March - April 2006 Research Highlight In This Issue Missing Variables in Theories of 1 Missing Variables in Theories Strategic HRM: Time, Cause and of Strategic HRM 2 Up Close with Tony Bloxham Individuals of AstraZeneca Human resources leaders are development of the HR-performance 3 CAHRS New Advisory Board constantly on the lookout for ways to relationship, the researchers noted Members demonstrate the value their three areas that are missing. They are 4 ILR School’s HR High Flyers organizations add to the business. For time, cause and individuals. over a decade, research Time is an important 6 Save the Date has been conducted to factor because most Improved 9 In the Newsshow the cost benefit of current research is cross- HR programs and company sectional. It measures 10 CAHRS Events Calendar practices, which has led both input and output to a more strategic performance variables at one point in approach to HR as well can lead to time. It looks at the HR is problematic according to these as an increase in the investment practice or program and researchers. It is an area that is ripelevel of respect and its effect on the in better for additional theoretical andposition that HR organization as a empirical analysis in the future. The commands within firms. HR practices. snapshot view. Time is evaluation of the time factor led the In an attempt to assumed as a constant or researchers to the next area that is propel these theories considered in a missing: cause. and research a step relatively shallow way. “It is a chicken or the egg issue. This further, Patrick M. Wright and John J. It is either “post predictive” because it leads to that,” says Wright. Our Haggerty have released a working asks respondents to measure practices existing research seldom addresses the paper titled, Missing Variables in after the performance period that is potential for anything other than a Theories of Strategic Human Resources being evaluated. Or, it is one-way causal relationship. That Management: Time, Cause and “retrospective’ in that it asks assumed direction is almost always Individuals. respondents to recall HR practices expressed as HR does this, then that The goal is to critically evaluate that existed prior to the performance happens. Reverse causation isn’t the existing research. “This is not an period. Only a few predictive studies considered. That is, as company attempt to show that HR doesn’t have explored if practices assessed at performance improves they invest matter,” says Wright. “It demonstrates one point in time were related to more in better HR practices. that we need a more rigorous specific changes in firm performance. A number of HR practices more approach to further show how HR Given the increasingly fast pace of logically show a reverse causation really impacts our businesses.” environmental and organizational effect. Practices such as percentage of After carefully evaluating the change, the seeming lack of attention total pay that is variable, differences existing research on the theoretical to time, as it relates to HR practices, in merit increases between high and low performers, and hours of training employees receive are obviously influenced by the economic success of a business. Continued on Page Eight P A G E 0 N E www.ilr.cornell.edu/cahrs/ Up Close with … Tony Bloxham of AstraZeneca A 30-year veteran of leadership, Tony core processes, they should be clear at a Bloxham is the Executive Vice President of global level so that whether you’re in the HR at AstraZeneca, one of the world’s Philippines or Argentina you can largest manufacturers of pharmaceuticals. It recognise that they are of a consistently is a large company—more than 64,000 high standard.” Tony remarks that this is employees in over 50 countries—with an crucial as marketing and regulatory even larger responsibility. It spends over requirements become regional and global $15 million daily on research and in scope, not just dictated country by development to improve health and quality country. of life. Tony takes his role and the As for the specific people elements of company’s mission very seriously. Tony Bloxham the business strategy, those are closely “The majority of people in this industry incorporated into the business rationale. believe they are privileged to do what they do. We are Tony shares his function’s current priorities: “First is contributing to human health,” says Tony. It is an optimizing performance through high quality important perspective, especially considering the performance management systems. This includes recent coverage of alleged scandals and adverse affects helping our managers develop good coaching and of some drugs. feedback skills to improve individual and team This perspective makes the role of HR at performance. Second is talent management and AstraZeneca all the more critical. “To say that creating a method to identify, assess and develop a attraction and retention of talented people is a priority continuous pipeline of global high performers. Next is seems obvious but it is really at the essence of what we defining consistent expectations for organizational do,” remarks Tony. “Intellectual capital is critical. It’s behaviors and building these into performance and why we are a people based organization.” development planning. Lastly, leadership development How does Tony lead an organization whose products to ensure we are giving existing and potential leaders may literally offer a life or death proposition? “As HR, the capabilities to work effectively across functional and we must enable this business to continuously adapt to a geographical boundaries.” changing and more demanding business environment Tony’s management philosophy supports these people while we are changing ourselves as a function. We are based initiatives. “You must have courage to step up and not just here to tell other parts of the organization to be singled out, have the conviction to make a change but we are about changing ourselves; improving difference.” It’s a perspective that clearly ties to a our own effectiveness and capability is paramount.” mission critical industry. “Behavior and values have AstraZeneca is not just global in scope, but global in always been very important to me. As leaders we must origin. It was a spin-off of ICI, a U.K.