Moving from expansion to a downturn to new growth, EMC Corp.'s Jack Mollen, this year's HR Executive of the Year, is ready for anything the business cycle can throw at him.
In 1999, at the height of the dot-com boom, there was good news and bad news for EMC Corp. The good news: The Hopkinton, Mass.-based firm known best for its modest place in the data-storage hardware niche, was poised for sudden growth. The bad news: While it was quickly becoming a 21st-century company, its organization -- and its HR functions -- were still running in 20th-century mode.
Enter Jack Mollen.
Seven years and several business cycles later, observers say, Mollen, 56, now EMC's executive vice president of HR, has built a modern, responsive, strategy-focused HR team that plays an integral role in executing business goals. It's an achievement that has earned him Human Resource Executive®'s HR Executive of the Year award.
Mollen came to EMC with a solid HR pedigree and experiences that prepared him well for the company's challenges.
After earning a degree in economics from St. John Fisher College in Rochester, N.Y., and a master's degree in labor relations from St. Francis University in Loretto, Pa., he spent two decades at Melbourne, Fla.-based Harris Corp. Eventually, he rose to the position of vice president of administration for Harris' 12,000-person electronic-systems sector, where he was responsible for information services, quality, engineering services, HR, M&A -- even facilities and security.
"I had a lot of different functions," Mollen recalls. "It gave me an ability to look at business operations and analyze the best way to operate them."
He then moved to financial services giant Citigroup Inc., where he was vice president of HR for the company's 80,000-person global operations and technology organization, and played a key employee-integration role following the 1998 merger of Citicorp and Travelers Group Inc.
"It was a major restructuring and a very good experience," he says. "Most of the issues that the company had to deal with turned out to be centered around people issues: how to have the right people doing the right job, and understanding the business needs."
Upon arriving at EMC as senior vice president of HR, Mollen says, he immediately saw what the top HR priority was: "We had not really established the HR infrastructure that would give us the ability to scale the business," he says. "We had to make the transition from pen-and-paper to online systems and we had to create a true staffing organization. The company was growing, and it was clear we were going to have to onboard a massive number of employees and then accelerate their success."
Mollen believes the first 90 days are crucial for making an impact on a new hire. "Build that instant respect and they will truly feel like part of the company, and, in turn, they'll make a bigger contribution."
The results: In 18 months, the processes Mollen had helped put in place allowed EMC to add thousands of employees and increase its annual revenues from about $6.7 billion to nearly $9 billion.
Then the dot-com bubble burst, followed shortly thereafter by the 9/11 attacks. EMC's revenues declined almost 50 percent over a matter of months. Mollen was now facing an entirely different HR challenge: the dismissal of approximately 7,000 employees, more than a quarter of the company's global workforce. Mollen says Wall Street insiders wrote off the company, declaring that a comeback from such a blow had never taken place in the computer-hardware industry.
Ignoring the naysayers, the firm restructured itself, and its product mix. Although EMC had always offered some software along with its hardware and service offerings, the new management team, which included Mollen, gave it greater emphasis. In the past, most of the company's operations were domestic; now they would be global.
In the past, the EMC structure had been the traditional "chain of command" management style, with its hierarchical structure; now, it would use the more cross-functional "matrix" management style, a more collaborative structure requiring two or more people to come to agreement and provide unified direction. "It's unusual for a company to do any one of those changes," Mollen says. "The experts said doing all of them at once was going to be impossible."
Over the next five years, Mollen collaborated with Joe Tucci, EMC's chairman, president and CEO, and CFO Bill Teuber on the process of, first, rebalancing business priorities and, then, realigning the reduced organization and, ultimately, acquiring 25 firms and 11,000 staffers as the company rebuilt itself. (See accompanying list of EMC's acquisitions.)
Projections foresee revenues at about $11 billion for 2006.
"Every step of the way, the key was in understanding the strategy and then executing it," Mollen says, noting that there are several steps to bringing that about. "People have to understand the guiding principles of the company, they have to understand that the strategy is compelling and they have to have the courage to organize right."
Tucci has high praise for that effort. "Jack is one of those people who understands both strategy and execution," he says. "EMC's transformation could not have happened without a fast-acting HR group pulling the right levers at the right time -- and making sure we attracted some of the best talent in the industry to EMC."
Ram Charan, business adviser, public speaker and author of numerous business books, including Confronting Reality, has served as an outside consultant to EMC, and has known Mollen since his days at Harris.
"I engage with a large number of senior HR people, and Jack stands out as a leader with superb judgment and the courage to get people to see reality," he says. "Because of that, he has the respect of the senior management, and has worked intimately with the CEO. He has been a major partner in the transformation."
