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Marathon Man

Qualcomm's Dan Sullivan wins HR Executive of the Year honor by setting the pace for constant change in the competitive high-tech sector.

Thursday, November 1, 2001
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He's a master communicator who never shouts or passes judgment. He's a people person with an unusually strong command of business principles. A strategic HR visionary. Grace under pressure. And now the 2001 Human Resource Executive of the Year.

But there's much more to Dan Sullivan, executive vice president of human resources at Qualcomm Inc., who married his high-school sweetheart about 30 years ago and hasn't missed a week of running since 1993.

When Sullivan joined Qualcomm nearly 10 years ago, the San Diego-based pioneer of digital wireless technology was relatively small, with about 700 employees. At its height, Qualcomm employed more than 11,000 people (a number that divestitures later pared to 7,000), while the HR department swelled to 130 from just seven staffers.

Dealing with a huge workforce wasn't new to Sullivan, however. Prior to joining Qualcomm, he'd worked at competitor Motorola during the days when it employed more than 100,000 people. His Motorola experience helped Sullivan brace for the explosive growth that would lie ahead for high-flying Qualcomm, which was founded in July 1985.

Susan Laun, the firm's senior director of organization planning, recalls how Sullivan reacted to the growing pains on a rare rainy day in Southern California in 1995. About 2,000 people were expected to show up for a job fair as the company was ramping up with new hires to keep pace with rapid industry growth, but the event ended up drawing 10,000 applicants queued up around corporate headquarters.

"It was a pretty heady experience to watch Dan, who walked the line in the rain and talked to people as they were waiting there," she says. "Obviously, we couldn't get people through in the timetable we anticipated. I remember him picking up resumes from people who had to go."

HR's mission in those days was primarily staffing. "We needed to bring in as many people as possible with strong skills," Sullivan explains from his office overlooking suburban San Diego. "I think the hardest part was evolving HR from a largely transactional organization that was supplying recruiters, benefit professionals and compensation specialists to an organization that met the needs of a rapidly maturing company which was becoming more complex."

Complex indeed. At the time of its initial public offering in December 1991, Qualcomm's stock was trading at just $1 per share. Following a series of stock splits beginning in early 1994, including 2-for-1 and 4-for-1 splits just seven months apart in 1999, the stock was trading at $200 per share.

"That presented a lot of challenges," Sullivan notes. "We had millionaires everywhere in the company."

Since then, Qualcomm's stock price has fallen back to earth (it was trading at about $50 per share as this issue went to press). The firm also recently called off plans for a major spin-off that would have split it into approximately two equal parts.

Company officials had a lot of explaining to do to both employees and investors. While analysts are still generally bullish about Qualcomm's long-term prospects, they say there's no escaping a series of immediate hurdles tied to the wireless waiting game. Indeed, Sullivan's challenges have intensified as the entire IT industry has been hit hard by the economic downturn.

"To some extent," he says, "our approach to the slowing economy has been rather straightforward." The company has responded to these conditions by accelerating communication with employees at all levels during informal chats and by broadcasting closed-circuit meetings featuring the CEO, president, CFO and executives who head up all major business groups.

"We shared our best view of the economy and reasoning for not completing the spin-off, as well as our strategy and position in the marketplace," Sullivan says.

Strategic Vision

For the past five or six years, Qualcomm's HR vision has been to energize and guide the company in the areas of motivation, employee satisfaction and the achievement of corporate objectives. Another critical component of that vision is to maximize the firm's operational efficiencies.

"It has allowed us to develop a set of strategic objectives that is flexible and adaptable -- first and foremost to provide not only a partnership role but also a leadership role," according to Sullivan.

Line managers have sought leadership and support from HR through several major transitions, including divestitures in the firm's infrastructure and cell-phone businesses. Management also relied on HR more than a year ago when it decided to spin off the firm's chip and software business -- a plan that was recently abandoned.

Sullivan is as much a coach and guide as an officer of the company and member of the executive team. But his role is more serious than soft: He has structured an operations team to focus on HR alignment within divisions and corporate functions.

"In all of my 30 years working for three major companies, I have never met an HR executive as broadly talented as Dan Sullivan," says Rich Sulpizio, Qualcomm's former president and chief operating officer, who nominated Sullivan for HR Executive of the Year. "He's a general-manager type person who happened to choose HR as his discipline. He really fits with all levels of employees and departments."

