1

C H A P T E R

1 AVON PRODUCTS, INC.

MARC EFFRON

A leadership development and talent turnaround system designed for executives that leverage 360 - degree feedback, a leadership skill/competency model, and indi- vidual development planning.

Introduction

A Success - Driven Challenge

The Turnaround

The Talent Challenge

Execute on the “ What, ” Differentiate with “ How ”

From Opaque to Transparent

The Avon 360

Broad - Based Transparency

From Complex to Simple

Performance Management

Engagement Survey

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Copyright © 2009 John Wiley & Sons

2 Best Practices in Talent Management

From Egalitarian to Differentiated

Communication to Leadership Teams

A Few Big Bets

Tools and Processes

From Episodic to Disciplined

From Emotional to Factual

From Meaningless to Consequential

The Results of a Talent Turnaround

Measuring the Talent Turnaround ’ s Success

INTRODUCTION

In early 2006, Avon Products, Inc., a global consumer products company focused on

the economic empowerment of women around the world, began the most radical

restructuring process in its 120 - year history. Driving this effort was the belief that

Avon could sustain its historically strong fi nancial performance while building the

foundation for a larger, more globally integrated organization. The proposed changes

would affect every aspect of the organization and would demand an approach to fi nd-

ing, building, and engaging talent that differed from anything tried before.

A SUCCESS - DRIVEN CHALLENGE

Avon Products is a 122 - year-old company originally founded by David H. McConnell —

a door - to - door book seller who distributed free samples of perfume as an incentive to

his customers. He soon discovered that customers were more interested in samples

of his rose oil perfumes than in his books and so, in 1886, he founded the California

Perfume Company. Renamed Avon Products in 1939, the organization steadily grew

to become a leader in the direct selling of cosmetics, fragrances, and skin care

products.

By 2005, Avon was an $8 billion company that had achieved a 10 percent cumula-

tive annual growth rate (CAGR) in revenue and a 25 percent CAGR in operating profi t

from 2000 through 2004. A global company, Avon operated in more than forty coun-

tries and received more than 70 percent of its earnings from outside the United States.

By all typical fi nancial metrics, Avon was a very successful company.

However, as the company entered 2006 it found itself challenged by fl attening

revenues and declining operating profi ts. While the situation had many contributing

causes, one underlying issue was that Avon had grown faster than portions of its infra-

structure and talent could support. As with many growing organizations, the struc-

tures, people, and processes that were right for a $5 billion company weren ’ t necessarily

a good fi t for a $10 billion company.

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Copyright © 2009 John Wiley & Sons

Avon Products, Inc. 3

THE TURNAROUND

Faced with these challenges, CEO Andrea Jung and her executive team launched a

fundamental restructuring of the organization in January 2006. Some of the larger

changes announced included:

Moving from a Regional to a Matrix Structure: Geographic regions that had operated with signifi cant latitude were now matrixed with global business func-

tions, including Marketing and Supply Chain.

Delayering : A systematic, six - month process was started to take the organization from fi fteen layers of management to eight, including a compensation and benefi t

reduction of up to 25 percent.

Signifi cant Investment in Executive Talent: Of the CEO ’ s fourteen direct reports, six key roles were replaced externally from 2004 to 2006, including the

CFO, head of North America, head of Latin America, and the leaders of Human

Resources, Marketing, and Strategy. Five of her other direct reports were in new

roles.

New Capabilities Were Created: A major effort to source Brand Management, Marketing Analytics, and Supply Chain capabilities was launched, which brought

hundreds of new leaders into Avon.

THE TALENT CHALLENGE

As the turnaround was launched, numerous gaps existed in Avon ’ s existing talent and

in its ability to identify and produce talent. While some of those gaps were due to

missing or poorly functioning talent processes, an underlying weakness seemed to lie

in the overall approach to managing talent and talent practices.

