Talent Development Strategies: A Values-Based Approach at Amway
The need to develop talent in an organization as a critical factor for its long term survival is probably not an area that many will dispute. The March 2008 issue of the Harvard Business Review’s article "When Growth Stalls," by Matthew S. Olson, Derek van Bever and Seth Verry, explains that one of the top four reasons growth in companies stalls is because they have a shortfall in talent. However, simply having intelligent people in an organization is often not sufficient for an organization's continued success in the long term. As Ralph Larsen, former CEO of Johnson & Johnson puts it, "No matter how clever or competent [staff members] are, they must also have sound values and a powerful sense of integrity. In a world where corporate reputations built over decades can be destroyed overnight, it is absolutely essential that we employ and are represented by people of character."
Amway the Corporation
Amway is a privately held global corporation, headquartered in Ada, Michigan, and is recognized for its sales of over $7 billion. Founded by Jay Van Andel and Rich Devos in 1959, the company is now led by the second generation of leadership Steve Van Andel and Doug Devos. Amway employs more than 13,000 people around the world, and has more than 3 million independent business owners who distribute the company’s products.
Since its founding, the company has been grounded in four basic fundamentals of Freedom, Family, Hope and Rewards. There is a strong belief that both personal and economic Freedom must go hand in hand. It is also about the freedom to explore the full and exciting range of one’s potentials. Family is about having a consistent set of values and the framework for growth to allow individuals to thrive. With Hope, there is the power to transform our lives in positive ways as well as opening the door of possibilities for others. Finally, Reward is about the shared action of giving and receiving—to be recognized for one’s commitment and valued for our contributions. These fundamentals are not scripted but are timeless and built into everything that Amway does across the world.
The Amway Talent Development Vision
The vision for talent development at Amway is to enable the company to become not just another employer of choice, but to be uniquely recognized as an organization that is values-based. In achieving this, the company will have a workforce that is both engaged, and at the same time, performance driven through the intentional development of people to enable a culture of innovation and customer orientation.
To activate this vision, Amway has developed a framework (see figure 1) that is grounded in the founding values of Freedom, Family, Hope and Reward. The framework is also guided by a set of Global Leadership Competencies built around the clusters of innovating to win, inspiring high performance, delivering on results and having a passion for the business. With these and the foundation of its global business strategy, Amway has adopted both a bottom up, as well as top down approach, to talent development.
Beginning with the development of people in general, in 2007, the company instituted a global performance management process. This global process had the dual aim of differentiating and paying for performance as well as placing emphasis on the development and growth of individuals for both engagement and driving a high performing culture. The performance management process is closely linked to how the organization provides developmental resources to allow employees to be self-directed and yet guided by their managers in their personal growth. Simultaneously, as Amway addresses the development of its employees, it is also paying attention to the identification and development of its leadership that can take the corporation to its growth aspirations.
In the identification of leadership potentials, the basic premise is that leadership is a job with its required competencies. It is not just used as another way to reward performance. Amway continues to take care of and compensate high performers well; but it also recognizes that not everyone is capable or wants to take on a leadership role. The identification of potential leaders goes beyond the traditional replacement planning that drives many organizations’ succession planning process. Once potential leaders are identified, they are provided with intentional development as well as attention to their retention. Amway recognizes that this is a fluid and dynamic process.
On the leadership development side of the equation, Amway’s activities are grounded on an adaptation of the Charan, Drotter & Noel (2001) Leadership Pipeline Model (see figure 2). As leaders move through different critical passages, the goal of the leadership development programs is to facilitate the leaders’ ability to make the turns in the pipeline by providing them with the appropriate skills, time orientation and work values to be effective at their level. The programs are implemented holistically utilizing a blend of technology-leveraged learning, classroom experiences and stretch assignments, as well as action learning programs.
With this framework for developing talent, Amway is well placed to achieve its growth aspirations as well as becoming a values based employer of choice.
Figure 1 – Amway’s Talent Development Framework
Figure 2 – Amway’s Leadership Pipeline Approach