Transforming PMI from cigarette manufacturer to smoke-free champion: HR's role

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Moving away from the cigarette business at Philip Morris International (PMI) requires a completely new value chain, and from an HR perspective it's vital to equip the organisation with new skills

PMI announced its new business vision to create a smoke-free future in 2016. We aimed to move away from the cigarette business as quickly as possible and build our future on less harmful smoke-free products. This seismic shift of our business extends far beyond changing our product. It requires a completely new value chain as we move from a traditional manufacturing giant with essentially one core product line, to a company with a portfolio of electronic-based products requiring new processes and machinery.

A new model for commercialising these products was also needed – with retail stores, digital platforms and after-sales support for adult consumers to switch to smoke-free alternatives. Add to that product recycling and reuse initiatives as part of our new electronics supply chain to contribute to the circular economy in addition to efforts to help farmers diversify into new crops as our tobacco leaf requirements decrease over time. From an HR perspective it was vital to equip the organisation with a host of new skills.

I had many conversations with our CEO to formulate strategies to put our smoke-free vision into practice. We knew the importance of closing our skills gap, building a new workplace culture, and creating new ways of working by breaking down silos and hierarchy. No small feat by any standards.

We visited Silicon Valley and other tech hubs across the globe, where we learned some essentials for success:

  • A robust data governance system to support fact-based decision-making
  • Improved systems and processes
  • Becoming more customer-centric

With PMI’s new plan for our business transformation crafted, it was clear that we lacked many of the skills required to become a data-literate company. So the people and culture department created new roles – in data governance, data architecture, data science, data development and many other fields. And we went on a search for top talent from globally-renowned tech hubs so that we would be equipped to meet the business challenges of today’s rapidly-changing world.

In 2017 we set up a new function in PMI, enterprise analytics and data (EAD), which represents an innovative hub of internationally-diverse data governance and data science specialists. We have blended external talent with existing talent from a variety of backgrounds to create a 100-strong pool of individuals organised into multidisciplinary teams, offering a more comprehensive approach to problem-solving. This is something completely new for us at PMI. Now every decision we make is based on insights generated from a solid data foundation as we accelerate our progress toward a smoke-free future.

Given our longstanding history as a leading tobacco manufacturer, I feared we would struggle to attract this highly-coveted pool of tech talent. But I had no need to worry, for these three reasons:

  1. PMI’s new purpose to transform into a science and technology leader in smoke-free products with the potential to improve the lives of the world’s 1.1 billion smokers proved an enticing proposition for experts from these fields.
  2. Our tech stack of tools and platforms are best in class, so today’s digital natives and other experts in the tech domain know that when they join PMI they’ll have access to tools and techniques to help them solve business problems, drive innovation and put their skills to work.
  3. PMI champions an inclusive workplace where everyone feels they belong – regardless of age, gender, ethnicity, disability or sexual orientation. Our people know they will be treated with fairness and respect and that their voices will be heard. One important initiative has been ensuring that women and men are paid equally for work of equal value (independently validated, with our global Equal-Salary certification earned earlier this year).

These factors have accelerated our progress toward becoming data-driven and mark a significant shift in style for a company steeped in a long tradition of combustible cigarette brands. But it’s not just the scientists and researchers at PMI who are helping us build a smoke-free future; it’s a collective effort involving the power of many. As American entrepreneur J.C. Penney so aptly put it: “Growth is never by mere chance; it is the result of forces working together".

At this point in our journey I find a lot to be optimistic about. And as we transform our business from the inside out I’m hopeful that attitudes will soon change and smoking cigarettes will become as outdated as the telegram, fax and typewriter.

Charles Bendotti is senior vice president people and culture at Philip Morris International (PMI)

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