After reviewing Avon ’ s existing talent practices, the talent management group

(TM) identifi ed six overriding weaknesses that hurt their effectiveness. They found

that existing talent practices were

Opaque: Neither managers nor Associates knew how existing talent practices (that is, performance management, succession planning) worked or what they

were intended to do. To the average employee, these processes were a black box.

Egalitarian: While the Avon culture reinforced treating every Associate well, this behavior had morphed into treating every Associate in the same way. High

performers weren ’ t enjoying a fundamentally different work experience and

low performers weren ’ t being managed effectively.

Complex: The performance management form was ten pages long, and the suc- cession planning process required a full - time employee just to manage the data

and assemble thick black binders of information for twice - yearly reviews.

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4 Best Practices in Talent Management

Complexity existed without commensurate value, and the effectiveness rate of the

talent practices was low.

Episodic: Employee surveys, talent reviews, development planning, and succes- sion planning, when done at all, were done at a frequency determined by individ-

ual managers around the world.

Emotional: Decisions on talent movement, promotions, and other key talent activities were often infl uenced as much by individual knowledge and emotion as

by objective facts.

Meaningless: No talent practice had “ teeth. ” HR couldn ’ t answer the most basic question a manager might ask about talent practices — “ What will happen to me if

I don ’ t do this? ”

EXECUTE ON THE “ WHAT, ” DIFFERENTIATE WITH “ HOW ”

Our TM group found ourselves in a diffi cult situation. Fundamental changes were

needed in every talent practice, and the practices had to be changed and implemented

in time to support the turnaround. This meant that the practices had to be quick to

build, easy to use, and, most of all, effective.

Taking our guidance from the Top Companies for Leaders study (Effron, Greenslade, & Salob, 2005) and the philosophies of executive coach Marshall Gold-

smith (2006), we decided to build our talent practices with two key guiding

principles.

1. Execute on the “ what. ” The Top Companies for Leaders study found that sim- ple, well - executed talent practices dominated at companies that consistently pro-

duced great earnings and great leaders. We similarly believed that fundamental

talent practices (that is, performance management or succession planning) would

deliver the expected results if they were consistently and fl awlessly executed.

We decided to build talent practices that were easy to implement and a talent

management structure that would ensure they were consistently and fl awlessly

implemented. More importantly, we decided to . . .

2. Differentiate on “ how. ” While disciplined execution could create a strong foun- dation for success, the six adjectives that described Avon ’ s current processes

were largely responsible for their failure. We drew inspiration from Marshall

Goldsmith ’ s revolutionary recreation of the executive coaching process. He had

taken a staid, academic/therapy model for improving leaders and turned it into

a simple but powerful process that was proven effective in changing leaders ’

behaviors.

With those two guiding principles in place, we began a 180 - degree transformation

of Avon ’ s talent practices.

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Avon Products, Inc. 5

FROM OPAQUE TO TRANSPARENT

One of the most simple and powerful changes was to bring as much transparency as

possible to every talent practice. TM designed new practices and redesigned existing

ones using total transparency as the starting point. Transparency was only removed

when confi dentiality concerns outweighed the benefi ts of sharing information. The

change in Avon ’ s 360 assessment process was a telling example.

The Avon 360 Avon ’ s 360 - degree assessment process was hardly a model of transparency when the

turnaround began. When the new TM leader arrived at Avon, he asked for copies of

each VP ’ s 360 - degree assessment, with the goal of better understanding any common

behavioral strengths and weaknesses. He was told by the 360 administrator in his

group that he was not allowed to see them. The TM leader explained that his intent

wasn ’ t to take any action on an individual VP, simply to learn more about his clients.

He was again told “ no ” — that confi dentiality prevented their disclosure.

