Newell Rubbermaid Aspires to Grow Leaders
Evolving from holding company to product innovator, the 108-year-old consumer products firm ramps up leadership for an exclusive group of senior managers.
Laurel Hurd represents the face of leadership development at Newell Rubbermaid Inc. She also represents the Atlanta-based company’s effort to keep more of its talent in house, adopt a new corporate strategy and combat an industrywide trend of failing executives.
In 2008, the consumer products giant selected Hurd, then a vice president of sales, and 11 other top managers for an exclusive leadership training program, known as Aspire. Limited to 12 participants at a time, the initiative consists of four weeks of group learning spread out over one year, including classroom instruction, required readings, structured exercises and on-the-job projects.
Up-and-coming leaders also are paired up with individual coaches within Newell to reinforce what they learn and help apply it on the job. The most meaningful part may be the frank feedback of other participants when the group meets every three months. Being forced to share her planned marketing or branding strategies—and have the rest of the group pass judgment—wasn’t easy for Hurd, 41, a 10-year company veteran who is now general manager of Newell’s baby and parenting essentials division in North America. But the constructive criticism was worth it, she says. “The team piece was incredibly powerful in that we were holding each other accountable,” she says. “It also built real trust and collaboration.”
Hurd exemplifies the type of leader Newell wants to develop on a fast track: young, upwardly mobile senior managers eager to think globally. The Aspire program targets vice presidents and functional heads that have potential to “run one of our 13 global business units within the next three to five years,” says Brian Hults, Newell’s vice president of organization and people development.
Aspire is the culmination of a “transformation effort” started in 2006 by then-CEO Mark Ketchum, who retired in June. Up to that point, Newell had been a holding company for dozens of brand-name consumer products, “very lean at the center” but lacking a global training function, Hults says.
Ketchum shifted the emphasis more toward innovation. “To do that, our leaders needed a different set of skills,” Hults says.
In addition to being skilled at point-of-sale promotions, product placement and marketing, senior executives now are required to interpret the results of consumer surveys and focus groups. “Our focus has really changed to understand unmet consumer demand in a systematic and scientific way—and then to utilize that knowledge to help bring new products to market” at higher prices, thus creating greater margins, Hults says.
Newell markets its products in three broad market sectors: home and family; office products; and tools, hardware and commercial products. The company markets nearly 40 brand-name products, including Rubbermaid plastic storage containers, Sharpie pens, Calphalon cookware, and Graco baby gear. Newell generated $5.76 billion in revenue in 2010, up slightly from $5.6 billion year over year, according to its annual report.
Major demographic shifts also fuel Newell’s drive to develop younger leaders. The Aspire program is Newell’s answer to a problem plaguing many large companies: the loss of vast institutional knowledge as baby boomer-era executives approach retirement. The invitation-only training is aimed at the 250 vice presidents and functional heads at Newell. It was created “because the greatest need was at the top of our organization,” Hults says.
Aspire also amounts to Newell’s attempt to buck an alarming trend of failing leaders in the business world. Whether they are hired from outside their organizations or promoted internally, some executives struggle with the transition to senior management, according to a joint study by the Institute of Executive Development in Palo Alto, California, and consulting firm Alexcel Group, near Oakland, California. Thirty percent of senior executives hired from outside a company fail to make the grade within two years, and end up leaving sooner than expected, according to the study.
The situation improves only slightly (23 percent) among executives who are promoted internally, according to the Executive Transitions Market Study Report 2010. The annual study culled responses from 320 executives and talent professionals in 12 countries and 21 industries.
The findings echo other industry studies on executive turnover. Companies invest huge sums of money to recruit, hire and groom people for senior roles. In spite of that, there is a 50 percent chance a new executive will quit or be fired within the first three years, and 40 percent fail within 18 months, according to a 2008 study by Aon Consulting, part of Chicago-based Aon Corp.
One possible reason for the high level of new boss busts is an overemphasis on logical prowess at the expense of domain expertise. Top business schools and many leading companies “believed they could churn out excellent managers who could be parachuted into virtually any organization and transform it through superior reasoning,” author Matthew Syed wrote in his 2010 book about the science of success, Bounce. “This approach was seriously misguided.”
Newell seems to have taken the message to heart. Hults says cookie-cutter leadership programs won’t suffice as Newell pushes aggressively into foreign markets. Rather than producing leaders who are top-down decision-makers, Aspire teaches them to learn the value of “working through others.”
“As an executive, it’s impossible to do all the work [of leadership] yourself anymore. You need to empower your employees by coaching them and enabling them to do the work—and then supporting their development,” Hults says.
Strengthening the bench
Aspire’s learning content is broken into four modules: creating followership, leading global change, coaching employees and developing “next generation” leaders.
Aspire participants also spend one week gaining firsthand knowledge of the differences between North American and overseas markets. Paris has been the destination the past two years. In addition to structured learning exercises on understanding cultural differences, the most significant learning takes place on in-store visits. Senior leaders observe and sometimes interact with shoppers, trying to get a handle on their preferences and desired product features.
Observing Parisian shoppers helped Hurd better understand their preferences. In the U.S., for example, shoppers place a high premium on utilitarian strollers that collapse easily into the trunk of a car. Parents in Paris, conversely, tend to be more pedestrian-oriented, and want the stroller to also have a more stylish look. “What they care about from a product standpoint is different,” Hurd says.
Giving managers international exposure is crucial to Newell’s plan to boost operating margins, especially in Europe. The company last year began revamping its European business operations, seeking to boost margins at least 10 percent, according to its 2010 annual report.
If retention is an indication, Aspire appears to be paying off for the company and its participants. Of the four classes thus far, 80 percent of the participants have been retained— not outstanding, but far better than a few years ago, Hults says. Nearly three-quarters of them have been promoted.
In 2010, roughly 90 percent of vice presidencies were filled from within, compared to an internal fill rate between 30 percent and 40 percent in the years prior to the program. Last year, Hurd parlayed her participation into a promotion as general manager for the baby and family essentials division. Along with bolstering her confidence, she says it taught her how to coach employees who demonstrate leadership potential.
If Hurd is an indication, the Aspire program should help other promising leaders realize their career goals at Newell. “The fact that the company was going to spend that much time and energy to help develop me as a leader was inspiring,” she says.
Workforce Management Online, July 2011 -- Register Now!