Boyden Executive Search

As Chief Human Resources Officer of Sears Holdings, Dean Carter has experienced firsthand the rise of the human resources professional to the chief executive ranks. In this edition of Leadership Series, he shares his perspectives on the vital role of human capital and talent management as well as the importance of diversity recruitment.
By Boyden

Boyden’s Leadership Series presents discussions with business and thought leaders from organizations across the globe. The series focuses on topical issues that offer executives, political leaders and the media insight into current trends in business and talent management in the global marketplace.

This issue features Dean Carter, Chief Human Resources Officer (CHRO) of Sears Holdings. He discusses building the future of Sears, leveraging the clout of CHROs, the nexus of technology and human capital, how diversity is good business, and why young managers must focus on learning instead of earning.

Dean Eric Carter is the Chief Human Resources Officer for Sears Holdings Corporation (SHC), a Fortune 100 company with over $35 billion in revenue and 246,000 employees globally. Sears Holdings includes the iconic retail brands Sears, Kmart and Lands’ End as well as leading consumer brands Kenmore, Craftsman and DieHard. Sears is the fourth largest broadline retailer and seventh largest retailer in the U.S., and was recently recognized as the Fastest Internet Retailer by Internet Retailer Magazine and received the 2012 Mobile App of the Year award.

Mr. Carter joined Sears Holdings in 2010 as Vice President, Talent Management, responsible for enterprise-wide talent management including strategies and platforms driving succession planning, talent assessment, learning and development, engagement and performance management. He assumed additional responsibility leading the corporate HR business partner team supporting 26 business unit presidents, and shortly thereafter was promoted to CHRO in 2012. 

Prior to SHC, Mr. Carter was CHRO for Fossil, Inc., the global leader in accessory design, manufacturing international brands including Fossil, Burberry, Armani, Michael Kors, DKNY, Diesel and Adidas. During his 10-year tenure as CHRO, Fossil experienced transformation and growth. After beginning his career with Proctor & Gamble in the Advanced Management Development Program, he held a variety of progressive HR roles with Pier 1 Imports and Pearle Vision. 

Mr. Carter holds a bachelor’s degree in organizational communication from the University of Texas at Austin. He has served on the City of Dallas Board of Adjustments, Lee Park Conservancy Board, Founder of the Oak Lawn Presidents Board, Officer of the Kessler Park Board, and President and Founder of the Oak Lawn Legacy Monument Foundation. 

Boyden: Since joining Sears, you’ve moved up to CHRO in a span of three years, in an environment with a lot of change. What’s unique to your role and what do you like most about it? 

Carter: The biggest skill that’s needed, especially at Sears Holdings in this time of transformation, is around problem solving and innovation. First, the company has to transform in order for us to get to the next level. The industry is constantly evolving and what our members are looking for from us is changing. Thus, our business model and how we support our human capital strategy has to evolve and change along with everything else. 

We really have to think about the role of human resources in new and different ways, from either innovating human capital solutions or bringing in new solutions to complex problems. 

Secondly, there’s a sense of urgency in innovation and execution. Because the retail industry is rapidly changing and the case for transformation at Sears Holdings is significant, we have to make change happen faster. If we don’t innovate, iterate and execute quickly, by the time we implement the idea the industry will have changed and we will fall behind.  

Boyden: What’s been the biggest surprise?

Carter: When I joined three years ago, what I expected to see “under the hood” and what was actually going on here was very different. For most people like me, my experience with Sears and Kmart was largely determined by the stores and perhaps a bit online. When you get inside the company, you can see and feel the energy around its transformation. Even three years ago I could feel a new and exciting future for SHC.

Boyden: In looking at the future, what are the key areas of your focus for change and workforce transformation?

Carter: Our goal is to be the leading integrated retailer. To get there, we are focused on two areas. First, we need to understand our members – those who have joined our Shop Your Way Rewards program – and how they want to shop with us – in stores, at home, online and via mobile devices. Our transformation is based on expanding our physical and digital footprints to support how members are shopping, and technology infrastructure plays a major supporting role in that regard.

