From chemical engineer to HRO thought leader, DuPont�s Ernest Lareau has packed a lifetime of experiences into his career with the chemical giant. Now, as the chairman of the HROA�s executive committee, the multitalented Lareau will share the lessons he has learned with the industry.
As HR director, portfolio and program management for DuPont, Ernie Lareau leads the global chemical giant’s implementation of its record-shattering HRO deal. The Georgia Tech graduate and Six Sigma master black belt also serves on the HRO Buyers Group leadership committee. Lest you think he’s lazy, Lareau also recently accepted the job of chairman of the board of trustees of the HRO Association. And during his spare moments, he is known to traipse around the country, speaking at various events and conferences as one of HRO’s outspoken ambassadors.
For the first 20 years of his career, Lareau had a strong general manager’s background. But over the past 15 years, he has become a transformation leader, finding solutions for the company when things needed repairs or improvement. Along the way, he earned his Six Sigma certification and became a Hammer & Associates process master.
During his 35 years at DuPont, Lareau had the opportunity to oversee the build-out of general and administrative functions for a company spin-off, for which he was given a very short implementation schedule. He led the build-out for HR, IT, F&A, legal, and facilities management—everything you need to run a company, he recalled. The fact that he had to do so under a compressed time frame piqued his interest in BPO and managing by process. When DuPont sold the spin-off to Koch Industries in Kansas, he chose to remain on the East Coast. His plan was to become a consultant, but DuPont had other ideas.
“They asked me to come back and lead HR transformation work. I thought it was an intriguing opportunity, in areas I found interesting, so I came back, and that’s what I’ve been doing,” said Lareau.
As newly appointed chairman of the board of the HROA, Lareau sees the mission of the group as a mandate to become the place to go for market knowledge and market access. He noted the association started out focusing on suppliers, working to create an understanding of the marketplace and opportunities for them.
“Now, it needs to evolve to ‘a place to be,’ so buyers are attracted to become members and use HROA resources to understand better practices, what’s going on in the market, and how to take advantage from an investment and operational standpoint. We have to create value for buyers, while keeping the value for providers and advisors,” he said.
For buyers, the HROA brings to the table its ability to set standards and better practices for the industry. As buyers enter the space, the HROA is trying to understand what’s possible and what’s the “state of being” for the industry and the association’s constituents, so it can meet their needs in that marketplace.
Those better practices cover service level metrics, contract negotiations, governance, and more. The goal, according to Lareau, is for buyers to see the HROA as “a good source of information and education around the state of the industry and things you need to think about when embarking on relationships in the HRO environment. We are just scratching the surface with recent metrics on service levels, but it’s a step in the right direction. A lot more can be done to create more value and attract more buyers.”
Lareau said he understands the buyer’s point of view, as he has been a member of the HRO Buyers Group since 2004 and is currently on its leadership team. The Buyers Group has agreed to become a special interest group of the HROA. That partnership is in the early stages, but the leadership of the Buyers Group believes that for the long-term health of the group, the industry, and the HROA, it makes sense to work together, Lareau added.
“We are evolving the relationship, seeing what we can add so we have a situation where one and one make three, as opposed to one and one making less than two,” said Lareau.
Some of the Buyers Group shared a concern that they would be absorbed by the HROA, which they saw as a strong vendor association rather than a market or industry association. However, “the synergies and the ability to work together in a way that deals with creating a competitive marketplace relative to standards and market access lead to a win-win-win” for buyers, vendors, and advisors, Lareau added.
“We are in the early stages of the journey. We went through a time when vendors and consultants were trying to create demand through recognition of the marketplace, but once they did, that got the buyers’ attention, and a number of things occurred relative to doing deals. The natural evolution in the industry elevated to where the association is doing more than creating market knowledge and access and is now creating value to attract buyers and grow the industry in a successful way that makes sense for all constituents.”
Lareau’s vision is to take the leadership of the HROA to the next level. Looking back at the association’s history, he noted that Glenn Davidson, the public sector managing director at sourcing advisory firm EquaTerra, had worked on the provider side to create industry awareness and built on that to create market access for both the vendor and consulting side. Similarly, Prudential SVP of HR Sharon Taylor, whom Lareau had replaced as trustee chairman at the HROA, helped to make the association become more balanced for all constituents.
“What I hope to do next is a natural step in the association’s evolution, to bring it to a state where it’s viewed by buyers as an attractive, value-adding place that’s in their interest while maintaining the good progress made by Glenn and Sharon in creating value and awareness from the seller and consultant side. It’s a journey we’re on—a natural evolution,” Lareau noted.
If during the next couple of years the HROA can continue to make progress toward those goals, Lareau said he feels the association would be valued by all of its constituents, and that he will have achieved his mission at the end of his chairmanship. Ultimately, he said he wants to solidify the HROA as the organization to turn to for industry knowledge, opportunities, and access.
Part of what’s driving this evolution is a shift in market trends. Lareau noted that “large, global, complex deals like DuPont, J&J, and Unilever have pretty much dried up.” Today, smaller deals are the rule, and contracts are more process-specific in nature.
“It’s unclear whether this represents a shift in growth in the industry as it matures, or if it’s a breather for deals that have gone down, as participants digest, take a deep breath, and run after another big chunk of business. It should become clear in the next couple of years where the industry is going, relative to the HRO space,” said Lareau.
His experience in leading DuPont’s HR transformation—from building the business case through the RFP process—taught him a lot about achieving better practices through outsourcing. In the process, he has learned a lot about the industry in its current state.
“I identified things as a buyer that I would have liked to have seen [prior to signing the contract]. I would have liked to have the information on what was available presented differently, to be more objective from the state-of-the-art and reality standpoint. I bring to the leadership here the pieces that might have been missing in the HROA, which is the buyer’s perspective on the challenges.”
Looking back at the first 35 years of his career, Lareau acknowledged that it’s been a rewarding ride so far. “I have had a wonderful career with DuPont,” he said, crediting the company culture for providing a unique learning and personal growth environment. “My track record shows that I’ve had the opportunity to do things, again and again, that would seem to be once-in-a-lifetime roles.”
From manufacturing to strategy, acquisitions to spin-offs, he has run the gamut and landed in…HRO. “You’d be hard pressed to find opportunities like that once in a lifetime, much less four or five of them,” he reflected. “I can look back and say, ‘Gee that was fun, and I got a lot out of it.’”
