presentation about the article
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Human resource management in a global environment: Keys for personal and organizational success: An interview with Eliza Hermann
Catherine M. Dalton
Kelly School of Business, Indiana University, 1309 East 10th Street, Bloomington, IN 47405—1701, USA
Eliza Hermann is Vice President Human Resources Strategy at BP plc, based in London, England. In 1986, her career in the energy business began when she joined Amoco Corporation, where she earned a series of promotions in the international oil busi- ness which exposed her to markets ranging from Argentina to Azerbaijan. She was a member of the team involved in the successful integration of Amoco when BP acquired the company in 1998. During the past several years at BP, she has served as Manager, Strategy and Business Transformation- Global Aromatics, leading a team responsible for strategic planning and business development in the company’s Petrochemical segment, and more recently as Vice President, Human Resources for BP’s global Gas, Power, and Renewables segment. Throughout her career, Ms. Hermann has traveled extensively, with particular focus on Asia, Western Europe, North America, South America, Russia, and the republics of the former Soviet Union.
Ms. Hermann holds a Master of Business Admin- istration (MBA) degree from the Kelley School of Business, Indiana University and a Bachelor of Arts degree in social and behavioral sciences from Johns Hopkins University. She serves on the board of directors of Brightpoint, Inc., where she is Chair- person of the Compensation and Human Resources Committee, as well as a member of the Corporate Governance and Nominating Committee.
doi:10.1016/j.bushor.2005.01.003
E-mail address: [email protected].
Business Horizons (2005) 48, 193 — 198
www.elsevier.com/locate/bushor
Copyright 2005 by Indiana University Kelley School of Business. For reprints, call HBS Publishing at (800) 545-7685. BH 119
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I recently had the opportunity to talk with Ms. Hermann about her experiences in human resources at BP and Amoco, as well as her experience as a corporate board member with Brightpoint. During our conversation, she shared her reflections on the centrality of human resources in major strategic initiatives, and her belief in the power of mentor- ing as a means for ensuring a flow of talent within a company.
Business Horizons: Firstly, thank you for taking the time to share your thoughts with our reader- ship at Business Horizons. I would like to begin our conversation with your career at Amoco. I suspect it would be fair to say that the oil industry is, and was, a relatively non-traditional industry for a freshly-minted MBA, yet alone a woman, when you joined Amoco in 1986. As a result, what attracted you to Amoco and the oil industry, more generally?
Eliza Hermann: Actually, most major energy companies hire a number of new MBAs each year because business acumen and commercial skills are critical in this industry, along with science and technical skills. What may have been more unusual was the hiring of women. There were certainly not a lot of woman in the industry in the early days and, frankly, even today it is fairly male-dominated.
How did you choose Amoco out of your many options when graduating with your MBA?
The simple truth is that Amoco chose me. Toward the end of my first year in the MBA program, a representative from Amoco called the Business Placement Office about hiring a summer intern; someone with knowledge about labor relations. I had such experience, so following a phone interview with an Amoco representative, I was hired and spent a summer interning in Chicago with the company. I really enjoyed the job and was impressed with my colleagues and the leadership that I met. I returned to Bloomington for the second year of the MBA program with a job offer in my pocket for when I finished the program. While I did interview a bit more broadly during my second year, I was fairly certain I would return to Amoco, and I did.
That certainly speaks very well of Amoco that you were so certain that you would return to the company full-time following your internship experience.
It was a very good experience interning with Amoco, and the single biggest factor why I
wanted to go back was definitely the people. Also, I was attracted to Amoco because it was such a global business, and I’d been interested in international business as early as the seventh or eighth grade.
It sounds like you knew very early what career path you wished to pursue. You have had an extensive and highly successful career in human resources management. Did you always know that you were interested in human resources and, if so, what attracted you to this area of business?
When I was a sophomore in college at Johns Hopkins University in Baltimore, I had not yet decided what I would pursue as a career. To help defray college costs, I took a part-time job as a reader for a blind man who worked for the National Labor Relations Board, the government agency that handles union relations in the U.S. The job entailed making audio tapes that he could listen to, and I became fascinated by the material that I was reading to him, which included labor law cases and other labor research and journal articles. This job opened my eyes to labor relations, which I had not previously heard much about. I ended up working part-time for the NLRB for two years and, through that experience, realized that labor relations was but a small part of a larger arena called human resources, which I then became very interested in. Later on, my rationale for going back to business school was to earn an MBA and deepen my business knowledge, so that I could launch my career in corporate HR.