Second, we’re focused on building relationships and staying connected with our members through social media. Our Shop Your Way site and app are tools we use to have conversations with members and connect them with other members. It’s a very dynamic experience. 

Boyden: Over the past decade, the Head of HR has moved into the C-suite, often directly reporting to the CEO. What is the next step in the evolution of the CHRO?

Carter: The conversation in HR circles for so long had been about how we can earn a seat at the table. Today HR IS at the table. I think the challenge is to make sure we add clear value now that we are there.  

Business leaders are increasingly seeing the value in a strategic approach to human capital and looking at HR leaders in the eye and saying, “OK, I’m listening. What do we do?” We have to be prepared with solid answers that offer a fresh perspective. 

For me, the skill set that I’m looking for in HR professionals is much more analytic and financially driven; for example, developing and leveraging data to provide a more strategic roadmap on the best and highest use of human capital. Such insights are changing the skill set for HR professionals in general and that’s certainly the case on my team as well. And this isn’t some analyst in the back room crunching numbers – this has to be a front-line and HR leadership skill.

If we can’t make the clear connection of specific HR levers to specific business results, then our seat at the table is wasted.   

Boyden: You oversee employee engagement with 246,000 employees globally – how do you balance such cultural diversity while sustaining a unified corporate culture?

Carter: We try to drive a unified culture and we do it in two ways. First is communication through our internal social networking site that the entire organization – from Chairman and CEO to retail associates – are highly active in. We have a dynamic and extraordinarily active conversation online, where a senior vice president can coach 130,000 associates in a day through very focused feedback and storytelling. It’s a powerful tool.

The second piece is embracing feedback. Social networking allows us to highlight what we are doing culturally, engage in a dialogue and receive valuable feedback. But if we are not living our values or our culture every day, then we are not doing what we need to be doing. Transparent feedback keeps us all honest and improving every day.

Boyden: Would you say social media is the key behind successfully sustaining multiple iconic retail and consumer brand identities under one unified corporate umbrella? 

Carter: I think it’s a little bit different for the brands. What we want to do is to try and create a unified holding company environment while allowing each unique brand to thrive on its own. We allow Lands’ End or Kenmore and Craftsman or other individual business units to operate together at a holding company environment level, but as individual brands they have unique identities. We leverage social media to connect the company socially and culturally and to learn from each other, but from a business standpoint we use it in parts, such as relationships with members that are an individual business unit’s role.   

It is a challenging balance in how much of a holding company environment you have versus fully independent businesses like Kenmore, Craftsman, Lands’ End, Sears and Kmart, and how much to leverage in terms of centers of excellence. I can’t say that we get that right all the time. We learn and we change and move. We understand what things we need to vet more fully in the business, when to be completely independent and what things we need to leverage.

Boyden: Sears won the 2012 Mobile App of the Year and 2011 Mobile Retailer of the Year awards, and gaming platforms are driving employee engagement. What’s key in driving the nexus of technology and human capital? 

Carter: I am going to start with necessity in some ways. Communicating with people in the way they are used to communicating is important. If members are going to communicate with each other and have relationships with retail sites via apps, we better get good at that.  

But we also hire people who have a high level of curiosity about leading edge technology. I can tell you that the teams that are driving Mobile Retailer of the Year and Mobile App of the Year are wildly curious about platforms and what’s next. That’s what drives us. We have a pretty extraordinary gamification performance platform that the teams are working on as well. 

The last piece that’s important in terms of driving these is tone at the top. This nexus of technology and human capital is important to our senior team, and of course, to our Chairman and CEO Eddie Lampert. He is a strong driver of technology as a change agent. For us to connect well with our members in stores and with our associates in a really intuitive way, we’ve got to connect technology and human capital.  

Boyden: Sears has more than a century of brand equity that has withstood lots of changes. Where does the tradition of the bricks and mortar meet the “new age”?

Carter: The idea challenges organizational design. It challenges compensation structures and customer experience thought processes. Everything we’ve always thought about retail here has been separate in terms of a store experience, a mobile experience or a delivery experience. But in fact, now they are so incredibly integrated and we’re taking that into account in our complete membership experience. That’s integrated retail and we will be the best at it – regardless.