-based industrial develop relationships with those on the other side of powerhouse that included a pharmaceutical arm among the table in any situation. Trust and openness is a very other things, which merged with Astra, a Swedish drug strong driver for me and critical for anyone aspiring to company, in 1999. leadership.” It is reassuring to know that this is the Because of its merged history and worldwide scope, professional and personal philosophy helping lead a change management is a priority. “We are focused on company that might make your father’s heart becoming more globally aligned. Wherever we have medication or cancer treatment for a dear friend. AstraZeneca, Inc. joined CAHRS in 2005, the “UP Close With...” profiles feature interviews with leaders of CAHRS sponsors. hrSPECTRUM March - April 2006 P A G E T W O www.ilr.cornell.edu/cahrs/ The CAHRS Advisory Board New Members The CAHRS team would like to welcome new educated in central Scotland and graduated from CAHRS Board members and honor those moving on. Edinburgh University with a degree in History. John Hofmeister, President of Shell Oil Company, Laurie is the Senior Vice President of Human moved on to new and exciting roles leaving the Chair Resources of Tyco International. She has worldwide position he has held since July of 2004. John has been responsibility for leading the company’s strategy in the an impeccable leader, an ‘HR Champion’ showing the area of leadership development, organizational world that an HR background has the business effectiveness, compensation and benefits, staffing, understanding and intellectual skills to get the job diversity, learning, and human resource systems and done. We will miss his presence. Stepping up to the role processes and internal communications. Laurie serves on is Eva Sage-Gavin, Executive Vice President of Human the Board of Directors of Embarq Corporation. She holds Resources and Corporate Communications of the Gap Eva Sage-Gavin a Bachelor of General Studies from the University of Inc. Eva began her participation as a CAHRS Board Michigan and received an M.B.A and a masters degree member in July of 2003, and we now welcome her as in city planning from Harvard University. our new Chair. In her role as Chief People Officer, she Kevin is the executive resource for the sets the strategy for the company’s communications and Compensation and Benefits Committee for the Board human resources operations worldwide, including of Directors and a member of the Global Management staffing, diversity, rewards, recognition, employee Team. Kevin is responsible for HR strategy, business benefits, learning & development, strategic change, and unit support, recruiting and staffing, compensation, internal & external communications. Sage-Gavin benefits, diversity, employee and executive joined Gap Inc. in March 2003. Prior to this she development, employee relations, organizational and worked at Sun Microsystems where she was Senior Vice succession planning, and health services. Kevin President of Human Resources, and at Disney Hugh Mitchell joined American Express from the Pepsi Bottling Consumer Products, a division of The Walt Disney Group, where his most recent position was executive Company, where she also was Senior Vice President, vice president for The Pepsi Bottling Group. For the Human Resources. In addition, she has served in past several years, he has been involved with Ability various senior human resources leadership positions for Beyond Disability, a rehabilitation institute located in The PepsiCo Corporation, including its Taco Bell Brookfield, Connecticut, and currently serves as the division, and for Xerox Corporation. She serves on the organization’s Vice Chairman. Kevin received a B.A. Cornell University School of Industrial and Labor degree from Marshall University in Huntington, West Relations Advisory Board, works with the President’s Virginia, and a master of labor and industrial relations Council of Cornell Women, Alumni Relations degree from Michigan State University. Committee, and is also a member of the Human CAHRS is looking forward to contributions from Resource Policy Association Board of Directors. She Laurie Siegel the new members to an already strong CAHRS Board holds a bachelor’s degree in industrial and labor that includes: David Pace, Executive VP, Partner relations from Cornell University. Resources, Starbucks; Pam Kimmet, Global Head of We are also proud to welcome new HR executives HR, Bear Stearns; William Rosner, Chief HR Officer, to the board this summer. Joining the team are: Hugh PNC; Ken Carrig, Executive Vice President, Mitchell, Human Resources Director for Royal Dutch Administration and CAO, SYSCO; Susan Cook, Vice Shell; Laurie Siegel, Senior Vice President, Human President, HR, Eaton; John Murabito, Executive Vice Resources at Tyco International; and L. Kevin Cox, President, HR and Services, Cigna; Elease Wright, Executive Vice President, Human Resources of Senior Vice President, HR, Aetna; William Bucknall, American Express Company. Hugh is stepping into Senior Vice President, HR, United Technologies; our Board having shared knowledge with John, and in William J. Conaty; Senior Vice President, Corporate his role at Shell he is responsible for the provision of Kevin Cox HR, General Electric; J. Randall MacDonald, Senior HR strategy, planning and support to all Shell Vice President, HR, IBM. businesses across 140 countries involving 120,000 direct staff. Ex. Officio members include: Lee Dyer, ILR Professor; Hugh is also responsible for managing Shell’s worldwide real Rosemary Batt, Alice H. Cook Professor of Women and Work; estate portfolio and Shell Aircraft which provides technical and Kevin Hallock, ILR Professor; Bruce Carswell, Visiting Executive advisory services, and operates the Group’s fleet of corporate Director; and CAHRS management Patrick Wright, Professor and aircraft. Hugh is a Foundation Board member of the International Director; Pamela Stepp, Executive Director; Scott Snell, Professor Institute for Management Development (Lausanne). He was and Director of Executive Education. hrSPECTRUM March - April 2006 P A G E T H R E E www.ilr.cornell.edu/cahrs/ The ILR School’s HR High Flyers ILR Alumni & CAHRS Sponsors The ILR School’s HR High Flyers are all at the pinnacle community. It’s diverse, global, and the core values have of their field. In our previous article our HR High Flyers been established through several generations.” indicated that receiving a BS degree at the ILR School The other Vice-Presidents learned over time how to provided them with a solid foundation from which to assess an organization’s value system. Pam Kimmet grow, an opportunity for life-long learning, and a strong suggested that job candidates do a reverse interview during connection to other top people in the field. They built on the hiring process and: (1) ask how the company gets that foundation throughout their careers by championing things done; (2) pose an ethical dilemma and ask the the strategic role of human resources, staying true to the interviewer how it would be handled; and 3) ask for the values they developed early on, developing consultative organization’s code of conduct. Then talk to employees to skills, and looking for challenging opportunities. see if the company puts the code into practice, and look at Championing the Strategic Role of Human Resources internet sites and the media to see what people are saying. As mentioned last time, the Vice Presidents praised Both Ken Murphy and Ken Carrig had the opportunity their ILR undergraduate education for putting