Ironically, when Sullivan first contacted Sulpizio at Qualcomm, it was as a recruiter trying to place someone in the job of executive vice president of human resources that Sullivan eventually decided to take himself. With experience in senior HR management roles at Motorola Inc., Wavetek Corp. and Bourns Inc. since entering the field in July 1977, Sullivan -- who was then doing HR consulting work between corporate stints -- decided to look no further and apply for the position he still holds today.

"Throughout his tenure at Qualcomm, Dan elevated the role and contribution of the human resource department," Sulpizio wrote in his nomination form. "He has led the organization through intensive hiring, critical talent development and ever-changing organizational structures."

Steve Altman, Qualcomm's executive vice president of tech alliance, says Sullivan "knows HR issues, but what really strikes me as impressive is that he knows our business and industry. And he understands it better than a lot of business people do."

Under Sullivan's leadership, there's a sense that HR makes a difference in the company. Adds Laun: "He's a nonstop thinker and gives everyone around him the space to learn his ideas and add to them."

Sullivan is passionate about education and mindful of the role students will play in advancing high technology through difficult business cycles and reinforcing San Diego's position as the wireless capital of the world. He played a critical role in helping secure funding for the University of California-San Diego's Jacobs School of Engineering as part of a new state initiative to establish the California Institute for Telecommunications and Information Technology. Key resources include endowed chairs for faculty as well as scholarships and fellowships for students.

"Dan understands that talent and quality in any organization is absolutely crucial in both good times and lean times," says Robert Conn, the UCSD school's dean. And as head of HR for a major American company with international reach, Sullivan probably understands better than anyone that people practices unlock the secrets of business success, according to Conn. "If Qualcomm is able to hire some of those great students," he says, "then all the better."

Passion Play

In recent years, Qualcomm has undergone a few significant divestitures and spin-offs. Setting the stage for one such transition was the development of a proprietary technology for telecom equipment manufacturers called Code Division Multiple Access (CDMA), whose adoption was stalled by economic factors as well as litigation initiated by Ericsson Inc. over proprietary rights.

Eventually, Qualcomm and Ericsson reached a significant settlement calling for the harmonization of competing technologies and paving the way for Qualcomm's CDMA technology becoming the industry standard. The settlement also included an agreement to abandon litigation and divest Qualcomm's ailing infrastructure business to Ericsson in the spring of 1999.

Sullivan's unique challenge at the time was to look out for the interests of the 1,300 employees who were about to join Ericsson while at the same time preserving Qualcomm's culture. Under his leadership, the HR department designed and produced a cultural play using a live theater performance for employees who were part of the divestiture. A local stage troupe specializing in corporate events wrote the script and acted alongside company officials.

The performance, chock full of light-hearted inside jokes, dramatized the differences and similarities of the two organizational cultures and management styles of the two companies. To wit: Ericsson, a 125-year-old Swedish company that employs about 105,000 people, primarily focuses on controlling distribution channels and supply chains, whereas it's easier to emphasize innovation and creativity at a company the size of Qualcomm, according to Sullivan.

The innovative approach gave employees a more meaningful view of their new employer by demystifying both businesses and explaining key differences such as the example above. It also brought with it a badly needed diversion.

While the event helped break the ice, ratchet down the level of tension and smooth the transition for employees, it did not single-handedly turn the tide. Sullivan reports that many employees continued to press Qualcomm HR staffers for answers, including what would happen to them once they were part of Ericsson. That meant working closely with the competitor's HR department to provide answers.

"This was difficult because for a number of years, Ericsson was viewed as our primary foe, but as a result of this agreement, the company became an ally and partner," he says. "Employees also had to give up unvested stock options that had potential future value that they no longer would realize."

Laboratory of Learning

Perhaps the one company resource they'd miss most was the Qualcomm Learning Center, which offers more than 200 engineering, manufacturing, computer and professional development courses online -- an approach that has saved the company nearly $1 million in annual training costs, not including staff time.

It's a "sparkling component of the company," says Sullivan, that was launched to help employees take responsibility for their own learning, motivation and level of performance with support from the company in terms of providing the necessary resources.

"We've found that many employees come to Qualcomm because of the learning environment," he explains. "It's not all about the benefits, stock options and compensation anymore because you can get that in a lot of places."

Indeed, professional growth and development has turned out to be a major differentiator in the increasingly competitive high-tech field. At Qualcomm, voluntary turnover has been about 5 percent for the past 10 years versus in the low double digits for the company's closest competitors.

Sullivan recently initiated a study to evaluate why people decline offers to join Qualcomm, as well as why they leave or stay with the company.