Boyden: Sears is known as a diversity leader, including the recent accolade of the eighth straight year of a score of 100 with the Human Rights Campaign (HRC) Foundation index. What differentiates Sears?

Carter: It’s very interesting why we are good at diversity. In addition to scoring a 100 on the HRC index for numerous years, we are also the number one company for veterans and the military, and we’re recognized as a great place to start your career.  

So, on top of having these talented new grads, we’ve naturally become a great place to support fresh thinkers and diverse thinkers. Sears’ companies have also become a top destination for our gay, lesbian and bisexual team members as well as our very deep population of Latino, African-American, and Asian colleagues.  

Boyden: How should companies look at diversity issues as a business decision?

Carter: For us, from a business perspective it’s absolutely necessary to understand our members. We need people who are thinking in a diverse way inside the building so we can make the best, most diverse connection possible outside.  

From a ”doing the right thing” perspective I think we like to hire people who like to do the right thing so much so it’s part of their DNA. You want to be the kind of place that’s attractive to the best, and the best come in a variety of shapes, sizes and forms. If you are not appealing and interesting to a broad tent of the best, then you are not attractive to the best part of the market.  

Boyden: What do you look for in a direct report?

Carter: In the new world for HR talent, first and foremost you really have to have HR leaders who know business. Not only do you need to know HR backward and forward, but you also need to possess business skills because otherwise you bring the same thing everyone else offers to the table.  

Second thing, I’m looking for people who engage in business naturally. When you have an engaging person at the table, they are missed when they’re not present. The business leaders will be sure that when we have a meeting or situation, this person is there because they make me and my HR programs better.  

The next piece is a curious learner. HR, like several professions but specifically for us, I believe is under rapid transformation. I want a person that is continuingly sharpening their saw and brings a high level of emotional intelligence. I think that’s critical, especially for HR. Finally, I want people who take their job very seriously but certainly not themselves. It’s important that in a meeting, people bring their full selves, in that they are very real and there is a healthy amount of humor and laughter. For all the change – I still believe that being “human” is critical in human resources.

Boyden: How often have you been able to turn around a hire that was not going to survive well, into an accomplished team member?

Carter: The way I’d like to answer that is more someone who I didn’t think was going to thrive versus survive. Often when they are not going to survive, usually the best course of action is helping that individual move out of the role quickly.  

Thriving is another question. I have had situations and specific individuals who were working in a role, they had a good attitude, they were coachable, and they were doing fine. These individuals likely would have stayed in that role for the rest of their career, not moved up and not done anything different. They would have just been fine there – contributing, but not thriving.  

For example, I worked with a direct report who thought she wanted to be a recruiter. She was a fine recruiter. But we found she was extremely detail oriented and very focused on process, which does help you be a good recruiter. There were glimpses in her interests and competencies that indicated she could be good in compensation. So I suggested she try a gig in comp – which was a huge leap for her.  

In the end, she got into comp and was extraordinary. To top it off, she is now leading the entire comp function for a multinational company and is thriving quite well. I think if she had stayed in recruiting she would have survived but certainly not thrived.  

Boyden: When you are looking at a hire, would you give preference to an HR degree over an MBA or another degree?

Carter: We actually have some data around this. Here are a couple of things we know from people that we like to hire: First, we prefer to hire people into our HR rotational program who have some business experience. They tend to progress more rapidly than people we hire straight out of school, even if they went to undergrad and then to graduate school.  

The second thing we found is that people with an MBA accelerate faster than those with an HR degree alone or an HR-related degree. I think that’s because of the business connection that happens with the MBA. What works out really well is if someone has an undergrad HR degree, moves and does some work in HR, goes back for an MBA and then works for us in a rotational program. That would be an ideal mix. 

Boyden: What’s the greatest lesson you’ve learned in business?

Carter: I have several, some of them more painful than others. The most important thing I have learned in 20 years in business is that it’s a very small community. I’m not talking about just the retail sector, but the whole business community in general is very small.    

What has been incredibly valuable to me are the connections I’ve made and kept from 20 years ago and the relationships I’ve developed. I still maintain solid relationships and connections with every single company I’ve worked with. Those are either valuable for just a question, valuable for networking, or valuable for helping other people I’m currently connected to get connected to other places.  

