For Colgate-Palmolive Co., the world is where the company hangs its hat, its coat and all its belongings. Because although the household and personal-care products conglomerate has an official corporate headquarters in New York City, it has businesses and people all over the world—and has for more than half a century.
Indeed, 70% of the company's more than $8 billion in sales comes from overseas, as Colgate-Palmolive markets such products as Colgate toothpaste, Palmolive soap and Ajax cleanser in 194 countries. The company's product line is immense, so extensive, in fact, that at one point the parent company began to lose track of where all of its "children," or businesses producing its myriad products, were. So, in 1989 Colgate remodeled its home so as to contain its products in five "rooms": oral care, personal care, hard-surface care, fabric care and pet nutrition.
With the remodeling came new business strategies. But as these strategies began to roll out, one fact became painfully clear—there was a gap between the business strategies and the company's current people strategies. For the businesses to succeed, the company would need to better align its human resources with its business objectives.
It has done so by creating a true partnership between senior line management and human resources leaders. The alignment has resulted in a human resources strategy tied to business needs, and a strong link between Colgate's 35,000 people throughout the world.
HR and business leaders strategize together.
The partnership effort began with the creation of a Global Human Resources Strategy Team. "The objective of the team was to work in partnership with management to build organizational excellence," says Brian Smith, director of global HR strategy. "We define organizational excellence as the continuous alignment of Colgate people, business processes and the organization in general with our vision, values and strategies, to become the best."
The team itself constituted a partnership. Approximately half of its 25 members were human resources leaders, the other half senior line managers. Among the members were the president of the Far East division, the president of the pet nutrition business and the global leader of the oral-care business, as well as senior staff people, such as general managers. "We wanted to ensure that our major HR activities were helping the business achieve its primary objectives," says Douglas M. Reid, senior vice president, global HR for Colgate-Palmolive.
One of the first actions the team took was to articulate a global HR vision. It was based on three values which the team determined needed to be shared globally: care, teamwork and continuous improvement. The statement reads: "We care about people. Colgate people, consumers, shareholders and our business partners. We are committed to act with compassion, integrity and honesty in all situations, to listen with respect to others and to value cultural differences. We are also committed to protect our global environment and enhance the local communities where we work.
"We are all part of a global team, committed to working together across functions, across countries and throughout the world. Only by sharing ideas, technologies and talents can we sustain profitable growth.
"We are committed to getting better every day in all we do, as individuals and as teams. By better understanding consumers' and customers' expectations, and by continuously working to innovate and improve our products, services and processes, we will 'become the best.'"
Although the vision statement originated with the Global HR Strategy Team, it was circulated among 75 general managers and the entire senior management team for revisions and approval. Then, based on the principles that the vision espoused, the team worked together for nearly a year crafting an HR strategy that would align with business objectives. To do so, it solicited customer feedback through interviews with Colgate people across the globe. "The line managers [both the ones on the team and those interviewed] provided invaluable perspective and insight as to the needs of the organization and the role of HR in achieving business goals," says Smith.
The team identified several areas for which business managers needed HR's support. One of the most crucial was career planning. "Career planning was an important need from a management perspective," says Reid. "[A big question always is] are we going to have enough managers with the right skills and experiences to fill our forecasted openings?"
Career planning also was a concern of employees, the team learned. Workers wanted a legible road map for charting a meaningful career, a system to help them determine what experiences and skills they would need to achieve their career objectives. "That need existed in virtually every one of the countries in which we operate," says Reid.
The second area the team identified as crucial for HR to align with business needs was education and training. "We discovered that in many of our operating companies—and we now have approximately 75 operating companies around the world—HR was reinventing the wheel," says Reid. "They were all trying to address the education and training needs in their own way." The global team realized that, because there was a need for certain education and training across the globe, it made sense to provide global programs.
HR strategy meets business leaders' needs.
Based on these two crucial elements, the team created an HR strategy that it broke into three parts: generating, reinforcing and sustaining organizational excellence through a partnership with business leaders.
Generating organizational excellence requires selecting and developing Colgate people. Therefore, selection processes, including recruitment programs and education and training programs, would fall under this category of the human resources strategy.
Reinforcing organizational excellence means helping to focus and align Colgate people. This category encompasses performance management, rewards and recognition.
The final strategy category, sustaining organizational excellence, basically houses continuous improvement initiatives. Constant communication of Colgate's values, visions, strategies and programs to the world of Colgate falls under this section, as does continual data gathering from employee insight surveys.
