A data giant takes its employee recognition program global.
So imagine you are cast in an HR reality TV show. Your scenario is this: You work for a 40,000-employee global enterprise in 100-plus countries, part of a major public company. Suddenly, the capital markets change and being a private company is a much more attractive option for investors. Several of the world’s largest private equity firms join forces to buy out public shareholders and take the company private.
Then the plot thickens. Your new CEO plans to accelerate financial return to the new owners. One catch: It involves a dramatic 25-percent workforce reduction. That’s 10,000 jobs. Get through that and you are left with a core, if traumatized, staff of 30,000. Your mission: In the teeth of the deepest economic recession in a generation, retain and motivate the remaining people to get high ratings from a very tough audience—customers and shareholders.
If it were fiction, this passion play would provide blockbuster entertainment. But it really happened to Nielsen, the $10 billion company famous for its TV ratings that influence more than $70 billion in annual advertising spending. Once a part of Dutch media conglomerate VNU, the company went private in a buyout in 2006. Suddenly, the company took on more than $8 billion in debt to fund the $12 billion leveraged buyout. And Nielsen found itself in its own version of Big Brother, struggling to turn a lumbering giant of the media research business into a new lean, mean ratings machine, all under the hot lights of a real-life private equity LBO. The 30,000-person cast and crew desperately needed a new set of tools to recognize, reward, and motivate themselves to deliver a happy ending.
Eric Lange, Nielsen’s Senior Vice President, Global Human Resources neatly recaps the earlier episodes. “We’d gone private,” Lange recalls. “And we brought in a vice chair from GE to be our CEO [Dave Calhoun]. We needed to shake things up. So we brought in the whole concept of meritocracy. We wanted to differentiate between the stars and those people who need some help figuring things out. And that means recognizing and rewarding those who deliver more, and not so much those who don’t. We’ve really moved the needle on that with base pay, bonus, training, development, and recognition. I can’t tell you that it’s contributed x-percent to the whole enterprise, but we know we’ve moved the needle.”
Lange knew that among his employees popular programming can become self-perpetuating. High ratings can bring even higher ratings. In the Nielsen TV ratings, it happened for I Love Lucy and Gunsmoke in the 1950s, the Beverly Hillbillies and Bonanza in the 1960s, All In The Family in the 70s, Dallas and The Cosby Show in the 80s, ER in the 90s, and today it’s American Idol. On the other hand, mishandled ratings can lead to loss of engagement, resulting in movement exactly in the opposite direction, spiraling down into HR’s version of a flop, a jump-the-shark episode, a show that’s lost it mojo: mass firings, bankruptcy protection, or a complete shareholder wipeout.
For the modern HR leader, installing a performance culture in a modern workforce is part science, part art. But fortunately, it is more science than the gossamer-like mix of kismet and genius required to create a TV hit such as Friends or Seinfeld.
Enter stage right: points-based employee recognition, an IT-supercharged solution that evolved in parallel with the emergence of enterprise-based HR systems and the internet. Aided by real-time, company-wide performance data and metrics-driven management techniques, modern recognition has gone far beyond the days of tenure-based rewards involving an engraved gold watch or a pin with the company logo. Today’s state-of-the-art recognition solutions allow HR leaders to drive workforce behaviors systematically. Such an approach can deliver on a specific set of performance metrics—sales goals, cost savings, time-to-market targets, customer service turnaround, system integration timelines, and even environmental impact reduction or improved corporate citizenship. Not surprisingly, a host of large and heavily-competitive employee recognition providers have grown up with the emerging practice, supporting a rapidly-growing number of recognition-savvy HR practitioners. Today, Recognition Professionals International, the recognition segment industry association, counts more than 500 member companies, representing both providers and practitioners. HRO Today’s own Resource Guide features more than 100 provider organizations, several with global capabilities. The combined revenues of the leading 10 reward and recognition providers in the 2009 HRO Today “Recognition Baker’s Dozen” tops a record $2 billion.
Fortunately for Nielsen, its SVP HR Lange counted himself among the recognition-savvy. He knew the new tools well, and was not afraid to use them. But we’re getting ahead of ourselves. So now, back to the show.
