In the 42 months since becoming independent, Hillenbrand Indus- tries, the parent company of Batesville Casket Company, has grown by nearly 50%—all during a very challenging world economy. We now teach the Topgrading methods in the companies we acquire. Stated simply, the best talent wins and Topgrading helps identify and hire the best talent. This is true for internal promotions and external hires. - Ken Camp, CEO, Hillenbrand (parent of Batesville Casket Company)
As a company that prides itself on having a strong culture of execution and delivering bottom-line results, we depend on Topgrading to ensure we have the talent necessary to win; the results speak for themselves. - Philip Waddell, Vice President, Human Resources, Batesville Casket Company
BATESVILLE CASKET COMPANY (3,200 EMPLOYEES)
Industry: Burial Options Highlights:
- Improved from 60% to 80% As hired/ promoted in management.
- Improved A Player hiring effectiveness, throughout the company, from 60% to 80% in 2011.
- How to flourish in a declining market.
- How to measure quality of hire.
- Topgrading all levels in the company.
- Importance of CEO buy-in.
BATESVILLE (BCC) CASKET COMPANY case study, draft 9/2/11
Company: With annual revenues of approximately $650 million, Batesville is the industry leader in the manufacture and distribution of death care products. Batesville’s products range from metal and hardwood burial caskets to cremation products, technology solutions, and innovative casket containers.
Batesville traces its roots back to 1884 when it began producing hand-made wooden caskets as the Batesville Coffin Company. In 1906, John Hillenbrand acquired the company and renamed it Batesville Casket Company. Today, Batesville operates as a subsidiary of Hillenbrand, Inc. and is publicly trade on the New York Stock Exchange (NYSE: HI).
Batesville has been recognized for award winning manufacturing facilities and operational excellence. Recently, Batesville’s manufacturing operations were identified by Industry Week as one of the Top 10 Manufacturing Plants in North America. The combination of an iconic brand, a truly consultative sales approach, innovative products and services, outstanding customer support and service, and a best in class logistics footprint enables Batesville to drive value and profitability.
Topgrading History: While Topgrading was introduced to Hillenbrand in the 1990s, upon the completion of the Hill-Rom Hillenbrand Industries split, hiring success/practices saw a decline in hiring performance and process compliance.
“If the desired outcome is an organization rich with top talent, we must ensure that senior management isn’t the only body of associates who embrace the concept;”
—Philip Waddell, Vice President, Human Resources, Batesville Casket Company
Results: In the midst of evaluating the health of Hillenbrand’s Topgrading practices, a number of opportunities were identified:
- The hiring scorecard was not in place
- Some areas of the organization were short-cutting the process
- A moderate dependency on validated hiring assessments was identified
- The term “Topgrading” had morphed into meaning a process to exit someone from the Organization
These findings, coupled with the enhanced need for top talent in key growth areas of the business, led to the introduction of a company-wide investment in Topgrading Workshops. As a result of these workshops, we have clarity and consistency in the process, a renewed focus and commitment to hiring A Players, buy-in, multiple champions of the process in the organization, and the beginning of an uptick in the quality of hires. Additionally, the cessation of the assessment tool really made it important for our hiring managers to focus on mastery of the process.
“Associates walk away with in depth knowledge of the 12-step methodology and an opportunity to test their newly acquired skills during live interview simulations,” — Jason A. Riley, HR Director of Talent Acquisition and Development
Batesville was able to increase “A” hiring effectiveness from 60% in the 90s to 80% in 2011. We continue to press onward toward a goal of 90%, and are seeing our hit begin to move in that direction.
“One of the most costly oversights an organization can make is assuming that newly hired talent arrives ready to perform. Hillenbrand recognizes the importance of effective on-boarding and continued development throughout all stages of an associate’s career progression. This is reinforced with the development interview conducted for each succession/promotion to identify strengths and weaknesses of the incoming associate.”
— Doug Wilson, Sr. VP and Chief Administrative Officer
Step #1: Measurement. One year after hire, associates are assessed as part of our LTR (leadership talent review) and identified as “A” or Non-“A” based on an assessment and comparison to the contents captured in each role Scorecard and our internal performance management document – (the APEX).
