How Ericsson aligned its people with its transformation strategy:
An interview with
chief HR officer Bina Chaurasia
A recent shift in strategy required an overhaul of
HR. Ericsson’s chief human-resources officer, Bina Chaurasia, describes how
skills, technology, and processes had to change on a global scale.
It’s been more than a decade since Ericsson relied on
its own mobile-phone production, and nearly four years since it sold its stake
in the Sony–Ericsson joint venture. In 2010, Ericsson embarked on a journey to
reframe its strategy and become a leader in telecom services, software, and
hardware.
This strategic
shift brought with it a talent challenge, as new markets and priorities
required different capabilities. In this interview conducted by McKinsey’s
Simon London, Bina Chaurasia, Ericsson’s chief human-resources officer,
describes how the company has revamped HR in response—increasing its agility,
coordination, global scale, and ability to leverage data analytics.
The Quarterly: What was the business
context for the organizational changes human resources has been driving over
the past few year.
Bina Chaurasia: When Hans Vestberg started
as CEO six years ago, he decided to get out of the remaining consumer
businesses and grow the software and services segments, which now make up about
two thirds of our total operations. The idea was to leverage the core
network-infrastructure business to develop new growth areas, including TV and
media, cloud services, and support software—what you might call telecom IT
solutions. At the time, it was very clear to Hans that you couldn’t accomplish
this vision without transforming the skills and capabilities of our people
across the organization.
The Quarterly: What were
the company’s biggest organizational strengths and liabilities in pursuing this
new strategy?
Bina Chaurasia: Our culture was our
strongest asset. It’s a culture of collaboration and innovation; people are
used to working with colleagues across the globe or taking assignments in other
locations. Our employees are also very clear about our deeper purpose—we are
ultimately creating technology for good. We go where no one’s gone before, and
we build communications infrastructure that makes a difference in communities
across the world.
At the same
time, we were incredibly decentralized. We had 23 regional groups that are now
consolidated into 10. Every region had their own way of doing things. We had no
clear systems in place. From an HR perspective, we had scattered processes and
tools.
We had to
tackle the problem in three simultaneous waves. One, we needed a single people
strategy that was fully aligned with the business strategy. Two, we needed an
integrated IT platform for HR. You can’t run an efficient global company with
disjointed IT tools. We’re now on an integrated platform that can be used by
both managers and employees, where our data can be centrally gathered and
analyzed. And, three, we had to globalize our HR processes, with the criteria
that each one should be simple, user friendly, and business focused. For
example, we created global learning programs that our employees can access
virtually on our Ericsson Academy portal from anywhere in the world.
We also had a
larger vision to build an HR team with the knowledge and skills to partner with
our leaders on implementing strategic shifts in the business. So we had to
clarify roles, promote from within, bring in some strong external talent, and
provide everyone with thorough training that included business acumen, financial
analysis, and data analytics.
The Quarterly: What kind of insights have
you been able to glean from the data analytics?
Bina Chaurasia: It’s incredible. It’s a
guiding indicator in a variety of areas for the business as a whole. We can
pool and crunch data from all over, not just from recruiting or performance.
For example, in 2014, we did an extensive data analysis across more than 52,000
job applications for over 2,000 open positions in the US. We saw that more
female candidates were applying to jobs posted by female managers. So we
started looking at what might be the cause. Is the wording in the female
managers’ job descriptions different?
We decided to
use an app to do a “gender bias wash” of job descriptions, removing
male-focused references. Overall, we have now increased the percentage of
external female applicants to one of our key global job portals from 16 percent
to 21 percent in just the last 9 months. We have similar analytics insights
into our learning programs, which enable us to develop and deliver those
programs to our employees that best enable knowledge transfer on the job. It’s
essentially provided us with an ROI that we had not previously seen.
These kinds of
stats are great, but the key is to move beyond data reporting and basic analytics
to true predictive analytics—make the data a parameter in decision making. And
you can’t have that kind of analysis across the whole enterprise, if you don’t
go through the initial pain of bringing everyone onboard with common platforms
and processes. And, of course, we build flexibility into our processes as
needed to ensure that we are fast and relevant across our business lines and
regions.
