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Righting the Ship

Since taking over the top HR post at A.P. Moller-Maersk, Bill Allen has steered the course toward a more efficient and essential HR function.

This article accompanies Piloting His Own Path: Jeff Shuman, the 2011 HR Executive of the Year, and The 2011 HR Honor Roll .

Sunday, October 2, 2011
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When Bill Allen was growing up in Florida, he would often play on his father's office floor while the elder Allen pored over job descriptions and benefits plans.

Little did he think at the time that he'd end up in the same field as his dad, who headed HR at one of RCA Corp.'s manufacturing plants in West Palm Beach, Fla. It wasn't until he was in college in the late 1970s, at Auburn University, that Allen decided to pursue a degree in business.

"I thought of marketing and I thought of HR, and realized they were really very similar functions," says Allen, now group senior vice president of human resources for shipping and oil-exploration conglomerate A.P. Moller-Maersk A/S. "In both cases, you're trying to get the best ingredients -- in HR's case, people -- and get the most out of them for the business."

After earning his master's degree in labor economics and labor relations at the University of Texas in Denton, Allen went on to hold positions of increasing responsibility in HR -- at Purchase, N.Y.-based PepsiCo.; then Purchase, N.Y.-based Atlas Air Worldwide Holdings; then Maersk, where he now heads up corporate HR for the Copenhagen, Denmark-based 110,000-employee giant with $57 billion in revenue and offices in 120 countries.

Was it those early years -- being exposed to HR through his dad -- that eventually led him across the globe? He says no. What he did get from his father, he says, "is an acute sense of doing the right thing and being ethical, and making sure you don't feel entitled to anything, that you have to work for what you get and earn your keep every single day."

Interesting, then, that some of those very lessons are at the heart of an organizational and corporate HR turnaround Allen has been leading since taking over the top post in 2008 -- a feat also central to his being named one of HRE's 2011 HR Honor Roll recipients.

When Allen took over Maersk's corporate HR function -- after serving two years as senior vice president of global HR for its Line & Logistics unit and three before that as the unit's HR vice president in charge of corporate communications -- he found problems that needed immediate attention.

The function, he says, was "immature, sort of learning and developing, but also formulaic, over-engineered and very, very complicated." The relationship between the HR leaders of Maersk's eight business units and corporate HR was strained; business-unit HR leaders often viewed corporate HR's contributions as duplicative and unnecessary, or even invasive and disruptive.

"Leaders," says Allen, "weren't trusted to make the right decisions, so we had formulas that made the decisions for them -- including in executive compensation, where you input data on engagement scores and 'strategic progression,' and out came your award."

Add to that a culture in which employees expected "a job for life," where individual performance wasn't assessed or rewarded and where few involuntary terminations occurred, according to Rachel Berry, communications consultant for Maersk and Allen's nominator, and it becomes clear his hands were full.

With a week's worth of assessment help from longtime friend Bill Conaty, author, consultant and former senior vice president of human resources for General Electric Co., Allen set out to, in his words, "clean up our organization."

He started by reinventing HR and redefining the role of the function as a source of strategic direction and governance for the business units.

He tightened the focus on key areas where corporate HR would provide direction -- talent management, leadership development, executive compensation and performance management -- and eliminated the rest, including staff redundancies, which brought his own department's headcount from 87 to 24.

He teamed with CEO Nils Smedegaard Andersen to tighten the focus and function of corporate headquarters at large, which brought those ranks from 375 to 205.

He set up numerous programs -- with minimal third-party help -- designed to improve companywide learning and knowledge-sharing, strengthen development opportunities for future leaders and solidify a new culture that holds people accountable.

"Research aside," says Allen, "what people really want out of work is to play for a winning team. So my job is to make sure we connect the HR function to the business, so everything we do [helps us] win in the marketplace; to be relentless in terms of ensuring we get the right leaders in the right place at the right time; and to ensure we get the best HR people we can get in the roles that are most important to HR."

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Under his guidance came The Maersk Way of Winning, a common learning platform with customized options for each business unit; The Development Shop, individualized coursework for business leaders in areas ranging from financial literacy to business acumen; People Strategy Sessions, a structured approach to team assessments for leaders that helps them identify high performers and business-critical positions; the Global Executive Compensation Scheme, putting trust in the leaders to make the right call instead of relying on formulas and tying more variable pay to business results; and the HRWiki, Maersk's first corporatewide venture into the use of social media to enhance knowledge-sharing.

The list goes on, all feats of a man Conaty describes as a "continuous learner," who is both "intellectually and globally curious [yet] very calm and unflappable." There's also an "adventuresome side to him," Conaty says, "that would [inspire him to] leave the comforts of his U.S. work and life, and pack up and go to Denmark" with his wife and two sons, now 20 and 18.

His willingness to be on the move also keeps him "traveling throughout the organization," says CEO Andersen, to promote and oversee "what we've worked to install -- performance management and a winning spirit -- in the organization."

Andersen cites Allen's "human approach, practicality and understanding of people" as keys to his success in "getting rid of bureaucracy and downscaling . . . so our performance management is practical and workable."

Allen says his next big challenge is to "really, really get to know who our top performers are," something both he and Conaty refer to as "talent intimacy." He also aims to keep expanding Maersk's horizons through partnerships with top business schools worldwide and a new off-site leadership learning center that will open in November.

These efforts, says Allen, along with maintaining a culture that went from having "a lot of reasons not to do things to a few reasons to do things and do them the right way, are what's required to really move this ship forward."

 

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