After five straights years of ten percent plus growth and twenty-five percent operating profit growth under CEO Andrea Jung, the company suddenly began losing profits. One of the main reasons of this lost was the fast growth of Avon that couldn’t be supported by its employees. As with many growing organizations the structure, people and processes that were right for a $5 billion company were not necessarily a good fit for a ten billion dollar company (Goldsmith & Carter, 2010, p. 2). There were weaknesses that hurt the effectiveness of the employees at the talent management practices.
Decisions on talent movement, promotions, and other key talent activities were often influenced as much by individual knowledge and emotion as by objective facts. Neither managers nor Associates have any idea about how the talent practices work. Even the HR department wasn’t sufficient to answer basic questions that might be asked by managers like “What will happen to me if I don’t do this? ” (Goldsmith & Carter, 2010). Thus, changing at the talent management practices was a necessity for the company in order to increase the operation profits.
The change theory typified in Avon Products case study is the 360 degree assessment process along with performance management and succession planning this would deliver the expected results if they were consistently and flawlessly executed. They used this method to build talent practices that were easy to implement. The proposed talent management model was integrated business and human resources strategy, talent management processes, organizational culture, provides a systemic approach, and results in having talented leaders and individuals available to accomplish the mission of the organization.
One of the most simple and powerful changes was to bring transparency to every talent practice. Avon’s 360 degree assessment process was hardly a model of transparency when the turnaround began. The new team leader requested copies of each VP’s 360 degree assessment due to understand common behavioral strengths and weaknesses. 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.
Helping to make the transition to transparency easier, the new 360 assessments and report differed from typical tools that rate the participants on proficiency in various areas. The type of evaluation information that was collected was from complex to simple, from egalitarian to differentiated, from episodic to disciplined, from meaningless to consequential, from opaque to transparent, from emotional to factual and from meaningless to consequential.
Leaders know what is required to be successful, how to measure the situation, how HR and management can assist them, and the consequences of higher and lower performance. They know their performance rating, their potential ratings and how they can change each of those. They actively differentiated levels of Avon talent and provided each level with the appropriate experience. Their highest potential leaders understand how management feels about them, and they see a commensurate investment. Their lower performing leaders get the attention they need (Silzer & Dowell, 2010).
Managers do the right thing for their associates both because the barriers have been lower than what they previously built and because management helped them with value added tools and information. Processes began to happen on schedule and consistently around the world. Talent decisions are made with an additional layer of qualitative and quantitative information drawn from across many different leader experiences. Leaders know that they must build talent the Avon way for both their short and long term success.
When the turnaround began, no global process for understanding or acting on associate engagement issues existed. Select regions or department made efforts of varying effectiveness, but there was no integrated focus on consistent measurement and improvement of engagement (Silzer & Dowell 2010). In designing the engagement process, management applied the same three questions: the business benefit, the simple path, to adding additional value. Management accepted the substantial research that showed a correlation, and some causation between increasing engagement and increasing various business metrics.
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 goals were to write the questions as simple as possible, so that if managers needed to improve the score on a question, their options for action would be relatively obvious. Management was confident 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 benefit from the incremental improvement.
The challenge was to determine and imply communicate to the managers what the right actions were. Management with the assistance of a research team developed a statistical equation model that would become the engine to produce the answers. The statistical equation model allowed them to understand the power of each engagement dimension, for example, immediate manager, empowerment, senior management, to increase engagement, and to express that power in an easy to understand statement (Goldsmith & Carter, 2010).
Avon’s mission is focused on six core aspirations the company continually strives to achieve. They are leader in global beauty, building a unique portfolio of beauty and related brands, striving to surpass competitors in quality, innovation, and value, and elevating Avon’s image to become the world’s trusted beauty company. Empower their employees to achieve economic independence by offering a superior earning opportunity as well as recognition, service and support, making it easy and rewarding to be affiliated with Avon.
Deliver superior returns to shareholders by pursuing new growth opportunities while maintaining a commitment to be a responsible, ethical company and a global corporate citizen that is held as a model of success (Avon Products Inc. , 2012). Avon Products Inc. is the world largest direct seller right now. The changes in 2006 set the stage for renewed growth by enabling them to be faster and nimbler, but since then the business has grown significantly and become increasingly complex.