The Change Agent

Greatest Challenge: How to deal with a recessionary environment, while still protecting jobs.

Greatest Achievement: Implementing a recession strategy through which employees got extra vacation days and stock options to help offset a temporary cut in pay and 401(k) match.

Thursday, July 1, 2010
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Perhaps one of the more telling examples of Kevin Close's character came from his decision to leave the Netherlands Insurance Co. in Boston back in the 1990s.

He had already helped it revitalize its benefits and compensation programs and put in place a new executive-compensation strategy.

Now, it seemed, he was on easy street. But he wanted more.

"I was going into administrative mode and I wasn't satisfied with just doing administration," says Close, 45.

"I want to go after problems. I want to be the change agent, so it was time for me to leave and find another opportunity."

That desire to solve problems has served him well in his current position -- vice president of global compensation and benefits at Hopkinton, Mass.-based information technology company EMC Corp. -- and has led to his selection as one of HR's Rising Stars for 2010.

Heading into the economic downturn, EMC positioned itself to weather the storm -- but, like many other organizations, it did not anticipate or expect it to be quite so severe, says Close.

"March [2009] comes along, the low of the lows, and the bottom falls out [of the stock market] again," says Close. "Now we have to increase our restructuring activities and take significant [steps] to reduce expenses across the organization."

With just a matter of weeks to come up with a new recession response, Close joined a group consisting of CHRO Jack Mollen and other HR and corporate-communication leaders to develop a plan to temporarily cut the pay of most employees by 5 percent and halt the 401(k) match.

Certainly, nothing easy for employees to swallow -- but Close made it a little more palatable by offering them five extra vacation days as well as restricted stock options to those whose pay was cut.

Echoing the company's corporate value of creating one, unified company, Close and the others branded the extra vacation days as "One EMC Days."

To institute such policies took what Close calls "honest, candid, thoughtful communication" targeted at specific groups within the 43,000-employee population.

Each morning at 8 a.m., Close held a conference call with leaders -- mostly HR -- in EMC offices in nearly 70 countries to figure out how they could effectively initiate the pay cut/extra vacation plan.

Communication was especially important for employees in countries where it's illegal to cut salaries without permission.

More than 90 percent of EMC employees eventually took the pay cut, says Close, because they realized that doing so allowed the company to potentially save their jobs as well as their co-workers' jobs.

In the end, the program saved more than 2,000 jobs as well as $450 million; while 2009 figures for employee satisfaction and employee engagement came in at record highs -- 83 percent and 86 percent, respectively. That represented an increase from 2007, when those numbers both stood at 82 percent.

Close attributes the scores to open communication and a level of confidence that the company was positioning itself to come out of the recession in a competitive position. Pay levels were restored in early 2010.

Since 2003, EMC has acquired 50 companies and Close has also been integral in bringing those new employees into EMC's compensation and benefits programs.

Sometimes, EMC has acquired a small company that can really benefit from a relationship with a company as large as EMC, so integrating many of its HR processes to the new workers has been the best plan.

Other times, such as in its acquisition of software company VMware, the acquired company has remained a wholly owned subsidiary, so Close has made sure not to force any integration.

"The big principle here is, 'do no harm,' respecting the cultures of the companies, understanding why we acquired them and how they fit into EMC," he says. "We learn, we share, we listen, we understand. That will dictate the path we take."

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Close has also been instrumental in changing the executive-compensation structure at EMC by aligning executives' successes to the financial goals of the company.

With a deep understanding of the company's financial goals, he has quarterly meetings with various business-unit teams and shares how their results are reflected in their compensation.

"We allow them to be rewarded for the direct influence they exert," says Close.

Jack Mollen, executive vice president of human resources at EMC, says Close is so talented that he's becoming a sought-after thought leader in the field.

He attributes Close's success to his ability to be calm and intense at the same time.

"He's got a very relaxed manner about him -- even under the gun, he's very cool," says Mollen.

Close says his philosophy about work is simple -- be frank and honest, and solicit the same from everyone else.

"It's really [about] being candid," he says. "Having the honest discussions about opportunities [and] being willing to challenge current thinking to ensure that we do what is right and best for the company, for employees and for shareholders."

These are the other 2010 HR's Rising Stars:

A Dynamo in The Energy Field: Tana Cashion

The Quintessential Collaborator: Nancy Wolfe

The Innovator: Prasad Setty

Inspired by Human Performance: Adam Malamut

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