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CH2M HILL: Reinventing Organizational Careers 93

CH2M HILL: Reinventing Organizational
Careers
Karen L. Newman,* University of Denver–Daniels College
of Business

Copyright © 2013 by the Case Research Journal and by Karen L. Newman.

In January 2012 Jan Walstrom reflected on the progress she had made in her new role as Chief Learning Officer for CH2M HILL, a large engineering company. With a background in biology and program management, moving to the HR func-
tion in July 2010 was uncharted territory for Walstrom. Yet her career was character-
ized by risk taking, so she accepted the opportunity. And while she was making prog-
ress, she had much yet to do. She looked back over the last eighteen months, recalling
her assignment, her accomplishments, and the challenges that lay ahead.

The Challenge

Walstrom’s boss, John Madia, Chief Human Resources Officer, and Lee McIntire,
CEO of CH2M HILL, had met with Walstrom in July 2010 to describe the problem
they wanted her to solve. McIntire observed:

We are not growing our own employees well enough. We have vacancies at the top that
we cannot fill because we have not developed our own people. Even in this recession,
the external labor market is tight for the kind of talent we need. And it is only going to
get worse when the Baby Boomers start retiring.

People from our recent acquisitions have filled many of our top positions, and I am
afraid we are losing some of our good employees because they see outsiders getting a
preference and blocking paths they might have taken. It’s not just a problem near the
top of the ladder. Voluntary turnover is increasing among new employees at all levels.
When almost 60 percent of our people have less than five years of service and turnover
is increasing in that group, we have a problem.

Madia presented the opportunity:

We want you to reinvent career development inside CH2M HILL. We want you to
create a climate of continuous learning and development for our employees so that
they have career opportunity in the company and so that we have the talent we need
internally to staff our key top positions. This will be an out-of-body experience for
you, in HR. You have spent your entire career on projects. Now we need you to run a

NA0219

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2021 to Jun 2021.

94 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

project for the company rather than for a client, to reinvent career opportunity inside
CH2M HILL.

Eighteen months later, in January 2012, Walstrom had made progress, but the prob-
lem was multi-faceted, systemic and evolving. She reviewed the process she had used.

From the beginning, I wanted to be sure I was addressing the real problem, not just
symptoms of a larger problem, and do it in a way that was consistent with our culture.
Initially, I approached the problem with the end goal in mind—to make career paths
known to employees and to have employee development opportunities in place so that
we could grow our own talent in the future. As time went on, I realized that I needed to
have a firmer grasp of the roots of the problem. So far it’s turned out to be a balancing
act and I have some real questions about the best way to proceed. We live or die by the
quality of our people. We have to get this right.

I’ve come to believe that our lack of home grown executives is due in no small part to
the fact that the industry in which we compete moved rapidly in the direction of much
larger infrastructure projects during the 1990s. As a small consulting firm, we could
not compete effectively for that work because we had not done it in the past and did
not have people on staff with that experience. And we could not give people the experi-
ence without winning the work. So we targeted strategic hires and acquired businesses
that gave us the experience that we lacked. We hired Lee McIntire, our current CEO,
from Bechtel for exactly those reasons.

Ch2M hIll BaCkground

CH2M HILL was a global leader in full-service engineering, consulting, construction,
and operations. With three major divisions, over 170 area offices, active work in more
than ninety countries, nearly 30,000 employees and about $6 billion in revenue in
2011, CH2M HILL was a complex, diversified firm (See Exhibit 1 for a high-level
organization chart).

Founded in 1946 by an Oregon State University engineering professor and three
of his former students, the firm of Cornell, Howland, Hayes, and Merryfield quickly
became known as CH2M. The 1971 merger of CH2M with Clair A. Hill and Associ-
ates created CH2M HILL (See ch2m.com for additional historical detail).

After almost two generations of steady growth, CH2M HILL promoted a twenty-
five-year veteran employee, Ralph Peterson, to CEO in 1991, ushering in eighteen
years of rapid growth and diversification. The firm ballooned from 6,000 employees
and revenues close to $1 billion in the early 1990s to over 23,000 employees and
revenues of about $6 billion when he retired in 2009. Most of the growth came from
acquisitions, the largest of which were the 2003 acquisition of Lockwood Greene and
the 2011 acquisition of Halcrow (See Exhibit 2 for growth data and Exhibit 3 for a
time line of acquisitions, other key events, and the background of key staff).