The centerpiece of this strategy rests on the formation of global competencies for every job function. During the strategy-development phase, the strategy team created competency-development teams. Each team was led by the head of the function for which it was developing competencies. For example, for the finance function, the chief financial officer of Colgate set up a team of finance people from the corporate office, the divisional offices and the operating companies. Together, they identified the skills and experience that are required for each job level, and then they developed career paths that properly reflect these skills and experiences.
So, for example, it's spelled out as to what skills and experiences are required to be an associate accountant, what further skills and experiences would be needed to move into an accountant position and what new skills would be required to become a senior accountant or a supervisor of accounting. "The key in the competency development was that in each case, the work was led by the functional head, whether it was the head of finance, marketing, manufacturing or human resources," says Reid.
The competencies are the centerpiece of the strategy because they're used to select people, for identifying training needs, for promotion decisions and in performance appraisals. In other words, they're the foundation for both career planning, and education and training—the two biggest needs identified as HR's primary role. "Armed with competencies, which are tiered through the organization and are functionally focused, we can target our efforts and be much more effective in bringing the best talent to Colgate," says Smith.
Leadership support strengthens strategy kickoff.
After getting buy-in from senior line management on the global HR strategy, the Global HR Strategy Team called together a Global Human Resources Conference in February 1992 to launch the strategy and vision. "We decided that if we were going to have a global HR strategy, we should call all the key HR operating people from around the Colgate World together to discuss this strategy and how to implement it," says Reid.
More than 200 HR leaders from around the world, representing approximately 35 countries, attended the weeklong conference. However, also in attendance were the company's chairman, president, COO, every division president and every global category leader. "We took advantage of this global meeting to hear from the president and the chairman about the overall objectives for the company—and also to hear firsthand from the various presidents of the operating units what their expectations were from HR people," says Reid.
This was key. According to Smith, having the major players at the conference "emphasized a terrific partnership and commitment from our senior management for the HR program. It was a watershed event for the function, if not the company."
Adds Reid: "The fact that line managers wanted the kind of assistance HR could provide—and that they were willing to invest their own time in the development of these programs and their subsequent implementation—is key to why it has been successful. We built a strategy to satisfy their needs with their help. So the final plan reflected their needs and their wishes."
The needs of management, as expressed at the conference, were that they wanted pragmatic, succinct programs that easily could be implemented at the operating country level. Design of these programs began at the conference. Prior to the event, Smith sent out questionnaires to HR people across the Colgate World asking them what they'd like to get out of the conference. Smith took these ideas and combined the key issues surrounding them with the issues related to the new Global HR Strategy to create the conference itinerary.
He then asked around and identified the Colgate people best suited to address these issues. "I found our centers of excellence and asked [the people there] to present workshops," says Smith. "All of the myriad activities that go on around the world of Colgate—such as high-commitment work systems, targeted selection, career planning and individual development plans—had workshops presented about them."
HR professionals returned from the conference to their corners of the world with a plan of attack for the future. The Global HR Strategy provided them with a vision of the next half decade or so. The conference workshops gave them the tools to succeed. And annual HR business plans linked to the vision provided them ways to gauge their success.
The business plan basically is an action grid, detailing for each country, each division, each function, the steps to be taken and the timeline for taking them. HR creates the plan—division presidents sign off on it. The business plan enables HR and senior management to evaluate strategy implementation. And, it keeps HR around the world of Colgate working off the same page.
Strategy implementation moves HR professionals to business partners.
According to Reid, the conference served as the rallying cry uniting the HR people of Colgate worldwide around some common initiatives. "Previously, they were focused entirely on their local operating company and not on global issues," says Reid. "We provided them specifics in terms of how to implement the programs and how to monitor their success, and we trained them in how to use these new tools."
Indeed, the structure of global HR, with approximately 500 HR people sprawled across the world, presents a challenge for keeping them linked. There's a global HR crew in New York City, headed by Reid, who reports to the chairman of Colgate-Palmolive. This global HR function is organized around traditional lines—compensation, benefits, labor relations, career planning, education and training, succession planning and so on. Then, each operating company has its own HR organization, with the HR director at the local operating company level reporting to the general manager of that company. These HR people also are pretty much organized around functions. Also, the president of each geographic division—Europe, Far East, Latin America, and so on—has a small HR team. And, as HR becomes more integrated into the business, HR positions are being formed to support particular functions. For example, there's an HR director supporting the CFO and global finance, and another supporting marketing.
Personnel Journal , October 1995, Vol. 74, No. 10, pp. 44-54.