The Most Admired Companies for HR share a common drive to ensure their workforces are prepared to drive bottom-line business objectives in a recovering economy.
In this complex business environment, where the need for growth is one of the few constants, David Ayre knows the simple -- yet critical -- role HR plays in helping his organization, Nike, maintain its global domination in the athletic apparel market.
"Growth is our biggest challenge," says the vice president of global human resources for the Beaverton, Ore.-based organization. " ... [I]t's expected everywhere in this company," including in every one of the 170 countries in which it operates. "And our job [as the HR function] is to help leaders make great decisions" around that.
But when an organization has 38,000 employees -- including 6,000 managers -- operating across the globe, that simple motto translates to complex learning and development processes to ensure the workforce is fully prepared to recognize and take advantage of the opportunities the business world presents it with.
"It's really getting the talent and leadership ready to capture that growth; that's the biggest issue," Ayre says. "It's about putting your resources in HR up against the most critical opportunities and supporting them with very great operating processes, great leaders and great managers."
As a part of that effort, Nike recently created Xcelerate, an annual, team-based learning program in which 35 employees are selected for high-potential development by their managers and are then given specific, business-relevant group projects by senior leaders that balance both current and future organizational needs. Those who distinguish themselves through this program may then be considered for future placement on the company's corporate leadership team, which is made up of about 200 leaders from a variety of divisions.
In addition to fulfilling their current job duties, Ayre says, those hi-pos spend six months traveling the world working on these projects, after which they present their findings to the senior leadership team for possible implementation within the organization, provided they have "the right merit and the right return."
This past year, Ayre was the sponsor for a smaller team within Xcelerate whose program centered around the theme of "managers as multipliers," which he says is not about making people work harder, but engaging them in a way that helps them produce better and more relevant work.
"The core to that is that the managers set the right environment," he says, adding that the members of his smaller group used surveys and interviews with employees to determine how good the company was "at providing great feedback."
They also developed a tool called the Net Multiplier Score, which is a simple concept that basically asks employees: "Would you recommend your manager to others?" and then rates the responses on a scale.
"Most companies do 360s," says Ayre, adding that Nike does, as well, "but this is a one-way, 'listen to your people' score."
Starting next spring, Ayre proudly notes, a pilot program called Manager 90 -- its name is a play on one portion of 360-degree feedback, from direct reports, that the program focuses on -- will send the scores directly to the managers. He says the program speaks to both the company's larger developmental goals, "and also it's meant to create a dialogue on making sure that you've got the right environment."
The Net Multiplier Score is actually a tweak on a similar retailing scoring system, which was brought to the Xcelerate group by a member from the retail side of the business. "[The group] took that idea and moved it inside," Ayre says, "and I'm pretty excited about that."
It is for initiatives such as these that Nike is listed at No. 4 on this year's "Most Admired Companies for HR" list, which is an HR-specific recalibration of Fortune magazine's "Most Admired Companies" list compiled by the Philadelphia-based Hay Group.
The Fortune "Most Admired" list was created through a survey of 4,100 HR executives, directors and securities analysts asked to rank companies on nine criteria. Four of those categories with HR implications (management quality, product/service quality, innovation and people management) were pulled out and recalibrated to create the "Most Admired Companies for HR" list. (See sidebar for more on the ranking process.)
The role HR plays in sustaining corporate performance is critical, especially in today's business environment, Ayre and other HR experts and practitioners say. At Nike, says Ayre, his HR team's commitment to creating the best managers and leaders is a necessity, because, even with an HR organization of 570 people, "there's never going to be enough HR people to basically manage a growth company, and so, what you have to do is rely on -- and put the responsibility for people with -- the leaders and the managers."
Mark Royal, a senior consultant at the Hay Group's Chicago office, says much has changed since last year's list came out, adding that 22 of 57 industry groupings are now headed by new No. 1 companies, compared to last year's list.
And many of this year's Most Admired companies have shifted their focus from last year, he says.
"Last year, there was the sense that engagement would be top of mind for leaders coming out of the downturn," he says. "Our theme this year is on the notion of sustaining performance, and our message is that engagement is critical, but a broader set of considerations needs to be looked at," including training and development, he says.
Organizations such as Nike are positioning themselves well for sustained momentum through the use of innovative programs such as Xcelerate, he says.
"The Most Admired Companies for HR are distinctive in their focus on investing in innovation as an organizational capability," Royal says, and that includes sharing information, knowledge management, and a more proactive approach and willingness to revisit processes that, while not broken, could still be improved.
Focused on Training
Royal says another trend among the Most Admired Companies is an emphasis on making sure skills keep up with shifting business objectives, adding that 89 percent of the companies on that larger list strongly agree that employee-skills development is an important driver of company performance, compared to 76 percent for other organizations in the same survey.
"As the game may have changed for employees," he says, "the skill sets they have now may not be the ones they need for their new positions."
Royal adds that these unstable times can wreak havoc on an organization's training system if it's left unattended.
"There's a trap with processes and training," he says. "They're great in stable times, but when the game changes, training may not be adequate."
In order to address such changes quickly, Medco Health Solutions Inc., which earned the No. 11 spot on this year's HR-specific list, created a broadcast studio at its Franklin Lakes, N.J., headquarters in order to better communicate with and train its 20,000 worldwide employees.
