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1998 General Excellence Optimas Award Profile Texas Instruments

Texas Instruments isn’t one of those quaint little companies you hear about now and again, those little home-grown operations helmed by idealists who’ve dropped out of the rat race to try a new way of running a company. You know the story. Texas Instruments ain’t it. Texas Instruments is big — Texas big. Headquartered in Dallas with a presence all over the United States, this semiconductor and digital signal processing solutions company has been a player for years. And it has a juggernaut of an HR operation. Anyone with even a toe in human resources has heard how great this HR department is — again and again and again.

What’s surprising is it can back up the hype.

When the folks at Texas Instruments (TI) say their HR department has a seat at the table, you’d better believe HR is front and center at that table. When they say they have an extremely ethical workforce, they’re more than happy to show you … and tell you … and prove it to you. And don’t raise one dubious eyebrow about their success in diversity, recruiting or benefits — they’ve got it all covered.

TI creates a new HR.
Chuck Nielson, vice president of HR, has an analogy he’s particularly fond of: For a long time, the personnel or HR department was like a spare tire — you kept it in the trunk until you needed it; you used it and then put it away again.

A lot has changed in the past decade, particularly at TI. Nielson describes the evolution: “Six or seven years ago, we were looked at as a good personnel department that provided great support. We needed to move beyond that. So we started partnering with the line and began to understand the business priorities. But for me that’s limited also. We need to really lead, and I think we’re getting there.”

Definitely HR is getting there. Nielson currently sits on TI’s Strategy Leadership Team right alongside the CEO and the COO. There he ensures the people portion of the company’s business strategy remains firmly in place. Case in point: In 1997 and again in 1998, the leadership team has chosen an HR issue as one of TI’s three business priorities — improving individual development.

As part of that priority, Nielson made it his 1997 mission to ensure that each of the more than 40,000 TI employees has a personal-development plan. To create the plan, individuals examine their careers — where they are, where they’d like to be and the gap between the two. Employees then submit a plan to their supervisors, offering suggestions on training. Nielson encourages employees not just to enroll in seminars or degree programs, but to consider lateral moves within the company to other departments or product areas. The supervisor and the employee then agree on a development path — Nielson worked with President and CEO Tom Engibous on his.

The changes spurred by the HR department has brought accolades, not just from inside the company, but from outside experts as well. “Chuck has added substantial intellectual fervor. He has brought important and useful agendas to the table that have resulted in substantial contributions,” says Wayne Brockbank, associate professor of business administration at the University of Michigan at Ann Arbor, who has consulted with TI on its effort to link HR to business issues. “The most fundamental question he has raised is [the need] to identify the cultural and technical capabilities TI needs in its people to execute long-term business strategies. The outcome of that work is directly reflected in TI’s impressive stock performance the last nine months.”

Employee development paths fold nicely into another of Nielson’s major concerns: thoughtful succession planning. Although the company has had a succession-planning program in place for 30-odd years, only recently has it become tightly focused. The new approach started several years ago after all the top executives completed an assessment process that identified the strengths and gaps in senior management. The exercise led to a realignment of the succession process, by which the top executive team began slating successions not by listing top performers and seeing where they’d fit, but by listing the competencies needed for each job and seeing who has them.

TI execs also are intensely aware of the need for creating the talent pool to fill the competencies. Peak performers are assigned “windows” of time in which they’re expected to accede to top positions. The plan is to never force the company into a situation in which it has to fill a position with less than the best.

The final large piece of the HR strategy: To keep the people aspect in the forefront, each business’s effectiveness is evaluated by its progress in three categories — business success, financial improvements and people issues.

“All this to me is hard evidence that this isn’t just about HR waving arms around,” says Nielson. “It’s an integral part of the business strategy and culture.”

HR builds a better candidate.
Part of having a great business is having a great recruiting mechanism, and TI does. For Nielson, this is key. “Just to be pragmatic, it’s damn competitive right now for the kind of people we’re needing. You can’t get the best if you don’t have an excellent recruitment product. We’re wrestling like crazy to get the best people in instead of just filling slots.”

Texas Instruments’ Internet recruiting page (www.ti.com/recruit) helps get those top people. In this cyber-center, job seekers can find one-stop shopping not just for a career at TI, but for any career. Depending on which icon the person clicks on, this Web site can make him or her a better networker, interviewee, job hunter and deal closer. He or she can learn how to write a sharper letter, get suggestions on job resource materials and receive advice on developing a resume, tracking the job hunt, making a job decision and even working the phones.

The theory is that the more prepared everyone is for job hunting, the easier TI recruiters will have it. One means to this end is the TI Career Mapper (TM). Aimed primarily at college students, the Career Mapper offers a series of questions for a student, such as: “I prefer work that involves a certain amount of ambiguity”; “I usually can quickly distinguish important from unimportant details”; “The best decisions come from the heart rather than the head”; and “Almost all rules should be followed.” After answering these yes-or-no questions, a student submits them to the TI database, which assesses work styles and recommends jobs that best suit the student’s aptitudes and talents.

