58. Enhancing Employee Value

Intro: Duration: (02:22)

Opening music jingle & sound effects

Jeff Hunt:

Welcome to the Human Capital Podcast. I'm your host Jeff Hunt today, I'm gonna start with a question if you are an employee, how often do you think about the actual value you bring to your company? Do you think about changes you could make to bring even greater value without adding to your workload? It's a great question for leadership too.

How do I know the value each employee department or team is delivering? Answering this question accurately can create a huge. If leaders know where people investments are benefiting them the most, they can create an organizational structure to support this and apply the right amount of human and financial resources to where their greatest value creation lives.

Value creation might seem like consultant language, but it's not. And today my guest, Sumeet Salwan will help me explore. Sumeet is co-founder of CEO Works, and he works directly with CEOs in public companies as well as private equity firms on making better value creation decisions when leveraging talent.

Previously, he was global head of HR for the Johnson and Johnson consumer and medical device companies. He was also with Unilever for over 20 years. Rising all the way from intern to senior VP of HR. He has worked across North America, Europe, and Asia, and Sumeet currently sits on the board of SVP Global, which is a 20 billion PE fund, and Saki, which is a nonprofit that is dedicated to supporting victims of domestic violence in the South Asian community.

Sumeet is married with two kids who are now beginning their own work lives in New York. And he's also an avid musician. Welcome, Sumeet.

Sumeet Salwan:

Hi, Jeff. Thanks for that intro. Great to be here.

Topic 1. Sumeet's career journey (02:23)

Jeff Hunt:

I'm excited to have you as a guest on the show today because this really isn't a topic we've talked about much on the show before.

And so, I'm looking forward to sort of waving away some of the ambiguity that exists about value. And before I do all of that, I would love to have you share with our listeners a brief thumbnail of your career journey. Also, if you want to share if there was any one person or event or something that really inspired you at some point in your career.

Sumeet Salwan:

Sure. So, I started my career as an intern in HR for Unilever in India. The story kind of maybe begins a little bit earlier than, which is I was very clear that I wanted to do a business job. And I applied to all the top business schools in India, all of whom rejected my application. And I got into only one school, which was the number one school in HR.

And being a good middle class, you know, Indian striving kind of work ethic guy. I said, I gotta go to whatever is number one. And I went in, I absolutely hated my first year in school, and I was. 100% sure that I'm going to pivot out and go back to my supposed first love. Now remember, I'm 19 years or 20 years old at that time, so first loves and all that is like being an astronaut when you're a kid and all that.

Nevertheless, I got an internship. So you were allowed to change your specialization in the second year. I'm now in my internship at Unilever, and I would say that would be the first pivotal experience for me because that internship was an absolute blast. What they gave me, you know, I went into a new acquisition.

I was doing some really, really interesting work, and I said, wow the real work is actually a lot more interesting than what I'm reading in the books, so maybe I'll continue. So that was step one. I went back to Unilever after completing my MBA as a management trainee and have stayed in HR since then.

I have to say the first three, four years were as rocky as the first year of my MBA. There would be times when I would kind of not enjoy what I'm doing at all because I was locked and lost in HR process land, which tends to happen for a lot of people who are starting out in HR careers and that was not fun.

But then in between there would be these magical jobs that would come up. And one of them was when I was leading recruiting for Unilever in India, just around the time when the.com boom was kind of going haywire, 1998, 99, Unilever, despite being the best employer in the country, was not able to get the best students from these top MBA schools.

And that was like an identity level issue for that business saying, we are not getting the best people, like how can that be? And I came into that job at the time with seemingly a mission impossible. All these kids were getting, you know, $100 000 - $200,000 jobs, which is a lot of money today.

Was really a lot of money in 1998. And my job was to kind of attract them back into the real world and do sales and marketing jobs and finance jobs and so on and so forth. So anyway, that's when for the first time we started thinking about using employer branding. We were a marketing companies, so how do you use branding principles and building that trust with consumers.

So took that, I would say, the superpower of the business and put it into HR. To really great results, and that was, I must say, one of the most fun I had in my career at that time. So now I was roughly at the 10-year mark and if you talk about pivotal moments, the next one came when I did my first international rotation, and I went to Netherlands to work for a gentleman called Sandy Yog, who's now my partner and founder of CEO Works.