Karin Princivalle, senior vice president of human resources for Medco, says training and communications go hand in hand at the organization, which manages pharmacy benefits and operates a large, mail-order pharmacy. And HR has an important overall role to play in both of those efforts, she adds.
"When I think of the role HR plays in the organization," she says, "it's really to ensure that our people practices drive the right behaviors to help our business outcomes."
Training plays a "very big" role within the organization, she says, "and one of the things we always try to do is keep people clear on the big picture. As the landscape changes, which drives changes in workflow, we like to keep our employees focused on what's really going on out there."
And, as both training and communications with employees need to be done quickly, Princivalle says, Medco uses a "fairly robust communications" program -- including the broadcast studio -- in order to easily disseminate both updated company information and training programs.
"Because we're a global organization, we do a lot of in-house e-learning, using virtual meeting tools to bring people together for training," she says. "Then we'll do a live chat on what it really means," she says, "and that's really important to both us and them.
"We can get to our employees in real-time, and it's all very interactive," she says.
Medco's HR function also regularly schedules televised events that take in employees' write-in questions about the company. Those questions are then answered for all to see, because, as Princivalle puts it, "suggestion boxes have their limits."
A companywide business-process redesign is in the works at Medco, she says, designed to create more streamlined and efficient processes in every division, including everything from finance to patient-advocacy systems. That redesign will mean many hundreds of hours of training for employees; and when you throw in the proposed merger between Medco and Express Scripts set to take place next year, things will most certainly be changing at her organization, a key reason Princivalle is very happy to have access to such a powerful communication tool in the form of its broadcast studio.
"We're keeping people very much in tune with the big picture," she says, "so when things change, they understand why."
While Medco may be using the small screen to help train its workers, New York-based financial-services firm Goldman Sachs -- No. 22 on this year's list -- is taking to the stage to help workers better understand cultures apart from their own, according to Carol Pledger, managing director in the firm's human capital management division.
"Given that we're such a global firm in so many new markets," she says, "we've put a lot of focus on cross-culture programs" as well as on diversity and inclusion.
"We've really put a lot of focus on it in the last several years," she says, "and all employees are required to take at least two hours of training per year on diversity."
Which is where Voices from Asia takes it bow.
The program -- recently launched in the United States and soon to be rolled out to European offices -- is based on what she calls an "interactive-theater" style.
"We interviewed a lot of business people around the world; then, we built scenarios related to different cultures working together, and also regarding working with global teams," she says, citing the example of a recent skit that dealt with direct versus indirect communication styles.
The target audience for this consists of managers based in the Americas and Europe, Middle East and Africa regions who manage or provide performance-review feedback on people based in Asia, she says. Participants are invited to attend, she adds, although the company will be offering open-enrollment sessions as part of the Asia Pacific Heritage Month in May.
The actors play out a scenario, and a facilitator then brings the audience into the action by asking questions of the actors, who respond in character and whose behaviors change as the audience makes recommendations for how to better handle a particular situation.
In Royal's estimation, these two companies' approaches to training are in line with other Most Admired companies in that they recognize training processes must always remain fluid and ready to change with the times.
"For employees to be effective in dynamic environments," he says, "training must be continually updated to reflect the new realities they face. Otherwise, the skills and abilities that once made an employee a strong contributor can quickly become obsolete."
Reworking Work Flows
Another notable trend among the most admired companies for HR, Royal says, is their commitment to becoming more efficient.
"The original Most Admired Companies told us they're doing a lot to solicit ideas from employees around improving efficiency," he says, as the roiling economy may have disrupted the way many companies operate.
Indeed, 91 percent of those on the overall Most Admired Companies list regularly solicit ideas from employees for increasing efficiency, compared to just 76 percent of peer organizations.
"It makes sense," says Royal, "because a lot may have changed during this chaos. It's like changing tires on a moving car."
At Procter & Gamble -- No. 22 on this year's list -- the Cincinnati-based consumer-goods producer is enlisting the help of its 133,000 worldwide workers to ensure their work processes aren't longer than they need to be. The venture is part of a companywide effort to redesign the entire organization -- its first overall redesign since 2000 -- says Moheet Nagrath, the company's global human resource officer.
"The real power of simplifying work is when people can take [work flows] into their own hands" in order to make the most appropriate changes, he says, adding that such an approach does not require any sophisticated technique.
"All it requires is a manager to have conversations with a worker to find out the one thing [the manager] can do to simplify [his or her] work, and that creates momentum," he says, because such conversations can often be used to uncover redundant or outdated work processes.
Procter & Gamble, like most of the companies on the HRE list, outperform their competition, says Jim Concelman, vice president of leadership development for Bridgeville, Pa.-based DDI's leadership-solutions group. And that likely means they have workforces that are more knowledgeable and better skilled than their competitors. But superior execution isn't enough, he says.
"Companies that have a reputation for growing and developing people, and deploying them in assignments that stretch their capabilities, attract the best talent," he says. "It becomes a repeatable cycle: attract, develop, deploy, compete. When companies consistently do this, they achieve a talent advantage that makes them agile, adaptable and best-in-class."