Fundamentals of Human Resource Management 5th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart, Patrick Wright

Exercise 7

How HR Helps Newell Rubbermaid Navigate Change
Newell Rubbermaid's 22,000 employees produce and market a variety of consumables, including hardware, home furnishings, and office supplies. After the company went through rounds of acquiring and divesting businesses, employees came to think of their employer mainly in terms of its product lines, including Rubbermaid kitchen supplies, Levolor blinds, Goody hair products, and Sharpie markers. The brand focus gave employees no sense of common mission.
Newell Rubbermaid decided to chart a more strategic course. It would become less of a diversified manufacturer and would focus on understanding consumers' everyday frustrations and offering products targeted to unmet needs. It outsourced more of its manufacturing, eventually making only about half of its products. The changes meant that Newell Rubbermaid would need employees with new kinds of skills. Instead of production and marketing experts specializing in particular product lines, Newell Rubbermaid would depend more on people who can learn from consumers and apply what they have learned.
Newell Rubbermaid's HR managers were involved in this strategic change from early on. They decided their role would be "agents of change." In the spirit of the new strategy, they committed themselves to serving the various departments by being part of their everyday planning and operations. For example, when the strategy change was still being planned, leaders of the HR department sat down with the chief marketing officer to identify what processes and roles would need to change. They studied successful companies and interviewed business unit leaders to identify new marketing processes and roles associated with high performance. For example, they learned that the company had been focusing new-product development only on North America, whereas best-in-class companies consider demand globally. They reviewed the results with each business unit leader to identify areas where that group needed to improve most, and this analysis formed the basis of action plans for each group. They also discovered that employees feared the change, so they pressed the leadership to ensure that the change process would build a culture that was ethical and supportive.
Especially given the resistance to change, an essential part of HR's role was to plan how the HR department would communicate the changes to employees. The HR leaders determined that transparency was essential. They not only described what would be different, but also expressed why the changes were important to the company's future. They started with the leaders of marketing and the business units and then delivered this information to every employee. The HR department also prepared all the managers to talk about the change and the company's new cultural values one-on-one with each employee.
The HR department used the information it had gathered about best-in-class companies in other ways. It developed training programs on how to carry out more effective global marketing. Marketing employees were educated about brand strategy, consumer research, pricing strategy, and financial management. Also, the action plans that result from comparing the information against current practices have been used every year as the basis for business unit leaders' performance reviews with the chief executive officer and chief marketing officer.
Within the HR department itself, the company's new strategy meant HR employees had to shift their efforts toward building marketing skills throughout the company. They identified the job capabilities required at each level, rewrote job descriptions, and drew up a career ladder for each position. The career ladder is a kind of flow chart that shows how an individual can take on positions of greater responsibility as he or she gains specific types of skills and experience. They created a training program to teach the skills required for the job descriptions and for progress up the career ladder. The career ladders and training were innovative: in the past, managers often left because they had gone as far as they could within a division and no talent management occurred across divisional lines. When the HR department began training hundreds of Newell Rubbermaid employees, the effort had immediate credibility because everyone could see what was expected and participate in the development programs they needed.
Now a new question facing the company is how it will maintain employees' morale and commitment as it continues to press on toward greater efficiency. Newell Rubbermaid recently announced that it was reorganizing into a simpler structure and would be laying off 500 employees, mostly white-collar workers.
How well did Newell Rubbermaid empower employees? What else would you recommend? How might the HR department prepare for a strategic shift concerned more with efficiency?