Biting off a chunk of change
Atul Khosla, vice president, APAC human resources, Mondelēz International
Atul Khosla has been the vice-president of human resources in Asia Pacific at Mondelēz International since January 2013. Previously, he spent 11 years in a range of roles at Novartis, most recently as the head of HR for the JAPAC region. Having also worked with Bharti Airtel and PepsiCo, his HR expertise spans the US, Europe and Asia.
Q What’s the context of the transformation journey Mondelez commenced three years ago?
We call Mondelez Asia’s favourite snacking company, with brands which consumers love such as Cadbury Dairy Milk, Oreo, Toblerone and Milka. In Asia, we are in the range of US$5 billion in revenue, with close to 20,000 people.
Around three years ago when I joined, our businesses started maturing. From a single category business, we became a multi-category business. When you grow scale and size, it brings complexity.
Our capability to build our talent and leadership to run a large business at the same pace as the growth of the business was challenged a little bit. The big businesses started to stumble a little because we didn’t have the right capabilities to run them. And that’s when the transformation agenda came into the picture – how do we build a strong core in the organisation which will help us to stay competitive and help us to win every day, while building capabilities for sustained success?
Q How did you contribute to this mandate early on?
When I joined, we were in transition to creating Mondelez. We had been growing in high double-digits in the previous three years in this region, and had just started getting the first feel of the headwinds.
If you look at our background, we have grown through successfully bringing together different businesses over the last 10 years – including Cadbury, Danone’s biscuit business, Kinh Do Foods. What struck me was our ability to welcome different cultures to create a space where everybody could co-exist. We just took the best of everything, and created a collective organisation.
This worked till it worked – and then we started facing challenges. For example, our costing models were very different, or the way that we gathered talent information - which created complexity and impacted efficiency.
So we made the choice to transform, with two aims – to stay on the growth track and continue to deliver results in the short-term; and fix our fundamental issues to build sustainability for the long-term.
After assessing our challenges, we embarked on the journey in 2014, deciding to have one common operating model, and align it with the One Mondelez way of doing things. We moved away from our country-led model to a category-led model.
I always felt this organisation was change-agile because we had merged multiple companies. But this was the first change which was not time-bound, it was about embedding a different way of working, embarking upon a journey that our people were not used to.
Q Broadly speaking, what were the biggest two or three changes?
The three main pillars of our change strategy were capacity, capability and the right culture.
As part of capacity, we looked at the right structural design that would enable this organisation to be successful. We scanned the region, markets, categories, and aligned each one with a new globally-common consistent operating model, which included changes in reporting lines.
The next step was to assess our capabilities. Do we have leaders who can handle multi-category, complex large businesses? We filled those gaps both through acquiring skills which we didn’t have, and building capabilities which we could.
We also put in place an end-to-end three-tiered leadership development agenda to prepare our talent for bigger, more complex roles. For example, if you have a successful marketing manager who becomes a mediocre general manager, you risk losing a great talent, while the business also suffers.
So while we had global programmes to leverage, we created programmes to address the specific needs of this fast growing region. We collaborated with Singapore Management University to create a customised six-month intervention, under which we have already covered 100 early leaders who we feel will be part of our senior leadership team five to seven years down the line.
We have since covered close to 500 leaders in the last two-and-a-half years.
Once we figured out the capabilities required to be successful for our structure, we focused on the culture. What would define associates part of Mondelez?
Earlier, we were bringing together different companies with their different cultures which made this place very vibrant – but it also created an untenable cost structure. We needed resources to pull out of our existing cost structure and deploy back into our brands and our people. We put in place consistent common policies, and brought in an awareness of things which we don’t need to do or have.
The leadership development programmes, for example, were a USD five million investment. So how do we take out some resources and deploy those back into building our leadership capability? This was a culture shift in the mind-set. You bring in a focus on costs, it has its implications, which we helped people with.
Another big shift was working with ambiguity. People were very comfortable with what was expected of them, but we were now moving into a more dynamic environment where we wanted them to understand that the structure will not stay stagnant. Simplicity was the answer – making sure there is one way of doing things.
Q On the ground, what initiatives did these three elements translate to?
Our new category-led model made significant roles location-agnostic, resulting in a significant number of people reporting to managers in another geography - close to 1,000 people reporting into different countries, for example, someone in Indonesia was now reporting to someone in Australia.
Language was a barrier, as associates were uncomfortable calling up their supervisors. So we got them everything they needed to build connections remotely – for example, technology like video conference. We also created programmes on remote working, provided tools to break language barriers, and ran regular programmes to coach people through the change.
Q Reporting to a boss in a different country is a huge deal – how did you help employees cope with that?
That’s the dilemma for an organisation with 20,000 people. Apart from costs, it’s not physically possible to have everyone bond in one place.