And Sandy was the chief HR officer of Unilever, and I went to be his back carrier or chief of staff or call it what you mean. And as luck would have it, it was the time when Unilever was going through a DNA level transformation where it had for a hundred years been extremely successful by being independent operating companies.

200 of them running, like I said, independently, but they had therefore replicated their cost base 200 times. The world had globalized, and they hadn't, and that disadvantage was crushing them in the market, and the business was moving towards becoming a global interdependent organization. So this was like doing org design for a 50 billion business where you're taking 200 businesses across 80 countries and making them one per country.

Stripping out brand development, supply chain, HR, finance from these businesses, and creating global organizations, which would talk with each other. Really fascinating work. And that's where I built my relationship with Sandy. It was a huge transformation, and that was also the time we learned the basic folly in our thinking about talent.

So, all of us have talked about top 200 jobs, top 100 talents, and our definition of top was senior. So, the more senior you are, the more valuable you are. And the Unilever transformation taught us that all the value in our business was sitting in these small emerging markets and emerging categories all over the world.

And all our talent was trapped in today's business, big, processed foods, north American, European businesses. So, size and seniority was what was driving the energy of talent management versus where the value is at. And we took that 300,000, you know, people organization clicked it into about 56 jobs, which you said are points of leverage, where if we assembled stunningly good talent, the earth would move.

And it did. I went from there in Netherlands to sort of design this thing as a process as a chief talent officer for all our emerging markets and so on, based out of London. Then went to Singapore to head for the Asia Pacific region, and finally came to the US about 11 years ago as the head of HR for Unilever.

And that was sort of my journey in Unilever. By this time, our family had kind of lived in five countries. My 13-year-old and 11-year-old had worked and lived in four schools, sorry. And we decided to take a pause and cool our jets and stay in the same place where we were as the kids got into high school.

And that's when I went to, uh, Johnson and Johnson as, as the head of HR for the consumer company. And four years later, the second pivot, which was again linked to the now the kids going into college and both of us becoming empty nesters. And we put the band back together with Sandy and Shali to co-found CEO works.

With a mission of ensuring that what I experienced personally in HR in the beginning, too much process, too much task orientation and efficiency orientation, and very little connect with where does the value sit in the business. And I would just say that the number one thing in the HR profession, which needs to be shifted is a precise and very proximate connection to value creation.

Versus a religious bent of mind, which says if we do the right things, if I spend one day every quarter on people as a whole board, and if we hire people from the best schools, if we build an employee-centric culture, good things would happen. This to me sounds like religious stock. Nothing wrong with it, but no other profession in the corporate world gets away with.

I think if I'm sort of very consumer centric, then that's enough for marketing. You know, at the end of the day, they have to build brands, deliver value, and so on and so forth. And I can go across to sales and supply chain and every function in many ways. Even finance, which is actually only counting what everyone else is doing in the business.

They've managed to connect themselves to value, and that's why the CFO of business sometimes get paid twice as much as the CHRO. I just think that's a travesty. If people are truly our most important assets, why would that be true? And the only reason that is true is that we have connected ourselves to process efficiency and religion, and I think we have to connect ourselves to value.

Topic 2. How to create value? Defining real value when it comes to employees (10:50)

Jeff Hunt:

So I just wanna underscore the impact of the statement that you just made. Sumeet, you said the HR executives, the HR community, HR leadership. The number one thing that they need to do is pivot away from these things like process disciplines and these efficiency elements to understanding value, what value is and how to leverage value within human capital in their organizations, is that correct?

Sumeet Salwan:

Yes, Jeff. I would just nuance that by saying this is not a pivot away. You do need process efficiency. Every function has that. You do need all of that. I'm just saying, you have to connect our expertise to value creation.

Jeff Hunt:

So, you're really talking about an integration. Let's better integrate value into our daily processes and how we make decisions and what we're doing internally.

Sumeet Salwan:

I think HR practitioners have to hold themselves accountable to saying it. It'll sound a bit crude, but tell me how this is making money, this quarter and this year, how we are building purpose, how we are creating an organization which will be built to last. I get that and it's very important, and I am not talking that down.

