Playing for Keeps

Mattel’s Alan Kaye tells Huw Thomas that managing HR at one of the world’s biggest toy companies isn’t all fun and games.

“There's a lot of passion in our organization, which is a big part of how we built this culture”
-Alan Kaye

“Let me tell you a story.” If you speak with Mattels’ SVP of HR Alan Kaye for any length of time, it’s a phrase you’re going to hear quite often. After decades in the business, with a 12-year stint at IBM preceding his time at Mattel, Kaye is a true HR veteran. He’s picked up a few things over the course of his working life and he sets them out in stories and anecdotes about his experiences. He jokingly apologizes as he launches into his third or fourth tale over the course of our interview, but there really is no need for any excuses. What these stories reveal is a passionate and committed HR man, someone whose professional experiences are seamlessly intertwined with the narrative of his life. Our interview takes place in Kaye’s office, a place with ample reminders of what makes Mattel tick. Dominating the wall is a series of pictures of happy, smiling children. This, argues Kaye, sums up the culture that the company aims to promote. “When I recruit at a very senior level there are a lot of skill sets we’re looking for,” he says. “But if we can get people into our company who have in their heart the desire to put smiles on kids’ faces, we’re starting with the right stuff.”

But smiles haven’t always been in such ready supply at Mattel. Around the turn of the millennium, the organization hit a thoroughly rocky patch with its acquisition of The Learning Company. Made at the height of the dotcom bubble, the $3.8 billion takeover has gone down in infamy. Rather than delivering the expected big profits, The Learning Company quickly became a millstone around the neck of its parent company, knocking about 75 percent off its stock price. The fallout led to turmoil in the boardroom with the then CEO and much of the executive management being forced to resign. But as difficult as these times were, it is also possible to perceive the moment when Mattel truly began to change as a company. The arrival of current CEO Bob Eckert in 2000 had a galvanising effect across the entire organization, and HR was no exception. For Kaye, it was clear from the first meeting that Eckert was going to make a big difference. “When we hired Bob Eckert from Kraft, the board brought him in and asked him, ‘Who do you want to see inside the company?’” Kaye recounts. “His answer was, ‘I only want to see the head of HR. I want to understand the culture.’” Eckert had been at Kraft for 23 years of his career and had gone all the way up to president. Kaye was fascinated by Eckert’s interest in HR and the way is career had progressed. He wanted to get a handle on the man.

“So I went to visit the head of HR from Kraft,” Kaye continues. “I flew out to Chicago to sit down to understand what culture Bob was coming from, to understand what his transition was going to be like. I was kept waiting for about five or ten minutes, and the HR guy came out and apologized for the delay. Now, in Mattel, in those days, somebody might wait until 10:45 for an interview that was scheduled at 10:00 so it wasn’t a big issue to me. It was to him. He told me he was talking to a new Vice President and I said, ‘Oh, that’s great.’ And he said, ‘No, you don’t understand. This is one of the first Vice Presidents we’ve brought in from the outside since I’ve been here.’ He had been at Kraft for 33 years. Immediately, I understood where Bob was coming from. At Mattel we did maybe 60 percent of our placements were from the outside, and we needed to turn it around to be a shop that developed people from the inside. This leadership development has been a big key.”

Since Eckert’s arrival, the way Mattel approaches employee development has changed beyond all recognition. “We do very active, robust succession planning,” says Kaye. “We do it right up to the board level. The board gets very much involved with our succession planning, and it has become a case of only bringing people in from outside once in a while. We have really become that kind of development house. We have a solid group of executives and a solid group of executives underneath that, and so on right down the line.”

Significant developments
Key to Mattel’s efforts to promote from within has been its Leadership Development Center. “It’s actually a global program,” explains Kaye. We have a center here in El Segundo in Southern California, but we also roll these classes out throughout the world, and we bring in management, we bring in cross-functional management and cross-silo management from all over the world. Some of these classes are truly global classes.”

Once again, CEO Bob Eckert has been a key player in this initiative. “He actually sponsors one class a year where he’s in the class with 20 to 30 executives going through whatever the mission of the class might be,” says Kaye. “We also do a global leadership class, where we bring in people from all over the world. We ran that for a few years at Thunderbird University, which probably the best-known international management school in the US.” 