In another online self-assessment exercise, people examine what TI calls their critical career dimensions: interests, skills, needs and style. In response to the question, “What do you want to do?” candidates can include anything from “use my degree knowledge” to “work in a multicultural environment” and “work in a creative setting.” Answers to the question, “What can you do best?” can include “manage products on budget,” “persuade others” and “understand others’ motivations, feelings.” “Living near family and friends,” “having fun at work” and “being in a learning environment” may be part of a candidate’s answer to, “What is important to you?” Respondents then list the top-five items from each of the three categories to determine their ideal workplace. TI encourages job hunters to continually refer to the list as they continue their search.

Those interested in becoming a “TIer” can undergo a lengthy Fit Check. Queries fall under two categories: Work Content and Work Environment. In the first category, users respond “strongly disagree” to “strongly agree” on a variety of questions from, “I prefer work that confronts me with difficult or complex problems,” to “I prefer a job that provides opportunities for rapid movement up the management hierarchy.” In the second category, respondents answer questions from, “I prefer work that involves little or no contact with my customers,” to “I prefer a smoke-free environment.”

At the end of the survey, the database informs the candidate on the strength of the match between TI’s culture and the individual’s needs — from very weak to very strong. The user can peruse TI’s best answer to each question, along with an explanation. For instance, TI’s best answer to, “I prefer a work environment that stays fairly constant,” is “strongly disagree.” Explanation: “It’s safe to say this is not a sedate, boring work environment. Your assignment, if you choose to accept it, is to stay one step ahead of the changes we’re creating — or create the change yourself!”

Nielson says the Fit Check helps ensure better matches between potential employees and TI. “If it’s a total mismatch, that’s not good for the employee or the company,” he says. “But I’d quickly qualify that by saying diversity is much more than a race or gender issue. We want diversity of thought, and if we’re narrowing our focus so much that we eliminate everyone who thinks differently, we’re going to limit our creativity. Divergent thought processes are key to creativity. When you clash you get ideas no one ever heard of before. So I never want to get in a situation where we’re only [recruiting] one kind of person.”

One employee attribute TI won’t compromise on is ethics.
Texas Instruments always has placed ethics in the forefront of its interests — the company’s written code of ethics was adopted more than 35 years ago. Today, a five-person ethics department guides employees worldwide. The department’s goal isn’t to be a repository for all ethical issues, but to promote knee-jerk ethical actions throughout the workforce. “It’s got to happen out there, on the line,” explains Carl Skooglund, vice president and director of ethics. “You can’t manage integrity; you can’t drive it through a bureaucracy.”

Skooglund’s job, then, is to encourage ethical decision making by communicating TI’s ethical stance and clarifying any questions employees may have. In that vein, the ethics professionals spent a large chunk of 1997 working with TI’s strategy leadership team to revamp the company’s values statement-particularly in the wake of TI’s divestiture of its defense business in favor of its core semiconductor business.

In January the company distributed a new booklet in 12 languages with a list of TI’s three primary values: integrity, innovation and commitment. Each value links to two corresponding supporting values. Integrity in action means supporting, respecting and valuing people, and being honest. Innovation requires learning and creating, and acting boldly. Commitment means taking responsibility and committing to win. The team went through four review cycles and several focus groups to narrow a three-page, single-spaced memo on values down to the ultraslim list. He thinks it provides a good summary of TI’s ethical stance.

The values statement helps employees understand TI’s bottom-line ethical requirements. A battery of communications helps them translate that knowledge into everyday action. TI News, a weekly electronic newsletter, offers the “Ethics and the TIer” column, which presents scenarios and explanations on a smorgasbord of ethical topics. Appropriate use of the Internet, the possible conflict of moonlighting, and offering and receiving business gifts have been subjects. “It keeps the topic of ethics in front of everybody and helps people get back to us,” says Skooglund. “And it’s humbling when we go out on the line and are told we’re not in touch with real situations.”

Such was the aftermath of a 1997 column on pornography on the Internet, explaining TI’s prohibition of downloading porn, and the possible termination for employees who do so. Many workers responded angrily — explaining the possibility of accidentally slipping into dubious sites because of inappropriate labeling and expressing concern at the idea that TI might be monitoring their computer use. Skooglund had to reposition the statement to explain that employees who accidentally stumbled across a site wouldn’t be fired, and also to ensure employees that their Internet use was never monitored.

Hands-on help makes ethical values a reality.
Backing up the newsletter column is a group of resource people Skooglund calls “subject experts.” In nearly 70 TI locations, employees can grab quick-read pamphlets on everyday ethical and legal issues. Each pamphlet explains TI’s position and refers employees interested in more in-depth discussion to “subject experts,” employees within the workforce who can speak more on the topic. If an employee is concerned about an ethical issue involving safety, he or she can find the number for a safety professional. If the concern is over an environmental issue, there’s an expert for that too. This year, a values Web site is under way that will allow employees to tap into articles, policies or procedures.

