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Many People, One Mattel

March 1, 2004
Mattel may be the brains behind such long-standing favorites as Barbie, Hot Wheels and Elmo dolls, but when Robert Eckert was hired as CEO in May 2000, the world’s largest toy maker was losing at its own game. Former CEO Jill Barad’s growth-by-acquisition strategy had flopped, driving the company’s stock price to $11.25 per share. Since Eckert took charge, Mattel’s stock price has risen 71 percent, to $19.27 per share, and earnings have grown by almost 70 percent, from $328.5 million in 2000 to $552.6 million in 2003.

    For Eckert, the key to reviving the company has been the energy and resources he has committed to people management. It is Mattel’s success at turning management around with a global strategy to develop employees that makes it the 2004 Optimas Award winner for Global Outlook. The toy maker has 25,000 employees in 36 countries and sells its products in 150 nations. Therefore, its turnaround strategy had to be global, says David Lewin, a human resources professor at UCLA’s Anderson School. Revitalizing a global company is especially challenging when dealing with foreign companies because there are so many more unknowns, such as different subsidies, tax regulations and government policies, Lewin says. Mattel also was willing to dump its unprofitable businesses and concentrate on investing in its people. "Motivating your workforce to accomplish that turnaround is a very tall order whenever you shake up a company," he says.

    Mattel has launched a set of leadership and professional-development programs for the entire company at the Conference Leadership Center at its headquarters in El Segundo, California. The programs extend to facilities throughout the world, with an e-learning system that includes 150 training programs. Among the key programs is a three-day session for new supervisors that focuses on skills that managers need to address on day-to-day issues. A one and a half day advanced leadership program for senior vice presidents, vice presidents and directors teaches executives how to better manage and develop their staffs, with an emphasis on how to discuss performance with employees. Twice a year, Mattel and Thunderbird, the American Graduate School of International Management, hold a weeklong leadership program on global business growth for 35 directors and officers from around the world. One of the newest programs is an executive seminar for Mattel’s senior management led by Eckert and also taught by professors from the London Business School and the University of Southern California. Eckert selects topics that reflect the most critical strategic issues facing the company.

    The global leadership programs have increased the knowledge and skills of management worldwide, and now "global management is more closely aligned with the corporate strategies and goals," says Grace MacArthur, vice president of leadership development, who spearheaded the design of the programs. "This, in turn, produces innovative and creative products, reduces costs and improves employee satisfaction." Now employees are becoming "one Mattel company," rather than a number of companies operating separately, she says.

    Beyond leadership development, in 2001 the company initiated its first performance-management system and succession-management process. "Developing people is much more than just classroom training," MacArthur says.

    The company’s own managers believe that the changes are making a difference. A company-wide employee survey last year showed a 35 percent increase in the number of directors and executives who believed that Mattel was doing a good job of providing training, succession management and career opportunities, compared to a survey two years earlier. And since 1999, the value of the company has increased by approximately $5 billion. "We needed a more disciplined approach to running the business," MacArthur says. "If you can convert the hearts and minds of your leaders, you begin to change the culture of your company."

Workforce Management, March 2004, pp. 42-44 -- Subscribe Now!