Staff Development in a Downturn

8 December 2009 Robert Selander

The value of staff development is vital during good times and bad. As MasterCard CEO Bob Selander tells Jim Banks, training programmes align the company’s strategy and provide executives with the skills to become inspirational leaders.

There is no doubt that talent management has become a core element of strategic thinking in the last two decades. If proof were needed, one could look at some of the world’s leading companies to see that CEOs have become much more involved in training and development programmes.

This is certainly the case at MasterCard, where CEO Bob Selander spends a great deal of his time considering the long-term future of the company and the ability of its people to deliver on strategic objectives.

"Most companies realise that it is important to develop talent, even in a downturn, in order to be ready for the recovery."

"Of all the things I am most likely to lose sleep over, one of them is always people," he says. "Without the right people, an organisation cannot deliver what its customers are expecting in a dynamic and competitive environment. If we can't do a good job in getting good, adaptable people with the right acumen and skills, then we will find it hard to deliver."

In some organisations talent development might slip down the agenda as short-term economic pressures mount, but this is not the case for companies with a strong strategic vision.

"Talent development is a priority at MasterCard," says Selander.

Regardless of the challenges created by the economic downturn, no organisation can neglect the people who will see it through the hard times and help it prosper when conditions improve.

"Most companies realise that it is important to develop talent, even in a downturn, in order to be ready for the recovery," says Rebecca Ray, who for the last four years was senior vice-president of MasterCard’s Global Talent Management and Development department, but is no longer with the company.

There will, of course, be an added focus on controlling learning costs, but it cannot be to the detriment of executive talent development.

"We carefully manage our expenses, and where we may have flown people in for training sessions we might use webcasts or online learning instead, but the challenge of the current environment is to remain adaptive and flexible," stresses Selander.

Possible futures

The ability to respond to changing markets stems largely from aligning human resources with the projected model for a business and the behaviour of its customers. At MasterCard, a crucial element in defining this model is the use of scenario planning, which brings together research, trend analysis and focused creativity to inform strategic planning for many of today’s top companies.

"We do scenario planning, which leads to a valuable set of experiences and skills for people in the organisation," Selander explains. "We have invested heavily in it as it makes people more sensitive, adaptive and flexible. The future won’t be the same; we just don’t know how it will be different. Scenario planning is a way of staying nimble and flexible."

"We do scenario planning, which leads to a valuable set of experiences and skills for people in the organisation."

"One thing we continue to do is improve the efficiency and effectiveness of talent development without reducing its impact," adds Ray. "We have invested resources in scenario planning because we recognise that leaders and employees at all levels need to understand the key issues and trends affecting our business."

With this in mind, MasterCard uses a combination of live training, virtual classrooms and online courses to ensure that all of its employees, on every rung of the corporate ladder, have access to the skills they need through targeted development programmes.

"It is fair to say that we have robust offerings for all our employees," Ray says. "We have core programmes for managers, but also for specific parts of the organisation such as sales. All our programmes focus on managing through change."

This focus has been driven by the need to deliver development programmes around core strategic values in the three years since MasterCard’s IPO. The result was the company’s Roadmap to the Future, which has been delivered to nearly all of its employees.

"We knew our culture needed to evolve and we wanted to ensure that we were focused on our customers and that we were commercially more robust," says Selander. "We laid out our strategy and business model, described how we make money and explained the implications of going public. We had become a different organisation, so it was important that people understood how we generate revenue and profit, and how our strategy fits with a new environment."

One of the main tools was a 'placemat' with diagrammatic representations of the company and its business. Serving as an easy reference guide, it quickly became a common symbol throughout the organisation, helping everyone to engage with the company’s strategy in a meaningful way.

"There are different ways to judge the success of the programme, but the first is its longevity,"explains Ray. "The placemats are still being used. Also, we managed to reach 97% of our employees within a couple of weeks. We engaged our business leaders in different regions to facilitate the programme and we evolved a new leadership model for a new company on a new playing field. We showed our managers how to equip themselves and what they would be accountable for."

Casting the net

The company-wide programme has proven successful in helping employees engage with strategy. It has also provided a good platform for other talent development initiatives.

"One thing we continue to do is improve the efficiency and effectiveness of talent development without reducing its impact."

Among these initiatives is the Leadership Excellence programme aimed at roughly the top 200 leaders in the company.

It aims to help them build their core skills and capability as leaders by briefing on key competencies and on what is expected of them within the organisation. These messages are regularly backed up in performance reviews and by material available online.

"We monitor many things and rate performance in many competencies," explains Ray. "We assess people at the start and end of a programme, and then we back it up so that we can see how far we have moved the needle."

The ultimate goal is to ensure that leaders' actions are in line with the values of the company. To achieve this, MasterCard has often opted to bring in expertise from outside the company, such as author John Cotter and futurologist Peter Schwartz.

"The reach, frequency and impact of our messages are very important," says Selander. "To support our leaders we often bring in external experts, be they experienced executives, writers or thinkers."

The company also works with the world’s leading business schools. For example, during its IPO, MasterCard worked with Switzerland’s IMD on a programme to help the senior leadership team understand the nuances of going public. These leaders could then cascade that knowledge down through their business units.

Equally important as the relationships with visionary thinkers and leading business schools is the ability to tap the experience and skills that already reside in house. As a result, MasterCard’s executives take a lead in the formation of the development strategy along with the delivery of its programmes.

"The involvement of senior leadership resonates with the workforce, especially when they talk about their own developmental journeys," notes Ray.

Lead from the front

This participation in training programmes is also a key part of the development process of senior executives. Leaders grow partly through the daily experience of their demanding jobs and partly through teaching others.

"I had to learn to be a better listener and to hold back, but then to still ensure that when the debate is over a decision is made."

"One example is my own 360-degree feedback," says Selander. "It became clear that if I express an opinion it can shut down the conversation, as people tend to align with what the CEO says. So, I had to learn to be a better listener and to hold back, but then to still ensure that when the debate is over a decision is made. We have some very seasoned and talented people here, and we want to achieve better buy-in, so that people understand why decisions are made."

The success of the company’s approach proves that talent development must be an important element in strategy, not an activity that fluctuates in the face of market conditions.

"People development is not philanthropic," says Selander. "We want to improve the performance of the company and we realise that everyone in the organisation can help to do that. It is hard to equate a dollar spent on training to a direct dollar increase in revenue, so this is an art as well as a science. But we know there should be constant support and resources available for developing people.

"In the current economic environment there is stress on our customers, and that preoccupies me. So do changes in the legal and regulatory landscape, but these concerns wax and wane. The way you get through them is by having the right people."