them at the to contribute significantly to value shifts within forefront of a major paradigm shift in human resources. organizations. Ken Murphy had taken a job with Phillip When they graduated, only a handful of companies truly Morris, but planned to leave after the first year because of recognized the contribution Human Resources could make the company’s product and a culture that did not match to the bottom line. All the Vice Presidents emphasized the his own values. However, a new CEO came on board importance of working for organizations that understood determined to make changes, facilitate honesty and trust, the strategic value of Human Resources. David Pace, and lift the business out of its siege mentality. Ken James Williams and Ken Carrig, advised seeking out best- Murphy was offered the top Human Resources position, in-class Human Resource organizations because, as stated and he jumped at the chance to make a difference. by James Williams, “they are accelerators for learning and Ken Carrig had been working for PepsiCo for several you will be stifled in other organizations.” years when he decided to take on a new challenge at The Vice Presidents learned early in their careers that Continental Airlines, a company which had been losing they could be effective champions only by thoroughly money for years and was in its third bankruptcy. When he understanding their companies’ businesses. The key, arrived he found a complete lack of trust and cooperation according to Mike D’Ambrose, is knowing what drives among managers, yet he and his team contributed to shareholder value. He asks all his Human Resource staff Continental’s turnaround from “the worst to first” airline three questions during performance reviews; “(1) what are in the industry. you going to do to drive revenue? (2) what are you going Consultative Skills to do to reduce costs? and (3) why are you doing it?” In order to have an impact on the culture of an Kevin Barr tells his staff they are as accountable as general organization and be effective business partners, all the Vice managers for the performance and retention of employees, Presidents needed to develop strong consultative skills. even though they may not have complete control over the They praised the ILR School for giving them the basics: outcomes. He stresses the importance of looking at the ability to think clearly; express their ideas effectively business in a holistic way. “All you have to do to learn the both orally and in writing; and solve problems in a business intimately is ride with the sales people, listen to collaborative way. From there, they needed to learn to be customers, and walk the shop floor if it’s manufacturing.“ more service oriented and slowly build trust among their Values constituents. David Nachbar said he needed to become a In addition to championing the strategic role of HR, the non-filtering mirror to his CEO and peers. “You need to be Vice-Presidents emphasized the importance of finding able to talk back to power. The old generalists used to organizations whose values matched their own. Steve want to be everyone’s best friend. I don’t want to be a best Leven found his match at Texas Instruments, soon after he friend; I want to be a respected peer, a confidant or graduated from the ILR School, and has spent almost his consigliore.” According to Pam Kimmet, “You need to be a entire career there. When he first visited as a job candidate leader who tries to inspire, motivate, and build your team. in 1973 he met employees who were motivated and excited You must practice what you preach, even if it’s sometimes by the work they were doing. “Texas Instruments is my very difficult to do so.” hrSPECTRUM March - April 2006 P A G E F O U R www.ilr.cornell.edu/cahrs/ Continuous Learning Opportunities To develop their leadership skills, the Vice Cornell University’s ILR School HR Presidents searched continually for new challenges and learning opportunities. They High Flyers learned a great deal from role models (frequently their bosses), and mentors (sometimes other ILR graduates) who helped them along the way. They also learned from switching industries and building a repertoire of transferable skills. For example, David Pace went from heading a unit with 300,000 people in 92 countries to managing 300 people where he said, “if you wanted a writing pad you had Kenneth F. Murphy* David Nachbar James P. Williams to go out and get it. In big companies you take Senior Vice President, Senior Vice President, HR Corporate Vice President, HRHR and Administration Baush & Lomb a lot of things for granted. In a small company Altria Group Danaher International you have no staff; no one will help you with your presentations to the Board, but you can start from a blank slate.” Eva Sage-Gavin spent time in five companies and relocated 15 times. “You have to take jobs that stretch you, that give you the opportunity to learn. When you close one door, there is another one to open—that is the excitement of treating life as a continuous learning experience.” Eva Sage-Gavin The most challenging events and greatest Michael D’Ambrose** Executive Vice President, HR Executive Vice President, HR learning opportunities for these Vice Presidents, First Data Corporation GAP Inc. however, centered around culture change, either through mergers and acquisitions, and/or responsibility for a global business. They all emphasized the importance of acquiring global experience, either by heading a global unit located within the U.S., or by working for an overseas division. Mike D’Ambrose worked with Ingersoll Rand in Switzerland, Italy and Australia. David Pace held positions in England and the Middle East while working for PepsiCo, Pam Kimmet*** Dave Pace Ken Carrig and Kevin Barr worked for Nabisco in Senior Vice President, Executive Vice President, Executive Vice PresidentHR Partner Resources Administration and CAO Singapore. Before that, he had worked in an Lucent Technologies Starbucks Coffee SYSCO Corporation international capacity in the U.S. covering Asia, Latin American and Canada. The other Vice Presidents who obtained overseas experience while they were based in the U.S. included James Williams at AlliedSignal- Honeywell, Eva Sage-Gavin at Disney, Steve Leven at Texas Instruments, and Pam Kimmet at Citigroup. James Williams and Mike D’Ambrose faced Kevin Barr Steve H. Leven some of their greatest challenges during Senior Vice President, Senior Vice President mergers and acquisitions. James Williams was HR Texas InstrumentsTerex Corporation working for AlliedSignal when they bought * Formerly with Altria Group Honeywell, and his job as Vice President of ** Formerly with First Data Corporation Continued on Page Eight *** Now working for Bear Stearns hrSPECTRUM March - April 2006 P A G E F I V E www.ilr.cornell.edu/cahrs/ SAVE THE DATE CAHRS Spring Sponsor Meeting The Talent Management Challenge May 10-11, 2006 • Cornell University, Statler Hotel, Ithaca, NY