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AMC: Developing Star-Quality Talent

The right talent can make or break a business, even when the product offers some of the brightest stars available.

May 3, 2009
Related Topics: Strategy and Management

“Potential” is a term every aspiring movie star wants to hear from casting directors. It’s also a trait AMC Entertainment Inc. looks for when recruiting employees. Like an Oscar-worthy film, the service industry requires superb talent performance.

AMC understands its people are key to its success and therefore provides a workforce of 18,000 with the skills it needs to keep theatergoers flocking. Keith Wiedenkeller, AMC’s senior vice president of human resources, discussed the company’s talent management strategies and the value of promoting from within.

TM: Describe AMC’s approach to talent management.

Wiedenkeller: We’ve got kind of a multitiered approach because we’ve got several different constituencies as a multiunit entertainment-based company. We’ve got our theater-based talent management, which includes the theater staff, or what we call our film crew. And we also have corporate employees. But the demographic out on our field is very different.

The people who tear or sell your tickets tend to be part-time, young and, predominately, this is not a bread-winning type job for them. Talent management at that level is focused heavily on hiring the right person so we can hang onto them as long as possible. As you might imagine, it’s a pretty high turnover position. The key is making sure we get a good job fit to begin with. Our theater managers are predominately promoted from those ranks, so that’s the other reason we have a strong focus on our recruitment and screening processes at the field level. Hopefully, we’re creating a good candidate pool for our management ranks, as well.

We’re big believers in hiring for attitude and potential, and then training for skills. To that end, we also are big believers in promoting from within. As long as we feel like somebody comes to a position with the right approach and has potential, teaching them the skills of a job is really the least challenging part of their development. Over half of our officers at AMC at one time worked at a theater as a staff member or as a theater manager.

TM: What processes or programs have you established to improve workforce performance?

Wiedenkeller: We’ve got a pretty heavy emphasis on training. In the last couple of years, we’ve developed an internal online training system and learning management system that not only allows us to deliver online content, but to track and to help individuals manage their own personal development. We also have a strong focus on what we call market-based training.

We empower certain people in our markets, managers, to help deliver training almost with a university-type format, where courses are offered several times during the course of the year. People can sign up and attend that coursework. Then we’ve got online training here at the home office, although most of our focus has been in the field because that’s where we deliver our products. We spend the most time and energy making sure our managers are well-trained.

TM: What challenges impact talent management at AMC?

Wiedenkeller: We’ve got several challenges; some of them not particularly unique. One perhaps a little more unique would be fairly high turnover, especially at our unit level because of the nature of the job at the staff level. When you’re working with a group of folks on a team, you can assume most of them will not be there at that same time next year.

Also, many of them are seasonal. That trickles up to the management teams, as well, in that the turnover rate in the management ranks — while it’s much better than at typical retail or hospitality employers — is still fairly high. A big challenge is making sure we do what we can to keep people engaged and to help them see good reasons to stay on-board and stick with us for a little while.

TM: What compensation and incentive practices do you use at AMC?

Wiedenkeller: We try to make sure our compensation practices are competitive. We don’t want to lag the market too much, and we don’t want to lead the market too much. We try to have our compensation practices pretty much right in line with median practices out there, both at the corporate and at the theater level.

Where we are a little different is we focus a bit more on performance incentives. Most of our jobs are more highly leveraged — both at the theater level and at the home office — than you might find at most other employers. And when I say highly leveraged, I mean more focused on variable pay. So while base pay might be around median market practices, our annual incentive plan is usually more robust, or at least has the potential to be more robust than most other employers. That is driven by cash-flow performance. So everybody’s focused on that for their annual incentives and, to the extent the company can meet or exceed targets, everybody wins.

We focus on pay for performance. Our annual salary reviews are highly tied into our performance management system and the recommendations and guidelines created for department heads in terms of annual performance. Annual salary increases are very directly driven by performance evaluations.

TM: How do you measure workforce performance?

Wiedenkeller: Most of our tools are metrics around the individual theater performance in terms of results at each individual unit, and we have a tremendous amount of data. We actually track our unit performance on a daily basis in terms of sales and bottom-line operating income. We also look at different dials relative to staffing and how efficient we’re being at staffing our units as well as we should, so we get that right balance between having too many and not enough people on hand. Overall, our biggest metric is based on the operating income at our unit level.

TM: How have your workforce performance management activities contributed to AMC’s bottom line?

Wiedenkeller: I think there’s consensus here that we are a service industry, so we live or die by the quality of our people, both the people who are interacting directly with the guests and the people who are supporting them. We all understand they are a key to providing profitability. It’s impossible to trace back X amount of dollars, but I think there are numerous ways in which we can say our development efforts pay off in terms of anecdotal evidence, in terms of the performance of our theaters.

Our theaters generally tend to outperform our competitors’ theaters on any given film and from almost any metric you can come up with. We have to believe, in many cases, we’re playing the same product they are, and, in many cases, our competitors are able to build facilities that are of the same caliber as ours. Really, it’s almost by process of elimination you have to say, what’s left to cause that difference in performance? We tend to feel it has to be our people.

TM: How do you handle succession planning at AMC?

Wiedenkeller: Our succession planning processes are fairly informal. A big part of that is due to the fact that we promote from within. [For] many jobs, it’s not really rocket science to understand who the heir-apparent might be to that job. But we do have a process whereby we, at least the corporate level, go through and try to identify potential replacement strategies for key positions.

We’ve also got a program out in the field so that we’ve always got bench strength ready to replace our general managers. We’ve got a system in place that allows for a position that we call a ‘senior manager,’ where we promote from within. But we’ve also got a fast-track program we’ve developed called our EXCELerated Leadership Development Program. It brings in leaders from other industries who have the leadership qualities but may not know our industry and plugs them in as basically general managers in training. So we develop our bench strength in the field among those ranks.

TM: What’s next for AMC in terms of talent management?

Wiedenkeller: You’ll see a continued emphasis on developing people for whatever that next step might be. As economic pressures continue to make consumers be discerning about how they spend their dollars, you’re going to see even more competition for that dollar. One of the few and one of the most cost-effective ways to be in the running for that dollar is to have better people than anyone else.

We see a continued emphasis on development, a continued emphasis on picking the right people. We are exploring some different technologies to help us to identify the people who are a good fit and who will flourish in our organization even better. We’re looking at actually finding different ways to deliver our training, both at the field level and from the home-office level, so we can become as efficient at that as possible, but also do so in a way that is value-added.

We started down a path a while ago of employing technology to help screen candidates before they come in the door to help make sure we’ve got good fits. We’re going to be fine-tuning those processes and adding some elements to help us do an even better job of getting a good job fit for people.

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