While the administrator was correct in withholding the information (the partici-

pants had been promised 100 percent confi dentiality), the fact that the most critical

behavioral information about top leaders was not visible to the TM leader (or anyone

else) had to change. A new, much simpler 360 was designed and implemented that

explicitly stated that proper managerial and leadership behaviors were critical for a

leader ’ s success at Avon. Citing that level of importance, the disclosure to all partici-

pants and respondents stated that the 360 information could be shown to the partici-

pant ’ s manager, HR leader, regional talent leader, and anyone else the Avon ’ s HR team

decided was critical to the participant ’ s development. It also stated that the behavioral

information could be considered when making decisions about talent moves, includ-

ing promotions or project assignments.

Helping to make this transition to transparency easier, the new 360 assessment

and report differed from typical tools that rate the participant on profi ciency in various

areas. The Avon 360 borrowed heavily from the “ feed - forward ” principles of Marshall

Goldsmith 1 and showed the participant which behaviors participants wanted to see

more of, or less of, going forward. Without the potential stigma of having others seeing

you rated as a “ bad ” manager, openly sharing 360 fi ndings quickly evaporated as an

issue.

Broad - Based Transparency Transparency was woven into every talent process or program in a variety of ways.

Examples would include:

Career Development Plans: To provide Associates with more transparency about how to succeed at Avon, the HR team developed “ The Deal. ” The Deal was a sim-

ple description of what was required to have a successful career at Avon, and what

parts the Associate and Avon needed to play (see Figure 1.1 ). The Deal made clear

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Copyright © 2009 John Wiley & Sons

6 Best Practices in Talent Management

FIGURE 1.1. Talent Investment Matrix

P e rf

o rm

a n

ce O

ve r

T im

e

H ig

h 2 0 %

M id

6 0 %

Lo w

2 0 %

Potential

24+ months 50%

1 level in 2 years 30%

2 levels in 6 years 20%

Compensation targets: • Base 50th, Bonus 40th

Development investment: • Average Hi Po Program: No Global Move: No Special Projects: Consider

Compensation targets: • Base 50th, Bonus 40th

Development investment: • Average Hi Po Program: No Global Move: No Special Projects: No

Compensation targets: • Base 50th, Bonus -- NONE Development investment: • None without TM approval Hi Po Program: No Global Move: No Special Projects: No

Compensation targets: • Base 60th, Bonus 60th

Development investment: • 2x average Hi Po Program: Consider Global Move: Yes Special Projects: Yes

Compensation targets: • Base 50th, Bonus 50th

Development investment: • Average Hi Po Program: No Global Move: Consider Special Projects: Yes

Compensation targets: • Base 50th, Bonus 50th

Development investment: • .75x average Hi Po Program: No Global Move: No Special Projects: No

Compensation targets: • Base 60th, Bonus 90th

Development investment: • 5x average Hi Po Program: Yes Global Move: Yes Special Projects: Yes

Compensation targets: • Base 50th, Bonus 75th

Development investment: • 2x average Hi Po Program: Consider Global Move: Yes Special Projects: Yes

Compensation targets: • Base 50th, Bonus 75th

Development investment: • 1.5x average Hi Po Program: No Global Move: No Special Projects: Yes

that every Associate had to deliver results, display proper leadership behaviors,

know our unique business, and take advantage of development experiences if they

hoped to move forward in the organization.

Development Courses: Avon acknowledged the unspoken but obvious fact about participating in leadership or functional training courses — of course you ’ re being

observed! We believed it was important for participants to understand that we

were investing in their future and that monitoring that investment was critical. The

larger investment that we made, the more explicitly we made the disclosure. For

our Accelerated Development Process (a two - year high - potential development

process offered to the top 10 percent of VPs), we let them know that they were

now “ on Broadway. ” The lights would be hotter and the critics would be less for-

giving. They knew that we would help each of them to be a great actor, but that

their successes and failures would be more public and have greater

consequences.

