HR at the Summit

By Bill Roberts Jun 1, 2007
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HR Magazine, June 2007 Whether climbing a mountain or running HR for a major corporation, the rules of engagement are a lot alike for Agilent Technologies' Jean Halloran.

High on Alaska’s Mount McKinley, Jean Halloran and five climbing partners hunkered down in foul weather and waited for a chance to push to the 20,320-foot summit. They passed their time in the tent by brewing tea and reading. With all their gear, a climbing team can carry only a few books. During bivouacs, one person reads the first couple hundred pages of a book, rips them out and hands them to the next person. Books are shared like water, food, work, success and defeat.

“I’ve done a ton of mountaineering, and you become conscious that you cannot waste extra energy doing unnecessary stuff,” explains Halloran, citing the use of books as an example. “You need to conserve your strength so you have enough to go from your high camp to the summit. The point is to stay focused. You can’t carry extra stuff.”

Halloran is senior vice president of HR at Agilent Technologies Inc., a measurement technology company based in Santa Clara, Calif. She has a bachelor’s degree in art history from Princeton University and an MBA from Harvard Business School, and she studied at Oxford University. Yet mountaineering, not art or academics, is her analogy: “On the mountain, you threaten the success of meeting your goal if you carry superfluous stuff. It’s the same in business. You avoid what slows you down and is distracting.”

Share the load, avoid the superfluous and stay focused—these are among the principles from mountaineering that Halloran, one of Silicon Valley’s most highly regarded HR executives, applies in guiding the development of nearly 19,000 employees, a diverse global mix of scientific, engineering and business talent.

“Agilent exists to solve problems through technology,” she says. “The best HR contributed here is done in service to the people who are doing that business.”

Leadership in HR—And Beyond

In a two-hour interview in the conference room near her office, next door to the CEO and the CFO, Halloran often pauses to choose her words—a trait also noted by her staff. She grew up in Greenwich, Conn., and spent most of her career in the East. She has the straightforward manner of a New Englander, the dependability of a person you could count on in HR or on a mountain.

In 1987, Halloran and her climbing partners spent three of their 19 days on McKinley tent-bound. After the storm broke, they all made it to the summit. Now 54, her sights are set lower—Northern California’s 10,457-foot Mount Lassen this summer. Since she started hiking nearly four decades ago, Halloran has trekked and climbed on three continents and ascended the highest mountain in each of 37 states. McKinley, the tallest peak in North America, is her crowning achievement.

Halloran’s business achievements are no less impressive. In two decades at Hewlett-Packard Co. (HP), based in Palo Alto, Calif., she worked in HR, with stints outside HR in manufacturing and in strategic planning. She became director of corporate education and development in 1997, when HP was a $40 billion company with 125,000 employees. In 1999, HP spun off its measurement business and Halloran was chosen to be the top HR executive at Agilent.

Halloran serves on several advisory committees, including those of the HR Policy Institute at Boston University and the California Strategic HR Partnership. “Jean’s impact is not just the leadership she has demonstrated in Agilent but in the larger HR community,” says Deborah Barber, a principal at Jackson Hole Group, a San Francisco-based HR consulting firm. “She evolved into one of our thought leaders,” says Barber, who has known Halloran for nearly two decades. They met when both were involved with the HR Policy Institute. “She is so well-grounded. She always comes back to what is practical and what is the right thing to do. This really came through when Agilent had to go through significant restructuring.”

A Need To Add value

Too many HR people are too reactive, Halloran says. “People talk about strategic HR, a place at the table next to the CEO. I could have a place at the table and be irrelevant. Every step of the way I should be concerned if I am adding to the value of the business.”

This became abundantly clear when she took a break early in her HR career for a three-year stint as a manager of 150 production workers in the printed circuit board assembly plant for HP’s medical products division in Waltham, Mass. “If you’re trying to meet monthly shipping targets, you’re the daily recipient of clear or not clear help from HR,” she says. “I never did a day of HR work after that the same way I did before.”

An MBA and business management experience is a rare combination among HR professionals—although Agilent has a few such people. “There aren’t many Harvard Business School graduates doing HR. I think fewer than 100,” says Fred Foulkes, professor of organizational behavior at Boston University and director of the HR Policy Institute. He has known Halloran since she was a grad student. “Jean has the empathy to look at things from an employee point of view, but balances that with the needs of the company.”

Agilent business executives describe Halloran in much the same way.

