There’s a lot of talk about developing a talent-first culture—that is, a culture where people serve a critical role in developing a company’s growth strategy. However, a talent-driven company requires two critical elements: the range of skilled talent needed to execute game-changing initiatives and company-wide adoption of a new way of working. For some companies, achieving these two elements may prove challenging.
But while it may be challenging, it’s not impossible if you approach it with the right strategy.
Volvo’s Cinderella story
The company didn’t have the capacity to compete against mass-market brands such as Toyota. So Volvo decided to compete in the premium luxury-brand market against the likes of BMW. This, however, required redesigning its product line. The strategy pivoted around revamping its workforce. The result: Industry reviews praised its cars, and net revenue hit an all-time high in 2017.
Below are four essential elements of its successful talent change management.
1. Identifying the Talent Need
After detailed analysis of their current employees, CEO Stefan Jacoby and CHRO Björn Sällström determined that the company required a large infusion of outside talent. External talent provided not only skills missing in-house but also fresh perspectives. “Technically, cars today are very different from 10 years ago,” says Sällström. “Once, you needed mechanical engineers. Today, there’s a greater need for software engineers because cars are computers more than anything else.”
2. Assigning the Right Stakeholders
Jacoby and Sällström worked closely together throughout the initiative. Their collaboration followed a top-down change management model involving a core group that McKinsey & Company calls the G3: CEO, CFO, and CHRO. Because the initiative pivoted around outside talent, they placed Sällström at the center.
3. Targeting Unexpected Talent Pools
Transforming Volvo’s product line required new ideas and processes. To Sällström, this meant seeking talent outside of the automotive industry. He hired sales and marketing people from Google to change how Volvo used technology. He hired Nokia engineers, trained in consumer-centric design, to overhaul Volvo’s radio and navigation systems.
Jacoby and Sällström understood that for this initiative to be successful, the entire company needed to think differently about how it approached designing, making, and selling cars. To shake workers out of old thought processes, they hired executives who had previously initiated strategic changes at bigger companies.
4. Creating a Comprehensive System for Integrating New Talent
Between 2011 and 2015, the company’s engineering and development departments welcomed 3,000 new employees. Communication and training were vital to ensure company-wide adoption of the new talent and entrepreneurial mindset.
Sällström’s team began by assembling a key group of 300 Volvo employees to create a groundswell of support. Each of the 300 employees was given a personal coach. The team held regular live chats with those employees and implemented several programs geared toward increasing the staff’s entrepreneurial ethos. The team also created a 30-person “catalyst group” tasked with showing other employees how work could be done differently.
Remember it’s a marathon, not a race
A talent-driven company involves how you source and utilize all talent—from independent contractors (ICs) to employees. Creating change with ICs might involve different processes, but the journey is similar in that it takes a well thought-out and steady approach.
“Even with all this outside DNA, it’s a long journey to change the mindset of an organization. It’s still a work in progress,” says Sällström. However, Volvo appears to be on the right track. Sales were up 53% in 2016 compared with 2010, and profits rose for the third consecutive year.
If you’re unsure about how to begin your change management strategy or you don’t have the resources to execute it, ICs can be a tremendous help. Their expertise and experience with other companies might provide insights that could help you achieve better results.