Global Integrator

By Nancy M. Davis Dec 1, 2010
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Acquire expertise in global human resources. Work for a demanding boss. Survive downsizing. Build a worldwide human resources department to provide common services for four disparate brands. Learn to drive a high-tech tractor.

Lucinda B. Smith, the nascent art historian just out of college, could not have imagined facing that to-do list. But Lucinda B. Smith, GPHR, senior vice president of human resources at AGCO Corp., strives for such goals as part of her typical workday.

A liberal arts degree provides a foundation for business, she says. But when it came to getting a job, she rejected museum work as too narrow in scope and ended up participating in executive training for May Department Stores Co., followed by time in retail benefits administration. From there, she sampled almost all areas of human resources—from recruiting to training— until she discovered an aptitude for global HR.

“It’s a passion,” she admits.

That passion serves her well, as AGCO—a mere 20 years old—now offers the world’s farmers equipment and services once produced by 25 companies. With AGCO’s merger binge reportedly over, Smith and her 238-person HR team must now integrate services for the Challenger, Fendt, Massey Ferguson and Valtra brands into operations from North America to India and from Brazil to the Netherlands. At first, executives kept individual companies intact. But since 2004, Chief Executive Officer Martin H. Richenhagen has been fashioning a “multi-brand strategy” while promoting unification with “lean” production, global purchasing and consolidated HR services for the company’s 14,500 employees.

Below, Smith discusses AGCO’s human resource operations.

How did you develop skills and knowledge about how to conduct international HR?

I was looking for a way to grow. From a larger company, I went to a startup to set up the entire global human resources structure. Cendian Corp. was a chemical logistics company that didn’t continue on for a long time. Regardless of the size of the company, the basics—such as setting up a succession plan—are about the same.

What is the most challenging aspect of global HR?

Dealing with European works councils— employee groups that serve as a forum for information sharing and consultation with employers. Cendian Corp.’s office in the Netherlands had to have a works council, but we were proactive in putting it together; instead of council members telling us what we needed to do, we got out in front of this.

At AGCO, how are your HR operations structured?

We’re in the process of updating our structure. Global responsibilities focus on processes such as talent management and management training. But I have a high respect for functions that happen at the local level. I don’t want to minimize that. We’re set up locally, and we have four regional offices. Local functions include payroll, unions or works councils, administration, and talent acquisition. At the regional level, we provide support and structure to organize and gather information for projects such as succession planning or defining roles and responsibilities across the company.

So, there’s more structure than there used to be. Our HR operations used to be very decentralized.

As AGCO merged with and acquired other companies, were HR operations standardized?

The initial approach was to keep individual companies intact. That was not sustainable. Our chief executive officer asked, “How can we globalize?” In HR, we’re going to a model of shared HR operations and centers of excellence. In the regional HR operations, we’re matrixed through corporate as well. A good example of how this will work involves the global job-grading system: We will determine what the process is, and local HR professionals will execute it. In contrast, for compensation and benefits, for instance, we have people in the regions but job grades across the company. In addition, we now have performance management, succession planning, and training and development tied together through our training portal, AGCO University.

You became senior vice president of HR at AGCO in 2009. How did the recession affect your plans?

We had layoffs worldwide touching around 20 percent of our employees. We had to go location by location. Our priorities for the HR department were to reduce costs and support the business. We had a lot of plans. Instead, we had to step back and reduce costs and redundancies. But we didn’t cut the budget for training. Today, recovery varies from country to country. Business has improved—not to where we would like it to be, but more positive. South America is doing great; the United States has improved; Europe is still tough.

What kind of measures does CEO Martin Richenhagen hold you to?

In recent years, the focus of the organization has been on organic growth. He is looking for results, creating an environment where employees are motivated, bringing on excellent employees measured through assessments and competency modeling. He wants us to become a global human resource operation. We continue to work in that direction.

We look at turnover, employee satisfaction and the progress we’ve made in training employees. There is a challenge in acquiring key performance indicators because systemwide we’re not fully integrated yet. We’d like to have more data, but we still have 28 different payroll systems.

A lot of what I came to AGCO to do resulted from employee survey results. For example, we developed a unified compensation program. That paved the way for other work on HR initiatives such as our training portal, AGCO University, which provides consistent training across brands.

The interviewer is editor of HR Magazine.

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