After years of cost-cutting and down-sizing, many companies Both of these meetings will highlight some of the companies now are in financially healthy positions to grow their businesses. that have achieved excellence in identifying high potential talent During this growth period and emphasis on globalization, and succession planning, developing leadership competence across companies are facing serious talent issues. The Center for different levels of the leadership pipeline, and creating a Advanced Human Resource Studies reacted to the “The Talent development culture. The meeting in Ithaca will add sessions on Management Challenge” by building a year long study to learn integrating HR information systems to help manage talent more how HR Talent Management executives at leading companies in effectively and using an employment brand to attract talent. The the world are going about making sure that they have the right Amsterdam meeting will include additional issues of diversity and people in the right place with the right competencies. inclusion, the role of the top HR executive in Talent Management, We are pleased to present the results of our study including building talent in the new economies and finding a pool of practices and processes associated with successful talent resources at the most efficient cost. These meetings are ideal for management at two different meetings to reach both domestic anyone interested or charged with talent management, leadership and international audiences. development, or succession planning in their firm. AGENDA WEDNESDAY, May 10, 2006 1:00 - 2:30pm — Panel Discussion: 6:00 - 7:00pm — Reception “Developing Leaders and Leadership” 7:00 - 9:00pm — Dinner Facilitator - Brad Bell - Assistant Professor, Cornell CAHRS THURSDAY, May 11, 2006 IBM - Mike Markovits, Vice President of Global Executive 7:30 - 8:00am — Breakfast & Organization Capability Corning - invited 8:00 - 8:30am — Welcome and Introductions Shell - Rick Brown, Head of Global HR Functional Pamela Stepp - Executive Director, Cornell CAHRS Excellence Patrick Wright - Director, Cornell CAHRS Scott Snell - Director, Executive Education, Cornell CAHRS 2:30 - 2:45pm — Break 8:30 - 9:15am — “Overview on Talent Management Study: 2:45 - 4:15pm — Panel Discussion: “Attracting and Issues and Challenges” Retaining Top Talent” Christopher Collins - Assistant Professor, Cornell CAHRS Facilitator - Chris Collins - Assistant Professor, Cornell CAHRS 9:15 - 10:00am — Keynote Address: General Mills - Beth Flynn, Vice President, HR “Building A Leadership Culture” Merck - Dan Guaglianne, Executive Director, American Express - Kevin Cox, Executive Vice President, HR Recruiting & Staffing 10:00 - 10:30am — Break Time, Inc. - Steve Schloss, Vice President, 10:30 - 12:00pm — Panel Discussion: “Succession Planning and People Development Identifying High Potential Talent” 4:15 - 5:00pm — “IT and Talent Management at Facilitator - Pamela Stepp - Executive Director, Cornell CAHRS StorageTek and Sun Microsystems” General Electric - Joe Ruocco, Vice President, HR Sun Microsystems - Steve Fitzgerald, Leader Global United Technologies - Bill Panetta, Director, Talent Management, Sun Microsystems HR Leadership Development 5:00 - 5:15pm — Program Wrap-Up Citigroup - Ram Sreekantan, Vice President, SHRO for Pamela Stepp - Executive Director, Cornell CAHRS Consumer Sector Group, Talent & Diversity Patrick Wright - Director, Cornell CAHRS 12:00 - 1:00pm — Lunch Scott Snell - Director, Executive Education, Cornell CAHRS 5:30 - 7:00pm — Reception Registration Information To register for either meeting please fill out our on-line registration form located on our website: www.ilr.cornell.edu/cahrs hrSPECTRUM March - April 2006 P A G E S I X www.ilr.cornell.edu/cahrs/ SAVE THE DATE CAHRS International Spring Sponsor Meeting The Talent Management Challenge June 27-28, 2006 • Renaissance Amsterdam Hotel, Netherlands AGENDA TUESDAY, June 27, 2006 9.30 - 9.45 — Morning Break 12.00 - 13.00 — Welcome Lunch 9.45 - 11.00 — Panel Discussion - “Managing Bias in a 13.00 — Welcome and Introductions Global Workplace” Pamela Stepp - Executive Director, Cornell CAHRS Facilitator - Lisa Nishii - Assistant Professor, Cornell CAHRS Patrick Wright - Director, Cornell CAHRS Quinetta Roberson - Professsor, Cornell CAHRS Scott Snell - Director, Executive Education, Cornell CAHRS Pre Rungasamy - HR Director, Corporate Center 13.30 - 14.30 — “Overview on Talent Management Study: South Africa, Anglo American Issues and Challenges” Madelon Flint - Head of Services HR, ABN AMRO Chris Collins - Assistant Professor, Cornell CAHRS 11.00 - 12.15 — Panel Discussion - “Unlocking Human Potential” 14.30 - 15.45 — “Head of HR Role in the Executive Suite for Facilitator - Derkjan van der Leest - Professor/Partner, Talent Management” Strategic Management Centre Hugh Mitchell - Human Resources Director, Royal Dutch Shell plc Jos Nijhuis - Senior Partner, PwC NL Pauline van der Meer Mohr - Group HR Director, TNT N.V. Scott Sherman - Vice President, Human Resources, Medtronic Europe, Canada and Emerging Markets 15:45 - 16.10 — Break 12.15 - 13.15 — Lunch 16.10 - 17.25 — Panel Discussion - “Finding Pool of Resources at the Most Efficient Cost” 13.15 - 14.30 — Panel Discussion - “Developing Leadership Facilitator - Federico Castellanos - VP HR Global S&D, Competencies” IBM Corporation Facilitator - Pamela Stepp - Executive Director, Cornell CAHRS Bert Ferwerda - Director, HR Netherland, IBM Corporation Randall Peterson - Professor, London Business School Joe Severi - Vice President, HR Southwest Europe, Curran Brugger - Global Director of Leadership IBM Corporation Development, AstraZeneca Michael Burkhardt - Vice President, Northeast Europe, Marielle de Macker - EMEA Organization & Staffing Partner, IBM Corporation GE Europe NV 18.00 - 19.30 — Reception 14.30 - 14.45 — Afternoon Break 19.30 - 21.30 — Dinner 14.45 - 16.00 — Roundtable Discussion - “Identifying High Potentials” WEDNESDAY, June 28, 2006 16.00 - 16.50 — “Creating A Culture of Coaching and Leadership 8.00 — Welcome Development” Pamela Stepp - Executive Director, Cornell CAHRS Colleen Rumbal - VP, HR Relationship Leader, EMEA, Patrick Wright - Director, Cornell CAHRS American Express Scott Snell - Director, Executive Education, Cornell CAHRS 16.50 - 17.15 — Wrap Up 8.15 - 9.30 — Panel Discussion - “Building Talent in the Pamela Stepp - Executive Director, Cornell CAHRS New Economies” Patrick Wright - Director, Cornell CAHRS Facilitator - Kevin Hallock - Professor, Cornell CAHRS Scott Snell - Director, Executive Education, Cornell CAHRS Willem Lammertink - Director HR&C Europe, 18.30 — Closing Reception/Dinner Cruise Johns Manville Europe GmbH Marcia Fish - Human Resources Director, General Electric Consumer & Industrial Bina Chaurasia - VP, Corporate HR & Strategy, Gap, Inc. Hotel Information To reserve a room at the Renaissance Amsterdam Hotel in The Netherlands, you need to contact the