Craig Mundy, VP of Enterprise Learning and Talent Management for Ingersoll Rand, and Sean Kennedy, Senior Strategy Relationship Manager for Harvard Business Publishing Corporate Learning, discussed proper leadership development and how to create a winning culture.
Sean Kennedy: Perhaps you can start off by giving us some background on your role at Ingersoll Rand?
Craig Mundy: I’m Vice President of Enterprise Learning and Talent Management, and I’ve been with Ingersoll Rand for about seven years in different HR leadership roles. Previously, I was the Head of HR for the Climate Solutions sector of Ingersoll Rand, which included Trane Commercial Heating, Ventilation and Air Conditioning (HVAC) and Thermo King Transport Refrigeration. That’s about an $8 billion business unit.
In your work at Ingersoll Rand, how do you connect organizational strategy and talent development, and what role do you think they play in developing effective HR practices?
At Ingersoll Rand, we develop our long-range plan for our business and our strategy that looks out about three to five years, and we develop our operating plans each year. We also have a process named the organizational leadership review, or OLR, which we conduct in three different ways. First is within our business units, looking at the talent that currently is in the organization against the strategic capabilities that are needed to deliver against the long-range plan, and we identify opportunities for talent development within the organization. Second is within our functional organizations, and third is from a regional standpoint. It’s a process that drives our talent development focus as an organization.
For each OLR, we look at the leadership AND strategic capabilities we need to drive the business forward. We identify strategic positions within the organization and do assessments of what the current capability is against the capability needs we have in the future. All of this comes together to create our talent development strategy and plans year-over-year. I look at developing HR practices beyond what I would call the “guardrails”: compliance, legal and ethical things of that nature that HR has the responsibility for typically. But inside those guardrails, there’s a tremendous amount of space where HR can have an impact and be a difference-maker within an organization, and all of our focus beyond those guardrails is to drive organizational capability.
“One of the things that I want to say about employee engagement and its tie to culture is the importance of an aligned executive leadership team and a passionate CEO. That’s the most compelling aspect of success in this area.”
You talked about leadership capabilities. What are the biggest challenges that you see within leadership development, and are there any particular approaches that you’ve found effective?
Every two or three years, we also step back and look at – based on the evolution of our strategy – what changes we’ve made in our focus from a business standpoint, and maybe look at the differences we made in the design of our organization. We step back and look at what has changed or what should be emphasized in terms of leadership competencies. One of the challenges is that organizations have evolving strategies. From the leadership-development standpoint you have to have an evolving strategy to match that business strategy. So we identify and have a foundation that we call our path to premier performance, which is how we refer to our effort to be one of the top performers in the diversified industrial space, measuring ourselves against a key set of peers. We have a one-page guide that describes our path to premier performance, which starts with our vision and our purpose. We speak to our values and spend a lot of time trying to emphasize and drive a dialogue around the values of the company and how we lead. And then that goes to the expectations of our leaders and the competencies that we identify to articulate how we should lead within the company. I think one of our big challenges is about evolving strategy and figuring out how you go beyond that PowerPoint slide. How do you create experiences and dialogue around how we lead and what those competencies really mean, and how do you measure progress against that?
So we’ve designed our performance management process to talk about performance against objectives and do an assessment against very well-defined leadership competencies, creating a dialogue for managers and other leaders to talk about how they lead and how they perform against that competency set.
It sounds like you’ve created a real strong connection between the strategy of the organization and what premier performance means and the competency model. What’s next for you to tackle in the leadership-development space?
We’re in the midst of actually going through one of the assessments I talked about. We recently went through a strategy refresh, where we did a spinoff of a $2 billion portion of our business and made it a stand-alone, publicly traded company. Looking at the strategy of the remaining portfolio, we asked, “What would be different?” We’ve spent the last five years under our CEO Mike Lamach’s leadership, developing very strong competencies around operational excellence and being able to deliver what we say, when we say, at the quality our customers expect. Mike talks about the fact that the trains are running on time, and now it’s time to really double down on growth. So as a fast follower to the strategy, we did a major organization redesign and went from four sectors to 11 strategic business units, in such a way that we would be able to highlight and emphasize the opportunities for growth.
