Head of the Class

Hasbro Inc. is infusing skills and knowledge at the top ranks in partnership with the Tuck School of Business at Dartmouth.

By Jan 1, 2005
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HR Magazine, January 2005Five years ago, Hasbro Inc., the Pawtucket, R.I.-based toy company founded in 1923 by the Hassenfeld brothers, was floundering. After decades of success with such well-known brands as Mr. Potato Head, G.I. Joe, Monopoly and Scrabble, the company had suffered financial losses and experienced high turnover among a group of executives brought in from outside the organization. Executive bench strength was down, and recruiting, once easy for the family-owned company, had become increasingly difficult.

In 2000, then-CEO Alan Hassenfeld, a grandson of one of the founders, asked Hasbro veteran Al Verrecchia to take on the role of president and chief operating officer and help him turn the company around; in 2003, Verrecchia was promoted to CEO while Hassenfeld continued as chairman.

Both men recognized that "Hasbro's key skill is our ability to design and make great games and toys," says Verrecchia. "We develop intellectual property, so it's important to develop the creativity and skills of our people."

And that included the creativity and skills of the people at the very top of the organization. Hasbro recognized something that is increasingly overlooked in the halls of corporate America: While companies turn their focus to developing middle managers for future posts, development of current top leaders often slips.

Over the past few years, David Silverstein, president and CEO of Breakthrough Management Group, a Longmont, Colo.-based business performance improvement and training consulting firm, has seen a "generation gap" among different levels of management when it comes to training. While the executive education market is big today, he says it tends to target employees who are being groomed to become executives. Those already in the top ranks "aren't accepting the need to refresh their own education," Silverstein says. "Executives need to develop their own skills by getting into a classroom."

As Hassenfeld and Verrecchia set out to rebuild the senior management team, they reflected back on the company's roots.

For decades, the family atmosphere and nurturing environment had kept executives loyal to Hasbro. It was time to return to the original model of "Hassenfeld Brothers," the small textile remnant company built by Hassenfeld's Russian immigrant ancestors, and invest in the talent of its internal leaders.

HR Leads the Charge

In 2002, Verrecchia asked Bob Carniaux, senior vice president of human resources, and his HR staff to make recommendations for a multiyear program that would train Hasbro's leaders as part of the company's succession plan.

Carniaux, along with Kim Janson, vice president for organizational effectiveness and diversity, and Jackie Boucher, senior manager of people development, organizational effectiveness and diversity, spent months developing a detailed plan for Hasbro. "We knew we only had one shot at getting it right," Janson says.

Getting it right meant finding a custom approach to designing a program that would be built from the ground up to suit Hasbro's specific needs. Using the employee attitude survey, the HR team established that the program should include 360-degree performance assessments and a practical application component and should be well respected "so people would be clamoring to get in." (For more information on the program's elements, see " Coaching Executives for Success.") Janson and Boucher then examined 50 executive education programs at top business schools, gradually narrowing that number down to a dozen and then to the top four programs.

Among the finalists was the Tuck School of Business at Dartmouth College. "The service orientation of Tuck surpassed other groups," says Janson, "and the faculty quality is truly amazing. As big as we are [about 7,000 employees worldwide, with markets in 40 countries], we're very much a boutique organization," she says, "and Tuck [which is small] was a great fit." In January 2003, Hasbro chose Tuck to be its executive education partner.

Hasbro, with its family feel, was a great fit for Tuck as well, according to associate dean Jim Danko, who had arrived at Tuck in 2000 with an interest in overhauling the school's executive education programs. Danko-who came with a background as a successful entrepreneur as well as an academic-believed in linking education with company strategy. He wanted to provide a customized "high-impact" executive education model as opposed to the traditional faculty-as-expert open enrollment model that had been common at Tuck and at many other top business schools for years. Instead of "taking the suit and altering it," Danko advocated a build-from-the-ground-up approach.