Hotel by April 27th via fax, using the form located on our website. Inquiries for Amsterdam Program, please contact: Jo Hagin Program Manager Phone: 607-255-9358 Fax: 607-255-4953 Email: jap7@cornell.edu hrSPECTRUM March - April 2006 P A G E S E V E N www.ilr.cornell.edu/cahrs/ ILR Alumni & CAHRS Sponsors Continued from Page Five Human Resources was to accelerate the integration of two assignments, your career is not a ‘Candy Land’ path, step extremely different cultures. He compared the experience out and take chances, learn, go for it, have confidence, and to being the first one on the beachhead during an don’t take the obvious path. There are no dress rehearsals, invasion, or like walking off a cliff. Mike D’Ambrose had and eventually the cream rises to the top.” Perhaps David significant responsibility for the integration of Citibank Nachbar summed up the careers of these Vice Presidents and Travelers. The companies had 56 Presidents and most eloquently when he said, “You are on a voyage of Division Heads who needed to learn how to work together discovery and you never know how your learning will come within a new corporate culture. into play.” He compares Human Resources to “polishing a Final Advice stone with a grinding wheel and slowly unveiling all the As final advice to those who want successful Human facets so that the stone becomes a gem.” Resource careers, James Williams suggests, “Take the tough Missing Variables in Theories of Strategic HRM Continued from Page One Consequently, our research around HR impact can more multi-level theories of the relationship between HR benefit from a more thorough approach to addressing cause management practices and economic performance. This in the relationship between specific HR practices and modeling would simultaneously explain variance at the changes in firm performance. One way to do this may be to individual, group and organizational level. recognize how individuals impact this causal relationship. Wright and Haggerty conclude with the encouragement To date, much of the research and literature on strategic that there is a definite advantage to extending our current HR has ignored the critical role that individual and group research work in HR to examine time, cause and differences play in the implementation and interpretation individuals. This expanded theoretical approach can build of HR practices. Capturing and measuring such variation a more robust empirical base that will significantly increase requires more sophisticated analytical tools and more our knowledge of the relationship between HRM and complex research designs than have been applied so far. economic performance. The ultimate result is a more While this variation will be difficult to measure, it is eloquent and meaningful way to demonstrate the value we essential that we move in this direction if we are to better add as strategic partners and professionals in our firms. understand exactly how HR practices lead to appropriate or desired individual and group behaviors. For more information regarding this research please contact Patrick Wrightvia email: pmw6@cornell.edu, or Tel: (607)255-3429. This article refer- There may also be a benefit to recognizing that there is ences research from the CAHRS Working Paper #05-03, which can be variance in how individuals form their impressions of HR found on our web site: www.ilr.cornell.edu/cahrs/paper.html practices because everyone has a different way of attending to and processing data. This issue suggests the need for hrSPECTRUM is published by the Center for Advanced Human Resource Studies, School of Industrial and Labor Relations, Cornell University, Ithaca, New York 14853-3901 Phone: 607-255-9358 • Fax: 607-255-4953 Dr. Patrick Wright, Director Dr. Pamela Stepp, Executive Director hrSPECTRUM March - April 2006 P A G E E I G H T www.ilr.cornell.edu/cahrs/ IIn The News Tae-Jin Kim of SK Group Continues to Excel in Seoul - Tae-Jin Kim, Vice President and Head of Human Resources and Industrial Relations at SK Group in Seoul, Korea, has been promoted. This unique promotion gives Tae-Jin two additional titles: Head of SK Management System (SKMS), a newly created segment to find strategies for overall company management and; Director of SK Academy, a training and development center within the firm. In these combined roles Tae-Jin will oversee HR, employee education, management-related regulations and practical strategies for SK Group. Tae-Jin is a ’93 MILR, a devoted Cornell Alumnus and CAHRS Tae-Jin Kim Sponsor since 1995, and a longtime friend to the ILR School. In learning of this promotion, ILR Dean Harry Katz said, “Tae-Jin Kim has emerged as a foremost alumnus and a leader in international HR/IR. The ILR School congratulates him on this well-deserved promotion and wishes him every success.” SK Group is one of the leading business organizations in Asia, composed of more than 50 companies. It is a major player in a range of industries including Energy & Chemicals, Information & Telecommunications, Logistics & Services, and Finance. In addition, SK is Korea’s dominant wireless service provider and is a key participant in the development of the global information network. Cornell ILR HR Seniors Win Northeast Region HR Games – Chris Collins, ILR HR Professor and coach for the team is happy to announce that three seniors—Anna Fishman, Maureen Martin, and Rebecca Ong—won the 2006 Northeast Region HR Games this past month in New Jersey taking home the Championship Plaque. The winning team of seniors will now compete in the National HR Games competition that is held during the Society for Human Resource Management Annual Conference in June. There were 16 teams in the competition, representing 15 different Northeastern universities. The Cornell Team beat a team of seniors from Penn State in the finals, overcoming a 4000 point deficit in the first round of the finals, to win 4400 points to 4000. As you may remember the HR Anna Fishman, Maureen Martin and Rebecca Ong Games are a college bowl/Jeopardy style competition that tests the students knowledge on HR and Labor Relations issues (topics include such areas as staffing, training, compensation, benefits, labor law, collective bargaining, motivation, leadership theories, and workplace health and safety). Everyone is very proud of the students for their hard work in preparation and training, and for their huge success at the competition. HR Leaders Address The Conference Board at Senior HR Executive Conference – The Conference Board 2006 Senior Human Resources Executive Conference was held at the Millennium Broadway Hotel in New York on April 6-7. The theme of The Conference Board 2006 was: Strategic Workforce Management and Growth—Aligning People, HR and Business Strategy. HR management amid global competition and the increase of knowledge workers were some of the topics covered at the conference. On April 7th Sue Oliver, Senior Vice President, People, Wal-Mart