This From the Vault article was originally published in May 2012 on CLOmedia.com.
Chief Learning Officer Bob Bennett joined FedEx Express in 1979 and has worked in myriad areas of the company. This offered him a comprehensive view of its operations and services, but 10 years ago his insight nearly got him fired. He said it was the best thing that ever happened to him.
A native New Yorker, Bennett received his bachelor’s and master’s degrees in industrial engineering from Cornell University. He earned his MBA from Bernard Baruch College at the City University of New York. When he became a senior engineer at FedEx, Bennett moved his office space from the company’s headquarters to the closest station — where package pickup and delivery take place. His project was setting the time for FedEx morning delivery. The other three senior engineers stayed in Memphis, but Bennett knew his project couldn’t be completed without working alongside the operating staff.
“Moving created a reputation for me, a reputation of caring,” he said. “This led to instant credibility in the field among operations and helped facilitate the implementation of ideas I may have in the future. It opened the door for the rest of my career.”
Before long Bennett was promoted to vice president of planning and engineering in Latin America. At this time — 10 years ago — he was asked to help the company’s board restructure FedEx, an invitation he credits to his move to that packaging station years before.
FedEx had grown since it began operations in 1973, and so had its individual organizations. “In my mind, while this had optimized the various organizations — internal departments — it may not have optimized the overall business; all we had was optimized silos. Truly successful companies realize the impact the entire infrastructure has on the bottom line and overall organization’s health. At FedEx it’s a comprehensive look at the people, service and profit side of the business.”
Bennett and nine other individuals dissected the company’s structure, role and responsibilities across all divisions to see where there was duplicate work or service gaps. The intent was to improve the company’s profit margin and employees’ ability to provide better services and more offerings to customers. “Rather than leaving incumbents in positions, it was more important to have the right skills in the right positions,” he said. “After the company was reorganized I was convinced I had strategically fired myself.”
The initiative moved employees across the company into positions that were the best match for their skills regardless of their titles. A draft ensued. Every vice president would either get a call from human resources to discuss the procedure when exiting the company or from the senior leader in his or her division, congratulating the individual on keeping his or her position within FedEx. When Bennett came home at 9 p.m. one evening, he was shocked to receive a call from Larry Brown, senior vice president of HR for FedEx.
“‘Bob, this is Larry,’” Bennett said. “My first reaction was to turn to my wife and whisper, ‘Holy mackerel, I’m getting fired.’ His next line was, ‘I hear you’re a problem solver, I hear you make things happen. I want you in the HR organization.’”
That was Bennett’s introduction to learning and development, where he said his ability to influence business strategy was welcomed with open arms.
“Getting a seat at the table has to do not with what you do today, but what you’ve done over the long term,” he said. “The whole concept of earning a seat at the table is building and earning the respect of your internal customers. For me it was about an adherence to FedEx’s people-service-profit philosophy from day one, staying up to speed on the business needs and providing solutions on the front end. It was focusing on the company goals and objectives. It was making sure I was providing more than just my salary back to the company, that I was always providing value as well.”
Be a Translator
Bennett attends other divisions’ department meetings regularly. He is involved at the C-suite level, but finds it equally important to spend time at stations, as much time as he did in 1979. “I cannot be expected to provide them knowledge on how to help run their business if I don’t know what their business is,” he said.
Similarly, Michael S. Hamilton, chief learning and development officer for the Americas at Ernst & Young, said he believes it is the CLO’s role to be a bridge between the company’s learning and development resources and operators. Acknowledging this idea is part of the recipe to please internal and external customers, and Hamilton may have a point. Ernst & Young is the only company to be on Fortune’s “Best Places to Work” list 14 years in a row.
“Our inventory — what we sell — is our people,” he said. “The better our people are, the easier it is to serve the needs of our clients. We invest in our people like other companies invest in their products and services.”
Previously a managing partner for Ernst & Young, Hamilton was asked to join the HR team because of his success managing his audit staff. “I joke today that I’m a translator,” he said. “The operators, the people who run the business, aren’t always sure what learning and development executives have to offer as solutions to their business needs. The learning and development executives don’t always understand the business challenges from an operator’s perspective. Knowing the talents of our learning and development team and having been one of those operators has made me a great intermediary.”
Ernst & Young conducts an annual global people survey of employees in every service line across the business. Last year Ernst & Young studied the linkages between the survey conducted in 2009 with 2009 and 2010 financial, operational and brand measures for all organizational units. Hamilton and other business leaders were hoping to learn how people practices align with business results and what people factors most enhance the company’s performance and brand, including learning and development.
Ultimately he observed that more payoff comes from being “best-in-class” at engaging employees when compared to external benchmarks. For example, the year after the 2009 survey, best-in-class performers in engagement saw retention rates 11 points higher than those below the local norm. In fiscal year 2010, revenue per person was 24 percent higher in units that were best-in-class in engagement compared to others who were above average.
“Specifically looking at learning and development, we found that in business units where people see the opportunity to build their skills, we generally see higher profitability and stronger brand favorability,” he said.
In Ernst & Young’s 2011 survey, when employees were asked if they believe they have adequate access to meaningful experiences that help them grow and develop, 80 percent responded favorably, which was 15 points higher than the external norm.
According to Hamilton, these are the scores the CEO wants to see. This is what gets the board invested in learning and development.
Focus on Customer Needs
Bonnie Fetch at Caterpillar, who was recruited to serve as president of Caterpillar University after running manufacturing and engineering operations for a small drive-train system within the company, said delivering metrics consistently to the CEO and fellow executive team members is key to remaining relevant.
Fetch provides monthly updates on Caterpillar University to the CEO, Douglas R. Oberhelman, and writes a separate report for the CFO. Once per quarter she delivers an update on leadership development programs to the entire C-suite.
“We will need to develop as many as 17,000 leaders between now and 2020 to accommodate growth and retirements,” Fetch said. “Now more than ever before, it is important to focus on building current leaders and to ensure we are developing leaders who will join the company or get promoted into leadership roles.”
Oberhelman is championing leadership development by talking internally to the organization about the need to develop leaders, and focuses on Fetch’s reports when talking to Wall Street. Specifically, he homes in on the company’s leadership assessment, a 360 feedback tool that measures leaders’ use of competencies, leadership styles and the nature of the work climate they create — direct reports, peers and direct supervisors participate in the assessment. Fetch measures the percentage of leaders who create a high-performing work climate and the percentage who use a broad repertoire of styles. Each individual gets an assessment report that is subsequently used for developing and coaching.
“Learning leaders like to spend a lot of time on how many butts are in seats, how the learners feel about learning and what the ROI of the program is,” she said. “While I think that’s a fine indicator for learning, these don’t always translate to business numbers. For example, our ROI for leadership development is somewhere in the 700 percent range. That sort of number doesn’t make sense to the rest of the business world. When I mention 700 percent ROI to the C-suite, the conversation derails immediately. Business metrics are the ultimate measure of success; sometimes the metrics CLOs focus on are too learning specific.”
Eileen Walsh, audit partner in charge of KPMG Business School, agrees with Fetch. She said to have a seat at the table, learning leaders need to thoroughly understand and be able to articulate the company’s business and strategy. They must be intimately familiar with the company’s market position and industry, its challenges and opportunities, and skills and competencies professionals need to operate effectively within that industry and marketplace.
“Your credibility with the rest of leadership relies on your ability to effectively interpret data and use it to provide training that helps your professionals perform at the highest level,” she said. “Effectiveness is driven by people. Hiring, developing, supporting and retaining the best people is essential to providing quality service.”