Performance Reviews: Switching from a 3 - point scale to a 5 - point scale pro- vided additional clarity to participants about their actual progress, as did clarify-

ing the scale defi nitions. Associates were informed about what performance

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Copyright © 2009 John Wiley & Sons

Avon Products, Inc. 7

conversations their managers should be having with them and when. The recom-

mended distribution of ratings across the scale was widely communicated.

FROM COMPLEX TO SIMPLE

One of the most important changes made in Avon ’ s talent practices was the radical sim-

plifi cation of every process. We believed that traditional talent processes would work

(that is, grow better talent, faster) if they were effectively executed. However, we under-

stood from our experience and a plethora of research (Hunter, Schmidt, & Judiesch,

1990) that most talent practices were very complex without that complexity adding any

signifi cant value. This level of complexity caused managers to avoid using those tools,

and so talent wasn ’ t grown at the pace or quality that companies required.

We committed ourselves to radically simplifying every talent process and ensur-

ing that any complexity in those processes was balanced by an equal amount of value

(as perceived by managers). Making this work was easier than we had anticipated. As

the TM team designed each process, we would start literally with a blank sheet of

paper and an open mind. We would set aside our hard - earned knowledge about the

“ right ” way to design these processes and instead ask ourselves these questions:

1. What is the fundamental business benefi t that this talent process is trying to

achieve?

2. What is the simplest possible way to achieve that benefi t?

3. Can we add value to the process that would make it easier for managers to make

smarter people decisions?

Using just those three questions, it was amazing how many steps and “ bells and

whistles ” fell away from the existing processes. The two examples below provide

helpful illustration.

Performance Management Aligning Associates with the turnaround goals of the business and ensuring they were

fairly evaluated was at the foundation of the business turnaround. As we entered the

turnaround, the company had a complex ten - page performance management form with

understandably low participation rates. Many Associates had not had a performance

review in three, four, or even fi ve years. It would have been impossible to align Asso-

ciates with the vital few turnaround goals using that tool and process.

The business benefi t: We stated that the fundamental benefi t of performance goals and reviews is that they aligned Associates with business goals and caused

Associates to work toward those goals with the expectation of fair rewards.

The simplest path: It seemed obvious that the simplest way of achieving the busi- ness goal was simply to have managers tell their Associates what their goals were.

It was simple and the value to managers outweighed any complexity. After taking

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8 Best Practices in Talent Management

that very small step forward, we literally advanced at the same pace, taking incre-

mentally small steps forward in the design process. At each step, we would ask

ourselves, does this step add more value to managers than it does complexity? As

long as it did, we added the additional design element. When that complexity/value

curve started to level (see Figure 1.2 ), we very carefully weighed adding any addi-

tional elements. And, when we couldn ’ t justify that adding another unit of com-

plexity would add another unit of value, we stopped.

What went away as the design process progressed? Just a few examples

would include:

Goal labels (highly valued, star performer, etc.), which added no value (in fact

blurred transparency!) but did add complexity.

Individual rating of goals, which implied a false precision in the benefi t of each

goal and encouraged Associates to game the system.

Behavioral ratings, which were replaced with a focus on behaviors that would

help achieve the current goals.

The output was a one - page form with spaces for listing the goal, the metric,

and the outcome. A maximum of four goals was allowed. Two behaviors that

supported achievement of the current goal could be listed but were not for-

mally rated. As a result, participation reached nearly 100 percent, and

line managers actually thanked the talent team for creating a simple perform-

ance management process!

Adding Additional Value: In this process, we didn ’ t fi nd opportunities to add more value than was achieved through simplifi cation alone.