Before Peterson’s tenure, the company was in the consulting engineering business,
focusing on water and environmental projects. It had grown organically and not hired
top-level people from outside. Peterson saw the industry moving to more comprehen-
sive firms that could also design, build, operate, and maintain facilities, in addition to
consulting on the projects. He led a change in CH2M HILL’s strategy to become a
comprehensive firm through strategic hires at higher levels and strategic acquisitions
to add capabilities.

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2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 95

Exhibit 1: Top Level Organizational Structure of

CH2M HILL

CH2M HILL

Energy, Water &
Facilities Division

Government,
Environment &

Infrastructure Division
International Division

Energy & Chemicals

Business Group

Environmental Services
Business Group Canada

Water
Business Group

Transportation
Business Group Europe

Power
Business Group

Nuclear
Business Group

Middle East/North
Africa

Operations &
Maintenance

Business Group

Government Facilities &
Infrastructure

Business Group
Asia/Pacifi c

Industrial & Advanced
Technologies

Business Group
Latin America

Source: CH2M HILL. Within each business group is a matrix organization to support project-based
work.

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2021 to Jun 2021.

96 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

The CH2M HILL culture was embodied in The Little Yellow Book, penned by Jim
Howland in 1982. The book itself reflected the corporate culture—unassuming, egali-
tarian, and empowering. There were no assigned parking places; dress was informal;
there was no executive dining room; and offices were simple, similar and small. Every-
one was on a first name basis, including the CEO. Since its writing, the 4ʺ x 5½ʺ book-
let had been distributed to every employee in hard copy (See Exhibit 4 for excerpts
and a copy of the book’s cover.)

The IndusTry

Companies in the engineering services industry plan, design, construct, operate and
maintain industrial and government facilities. These companies provide feasibility
studies, preliminary and final plans, and technical services during the design stage of
a project, as well as actually completing the project. In 2012, the $183 billion indus-
try was primarily made up of small firms—about 75 percent of all firms employed
fewer than ten full time people (ibisworld.com). The largest firms in the industry were
Bechtel Group (2011 revenue of $32.9 billion, privately held), Fluor (2011 revenue
of $23.4 billion, publicly traded), and Jacobs Engineering (2011 revenue of $10 bil-
lion, publicly traded). Employee-owned CH2M HILL, at $6 billion in revenue, was
large by industry standards but smaller than the industry’s largest firms. The company
listed its main competitor as UBS, a $9.5 billion dollar publicly traded firm. Each of
these firms offered a full range of engineering, design, construction, maintenance, and
operating services.

Exhibit 2: CH2M HILL Growth in Revenue and Employees

Source: CH2M HILL

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CH2M HILL: Reinventing Organizational Careers 97

The Work aT Ch2M hIll

CH2M HILL’s work reflected four broad capabilities. First, it did consulting work (its
historic roots) that could run the gamut from fairly hands-off to significant involve-
ment in project design. Second, it did design-build work which went beyond con-
sulting and included actual construction management of projects. This capability was
established organically (from within) in 1984 and enhanced in 1997. Third, it did
operations and maintenance, which, as its name suggests, involved engagement with
a project after its completion and included a number of engagements on projects built
by a different firm. This capability was established organically in 1980. Finally, it did
program management that could involve multiple firms over many years and over-
sight of the other three activities.

These four capabilities were not evenly distributed across all business groups. For
example, operations and maintenance was concentrated in that business group. Project
management was found in every business group. The water business group was the
legacy business and had the highest concentration of consulting work. Employees’
careers usually unfolded in one business group if they were technical specialists. Project
management careers most readily transcended business groups.

The firm’s culture valued agility and demanded that people be able to cope with
change and ambiguity. On-the-job problem solving and innovation were the norm.
As noted in The Little Yellow Book, decisions were pushed down to the lowest possible
level. Projects often required long hours, hard work, and real time adaptability; to the
point that some employees felt they could use more clarity and direction in their jobs.
(See engagement survey data in Exhibit 5.) Historically CH2M HILL had been a lean
organization with few levels of management, though as it grew there was more need
for coordination, hence more central management.