There is much discussion about the differences between line and staff jobs in organizations. Within this discussion, how would you characterize the importance of HR in organizations?
Without people, most businesses wouldn’t be in business. HR focuses on driving much greater organizational and human capability and effective- ness for bottom-line business benefit.
With BP’s acquisition of Amoco, you had the opportunity to experience in real time one of the more important corporate strategic changes organ- izations might experience. As you know, a merger/ acquisition in some fashion affects everyone in both organizations. Can you share your thoughts on the role that you believe HR played in the successful integration of Amoco into the BP corpo- rate structure?
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One of the key success factors was very tight project management of all aspects of the deal, including the people aspects. For example, in HR we laid out a staffing process that started at the top of the company and cascaded down from there on a schedule, so that people would find out their new status as quickly as possible. In such situations, you don’t want people living in an uncomfortable area of uncertainty for any longer than absolutely necessary. We worked very fast in the first two years or so to integrate or harmonize all the various people processes, or design new ones where we needed to. For example, the performance appraisal process, the job posting process, how people are treated; anything that was directly touching or affecting employees we worked very hard to get sorted out quickly. We also led a lot of change management work to help people cope with change. These were some of the areas of HR’s contribution.
Was the acquisition particularly hard on Amoco employees, as they were acculturated into the BP system?
I think this varied by employee. There were some people who saw the acquisition as a really good thing, offering new opportunities. Others immediately saw it as a negative; being bought by a non-American company, people who might have been senior in the old headquarters in Chicago and knew they could never move. It was much more an individual set of reactions. There were also a lot of the classic stories about people leaving, either at the time of the acquisition or within the first two years after the acquisition. Lots of people left.
And these were not necessarily the people that you would want to leave, were they?
Most definitely not.
With your permission, I’d also like to talk about HRM in general, training in particular. There is considerable discussion and debate in the field of human resources management about the impor- tance of training and how to make training bstick;Q how to ensure that training is effective. Would you mind sharing your thoughts on the training func- tion and how to ensure that organizational training is effective?
Firstly, I would probably reframe the question more broadly as overall learning and development. Training implies training classes. I don’t know if you intend to focus on training classes or the broader arena.
Thank you for the opportunity to clarify. Let’s focus on the broader arena.
OK. My belief is that the best way to actually make learning stick, whether it originates in the classroom or not, is to reinforce it. One of the best reinforcements is to be sure to apply it at work, quickly and frequently. And it is certainly helpful if there is a supervisor, peer, or colleague who is actively involved in helping the person apply the new learning effectively: giving feedback and follow-on coaching as needed, or just being a sounding board. So, I’d say those are two significant reinforcers that help make training effective. With regard to measuring effectiveness of training, this is very difficult, particularly for knowledge work, leadership, or behavioral skills.
Another belief about training is that it is not necessarily about the classroom experience or training experience itself, but also the opportu- nity to network with other individuals.
Absolutely. I am a huge believer in networking. And networking could be internal to a corporation or broadly external across many organizations. Either could be really important, depending on what the learning goal is.
Internal networks are good for learning within an organization, especially in a large company like BP. This is one thing BP does really well compared to others companies I’ve touched. Obviously, we are huge, we are global, we are very dispersed physi- cally, but there are mechanisms that enable the creation of global communities of interest or communities of practice, to share learning, knowl- edge, and processes.
One aspect of your career that has almost certainly enabled a rich variety of learning oppor- tunities is your extensive experience with interna- tional travel while with Amoco and, subsequently, BP. What do you think has been the greatest benefit you have realized from these experiences in non-domestic markets?
You learn pretty quickly that there is no one right way culturally, or what works well in one country or culture isn’t going to work well in another. Cultural context is everything in the practice of HR. You develop a pretty quick appreciation for other peo- ples’ beliefs and practices and how things get done.
One school of thought with regard to organ- izational structure and design is that the more decentralized the organization, for example, a
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decentralized organization such as BP, the more important it is at a corporate level to under- stand these cultural issues. Would you agree?
That’s an interesting theory. I’m not sure that centralization/decentralization would make a dif- ference in that.
Is it simply that it is a good guideline to be culturally sensitive, regardless of how the company is structured?