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FIGURE 1.2. The Avon Deal (Example)

Grow Avon

Achieve Results for Our Representatives

Provide Clear Performance

Expectations; Let You Know Where

You Stand

Develop Through

Experiences

Take on Critical Career Experiences

Provide the Right Assignments and

Experiences

Know Avon

Understand Direct Selling

Provide Training and Exposure

Lead Avon

Lead Our Associates

Provide Feedback on Your

Leadership Skills

Your Role

Avon’s Role

Working Together to Help You Create a Great Career at Avon

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Avon Products, Inc. 9

Engagement Survey When the turnaround began, no global process for understanding or acting on Associ-

ate engagement issues existed. Select regions or departments made efforts of varying

effectiveness, but there was no integrated focus on consistent measurement and

improvement of engagement. In designing the engagement survey process, we applied

the same three questions:

The business benefi t: We accepted the substantial research that showed a corre- lation (and some that showed causation) between increasing engagement and

increasing various business metrics. In addition, we felt that the ability to measure

managers ’ effectiveness through engagement levels and changes would provide an

opportunity for driving accountability around this issue. As with performance

management, we knew that managers would use this tool if we could make it sim-

ple and, ideally, if we could show that it would allow them to more effectively

manage their teams.

The simple path: There were two goals established around simplicity. One goal was to understand as much of what drove engagement as possible, while asking

the least number of questions. The second goal was to write the questions as sim-

ply as possible, so that if managers needed to improve the score on a question,

their options for action would be relatively obvious. The fi nal version of the sur-

vey had forty - fi ve questions, which explained 68 percent of the variance in

engagement. The questions were quite simple, which had some value in itself, but

their true value was multiplied tenfold by the actions described below.

Adding additional value: We were confi dent that, if managers took the “ right ” actions to improve their engagement results, not only would the next year ’ s scores

increase, but the business would benefi t from the incremental improvement. The

challenge was to determine and simply communicate to the manager what

the “ right ” actions were. Working with our external survey provider, we devel-

oped a statistical equation model (SEM) that became the “ engine ” to produce

those answers. The SEM allowed us to understand the power of each engagement

dimension (for example, Immediate Manager, Empowerment, Senior Manage-

ment) to increase engagement, and to express that power in an easy-to-understand

statement.

For example, we could determine that the relationship between the Immediate

Manager dimension and overall engagement was 2:1. This meant that for every two

percentage points a manager could increase his or her Immediate Manager dimension

score, the overall engagement result would increase by one percentage point. Even

better, this model allowed us to tell every manager receiving a report the specifi c three or four questions that were the key drivers of engagement for his or her group .

No longer would managers mistakenly look at the top - ten or bottom - ten questions to

guess at which issues needed attention. We could tell them exactly where to focus their

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10 Best Practices in Talent Management

efforts. The list of these questions on page fi ve of the survey report essentially reduced a

manager ’ s effort to understand his or her survey results to just reading one page.

FROM EGALITARIAN TO DIFFERENTIATED

A critical step in supporting Avon ’ s turnaround was determining the quality of talent

we had across the business — an outcome made much easier with transparent processes

and conversations. Once we understood our talent inventory, we made a broad and

explicit shift to differentiate our investment in talent. While we would still invest in

the development of every Associate, we would more effectively match the level of that

investment with the expected return. We also differentiated leaders ’ experiences to

ensure that our highest potential leaders were very engaged, very challenged, and very

tied to our company.

We made the shift to differentiation in a number of ways, including:

Communication to Leadership Teams At the start of the turnaround process, presentations were made to each of the

regional leadership teams to explain the shift in talent philosophy. The chart below

(see Figure 1.3 ) helped to emphasize that we were serious about differentiation, could

be relatively specifi c about what it meant and how we planned to apply it. Showing the

differentiation on our new Performance and Potential matrix also let leaders know that

accurately assessing talent on this tool was critical to our making the right talent

investments.

FIGURE 1.3. The Value/Complexity Curve

Continue

Caution

Stop

Effort /Complexity Added

V al

u e

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Avon Products, Inc. 11

A Few Big Bets A key plank in our philosophy was that we believed in placing a “ few big bets ” on a

small number of leaders. This approach was informed by the research showing the

vastly superior performance of the top 5 to 10 percent of a specifi c population and by

the belief that fl awless execution of well - known high - potential development tactics

would rapidly accelerate development. 2 With limited funds to spend, we needed to

make a decision about what talent bets would truly pay off.