Job Flexibility, Meaning, and Satisfaction
The flexible, fluid work environment was an advantage when recruiting new employ-
ees and the firm’s engagement survey data suggested a fair amount of satisfaction with
workplace flexibility (Exhibit 5). Potential employees were attracted to CH2M HILL
because of its “undeniably cool projects” and its “make the world a better place” work
(ch2m.com). The vast majority of its professional employees were engineers and scien-
tists who spent their entire careers working on projects. Some of them had rare and eso-
teric skills. As most were college-educated and working sometimes in remote locations,
supervision was minimal with a great deal of individual autonomy and empowerment.

Assignments that were particularly attractive to young scientists were also the heart
and soul of the company, including clean water projects, hazardous waste cleanup
projects, building ports and running scientific installations for governments around
the world. Employees felt they were making the world a better place through their
work. As Walstrom said, “We are attracted to the work itself and to the benefits we can
bring to communities worldwide, though our work.”

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98 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

Exhibit 3: Timeline of Change and Growth at CH2M HILL

1946 Founded as CH2M
1969 $6.2 million revenue, 310 staff
1971 Merged with Clair A. Hill and Associates, becomes CH2M HILL
1977 Acquired Black, Crow, and Eidsness allowing national U.S. coverage
1979 $95 million revenues, 1,800 employees in the U.S. and Canada
1980 Organically added Operations and Maintenance business
1980 $125 million revenues, 1,800 employees in the U.S. and Canada
1984 Organically added Industrial Design business
1987 $330 million revenues, 3,400 employees
1990 $500 million revenues
1991 Ralph Peterson tapped as CEO, beginning third generation of leadership
1992 “New blood” hiring begins with Bud Ahearn in high-level position
1994 More new blood hired: CFO who championed all employee ownership rather than key execs
1995 Acquired Gore and Storrie, Canadian consulting engineering firm
1995 $1 billion revenues
1997 Organically added CH2M HILL Constructors, Inc., to enter construction business
2000 Acquired Hanford Group from Lockheed Martin (nuclear business) 1,400 employees
2001 Acquired Gee and Jensen (200 employees) with ports and cruise industry expertise
2003 Acquired Lockwood Green ($600 million in revenue, approx. 2,500 employees)
2003 $2.7 billion revenues
2007 Acquired VECO, oil services firm ($900 million revenue, 4,000 employees)
2007 Acquired Trigon EPC, oil and gas services company (320 employees)
2011 Acquired Halcrow, London global transportation engineering ($750 revenue, 7,000 employees)
2011 Acquired Booz Allen Hamilton; State and Local Government Transportation Practice

Key Staff Background 2012

Outside Hires Acquisitions Home Grown—Legacy
CEO Power International
Finance Nuclear Water
Legal and Ethics Transportation Corporate Affairs
Human Resources Industrial and Advanced Tech
Operations and Maintenance Government, Environment, and

Infrastructure
Energy, Water, and Facilities
Environmental

Sources: CH2M HILL: Building a Better World 1946–2009 (in-house publication), ch2m.com, and
linkedIn.com.

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2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 99

Exhibit 4: Excerpts from The Little Yellow Book

A good test to determine if a contemplated action is ethical is to ask, “Would I want to see it in the
headlines tomorrow morning?”
Avoid position perks such as parking spaces reserved for individuals, thick rugs, swivel thrones, and
oversized offices.
The one-page memo is the most effective form of written communication. The number of memos set
aside and lost increases as the square of the number of pages.
Let’s everybody be generous.
The person closest to the action has the best chance of making the right decision—if the person is
properly informed of the firm-wide implications.
Integrity is the all-important prerequisite to employment.
No matter what the organizational structure, if the people in it want it to work, it will.

The Little Yellow Book cover

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100 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

Comments posted on glassdoor.com1 were illustrative of how employees felt about
working at CH2M HILL.

Overall, flexibility is good. Work-life balance is encouraged and supported through
things like flexible working schedules. Supervisors’ primary concerns are getting the job
done, and they give me latitude to figure out how to get there.

I’ve always benefited from the flexible work schedule that CH2M HILL prides itself
upon. This flexible work schedule provides me the ability to better maintain and man-
age my work-life balance.