Stores delivered the keynote address, “Aligning HR with Business Strategy in a Dynamic Corporation,” and Samuel Bacharach, Director, Institute for Workplace Studies, Cornell ILR, moderated the executive roundtable, “The HR Challenge.” The closing session, “2020 Vision: Preparing for the Next Decade,” was moderated by Scott Snell, Professor of HR Studies and Director of Executive Education, School of ILR, Cornell University. A full copy of the program is available on The Conference Board’s website: www.tcb.org . hrSPECTRUM March - April 2006 P A G E N I N E www.ilr.cornell.edu/cahrs/ 2006 - 2007 CAHRS Advisory Board Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 6, 2006 New York, NY CAHRS Spring Sponsor Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 10 - 11, 2006 Ithaca, NY The Talent Management Challenge CAHRS Spring International Sponsor Meeting . . . . . . . . . . . . . . June 27 - 28, 2006 Amsterdam, The Netherlands The Talent Management Challenge ILR Orientation and CAHRS Executive Roundtables . . . . . . . . . . . . . . . . . . . . . . . . . . . . August 22, 2006 Ithaca, NY CAHRS Fall Sponsor Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . October 23 - 24, 2006 Ithaca, NY (Please note new date) CAHRS Spring Sponsor Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 9 - 10, 2007 Ithaca NY ILR Orientation and CAHRS Executive Roundtables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . August 21, 2007 Ithaca NY CAHRS Fall Sponsor Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 14 - 15, 2007 Ithaca NY ILR Executive Education & Events TNT Custom Program: HR Leaders . . . . . . . . . . . . . . . . . . . . . . . . March 19 - 24, 2006 Amsterdam, The Netherlands Managing for Impact: HR Metrics and Firm Performance . . . . . . . . . . . . . . . . . . . . . . April 6 - 7, 2006 New York, NY TNT Custom Program: HR Leaders . . . . . . . . . . . . . . . . . . . . . . . . . April 23 - 28, 2006 Amsterdam, The Netherlands HR Transformation: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 30 - May 5, 2006 Ithaca, NY Partnering to Achieve Functional Excellence The Cornell Industry Consortium: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 7 - 12, 2006 Ithaca, NY Critical Strategies in Employee Relations Shell Custom Program: Strategic Business Partners . . . . . . . . . . . . . . . . . . . . . May 14 - 19, 2006 The Woodlands, TX ILR International Programs Annual Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 31 - June 4, 2006 Ithaca NY Seminar On Global Labor Standards And Monitoring SKGroup Custom Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . August 24 - 28, 2006 Ithaca, NY HR Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 24 -29, 2006 Ithaca, NY Shell Custom Program: Strategic Business Partners . . . . . . . . . . . October 8 - 13, 2006 The Hague, The Netherlands Talent Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . October 12 - 13, 2006 New York, NY HR Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . November 9 - 10, 2006 Arlington, VA For more information, contact Jo Hagin at 607/255-9358 or email: jap7@cornell.edu, or visit our website at: www.ilr.cornell.edu/cahrs/Calendar.html advancing the world of work hrSPECTRUM March - April 2006 P A G E T E N www.ilr.cornell.edu/cahrs/ 0406 HR Magazine: Big Oil’s HR Champion Page 1 of 4 SHRM Home > Publications > HR Magazine > Articles Big Oil’s HR Champion This oil industry leader is a problem-solver who relies on his HR skills to tackle the most intractable challenges. By Ann Pomeroy April 2006 Vol. 51, No. 4 John Hofmeister, president of Shell Oil Co. and U.S. Country Chair for Royal Dutch/Shell Group, exudes an air of quiet confidence. Seated in his book-lined office overlooking the collection of glass skyscrapers that forms the Houston skyline, the head of U.S. operations and former HR leader at one of the world’s largest oil companies strikes an observer as a man who is comfortable in his own skin. Although he works in what he describes as “a dangerous business” at a job that demands he be on call 24 hours a day, seven days a week, Hofmeister is undaunted. “I love it,” he says. “I hope to do this for a long time to come.” Hofmeister the Behaviorist While today he is a focused executive, Hofmeister wasn’t always so sure of his career path. Like most college freshmen, Hofmeister entered Kansas State University in the late 1960s without a clear idea of what career he wanted to pursue. He was interested in political science, but less as a study of government than as a study of behavior. Growing up in the Cold War era, he recalls that “the great democratic/communistic divides were fascinating to me as a student.” He was 14—“a very impressionable age”—when the Berlin Wall was built. The arms race and then the Vietnam War galvanized his political thinking, Hofmeister says. He earned bachelor’s and master’s degrees in political science and also studied economics and the social sciences with a view toward giving himself several career options. His wrote his thesis on a form of political behavior, and considers himself to be a behaviorist. When he graduated, he was broke and in debt, recalls Hofmeister. “I didn’t have two nickels to rub together.” As he considered what to do next, he examined four possibilities: attending law school (he had applied and been accepted at several schools), going back to graduate school for a Ph.D. (he had been offered a fellowship), working for the federal government or working for General Electric (GE). Pragmatism carried the day. Deciding that further schooling could wait—“I needed money!”—Hofmeister entered GE’s Human Resources Management Program in 1973. This turned out to be a felicitous choice that established his HR career path, and Hofmeister spent 15 challenging years working in five of GE’s major businesses in several locations. A Businessman First At a Glance: John Hofmeister “My first assignment in HR was actually in the marketing and sales of lightbulbs in France and West Germany” as part of GE’s cross functional training program, says Hofmeister. It was his job to commission a study on Personal: Age 58. Born in Cheverly, Md. Lives in how to improve the sales penetration of lightbulbs in those countries and Houston with his wife, Karen. They have two adult make recommendations to GE. daughters. “I enjoyed it,” he says. “I learned a lot, and GE became more successful as Current Job: President of Shell Oil Co. and U.S. a result of my recommendations.” Country Chair, Royal Dutch/Shell Group, based in Houston, 2005–present. Hofmeister praises the training he received at GE, where he took courses— complete with homework—taught by senior GE executives. In some ways, Previous Jobs: Served as group human resources he says, the classes were like a continuation of graduate school. It was at director at Royal Dutch/Shell Group, based in The GE, says Hofmeister, that he learned to approach business issues from an Hague and London, 1997–2005; worked at Allied HR point of view. Signal Inc. (now Honeywell International) as vice president, international human resources, based in Hong Kong and Paris, 1995–1997, and as vice “I am a businessman first who worked in HR as my main contribution to president, aerospace human resources, based in business,” he says. He has always been interested in working in large http://www.shrm.org/hrmagazine/articles/0406/0406pomeroy_profile.asp 5/2/2006 0406 HR Magazine: Big Oil’s HR Champion Page 2 of 4 technical global companies that are “multi-industry, multi-country, multi- function and multi-technology,” he says. And he has always loved a Los Angeles, 1992–1995; served as vice president, challenge. “The pattern of my career,” says Hofmeister, “has been to be U.S. human resources, at Northern Telecom Inc. with extremely challenging technical businesses at difficult cycles in their (now Nortel), based in Nashville, Tenn., 1989– history. I’m a sucker for difficult cycles.” 