Our monetary investment in our highest - potential leaders was fi ve to ten times

what we would invest in an average performer. This investment would include train-

ing, coaching, and incentive compensation, but we also invested the highly valuable

time of our CEO, executive team, and board members. Our highest - potential leaders

would often have an audience with these executives on a regular basis.

Tools and Processes Our new talent review process and performance review process also emphasized our

differentiation philosophy. Our new 5 - point performance scale came with a recom-

mended distribution that assumed 15 percent of our leaders would fail to meet some of

their goals during the year. We believed that if goals were set at an appropriately chal-

lenging level, this was a very reasonable expectation. As a consequence, we saw mar-

ginal performers, who typically could have limped along for years with an average

rating, receive the appropriate attention to either improve their performance or move

out of the business.

Our performance and potential grid (3 by 3) also had recommended distributions,

but we found over time that the grid defi nitions actually better served our differentia-

tion goals. After initially rating leaders as having higher potential (the ability to move

a certain number of levels over a certain period of time), over time, managers saw that

the movement they predicted didn ’ t occur and those with more potential to move

became a smaller, more differentiated group. We also asked managers to “ stack rank ”

Box 6, which contained average performers who were not likely to move a level in the

next twenty - four months. This process helped to differentiate “ solid average ” perform-

ers from those who were probably below average and possibly blocking others ’ career

movement.

FROM EPISODIC TO DISCIPLINED

As with many companies, Avon had plenty of well intentioned but very busy managers.

Processes like talent reviews, which were administratively complex and diffi cult to

understand, were not going to inspire the typical manager to reorder her priority list. By

greatly simplifying these processes, we had removed one barrier to effectiveness, but we

hadn ’ t actually moved the process forward. We still needed to build organizational

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12 Best Practices in Talent Management

discipline around the execution of these simple new processes. We did that in a number

of ways:

Consistent global tools and processes: Many parts of the organization had cre- ated their own tools for activities like performance management or individual

development. The corporate talent management function was not empowered to

push for global consistency, and consequently there was not a common approach

to build Avon talent. This changed with a shift to global consistency that was

championed by the SVP HR. While all talent practices would now be designed by

the corporate TM group, each still had to be vetted with the HR leaders of each

geographic region and functional discipline. As a fi nal part of the design process,

adjustments were made to tools and processes to ensure they met needs around the

world.

Adding talent management structure globally: We created the role of “ regional talent management leader, ” a manager - or director - level role responsible for the

local implementation of the global processes. Five of these positions were cre-

ated — one in each key geographic region — and the improved process discipline

can be credited to them and their HR leaders. Regular meetings and calls between

regional leaders and the corporate TM group helped ensure great dialogue and

consistent improvements in the processes.

A committed CEO: Our CEO, Andrea Jung, showed herself to be a tremendous supporter of effective talent processes. Both through her role modeling (conduct-

ing performance reviews and setting clear goals for her team) and instilling

process discipline (she held formal talent review meetings with each direct report

and an executive committee talent calibration meeting twice each year), she signaled

that these processes had value.

This new level of discipline was an incredibly strong lever in our ability to assess

and develop our talent. By holding talent processes every six months, we were able to

drive transparency around talent issues on a regular basis and instill accountability

to take action on issues before the next cycle.

FROM EMOTIONAL TO FACTUAL

Avon was a company with genuine, heart - felt concern for its Associates and an organi-

zation in which strong relationships were built over a lifetime of employment. As the

organization grew, a leader ’ s personal knowledge of other Associates ’ performance or

development needs often served as a key factor in determining talent movement. While

in many cases a leader ’ s individual knowledge was relatively accurate, it ’ s likely that

a more calibrated point of view or additional quantitative facts may have allowed a

richer discussion or more confi dence in decision making.