I'm just pushing the envelope here to say, if you can't prove your actions, your expertise is connected to where the money is, the market is talking to us as a profession, right? Why would I get paid less as an HR person than a finance or a marketing or a supply chain person? I'm maybe trivializing this with only money, but the purpose of business is to create value.

I think there is massive potential locked in human beings, and you have to find a way of connecting that to value. And it cannot just be, I hire great people and I put a smile on their face, and that ultimately must be creating value.

Jeff Hunt:

And that makes sense. And to provide a little bit more context for our listeners, how would you actually define value when it comes to employees?

Sumeet Salwan:

So Jeff, maybe I'll start with a story here. So, I was working with a client who was a very large infrastructure provider for one of the top five economies in the world. They had a huge office, about 50 story building. And there was a floor of finance people who used to generate a couple of reports, which was read by everyone in the company.

I was at that time working with the CFO of the business, and she gave me a really interesting story here and she said, you know, something told me that these reports are not very relevant. So, she took those weekly reports and just quietly turned the frequency to biweek. Silence, no problem. She then turned the frequency to monthly.

Nobody in the company reached out. She then made it quarter. And one person wrote an email saying, Hey, listen, there used to be this somebody from audit wrote a note saying something's missing here. And now I just want you to imagine the 43 people who are sitting on that floor essentially eight hours a day producing something that nobody's reading.

I know it sounds like a cartoon, but this happens in organizations a lot. These employees are disconnected from value, and I think it's a soul crushy thing to do for an employee. Sitting there doing stuff, which actually used to matter at one point of time, the company has started working differently. The world has moved to a different place, and you are caught in a pocket of inefficiency waiting for someone to then route you out and say, we don't need these 43 jobs.

That to me, was like a very visceral reminder of you can keep talking about value in terms of financials and strategy and money, but actually value to me from an employee perspective means relevance, are you relevant? Will it matter if you didn't do what you were doing tomorrow?

Jeff Hunt:

That's such a great question Sumeet.

Sumeet Salwan:.

So, whenever I get confused, I think about value as relevance.

Topic 3. Building cultures that are more innovative, the connection between innovation and value (14:53)

Jeff Hunt:

There's also a connection to innovation and value. Say a little bit about that because I know you know a lot about this. My question, I guess to be a little bit more specific is how can we build cultures that are more innovative?

Sumeet Salwan:

You know, Jeff, I have always believed that innovation happens when two different worlds collide.

Let me take talent to value as an example. A lot of human capital practices are built in what I call the supply side world, corporate HR, public equities, you know, the world I grew up in. Was all about building supply of talent. So, every practice from diversity, leadership development, recruiting, all of it was succession planning, was about driving talent supply.

You take all the excellence, which is in the talent supply world, and then you crash it with, let's say the private equity world, which doesn't have the time to build talent supply and the talent management function there is all about talent demand. Here are the 10, 15 roles where I need to put stunningly good talent quickly.

When I stumbled onto that world is when I realized that you connect this supply side excellence with this demand side, urgency, and boom, something gets born, which I think will change the world. Innovation therefore is always like that. So how do I build a culture of innovation? First thing, if you're a siloed organization where things don't collide with each other, I think you'll have a problem.

You won't innovate. There's a second thing, which I think drives innovation, is diversity. You know, people talk about diversity all the time, but diversity is important if you're trying to innovate. Actually, there's a lot of research that shows that homogenous teams do better at straightforward tasks, which need, you know, you're running the boat harder, better to have a homogenous team.

Diversity is clumsy and difficult and all that, and the upside of it is innovation. So that's the second thing. What can I count? Your organization should not be siloed. I'll say three other things, which are gonna sound like motherhood and apple pie, but customer-centricity is really important, for innovation, especially as you grow larger.

There is too much money in a business where you can actually generate value through efficiency by just doing things better and cheaper and faster, and all that. Customer centricity forces you to innovate. Now we can talk about how do I count that? But it helps. Purpose, I have never really seen truly innovative businesses which believed in something more than the PNL.

I haven't seen it. Real innovation coming out of places which don't have a purpose. The last one is something I've thought about very deeply, and it may be kind of counter to today's trend of the post covid world and work from home, and flexibility. I think innovation is a contact sport. You cannot do it over email and zoom.