The work is diverse and should you desire more variety, a change in project or venue
is easy.

The work is interesting and engaging and I enjoy colleagues both within my business
group and throughout the firm.

We have lots of very smart folks who will work hard to achieve clients’ goals.

Walstrom noted,

CH2M HILL is a welcoming employer at all ages and all levels of activity. No one is
pushed out the door as long as they are contributing. But you have to take the initia-
tive around here. For example, our Emeritus Program allows long service employees to
stay engaged in our work if they want to, for as few as one hundred-hours a year. It is
our version of a flexible retirement program. But under the current system, Emeritus
employees need to find their own projects. Some people do not sign up because they
don’t know how to let others know they are available.

Exhibit 5: Employee Engagement Survey Results: 2010

Category of Engagement Percent Satisfied or Very Satisfied
0–2 Years of Service 3–5

Years of Service

Job Expectations 47.6 57.4
Growth and Development 56.2 56.3
Opportunities for Advancement 39.6 36.2
Teamwork 55.1 59.6
Resources and Support 67.3 71.1
My Manager 66.7 63.3
Recognition and Reward 59.7 59.0
Involvement 61.8 62.6
Clarity of Direction 49.6 45.2
Pride about Employment at CH 64.6 68.8

Source: CH2M HILL 2010 Employee Engagement Survey

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2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 101

Projects, Promotions, and Pay
When asked what they liked about CH2M HILL most employees mentioned the
nature of the work itself. Remediating hazardous waste sites, developing water treat-
ment facilities, and planning and executing the London Olympics were meaningful,
challenging opportunities. However, several employees commented on the downside
of the project structure via glassdoor.com:

People are left to find their own work. This means you have to have a large network
within the company and constantly be seeking out projects to work on. If you can’t find
work or have trouble being the go-get-em kind of person, you’ll have a tough time here.

Like many project oriented companies, there are not clear promotion pathways or
career development opportunities—it helps tremendously if you can find your ‘angel
mentor(s)’ to support you as you progress through the organization.

(It is) difficult to cross over to different business groups and other positions within
your own business group. (People are) very easily ‘pigeon holed’ into certain positions.

(There is) little or no career development or support.

There was also some concern among more junior employees about pay and the
performance-reward link. The recession of 2007–2008 had caused a downturn in busi-
ness which led to cost cutting. There seemed to be some underlying concern about
how bonuses and raises were determined and how the best performers were rewarded,
or not. One person on glassdoor.com said

Poor performers are often not dealt with expediently and linger in the system until
such time that work gets low, and then they may or may not be laid off first. However,
if work is going strong for four years, you may have to deal with poorly performing
coworkers for four years since even the poor performers make the company money.
Differences in employee productivity can easily be 5:1 between the Jedis [the best per-
formers] and the non-Jedis. There is however, no difference in pay.

Several other people voiced frustration with raises on glassdoor.com:

There were no incentives to work hard, go the extra mile, or take on challenges. Raises
for the top performing mid-level engineers were approximately 4–5 percent per year.
Raises for the average performers, e.g., just showing up for forty-hours per week, were
in the 3–4 percent range per year.

Average compensation and benefits, with minimal percent increase salary adjustments,
even with high performance.

Good initial pay and benefits, positive work environment, flexible schedule but raises
are small, and far apart. Basically you will be earning the amount they hired you on for.

Employee Orientation and Socialization
The culture at CH2M HILL did not include a lot of new employee orientation and
socialization. Nor did it include rotational or training assignments. Employees were
expected to be independent problem-solvers who could hit the ground running.
For this reason, CH2M HILL did not routinely hire employees right out of college,

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102 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

preferring instead people with work experience. New employees were usually hired
onto a specific project and began work immediately.

Karen Hancock, a CH2M HILL project director, said the hiring process was often
compromised:

Our onboarding process is broken. Thirty percent of the time a new employee shows
up and everything goes wrong: The facilities people don’t have an office ready; IT
doesn’t have equipment ready; and the hiring manager is not in the office. Nobody
knows the new employee is coming. The vast majority of our managers hire one person
or less per year. And we have completely decentralized onboarding to the hiring man-
ager. One of them told me it took eleven different requests to get a new employee’s IT
equipment organized.