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Avon Products, Inc. 13

The TM team worked to inject more fact - based decision making into talent dis-

cussions. Some of those facts were qualitative and others quantitative, but as a whole,

they allowed a more complete discussion of an individual ’ s performance and

potential.

Qualitative facts added: Additional qualitative facts were found everywhere from talent reviews to leadership and functional courses. In talent reviews, cali-

bration discussions were added at each level so that individual managers could

justify individual potential ratings to their peers. Those ratings might also be

reviewed an additional time at the next level. Regional talent management leaders

would facilitate many of those meetings to help leaders have complete and honest

discussions, helping to ensure that the qualitative data was accurate. Additional

qualitative data was also added from a leader ’ s participation in leadership or func-

tional development programs. Senior line managers would sponsor those pro-

grams, frequently attending the entire one - , two - , or three - week process. Those

managers would then bring rich observations to the talent discussions about an

individual ’ s performance in those classes.

Quantitative facts added: Two of the new tools discussed above, the 360 and the engagement survey, provided quantitative facts that helped Avon assess talent.

Progress against engagement goals or individual behavior improvement (or lack

of it) was often a key indicator of readiness for additional development.

FROM MEANINGLESS TO CONSEQUENTIAL

Injecting managerial accountability for talent practices was a key factor in their effec-

tiveness. Prior to the turnaround, accountability for those practices did not exist, with

some managers taking personal responsibility to implement them and others doing

very little. In creating the new talent practices, we tried to inject accountability into

each one, answering that critical question, “ Why should I do this ” ?

Monetary accountability: Varying a leader ’ s pay for successfully or unsuccess- fully managing talent is a dream of many HR and compensation leaders. We chose

to use that lever in a very targeted way when we applied it to engagement survey

improvement. The executive team believed that the survey provided a strong

enough measure of a manager ’ s focus on people issues that they could be held

accountable for its improvement. The executive committee established year - over -

year improvement in engagement scores as a goal in every VP ’ s performance plan.

Associate - led accountability: To encourage the timely completion of the perfor- mance management process steps, we empowered Associates to hold their manag-

ers accountable. A memo was sent to every Associate at the beginning of each

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14 Best Practices in Talent Management

year informing them of the specifi c action steps and corresponding dates their

managers should be taking to set goals. A similar note was sent for mid - year and

end - of - year reviews. The notes asked the Associates to let their local HR leaders

know if those steps weren ’ t occurring.

CEO - led accountability: Every six months each executive team member would meet to present his or her talent review to the CEO. Actions promised at the last

meeting were reviewed and progress noted. Leaders knew that promises were

being tracked and reviewed, and that progress would need to be shown at the next

meeting.

While accountability was applied in many different ways, the common outcome

was that leaders understood that focusing on talent during the turnaround (and after)

mattered, and that they were responsible for getting it done.

The progress made on talent issues was helped by the various factors discussed

above, from a committed CEO and SVP HR to the urgency of a turnaround to the dra-

matic change in talent practices. But it would not have been possible without the desire

of every manager at Avon to do the right thing. We started with a culture that valued

every Associate, and we channeled that positive spirit using sound processes and

unfl inching discipline. We didn ’ t delude ourselves into thinking that those talent

changes would have been possible without the Avon culture.

THE RESULTS OF A TALENT TURNAROUND

We described the six weaknesses in Avon ’ s talent practices at the beginning of this

chapter. Over the initial turnaround period (twelve to eighteen months), we moved

those talent processes:

From opaque to transparent: Leaders now know what ’ s required to be success- ful, how we ’ ll measure that, how we ’ ll help them, and the consequences of higher

and lower performance. They know their performance ratings, their potential rat-

ings, and how they can change each of those.

From egalitarian to differentiated: We actively differentiated levels of Avon tal- ent and provided each level with the appropriate experience. Our highest - potential

leaders understand how we feel about them, and they see a commensurate invest-

ment. Our lower - performing leaders get the attention they need.

