At last year’s Competencies Tools and Applications conference staged by Linkage in London, and sponsored by Competency, Stephen Martin of Kimball Consulting, and Bronwen Curtis, Executive Vice President for HR at Avon Cosmetics, presented on the development of competencies and their strategic applications with the Avon board. The session was packed, and many reacted to the presentation with some envy ~ few businesses get the kind of senior sponsorship for HRD initiatives that clearly featured at Avon. And as the presentation unfolded, the depth, range and impact of the initiative impressed many more.

Competency asked Stephen Martin to write-up the main features of the Avon programme.

While most sign-up to the idea that HRD initiatives are most effective when they start at the top, in reality only a minority are given that opportunity. But at Avon Cosmetics, the Board saw for themselves that they needed to change the way they identified and developed talent for the most senior roles in the business ~ and they were clear that the solutions started with understanding what it took to succeed at board level, and how that was different from even the most senior levels just below them.

Avon is a large, complex business. With 150,000 Representatives in the UK, it boasts that "There are more Avon ladies than soldiers in the British Army", and it dominates the direct-sales sector for it’s core business – cosmetics, fragrances and toiletries (the CFT market) by a considerable margin. In direct sales in this sector, it really has no substantial competitor. With world-wide sales in excess of US$5 billion, and 2 million representatives across 131 countries, Avon Products Inc. is a significant business.

Outside of North America, the UK is one of the most significant earners for the corporation, the more noteworthy for the fact that the UK is a very mature and sophisticated market, with a wide range of choice for the customer. Yet UK sales continue to grow year-on-year, and with a substantial proportion of the product manufacturing and distribution for Europe centred in the UK, the Head Office in Northampton is in effect the Head Office for Europe.

Up until recently, however, and despite the complexities and scale of the business, development and succession to senior levels relied very much on a ‘traditional’ methodology ~ the most technically talented tended to rise to the top within their business function, and were accordingly ‘noticed’. As needs at board level arose, this population were the first resource, supplemented by external candidates when necessary. Selection, either internally or externally, followed a well-worn pattern based on classic interviewing processes coupled with internal intelligence where available.

While the process itself felt comfortable enough, the results didn’t. Over the years, too many successful candidates ultimately could not offer the critical skills and capabilities which board-level roles seemed to demand, and just as bad ~ the process was not trusted or understood by the senior internal population. Consequently, Avon was losing many of its most talented people just at the point when they might be ready for an executive role. The status quo was no longer acceptable ~ and unusually for a board, the Avon executive team saw the problem and the solution starting with themselves.

Issues and Questions

In the presentation at last year’s conference, Bronwen Curtis used these slides first :

What Bronwen was highlighting here was that, at around three years ago, the senior management team had recognised through the existing HR processes that the business was not developing individuals to their potential, that those apparently capable of making it to the highest levels were not making it, or failed when they did, and that nobody really knew why.

It was also clear by that stage that the strategy of the organisation would require more from less people, in fewer organisational levels, with greater freedom and willingness to act, and with greater accountability for their actions. Attempts at internal promotion to what Bob Garratt¹ calls ‘The thinking brain of the organisation’ – the board – had been too frequently unsuccessful, and yet it was clear that the external market was full of risks too, particularly when you are not sure what you are looking for.

The senior HR manager with accountability for development under Bronwen Curtis’s re-focused HR function ~ Sherrell Pape ~ was the first to identify a competencies-based approach as having the potential to address these issues. Sherrell recognised that carrying on with the same approaches and expecting a different result was not going to achieve what was needed, and she recognised too that the board was ready for a more radical programme; it was a good opportunity to enrol their commitment.

While significant initiatives around performance management, compensation, training and recruitment were taking place throughout the organisation, the sponsors of those HRM-agenda programmes became increasingly convinced that this ‘new’ competencies approach was more systematic, more developmental in nature, and more closely aligned to the strategic needs of the business than anything they had seen out of HR before.

As consultants we were asked to help design and deliver tools that provided solutions rather than sold concepts, and which allowed for the development of internal capability to provide them over time through the transference of expertise. The board wanted to understand, identify and measure those factors that differentiated superior performance at board level, and ultimately at all other levels, and to apply that learning quickly to internal development, and to internal promotion and external recruitment.

The Project Structure

The project plan was built closely in line with the classic design of professional competency-analysis processes, with one important difference – from the outset the focus was on applications. It was vital for the credibility of this ‘new HR technology’ and for the achievement of the strategic HR objectives that there were, in the language of Kotter, some ‘short-term wins’. We were definitely in the ‘organisational transformation’ business, and Kotter’s² famed eight steps were a subliminal road map for the whole process.

The key stages of the process were :

1. Primary research and analysis ~ including strategic and ‘Behavioural Event’ interviews, and a thorough document search, looking at strategic plans and performance commitments and measures for the UK business.