We are also now looking at our entire leadership-development program to see where we’re going, what would we change, what would we add and what would we do differently. We’re not going to change our path to premier performance but are looking at what competencies might we emphasize that are most critical at this point of the journey, and then bump that assessment up against our current leadership-development programs. An example may be that we expect our leaders to model our values, inspire our people, focus on customers and create long-term value. And within focusing on the customer, one of our competencies is to create external awareness.
So I would assume going into this assessment that our programs are probably inwardly focused more than they should be, and that we need to look externally to create that awareness. We need to better help leaders and their organizations with external awareness, along with creating long-term value, competency of thinking and acting strategically with the intent to deliver our growth expectations. It’s about helping our leaders think in terms of strategic analytics; being able to see around the corner and have an appreciation for a macroeconomic view the whole way down to the areas where we can compete. How do we help our leaders develop capabilities to drive an organization to do that better and innovate? So we’re currently in the middle of going through that assessment, and anticipate having a roadmap of leadership development beginning in April of this year and implementing those changes throughout the year.
It certainly sounds like there’s a lot of change in the organization between spinning off some businesses and the restructuring that you went through. As you go through all that change, are there things that you’re doing to really maintain employee engagement and the retention of employees?
Yes, absolutely. One thing I want to say upfront is that we do an annual engagement survey throughout the entire company. We have remarkable response rates and we don’t force people to take it. It really is a disciplined way of encouraging people to take it and provide opportunities. We had 93 percent of our organization globally taking the survey, up from 90 percent the year before. Even better than that was the fact that our employee engagement index score went from the 63 percent favorable range to 71 percent. Our goal was to improve by 2 percent and we managed 8 percent. To do that in a year where we went through quite a bit of restructuring and so forth is something we’re very proud of.
“A winning culture breeds success, and success breeds engagement, and it’s a virtuous circle of positive energy in an organization if you articulate your goals and help build a line of sight to the individual’s contribution to that.”
That’s a pretty big jump. What do you attribute the increase to?
What we had done consistently for about four years with little success was what I would call a very traditional response, where you break down the survey and ask teams to develop action plans based on low scores, and maybe you’re creative in emphasizing some of your high scores. In the past year, we really made an emphasis on a manager’s score and having a focus on manager accountability. We also held people accountable for improving scores, providing them with a very robust employee engagement toolkit that encouraged all of our managers to do an engagement conversation where they sit down with each of their employees one-on-one. We gave them a context to have this conversation where the employee identifies “what matters” most to them from among 26 selections. That accountability, and the support we gave our leaders, had the greatest impact in our opinion. We could actually see year-over-year improvements for those leaders who attended our Engage-Your-Employees sessions.
So our challenge for this year and going forward is figuring out how do we continue that momentum. We’re working on plans right now to do that, but we do believe the key is manager accountability. Part of what we talked about for next year is the employees’ accountability for their own engagement, meaning what part can they do and own in that process?
Accountability is a strong theme coming through in your engagement work, and I think part of that probably comes from the organizational culture. Can you talk a little bit about the importance of company culture to the work that you do?
One of the things that I want to say about employee engagement and its tie to culture is the importance of an aligned executive leadership team and a passionate CEO. That’s the most compelling aspect of success in this area. Our CEO knows everybody that’s in the bottom 25 percent of our employee engagement scores and he knows everybody that’s in the top 25. He encourages us to work really hard to help the bottom 25 percent improve and even consider the fact that someone’s not cut out to be a manager, but maybe they could be an individual distributor. So the entire executive leadership team, including our CHRO Marcia Avedon, is very passionate about this, and it’s the same with culture. Part of our strategy refresh this year, in addition to the focus on growth excellence and continuing our foundation of operational excellence, is about developing a winning culture within Ingersoll Rand.
A winning culture breeds success, and success breeds engagement, and it’s a virtuous circle of positive energy in an organization if you articulate your goals and help build a line of sight to the individual’s contribution to that. And the foundation of our culture is our values: integrity, respect, innovation, courage and teamwork. What we’re focusing on doing is really tying our values and our leadership competencies to our vision and our purpose as a company, connecting them all to create this path to premier performance. So it’s all tied together. Integrity is the price of entry, and we do business at the highest level of integrity and compliance. We respect the individual’s contribution and value that individuals bring to the organization in different ways and from different perspectives. We value innovation not only from a product portfolio standpoint but from the standpoint of not accepting the status quo and overcoming barriers to creativity, and the courage not only for someone in the organization to speak up and say what needs to be said, but for leaders to actually listen and hear, even if it’s uncomfortable. Our senior leaders in this company drive that kind of culture.