The Setup: No Sitcom
Here’s the setup. From a workforce performance perspective, Nielsen’s “before” picture was not pretty. HR leader Lange tells HRO Today that pre-LBO, Nielsen was always a place where if you merely showed up and did your job, you were assured tenure-based awards—your five-year watch, your ten-year pin. The culture had become stale, and the staff’s relationship with awards was one of entitlement. Lange acknowledges that while rewarding tenure is admirable, the practice falls far short of the results delivered when achievements or performance are recognized.
Yet, Lange also understands that a system of performance and achievement awards represents a complex management challenge, especially since Nielsen operates in more than 100 countries representing dozens of cultures and languages. Meeting the challenge requires the clear and candid formation of objective targets—such as sales goals, customer retention target levels, employee and customer engagement scores, employee turnover rates, cost controls, environmental impact statements. It involves measuring progress. But that also means gauging failure and stasis. Lange explains that the process entails the sometimes uncomfortable exercise of holding people accountable for the numbers.
The good side of performance measurement is getting the rewards when you achieve. The downside for a certain category of staffers is that the company no longer rewards merely showing up.
In late 2007, Nielsen decided that the recognition program supporting its streamlined, but still far-flung, enterprise needed to be harmonized.
“We wanted one approach,” Lange recalls. “We wanted to make sure that a person who works in—pick a country, let’s say Thailand—would now be treated as importantly as someone in the headquarters in New York or Connecticut.”
Nielsen put out RFPs, received four serious responses and whittled that down to two. And the winner: O.C. Tanner, which had been working with Nielsen before. How did they arrive at the choice? “The decision actually started before the RFPs,” explains Lange. “You need buy-in from senior management. Then ask basic questions about what you want to do. Recognition and rewards form just one piece, a vehicle to engage employees more fully on many levels. We wanted to communicate to our people through recognition how critical they are to achieving our goals. We don’t make anything. We’re not building things. We are selling services. We are selling solutions to our clients. It’s all about the people. We’re one of those companies, where all your assets go out the door at night, and if you’re not focusing on that you’re missing the boat.”
Lange concluded that O.C. Tanner brought a unique value proposition to the table. “They got our business because their sole business is employee recognition, whereas a lot of their competition did this as one of their things,” says Lange. But the provider also offered something else that Lange valued: thought leadership. “They focus on the whole psychology, not just the gifts and so forth. Chester Elton literally wrote the book on employee recognition. The other guys sent a salesman. They didn’t do anything wrong, but O.C. Tanner sent Chester.”
Sequel, With Guest Star
Lange casts Chester Elton as his show’s guest star. “I really believe that they’re at the forefront of the industry when it comes to state of the art thinking. We brought Chester in to talk to our people, and two years later they’re still talking about it. Anyone can run a system to deliver gifts. They bring domain expertise.”
Elton explains how O.C. Tanner applied that expertise to Nielsen’s case. “We went to them and said we had other clients that had great results in bringing together all of their recognition programs into portals,” he recalls. Offering employees real-time, on-screen access to the rewards system—whether as a way to monitor one’s own points, nominate a colleague, or hear about the latest round of recognition recipients—portals ensure optimal buy-in from the employee side of the equation.
“Nielsen’s situation featured a lot of transformation and relocation,” Elton continues. “The value and driving messages were being garbled, and it manifested itself even into their awards programs. There were all these disparate programs, and they weren’t equal in nature. There was a real need to simplify the communication.”
Nielsen distilled its new approach into a three-word mantra: simple, open, integrated. The recognition team then aligned the program with those corporate objectives.
“We wanted to engage employees in this new world order that we were trying to build. We wanted to recognize efforts and results taken against very aggressive goals,” says Lange. “We asked ourselves, ‘We’re here, we need to get there, how do we get there?’ We put together some great programs on leadership and vision and building that commitment and executing the changes with recognition being a key part of all that. The recognition program is called Simply Excellent.”
Lange rolled out the new program with the full support of senior leadership who participated in a launch video. Nielsen CEO Dave Calhoun sent a strong message to employees about the bar that had been set in the new organization and the company’s commitment to honoring effort and celebrating victories.
