How Companies Really Become “Best Places to Work”

“We’re a people business,” said Tom Wilson, CEO of Allstate.

“We’re a people business,” said Rick Waddell, CEO of Northern Trust Company.

“We’re a people business,” said Paul Purcell, CEO of Robert W. Baird.

Three financial services companies, one cliché. You might have been
forgiven for thinking that a time-machine had plunked you in front of a
black-and-white TV to watch “To Tell the Truth.”
But I heard these comments at a conference of HR executives in Chicago
just over a week ago. The three chief executives, each the leader of a
company that ranks high on one or another best-places-to-work list, spoke before several hundred people who like people businesses.

Here’s what I heard: There’s no such thing as a generic “people
business.” A company is a great place to work, or a lousy one, not
because of its HR package. The key is whether the total deal it offers
employees is consistent with the strategy the company takes to market.

Maybe I was thinking this because we at Booz & Company just
completed our internal, annual people survey, or because of the intense
reactions to my post a couple of weeks ago about how CEO Vineet Nayar puts employees ahead of customers.

Whatever the reason, it became clear to me that in people policies,
as in just about everything else, the rule is “horses for courses.”

Take Baird: A great little company but not a big brand name, Baird
aggressively pursued its “best companies” prize as a way to sell itself
to recruits. (Consulting firms sell hard, too, all of us thinking that
the cream of the crop is barely good enough.)  A signature demonstration
of Baird’s muscular people strategy: When the financial crisis hit,
Purcell first moved to keep his top team intact by getting them all to
take a pay cut so no jobs would be lost; a few weeks later, he got
employees’ consent to dilute their ownership, then ventured into the
teeth of the storm to hire a couple hundred top-notch people who’d been
released by struggling rivals. (That was a big move: The firm’s
headcount is just 1,300.) This boldness is combined with high
expectations and what seems like a no-excuses insistence on
accountability: as the company website puts it, “a world-class environment that challenges you to achieve your potential and rewards you for your efforts.” Buckle up.

Allstate worries that it’s too nice. People either leave quickly or
become lifers. One good hand washes the other: Teamwork increases (not a
bad thing) but accountability and ambition become dampened (not a good
thing). But Wilson can’t just crack the whip, because Allstate, like
State Farm, targets customers who value service over price — it
advertises that it seeks “compassionate individuals involved in the business of helping people.”
In other words, both the pluses and the minuses of its culture are
outgrowths of its value proposition. To challenge complacency and
introduce more accountability, Wilson and his HR team now are offering
all employees a day-long workshop to help them discover what they want
out of work and life — and then gradually changing incentives and

To Waddell,  Northern Trust’s biggest people issue is creating a
global culture. That figures, since the bank comes from Illinois, which
outlawed any branch banking at all until 1967 and restricted their
number till 1993. The Northern needs to guard the conservative,
high-integrity culture that is the heart of its brand. Strategically the
bank’s story has been to resist temptations to diversify too much in
financial services — “We know what we do well, and focus sharply on those things
— and successfully transplant that expertise to the 18 states and 16
countries where it now operates. That has provoked intensive discussions
of the “what-one-word-best-describes-this-company?” sort that can seem
like the epitome of soft-side fluff. But in this case, they are
foundation stones for maintaining coherence as the bank pursues a global
strategy based on carefully defined expertise.

I can’t imagine three more different places to work, which is the
point. When you build your strategy on your capabilities — which is the
right way to build it — then your people policies should be as
differentiated as your way to going to marke
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