Toymaker Hasbro Inc. built a successful stable of homegrown products through the years, including Mr. Potato Head, G.I. Joe and My Little Pony. In the 1980s and 1990s, the company fueled continued growth through acquisition, picking up Milton Bradley and Playskool in 1984 and Tonka, Parker Brothers and Wizards of the Coast in the 1990s.
But by 2000, the company needed to refocus, shifting from acquisitions to nurturing the cadre of more than 1,000 brands in its portfolio with the goal of total brand immersion, including games, toys, entertainment and housewares. It’s not just toys and games anymore — Hasbro brands are now seen in digital entertainment, movies and TV.
Along with the new strategy came the need for more strategic leaders to make it happen. Hasbro already offered employees development from basic management training to tuition reimbursement but needed a new kind of investment to develop future leaders.
In 2003, the company, in partnership with the executive education program at Dartmouth’s Tuck School of Business, created the Hasbro Global Leadership Program to bolster the talent pipeline and provide opportunity for high potentials to expand their leadership roles. More than 200 Hasbro executives have attended the week-long program, starting with vice presidents and above from 2003 to 2006 and broadening to director-level employees in 2009.
Working with faculty at Tuck’s campus in Hanover, N.H., the company continues to run the program annually with the aim to fuel continued growth through dynamic leaders who are moving Hasbro’s employees from a toy-manufacturing paradigm into new roles as global brand caretakers.
Beyond Toys to Transcultural Teams
To set the initial curriculum, Tuck professor Vijay Govindarajan, faculty director for the Hasbro program, worked closely with Hasbro’s leadership to identify skill gaps and plot where the company needed to go and the skills needed to get there.
“There’s no doubt they are incredibly smart professionals equipped with strategic know-how,” said Hasbro President and CEO Brian Goldner about the staff at the Tuck School. “But they also have a practical understanding of what it takes to succeed in business. That’s pivotal to real-world application.”
Modules were mapped out to address global strategy, personal leadership, brand building, emerging markets and ethics. Specific modules included “Changing the Rules of the Global Game: Creating the Future,” “Developing Transcultural Competence,” “Emerging Markets: Challenges and Opportunities,” “What Got You Here Won’t Get You There” and “Building the Global Organization of the Future.”
“Hasbro understands that the future of the corporation lies not in products and technology, but in its people,” Govindarajan said. “Brian Goldner has transformed the company by showing his commitment to developing strong leaders, and therein lies a key to Hasbro’s success.”
The company needed a new mindset that stretched employees’ imaginations beyond its history as a manufacturer of toys and games to turning its brands and properties into a strategic advantage, Goldner said.
Hasbro executives attended classroom sessions, networked with one another and spent time with top executives. In the program’s early years, they also were assigned to a cross-functional team of people from different business units and offices to work on an action learning project focused on real-world business challenges, often meeting for months after the program’s conclusion.
Dolph Johnson, Hasbro’s senior vice president of global human resources, assisted with the inaugural 2003 session when he was vice president of HR for the toys and games group, and returned two years later as a participant. Hasbro’s leadership was expanding into global markets but needed to better align people to the strategy and vision.
“Tuck was the place to do that,” Johnson said. “The work of the action learning teams, in many ways, is a large measure of where we are today.”
Team discussions took on a global dimension, whether talking about ways to stimulate out-of-season sales, such as promoting the games business at Easter, leveraging Kids Day in Latin America or Canada’s summer cottage season, or the cultural particulars of emerging markets. In some countries with low per-capita income, it is essential for parents to understand the educational benefits of play.
For Canan Ilter, now the company’s business head for Turkey and a 2006 participant, the program provided the chance to accelerate the opening of Hasbro offices in Turkey, Romania and Bulgaria. Oscar Miranda, regional marketing director for the Latin America region and a 2009 participant, found ways to integrate his far-flung direct reports from countries such as Chile, Brazil and Mexico. Jonathan Berkowitz, recently promoted to vice president of games marketing, was part of the sports action business when he attended in 2009. Nerf products had just become a global brand.