In a video message to company leaders, Calhoun declared: “As we go through all this, there are moments when everybody will wonder about our resolve. You need to know, you need to believe, that this company and this leadership team are going to see this one through. And one of the ways we see it through is to celebrate the successes that get us closer to that integrated, open, and simple company. And you know what? We have a million of them. So what we’re going to do with Simply Excellent is to recognize the people, the teams, who help us day in and day out overcome obstacles and get just an inch closer to those objectives. Some of the recognition will be around big things, and some of this recognition will be around little things. It takes both for us to capture momentum and then sustain momentum, to again build resolve around these ideals. It’s just the most important thing in the world that we recognize our people, and we have great people.”
“It really helped that [with the new company] we got a CEO who understands HR,” says Lange. “It helped with tying recruiting, retaining, and the bottom line.”
And Lange is careful to point out that those company values—simple, integrated, open—are the focus of the recognition program and the key to its success, not just the bottom line.
“Our philosophy now is not just about the numbers. It’s how you get there as well. And if you get to the numbers, but you’re not living the values, that’s not good enough,” says Lange. He adds that a carefully crafted nomination wizard has been a key tool to guiding users to the appropriate recognition award level through a series of questions. In addition to keeping the budget central, the wizard is helping everyone stay on track with strategic recognition and its multiple goals: “Our engagement program is about employee performance, it’s about retention, it’s about client satisfaction, and we’ve really built this program around that. Those are the things that we want to focus on to help our employees become engaged. And, for us, it’s about executing this and getting all of our leadership team on board to understand why these things matter and to understand how they take this and they bring it down to the workforce.”
Although he concedes that he would love to perfectly measure the ROI on his recognition spend, particularly in this economy, Lange says that, even without that, he enjoys complete support from the C-Suite. “This past year, the budgets have obviously not been wide open,” he says. “We’re not doing battle, but we’re constantly discussing how much to spend on this.”
He also says he can gauge the program’s success anecdotally, and he shares a favorite story. “When we first rolled this out and were introducing the program in front of 200 or so leaders,” he recalls, “we gave out an award to a woman who still works for us. And to this day, whenever I see here, she’ll wave the little diamond bracelet that we gave her. She was a very senior executive and could have bought it herself, but she tells me it was the recognition in front of her peers she treasured. We could have made it a cash bonus, if you ask a recipient of cash six months later what they did with the money, it’s either ‘I forget,’ or ‘I paid off bills.’ We’re looking to make a lasting statement.”
Roll the credits.
Chester Elton, O.C. Tanner’s Icon of Carrot Culture
Listening to the rat-a-tat-tat phone message of Chester Elton, author and SVP of the Carrot Culture Group division of O.C. Tanner, would leave you in no doubt that this born showman has internalized his role as what the Toronto Star newspaper called “the apostle of appreciation.” With an enthusiasm for the orange veggie that would make even Bugs Bunny blush, Chester openly declares that every day is “tuber-riffic.” Without warning, he will whip out a copy of his book Carrot Culture, and a plush doll figurine version of his book’s mascot, Garrett the Carrot.
Chester’s speech is chock full of garden-ready nuggets. He’s always itching to “get to the root of the problem.” His Peter Rabbit-like aphorism barrage includes claims that “orange is the new black,” that “thank you in any language is good business,” that bosses should use “more carrots and fewer sticks.” In the Strategy room on Facebook, his mascot Carrot has more than 1,000 friends. He is known as the “deacon of danke schoen,” the “high priest of praise,” the “savior of bad boss behavior,” the “Dalai Lama of workplace trauma,” the “Mark Twain of jobsite pain.” You get the picture.
Even Chester’s O.C. Tanner colleagues can’t help but drop a vegetable reference into their everyday patter. Managing Director Jim Vincenzi says that bringing Chester into the Nielsen account to give one of his trademark Carrot speeches was “the carrot that led to a larger contract.” Is Elton’s carrot schtick a gimmick or a secret weapon? While the carrot may be too corny for some, one thing is certain: Nielsen would give it a high rating.