Since AOL LLC’s high-profile merger with Time Warner Inc. in 2001, the company has struggled to find its footing. With the resignation of numerous senior executives, the steady decline of Internet subscribers and decrease in advertising revenue, AOL’s business model was challenged post-merger. However, when Jonathan Miller was appointed CEO of AOL in 2002, the future of the company looked more promising as he developed a market-responsive vision and strategy to spark AOL’s recent resurgence. Reviving the organization, nevertheless, would not have been possible without the support of the company’s learning and development organization and its leader, Vice President of People Development and Talent Acquisition Thomas Lokar.
Lokar joined AOL in 2002 and was promoted to his current position as vice president of people development and talent acquisition in 2003. Before joining AOL, he was the director of leadership development at Bristol-Myers Squibb Company, a global pharmaceutical company, and a regional practice leader with the Hay Group, a global management consultancy. Lokar said his previous positions provided him with a strong foundation to take on the challenge of transforming AOL’s learning and development organization in tandem with the company’s new business objectives and strategies. “In my previous roles, I learned a lot on how to organize performance improvement and learning initiatives and how to get good business leaders behind these initiatives as part of business strategy,” Lokar said.
As AOL began to create an open culture and redefine its business model, Lokar and his team began strategically aligning the learning and development organization to the business. “The idea was to establish a more open culture and focus on leadership development, learning and performance improvement, and employee engagement—stabilizing those things to build capabilities to grow the business,” he said.
To grow the business through learning and development, Lokar and his team had to make sure AOL’s workforce had the skills and capabilities to support business growth, as well as try to maximize the company’s current learning investments and link learning to the business. “Our learning philosophy is for learning to be seen as a strategic business advantage because of the impact that learning has on AOL’s success,” explained Michele Isaacs, director of learning and development at AOL. “So it is how we make learning part of the strategic makeup of the organization in terms of how AOL delivers against its goals.”
With a new learning philosophy established, Lokar worked closely with Miller and the senior team to identify and prioritize the vital areas of the business in need of improvement. Leadership development was the first strategic area identified. AOL was struggling to retain leaders post-merger, and the leadership churn rate was continuing to rise. “The data was overwhelming. Leaders were churning way too fast, we weren’t making the right selection decisions, we could not drive learning and performance or performance management, and you couldn’t have a successful training program if you had this entire leadership churn,” Lokar explained. “So I took the story of leadership to the CEO and senior team and proposed a multi-organizational-level approach to raising the capabilities of our leaders. We started with the executive tier and made cuts at the general-manager layer, functional manager, manager of managers, managers of individuals and down to individual contributors. I proposed to them approaches and programs for each of those levels along the lines of how to consider the leadership side of the equation, leadership selection, leadership on boarding, new leader integration, strategic competencies, coaching and development planning, assessment, succession planning, HIPO (high potential) identification and started building formal leadership programs.”
As a result, AOL executives reduced the number of leadership roles and created bigger jobs that provided clear lines of accountability. Lokar developed a competency model in partnership with the Hay Group for the top-tier executives of the organization and developed numerous leadership programs for every leadership tier, including selection, on boarding, performance management and learning, talent management and development. Leading for Results (LFR) and Future Stars are two of the programs that were built internally for AOL leaders.
In a three-month timeframe, Lokar and his team put more than 150 executives through LFR, which included six months of follow up on executive coaching. LFR targets the senior-vice-president- and vice-president-level employees and gives them a thorough understanding of AOL’s business strategies, their role in these strategies and how to lead the organization to achieving its set objectives. According to Lokar, 90 percent of the leaders completed the coaching process and a significant number have continued with coaching as part of their learning plan. “The next stage of LFR is to start—not through a program, even though we are going to do something to keep the steam up—moving the executive talent around into roles that will generalize their management capabilities,” he said.
Future Stars is AOL’s HIPO program, which targets the company’s highest-potential director-level population. According to Lokar, high-potential employees go through a yearlong development opportunity that starts with a BTS business simulation. “During the simulation, employees will get the opportunity to run a version of the company. Sixty of them are going through the program in cohorts of 30,” Lokar explained. “They’ll go through this BTS simulation and get some feedback on their business management skills, leadership skills and then during the next few quarters, they will go through some assessment experiences, some coaching experiences and some action learning as well. We will form some small cross-functional teams, and they will get issues within the business that executive leaders have sponsored and have them spend some time solving those problems and, in the end, make a presentation for the senior leaders.”
Recently, Lokar began working with senior leaders in AOL’s ad sales division. To revive advertising, AOL executives revamped the ad sales division at the end of 2005. During this process, Lokar and his team had conversations with the ad sales leaders to develop and align learning strategies to their goals. “We tried to have more business conversations with them—meaning we didn’t go in and say ‘What training do you need?’ But we asked things like, ‘Where is your business headed? What are the skill capabilities that you are looking for? What are the things that you are challenged by?’” Isaacs explained. “Then we had conversations from a performance improvement standpoint—meaning how we help bridge those capability gaps. What people levers do we pull to help the business achieve its goal?”
