Despite the Pain, They Train

Persuading employees to embrace new training is challenging even during times of prosperity. Imagine their reluctance when your company makes deep, painful job cuts.

    Such is the dilemma facing LandAmerica Financial Group Inc., one of the nation’s largest title insurers. The company, based in Richmond, Virginia, provides title insurance and related transaction services to mortgage lenders, real estate developers and brokers, attorneys and homebuyers. Fueled by a sustained homebuilding boom, LandAmerica during the past decade evolved from a regional niche player in the southeastern U.S. to a Fortune 500 company. Revenue has doubled since 2000, from $1.8 billion to more than $4 billion in 2006 (full-year financial results for 2007 were not available at press time).

    At one point, its workforce swelled to 13,500 people. Like many of its financial brethren, however, LandAmerica is feeling the effects of the nation’s ongoing mortgage fiasco. Real estate has gone from robust to bust. Although always cyclical, market conditions seldom have been as devastating as they are now. Languishing home sales are triggering a spate of mortgage-related job cuts across the United States. LandAmerica has slashed about 2,400 jobs during the past year, including 1,100 layoffs announced in August.

    Even as the housing market continues its plunge, LandAmerica hopes to withstand the onslaught by steering employees into well-defined career paths. Heading into 2008, employees will be required to begin mapping out individual career plans, guided by clearly established performance objectives for each job and job family.

    For the first time, LandAmerica is gathering comprehensive data on competencies and skills gaps. It will use the data to design training that lifts employee performance. Training resources delivered through LandAmerica University, the company’s online learning and development center, will connect the dots between learning, career growth and the company’s financial results, according to the company.

    “It is an effort to ensure that our employees know what is expected of them, and how they can progress and develop,” says Susan Sinkiewicz, the company’s vice president of talent and learning resources.

    The approach marks a huge step forward for the company and it is prompted by two factors, both related to the need to better assess the talents and skills of the organization. First, LandAmerica realized about four years ago that a large percentage of employees soon would be eligible to retire. Finding replacements is no easy matter. Second, the company’s workforce is spread across three continents. In addition to the U.S., LandAmerica operates branches in Canada, Mexico, Central America and South America.

    The company’s origins date to October 1991, when Universal Corp. spun off its Lawyers Title Insurance Corp. subsidiary. The new company, named Lawyers Title Corp., went on to acquire two other title insurers: Commonwealth Land Title Insurance Co. and Transnation Title Insurance Co. The combined entities later were renamed LandAmerica Financial Group, which serves as a holding company for a host of subsidiaries.

    Until recently, the different companies retained a fair amount of autonomy, but LandAmerica wants to digest its separate holdings into a unified operating company. The business objective is to get its 900 offices to follow a set of uniform business procedures. LandAmerica needs to provide “superior customer service all the way from Arizona to New York” and beyond to remain competitive, Sinkiewicz says.

    “Four years ago, we made learning and talent development a priority. But we didn’t want to just create a training department; we wanted to embed active learning into our training,” Sinkiewicz says. “To do that, we needed know where our employees stood. That’s data we didn’t have.”

    Part of the problem stems from the highly fragmented nature of the escrow and title business. Much of the work traditionally has been processed by smaller mom-and-pop businesses. As LandAmerica began acquiring other companies, it also inherited their problems. For one thing, performance reviews often were lacking or inconsistent, making it impossible to pinpoint areas of deficiency when planning for succession.

    Even worse, LandAmerica lacked a systematic way to gather and assess data about employee performance. In particular, the company could not determine whether employees were capable of executing the complex tasks associated with real estate transactions.

    “It quickly became apparent that we didn’t have a handle on our talent profile in transaction services,” which are the customer service positions that generate revenue, Sinkiewicz says.

    Rather than customizing a solution on its own, LandAmerica solicited bids from talent management software vendors to analyze jobs by job families, identify critical functions, build a skills inventory and design appropriate training.

    The company eventually settled on human capital management vendor Softscape, based in Wayland, Massachusetts. Softscape is creating a “knowledge warehouse” that would enable LandAmerica’s decision-makers to make a quick inventory of skills and competencies of individual employees.

    “LandAmerica has a lot of cross-fertilization between different lines of business. They’re looking for successors from within—people who can move vertically or horizontally across the organization,” says Christopher Faust, executive vice president of global strategy for Softscape.