Tuck professor Vijay "V.G." Govindarajan, who serves as faculty director for the Hasbro program, worked closely with Janson and the Hasbro team to develop a Hasbro-specific curriculum. After identifying Hasbro's "skill gaps"-through employee attitude surveys and by plotting where the company needed to go and the skills needed to get there-they planned five modules for the curriculum: global strategy and competitive advantage; personal leadership; brand building; emerging markets; and ethics.

The result would be a week of highly relevant classes combining academic theory and practical business applications. At the conclusion, participants would be divided into small groups, assigned a real-life problem facing the company and given six months to work on a solution. At the end, each group would present its case to the top executive team.

Mr. Potato Head Goes to School

In August 2003, the first 26 Hasbro executives traveled to the Tuck campus in Hanover, N.H., to participate in the Hasbro Global Leadership Development Program, known as Tuck I.

It was important to Hasbro that the class be diverse, not only in terms of race and gender, but globally and across business units. The company hoped to counteract the silo effect and bring together people who otherwise might not have met.

To underscore the importance top management placed on the program, Hassenfeld spent the entire week at Tuck, and Verrecchia and several other members of the executive team served as faculty for some of the classes. For instance, Carniaux and Verrecchia taught the ethics class together.

But even with the highest level of support, some of the participants were cynical. "I think a lot of us went into Tuck I skeptical," says Michael Block, president of Hasbro Latin America, "and I was one of the most skeptical of all." At this successful stage of their careers, each participant had attended at least one executive education program in the past. Why should this one be different?

By the end of the week, however, Block was a believer. In addition to academic classes described by several as "very MBA-like," Block found the real-world "action learning projects" relevant. Verrecchia says the six-month action learning projects are "almost like a second job" for these high-potential leaders since their regular work still must get done.

"What I admire a great deal about the program," says Lorrie Browning, who wears two hats-general manager of international marketing, U.S. brands, and general manager of girls' toys and Disney Entertainment-"is senior management's willingness to put big, meaty Hasbro issues on the table and let upcoming leaders deal with them." Because of the action learning projects, "you stay in it after classes end," Browning says. She's enthusiastic about the long-term effects of the program. "You feel like you really could, if not change the world, have a significant impact on the company."

For Bryony Bouyer, senior vice president of marketing of the Hasbro Properties Group for the Americas, the Tuck program was "a surprise." It was a combination of theoretical and practical learning in which, says Bouyer, "you learned some things you thought you already knew." For example, "I learned that if you've already figured out the answer, you are probably not strategic, because the ball is always moving."

Across the board, the reaction of the first Tuck program participants was dramatic. People were so enthusiastic about the program, says Carniaux, that it was as if "the heavens opened up and the earth shook. There was a sense that [the Tuck program] changed people's lives," he says, and that kind of reaction has continued in successive classes.

Todd Wise, vice president of research and development of boys' games, was a participant in the second program offering, Tuck II, and came away feeling that his week at Tuck had been "life-changing." Quoting a Chinese proverb, Wise says, "We may sleep in the same bed, but we have different dreams." He now has a better sense of the company's perspective after attending the program.

Why it's so successful, says executive coach Sandra Drought, who leads the 360 assessment process for the Tuck program, is the involvement of top management from the beginning. She credits Janson with "masterminding" the program for Hasbro. "Kim did a great job of influencing the top leaders to understand how this could benefit their business," she says. Ultimately, the program's success is the result of careful planning, execution and communication every step of the way, Drought says.

So important does Verrecchia consider the training that he required one Tuck I attendee to go through the program again. "He didn't take it as seriously as we thought he should have," Verrecchia says. The man repeated the program, and "he's doing a great job now."

After the Classes

An executive education program can be really great-for the time the participants are there. A mark of an excellent program is what happens after everyone goes home. Do participants apply what they learned in their daily business lives?