“Jean has the unique ability not only to run the fundamentals of HR, but has business credibility with senior managers steeped in technology,” says Bill Sullivan, Agilent’s CEO. After Sullivan, previously COO, took the helm two years ago, Agilent restructured. “Jean helped us quantify the management practices for this phase and determine how to look at staffing and training, also putting together a new rewards program to move us to higher sustainable growth.”

Ned Barnholt, who retired as CEO in 2005, hired Halloran for the top HR job. “The combination of being able to see the big picture, strategize on the issues, her common sense and our good relationship are the reasons I hired her.”

Her HR managers describe Halloran as “a powerful example of head and heart,” “wicked smart,” “generous of spirit,” and “skating to where the puck is going to be, not where it is.”

“She heads an HR organization that is so far advanced, efficient and effective compared to others,” says Sue Donovan, who was vice president of HR for Agilent’s semiconductor products group, which it sold in 2005. “She’s a strategist, but she’s also nice, approachable and down-to-earth. I admire her greatly and respect her deeply.”

Navigating the Storms

At Agilent, Halloran tackled a mountain as big as McKinley in markets as mercurial as its weather. In the first 18 months, she guided Agilent’s cultural transformation, helping to select business executives and HR staff, creating compensation and benefit plans, launching leadership and other training programs, and determining what parts of the HP culture were appropriate to keep while creating Agilent’s own.

After the split, the printer and computer businesses kept the HP name, but Agilent is the legacy of the original company. HP was founded in 1938 by two Stanford University engineering graduates, Bill Hewlett and Dave Packard. The first product was an oscillator for testing sound systems. Today, Agilent’s 40 divisions, each with its own HR head, develop 21st century versions of the oscillator and other measurement tools and software for communications, electronics, life sciences and chemical analysis.

“HP’s approach to the spinout was nicknamed ‘clone and go,’ ” Halloran says. “The intention was to create two great companies.”

One challenge was to strike a balance between the HP culture and the new values Agilent would need. Lionized in management lore as “the HP Way,” the parent culture was about openness: open cubicles; door-less executive offices; employees encouraged to discuss issues; and profit sharing for all. Bill Hewlett once described the HP Way as “a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity.”

Who could argue with that? But by the 1990s the HP Way had gone wayward. For example, it was almost impossible to get fired; employees remained whether productive or not, one of many traits that has changed in the past decade.

Halloran knew some of HP’s shortcomings, but was surprised by what else she learned about the company where she had spent two decades. One surprise was the legacy costs Agilent inherited—software applications, information technology infrastructure and the like, nearly a billion dollars worth. “It took me a year to figure out how much of an overhaul would be required,” she admits.

The overhaul included an HR shared-services strategy. HR administrative processes are handled by a central staff, assisted by outsourcing where it makes sense. “When I headed HR for the semiconductor products group, I didn’t have to worry about payroll, compensation or benefits,” Donovan says. “The shared-services groups provided that. I could focus on organizational effectiveness and talent management.”

To shed debilitating HP traits was one problem, but to curb the zeal to establish Agilent as different was the flip side. Halloran says, “There was too much focus on how do we create the ‘not HP’ part of our new corporate personality. And we overdid it.”

The best example is the hiring flurry. HP CEOs were always strict about hiring, but Agilent executives let it get out of hand. It is important to remember the context, however. Agilent went public during the dot-com boom. The result: Agilent added a total of 10,000 employees between 1999 and 2000, almost a 15 percent increase in the workforce.

“It would have been a good thing when the bust hit if we hadn’t had to lay off the equivalent number,” Halloran admits with chagrin.

The Importance of Context

“Nothing exists out of context,” Halloran often says. When the bubble burst, the communications market was hit the worst, and its shock waves hit Agilent like an avalanche. From fiscal 2002 to fiscal 2003, it posted losses of more than $3 billion. From late 2001 to early 2004, Agilent laid off 15,000 workers, about a third of its total.

“Given the deep HP heritage, one would have thought that cutting the workforce that much would have been mortal,” says CFO Adrian Dillon. “But Jean knew that if you had to do the right thing, you had to do it sooner rather than later.” ›

If she had it to do over, Halloran says, she would act more decisively sooner. “We let it dribble out over time. We always had good intentions, but the problem is you create additional morale problems because every employee still here knows that orders and revenues are constrained in a following market like ours.”