I do have to say LinkedIn is incredibly helpful in staying connected. I love it. Through it I keep in contact with several mentors, bosses, peers and people I worked with over the years.  

Boyden: What is the value of having an external search firm in finding the right talent?

Carter: Clearly technology has changed the game for search. It is incredibly easy to connect with people and you can do a lot of things in-house that weren’t possible before. This is especially true for a large organization like Sears.    

But there’s still a very absolute place for search firms, especially if it’s “surgical” work, where there’s a specific type of role that’s somewhat equivalent to looking for a “needle in a haystack.” So when there’s surgical work or even bigger executive searches, you are benefiting from relationships that allow a search firm to advance a conversation, especially if the opportunity isn’t immediately apparent. 

In the case of Sears, it’s very helpful in more senior searches for us to have someone else tell the story and talk about the transformation at Sears versus just working a LinkedIn connection. The recruiting firm can say: “Here’s what you may think, but let’s talk about what’s really going on and why I think this is a good fit and why you should listen.”

The other space where an outside search firm is very valuable is if internal HR and talent units aren’t focused on culture and hiring for a specific organization, it’s usually better to outsource it to add a deeper understanding of a unique culture of that particular organization. 

Boyden: You’ve been in HR across multiple well-known companies. If you had a few minutes to offer career advice to a new HR exec, what would it be?

Carter: There are so many people who, in the beginning of their career, focus on the wrong priorities. Be sure you understand the difference between your learning years and your earning years. If you don’t focus on the learning years in the beginning of your career, you will not maximize your earning years when they arrive. There are so many people who get out of school and for a variety of reasons focus on trying to earn a ton, and in doing so don’t focus enough on gaining the experiences and the skill sets needed to do the earning long-term.  

I can tell you 20 years later that people I’ve observed who focused on the learning years by just getting the right amount of information in the basket and who were not focused on just earning in the beginning of their careers had much longer legs in their careers than those who just focused on the earning early on.

I interview people all the time who reveal that they had a great boss and a great situation, and then another company offered them a ton of money and it goes wrong. They then spend the rest of their career recovering from that situation. If I could tell new grads or people who are new in their career one message over and over, it would be to just focus on learning. The earning will come. This is not just theory. This is from seeing it work and watching people’s careers grow over two decades. 

We would like to thank Catherine Gray of Boyden Chicago for making this edition of Boyden’s Leadership Series possible. The views and opinions expressed here do not necessarily represent the views of Boyden or Sears Holdings; only those of Mr. Carter. 

For Ms. Gray’s insight into the current executive markets in the human resources sector, please continue to the Boyden View section. 

The Boyden View: The Challenge in Landing a World Class CHRO

As they have moved into the C-suite, what experience and track records today are clients most often looking for in Chief Human Resources Officers?

“Must-haves” for best in class CHROs are business leaders with a commercial mindset, a strategic focus and global experience. Additionally, they are collaborative, and experienced in business transformation and global talent management.

In what area is there often a dearth of experience in the HR executive landscape?

There is a small pool of CHRO talent that truly has global experience. They have lived as an expat or spent significant time in a region, particularly in an emerging market. These CHROs are highly sought-after.

Are internal candidates or external candidate selections increasing compared to a few years ago? And why?

With the number of changes in executive leadership at the top of organizations, there has been an increased demand for external candidates. Most often, the new leader wants to select his or her own HR partner.

Has there been an increase in review of “cross-border” candidates, as many companies plan to continue aggressive expansion globally?

Yes. Candidates who have global experience have a competitive advantage over those without. Assessing a candidate’s ability to work in overseas markets is becoming an important part of the evaluation process. 

In what industry sectors is recruitment for HR executives most competitive on the client side?

Great HR talent is in demand across all sectors.  

The lean model is now the permanent “new normal.” How does this change the approach and priorities of HR leaders?

More than ever the role, the approach and priorities of HR leaders have changed. Responsibilities have expanded, requiring new areas of expertise. Their priorities include talent management, collaborating with the leaders on the corporate strategy and as an advisor to the board around corporate governance and compensation issues. 

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