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Results from the study show that growth and development opportunities were cited by respondents as the No. 1 reason people are drawn to the company and interested in sticking around.

Perhaps it's no wonder then that for each of the past three years, Qualcomm has been listed as one of Fortune magazine's "100 Best Companies to Work for in America."

Meaningful Communications

One of Sullivan's top initiatives has been transferring HR transactions to the Internet. In recent years, he has led the human resource information systems organization to create a fully Web-enabled self-service portal called "My Source." Capabilities include merit and performance management, benefit transactions and 24/7 employee access to organizational and personal information. The effort has increased organizational efficiency and improved employee satisfaction. It also has helped free up HR managers for strategic projects.

As part of the company's online emphasis, all employees worldwide receive continually updated industry and market news to provide them with an external context for making internal product and service decisions. The daily messages link receives more hits than any other part of Qualcomm's Web site.

Sullivan -- who holds a Ph.D. in organization communication from the University of Nebraska, as well as master's and bachelor's degrees in communication from West Virginia University and Illinois State University -- says his studies helped him realize that communications is more than transmitting information. It's about attaching meaning to the information people receive.

"He's the best communicator I have ever known, not only in the HR arena but in general," Michelle Sterling, Qualcomm's vice president of human resources, says of her boss. "He's excellent in negotiations and is a real visionary who understands business issues and how they impact the workforce."

Adds Julie Kalk, Qualcomm's senior manager of corporate giving, "He's the most even-tempered guy. I don't think I've ever seen him lose his cool." It's a quality that she says comes in handy in a dynamic, constantly changing workplace. "He has so much experience and wisdom to impart and is so accessible. He's also very entrepreneurial and allows you to take risks and is open to new ideas."

Sullivan also is viewed as even-handed. In the early days of his Qualcomm tenure, he was hearing gripes about HR being too closely aligned with management and not fully factoring in employee interests. He cites the classic scenario of a manager approaching HR about an employee performance problem.

"I said to the HR team, 'I want you to be the international equivalent of Switzerland: that this is a place of neutrality with no axes to grind, no leaning to management or the employee [and no] preconceived notions about right or wrong or preferred outcomes,' " he says. "Our measure of that [neutrality] is whether or not employees and managers report that they've had a fair hearing and action that was based on collection of facts."

Corporate Citizenship

Sullivan's face lights up when the subject turns to philanthropy and volunteerism, programs described by company literature as "essential to our fundamental, top-down commitment to creating meaningful community partnerships." Qualcomm donates about 1 percent to 2 percent of its pretax profit, and each month reviews between 150 and 250 community funding proposals from eligible nonprofit organizations.

Sullivan describes corporate giving -- which targets health and human services, arts and education -- as "an interesting and unique component to have under the HR umbrella."

Under his leadership, the company has doubled the number of employees committed to volunteerism in the community. "We found that employees not only want to work for companies with a strong learning environment, but also are strong leaders in the community," he says, "and employees want to become involved in their communities."

Sullivan is active in educational reform efforts and recently created the Foundation for the Improvement of Math and Science Instruction in San Diego -- a collaborative effort involving several other local high-tech companies whose focus is on bridging the digital divide and improving education in these vital subjects.

Qualcomm has donated $15 million to the program, which company officials hope will broaden the pipeline for qualified math and science students, expand the local labor pool and sow the seeds for a new generation of Qualcomm employees.

In addition, Sullivan has been a leader in UCSD's Human Resources Connect, which designs educational programs and networking opportunities for local HR professionals. And he has taught HR courses at both San Diego State University and the University of California at San Diego.

When he's not working, Sullivan loves to run long distances and averages about 20 miles a week. He ran in the 26.2 mile 2001 New York City Marathon and is eyeing more marathons, which provides tremendous insight into what makes Dan Sullivan tick. He's clearly a long-haul runner with no intention of leaving HR for any of the general manager roles his executive team envisions for him.

"He's very athletic," says Kalk, "and is a good inspiration for us."

Sullivan fits right in at a company that's so fitness-conscious it paid $18 million to rename the home of baseball's San Diego Padres and football's San Diego Chargers Qualcomm Stadium -- known to locals as simply the "Q." He approaches his hobby like his career: as an endurance runner and manager always looking to outlast the competition in the face of adversity.

Noting that there has been no net reduction in Qualcomm's 2001 head count amid competitor cutbacks, Sullivan is grateful for how "employees have supported the company and focused on what needs to be done during these trying times."

See our report on the dinner honoring Jack Mollen and the HR Honor Roll winners at the University Club in Chicago on Oct. 3.

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