Vice President of Talent Development Laura Heaton and her team are ensuring Penske staff have the skills they need to drive the business forward.
Penske Transportation Solutions prides itself on being a company that "moves the things that move the world forward." It is recognized for its bright yellow trucks that crisscross US interstates. The transportation services company also has subsidiaries operating in a variety of industry segments, including retail automotive, truck leasing, transportation logistics, and professional motorsports.
But that tagline doesn't only reflect how its trucks and drivers transport goods from point A to point B. Laura Heaton, vice president of talent development, says Penske is an organization where people help people move forward—both external customers and the internal workforce.
"From a talent development perspective, it's crucial that we have an environment where our employees have the skill sets and mindsets they need to perform meaningful work and have opportunities to grow their careers," she explains.
Like most organizations, pandemic-induced turmoil, ever-changing regulations, and supply chain disruptions presented Penske with unique challenges. However, rather than losing business and staff during the past few years, the company has seen double-digit growth.
It currently employs approximately 40,000 workers who require a diverse set of knowledge, skills, and capabilities. In addition to drivers, the workforce comprises such roles as warehouse workers, diesel technicians, software engineers, customer service representatives, data scientists, and logistics and operations professionals. Penske is adding new positions daily.
"It's a challenge to stay ahead of the increasing talent demands," Heaton says, and her main objective is to "lead a strategy that prepares our workforce to thrive amidst continuous growth while also building the organizational agility necessary for adapting to a volatile, uncertain, complex, and ambiguous environment."
That's no easy task. "The company's rapid growth and the complex business environment mean that we need to develop talent systemically," she explains.
Heaton relies on a team of 60 TD and organization development professionals, which has grown from just 13 individuals when she joined the company in 2015. The TD team is organized around five interdependent centers of excellence: enterprise leadership and succession development, learning design, sales training, operations development, and performance and professional development. TD professionals within those centers of excellence have strong partnerships with the heads of the company's various business units.
Heaton explains that to shape the right learning and performance solutions, each center of excellence must work with business unit leaders to examine business objectives, contexts, processes, and work tasks through a different lens: an OD lens that puts the human dimension at its core.
What the business leader asks for and what they really need often varies. For example, the team may receive a request for communications training. However, after the team conducts a thorough analysis, it may find that role clarity is the root cause, and therefore—instead of the communications training initially requested—the solution could involve job design or redesign, a new team startup workshop, or some job aids.
The analysis is the tricky part, Heaton admits. And it's her responsibility to ensure the TD practitioners "have the knowledge and influence skills to conduct thorough process consulting," she says. "We often view a request for employee training as a Trojan horse for delivering high-impact organization development."
Ultimately, one of Heaton's primary goals is to help her team take a more OD and systemic business approach. By doing so, she says the TD function helps strengthen business performance through increased workforce's capabilities.
"Being able to determine the underlying needs well requires a solid understanding of areas like human dynamics, psychology, business acumen, systems thinking, process consultation, process design, organization design, in addition to instructional design. By artfully combining these elements, talent development increases impact," Heaton notes.
Need for speed
Succession planning was another area where Penske needed to make positive changes. Heaton relays that the annual process wasn't moving the needle fast enough, and managers often struggled to determine staff's underlying development needs. Managers instead assumed the employees just needed more time in their positions.
"We needed to create processes and capability that genuinely accelerated the next-level readiness at a pace both the talent and the business needed. We needed to speed things up."
Beginning in 2020, Penske introduced quarterly talent review meetings where managers identify talent in their pipeline who demonstrate the strongest potential fit for critical roles. The senior-most leader of the business under review hosts each quarterly review.
The first quarter focuses on identifying development priorities for the succession candidates. The second quarter reviews the associate's engagement in the development process. The next quarter highlights noticeable results of development. And the final quarter is the formal review that addresses changes in readiness, determines whether employees will relocate, and discusses emerging talent in need of stretch assignments.
Heaton says the traditional classifications of "ready now," "one to two years," and "three to five years" do little to focus development efforts. Worse yet, the process does not help teach managers to identify development needs that the associate could address on their own or that which the TD or HR teams could support.
Thus, Penske changed the categories to discern "who is ready now, and who is ready if, and who is emerging talent." By changing the classifications, providing clear definitions, and increasing the frequency of the talent discussions, meaningful development needs started to come into focus.
As is common with succession planning, in the initial meeting, managers don't always have a specific and actionable development need for the high potentials they've identified. "They recognize that some people are standing head and shoulders above the people they stand next to and that someone needs to have a development conversation with them," Heaton says.
