What Top Companies Do

Bob Gandossy is the Global Leader for Talent, Leadership, and Engagement at Hewitt Associates*. As an expert on leadership, the future of HR, employee engagement, and organizational change, Bob draws on 20 years of consulting experience and extensive research and publications in these areas. Using Hewitt’s Top Companies for Leaders Study—the largest global study ever undertaken on what great companies do around talent management—and his own extensive consulting experience, Bob describes how to develop the discipline needed to become a talent factory and drive change through leadership. As the architect for the landmark Top Companies for Leaders study and with diverse clients like IBM, GE, Walmart, American Express and Accenture few people are in a better position to guide companies on their journey. He adds, “Articulating what IBM or GE or ICICI Bank or Wipro does is easy. Doing it is another matter.”Abhijit: I am curious to know what you feel about the statement Rosabeth Moss Kanter had made in your book HR in the 21^st Century. She had said in 2002 that the 21^st century will signal the end of the HR Department but will see the continuation of HR Execs – a savvy leader who connects people to strategy. Do you see that happening now?Robert Gandossy: Like most functions in business today, HR is in a state of evolution and has been for some time. There are some HR leaders that are 'out in front', charting new ground, adding value in ways that were unforeseen 10 years ago. But many HR organizations are stuck, saying the right things but not really focused in ways the move the enterprise.I am working on a book on HR of the Future that provides examples of leading HR functions that are redefining the function so that is focused in four areas:1.      HR as the R&D function for human capital. We know a lot about what works and what doesn't inside organizations and we sit on a lot of data. Most HR leaders use very little of either.  Leading companies are making use of a more 'evidence based' approach to making more informed human capital decisions;2.      Being the talent engine for the enterprise. Every company has talent and leadership challenges. That is especially true for countries like India. Yet the accountability for talent is all too often fragmented. Top Companies have clear accountability and an integrated process for developing capability;3.      Driving individual and organizational performance. While HR has always developed performance management and reward systems to drive performance, this is a shift to more of 'outcome thinking'. HR leaders see themselves as responsible for driving more outcomes than simply building the tools and processes. This is a subtle but very important distinction.4.      Responsible for building and restoring the trust and integrity of the institution. Around the world, trust in leaders is at an all time low and only one out of every two employees is engaged at work. There is no way an organization can achieve sustained performance under these circumstances.  HR needs to step up and change the environment to one that is less toxic.HR cannot do this alone. HR leaders need to forge strong partnerships with other business leaders and accelerate the development of leaders who connect people to strategy, something great leaders have always done.Abhijit:    Who are the stakeholders for whom HR should be a Trusted Advisor – the CEO, the Employees, the potential employees, or the community? Are the actions that get one to be trusted advisors different for these shareholders? Robert: Many of the best HR leaders I know see themselves as business leaders who happen to be in HR. Like all leaders, HR leaders have a strong and clear set of values and principles that guide their thinking and behavior. They tend to be good listeners and seek to understand before they act. They have strong technical and functional competence and they are clear on the strategy and priorities of the enterprise. Like most leaders, they subordinate their own goals and aspirations to those of the firm. To be seen as a trusted advisor across these constituencies is a tough balancing act but no more challenging than what we expect of most leaders.Abhijit: What are some of the things HR can do to become trusted advisors?Robert: This is not something that is done over night. At first, HR leaders need to do a lot of listening, understand the business and what is needed and where best to add value. One of the greatest writers about business and leadership, Peter Drucker, said great leaders need to ask, 'what does the enterprise need from me right now that I can deliver better than anyone else?' They focus on those things and delegate everything else. I find the best HR leaders have this skill of ruthless focus on what really matters to the business and they deliver that very well. Of course they must have deep technical competence and the most trusted advisors I know are quite direct, they do not shy away from issues or conflict and they need to be trusting and have high integrity. By virtue of their role, they often become the confidants of other senior leaders. It is a role that role that is hard to win but easy to lose.Abhijit:    How does the corporate culture drive performance? What can leaders do to impact those elements of the corporate culture? What are the three levers of corporate culture that leaders can leverage?Robert: As a consultant, I get to observe many different corporate environments and you can 'feel' a high performing environment the minute you step into the lobby. People walk with a bounce to their step, there is more energy and they speak with more energy and excitement. There is much more of an action orientation, a willingness to try something, to experiment, to move forward. In poor performing environments, the opposite is true. People are slower, more deliberate, more ponderous, more formal, more hierarchical, more willing to study and contemplate than act.The single biggest change a leader can make to alter that dynamic is to change the leadership culture--who gets hired, who gets promoted and how leaders are developed and held accountable. I don't care what you are told by your favorite consultant about what explains the variance in performance or employee engagement, it all comes down to leadership. So to change1.      Be very clear about what you want and expect from leaders.2.      Start at the C -suite and ensure the top of the house is modeling the behavior you are looking for from others3.      Start building the talent pipeline to get more of what you say you want--hire, develop, promote and hold people accountable.It is not hard to articulate what to do. It is far harder to actually do it on a consistent basis. But that is what separates the Top Companies from the rest.Abhijit:  What are the “little things” that build great leadership in organizations?Robert: We all know the basics some of which I have said above and the roadmap is in my book Leading the Way which describes what the best companies in the world do to develop talent. But I have been trying to understand the 'less obvious', more subtle things that make big differences. Some of these are captured in the book and an article I wrote called "What's the big idea? The Little things that build great leadership in organizations" (Leader to Leader, Summer 2003). One of the most powerful motivators in business, but one of the least understood, is the notion of reciprocity. When you talk with leaders they will tell you about how someone took them under their wing, guided and mentored them.  It creates a strong desire to 'give back' what they have received. In many leaders' eyes, this sense of giving back is emotional; it is a duty, an obligation to give back more than what was given.Great companies have institutionalized this sense of reciprocity and it is far more powerful than any incentive scheme will ever be.Abhijit:  You have been involved with the Hewitt survey on Top Companies for Leaders. What are the lessons we can learn from Top Companies for Leaders?Robert: The lessons are many and they can be captured into four disciplines around

