Spin to Win

Marcia J. Avedon's integral role in the creation of a spin-off company proved just how vital it is for successful HR executives to have a firm grasp of their business's business. 

By Michael J. O'Brien

This article accompanies The Re-inventor and The 2015 HR Honor Roll.

If you had to choose the color of a new company's logo, what would it be?

For Marcia Avedon, senior vice president of human resources, communications and corporate affairs at Ingersoll Rand, that question was perhaps the least worrisome of all the ones facing her after she was asked to lead the company's effort to spin off its $2-billion commercial and residential security businesses into a stand-alone public company.

It was late 2013 when the Swords, Ireland-based diversified industrial company (with its U.S. headquarters in Davidson, N.C.) decided to create the new company, and Avedon -- who has been with the company in her current position for the past eight years -- was well aware of the challenges that lay ahead. The manner in which she rose to meet those challenges is largely what landed her a coveted spot on this year's HR Honor Roll.

"[In] creating a public company as a spin-off by taking a couple business units and making [them] a stand-alone enterprise, there were numerous challenges related to leadership and making sure the new company had the executive leadership it would need to be successful," she says. "So we strived to set the bar high enough so the company can be successful."

Avedon led the HR work to create the new company, which encompassed organizational design, compensation and benefits-program design, as well as selection of the new company's CEO, leadership and board members -- including one position particularly close to her.

"The new CHRO had been one of my direct reports," she says, "so that speaks to our succession planning," adding that IR's deep bench strength meant it had workers ready to be in those roles for the new company.

"We picked the CEO from outside," she says, "but everyone else was internal."

In order to establish a sense of "independence and autonomy" from the parent company, however, Avedon says, it was vital to fill the new board of directors with people without any ties to it.

"We didn't send over any [IR] board members," she says. "We really wanted it to be fully independent."

She also led the corporate-identity and brand creation for the new company and comprehensive communications plans, including the aforementioned color choice.

"We had responsibilities for that whole process of, 'What are we going to call it?' and 'How do we bring it to life?' " she says. Among all the other decisions made, Avedon's team selected the name Allegion along with a vibrant orange hue for the new company's stylized "A" logo.

So how were her efforts received on Wall Street, the ultimate measuring stick of business acumen?

"When we spun [off] Allegion in December 2013, it initially traded on Nasdaq at $42 per share," she says. "Now [as of August 2015], it's trading at $64."

Concurrent to the spin-off, Avedon also worked with IR's CEO and executive leadership team to determine the new organizational design that would enable a refreshed business strategy. The new design restructured the company into 11 strategic business units, designed to strengthen customer focus and market agility, while reducing management layers and increasing efficiency.

During 2014, the first year of the company's new model, Avedon and her team acted to ensure organizational effectiveness through change by heightening an emphasis on leadership development, employee engagement and communications -- connecting leaders and employees alike to the company's purpose and goals.

She discounts the commonly held myth around employee engagement that, when a company is going through big changes, engagement levels are going to go down.

"One of the things that made 2014 so fascinating," she says, "was that, despite the reorganization of IR and spinning off Allegion, engagement levels went up eight points."

She attributes the increase to three factors: a "doubling down" on holding leaders and managers accountable for engagement; a five-year focus on company efforts to be "progressive, diverse and inclusive;" and a change in how the company thinks about engagement and its impact on business -- e.g., lower accidents and higher customer satisfaction.

"[Employee-engagement levels] are not just another number," she says, "[They] actually make a difference in being a great company."

As evidence of that belief, Avedon's tenure coincides with the company's appearance at No. 1 in its industry by Fortune magazine's "World's Most Admired Companies" list, as well as being named one of the best companies for leaders by Chief Executive magazine, among other accolades.

She also says her view of HR's impact on an organization has evolved along with the discipline itself.

"We as HR professionals and executives need to be impacting individuals within the organization, but we also need to have a big impact on society and the communities where we live and work, by creating opportunities [and] by being more inclusive," she says. "We need to be thinking about both those levels of impact: organizational and societal."

For his part, IR Chairman and CEO Michael W. Lamach says Avedon has transformed the HR function to a mature, global, world-class organization.

"From learning and professional development to employee engagement and diversity and inclusion, Marcia has created a winning culture that encourages our employees to generate new ideas and improve our performance," he says. "Her leadership helps Ingersoll Rand exceed customer expectations and furthers our growth."

Read also:

Marcia Avedon: In Brief

Oct 13, 2015
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