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Game Plan: Coaches Drive Performance at Archer Daniels Midland

The company's short-range goal is to use coaching to boost the bottom line through cost savings and more efficient operations. Longer term, it's hoped that coaching will supplant the annual ritual of performance reviews.

June 15, 2012
Related Topics: Top Stories - Frontpage, Plan, Leadership Development, Motivating Employees, Learning & Development, Management Skills and Development, Training & Development
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Archer Daniels Midland Co. was founded in 1902, but it's a newcomer to the world of leadership coaching.

Known also as ADM, the Decatur, Illinois-based company has provided agricultural commodities such as grain, oil and cocoa to food-makers for decades. It wasn't until 2009 that the consumer-packaged-goods giant concocted its own in-house recipe for boosting manager performance.

That was the inaugural year of ADM's Coaching to Win initiative, an eight-week-long program geared to 6,000 "people managers" around the world. Collectively, they supervise nearly 30,000 employees.

"We expect every one of those managers to become a great coach," says Jane Pierce, ADM's vice president of talent and organizational development.

Since the inception of Coaching to Win, about 2,500 managers have taken part in the program, which uses blended learning to teach leaders the importance of continuously coaching employees. The short-range goal is to use coaching to boost the bottom line through cost savings and more efficient operations.

Longer term, it's hoped that coaching will supplant the annual ritual of performance reviews. "We think the best way to inspire performance, and equip people to be successful, is when leaders coach in the moment throughout the day," Pierce says.

Among the early returns at ADM: A newly promoted shipping superintendent received coaching from his manager on ways to streamline his facility for greater efficiency. By brainstorming, the two leaders determined it is cheaper to use company trucks to bring inventory into the facility.

"That resulted in significant cost savings, which they were able to quantify. It's not something they would have looked at otherwise—because we've always used outside trucking firms," Pierce says.

Coaching also helped a manager in ADM's commercial division, which buys agricultural commodities, to convey the importance of collaboration with its operations division, which converts the commodities into consumer products. One of the recently coached employees even took the lead, facilitating meetings between the two divisions to discuss ways to improve project delivery.

Consequently, the divisions combined to shave an average of three days from project deadlines, Pierce says.

More and more organizations are gravitating to coaching-based performance improvement. Companies whose senior leaders habitually practice coaching have business results that are 21 percent higher than noncoaching organizations, according to a study last year by consulting firm Bersin & Associates. The study from the Oakland, California, firm, High-Impact Performance Management, was based on interviews of 275 human resources and business leaders.

Another factor behind the rise in coaching is generational, says Ellen Kumata, managing director of Boston-based Cambria Consulting Inc. An influx of younger workers is forcing many organizations to abandon the traditional top-down approach to managing people. Gen Yers chafe against traditional hierarchies, but they still tend to want plenty of guidance. "They need managers who can ask provocative questions that help employees discover the best answer," Kumata says.

Coaching to Win was developed entirely by ADM's organizational development specialists and is available in multiple languages. It was not launched in response to a glaring skills gap, Pierce says, but to impose discipline around annual performance management.

Managers and employees long had understood the how-to aspect of yearly goal-setting, but too often lacked clear insight on its connection to ADM's business activities. Senior executives viewed coaching as a way "to move people from doing performance management by rote to appreciating its potential for improving their own success," Pierce says.

Each group in the program consists of about 45 colleagues, sometimes from the same business unit, but usually consisting of a cross-section of managers from various segments of the company. Individual participants complete a series of e-learning courses and a behavioral self-assessment, in preparation for an introductory conference call with other managers.

Technically, it's actually five simultaneous conference calls, each one including nine managers. HR professionals within ADM facilitate the calls, making sure each person participates in some way.

During the telephone calls, which last about an hour, managers are asked to discuss their management challenges and lessons learned from the behavioral assessments. Facilitators also help managers identify the first employee they would target for coaching.

"They are expected to coach every one of their direct reports, but we help them pick people with a high probability of success, based on the person's goals," ADM's Pierce says.

Coaching to Win participants also download a different coaching assignment every week for five weeks and are expected to put the lesson in practice when coaching their first employee. Follow-up conference calls are scheduled every couple of weeks.

In the third and final component of the coaching, managers meet for the first time face to face for a full day of discussion and exercises that reinforce the importance of daily coaching.

Although coaching is one of 12 attributes against which managers' performance gets measured, Coaching to Win is voluntary. Instead, the learning is "embedded through envy" by publicizing the achievements of managers who have completed the training.

"When we share with leaders the great results other leaders are having, the next thing they say is: 'How come they got coaching [through the program] and I didn't?' " Pierce says.

There aren't many drawbacks to performance-based coaching, says Rick Galbreath, president of HR consulting firm Performance Growth Partners Inc., in Bloomington, Illinois. Companies appreciate managers who show an interest in their growth, and that usually translates to higher employee loyalty, engagement and retention. "Continuous, ongoing performance coaching is critical if you want to be an employer of choice. Your customer's needs change daily, so the skills of your workforce must keep pace."

In January, ADM said it would take a pretax charge of up to $75 million by cutting 3 percent of its U.S. workforce, or roughly 1,200 jobs. Also hanging over the company is an investigation by the U.S. Department of Justice, which ADM initiated in 2009, related to transactions of grain and feed exports that potentially violate federal law.

The tough times make training on coaching and feedback all the more vital. It is "even more important during times of transition," Pierce says.

Garry Kranz is a Workforce Management contributing editor. Comment below or email editors@workforce.com.

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