Kaye tells us that these programs have proved extremely popular with Mattel’s people, as evidenced by the responses to the organization’s regular employee surveys. “By the time the next survey came along, the write-in comments were, ‘How do I get in?’ and that’s what we wanted to create. We’ve now been doing this for nine years, and people have really gotten to know each other through these programs.”

Culture is a term that Kaye keeps returning to. For a company like Mattel, which markets its products to children and families, the concept of living your values is particularly important. Because of the global reach of toys like Barbie, Hot Wheels and Fisher Price, Mattel’s people often end up acting as ambassadors for the brand even outside of working hours. Tell somebody you work for a big bank, an auto manufacturer or an oil company and that will often be the end of the conversation. Tell somebody that you work for the company that made their favorite childhood playthings and, chances are, the reaction will be quite different. “It becomes a discussion point,” says Kaye. “It’s usually met with a smile. The fact that you work for a toy company that’s been around for a long time and is so well known usually engenders some positive feelings and a discussion. That is what our employees face, and I or management or the company really want that discussion to be something that our employees can be proud of, and I think they are at this point.”

While Kaye admits that a large part of the company’s family friendly culture flows naturally from the fact that Mattel makes toys rather than weapons or medical devices, a great deal of effort needs to go into maintaining and promoting it, particularly in a globally dispersed workforce. One thing is key, any cultural efforts need to be fully backed by senior management. “You can’t just do it from the senior HR job,” says Kaye. “You have to do it with the entire senior team because if line management is not in this with you, it will be very visible to employees, and what you’re trying to do will just be a ‘flavor of the month. I think I’ve been very lucky, especially over the last nine years with our current senior team.” 

What’s the incentive?
Recognizing and incentivizing employees has become an increasingly important part of business in recent times. At Mattel, one of the main spokes is an annual bonus system based on company performance. “We have driven this annual bonus system pretty much through the organization,” says Kaye. “For the most part all of our professionals around the world are involved in a bonus system which says you get paid on how the overall company does.”

Tying the awards to the organization’s performance brings a number of benefits. “There is this forced interest in how Mattel is doing as a company,” Kaye continues. “We try to communicate that whether you’re in India or China or here at headquarters. The second piece is about how your unit does and then the third piece of our annual bonus arrangement is how you individually do, and we drive that low into the organization.”

Aside from straight monetary motivation, Mattel also rewards it people in more unorthodox ways, such as the concept of ‘Rave Reviews.’ “Say someone invites my assistant to participate in a charitable campaign that Mattel is running, and he or she really helps put this thing together, then they can give my assistant something we call ‘Kudos,’” Kaye explains. “It’s a recognition that goes to my assistant and automatically to her manager. It gives her a free Coke in the commissary or a cookie or something like that. It’s just a little thing, but it’s recognition that can be given throughout the company from anyone to anyone else. It has really caught on. And each organization will give out various Kudos Awards. Once a quarter we would pull people’s names from various jars, and they might get a designer Barbie, a hotel trip or something like that. Anybody who has gotten a Rave Review in that quarter is eligible to win a prize at our quarterly update.”

Unfortunately, HR can’t all be about prizes and presents, particularly at a point in history when every day brings news of fresh corporate layoffs. “These are difficult times and all organizations are looking within themselves to see how they can streamline, and where their economies of scale are,” Kaye concedes. “Bonuses aren’t the biggest these years, so how do you survive in these economic times?”

“Unfortunately, in all organizations you have to look at reduction in force. You have to look at people maybe working less hours than they’d want to work. You have to look at our factories not being on three shifts, but two shifts. Things like that are all difficult decisions to make. We’re fortunate that we have a strong enough culture to be able to say, ‘Yes, we’re in difficult times. We need to get through this together, and there need to be some sacrifices for the good of the whole.’ I think that it’s gotten us through some very tough times in the last two years. As long as we communicate well in the purpose and reason for these things, that positions us well this year and as we look to the future. I think our people are behind us.”