2. Creating a ‘Competencies Framework’ ~ identifying from the research a wide range of potential competency categories, transcribing and meticulously coding the behavioural data arising from the interviews, slotting the data and identifying the data-emergent categories, and creating a source-referenced numeric and behavioural data-base.

3. Identifying and defining Competencies ~ consolidating the ‘Framework’ driven by the data-patterns (distribution and cross-relationships, critical context, critical outcomes), developing definitions from the data-content of the consolidated categories, and focusing and identifying the differentiating factors by work-level and performance.

4. Organising the behavioural data ~ addressing the demands of the challenging applications this work was intended to support, through isolating and defining individual levels of sophistication within the behavioural data, for each competency.

5. Feedback and presentation to the board ~ including taking them through the methodology after the interview stage, looking at the results in some detail, and committing to specific, early actions

The first stage was initiated with focused strategic discussions with each individual Board member, their European functional peers, the President of the UK business, and a cross-section of global senior executives who had a clear stake in the success and output of the UK board, and had a role in defining the expectations of them. The idea was to get a more rounded, and longer-term view of the strategic influences and context within which the UK Board operated, and through the subsequent and major part of the research, to ascertain through ‘Behavioural Event Interviews’ with both the UK and non-UK executives, what the key differentiating competencies were, as expressed in actual behaviour, for success at this level.

From the Initial Framework to the Final Model

From the strategic and documentary input, an initial broad framework was built. The categories at this stage captured a wide range of factors, which from what was known at that stage, we anticipated would be sufficient for the subsequent data coding process. All the interviews, including those with global Avon executives senior to our target population, were tape-recorded, transcribed and meticulously analysed. They generated a rich resource of individually coded behavioural statements, addressed to their originating interview transcript, which were all slotted into the ‘framework’.

From this the board were able to see some interesting things. The data-distribution, illustrated in the chart above, illustrated two new pieces of information ~ the range of capabilities that were utilised by VP’s in dealing with critical elements of their roles, and the frequency that those capabilities were brought to bear. In essence, this gave a good indication of how VP’s spent their valuable time, and gave them some data on which to start addressing issues like – is this how we should spend our time?

Frequency is only one part of the picture of course. For example, there was a competency category in the framework called ‘Pro-Active Systems Thinking’ ~ a rather cumbersome title for activities to do with focusing and utilising the systems capabilities of the organisation in pursuit of the developing strategic agenda. Only a small number of behavioural statements were coded to this category, but because of the strategic significance of technology to the marketing, sales and distribution objectives of the business, thinking pro-actively at board level about new systems applications and tools was essential, and over time would become more so.

Using the frequency distribution, and by analysing overlaps and differentiators, and by checking context and re-coding, the original 23 ‘Framework’ categories were consolidated into the final 13 ‘Competencies’ ~ giving the board a new, clear picture of their roles, the key capabilities those roles required, and how their energies and capabilities were focused.

Because of it’s strategic significance, ‘Pro-Active Systems Thinking’ made it into the final cut as a separate category, as did other categories with low frequency but high impact. Some key themes emerged from the consolidated competencies model :

• that analytic and creative thinking capabilities were critical to success at this level
• that functional management, team leadership and focus on action and achievement did not disappear as VP’s considered the loftier issues of strategy and vision; such matters remained critical, at high levels of sophistication, and continued to demand the appropriate attention of VP’s on a frequent basis
• that a new set of issues, principally around the dynamics of establishing and building senior and networked relationships, became a key feature at this level. This cluster contained the clearest differentiators with the organisational levels just below the board, and offered the biggest clues as to why previous attempts at promotion or external appointment to the board had been sometimes unsuccessful, and what future senior development programmes might focus on.

The competencies that were identified through this process are shown in [X], with some included in detail as illustration. Within them, a set of consistent and differentiating themes emerged which conform to Elliott Jaques³ pioneering work in identifying and assessing meaningful management ‘strata’ by analysis of the time-horizons featuring in different roles (as distinct from typical organisational levels which are more usually defined by pay and status than real differentials in work content). It was clear to the Board that they were operating much of the time in relatively short time horizons ~ peaking at around 18 months to 2 years ~ whereas the strategic demands and expectations of the business required thinking and action over a 3 to 5 year horizon (moving from Strata III to Strata IV in Jaques terms). One key impact of their current mode was that the people under them were not allowed the room to think and act in time-scales appropriate to their nominal level, and were not therefore developing senior management skills in this important respect ~ and so on down the management chain.

Jaques' two other key themes ~ task complexity (the demand side of the equation) and cognitive processing capability (the supply side) are also reflected effectively in the competency work, and run consistent with the time-horizon data.