Yes, I think at any multi-country or multi- national organization, sensitivity to local cultural context is going to be crucially important to the success of the business.
Extensive international travel such as yours undoubtedly brings with it some challenges. What are some of the more notable challenges, either personal or corporate, you have faced operating in such a wide variety of global markets?
With a Western, capitalistic decision making approach, it is very easy to think that other cultures or people in other countries should make decisions based on the same thinking around economics that we would, when in fact their negotiating positions might be driven by quite different needs or value sets. So what’s uneconomic to us might be economic to them, or vice versa. One example might be Azerbaijan in the very early 1990s. Azeri leaders put an economic value on access to great training outside of their own country, whereas historically we might not have seen access to training as a big negotiating lever in constructing the terms of a deal. Another example more common in certain Asian cultures is the whole issue of saving face. This could become even more important than dollars and cents type thinking in certain situations. Another example involves the purpose of a meeting. Quite often, we may think the purpose of a meeting is to make a decision, but there are cultures where the purpose of the meeting is more a matter of form. The decision will already have been made before- hand, which then drives a lot of different meeting behaviors. If you are operating on the wrong assumption at the wrong moment, it’s quite difficult to interpret the meeting behavior. Respect for hierarchy is another example. In some cultures, this is a big behavioral driver. A subordinate might never openly, in a group setting, speak up unless agreeing with what the boss said.
You have been able to apply your HR expertise not only as a senior executive, but more recently
as a corporate director for a company involved in multiple country markets. In fact, you are part of a trend of corporations actively seeking specialized expertise, particularly in the area of human resources, for the board of directors. How have you found your experience as a corporate board member at Brightpoint?
The ability to apply my HR technical/func- tional expertise on Brightpoint’s board of direc- tors is tremendously gratifying. I feel I am able to contribute not only my HR skills, but also in the area of coaching for better organizational effectiveness.
Do you find that HR has historically been an under-represented area on corporate boards?
My sense is that there are not large numbers of HR professionals on corporate boards, although I don’t have any factual data on this. If HR people are under-represented, the one thing that does surprise me is that with all of the increased focus on CEO pay, there wouldn’t be more of a call for HR or compensation experts. But, then again, boards can hire these individuals as consultants.
I would agree. Historically, boards have simply hired this type of expertise and have therefore concluded that such expertise or guidance is not needed on the board on an ongoing basis. In some respects, that is not misguided thinking from the perspective that it is good practice in the current governance environment that the board hire out- side experts to provide context for critical board decisions.
It is interesting thinking. If you think about big construction engineering projects, who oversees and manages the whole contract with the outside engineering firm? Someone who knows engineering, of course. So it is interesting in the matter of compensation and compensation consultants that there might be some benefit in having someone manage that process who knows something about it, who can offer unique insight on the basis of solid experience in that area.
Speaking of the issue of compensation, con- gratulations on your appointment last year as Chairperson of the Compensation and Human Resources Committee at Brightpoint. Within that role, what do you see as the critical issues for an effective Compensation and Human Resources Committee?
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Executive pay and succession planning.
A crucial aspect of human resource planning is effectively managing succession processes. Do you believe most organizations are effective at succes- sion planning?
My assertion is that most are probably not as effective as they could be.
What would make them more effective?
The whole practice of succession planning has to be fully integrated into everything else to do with leadership performance assessment, leader- ship talent identification, assessment of upward potential, and leadership development. It all has to be one integrated approach that the top leadership takes very seriously as the backbone of their people process. This means it also has to be fully integrated with the business performance management process, of course. The important thing is that it is central; that it is integrated into the overall core business processes of the enterprise.
I would think that a key aspect of successful succession planning is effective mentoring of succession candidates.
In terms of leadership development, or employee development in any sense, I believe mentoring and coaching are very effective tactics.
Do you find that organizations effectively engage in mentoring and coaching?
I think that even the best organizations can probably do more. Fundamentally, I think that every supervisor, every team leader, everyone who is a manager of other human beings, as a part of their formal job should be coaching and mentoring the people who work for them. I think we have separated the concept of mentoring from that of coaching, and now think of mentor- ing as outside the reporting relationship, which is just a different form of coaching, or a different form of providing someone who is a sounding board or a source of advice or guidance. A lot of companies have effective mentoring programs. But I think that a formal mentoring program is never going to be 100% of the solution because the best mentoring relationships are often based on the chemistry and the relationship between the individuals, and you can’t ever formally arrange that.