Charan says that if EMC were a person, the transformation it has been through would be tantamount to undergoing "a heart transplant."
"You had a change in strategy, a change in business model, a change in organization structure and a change in how executives deal with each other," he says. "Jack was instrumental in making all that happen."
Recognizing that retention of EMC's leaders was going to be vital during the acquisition period, Mollen worked to maintain and add to executive bench strength: He oversaw the recruitment and retention of six executive vice presidents, all of whom remain with the company.
Mollen says a big part of that process was the firm's Acquisition Integration and Key Talent Retention program, designed to retain as many of the critical staffers from each acquisition as possible. That involved "long and deep discussions with principals at the potential acquisition," he says. "We talk about who we are and how we're organized and how they fit. Then they're able to go back and talk to their senior staff about the opportunities they'll have."
Mollen also oversaw an extensive "scope-of-influence analysis," looking closely at the ratio of managers to their direct reports, with the goal of determining the optimal number of subordinates that managers, directors and vice presidents should have and realigning the assignments -- as opposed to adding or subtracting positions -- to make management more effective.
"We had a pretty aggressive acquisition schedule, and what can happen when you do that is you bring in a lot of middle management. It's easy to get top-heavy. So we're continually looking at our workforce to see where people are," Mollen says.
That process, in turn, led to the integration of performance reviews and disciplined goal/bonus payout programs.
"The new interconnected system tracks quarterly goals, performance appraisals, compensation and equity in a way that allows us to develop leaders at every level," Mollen says.
He also came up with one- and two-year job-rotation programs for high-potentials.
"Adults learn by doing," Mollen says. "If we don't apply it right away, we forget it. Ninety percent of development is on the job. If you don't have multiple, functional experiences, it's going to be impossible to be a [profit-and-loss or business-savvy] leader at EMC, and we want to develop as many P&L leaders as we can. If people are going to have the ability to run a product business, they need experience in marketing, sales and engineering. So we move people around early in their career here, and after a year or two, they know the whole company."
Reshaping the Department
Contributing to the process of pulling a company back from the brink is praiseworthy, but at the same time, Mollen was working to build up and reshape his own department. "We always want to do more than we can pull off," he says of the transformation, "but we've gotten a lot done."
Determined to make members of his HR team the functional partners of line managers, Mollen implemented a nuts-and-bolts solution: Each organization has an HR operations director and HR staff dedicated to serving that function, with reporting lines matrixed into the line of business and into HR. Mollen says this structure permits HR leaders to be integral to every critical business decision.
"It allows each operations director to focus on understanding that business challenge," he says. "It's isn't a matter of the HR person asking: 'Can I sit in on your staff meeting?' In fact, now, our HR people are helping set the agenda, and our businesses rarely make an organizational decision without bouncing it off HR."
In addition, Mollen pushed EMC to be among the first companies to adopt the concept of online health management, including prescriptions, diet programs, doctor/hospital searches and health trackers -- an online health record where an employee can enter personal health information, have it integrated with health-claims information (such as drugs used) and be provided information for use in making health decisions and sharing with his or her physician. Mollen admits that, at the time, it seemed like a risky venture.
"When you look back on it, it was a bit of a gamble," he says. "But health-care costs were going up 15 percent. We did our homework and it was clear that consumerism was really going to be the best long-term strategy." The result: In recent years, EMC's health-care-cost increases have been half those of competitors within the industry. Also recently, the company has gone further down the health-care consumerism road, now offering health-savings accounts among its medical-plan offerings.
Though he accepts the HR Executive of the Year honor, Mollen says much of the credit goes to his team.
"I've been fortunate to work with some of the best in HR," he says. "When you operate at the pace of a high-tech company, the people making the HR decisions have to have strong organizational ties to business units. When that happens, the probability for success goes way up."
EMC leadership also encourages participation in charity work, and Mollen has found one project he finds especially rewarding: He's a trustee of Angel Flight New England, which provides free air travel for people throughout the northeastern United States so they can access medical care.
"It's some of the most rewarding work we do," Mollen says. In one case, the charity even made a difference for an EMC employee. "One of our employees had a brain tumor, and was told he had six months to live. He wanted to be transported to Duke University, where there was an experimental procedure being tried. We got him down there and he underwent treatment for six or seven months. He lived. It's a wonderful charity and any time spent on that is really worthwhile."
Whether it's making a difference for a single employee or managing a major business transformation, Mollen has seen all sides of the business cycle.
"People sometimes ask us if EMC is an acronym," Mollen says. "It isn't. But I often says it stands for 'effectively managing change.' "