    Softscape’s platform analyzes other questions too, such as the implications for succession and workforce planning when key contributors are moved from one business unit to another.

    LandAmerica is introducing the performance- and objectives-driven training in small doses. Eventually, Sinkiewicz says all employee groups will be assessed to spot gaps. The initial pilot is geared to 300 top performers, including 75 executive managers and 225 managers who work at its operating facilities.

    Using 360-degree feedback and targeted performance assessments, they are expected to create a development plan that includes a methodical approach to acquiring the knowledge that LandAmerica deems critical to its corporate strategies. LandAmerica has identified 14 competencies that are essential for employees to develop, including behaviors that describe concepts such as integrity and respect for others. Another important behavioral characteristic centers on continuous improvement, which involves encouraging employees to come up with innovative ways of improving business processes and serving clients.

    Sinkiewicz says the greatest benefit will emerge as the company begins to mine its performance data. Someone trained as an escrow assistant, for example, will be able to see the learning requirements for advancing to the position of escrow branch manager. Likewise, employees who work in the residential side of LandAmerica’s business will be able to see what training they would need if they wanted to pursue jobs in commercial divisions.

    “We don’t push training for training’s sake. What we are pushing is the importance of completing a performance review and an individual development plan that identifies gaps,” Sinkiewicz says.

    Companies facing adverse financial conditions frequently resort to cutting back their spending on employee training—a mistake LandAmerica intends to avoid.

    “We’re not necessarily stepping up our training budget, but we’re not pulling back. We are looking for more efficient ways to do things,” Sinkiewicz says.

    Kerry Patterson, a training and management consultant with Vital Smarts in Provo, Utah, says it’s critical for companies like LandAmerica to have ongoing “crucial conversations” with employees, especially when trying to weather a stormy business climate.

    “Be frank, be honest. Tell them: ‘Look, we don’t have control over the entire market. What we do have control over is an ability to make you a better employee by providing you with training,’” Patterson says.

    LandAmerica should be able to trade on a reservoir of good will among its employees. In 2007, even amid news of layoffs, LandAmerica earned a spot on Fortune magazine’s list of the most admired companies in America.

    The company says more than 75 percent of its employees have used the training resources made available through LandAmerica University. All told, about 20,000 online learning sessions and more than 200 classroom sessions have taken place.

    Early returns on skills assessments also are promising. Faust of Softscape says LandAmerica has been able to reduce turnover by about 10 percent. Most important, the company is holding on to more of its promising young managers.

    Along with emphasizing career paths, the company’s Leadership Academy provides in-depth management training to a select group of leaders. The 20 people who attend each year must be nominated for the program, which is run by the University of Richmond’s Robins School of Business. To be considered, managers must score exceptionally well on annual performance and talent assessments.

    Participants spend one week a year, over a two-year period, at an off-site location, where they tackle strategic issues considered essential to LandAmerica’s growth. The training includes material on relationship-centered leadership, communication, negotiation, evaluating joint ventures, honing financial skills and learning the basics of SWOT analysis—how to size up an organization’s “strengths, weaknesses, opportunities and threats.”

    A comprehensive range of activities deepens people’s exposure to critical issues facing the title and mortgage industry, and the learning doesn’t end after the week is up. The group conducts regular monthly meetings, aided by a facilitator, to gauge its progress toward assigned goals during the year.

    Morton Manassaram exemplifies the push to groom new leaders. A 12-year company veteran, Manassaram joined LandAmerica 12 years ago as an accounting manager in its South Florida branch. Later, he advanced to the position of regional controller.

    Last year, shortly after completing training through the Leadership Academy, Manassaram assumed a new role: corporate performance business partner. The fancy-sounding title entails evaluations of business practices that affect financial performance, including helping managers make fact-based decisions.

    “Retaining employees who are considered high performers, and letting them know that they will have opportunity to grow, is something that’s very important. That’s really the success of the Leadership Academy,” Manassaram says, who estimates about half of the 20 people in his group occupy positions of increased responsibilities.

    Manassaram also is sharing his knowledge with others, having recently taught a one-day Leadership Academy course that illustrates how an employee’s individual performance affects business and financial results.

    Sinkiewicz says the leadership initiative is paying off in new ideas and innovative thinking. “They’re taking the learning and immediately applying it, increasing revenue and reducing expenses.”