Because the company was working on projects around the world that were all going
to end within a few years, there was little in the way of geographically based network-
ing or support. And because new employees were not hired as a cohort, there was
little opportunity to develop networks with fellow hires. In addition, the company’s
intranet was not equipped to facilitate social networking, communities of practice, or
geographic communities.

Walstrom observed that the younger generation seemed to want more early ori-
entation and training as well as ongoing feedback, guidance and mentoring. Yet the
corporate culture was more about autonomy, agility, and immediate productivity. Wal-
strom wondered if the culture could be shifted enough to support new employee ori-
entation, socialization and career development, or if they needed to change their hiring
criteria toward more independent, experienced people.

Project Organizational Structures
Though CH2M HILL was organized into three business groups—Energy, Water and
Facilities; Government, Environment and Infrastructure; and International (Exhibit 1),
work was accomplished via matrix-based projects that ranged in duration from a few
months to several years. Each business group included staff in several disciplines or
areas of functional expertise (e.g., geologists, civil engineers, chemists). Each business
group was its own matrix organization, staffing and re-staffing projects as necessary.
Some projects involved two or more business groups in or outside the U.S., which
complicated staffing. For example, when a water project was undertaken in North
Africa, the Water Business Group had responsibility for the technical work while the
international division undertook local staffing and local government relations.

There was no fully functioning systematic process for project reassignment. New
employees were hired onto specific projects within a business area, not into the busi-
ness area first, to be assigned to a project later. As such, some new employees identified
with their project more than their business group. And the transition from the first
project to the second project was a crunch point. Though the firm had an internal
people-project matching system, it did not work well because information was not
kept up to date. New employees with good networking skills, those with a mentor and
those with visible roles had little difficulty transitioning from one project to another.
Those with fewer networking skills, without a mentor, or with more isolated roles had
a more difficult time transitioning. The vast majority of employees worked on projects
and most chose to stay within their discipline rather than go into management.

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2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 103

Walstrom noted another perverse feature of the culture. She knew from her own
experience that sharing employees across businesses and functions had to be part of
any career development system so that people could learn more systematically from a
variety of on-the-job experiences. Yet, as she noted, this was not happening:

Innovation sharing is part of our culture, but talent sharing is not. Most people are reti-
cent to share the best talent, understandably. But if career development is to take off,
if we are to develop our own people internally, we have to share talent. It will require
a culture tweak and a change in the way we measure people and projects. Our current
measurement system does not specifically measure and reward talent sharing. As you
know, what gets measured gets done.

eMployee deMographICs and Turnover

CH2M HILL had an age distribution of employees that was more heavily weighted
toward Generation X (born between 1965 and 1980), than the population as a whole.
As shown in Exhibit 6, employees were fairly evenly split between the Baby Boomer
generation (born between 1946 and 1964) and Gen X, each accounting for about 43
percent of full-time professional employees. Millennials, born after 1980, accounted
for about 11 percent and the remaining two percent were in the older traditional gen-
eration (born before 1946).

Walstrom believed her most immediate concern was the increasing rate of vol-
untary turnover rates among newly hired employees. Though nearly 90 percent of
employees were over age thirty, 50 percent were also recent hires with five years or less
at the company (Exhibit 6). The fact that turnover was high in this large group was
worrisome. Walstrom expressed her concerns:

It doesn’t matter that our overall turnover rate is not out of line with industry averages.
What matters is that it is happening, to a very large degree, among experienced people
who were hired specifically to bring their skills to the company and who we hoped
would be the leadership of the future. And our turnover rate is increasing.

We do a terrific job retaining people who have been here for more than ten years. Vol-
untary turnover is less than five percent per year in that group. For our new employees
it’s a different story. Our voluntary turnover in the group with five years or less tenure
is nearly 13 percent per year (Exhibit 7). And almost half of our voluntary turnover in
the entire company comes from those with less than one year of service. It’s a problem
throughout the industry but we aspire to a higher standard. It’s costing us more than
$10 million every year, and that doesn’t count the value of expertise that walks out the
door. That’s just hiring and initial orientation costs.