1992, and as assistant vice president-human resources based in Raleigh, N.C., 1988–1989; Hofmeister has ridden out difficult cycles to eventual success at four major began his career at General Electric, working in corporations: GE, Northern Telecom Inc. (now Nortel), Allied Signal Inc. several GE facilities from 1973–1988. (now Honeywell International) and Shell. At each company, he says, he has had the satisfaction of feeling that he has made a difference. Some Major Challenges The toughest challenge at GE came in the mid-1980s, says Hofmeister, “when the Rust Belt issues of America were roaring in my ears.” Facing high domestic costs and global competition—especially from Asia—in GE’s motor business, “we arrested the decline in” the division, he says. He left GE in 1988 to join Northern Telecom, where he took up the challenge of shifting that organization from a national company to a global company. At Allied Signal, which he joined in 1992, he discovered that “we were organized backward to the industry,” he says. Realizing that the company needed to become more market-focused, Hofmeister helped it take 23 product divisions and reorganize them around four major divisions. “We reorganized for the customer, not for ourselves,” he says, “and gained a competitive advantage.” When Hofmeister joined Shell as group human resources director in 1997, he was one of the first external hires into a senior leadership position at a company that favored long-term employees and promotion from within. Hofmeister brought 25 years of experience to the job, including stints in Hong Kong and Paris at Allied Signal. That global experience was extremely valuable, he says, as he tackled the challenges of shifting Shell from a national to a global focus. The company has faced plenty of challenges during his tenure, including what Hofmeister terms a “hugely embarrassing” situation involving Shell’s oil reserves. In 2004, the company’s proven oil reserves base was discovered to be significantly less than had previously been stated, and Shell was forced to perform a major re-categorization of reserves. The company also postponed publication of its 2003 annual report. Hofmeister, who was based in The Hague at the time, maintains that the problem was the result of a “flawed process” and involved no intentional wrongdoing. “We didn’t know what we didn’t know,” he says. “Shell investigated and corrected the problem,” says Hofmeister, and two senior executives were asked to leave the company following a vote of no confidence by the board. In the wake of this scandal, the company merged Royal Dutch and Shell Transport and Trading into a single entity known as Royal Dutch/Shell Group. The reorganized company is headquartered in The Hague and trades both on the London Stock Exchange and the New York Stock Exchange. Running U.S. Shell In March 2005, Hofmeister was named to the new position of president of Shell’s U.S. affiliate, Shell Oil Co. In that role, he represents the interests of the Shell Group to U.S. stakeholders, including investors, the government, customers, staff and communities. Working closely with U.S. policy-makers, Hofmeister says he is a “bipartisan business leader” who tells every member of Congress, “It is my goal that you will never know whether I’m a Democrat or Republican.” As a 23-year Shell veteran, Dale Wunder, vice president of human resources in the Americas for Shell’s exploration and production business, says he wasn’t surprised by Hofmeister’s promotion to president. “HR plays a significant role at Shell,” he says. “HR isn’t just warming a seat [here]; it’s clearly at the table, and John is a strong proponent of HR as part of the business.” David Sexton, vice president of strategy and portfolio and a 28-year Shell veteran, agrees that Hofmeister is eminently qualified for his current role. “He sat at the highest levels of Shell” before becoming president, Sexton says. “Having an HR person [as president] sends a message to employees that HR and talent and people” are important to the company. In addition, Sexton says that Hofmeister is an extremely effective company spokesman and “a very good communicator who doesn’t allow us to become too siloed.” He adds that Hofmeister is “a believable, creditable presence when giving congressional testimony.” (Hofmeister was one of several oil company executives who appeared before the Senate Energy and Commerce committees last fall to answer questions about high oil prices and high oil company profits following the Gulf hurricanes in August and September.) http://www.shrm.org/hrmagazine/articles/0406/0406pomeroy_profile.asp 5/2/2006 0406 HR Magazine: Big Oil’s HR Champion Page 3 of 4 Wunder says he appreciates the fact that Hofmeister provides a broad perspective and a long-term vision, and then “allows people to deliver without micromanaging.” Shell’s U.S. Country Controller, Randy Braud, says that in addition to understanding the business, Hofmeister knows that “it’s all about the people. He’s a great listener with an excellent radar detection system.” As U.S. Shell’s “head bean counter,” Braud says he and Hofmeister developed a close working relationship last year during hurricanes Katrina and Rita. Shell’s offshore platforms in the Gulf of Mexico were heavily damaged, as were refineries in the affected area. Nearly 5,000 Shell employees were affected by the storms, he says, and 1,000 New Orleans employees had to be evacuated and relocated to other offices. “John’s passion for HR was evident” in the way he handled this disaster, says Braud. “Our employees were the top priority.” Braud says all affected employees remained on the payroll and the company located apartments and homes for those whose homes were damaged or destroyed by the hurricanes. Managing Globally Talent management will be a critical focus of Hofmeister’s efforts to position U.S. Shell for the next 50 years and build its reputation as a major U.S. company, he says, and that includes recruiting and