Talent spotter

When it comes to people management, Gary Steel, Executive Vice President and Head of HR & Sustainability Affairs at ABB Engineering faces a mammoth task with over 118,000 employees across 100 countries worldwide. Here he reveals to CXO his strategies for talent management and how he plans to win the talent war.

“The days when the HR department was just there to make people happy are long gone”
-Gary Steel, EVP and Head of HR at ABB Engineering

What are your key business priorities?

Business excellence, talent management, and rewards and recognition are ABB's core

business priorities. These form the focus areas of our ABB people strategy, the foundation of which is values, leadership, and performance. So if you like the six things that we're trying globally to pay attention to, values, leadership, performance are our baseline. The three interlinked focus areas are business excellence, career development, and reward and recognition. This drives the way we think globally and it influences the way we act locally.

When did ABB decide that it needed a global HR strategy?

We determined that this was an important part of building a culture change in 2003. The company had been through a very difficult time up to the end of 2002 where our very existence was at threat, and the fact of the matter was that the company was able to turn around based on the quality globally of its people. The people strategy was a cohesive framework within which to build a professional, modern HR management system tied to principles and philosophies which were deployed globally during the group. That's in fact the framework we've been working to since 2003.

How important is good talent management to the success of ABB - given how competitive the war for talent has become?

Talent management is truly the spine or the thread that determines everything we do. Our strategies are designed to benefit all 180,000 people who work in our company today, and talent management is not restricted to the high potentials or the top end of the organisation.  We're trying to drive talent management through the organisation at all levels. The reason for that is like everyone else we want the best people. What we're trying to do to achieve that is to pay attention to the development needs of people at all levels in the organisation. 

What talent management initiatives have been deployed by ABB?

We've introduced a number of development programs, some of which are exclusive for a certain group of people in the organisation, and some of which are inclusive for everyone in the organisation. All of them are building on the same concept of leadership, which is one of the foundational principles of our strategy. Talent management is deployed through training and development programmes and both performance assessment and behaviour assessment. Career development takes place through job moves, t job rotations, global assignments, international assignments, and assignments outside one's normal business area.

How quickly can good employees progress through the ranks at ABB?

Typically people move upwards every five to seven years. That ensures that they spend enough time at the lower level getting experience first to justify their movement to the next level up.

We have about 1500 group key positions and today we have a coverage ratio for those group key positions of four people for each position. In 2003 that number was less than one.  We've not gone out and hired 4,500 people. What we have done though is we've plumbed the depths of our talent using the assessment tools and techniques that I mentioned earlier to a much greater effect and much deeper than was ever done before.

The target here is to have 80% of our people appointed from inside to group key positions, and right now we're running at about 68 percent.

Is your role primarily to keep your employees happy?

The days when the HR department was just there to make people happy are long gone. I think it's about building a culture in which people feel they can thrive, develop, and expand, and if they can have some fun on the way that's a bonus. The harsh reality is that many people are not fit for the career that they see themselves in, and in conjunction with their line partners we have to have direct full and frank conversations with them about it. It's not in anybody's interest, not least ABB's, to pretend that somebody has a career plan in line with their expectations if they're clearly not suited. Now unfortunately that's the opposite of making people happy. It makes them quite unhappy, but in the end the outcome for them and the company is probably going to be better.

How would you say you have succeeded in changing the HR function at ABB?

I think what I've tried to do is I've tried to ensure line managers are trained in good HR practice. Very often line manager make promises and when they make them they're genuine enough, but if they'd actually stop to think for a few minutes particularly around career and talent development, then they would know it wasn't in their power to deliver what they were promising. I count on my HR people to ensure that line managers don't fall into those traps.

ABB has a workforce that expands over 100 countries. How do you go about getting your message out to such geographically and culturally diverse audience?

We have a very good Intranet site. It is, I have to say, one of the best. We're very quick to carry the latest news developments on the site, particularly around the business development. I think it's important that we get those messages around the world quickly.  We also use it in an HR sense for specific messages that we want to transmit.

Secondly the leadership team at ABB, the executive committee, are international people and we travel, and when we travel we engage. We engage with groups of people, we engage with individuals, and provided we're consistent as a team in some of the messages we want to give, we do work hard at it. That's a very important channel of communication. Another very, very powerful channel has been the ABB Leadership Challenge, which is a single three-day leadership programme, which covers all aspects of ABB leadership, and we've run it now for about 30,000 people worldwide. We've trained over 200 ABB people to deliver the programme, and that programme has carried a consistent set of messages, concepts, languages, words into all the parts of ABB that I've just mentioned. 

A lot of people said to me, 'How do you cope with different cultures?' I have to say after 32 years of working in international environments, the last 15 of which have been in truly international roles, that the idea of cultural difference is a myth put about by consultants who want to sell you a cultural change programme. In my experience countries and people have many more things in common than they have that's different. 

One might expect an engineering company to be more focused on its technology but ABB seems to spend an enormous proportion of its time focusing on its people. What's the business rationale behind this?

Well it's people who develop technology. It's people who spend money. It's people who innovate. There's nobody doing it for them. We haven't got the machine yet that's more intelligent than a human being, and I think there's a very broad recognition that everything that gets done here gets done through people. I joke with our engineers that they were human beings before they were engineers, but if you think about it in those terms it helps you set the priorities. Good people who are oriented towards technology will produce better technology if they're motivated and led in an appropriate manner. That's the same with any other function, whether it be research and development, finance, HR, whatever. Good people want good leaders and good people want to work in a successful environment.

What is ABB current recruitment strategy given the difficult economic climate?

In September last year we had 109,000 people worldwide and we put a target for recruitment over the next five years of 45,000 people. That included 25,000 to meet our attrition rate, which is five percent per annum, and 20,000 completely new jobs. Now, notwithstanding the current economic climate, we have a total of 118,000 people. The downside is that for sure that the real economy is bound to have some impact on what's going on. I don't know if ABB will be affected I think it will be. How badly I don't know and nor does anyone else.

On the other hand there's upside, which is that we have come through our own crisis. We have a very strong position both from a financial balance sheet point of view but also in terms of our current performance. We have an exciting value proposition. We're a very well recognised brand within the engineering world. Good people are attracted by success. We have that. Good engineers are attracted by leading edge technology. We have that.

So without saying for a second it's easy I think we have some strengths that are exploitable.