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When Newell Rubbermaid’s business model changed, HR helped leaders identify the skills employees need to execute new strategies.
Newell Rubbermaid has been reinventing itself for more than a decade with continuous rounds of acquisitions, divestitures and new products. Yet substantially changing a business model means that an organization needs new business processes—and that requires different skills for workers and leaders. Shepherding that transformation is a way for HR professionals to demonstrate their value. We're not the experts in business processes or functions, nor should we pretend to be. But we are remarkably good at identifying people who hold that expertise, putting them in a room, and capturing what they know so that it can be duplicated and taught throughout the organization. We bridge that gap and then teach the leaders how to perpetuate new ways of thinking.
During a four-year restructuring completed in 2010 under former Chief Executive Officer Mark Ketchum, Newell Rubbermaid, an S&P 500 company, transformed from a manufacturing and sales-focused organization to a global marketer of consumer and commercial products. These products include housewares such as Rubbermaid, Calphalon, Levolor blinds and Amerock cabinet hardware; Irwin and Lenox hand tools; juvenile products from Graco; Goody hair products; and office supplies such as Dymo, Paper Mate and Sharpie. Since 2005, the company has reduced the proportion of goods that it manufactures at its own facilities from 65 percent to 50 percent of its $5.8 billion in annual sales.
Agents of Change
Moving from a manufacturing to a consumer marketing enterprise, a new business strategy emerged. Our employees now use a consumer-driven insights process to gain understanding of consumers and the common frustrations they encounter. Brand managers use these insights to develop products that address unmet consumer needs rather than simply providing what retailers think will sell. This requires marketing expertise and consumer understanding among brand managers, as well as a new way of working with and selling to retailers for sales teams.
As HR leaders, we responded to the new strategy by positioning ourselves as the agents to make executing the strategy possible. My objective was to make the partnership between HR and the business a normal part of our operating rhythm, not one that is dependent on the skills of individual professionals and executives.
Once our team was embedded into daily operations and business objectives, my contributions—and those of my staff—became a critical part of the thinking, not an afterthought, among employees at all levels. We went from putting marketing plans on paper to putting marketing plans to the test. As we moved forward with our transformation, here are some of the steps we took in HR.
Products: Manufactures and markets housewares, hardware, hand tools, home furnishings, juvenile products, hair products and office supplies.
Ownership: Publicly held (NYSE: NWL).
2010 sales: $5.8 billion.
Top executives: Mike Polk, chief executive officer; James M. Sweet, executive vice president of human resources; Brian Hults, vice president for global organization and people development.
Locations: Headquarters in Atlanta, with centers of excellence in Huntersville, N.C., Oakbrook, Ill., and Geneva, Switzerland, and sales in more than 100 countries.
Engage in Partnerships
First, we needed to involve ourselves in the marketing transformation.
"Soon after I joined Newell Rubbermaid to lead the company's marketing transformation, Brian and his team approached me about the need to change operating processes, structures, roles and individual competencies to support the execution of our strategy," recalls Ted Woehrle, chief marketing officer. He initiated a partnership. We worked with him to develop a detailed, step-by-step, multifaceted plan that included all the elements in a coherent change process.
One component was developing a communications platform to help our employees understand why it was important to move from a business model focused on manufacturing and sales to one focused on consumers and brand management. Such communication is fundamental. Everyone must understand why change occurs. We started with just marketing and business-unit leaders before tackling communication for every employee.
The second step was to benchmark our current capabilities, systems and processes against best-in-class consumer branding and marketing capabilities by tapping the knowledge of our 13 key business-unit marketing leaders who were setting the course for our transformation. While a benchmarking exercise can be a monumental task for a global company, it's essential even for small and medium-sized businesses. Before moving toward a goal, corporate leaders must know where they stand. We discovered, for instance, that:
Blueprints and Guidelines
Third, my staff and I facilitated meetings with marketing and other leaders to develop a blueprint for developing best-in-class marketing programs throughout Newell Rubbermaid. The blueprint provides guidelines for effective global marketing in the areas of brand strategy and positioning, consumer and market insights, innovation, pricing strategy, integrated marketing planning, and financial management.
The business-unit presidents and marketing vice presidents conducted self-assessments against the blueprint and developed their own priorities and action plans to close the gaps. For example, at an early stage in our transformation, employees in the Culinary Lifestyles business unit discovered that we did not conduct sufficient consumer testing of product designs before going into production. This issue was addressed within months, and the subsequent launch of the Calphalon Unison line exceeded all financial forecasts and expectations. The action plans are updated annually and regularly reviewed by the chief executive officer and chief marketing officer.
"Using the blueprint, we are able to track our progress each year," says Curt Rahilly, vice president of marketing for the Construction Tools & Accessories business unit.
Employees in every business unit work toward best-in-class marketing, but they do so in their own ways. And they are accountable: They have to report on their progress in quarterly reviews.
In the HR department, for instance, serving an organization newly focused on marketing requires instilling consumer marketing and brand-building skills in 700 marketing associates across 13 global business units. To that end, my HR team and I helped business-unit leaders:
The blueprint processes translate directly into role descriptions and competency models for the global business units. The descriptions define the responsibilities of each role, such as senior brand manager and associate brand manager, and link those jobs to the business processes. The competency models outline the skills required to execute the responsibilities. Once competency models were built, it was relatively simple to develop a career ladder for the marketing function.
Ease into Change
Fourth, in 2008, marketing professionals began evaluating themselves—and their supervisors began rating them—against the marketing competencies, and now they do so every year. Competencies for, say, brand managers include consumer and market knowledge; branding; pricing strategy; marketing, advertising and promotion spending; and integrated marketing plan measurement.
Yet we didn't want to scare people or have them feel threatened by change. They grade themselves on how well they are mastering the skills, and we provide the training. For the most part, we are taking the marketing people we have and teaching them to become best-in-class brand managers.
Our training features:
Marketing 101, which includes marketing research execution, consumer targeting and pricing management.
Marketing 201, which covers the consumer-driven insights process and commercialization, brand stewardship, and product life cycle management.
Marketing 301, which is for marketing leaders and business-unit presidents who need to learn integrated marketing strategy and planning.
About 500 employees have been trained in these courses. Meanwhile, through acquisitions, divestitures and turnover that occurred as a result of moving four business units to our headquarters in Atlanta, we supplemented existing talent with new marketers.
"By clearly tying business processes to roles and responsibilities, our company wins by achieving its strategic objectives through reliable, straightforward plans," says Kim Hoelting, vice president of marketing for the Beauty & Style global business unit. "But our employees win too because the process clearly delineates for them the responsibilities and requirements of their current roles and makes it very clear what is required, both in terms of job content and competencies, to have quality career progression."
In this way, we helped leaders create standards that determine how we approach marketing operations at Newell Rubbermaid. The result is an organization modeled after classic consumer-branded organizations such as Procter & Gamble and Pepsi. And, after four years of introspection, evaluation and training, we now have some pretty good marketing leaders in our organization.
This is just one example of how the HR team became an integral part of the execution of our overall business strategy. Our marketing transformation helped improve sales forecasting and had a positive impact on our balance sheet.
We took a similar approach to supporting other elements of our operating strategy. For example, as a result of changes HR professionals helped bring about in the sales and operations planning process, in conjunction with technological changes, "the company has been able to reduce inventories and improve cash flow by millions of dollars," notes Steve Sigrist, vice president of sales operations.
The credibility we have obtained through our work on the marketing transformation now gives us permission to move into other areas of the business, including supply chain management.
The author is vice president for global organization and people development at Newell Rubbermaid in Atlanta.
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