And then lastly, teamwork is at the core, including rewarding teamwork and those collaborative behaviors over the individual and the “star” if you will. All of this is made with the intent of having engaged employees, delighted customers and confident shareholders. That’s at the core of our winning culture.
What are some of the things that you’re doing to make sure that message gets carried throughout the organization?
One of the most powerful tools we have for that is our communications team and our communications strategy, and it all starts with Mike. Mike has a very purposeful and consistent message when he speaks to the company as a whole, and his leaders carry that consistent message. We’re trying to create a dialogue in the company about what does a winning culture mean? We give you a framework in the path to premier performance, and we have a framework in our values. The real power is to have a continuing dialogue around what does a winning culture mean to us and what do we expect of each other? And that will continue to grow and evolve. The worst thing you can do from a culture standpoint is to have a team create a PowerPoint presentation, deliver it and stop there. The power is in the dialogue; the power is in the organization owning the evolution and the creation of the culture. You need to identify the intent of the culture. You do need to give guardrails in terms of how we behave and how we treat one another, but inside of that you have to let it incubate and grow and become the culture of the organization to achieve the intent, which for us is premier performance.
You emphasized the importance of connecting organizational strategy and talent strategy. What are some tips that you could share about how to actually achieve that alignment?
It has to be a priority for senior leadership; it can’t be an HR initiative alone. The secret formula is to have passion at the top for talent and learning, and then capable people that help execute toward that intent. But it all starts at the top. If it isn’t something that’s truly believed in and seen as a competitive advantage to senior leaders, you’re not going to get too far with your efforts. And I think we spend a lot of time with our senior leaders doing our best from an assessment standpoint to try to help bring out and articulate what they need to achieve the business strategy and make that connection.
Once you have committed leadership that believes a strong focus on talent is a competitive advantage, the next step is really being able to do true assessments to understand the needs of the organization before you start down the path. All too often, organizations like mine respond to what leaders want and don’t do the performance consulting in a really robust way upfront. It’s an area that we’re continuing to grow. We’re not there yet, but I do think that we’re good at it and have some strong capabilities in that space. But Troy Hayes, who is our head of Talent and OD for the organization, is someone that has deep expertise in that, and he’s helping me and the organization continue to develop those performance-consulting capabilities within the HR organization and building that capability within our HR business partners. So you can go from understanding the leader’s vision to understanding what the true needs are, and then deliver plans to achieve that.
Before we conclude, is there anything else you would like to add?
Part of the attraction of joining this company was the investment and the belief that the senior leaders had in what I call the human capital lever, which makes my job very exciting. I think the biggest part of the formula for success for us is the commitment our leaders have to developing people, and that we’re a continuous learning organization and we’re never satisfied. There is no status quo; it’s a continuous exploration of improvement.
POSITIONS: Joined Ingersoll Rand in 2007
2013 – Present Vice President, Enterprise Learning & Talent Management, Corporate
2008 – 2013 Vice President, Human Resources and Communications, Climate Solutions
2007 – 2008 Human Resource Director, Global Product Management, Industrial Technologies
PRIOR WORK HISTORY:
Proctor and Gamble:
2006 – 2007 Vice President and Director, Human Resources Gillette Technical and Manufacturing
2006 Director, Human Resources, GTM Organizational Transformation
2005 – 2006 Director, Human Resources, Boston Area Manufacturing, Grooming Division
2003 – 2005 Director, Human Resources, Duracell Global Manufacturing and Technical Operations
2000 – 2003 Regional Human Resources Director, Duracell U.S. Manufacturing Schlumberger Industries (Metering Division)
1998 – 2000 Personnel Director, RMS Product Centers, North America
1997 – 1998 Personnel Manager, Resource Management
Sean Kennedy is a Senior Strategic Relationship Manager at Harvard Business Publishing, helping clients connect leadership development with business strategy and adopt blended approaches to improve effectiveness.