Kimberly-Clark rebuilds HR from scratch

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About a decade ago, global manufacturer Kimberly-Clark realised it was losing market value – fast.

“We were great at one point, then we went down to good, then we slid to mediocre,” CHRO Liz Gottung said.
 
The Wisconsin-based organisation prided itself on a team mentality, but Gottung realised that this culture was actually holding the company back. The firm was in decline, but performance reviews were ranking less than one percent of employees under the category of “needs improvement.”  Seventy-eight percent of global leaders were ranked as “exceptional.”
 
“We looked at ourselves and said, ‘Could the reason for these business results be the people in this room? Could it be the people at this table?'” said Gottung.
 
An external hiring company assessed the situation, and found that only five leaders were indeed exceptional. Gottung then decided to look externally for new talent, since Kimberly-Clark had not hired any new executives from outside the company in 25 years. “The wrong people were in the wrong place with the wrong skills,” she said.
 
So she decided to start completely anew.
 
Within her own function, nine of her 10 direct reports have been recently appointed from outside Kimberly-Clark.
 
She also implemented a new performance review structure that emphasised specific behaviours over vague descriptions, so managers would be less likely to rate staff highly out of loyalty. These changes all contributed to Kimberly-Clark’s revival.
 
“We had to build from almost nothing and bring in a lot of people from the outside, which of course demoralises all the people who are working with you,” said Gottung.
 
“We’ve turned that around a lot now.”
 
Since July 2011, Kimberly-Clark’s share price has risen 70% percent from US$65 to US$110.  Sales and revenue have been on a steady, consistent upswing as well.
 
This article was adapted from Good to great, published in issue 12.04 of HRD Magazine.

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