Step #2: Job Scorecard. We are beginning to move away from vague job descriptions; replacing them with tight job scorecards. Waddell: “Our Talent Acquisition team helps each hiring manager navigate through the completion of a scorecard which enables them to articulate those elements critical for success in the role.”
Step #3: Recruitment. Batesville has a referral program that rewards associates who refer talent to the organization ($500 for hourly associates and $1,500 - $2,500 for exempt associates.) In addition to the referral program, the Talent Acquisition team has revamped its career website to express our cultural values. To do this, we include short video clips of various A Players sharing their experiences, functional information, and quotes from senior leadership. Batesville has also initiated partnerships with social networking leaders LinkedIn and Simply Hired to take advantage of passive recruiting.
In 2010, Batesville’s Early Career Talent Strategy focusing on campus recruiting and robust internship opportunities was reenergized. We utilized Topgrading to identify and on-board high quality interns. Our program had yielded few hires in the past. After utilizing Topgrading principles, and renewing our focus, we hired about 30% of our intern class, and all but one of the interns were identified and asked to return for a second year (with an eye towards full-time employment after graduation).
Step #4: Career History Form/Topgrading Snapshot. The Topgrading Career History Form is used at all levels, and is on our HR IS list of items to incorporate with our applicant tracking system. We will begin “trying out” the Topgrading Snapshot in the near future.
Step #5: Phone Screen. All phone screens are completed by our Talent Acquisition recruiters and hiring managers, using Topgrading methods. This ensures we have identified cultural fit, technical aptitude, and required competencies prior to the onsite interview.
Step #6: Competency Interviews. Relevant competencies are distributed to members of each interview team to ensure there is a holistic representation of each candidate at the “debrief.” This discussion helps shape the hiring decision of the manager. We follow this process for all hires at all levels.
Step #7: Tandem Topgrading Interview. This is a required step and is vital to the successful identification of an A Player.
Step #8: Interviewer FB. While tandem interview preparation and post-review is encouraged, it is not executed every time. This is an area that is being improved.
Step #9: Executive Summary Report. Upon the completion of our CIDS summary process study, we determined that by including the scorecard and debrief notes in our process, but we could not only reduce the amount of time it takes to complete the document we could ultimately increase the selection quality and development plan for on-boarding. The introduction of this approach has earned Talent Acquisition and HR favorable feedback from hiring managers.
Step #10: Reference Checks Arranged by Candidates. This is covered during our CIDS Tandem interviews and provides telling insight based on the response to the questions, “Would we be able to contact your previous supervisor(s)?” and “Would you be able to schedule these discussions?”
Step #11: Coaching New Hires. This process is driven by the contents of the CIDS summary and reinforced by the quarterly completion of the APEX (performance reviews.)
Step #12: Annual Measurement of Hiring Success. There is a “first look” collected at 6 months. If a newly hired associate is off-track in terms of performance, this provides HR the opportunity to intervene and help identify gaps in expectation, training, performance, or coaching – with the intent to improve performance to “A” levels. The final assessment for hiring effectiveness takes place after 12 months in the role.
Chat with a Topgrader:
Philip: I’ll start with an overview of our company that will provide some context. Next, I will share some information about our history with Topgrading, and then what we’re doing currently, how we’re performing, what challenges we’ve seen, and what opportunities we’ve recognized.
Batesville Casket is part of Hillenbrand Inc. since 2008. We employ about thirty-two hundred employees. We’re the industry leading manufacturer of caskets and death care products. As you can imagine in the manufacturing industry, we operate very lean. So it is very important that the people we hire all contribute as “A” players. We are an extremely lean organization. We utilize lean management processes in our offices, back office processes, as well as all of our plants. Really making sure that we find the right talent is so critical for us, because we just don’t have a lot of bandwidth in terms of resources to constantly hire, deal with, and manage turnover. While 3200 associates is a pretty sizeable company, operating in a very lean environment has its own challenges.
In the late nineties, we were introduced to the Topgrading concept. There was a different leadership team than we have at present. But one thing that I think really stuck with everyone was the CIDS interview process, and so I can say -- I’ve been with the company now seven years -- when I came here, that was one of the most challenging interview processes I had ever been through. But I certainly appreciated it. I appreciated the level of detail that it allowed me to provide to the person who was interviewing, in terms of them being able to ascertain what they needed from me in order to fit, but likewise the types of questions also provided insight into this organization and how they viewed talent.