What advice would you give to someone looking for a coach or mentor?
The starting place is to look at one’s professional network and think about who you already know or who you already talk with in a professional context, inside or outside the organization, and enhance the relationship. Ask the person for advice or feedback on the particular issue. I see it as a very organic process as opposed to bOK, now we’re going to go into our mentoring conversation for the next 10 minutes.Q I see it much more as something that is just a part of everyday life.
There is a distinction between informal mentor- ing, which I think is actually much more powerful, and formal mentoring, which is formal programs where people are paired together and matched up. BP has a formal mentoring program; in fact, several of them. One of the more novel formal programs that I’ve participated in is reverse mentoring, where someone more senior is paired up with someone very junior, say a year or two out of university, and the senior individual is the mentee and gets to learn from the more junior person their issues and concerns from their perspective.
That sounds like a fascinating program. Our readers might enjoy hearing about how the reverse mentoring program works at BP.
It is voluntary on either person’s part. Both the more senior people and the more junior people can volunteer if they would like to be paired up and participate. It is a formal program, so there is a structure built around it that lasts about a year. The pairings are made by someone in HR and the process is deliberately set out to have as diverse pairings as possible. I participated two years ago. My mentor was a 20-something Azerbaijani accountant who was working in London for a couple of years to better develop his financial skills. He was very bright and had a deeply inquiring mind. We had a good year. There were a couple of blunch and learnQ sessions put on by the organizers; otherwise, we were left to our own devices to meet roughly every two months. I got some insight as to what he was thinking and what he was concerned about, and it was a very different mentoring experience.
What were your and your mentor’s individ- ual goals in entering this reverse mentoring experience?
For him, to learn more about how someone more senior looked at the organization and looked at career development, in particular. Insight into how
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BP decision-making works, how things actually get done. For me, as with all of the senior participants, to get the insight into how a more junior person would look at the organization.
You are clearly quite passionate about mentor- ing. Have you found other ways to serve as a mentor?
In BP, I am often asked if I will mentor others. I would say at any given time that I am mentoring around a dozen HR people. Some of these have been identified by us, the leadership of the HR function, as having significantly higher potential. But, in other cases, it may just be more junior people who I’ve come into contact with or who simply want a more senior mentor. I also mentor some Indiana University Kelley School of Business MBA students, two at the moment, although I keep in touch with two or three others who have already graduated. With the latter, it is not a program anymore, but a relationship that has carried on past the formal mentoring.
In either your formal or informal roles as a mentor, what do you find to be the most satisfying aspect of being a mentor?
When it is truly a two-way relationship where there is real conversation and collegial advice- giving in both directions. It’s also very satisfying seeing these people get ahead in their careers, seeing them do what they want to do.
Through your mentoring experiences, you have undoubtedly facilitated others’ career successes. What is it that you believe has enabled your own success as an HR professional?
There are certain elements of what I do that I am really passionate about, and because of this, I put a lot of energy, effort, and dedication into my job. In particular, I care very deeply about helping other people develop and get ahead in their careers, particularly professional women.
Have you relied on mentors throughout your career and, if so, how have they helped you professionally?
I’ve had lots of mentors, former bosses, and other senior colleagues with whom I’ve worked over the years. I’d say the people who I think of most actively as a coach or mentor to me now are a relatively small number of people: three, four, or five, and the frequency of our conversations varies widely. It’s definitely not on a schedule and it’s not a formal process.
When you do interact with them, is it because a specific issue has arisen and you would like their help?
It is more like a sounding board, in my case. It is because I want to run something past them and have them think about it from their perspective and think about different alternatives.
If you were tasked with mentoring your succes- sor, what advice would you offer that individual?
Recognize up front the amount of time and attention to organizational politics, the informal systems and processes that influence so much about how things actually get done in an organization. Leaders need to cultivate the skill of navigating an organization so that they can be the best engineer, the best HR person, or the best finance person in the world. Without the knowledge, skill, and inherent curiosity about how to work with people and get things through an organization, they are not going to achieve their full potential.
Politics, by the way, is not a bad thing. Any enterprise has its own political system, if we can call it that. But, I think what makes the difference is the curiosity and the inquiry to learn how the political system works.
Thank you so much for your time and willingness to share your thoughts with Business Horizons’ readers.
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