- Developing a fully integrated, corporate-wide leadership development initiative was the initial challenge American Standard Companies (ASD) brought to Wharton. The goal of the needs assessment process was to tie ASD’s business strategy to the critical skills their executives need to succeed in a complex and changing global business environment.
- Wharton focused on three perspectives: the external view of ASD, including channel partners, investors, and industry analysts; the internal view from ASD management, employees, and board members; and Wharton’s analysis.
Working with the senior management team, Wharton:
- Identified six strategic objectives and critical business challenges that ASD would face in the next five to seven years.
- Identified key organizational capabilities, individual skill sets, and corporate culture required to address those challenges.
- Assessed the current organizational capabilities, individual skill sets, and corporate culture to determine the gaps.
With 61,000 employees working in 50 countries, American Standard Companies (ASD) has its roots in the US, but its business is global.
The company operates three market-leading businesses — air conditioning systems and services (sold under the Trane® and American Standard® brands), bath and kitchen products (sold under various brands, including American Standard® and Ideal Standard®), and vehicle control systems (based in Europe and sold under the WABCO® name). Each business manufactures products that meet basic needs — the air people breathe and the comfort of their indoor surroundings, the water they use, and their level of safety on the highways they travel.
As a company with diverse brands and global operations, ASD found itself missing a basic function: an enterprise-wide talent development system. The company was not actively and systematically cultivating its executives to take over newly created or vacated upper-management positions and was hiring expensive mid-career managers from outside the organization. As well, executives did not have a well-structured forum for communicating with their peers across business units, which prevented the sharing of best practices and the establishment of common foundations.
“We needed to develop a talent management function that would build consistent strengths across the business units, provide opportunities for career advancement, and ensure that we were prepared for succession,” said Senior Vice President Larry Costello, head of human resources for ASD. “We worked with Wharton to create a system that would accomplish this by building the specific functional strengths and internal capabilities our businesses need to achieve success.”
American Standard and Wharton assembled an internal steering committee for the project staffed by senior leaders from across all ASD business units. Wharton’s program design team conducted interviews to determine the critical skills needed for success. The design team then surveyed the top 350 managers across all business units and interviewed additional ASD executives, channel partners, investors, and board members to determine the current strengths and weaknesses in ASD’s corporate skill set.
As a cross-check to the internal and stakeholder perspectives, Wharton faculty members then reviewed ASD’s strategy, as well as critical industry trends, and determined the essential skills needed to achieve the strategy — which closely matched those determined by ASD.
As part of a collaborative design process, Wharton held regular meetings with ASD’s steering committee to report and discuss the findings from the needs assessment. The final meeting, in which Wharton made recommendations for the leadership development curriculum, was held at Wharton’s campus and resembled an actual executive education program, including:
- Pre-program reading assignments that created a common language for the talent management and strategy discussions
- Two sessions taught by Wharton instructors: The Nomination Process and Talent Management with Peter Cappelli and Critical Thinking with Paul Schoemaker
- A program website
- Evaluation forms for Wharton faculty and design team
Wharton proposed a multilevel initiative featuring leadership development education at all levels within the organization, from the front-line leaders to the senior executive team and board of directors. At the front-line level, the initiative establishes common foundations and practices across all ASD units, with opportunities for self-paced learning available to each of ASD’s 61,000 employees. To maintain a consistent approach, leadership programs for managers within each business unit are aligned with the broader corporate initiative to create an integrated development pipeline. Ultimately, the goal is to prepare a talent pool of strong, strategic leaders — who share a common language and approach to business leadership — to facilitate succession planning.
The top high-potential managers would begin their leadership training with The Leadership Journey I, in which a cohort of 35 to 40 individuals participates in a two-module program with team-based, action-learning projects. At the next level, senior managers and executives would participate in The Leadership Journey II, in which a cohort of 25 to 30 executives participates in a global multimodule program with in-depth projects tied to critical strategic initiatives.
Leadership Journey Master Classes were proposed for the board of directors and senior executives to explore emerging strategic issues and ensure ongoing integration of the Leadership Journey programs with the key strategic priorities of the firm.
“We were clearly impressed — both with the proposal that Wharton presented and the process itself,” Costello said. “By taking the time to learn about our businesses, our strategies, our skill gaps, and our culture — and, most importantly, involving us in the process — Wharton was able to construct an integrated set of programs that we are eager to implement.”