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104 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

Exhibit 6: Generational Cohort and Years of Service Distribution
of Full Time Non-Craft Employees in 2010

Cohort:* N Percent
Traditionals 334 2.4
Baby Boomers 6,175 43.5
Gen X 6,145 43.3
Millennials 1,550 10.9

Years of Service

0–2 4,642 32.7
3–5 3,631 25.6
6–10 2,546 17.9
11–20 2,261 15.9
20+ 1,124 7.9

Total 14,204

*Millennials born 1981–1999; Gen X born 1965–1980; Boomers
born 1946–1964; Traditionals born before 1946.

Source: CH2M HILL

She continued reading results from her retention data and the latest information
from exit surveys and engagement surveys.

The biggest reason these new hires give for leaving is dissatisfaction with advance-
ment opportunities and our lowest marks on the employee engagement survey are
satisfaction with advancement opportunities, clear direction, and clear job expectations
(Exhibits 5 and 8).

The company recognized that turnover was higher among Millennials than other
generations. Its web site made the following reference to turnover:

Our turnover rate numbers are near those of other companies in our industry. Our
greatest generational turnover rate occurs among Millennials, who are generally defined
as those born between 1981 and 1999. We understand that companies across a wide
range of industries also face challenges in attracting and retaining Millennials. To
develop the most diverse and inclusive work force possible and stem this concerning
and expensive turnover trend, we have designed engagement and mentoring programs
to assist people who are new to their career or the industry. One example is JuMP
Network (Junior and Mid-level Professionals). JuMP was established in 2007 and seeks
to foster a culture within the North America Water Business Group that invests in
developing the future leaders of CH2M HILL; maximizes the potential of junior- and
mid-level staff; understands and bridges generational gaps; and enhances morale and
retention.

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This document is authorized for use only by Qijun Wang in Human Performance in the Organization -Spring 2021 taught by Sherry Harsch-Porter, Washington University in St. Louis from Jan
2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 105

Exhibit 7: 2010–2011 Voluntary Turnover

Percent Turnover

By Years of Service 2010 2011
0–2 12.8 15.1
3–5 8.3 10.1
6–10 4.3 4.9
11–20 3.1 3.7
20+ 2.3 2.6

By Generation
Millennials 11.7 12.3
Gen X 9.8 9.3
Boomers 6.3 5.0
Traditionals 5.1 9.6

Years of Service versus
Generation

0–5 Years of Service–all 10.9 12.7
0–5 Years of Service
excluding Millennials

10.5 12.3

By Gender*
Men 10.3 12.1
Women 9.0 8.9

*Includes all full time employees, including craft. Source: ch2m.com.

Source: CH2M HILL voluntary turnover of non-craft, full time employees, 2010 and 2011.

Interestingly, even though the JuMP program was widely viewed as valuable, it had
not spread to other business units because of the culture of not sharing talent or initia-
tives relating to talent management.

One employee offered this explanation for turnover on glassdoor.com:

The main reasons for this (turnover) are no clear path for transition from junior to
senior engineer and poor performing employees who are not dealt with.

There are few middle tenure people here, people with five to twelve years of service.
The company consists of lots of junior folks with less than five years of experience and
senior folks with more than twelve years. As such, the path for progression from junior
to senior is not particularly well laid-out. Senior folks who, in part, are responsible for
career development do not and cannot actively lay out a path.

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106 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

Walstrom spoke for others in her generation.

My cohort, those who have been here twenty to twenty-five years, thrives on the very
cool projects we do. The newer, young hires are even more motivated to build a better,
more sustainable world. They crave challenge and newness and are more willing to leave
the company than we were in order to find more challenge. They are less interested in
doing several similar projects in a row. They want novelty, challenge, and learning. One
of our challenges is to show them the value of repeating similar projects and how it can
lead to career advancement. Turnover is highest in this group, about twice as high as
turnover among Boomers, and growing. We don’t quite have a handle on how best to
motivate and retain them in a way that helps us build our capabilities as a company.

Though we still think of ourselves as a career employer, the fact is that only 20–25
percent of current top management was promoted from within. The others are from
acquisitions or from outside organizations. The fact that so few of our top team mem-
bers were promoted from within and that we have vacancies at the top for months
while we look for the perfect candidate tells me that we are not developing our more
seasoned employees either.