Board-Level Role Analysis : Doing It For Themselves…

The key stage after the completion of the competency model, using the springboard of a successful Board presentation, was to move to an analysis of a ‘generic VP’ role, profiled across the model. The intention was to identify the threshold for new-entrants at this level, and to isolate the factors that differentiated this role from those at the level just below the board. For this stage, Board members were fully trained and used as the analysts; the result was theirs, not HR’s or anyone else’s.

There is not space here to detail the role-analysis process ~ but essentially it focused around using the differentiated behavioural levels identified within the competencies to specify the difference between what may be acceptable as a new entrant at this level as against the reasonable expectations of experienced board-level practitioners. The board recognised that, in the absence of the information the competency model offered them, their collective approach to new entrants had tended to be a little unforgiving, expecting them to ‘hit the ground running’. Unfortunately, some of them just hit the ground.

Behavioural Assessment : Board Selection and beyond…

Concurrent with the research and development of the competencies model, an assessment process had been designed for use in development and selection applications, and all board members were then trained in the skills necessary for behaviourally-based interviewing, and in collecting and analysing behavioural data. This was to ensure that they understood the process by which decisions using these outputs were made, and so that they could work as skilled assessors in the forums which generated subsequent promotion, development and selection outcomes. Again, the decisions would be theirs, and they made sure they were equipped to make them.

The first use of the competency model and the role analysis based on it was in a board selection process, assessing both internal and external candidates through a programme illustrated below. The assessment ultimately produced a successful candidate who, as acknowledged by the board-level assessors, was not necessarily in the ‘Avon image’, but who did have the capabilities that had been identified as most important, at the appropriate levels. Their own data and analysis said so. Since appointment, that individual has proceeded to sponsor an aggressive agenda of change focused on the strategically critical areas of customer service and product distribution, exactly the issues identified by the board as key deliverables in advance of the recruitment process.

The fact that the first use of this work was in a selection context was not entirely intentional, but as events unfolded, that became the priority. Shortly after the selection forum, adaptations were made to the process which got back to the original agenda ~ internal development for senior, aspiring and talented individuals within the business. For the selection forum, a specific profile for that particular role had been drawn up, using the same process as before. In the development context, the profile for the ‘generic new entrant VP’ was the point of comparison for participants, and given the exclusively internal population and the purpose of the exercise, a higher degree of openness around the criteria was possible. In particular, nomination for the development centre commenced with the potential participants self-nominating on the basis of their own assessment of their readiness, using the behavioural data and VP profile to educate their analysis.

The ‘new technology’ of competencies and behavioural data enabled nominees to better understand the likely requirements of them at the VP level, and to be more objective ~ particularly with themselves ~ about where they currently stood in relation to the competency requirements of the senior roles. At this stage, some chose to work on a few things before putting themselves forward; others moved on into the development centre with greater confidence and an appreciation of what they might need to learn.

Over time, the application of the VP model has extended beyond succession-based selection and development applications and into development and performance management applications for the executive team themselves, driven by Bronwen and sponsored by a new President for the UK, appointed after the model had been researched and introduced. The use of competencies in these ways has had other organisational impact, enabling for example a much more open and engaging approach to cross-functional movement and joint-sponsorship of development placements and mentoring. (One of the critical points of understanding for the board was that success at this level required first-hand experience of a range of functions; the ‘specialist expert’ route to the top was not viable in the face of modern business-management complexities.)

For the development agenda at Avon, the lid is being lifted-off to the extent that many of those with real potential are appreciating and being challenged by the new expectations, while others may show signs of discomfort in the new terrain. The flatter structures, broader roles and complex demands of this new era are not comfortable for everybody, and it is in addressing the emergent needs of these new constituencies that the HRD function is now focussing, against a clear strategic template, and with clear competency analysis on which to progress.

The programme of competency analysis has now extended into all other levels of management, involving a cross functional and diagonally representative project group, all trained in the key elements of competency discovery. The outcomes of the VP level programme continue to develop; they are best summed-up by Bronwen Curtis’ final two slides at last year’s competency conference.

‘Knowing what to do about it all’ is not a bad outcome, given the complexities, risks and high political profile of the agenda. It says a lot about the power of competencies to offer solutions to business problems ~ particularly when the board is with you.

Notes and references

1. Bob Garratt, The Fish Rots from the Head, Harper Collins Business, 1996
2. John P. Kotter, Leading Change: Why Transformation Efforts Fail, Harvard Business Review, March 1995
3. Elliott Jaques, Requisite Organisation, Cason Hall & Co., 1989;
4. Elliott Jaques and Stephen Clement, Executive Leadership, Cason Hall & Co., 1991

This article was originally published in Competency & Emotional Intelligence / Volume 5. Number 4, Summer 1998.