Philip: I’ve been with the company seven years; was promoted after two years into HR. I would say about five years ago. I’m currently, and for the last 2 1/2years, the Vice-President of Human Resources for Batesville. Topgrading has been a focal point for us. In 2008, we split from our then parent company, Hillenbrand Industries, and came under a newly-formed public company called Hillenbrand Inc.
Let me talk to you a bit about how we think about Topgrading philosophies, because they led us to make fundamental changes in the way we view talent. Not just talent identification at the point of the interview, but what happens after that. We really shifted away from an appraisal or a review-center system to a performance-managed system. And that meant that we needed to develop competencies for our jobs that led to competency-based job descriptions. This move allowed us to delve into those competencies through the interview process. Later, we began to link competencies and performance much more tightly to how we differentiate our talent with merit rewards, short-term incentive, and long-term incentive compensation processes. It was all about differentiation, and differentiating in a way that tied back to our leadership talent review process, from a perspective of succession planning and talent development within the organization.
Brad: Okay, Philip, so what are the results of Topgrading at Batesville?
Philip: The Topgrading interview process for us is really the foundational element of how we build talent. As you can imagine, it is critical to get it right the first time when it comes to talent. When we started the process, we estimate that we were around 50% “A” hires. We implemented a measure that allows us to track quality of hires. We call this “A” hiring effectiveness, and it is a look at hires after one year in the role relative to their performance. Additionally, we also implemented high potential hires as a metric. This is measured similarly to “A” hiring effectiveness. Being able to demonstrative quantitative and qualitative data around the investment in Topgrading really helps generate enthusiasm and buy-in for the process. I’m really happy to say -- we’re not at the 90% yet, but we were in the seventies just two years ago, and we’re currently at 83%, in terms of hiring “A” talent, and that’s “A” talent in an evaluation after they’ve been in the role and we’ve observed their performance for one year.
Brad: Okay, for one year. That’s good. Is this just at management levels, or have you taken it down to the factory workers? How far down has Topgrading gone?
Philip: We have focused largely on our exempt population relative to our current metrics. However, have are utilizing a version of Topgrading, we call “Topgrading Lite,” that is in all of our non-exempt hiring processes. Those roles range from customer service reps who are delivering the product to the end-user or maybe someone in our call center. So yes, we’ve expanded it to begin including those other aspects of our business.
Brad: All right, cool. There are several questions already. As I had mentioned in my introduction about entry-level, you are actually doing that. What does that mean to you -- Topgrading Lite? Is that abbreviated career history forms, shortened Topgrading interview, fewer references? What does that mean?
Philip: We stick fairly close to the process. We don’t deviate much from the career history form. That is so important. It can really help you weed out or pull in top performers that you want to interview, and it reduces the amount of time and expense that you encounter. Because once you bring them in, you’re going to have to have an investment of an hour, hour and a half at least, even at that level, to really sit down with that person, and to make sure that they are the person that they say that they are on paper.
Brad: Has the Career History Form become your application form, Phil?
Philip: It has, absolutely.
Brad: Okay. Very good. Here’s a common question. “How do you roll out Topgrading? What do you do?” There are several people just introducing themselves, who said they read the book. What did you do, and what would you recommend any company do to “roll out” Topgrading?
Philip: You know, Brad, that is an interesting and in-depth question, a lot more in-depth than it may look on the surface. From our perspective, we first rolled it out by training and developing our HR team to have that competency. And then in addition to that, we trained and got the buy-in of our senior level management, because it’s really important that you have that from the top. There is a significant time commitment here, equally matched with a significant payback. The key is helping our leaders understand what that payback is, and that it’s not necessarily in the traditional ways of thinking about time to fill the job and days the position was open. All that is important, but really it’s the qualitative piece. So, are we hiring “A” players and are those “A” players generating value for the business? I think it’s best to start it with a small nucleus or core group. Few managers hire routinely, thus their competency level takes more time to build. Rather than try to train everybody on the hiring process at one time, we tried to build that competency through our HR team as tandem partners working with the hiring managers, and then train and develop select managers to participate on a more frequent basis.
Brad: Someone asks, how important is Topgrading training?