She also knew some programs must be protected even during deep cuts. Brian Underhill, founder of CoachSource, a Silicon Valley-based network of executive coaches, was surprised that an executive coaching program he set up was not dumped. “Leadership development people are usually gone in the first layoffs, and programs canceled. Not at Agilent,” he says. “It had something to do with Agilent’s concern for people. Most of the 100 or more people we coached are still there or with the businesses they sold.”

Several rounds of layoffs were not enough. Agilent needed to restructure its portfolio, weed out nonessential businesses and focus on segments poised for growth. After Sullivan became CEO in 2005, the company divested the semiconductor products group and spun off the semiconductor test business. The two moves helped set Agilent on the right course. It had net income of $3.3 billion on revenue of $5 billion in fiscal 2006.

The handling of those two actions illustrates the importance of context, Halloran says. The sale of the semiconductor products division—renamed Avago Technologies Ltd.—to private investors for $2.6 billion required only that processes be in working order. “Because this involved 7,000 employees, there was some temptation to upgrade things before the sale, whether it was an asset in the labs or a performance review system,” Halloran says. “The answer was no, leave it be.”

However, in the spinoff through an initial public offering of the $800 million semiconductor test business—renamed Verigy Ltd.—Agilent sought maximum shareholder return. Within the time allowed, it was appropriate to improve things, including an effort to reduce company costs by $50 million. “We worked like dogs,” she says. “HR redesigned the compensation system. And we completely changed the manufacturing footprint, outsourcing it.”

There have been other changes, including a new incentive bonus program for the top 500 managers. Like most Silicon Valley companies, Agilent’s incentive program was a straight profit-sharing formula. “I proposed we change the incentive comp system for senior folks to tie it to return on invested capital to encourage long-term growth,” says CFO Dillon. “It was Jean saying we have to do it that made it so much easier to get done.”

Helping all employees accumulate wealth is important because Agilent depends on attracting and keeping the best talent in highly technical fields. “Our philosophy is a basket of rewards that, with everything counted, is as good as or equal to top tech labor competitors in each region,” says Halloran. “And we’re 3 percent to 5 percent better than our measurement-segment competitors.”

The Personal Touch

Halloran’s business acumen doesn’t preclude a warm personal style. One of her sisters, Priscilla McClung, was impressed three years ago when Halloran gave her a tour of the office and knew the first names of every worker they encountered.

“She doesn’t forget anybody. It is one of her greatest gifts. She makes each person want to be the best they can be,” says McClung. “Our parents taught us that you treat every human being with respect and dignity, and honor them to the best of your ability.”

McClung, Halloran’s occasional mountaineering partner, says there’s no one she would rather be with when the going gets tough. “The most difficult situation we were ever in was when we were hiking in the Cairngorm Mountains in Scotland. They don’t have the altitude, but the weather can be terrible,” says McClung, who taught in Outward Bound Schools for 12 years. “Twice we got stuck in storms and had to bivouac. Jean’s a calm, level-headed person to be stuck with anywhere. She doesn’t get rattled. We entertained ourselves telling scary stories.”

In the mountains or running HR, in fair weather or foul, Halloran enjoys the journey. “I’m having more fun in my job than ever,” she says. “I sometimes shake my head in amazement that I worked for only two companies since I got my MBA 27 years ago. And what I find delightful and surprising is that I continue to be challenged by enough that is new that I’ve never been bored.”

Bill Roberts, technology contributing editor for HR Magazine, is a freelance writer based in Prunedale, Calif., who covers business, technology and management issues.

At A Glance: Jean Halloran

Personal: Born in New York City in 1952. Divorced; no children. Lives in Menlo Park, Calif.

Current job: Senior vice president of HR at Agilent Technologies.

Previous jobs: Prior to Agilent’s spinoff from Hewlett-Packard, Halloran held several positions at HP, including director of corporate education and development (1997–99) and personnel manager for the measurement systems organization (1993–97); she also was group personnel manager and held positions in HR, manufacturing, quality and strategic planning in the medical products group (1980–93). Internship, National Endowment for the Arts (1977). Director of the Savannah Science Museum (1975–77).

Education: MBA, Harvard Business School; bachelor’s degree in art history, Princeton University; Concord Academy; attended Oxford University in England.

Professional and community involvement: Currently the board chair for the Resource Area for Teachers, and former board member for various schools and nonprofit organizations, including Concord Academy and Jobs for the Future.

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