• What leaders do: They need to demonstrate that it matters and the best way to do that is how they spend their time. If leaders do not spend time on talent, no one else will. It is that simple. So leaders need to model the behavior they are looking for from others. There are many specific things leaders do from coaching other leaders to active participation in talent reviews to developing leadership programs or leading them, to selecting talent.
• A maniacal focus around talent: Top Companies look at talent in their organizations as a 'human capital supply chain' – How they hire, how they bring people in, who they reward, who they promote, who becomes a leader, who leads critical parts of their business. Leaders try to reduce the variance at every stage. They try to improve the quality of their decisions about people. It is not just a mechanical approach to talent, it really is a passionate, maniacal belief that it really matters.
• Practical and aligned programs in place: Processes should reduce the complexity of talent in large companies. The best companies do a few fundamentals very well. They hire right, what the business needs.  They hold people accountable for results and engaging and development of talent. They have robust talent reviews. They promote the right leaders and weed out those who are a drag on the organization. They are fair, objective and transparent in doing these things. If you do this, you will be far ahead of most organizations. Too many companies hire for "A", reward "B", promote "C" and then they wonder why there is no alignment.
• The commitment to getting better: Great leaders don't believe they have all the answers. They are smart and confident but they also want to learn and get better. The companies they lead are the same way. They have good ideas, good programs but they are always searching for ways to get better. They measure the impact of what they do and they have realistic assessments of where they are versus others. They face reality. They push hard to challenge themselves. There is almost an organizational humility to great companies.

----------Bob has recently decided to leave Hewitt to start his own firm helping organizations build great leaders and strong leadership teams and HR leadership to develop the strategies and infrastructure to make that happen.You may want to read his article with Nidhi Verma "Building Leadership Capability to Drive Change" in Leader to Leader (Winter 2009)