For Hasbro, one positive result is that the officers now speak a common language. Participants use the expression "we be they" to remind themselves that responsibility lies with the individual and not with a nameless "they." They also refer to "box 1, box 2, box 3." This language comes from Govindarajan, who defines box 1 as "managing the present," box 2 as "selectively forgetting the past," and box 3 as "creating the future."

June Youngs, Hasbro's senior vice president for logistics, came back from a "very intense" week at the Tuck II class last spring looking for ways to integrate what she had learned into her own department. It's always possible for logistics [which is responsible for Hasbro's transportation and warehousing operations] to be outsourced," says Youngs, so "I wondered if we could become a profit center instead of a cost center. Why not link up with some smaller noncompetitors whose off-peak seasons coincide with our peak season," she recalls, and thus help Hasbro leverage its ocean freight costs? A box 3 idea-a new way of doing business-was born. After looking into it, she has arranged for some future ocean freight contracts to be negotiated to take advantage of off-peak seasons with smaller companies.

"We need this kind of thinking to be part of the blood of the entire organization," believes Youngs. She has talked to her staff about the program and arranged an off-site "mini-Tuck" experience for them. She wants to cascade what she has learned down to the clerical level, she says.

Tweaking the Program

The general consensus on both sides is that Hasbro and Tuck did, indeed, get it right. Three classes had gone through the program by the end of 2004. Two or three more sessions are planned for this year. Verrecchia wants all of Hasbro's top executives-about 225 to 250 in all-to participate in the program.

Refinements are made after each session, and that will continue. For example, Block says a couple of the first classes that were somewhat weak have been improved. In addition, one of the executive coaches was not a good match and was replaced.

Verrecchia says the senior management team recently considered what tweaks are needed now. They identified more concrete follow-up on the action learning projects as an area to be addressed, and Janson says, "A plan is already in place to do just that."

ROI and ROE

Although everyone interviewed for this story believes the Tuck program is having a positive effect on the company, it's difficult to put a hard return on investment (ROI) on it. "It's a costly program in terms of both dollars and time," says Verrecchia, but he believes "intuitively" that Hasbro will realize a return on the investment.

"My impression," says Carniaux, "is that it's more of a return on expectations" of the program. According to Janson, half the members of Tuck I either have been promoted or given increased responsibility since completing the program. "Clearly we are getting a return in terms of expectations," Verrecchia says.

Govindarajan says the Tuck program is helping to build strategic thinking capability. The program is "changing the mind-set, the energy level, the focus of the company." While you can't put a dollar figure on it, there are ways to measure its impact, he says. One way is through participant feedback. It is also possible to measure what has been learned, to measure change in leadership behaviors after the program and to measure the business impact through the action learning projects, Govindarajan says.

Frank Bifulco, president of Hasbro Games, says he is less interested in establishing a hard ROI for the program.

"There are both tangible and intangible benefits that are going to allow us to better service customers and more strongly connect with consumers. That's how we win."

Govindarajan attributes the program's success to the fact that Hasbro paid attention to "the No. 1 issue for corporations today," which is building executive bench strength. "People become more capable by gaining knowledge, gaining experience and building relationships," he says. Over time, they increase their capability, but companies today "don't have the luxury of time," says Govindarajan, "so we need to accelerate executive capability."

The way to do that, says Govindarajan, is through custom executive programs such as Hasbro's, which speeds up capability in all three areas. Custom programs are increasing in popularity, and the number of open enrollment programs is declining, he has found, because "open enrollment programs only increase knowledge, not experience or relationships."

The Tuck program has been "a tremendous catalyst for change," adds Bifulco, resulting in "a greater alignment around what's important and greater collaboration within and across divisions. I've really seen that happen."

Meanwhile, Hasbro also has turned the corner financially, going from a loss of $145 million in 2000 to a net profit of $158 million at the end of 2003 and a reduction in debt of more than $1 billion. Although the company may continue to have financial challenges, "We don't let any good idea go unfunded," Bifulco says.

Ann Pomeroy is senior writer for HR Magazine.

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