So, you need some balance of people interacting not in extremely structured, regimented guardrail, 232, 315 kind of way.

Jeff Hunt:

There's something different when you get people together in a room with creative juices flowing and a purpose that things can happen where they can't happen otherwise, right? If you're on Zoom or you're meeting in some other.

Sumeet Salwan:

I've thought about it a lot here, Jeff, and I would say, I think we had designed this world too much into a contact sport world. You had to be in office, you had to be there at this time, and that inflexibility, I think, killed diversity and only some kind of people, mostly men, if I may say, you know, we designed the world for that.

You had to travel if you had to be in touch with your business, you had to be in office. I think that world was not okay. I'm almost equally certain a world where nobody's in the office, nobody ever goes to meet employees and consumers, and we are running the world from a desk is not a world which is gonna create innovation or value in the long run.

I think we had too much productivity lost in the overly contact world space, and I think we're gonna have a huge amount of innovation lost if we get used to what we've been doing for the last two years. So, you have to strike a balance and ask that question, if I need to go to office, why am I going?

And I think there are some good answers for that. And for those things we should congregate.

Jeff Hunt:

One of the things I'm reflecting on Sumeet about these core elements you just shared that lead to the most innovative cultures is that many of them seem like they're undergirded around having high trust levels.

So, there's sort of two things I'm reflecting on. The importance of trust in an organization, and then also how critical it is to be able to essentially connect the dots between innovation and value. Because it sounds like you're saying the most innovative cultures are actually delivering the highest value per employee.

Is that a truism, or am I making that up?

Sumeet Salwan:

I think I would have to go and count that, but I would believe that to be true. But you made a really good point, Jeff, there about trust, and there is research, you know, which we've all now read about. High performing teams have a lot of psychological safety in them, and it's actually intuitive, right?

Innovation means trying out stuff. Trying out stuff means failing a bit. and if you have a space where failing doesn't feel safe, doesn't mean that it's a culture of excuses and, oh, you know, failing is safe and all that. You can be high performing, but the leaders in the business and the employees in the business, if there is not enough psychological safety, I think you are absolutely right, it'll come in the way of building true innovation.

Topic 4. Value creation in an organization, understand it and connect to it (21:00)

Jeff Hunt:

And so with a concept of value creation, Whether I'm a large organization or a small organization, let's talk about this pragmatically. How can I better understand the value that is being created from each person? Position, department team role? Talk about that and then we'll move on to what are the strategic changes that I should make internally to make sure that I'm making better decisions around value that's being generated in my organization.

Sumeet Salwan:

So I think there are two different questions you've asked here. One is, how do I touch and count value at an individual level or a department level versus at a company level where there's market cap and so on and so forth. Here's how I have thought about individuals, and I call it connecting my talent to value.

As an individual, you may not be completely sort of immersed in the financials of the business and you know everything and so on because you are at that stage of your career, but you're not. However, there is really no reason that you, from an internal perspective, do you know what are the four or five big value hotspots in your business?

You know, I often ask this question, do you know how we make money? Just answer that question like, look, we, we do this, we do this, we do this. I often say, you should know what are some of the core big value hotspots in a business? Not a difficult question, and it's four or five things which are more valuable than others.

As we are thinking about the next two, three years. As an individual, you should know that. There is no organization in this world, which is not pivoting to something right now. Transformation is the most overused word right now because everyone is being forced to transform with all this external change and so on.

Do you know how we used to make money and what's gonna be different in the future? Just that one question. So, I have a small little checklist, which I would say, do I know the five value hotspots? Do I know the one pivot? And the third thing I would say to an individual employee, do you know what's happening out there?

You know, my daughter is studying human-centered design and from where she sits, if she doesn't know where the world is headed to between interior design, graphic design, product design, and so on, I just think it's important that where does the value sit versus where it used to, even externally, if you know these three simple things, I think connecting yourself to the money.

And to where value creation is happening is easier. So, number one, personally, when I think of departments, I actually like to think of value creation in terms of tables. Not teams. So, if there are these five or six value hotspots in the world that you live in, if you drop a metaphorical table on it, who's sitting around that table?