The Quarterly: How did you go about
tackling your new people strategy?
Bina Chaurasia: From a business perspective,
it was important for us to identify the skill gaps that we would need to fill
in order to succeed in our targeted growth areas. And a big part of that is
building a competency model that we could use as a framework. So, we literally
took every single function in the company and all of its roles, mapped out the
stages of each job, and laid out the competence needed for each one. That took
a couple years, as you might imagine, getting every functional area into the
framework. At that time, many in the company thought it would be impossible.
Today, every position in the company is mapped out.
At the same time, we had to ask ourselves, “How do we get an
aggregated assessment of capabilities across the entire organization?” Our
answer was to tie in the gap-identification process with our annual strategy
review. Every business unit, every region develops their annual operating plan
and their three-year plan. We then analyze the competencies needed to deliver
those plans, and determine how we’ll fill the gaps. The aggregated information
creates clear demand signals for our learning and recruiting teams. They know
exactly what competence will be needed by which date, and in which country.
And how you fill those competence gaps is equally important.
You can’t just go and hire all of them. You have to have a clear idea of what
talent to hire, what learning programs to develop, and at what scale. It has
always been very important to us as a company to focus on developing our
employees’ competence instead of just relying on hiring from the outside.
The Quarterly: How do you manage your
talent pipeline?
Bina Chaurasia: Hans and I meet annually
with every member of our global leadership team, and their HR partners, to
review their talent and succession plans. The executive-leadership team then
calibrates our top talent as a group and this talent-planning process
culminates in my presentation to the board of directors. Over the years, our
talent pools have been extremely healthy for any position. So when we look
externally, it’s because we want to, not because we have to.
The Quarterly: Have you put any
directional targets in place when it comes to geographic presence or diversity?
Bina Chaurasia: Along with many leading
Silicon Valley tech companies, we publicized our diversity figures. We weren’t
happy with the reality, so we put down a milestone—by 2020, at least 30 percent
of our global employees will be women, up from 22 percent in 2014. It starts
with the tone from the top. Hans has changed the makeup of his own leadership
team. Before, there was one woman on the executive team; now there are four. If
employees don’t see it from the leaders, then it won’t happen across the board.
I’ve also been very clear in communicating our philosophy: Not only do you have
to send the right signals from the top, but you have to make it organic so it’s
not about a quota system; naturally embed it into your hiring and talent-review
process. Finally, make it locally relevant.
The Quarterly: What role have social tools
played in the transformation, internally or externally?
Bina Chaurasia: We’ve invested a lot in
collaboration tools for our internal learning programs. It’s increasingly the
way people want to learn, particularly millennials. We created Ericsson Play, a
video learning model, where any employee can upload their own videos. Today, we
have over 30 video channels with over 450,000 video views. We also launched
Ericsson Academy Virtual Campus, which makes online training available to all
our employees, and we’ve included mobile programs as well so people can learn
on the go.
Externally,
we’ve used social to build the company’s employer brand. When I joined the
company, we asked an outside firm to evaluate our employer brand and in their
words it was “an incredibly well-kept secret.” So we tried to change that, and
our employees have been our best advocates on social media. We started winning
in rankings for great places to work.
The Quarterly: Looking back, is there
anything you would have done differently?
Bina Chaurasia: I would
have focused more on change management. I would have prepared the organization
more by saying up front, “This is going to be a year of transition.” I kept the
unit heads apprised, and the next level down was also engaged, but I could’ve
done better to ensure communication all the way down the line. Building
enterprise-wide tools and processes, and an HR department engaging on a
strategic level, was a big change. But if we hadn’t done that, we would not be
able to transform Ericsson’s capabilities, or contribute fully to the people
side of our business strategy.
http://www.mckinsey.com/insights/organization/How_Ericsson_aligned_its_people_with_its_transformation_strategy?cid=other-eml-alt-mkq-mck-oth-1601
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