and at this critical juncture of becoming truly global, made the conscious decision to invest in workshops, roadshows and development programs to embrace the increased diversity of its workforce. One of their key programs is for Senior Leaders, with support and involvement from the company’s Executive Committee, and looks at AIA’s operating philosophy and how as leaders they can use this to make decisions and resolve conflict. The business is also very focused on developing its next generation of leaders. To do so, they look for opportunities to provide critical experiences through stretch projects and internal mobility opportunities. Classroom learning is a small element of the company’s Leadership Development mix. One thing organisations in the East tend to stereotypically be

better at than their Western counterparts is longer term thinking. Eastern organisations are renowned for thinking in generations, in twenty to thirty year frameworks as opposed to the Western comparatively short term two, five or ten year thinking. AIA’s focus in establishing a clear vision, translating and communicating that vision and developing a philosophy to drive unification is a strong reflection of this longer term thinking and investment.

Having a global foot print is nothing new but the world’s Talent is becoming increasingly more fluid as employees are embracing international relocation to secure the best opportunities. As such cultural diversity is on the increase. Organisations will continue their fight for the best Talent and a changed view on culture unification and a reminder to clarify expectations through vision and goal communication can only be another valuable differentiator in securing and retaining the best.


Diversity and inclusion in the workplace are increasingly accepted as fundamental business necessities in today’s employment market. Organisations recognise that their potential to achieve better business results and attract and retain the best talent is increased when people from diverse backgrounds and perspectives are able to be themselves and are included in the decision-making.

However, many organisations continue to struggle with how to effectively implement a robust diversity and inclusion agenda and embed it into all aspects of their business plan, including their talent proposition. Without this, at best, company’s efforts can be seen as ‘a good attempt at addressing the issue’ and at worst can be seen as tokenistic.

Recent research conducted in London in 2014 on behalf of the Late Lord Mayor of London, Dame Fiona Woolf, found that company’s actions were not hitting the mark:

• 84% of City workers surveyed stated that their company had commitment from the top to create a more diverse and inclusive workforce

• 27% felt that they were under any pressure to support the delivery of creating an inclusive work environment

• Only 15% stated that the actions of their leaders mirrored their spoken commitment to diversity and inclusion

• 87% felt that the strategies within their company had no impact on them personally

The research demonstrated a very clear disconnect between the commitment from senior leaders and what was actually seen and experienced by employees at many different levels. The key to any progress is to understand this disconnect and deliver clear actions that help to reduce it. The following 10 steps are a guideline to enable companies to review their current activity and identify areas where further work may be required.

Step 1: Review your business plan

Before implementing a strategy to help improve the effectiveness of organisations by building on the benefits of inclusion and diversity, it is really important to first understand what the company vision and business strategy is. Any activity focusing on creating a more diverse and inclusive company should be able to articulate how it will support the business to deliver their business strategy and their talent aspirations. It is important to recognise that no two diversity and inclusion strategies are alike. It is useful to collaborate with other companies and research good practice in the industry; however, these are good examples of what you might do rather than what you must do.

Charlotte Sweeney

the key steps to creating A

diverse and inclusive culture

Charlotte worked for Blue Chip companies

in the Financial Services sector for 25

years (Barclays, Barclays Capital, HBOS and

Nomura International) before creating her

own consultancy. Charlotte has specialised

in large-scale change programmes with a

focus on diversity, inclusion, engagement

and wellbeing for over 15 years. Over the

years Charlotte has won many awards,

including from Harvard, for her work in

the Diversity and Inclusion field and was

recognised by TIAW for advancing the

economic empowerment of women.

Charlotte is a Non-Executive Director at

the Mid Yorkshire NHS Trust in the UK.

She conducted an independent review on

the Voluntary Code for Executive Search

firms in relation to getting more women

onto boards for the UK Secretary of State

Dr Vince Cable, which is now referred to as

“The Sweeney Report”. She is Vice-Chair of

the Dept of Business, Innovation and Skills

external Diversity & Inclusion Advisory Panel

and is leading the City of London’s Diversity

Programme “The Power of Diversity” on

behalf of the Late Lord Mayor of London

Dame Fiona Woolf CBE, collaborating with

over 70 companies.


Step 2: What are your people saying?

Having reviewed your business plan, the next step involves really finding out what is going on inside the company. To achieve this you need to ask a lot of questions at all levels of the company to find out what it’s like to work here. This can be achieved through employee opinion surveys, focus groups, chance conversations in the corridor, or even listening to what people are saying in the cafeteria or by the water cooler.

Step 3: Review current systems and processes Once you have gained a good idea of what it feels like for different people to work here, start to think about what you are doing in their business that could either help or hinder this by reviewing practices and processes. For example, do you have a recruitment process that states regardless of role all employees are expected to be qualified to university level? If so, that changes the dynamics of the talent pool that you can actually recruit into your company. Is that appropriate for your business?

Step 4: Create a plan and impact measures

Having pinpointed the areas of focus, many companies create

initiatives in an attempt to rectify an existing situation. Instead, organisations should create a robust change management system that ensures impact measures are created and sustainable progress is made.

Step 5: Be clear about your talent requirements

Recruiting talent into an organisation will have a significant impact on the diversity of the company. Working in partnership with recruitment and search companies is vital to ensure they are clear about your business aspirations and how they can help you achieve that.

Step 6: Continue to widen your talent pool

Work closely with recruitment and search companies to ensure that you are not inadvertently narrowing your talent pool. For example, a finance director does not necessarily need to have been a finance director in the past. Such a stipulation shrinks the market and potentially produces the same type of candidate that you have always had. Instead, think innovatively about the skills required and where else that could be sourced.


Step 7: Managing and leading a diverse workforce

Few companies talk about the risk of increased conflict within diverse groups. Naturally, as people think very differently there will be more debate, disagreement and, potentially, conflict. This can be a challenge for some managers and leaders who are not particularly comfortable dealing with conflict or challenge. Ensure that managers are supported in managing and leading diverse teams, how to get the best out of the talent around them and how to respond to conflict.

Step 8: Diversity and inclusion working in tandem

It is one thing to be inclusive, but it’s another to be diverse. The two must work together to be effective and to truly reap the rewards. Ensure your focus covers both elements to gain the greatest benefits.

Step 9: Remember an elephant is eaten one bite at a time

Companies start out with great intentions, a huge amount of commitment and an initial flurry of activity. Nine months down the line they then realise there is a lot to do, they haven’t thought it through properly, and therefore abandon the project. Be clear from the outset that this isn’t a 12-month plan and all will be completed. It must involve continuous improvement so that as an organisation you are constantly looking at what’s happening in the business and

thinking about how to constantly improve upon it.

Step 10: Involve everyone

Companies also assume that the sole drive for creating the right culture has to come from the chief executive or senior leadership team. Without question, their engagement and commitment is important, just as it is for any change. However, everybody can influence the culture, at every level, from the respect they give their colleagues, to the behaviours they display to clients and the decisions they make every day. Ensure that your strategy includes the appropriate engagement of all colleagues and clearly articulates the part they play within creating a more diverse and inclusive company.

Creating a more diverse and inclusive company isn’t easy, but it also isn’t rocket science. Working through the above steps will ensure you are on track to create the right strategy for your company that responds to both your business requirements and your talent aspirations for the future.


Mark LaddsHead of Commerce & Industry - Interim Recruitment

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