These fundamental conversations helped Lokar and his team develop a competency model as well as learning solutions to bridge and strengthen competency gaps for the ad sales division. “With the transformation, it was imperative that we start raising our proficiency in sales because we had to have a sales force ready to compete and sell our capabilities as an advertising platform to ad partners with a much more complex set of tools and options at their disposal,” Lokar explained. “So our effort to raise their proficiency is part people management coaching, and it is part functional skill building. However, we are not setting an agenda template. We are listening to the business needs and setting the priorities based on those needs in 2006, while keeping an eye on some long-term growth needs.”
To maximize AOL’s current investment in learning, AOL acquired a new LMS and improved and aligned the learning offerings at AOL University to the business. “We have done a couple of things with our corporate university vendors where we have streamlined our content to really make sure that we have the highest quality and to make sure that we are more accessible than we were,” Isaacs said.
“Largely with Michele’s help, we put a lot more capabilities into AOLU around what the business needs are to move AOL forward. Not just people and professional skills training, but we have had a huge push to building program and project management discipline,” Lokar said. “So all of the project managers, of all of the businesses, are part of this initiative to elevate the capabilities of managers.”
Currently, Lokar is working with the senior team to get AOL more synchronized with the market through AOL2.0pen, which will educate employees on the implications of an open, global marketplace and an open, global company. “We began with bringing the top 70 leaders together, building off of the LFR momentum from last year. Our two-day agenda immersed them into what 2.0pen means, how each business unit is already participating and allowed for an ‘open’ forum to debate key issues to our success. It was organizational learning at its best as Jon and the senior team interacted in small work groups and large sessions,” Lokar said.
The initiative’s name, AOL2.0pen, stems from the popular term Web 2.0 for advanced Internet technologies and applications including blogs, wikis, RSS and bookmark sharing. Lokar said that as the company and the Web-audience growth strategy move more to the Web 2.0 marketplace with a heavy focus on broadband connectivity, the company wants its culture to reflect that shift.
“From a talent management perspective, we began wondering how would we manage internal talent movement. How would we manage recruiting and succession planning if we applied a Web 2.0 concept? We took the idea of our Career Passport, which is an online, searchable-database tool where employees can go in and put down their job history, project history and accomplishments history and career aspirations at AOL, and developed a ‘2.0pen page.’ This employee platform—an open, global employee network—mashes up a newly developed commercial product with internal HR tools, where employees will be able to create their own personal page to blog, post skills, competencies, project accomplishments and professional interests, form communities of practice, match employees with hiring managers, and find others with similar skills, expertise and project experiences,” Lokar said. “Basically, we are creating a free-market system of knowledge sharing so that communities of practice can form out of this.”
Overall, AOL2.0pen will support internal knowledge share, job rotation and promotion. Lokar said that it should be up and running by June 2006. “Our philosophy that we are pushing toward is a more open free-market system of talent movement and knowledge movement where it is not so controlled by HR policy, but it can move more fluidly and dynamically,” he said. “AOL is no longer just an American brand, but a global company with great skill at producing and aggregating content, products and services for a global-user base. Being relatively young as a company, much of what we did early on was to shore up and mature our employee development practices. Now we are accelerating everyday to be in sync, and very soon, ahead of the curve.”
—Cari McLean, carim@clomedia.com
Name: Thomas G. Lokar
Title: Vice President, People Development and Talent Acquisition
COMPANY: AOL LLC
Successes:
- Built a culture change model with the CEO and head of HR to support 2004 to 2007 growth strategies.
- Leveraged a multi-level leadership development plan, beginning with definition of target culture, core leadership behaviors and key initiatives to support the entire lifecycle of leadership development.
- In a three-month timeframe, put 150-plus executives through Leading for Results. Ninety-five percent of the executives completed the coaching process and a significant number have continued with coaching as part of their learning plan.
- Reduced executive churn during last two years by 6 percent, which equates to savings in the millions.
- Launched a high-potential program for 100-plus middle managers that is highly interactive, online, team-based and includes a business simulation, action learning and quarterly learning events targeted at the core Personal Best Leadership behaviors.
- Developed an employee-managed knowledge sharing and skill-networking portal to empower AOL employees to network seamlessly to resolve immediate learning needs.
Learning Philosophy: “Our philosophy is very much in line with our CEO’s business philosophy to be in sync with our markets. With that in mind, we try to build our employee and organizational capabilities by choosing specific learning and development approaches that bring people’s current and future potential closer to where the business is heading. We strive to be inside that inflection point where employee performance and engagement meets the market, and we try to do it at levels of our talent pipeline.”