In many cases it’s easy to take pronouncements like ‘our people are behind us’ with a pinch of salt, but in Mattel’s case, there is string evidence that it’s not just talk. Kaye tells us of how, after the installation of Bob Eckert and the new management team was installed one of their first actions was to undertake a comprehensive employee survey. “One of the things that surprised both us and the survey company is we had something like plus-80 percent participation rate in this survey,” he says. “People had a lot to say. People wanted to express their opinions. They wanted to be involved. We’ve done a number of surveys since then, and that participation rate has only gone up. So that’s been really good. We really think we have a handle on what our employees are feeling, what the issues are, and we try to deal with those issues. We try to put in action plans, and as a senior team we follow up on those action plans to see what’s being done, and then we measure it the next time around.”

After spending some time in his company, not even the most hard-hearted cynic could doubt Kaye’s sincerity regarding the company and people he represents. He is justifiably proud of the way Mattel has reinvented itself as an organization since the turn of the century and seems intent on continuing the good work. He tells one last story about how those at the company identify with the products they create, but he could quite easily be talking about himself. “It’s not even a brand strategy. It’s a brand passion,” he says. “For the people who work for Barbie and on Barbie she’s not quite living, but she’s close to it. There’s a lot of passion in our organization, which is a big part of how we built this culture.” 

Internal affairs
How Mattel’s people defined the company’s values

“Mattel operates by what we call our Play Values. These are “Play with passion, play fair, play together, and play to grow.” How we got those really illustrates the way we work.

I already spoke about the leadership development classes. This was one of these classes in Arizona where we had about 30 middle management people for three and a half days. On the last day, Bob Eckert and the senior team traditionally all show up and ask the class various questions and have a discussion. It’s usually a good end for the program, which is almost like a three and half day MBA. 

This is maybe the second year of us doing this and it’s a very good class. On the final day we walk in and all 30 are sitting there in matching t-shirts that they had designed and printed. Remember they’ve only been together for a few days and they’re in a place where none of them work. For them to be able to do that in a different location and to get that together to be united after such a short time was pretty striking. 

So as Bob Eckert stood in the front of the room and began, one of the participants stood up and said, “Mr. Eckert, we’ve loved this class. We’ve really bonded as a group, and we know you’re trying to improve the organization. We have some suggestions for you.” They went through a number of things, but one of them was, “You know, we don’t know if our values really tell the story of our company.” 

So Bob asks the group, “Okay, tell me what are our values?” We had some very nice values, which I personally wrote and were very well thought out, but no one in the room could repeat them. That wasn’t good.

So the group said, “We would like the senior team to try to get together and come up with some values that really epitomize who Mattel is.” But Bob turned and looked at them, and he said, “No, you’re going to do it. It’s got to come from you.” And he said, “This class isn’t over. Four months from now is our officers meeting, and I want a new set of values by then, and you guys are doing it. I give you permission to get together and meet. Here’s your executive contact, and I want it presented to me a month before the meeting.” This team went out, 30 executives from all over the world and they did surveys and interviews throughout the corporation. 

A few months later they came back with these Play Values, and we were so impressed that we got them out to the entire corporation. This was seven or eight years ago, and to this day people talk in these values. We all know them. We have shirts, the bracelets, everything. From an HR standpoint it’s one of the things I am most proud of. This didn’t come from HR. This didn’t come from senior management. This came from the organization.”

Dress to impress
Mattel’s party atmosphere

I happen to be a big Lakers fan. I was going to go to the game one night, and I had to bring my Laker clothes to change into, and I said, “You know, I shouldn’t be changing into my Laker team shirt. We’re in LA. I should be able to wear it if I want. And why just me?” So I just took the initiative, wrote a little letter to all employees and said, “Tomorrow is Laker Day!” 
This was about 3:00PM in the afternoon on Thursday when we put it out. We have 2500 people just in this campus. By Friday, a majority of them were either wearing Laker gear, their own team colors or purple and gold. We had a costume contest in the cafeteria where people were just amazing, especially in our design center. One woman showed up with 10-foot wings that said “Kobe Bryant” on each wing and purple hair down to her back.

Also, Halloween is big for us. The building is just decked out. Families take their kids out of school, and the kids all come in, and every floor has trick-or-treat. In my office, we used to set up kind of some coffins outside, a real scary environment, and it’s just a wonderful place to be with the kids running around for trick-or-treat and costume contests. So it’s a very huge event for us here as well as at our other locations, so that’s a fun time. So we do those kind of things, and in our culture that’s what we need to do.