retaining new staff to keep up with attrition; 70 percent of Shell’s 24,000 U.S. employees are baby boomers in their 40s and 50s. In his previous role as head of HR for Shell, Hofmeister says he wanted “a globally consistent HR agenda for the world, recognizing that its application had to be locally adapted and managed.” To that end, Shell has developed a global framework for talent management that encompasses recruitment, compensation and benefits, HR information management, and leadership learning. Shell’s integrated global pro-cesses “work throughout the whole of Shell,” Hofmeister says proudly. “All are focused on today’s business deliverables we are trying to achieve.” Shell has facilities in 140 countries, and Hofmeister says the company “needs to be developing global nationals around the world so that our future management population is not dominated by any particular nationality” to pursue a diversity of thought. To aid in such efforts, he advises HR executives to take global assignments. It’s difficult to understand global operations if you haven’t worked and lived internationally, he says. “They can’t be understood by visitors.” Hofmeister stresses three critical success factors that have worked for Shell and should be the focus at any major organization: Have a succession plan, a talent management plan and a leadership development plan, he says, with each plan serving the future purposes of the organization. “But you need all three. You can’t do just one.” The Workforce of the Future A major HR issue for the next 20 to 25 years will be ensuring the availability of future talent, says Hofmeister, and he’s greatly concerned about what he terms a “bipolar future workforce.” In his opinion, the U.S. education system requires a “serious update” to avoid creating a society of haves and have nots, a society in which some children receive an excellent education and others—those in poor inner-city schools—receive a very poor one. “HR people must address this [issue]. It is missing the boat!” he says. The problem falls under HR’s purview, he insists, because the function is responsible for ensuring the welfare of the workforce. At Shell, he says, the company’s workforce development program is working to improve math and science in the nation’s secondary schools. “We’ve started in six states, and the program will continue to grow.” According to Hofmeister, HR also has another critical responsibility. He stresses the need for HR to “advocate on behalf of employees and not simply be stewards of the organization. Our people are the reason for our success.” A Balanced Life Unlike business leaders who talk about concern for employees but personally model a lifestyle where work/life balance is nearly nonexistent, Hofmeister makes time for personal pursuits. That’s a tall order, given that his responsibilities require him to burn the midnight oil at times. But even workaholics need a respite now and then. He says executives need to learn, early in their careers, to “compartmentalize” their responsibilities at work and at home. “There must be room for both,” says Hofmeister, “as well as room for their responsibilities to society.” We all make choices, he says, and he is comfortable that his have been balanced choices. “I have no regrets. All choices have consequences,” he says, and he and his wife “thought about the consequences ahead of the choice,” rather than after the fact. http://www.shrm.org/hrmagazine/articles/0406/0406pomeroy_profile.asp 5/2/2006 0406 HR Magazine: Big Oil’s HR Champion Page 4 of 4 “I’ve always compartmentalized my time and energy,” he says, “and tried to have invigorating pursuits outside work.” One of those outside interests is the historic farm and gristmill he owns in Lancaster County, Pa. “This is a deliberate pursuit to take me out of my ‘compartment’ as business leader,” says Hofmeister, “and put me into nature and agriculture.” His farm, he says, provides “a complete refreshment of my otherwise very busy business life, far removed from shareholders, quarterly results and other business dynamics.” Hofmeister, who grew up in New Holland, Pa., has fond memories of childhood summers spent working on a farm. He’s also interested in historic preservation. These interests mesh as he and his wife work to restore the 18th century mill and convert what is a traditional dairy farm today “back to its organic, non-chemical tradition.” He is able to visit the farm about three times a year, he says, and one of those visits coincides with an annual event that represents another of his interests—cycling. Each August, Hofmeister participates in a 100-kilometer bike ride over a route that crosses seven covered bridges in the Amish countryside. Being who he is—the quintessential businessman—Hofmeister and his wife have formed the John and Karen Hofmeister Foundation and incorporated the farm. It’s a working farm, he says, which sells wool from the sheep raised there, as well as corn and other field crops. (The web site is www.limevalleymill.com.) Although restoration efforts are expensive, Hofmeister says the farm has been profitable two out of the last five years. ‘Success Is Fleeting’ Asked to describe his greatest career success, Hofmeister maintains that he’s “not satisfied with anything yet. Success is fleeting,” he says. “Today’s success is tomorrow’s challenge.” Good HR people, he says, can never rest on their laurels because tomorrow’s business needs will be different. In the highly visible energy business, “everybody in all walks of life is interested in what we do and how we do it,” says Hofmeister. He’s on call around-the-clock because “the refineries never stop. And if the phone rings in the middle of the night, it’s probably an important call,” he says, and one that he must take. Hofmeister admits that this nonstop responsibility has “given me headaches, it has given me stomachaches, and it has exhausted me physically. So it’s not easy.” And yet, he says, “I deeply embrace what I do. It gives me joy, fulfillment and the satisfaction of challenge.” Ann Pomeroy is senior writer for HR Magazine. Society for Human Resource Management 1800 Duke Street • Alexandria, Virginia 22314 USA Phone US Only: (800) 283-SHRM Phone International: +1 (703) 548-3440 TTY/TDD (703) 548-6999 Fax (703) 535-6490 Questions? Contact SHRM Careers Careers @ SHRM Copyright © 2006, Society for Human Resource Management SHRM Privacy Statement | Your California Privacy Rights Terms under which this service is provided to you. Excerpts of HR Magazine articles may be used in printed memos, reports, presentations and publications if they are attributed to SHRM by including the name of the article and author, the month and year of the issue in which the article was published and "Used with permission of HR Magazine, published by the Society for Human Resource Management, Alexandria, Va. All rights reserved.” http://www.shrm.org/hrmagazine/articles/0406/0406pomeroy_profile.asp 5/2/2006