We did kick-off meetings by function and category. We started off with the APLC (leadership council) meeting, where our top 100 leaders came together face to face in Bangkok last year. We onboarded these leaders, and we provided them with tools and data to take back to their teams. Then they went back and replicated that process with their respective teams.
Each function and category leader pulled together their top teams, and led workshops, explaining new ways of working, creating dialogue around what was changing and how we will enable the change. In my HR meeting, we addressed all the questions under the sun - how are HR solutions going to work moving forward, or how are we going to recruit moving forward?
We encouraged our people to build connections using technology, by running remote team recognition events and meetings. In this way, people started getting comfortable with each other without the pressure of who they’re accountable to.
Q How did you keep the communication lines open throughout?
One was over communication – we made sure people had a line of sight to everything we were driving. For example, when we announced the new operating model, we announced the AP leadership team first. Then we engaged the next level team to share further about how the organisation will be structured, and provided clear timelines on the next round of announcements. Then we engaged the next level similarly.
We were also very transparent in our quarterly town hall meetings about our cost savings and where we had re-invested them. We have started our first employee services centre in Manila, which takes care of all back-end employee transactions for the region, which creates capacity for the organisation to focus on consumers.
Another initiative was coffee with the leader, where every week we set up a time for anyone to come and ask the leader any questions in the cafeteria – even what the change means for them specifically. And this made it very real for them, and us.
This was the first change which was not time-bound, it was about embedding a different way of working.
Q Now the journey is ongoing, but what key milestones have you measured so far?
We track our ability to attract the right kind of talent - are we an employer of choice?
We now have our own recruiting mechanism, which is maturing every year. A significant amount of hiring is done internally by us now, which enables us to know the candidate experience and the quality of candidates getting attracted.
We also measure our ability to build a deeper succession pipeline. One example is our top 100 roles – what percentage of my roles will have a ready-now or ready-in-the-short-term successor? Over half of our top 100 roles have ready-now successors.
Another thing I’m really proud of is our diversity in leadership – specifically gender diversity. Over 40% of our top 100 roles are gender diverse.
Q How did you go about setting up your in-house recruitment team?
We were working through our external search partners, like many companies do, until we realised that at the pace of growth we have, the need to build an internal pipeline is so strong, that we need to build our own hiring capability. We created a brand new talent acquisition function as well as infrastructure around it.
We can now provide an outstanding candidate and onboarding experience, because we are directly in touch with the candidates. Over 90% of the white collar hiring last year was done internally – more than 1,500 people.
Q How do you evaluate the potential and performance of people once they are on board?
Moving away from 2013, we replaced multiple country-based talent assessments with one way of assessing talent, consistent with what we do at a global level.
We have a leadership commitment to our talent agenda, whereby six times in a year, our AP leadership team meets to review our top talent’s potential and development plans. We plan focused development interventions for our talent by creating right experiences and regular coaching in very diverse set up.
That’s the beauty of this region, you can put people in multiple experiences across developing markets.
The by-product of this development journey has also been we’ve got a critical mass today of 500 leaders who understand what Mondelez is all about, and who bring passion and engagement, because they see the investment in them, and they see themselves as part of this long term journey to drive this change.
I am proud to say our AP leadership team, functional and country heads, own this talent agenda. HR only facilitates and enables. I take it as the biggest compliment, as the HR leader, when the talent agenda doesn’t belong to us anymore.
Employee attrition in the FMCG market in Asia is typically in the range of 15-16%, and we are on the lower end of that curve - i.e. we are closer to 12 rather than 18.
Q So now all functional or category heads are responsible for developing their own successors?
Absolutely. We target typically in a given time that we should have ready-now, ready-short or ready-in-one-two-years successors for our roles.
We are not successful all the time, because we are a fast moving organisation. Last year, for instance, we placed 60 people in new roles because of the new structure. The moment you have this big change, you deplete your pipeline. But that’s a good problem to have.
Q How do you track your metrics on the culture aspect of change?
We run our engagement survey, “unleashment survey”, enterprise-wide every year, where every single associate provides feedback on pre-defined parameters on how they see this organisation. It tells you right away how people feel about things.
So we get very real feedback every year and to track it we do dipsticks. Once we have the results, we get 20 volunteers from our top 100 leaders in a room called the Hothouse. They pull out three or four big areas in which our people are telling us they need help.
They present a plan to the AP leadership team, where they first get alignment, and then implement those actions. Then we communicate this back to the people – what they told us and how we are going to act on it, so they see the connection in this process.
This has had an impact on employee retention as well. Employee attrition in the FMCG market in Asia is typically in the range of 15-16%, and we are on the lower end of that curve, so if the range is 12-18, we are closer to 12 rather than 18. For the first-year retention rate, we are closer to the market mid-point in terms of attrition, i.e. about 15-16%.
Image Credits Art direction: Shahrom Kamarulzaman Photography: Elliot Lee, Nikon Ambassador (Singapore) - www.elliotly.com