Philip:I guess about two years ago, five of us came and did the two-day workshop in Chicago, and then here at Batesville, just this week, we had a two-day workshop done here on site. Chris came out and did that for us, and we had a lot of our senior level, high potential players in that rollout. The feedback was just tremendous. So we’re excited. We’ll probably do a couple more of those through the course of this year, and really keep this out in front of our people as an important part of the how and also what that we do in our business around talent.
Brad: Philip, someone emailed a basic question – is the longer Topgrading Interview really worth the extra time?
Philip: I tell you what, it’s very easy for a person who is fast on their feet to hold up in a 30-minute to one-hour interview. When you take them through a multi-hour interview and you look for those patterns of behaviors and responses, the truth versus the dancing will jump out at you so fast, and a lot of times you get those candidates that dance. Topgrading will help you ferret that out, and you’ll get to the bottom of whom it is that you’re actually talking to.
Brad: The next question is – how do you roll out Topgrading
at a large, multi-site organization. Philip, how many sites do you have?
Philip: We have six manufacturing sites in the US and Mexico. We have 97 customer service and/or distribution sites located across the US, Puerto Rico, and Canada.
Brad: At the 97 sites, has Topgrading gone to that level? Even if it’s a small entity, you’d rather have “A” players running it than “C” players.
Philip: It has, in large part. That is still an opportunity for us to be better, but we are using those techniques.
Brad: How important is CEO buy-in? It’s awfully hard for those of you in Human Resources to drive Topgrading if your peers can run to the CEO and say that your standards are too high, your “A” player requirement is too high, that they need to hire someone where maybe the best they can hope for is a “B”, maybe “C” player.
Philip:CEO buy-in is crucial. I’ll tell you what. I think it was about two years ago. We had a candidate coming in for a senior leadership position. Of course, we wanted him to go through the Topgrading process. So when the CEO and I got together he asked, “Well, I have not done this in a while; does it need to be this long?” After we came through the first hour or so, we took a little break. Our view of the candidate was pretty positive. However, near the end of the third hour the CEO said, “You know, I was ready to hire the guy in the first hour, but now after three hours, not so much. I see the value of this and the process and how it works.” Once you have senior leadership on board it makes it really easy to roll it out to the rest of the organization.
Brad:Philip, how important are talent reviews at Batesville Casket Company in determining whether people hired or promoted really did turn out to be “A” players?
Philip: Critical. When we review our exempt population and discuss our high potentials -- we do this maybe three or four times a year -- those meetings are maybe a one or two hour staff meeting where our executive team has sort of a circular view of an individual. We might talk about eight or ten individuals each time. That gives us a good view on how they interact broadly across the organization. Then twice a year, we do a full talent review where we have very similar conversations. One of the things we learned in the last two years -- you may be surprised -- but our worst performance on “A” hiring is actually internal. That’s because managers are comfortable with what they know, and often defer to their experience without consideration for the competencies required for success. Sometimes leaders are unwilling to make the hard call when they know someone and have to say, “Hey, you’re really not right for the role.” So that’s one of the cultural hurdles that you’ll have to come to grips with at some point as you take your journey with Topgrading.
Brad: Good for you for saying that!
Brad: Mark asks, “Once Topgrading practices are initially adopted, what are the best practices for maintaining very high engagement among all involved, in selection and assessment of talent?” How do you keep the mo- going? I have some thoughts on that, but what do you think? How do you keep people adhering to such discipline? This is a very thorough process that requires some time commitment and discipline. How do you keep people motivated to do that?
Philip: I think the best thing that you can do is to measure and demonstrate the value recognized for the investment of time. That’s got to be the number one thing.
Brad: We have time for one more question, I think. Someone says, “How do you Topgrade when hiring highly technical people and your knowledge of the subject matter is not as deep as that of the people you are interviewing?” Philip, how would you answer that?
Philip: Well there are a couple of ways to do it. It’s still really important that you interview for the attributes of leadership, interpersonal skills, cultural fit and things like that. One of the things we have done is to have a technical person participate in the process. That participation can either be in the Tandem Interview, or we may have someone who is technically competent spend an hour or so with them on the day that we do the Topgrading Interview and provide that input during our interview debrief. fit. Ideally, you would cover most of this in the course of a phone screen.