The core of TI’s ethics program, however, is the personal input of Skooglund and his fellow professionals. To ensure their accessibility, the department staffers offer a variety of ways to contact them. Employees can e-mail on a secure message system with a blank sending location. Skooglund also set up an outside post-office box, from which he personally retrieves any letters. Finally, employees can call a toll-free hot line any time. During the workweek, the ethics professionals field questions themselves; at night and on weekends an answering firm takes messages.

Skooglund works closely with the HR department — sometimes HR refers employees to him, and he often returns the favor. He says most of the questions (he receives approximately 20 a week) are everyday issues. “Can I help a small company set up its software system, or does that conflict with my work at TI?” for example. “Can I use my company computer to send personal e-mail?” “Can a supplier take me out to lunch?”

Skooglund says this proactive ethics approach doesn’t just help employees make better decisions, it helps them make more because managers aren’t concerned about their self-direction. “Values and ethics absolutely play a role in an empowered workforce,” he says. “This way we operate in an environment of trust rather than in one of command and control. We view our reputation as a result of hundreds of decisions made day in and day out.”

HR offers a better workplace.
Recruiting a good workforce and ensuring it acts ethically are only parts of the puzzle. HR also has to ensure workers stay and flourish. That’s where the company’s benefits and diversity programs come in. The TI diversity initiative began in 1989 when the top executive team started developing a vision for the kind of company it believed TI should be by the year 2000. Diversity networks and mentoring efforts have formed the crux of the effort to make TI the multicultural workforce it envisioned. To date, employees have formed more than 20 grass-roots diversity groups. Representatives from all these groups are members of the TI Diversity Network, which provides a forum for the various initiatives (or TI’s task forces) to share ideas and develop synergistic programs.

Currently, TI has initiatives under way targeting African-American, Chinese, Hispanic, female, Indian, Vietnamese, deaf, and lesbian and gay employees. The details of the initiatives vary, but they all have the same overall goals: to develop leadership skills among their members, to identify and remove barriers and to provide methods for creating positive perceptions and awareness of their members’ abilities.

Mentoring is also a key diversity effort. TI fosters networking between high-level professionals and women executives, and TI’s Women Initiative sponsors an annual conference for technical professionals, allowing women more insight into the industry as well as an opportunity to share strategies. Mentor relationships between TI executives and minority and women high school and college students also are common.

Cynthia Reavis, manager of diversity programs, travels around the world to conduct team meetings at TI plants. The visits foster interaction and understanding between all the global cultures in which TI operates. “TI has a wonderful network of highly talented people who are always willing to help,” she says.

All the effort has paid off. In 1997, TI appointed its first two female vice presidents in TI Asia, and one Hispanic man and two African-American men were appointed vice presidents. TI currently has 11 women officers.

Excellent employee services and benefits also aid retention. The professionals there are proud of the company’s open-door policy, which encourages opinions from anyone at any level, as well as candid discussions. A casual dress policy — “we’re more interested in what’s in your head than what you’re wearing” — nurtures the informal atmosphere.

For working parents, TI allows pretax payroll deduction to cover dependent-care expenses and has also negotiated discounts at certain child-care facilities near TI sites. Moms and dads can take advantage of the company’s Parent’s Network. Through this e-mail program, parents throughout the company can swap concerns, questions and ideas on raising kids. Such programs have made the company a regular on female- and family-friendly lists, such as the Top 100 Companies for Working Mothers of Working Mother magazine.

But goodies aren’t limited to parents. TI pays for university courses in industry-related fields, such as physics, engineering, computer science or micro-electronics. And as part of employees’ financial benefits, TIers belong to both 401(k) and profit-sharing programs. In 1996, the profit sharing reached a record of $175 million paid out to employees.

Nielson says TI is trying to improve the perceived value of benefits by making them easier to understand and by encouraging employees to take more control — from administering their 401(k)s to guiding their pension programs. Nielson is also trying to abolish the three-ring binder approach to policies, encouraging supervisors to consider the TI value system rather than to thumb through manuals when making decisions.

University of Michigan’s Brockbank says the key to HR’s success is its holistic approach. “They’ve [TI’s HR pros] expanded their definition of HR to include not only the traditional HR areas, but nontraditional areas that influence technological capabilities: organizational structure, customer-contact programs, information-systems redesign and allocation of physical space. Some companies get traditional HR in line and don’t align the nontraditional. Then the nontraditional alignment clashes with the aligned HR, and the two cancel each other out. That doesn’t happen at TI.”

What does happen at TI is continual planning for the future. Nielson has plenty of ideas for HR in the next millennium, so stay tuned. “This is the most exciting time of my career,” he says. “And I’ve been in HR 36 years. [Company execs] are starting to realize the fact-and it is a fact-that the only thing that’s really unique in a company is its people, and that provides really wonderful opportunities.”

Workforce, February 1998, Vol. 77, No. 2, pp. 30-35.