Give me five names. The R&D person is there. Maybe the supply chain person is there, whatever. Give me the names of the five functions or roles, not job families, but the five humans or roles that are sitting around this table, that starts giving you a sense of saying, here are the five human or organizational hotspots which are gonna light up this value hotspot of this table.

I know it sounds a little bit ethereal, but to me it's really simple at an individual level. Do I know how money gets made and am I connected to that? versus not in some ways. And I feel when it comes to teams or departments, same thing. What's the table which is driving value? I don't know if I answered your question clearly Jeff.

Jeff Hunt:

You absolutely answered my question. And I think one of the things that I'm realizing is that the understanding of value at a personal level within an organization, Is something that could very effectively inform a strategic planning process. So, if my executive team is gonna go do an offsite and they all have a common language around which people, specifically in our organization are delivering the greatest value for our company than as part of their planning process, we'll do a better job making sure that we apply scarce resources to adding value into either those people or the areas of the business that they're working in so that we can even be more successful as an organization, isn't that correct?

Sumeet Salwan:

It is Jeff and I would just change one thing in what you said. It's not the most valuable people, that are driving the most amount of value. I think, have to think in terms of the most valuable roles. People orientation, I think is the supply side orientation that we've all grown up in.

That executive leadership team needs to sit and think about the roles that drive disproportionate impact first. That's the demand side piece to it. I often say we spend way too much time in talent management on talent. Like it's too rotated on people. You have to think about from a value creation perspective, saying where is the role?

Is it set up for success or is it a manager or whatever? You're gonna put somebody in and they're gonna fail. So thinking about this demand side and taking your value creation plan, boiling it down to like 20, 25 jobs, which are going to have the most disproportionate impact and then getting to the human piece.

I think that is quite magical, and today, the thing is, Jeff, we have made the hierarchy a proxy for value. The more senior you go, the more money you make, the more power you have, the more resources you have, the more stroke in the system, so you get less resistance. What that means is you are more valuable if you're more senior.

Therefore the hierarchy must be a proxy to value. When I was in J&J, we were running a 30 billion business and there was a one and a half billion business in China, which was going to contribute 50% of the future value of this beast. And how do you think, were we organized like that?

No, we had China reporting to somebody in Asia reporting to this. So the hierarchy is not a good proxy to value in today's world. And I think therefore, you know, my passion on saying, if you're a human capital practitioner, you better understand where the value sit. Otherwise, you'll use all your supply side excellence to populate the hierarchy but that's not how we make money.

Topic 5. Misunderstanding diversity (27:51)

Jeff Hunt:

That's such a great piece of wisdom. Before we shift into our lightning round question, Sumeet, I don't wanna get too far afield from your comment about diversity, because you mentioned that diversity in organizations is such a critical element, but I think it's often misunderstood. Can you share what you feel is most misunderstood about diversity?

Sumeet Salwan:

Let me start with something that is well understood by most people in diversity, which is counting it and making it a numbers exercise is not enough. Probably counterintuitive and counterproductive at some points. By the way, I strongly believe that if you don't count it, it'll not move.

So, everybody who says, let's have inclusion initiatives and let's not worry about the numbers I unfortunately strongly disagree. Nobody has ever moved the needle on diversity without counting it, but most people know that it's necessary but not sufficient. I think the two pieces which are misunderstood about diversity,

One I think we talk about is diversity for the sake of it. There are tasks which homogenous teams do much better, so we shouldn't be blindly again, back to value creation. What will create value for my business and therefore, diversity. To me as a leader, you truly have diversity in your business if you are uncomfortable, diversity is uncomfortable.

It is much easier to work with people like you. It's much easier to lead people like you. To me the best analogy you know is of inviting somebody to your house for dinner. There are 10 people coming and one of them is vegetarian. It's not a big issue, but as you are putting the meal together, it's something to think about.

If as a leader, your team and how you lead it and get the best out of it is not making you pause and giving you something to think about, you don't have enough diversity in your business right now. It cannot be easy. It needs to be something that makes it hard for you. I think this part is misunderstood.

