If there's one constant in the world today, it is the rapid speed of change. People and organizations are facing a future that increasingly requires them to quickly adapt or risk becoming irrelevant. With the rapid and disruptive digital transformation happening in the industries we support, Siemens aims to quicken the pace of change to become even faster, more agile and more competitive.
In 2020, the year I joined Siemens, we embarked on a large business transformation, spearheaded by major changes in our corporate and leadership structure, including the appointment of a new CEO, Roland Busch, and other changes on our managing board. We kicked off this new chapter by identifying four strategic priorities we now live by: customer impact, technology with purpose, empowering people and growth mindset.
In line with these changes on the business side, we also recognized the need for a complementary workforce transformation. We had to rethink how we win, grow and bond our over 300,000 people worldwide. Working together with my People and Organization (P&O) team, we reviewed various overarching people-transformation initiatives, and we also took a closer look at the legacy approach to handling performance evaluations.
A Fundamental Shift in People Development
Like many large, established companies, we had used a classic performance management approach for many years. The performance review process was relatively formal and prescriptive, including rigid processes focusing on the past instead of being forward-looking. Managers scheduled end-of-year performance review talks with their people, provided verbal and written feedback, and assigned them ratings. But these dated methodologies no longer supported the growth and business transformation that Siemens was embarking on.
I am a big believer in systemic thinking; all measures undertaken to drive change need to be consistent and point in the same strategic direction. Only then will you be able to drive meaningful change.
So we made the strategic decision to dissolve these formal performance management processes and created a new approach, built around the concept of having regular conversations between leaders and their people based on performance, growth and well-being. We wanted to make an iconic change, underpinning the priority of a growth mindset and learning. We named our new approach Growth Talks.
Growth Talks created a fundamental shift in our people development strategy. This forward-looking approach is now used to drive meaningful, continuous conversations on goals connected to strategy and delivery, supporting both organizational growth and personal growth.
In introducing Growth Talks globally, we equipped our people with guiding material focusing on four dimensions:
- Continuously align on expectations as part of a more fluid process. The conversations don't have to be tied to a set schedule, but they should happen when things shift.
- Reflect and identify growth perspectives to stay relevant and commit to continuous development—as individuals and as a team.
- Encourage and enable everyday learning by courageously trying out new ideas and approaches, asking for feedback and growing from successes as well as failures.
- Provide timely recognition when someone does something well. This doesn't have to be a formal recognition. It can also be about giving somebody positive feedback in the moment.
The pandemic reinforced our belief in the power of empathy. Thus, it is no coincidence that an important aspect of Growth Talks is people's well-being and making sure they build resilience and feel a strong sense of belonging—both elements leading to empowerment.
One of the underlying foundations of empowerment is trust. Empowerment is about delegating decision-making and leading from the team level with an opportunity for everyone's voice to be heard. It's also about owning your own development and taking responsibility. This means that the impetus for a Growth Talk can begin with the leader or the individual themselves.
Now, changing what some might perceive to be a functioning system, especially at a company the size of Siemens, raised some skeptical eyebrows. At the beginning, some questioned how managers would determine merit increases in the absence of a clear-cut way to track progress against previously defined objectives and key results. Some felt the old process still worked because calibrating performance was more straightforward.
Yet others were happy to embrace the new approach because, on a practical level, they no longer had to spend hours working through grids or matrices of performance among their teams without talking about development in a meaningful way. Regardless of stance, meaningful and intense conversations were prompted around the question, "What do we mean by calibration—is it centered around learning and development or rather around performance distribution and pay?"
It became quickly evident that a lot of the concern was around pay. We openly addressed the elephant in the room by explaining that all our leaders were empowered to differentiate within their teams and allocated budget based on the contribution of individual team members. We also provided market data to help leaders make those decisions. Fast forward 18 months into the rollout of the new approach, and one piece of feedback has been consistent: People had to embrace letting go of the mandatory documentation of the conversations, which was no longer required in the internal systems.
After the first wave of implementation, we conducted a dedicated learning review to measure how people were putting this new approach into practice. In addition, we are constantly monitoring the success of Growth Talks with the help of our companywide engagement surveys. It is more about promoting dialogue in teams, or with individuals, to discuss what the four big strategic priorities mean for their part of the business and how they can contribute to them. We believe this framework and context provide people with a far better structure to take decisions and be accountable for them. This is what we mean by empowering our people.
Answering 'Why' and 'How'
In my experience, people and organization functions can sometimes fall into the trap of rolling out a new process without providing enough context for the "why" or a stable framework for the "how." For me, it was a powerful step to be clear about where we stand at Siemens within the context of our business and the global challenges. We have an opportunity and a responsibility as a large company to make a difference. The speed of change forces us to stay on our toes and regularly assess the validity and usefulness of approaches we are accustomed to using. We must keep on learning and asking the right questions to move us forward.
The turmoil of the past few years has thrust leaders into learning how to lead very differently and to relinquish some formerly prescribed methods. How do you navigate conversations to be more about outcomes rather than process or presence? We saw our leaders shifting more into the role of a coach than trying to have all the answers. Siemens' approach to mobile work in the new normal provides clear guidance, but also enough flexibility for different roles in the company.
In July 2020, we established our "New Normal Working Model" as a permanent and global standard. This model gives people the option of working remotely or in hybrid situations two to three days a week, whenever it's reasonable and feasible in alignment with team needs. We allow this discretion to happen at a team level, valuing outcome over presence.
There is no denying that the rapid change in business also requires a rethinking of how to make people resilient. An important aspect of why we introduced Growth Talks was to help people at Siemens stay relevant and, thus, employable over a long career. Sustainable employability means ensuring that people stay resilient and relevant for the labor market and encouraging them to embrace change.
The current shelf life of knowledge, especially in technology-related roles, is five years, with a downward trend. Someone entering the workforce today, considering they will likely be working for 45 or 50 years overall, probably has to reinvent themselves many times during their career. This reinvention could be done by continuous reskilling and upskilling.
Continuous and strategic learning is essential both for innovation and for sustainable employability. It is important to have flexible and varied learning options—such as learning experience platforms, augmented learning and bite-size learning nuggets—to match the level and needs of the individual. These efforts will help people increase their relevance on the job market and help them lead a fulfilling life.
An approach such as Growth Talks has the potential to transform the people culture of an organization. It fosters trust, empowerment and the desire to keep learning to create innovations that will make a difference. At Siemens, we've shifted into a new era that requires us to let go of some classic performance management practices and to focus on something that is much more effective and serves the true purpose of what we're trying to achieve. At the end of the day, it is all about our people. If our people grow, then so will our business.
Judith Wiese is the chief people and sustainability officer at Siemens AG.