From complex to simple: Managers now do the right thing for their Associates both because we ’ ve lowered the barriers we previously built and because we ’ ve

helped them with value - added tools and information.

From episodic to disciplined: Processes now happen on schedule and consis- tently around the world.

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Copyright © 2009 John Wiley & Sons

Avon Products, Inc. 15

From emotional to factual: Talent decisions are made with an additional layer of qualitative and quantitative information drawn from across many different leader

experiences.

From meaningless to consequential: Leaders know that they must build talent the Avon way for both their short - and long - term success.

MEASURING THE TALENT TURNAROUND ’ S SUCCESS

The specifi c talent practices we targeted have seen signifi cant improvements in effec-

tiveness. Ratings of Immediate Manager (including items such as clear goal setting,

frequent feedback, and development planning) have increased up to 17 percent, with

directors and vice presidents giving their immediate managers nearly a 90 percent

approval rating. The ratings of “ people effectiveness ” (which captures many HR and

talent practices) increased up to 16 percent, including strong gains on questions related

to dealing appropriately with low performers and holding leaders accountable for their

results.

More transparency has allowed faster movement of talent into key markets. Sim-

pler processes have allowed us to accelerate the development of leaders. Holding lead-

ers accountable for their behaviors has improved the work experience for Associates

around the world.

While these changes were hard - fought and we believe created much more effec-

tive processes, a more important set of metrics exists. Avon has achieved all of its

expense savings goals since the start of the turnaround and has recently reinforced

its commitments to even greater expense reductions. Even with this lower cost base

and 10 percent fewer Associates, Avon has grown from revenues of $ 8B in 2005 to

nearly $ 11B in projected 2009 revenues while delivering strong single - digit earnings

growth.

We can ’ t say with certainty that our new talent practices contributed to either

those cost savings or our revenue increases. We are confi dent, however, that the talent

practices now in place will deliver better leaders, faster, to help Avon meet its business

goals.

REFERENCES Effron, M., Greenslade, S., & Salob, M. (2005, September). Growing great leaders: Does it really matter? Human

Resource Planning Journal, 28(3), 18 – 23.

Goldsmith, M. (2006). Try feed forward instead of feedback. In M. Goldsmith & L. Lyons, Coaching for Leader- ship (pp. 45 – 49). San Francisco: Pfeiffer.

Hunter, J.E., Schmidt, F.L., & Judiesch, M.K. (1990). Individual differences in output variability as a function of

job complexity. Journal of Applied Psychology, 75 (1), 28 – 42.

Jones, C. (1986). Programming productivity . New York: McGraw - Hill.

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Copyright © 2009 John Wiley & Sons

16 Best Practices in Talent Management

Marc Effron helps companies build better talent, faster. As a talent management leader, Effron has worked for, and consulted to, some of the world’s largest and most

successful companies, including Bank of America, Citigroup, Philips Electronics,

Reliance Industries (India), and Alcoa. He applies a simplicity-based approach to

building leaders, which emphasizes transparency and managerial accountability.

Effron’s recent experience includes serving as vice president, Global Talent Manage-

ment, for Avon Products and as the global practice leader for Leadership Consulting at

Hewitt Associates. At Hewitt, Effron created the Top Companies for Leaders study, which is now an annual cover story in Fortune magazine. He was also senior vice pres-

ident, leadership development, at Bank of America and held other corporate and con-

sulting positions. Effron’s latest book is One Page Talent Management: How to Build Better Leaders, Faster (Harvard Business Press, 2010) with co-author Miriam Ort. He has co-authored two books on leadership, written chapters in eight edited books, and

is a frequent speaker at industry events. He is the founder of the New Talent Manage-

ment Network, the world’s largest organization for talent management professionals.

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Copyright © 2009 John Wiley & Sons