When we are building momentum on diversity, you know, it's the scorecards, it's the numbers, it's the unconscious bias training. It's the inclusion initiatives, the engagement surveys. And I often say as a leader, have you just stepped back and say, when I'm leading the team, I need to think about that vegetarian, and how am I putting a great meal for them as well?

Topic 7. Lighting round questions (30:23)

Jeff Hunt:

Such a great a analogy and I also love your perspective on being uncomfortable. That's always where the greatest growth lies. If I'm sitting on an executive team and nobody's pushing back and nobody's disagreeing with my feedback or my ideas, that's highly problematic. We're gonna become siloed and we're gonna become an organization that is designed around bringing my ideas and my strategies and my direction to fruition, rather than the collective whole.

So, I love that perspective that you've brought. How can we actually get uncomfortable? Are we uncomfortable enough in our organization? Because ultimately that'll be the manifestation of the best ideas rising to the top. Just because you've shared an idea that's different from mine doesn't mean that I have to agree with you, but the more ideas that we get, the greater the likelihood of our success and our opportunity and ability to improve our organization.

All right, well, let's shift into the lightning round. So the first question I have for you, Sumeet is, what are you most grateful for?

Sumeet Salwan:

I think I'm really grateful for the fact that I have discovered, I would say, my true purpose and I grew up not wanting to be in HR and then I was, I grew up wanting to only be a chief HR officer, and I have now discovered a whole new world of where HR should go and is going.

And the fact that I'm in the flow of that, I am really happy about. and I think a lot of people who have invested this much energy into their work sometimes have to make tradeoffs with their family, and I'm very grateful that I've not had to do that.

Jeff Hunt:

That's great. What's the most difficult leadership lesson you've learned over your career?

Sumeet Salwan:

I think the most difficult leadership lesson is probably that brilliance is overrated. There are seven types of intelligences, and the leadership lesson is cognitive smarts is only one of them.

Jeff Hunt:

And even when you think you have the answer, asking others what they believe first is probably the pathway to wisdom.

Sumeet Salwan:

Easier said though than done.

Jeff Hunt:

It is for sure, especially when the ego gets in the way. Who's one person you would interview if you could living or not?

Sumeet Salwan:

Well, I guess that would have to be Billy Joel.

Jeff Hunt:

The master pianist and vocalist right there, isn't he? What's the best piece of advice that you've ever received?

Sumeet Salwan:

I used to struggle with this idea of, my God, I gotta mow my lawn. I have to cook, I have to do every, like, you have to run the house, never have to do that. And Sandy, who's now my partner and founder of CEO Works, he told me, he used to be my boss at that time, and he said, listen, you should only do work that accept you nobody else can do.

And clearly lawn mowing was not that. I've tried to follow that often in organizations and even in my personal life and you know, it makes a big difference. And the other one for me is when things are really bad, I often say, look, if there's all this horse shit, there must be a pony somewhere.

Jeff Hunt:

All right, Sumeet, if you had to summarize our discussion today, what's the one, two, or three greatest takeaways to lead with our listeners?

Sumeet Salwan:

I think the first one for me would be that you should make value creation personal. This is not some material thing that is done by the organization and some people in a boardroom somewhere.

You have to continuously think about being connected to value and connected to relevance. That would be my number one. I think this is especially more important in an ever-changing world. When I was growing up, there was a template on how to kind of go forward. Organizations have career templates, and you need to really watch out because every template is designed to fail in a world of climate change.

So therefore, this whole practice of continuously understanding where does the value sit and am I connected to it or am I headed in that direction? Would be my number one thought. If you're an HR practitioner listening to this, it is time to connect your expertise and our profession to value creation. It is time to be able to count that and not make it a religious sort of an outcome of if you do good things, then good things would happen.

I guess those would be my two takeaways. If you could call it that.

Jeff Hunt:

Well Sumeet, thank you so much for coming on the show and sharing all this wisdom with our listeners.

Sumeet Salwan:

Thank you so much, Jeff. This was a real pleasure.

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Outro(35:15)

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Jeff Hunt:

Thanks for listening to Human Capital, if you like this show please tell your friends and also take the time to go rate and review us. Human Capital is a production of GoalSpan, your integrated source for performance management. Now go out and be the inspiration to other humans, and thank you for being human kind.