By the next quarterly check-in, the TD team discusses with each manager various development opportunities and resources for their high-potential employees. TD staff work with the manager to dig into each individual contributor's strengths and development needs. The TD function also gives each manager general guidance and templates with specific questions on how to conduct development conversations with their employees about career paths and required training.
At the third quarterly meeting, the TD team checks in with the supervisors to gauge how those conversations are going and what development opportunities staff are engaging in. If needed, the TD team recommends adjustments to individual development plans.
By the fourth quarterly meeting, the TD team is focused on accountability. Is each manager seeing a difference in their employees' performance? What type of new roles are the employees prepared to move into? What positions are open, and are the employees willing to relocate?
"With the pace of growth and our commitment to growing talent from within, we needed to move people along in their careers more quickly. It used to be the case that people would marinate in roles for many years before getting promoted," Heaton explains.
She continues: "That's just not the case anymore. People are moving through these roles so much more quickly that we have to get really clear about what the development needs are and what experiences will properly prepare people. We're also seeing managers take a much more involved approach in identifying and developing talent."
A steep incline
Many Penske employees are shifting into more complex roles with more responsibilities. Heaton notes that the size and complexity of the districts have grown tenfold. "That's a different animal," she admits. "While they're moving into those roles, they're doing so with less tenure. That's why we need to amp up the development and get really clear about what readiness looks like for bigger and bigger roles and how we prepare them at the pace of the business."
Meanwhile, Heaton identifies another challenge as how the industry itself is constantly changing. "There are tectonic shifts coming to this industry. We need to develop and support people who can lead effectively today but also have the flexibility, emotionally and cognitively, to grow the business of today and the business of tomorrow—even when we don't know for sure what that is going to look like."
Indeed, Heaton remarks that the business growth and commitment to promoting from within created needs that the TD model struggled to meet. "Most of our development followed a role-based curriculum format, focusing heavily on knowledge and skills for key roles. We needed to find a way to deepen an employee's subject matter expertise and their leadership skills for a world that was increasingly VUCA."
The answer, she says, was to develop the TD team so it could create more learning experiences that take a vertical development approach. Putting role complexity at the center, Penske created a stratified development model that guides development, readiness, and performance expectations. A defining feature of the model is a focus on both horizontal and vertical learning objectives for each leadership level.
Horizontal development concentrates solely on bolstering knowledge for a role and helps employees expertly perform tasks (what people know). Vertical development helps learners take increasingly sophisticated perspectives along multiple dimensions (how they know it).
The TD team blends both vertical and horizontal learning in the development programs, building new levels of capability to meet complex issues with confidence and increased wisdom.
Heaton notes that in vertical development, designers and facilitators must provide more opportunities for learners to expand their understanding. For example, she says a program facilitator needs to "pay attention to the language a participant is using to see how they're framing and making sense of something and then try reframing it or ask a follow-up question that is just one click bigger."
The approach requires a lot of psychological safety. Heaton points out that one key is to have cohorts where individuals feel a close bond with one another. Developing strong bonds is a result of the program design—the frequency of group activities (either virtually or in person), the length of time they are in the program together, and the reflections that uncover shared human experiences. The longer-format programs include a dedicated leadership coach for each person, which is an essential element of the design.
Essentially, the designers and facilitators work hard to create an environment and a community within the cohort that balances intellectual challenge and emotional support. "Vertical development is our X factor. We try to develop not just what people know but how they know it. It's how we're achieving transformational development at scale," Heaton says.
Committed for the long haul
Penske strongly values having a workforce that stays with the organization from hire to retire. The TD team is a driving force behind the mission to grow talent from within.
Heaton points to the technician role as an example. After an individual joins the company in that entry-level position, the company provides training in preventative maintenance and repairs. Then, as the technician gains on-the-job experience, they receive more specialized training and move through the technical ranks and beyond.
Every business unit has positions that offer a steady trajectory of skill building, she says. "There's a hierarchy of skills that increase within each function, and employees can earn more money with increased skills and experience. We provide the development resources and processes to help people move forward."
Support for employee development comes straight from the top of Penske, affirms Heaton. "Our founder has a saying that he wants Penske to be a very difficult company to get into but one that would be really, really difficult for anyone to ever want to leave."
With that mindset as a backdrop, "It's not out of the ordinary to find people who spend their entire careers here," Heaton notes. "New hires come on board. They start learning the business. They grow their knowledge, skills, and leadership. From there, these employees can go anywhere else at Penske."
And for Heaton and her team, watching people learn and grow their careers is a gift. She shares that they have an unofficial "goose-bump-o-meter" for measuring employees' development experiences—"the feeling you get when you see people make connections and grow can be addicting."
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