“The core of our business is to innovate and build global products, but there were cultural things we weren’t stopping to consider,” he said. “We couldn’t just continue to throw Nerf basketballs and footballs across the ocean. Tuck gave us the chance to step back and consider that the product needed to mean something when you put it in their hands.”
Berkowitz isn’t the only one to be promoted after attending the global leadership program. Of the more than 200 participants since the program started, nearly 20 percent have been promoted or taken on greater responsibilities.
“Box 1, Box 2 and Box 3,” Govindarajan’s strategy framework shorthand for managing the present, selectively forgetting the past and creating the future, is now part of Hasbro’s culture.
“It happens all the time in meetings,” Berkowitz said. “Someone will say, ‘You’re in Box 1, you need to get out of there.’ And it helps us all refocus on the long term.”
Wiebe Tinga, president of Latin America, Asia-Pacific and emerging markets, who attended in 2005 and has co-led sessions with Govindarajan, recalls a business review meeting with a manager in China who had attended the leadership program six months earlier.
“You could see the difference in how the agenda was set,” Wiebe said. “The first part of the agenda was a standard business review. The second half was very unconventional, talking about key building blocks for the business, and laying out strategic goals for the coming year, culminating in a very open discussion.”
The experience allowed the manager to approach the meeting differently and look for alternate ways to examine the situation and spur innovation. Hasbro’s internal Inny Awards program, which lauds innovation, grew out of another of the action learning projects. Two participants from one business unit decided to present awards to outstanding team members. The inaugural ceremony took place in front of an audience of 50 in the cafeteria but has since grown into a company-wide event.
“It’s one of the things our people are most enthusiastic about and most widely participated in,” Johnson said. “How we celebrate innovation, and then too, to recognize that innovation when we see it — it’s at the core of Hasbro. And it wouldn’t have happened without that time at Tuck.”
Senior Hasbro executives, including CEO Goldner, open the program with candid assessments of the company and set out the strategic blueprint. Starting in 2007, a conscious shift was made to put brands at the center of everything Hasbro does, and employees were challenged to look across all forms and formats to make that happen.
In 2001, Hasbro’s eight global core brands — G.I. Joe, Littlest Pet Shop, Magic: The Gathering, Monopoly, My Little Pony, Nerf, Playskool and Transformers — represented 17 percent of its total revenues. That total increased to 25 percent by 2005, and doubled to 50 percent by 2009. That same year, Hasbro achieved a record operating profit of nearly $600 million.
The team also made strides toward creating a pipeline for leaders of the future. Nearly 20 percent of participants have been promoted or changed jobs, and retention rates are around 90 percent. That pipeline needs to carry a more diverse set of skills than ever before as Hasbro properties cross many mediums, including feature films, digital entertainment, publishing and consumer/lifestyle goods. In fall 2010, Hasbro launched a multiplatform joint venture with Discovery Communications called The Hub.
“The most important thing is to be able to identify the next generation of Hasbro’s leaders and inculcate them to the company’s strategy,” Goldner said. “It’s important that we see individuals who embrace and work within teams, versus those who may not. We want to develop emissaries who understand the strategy and can find ways to execute and enhance on those strategies within their own teams.”
Every session of the program culminates in a dissection of what worked and what needs refinement. The curriculum is in continual development and Tuck faculty members are on hand to help re-balance as parts change from year to year.
Originally intended for an audience of vice presidents and above, application to the leadership program is now open to high-potential directors throughout the organization. Even in the tough economy of the past two years, Hasbro continues funding the program. Strong leaders are essential for future growth.
“Recession is always followed by expansion, and expansion lasts longer — three times as long,” Govindarajan said. “What you do in a recession needs to prepare you for the expansion — you need to focus on the future.”
Ensuring Hasbro has the right leaders for today and is prepared for the future helps to ensure survival during any economic challenge.
Alicia Korney is a freelance business writer living in New York City. She can be reached at editor@CLOmedia.com.