Exhibit 8: Exit Survey Data: 2011

Question Percent Favorable
0–2 Years of Service 3–5 Years of Service

I was given the mentoring or coaching I needed
to do my job effectively.

43.6 43.4

I was satisfied with my advancement opportuni-
ties at CH2M HILL.

35.5 28.7

I had the training I needed to do my job ef-
fectively.

50.4 48.7

I was satisfied with my opportunities for profes-
sional growth and development.

43.7 41.8

My department had an inclusive environment in
which different perspectives were valued.

51.6 54.8

Number of respondents 640 421

Source: CH2M HILL exit surveys, 2011.

groWTh and CulTural Change

As the company grew, it changed. An employee-owned firm from the beginning, it
had a family-like, employee-centered culture until early in the 2000s. As the firm grew
through acquisitions, it moved away from being a group of owner-engineers to being
run by managers who had little history with the legacy company. Several employees
posted on glassdoor.com:

There was a time when CH2M HILL was like a large family. The idea of employee
ownership was paramount. Over the past five years this idea has been replaced with
a top down organization. Outside management has replaced those who built the
company.

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CH2M HILL: Reinventing Organizational Careers 107

Transforming to being a large corporation has resulted in a loss of CH2M HILL’s family
feel.

People at the top have no idea what The Little Yellow Book is.

Growth also led to more standardization and greater need for coordination. Prior
to the mid 2000s, newly acquired firms were usually allowed to keep their structure,
processes and culture, being treated more like subsidiaries than part of the firm. In
some cases even systems were left intact (e.g., payroll, pensions, performance appraisal,
control). In the early 2000s, though, it became clear that this arrangement would no
longer work. Walstrom recalled:

We had too many systems, too many inconsistencies, and we were not getting the syn-
ergies we needed. We had to start integrating, rationalizing, and standardizing. As we
got bigger, we became more bureaucratic, even though it runs counter to our decentral-
ized project culture.

Finally, rapid growth and strategic change affected career opportunities in the com-
pany. Walstrom recalled her early years at CH2M HILL:

When Peterson took over he transformed the company to a full service engineering
organization over a period of years. Before the transformation, which began in the mid
1990s, we were very discipline focused, building expertise internally in our main busi-
nesses, water and environmental work. We were smaller and less complex, we grew from
within and we promoted from within. We had very clear career guidance, development,
and promotion paths. We competed for business based on our expertise so considerable
resources were devoted to training and development in order to be the best.

When we changed our focus to be more comprehensive and client-focused, our career
development activities took a back seat. And we started hiring new blood at mid and
upper levels for their expertise in the new areas of activity—design, and construction
in particular. And of course we began integrating people from acquired companies at
all levels, people who had come to us with very different backgrounds than long-term
CH2M HILL employees had. As a result, our formerly clear career paths became vague
and shifting. We put a lot of energy into finding the right companies to acquire and our
internal development of employees suffered.

Others agreed via glassdoor.com.

Top management is full of people from outside the company . . . which leads to discon-
nect between management and those doing the work.

Pathways to career advancement can be extremely limited. . . . I noticed a distinct pref-
erence for external hires as opposed to promotions from within.

They seem to bring in management from outside so getting promoted into a manage-
ment position is limited, and I feel very rare.

Careers aT The Top

Most CH2M HILL employees chose to stay in their technical discipline and work
on projects for their entire careers. Promotions were possible within the discipline on
a professional track without having to go into management to advance. Until Ralph

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2021 to Jun 2021.

108 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

Peterson’s tenure the company had promoted exclusively from within yet not in a rigid,
proscribed fashion. It had been opportunistic and flexible with promotion practices
which served its business needs well but probably made career paths more opaque to
lower level employees. The firm did not hire in cohorts, nor did it have a set of favored
schools from which it recruited. Promotions were based on performance and potential,
not seniority or educational attainment, as was the case in other firms.

Careers at the firm were flexible and fluid, and the company was willing to look in
unusual places for talent. Jan Walstrom’s own career path illustrated these patterns, as
did the careers of two recently retired senior employees, Nancy Tuor, and Bud Ahearn.

Walstrom’s background embodied much of the old CH2M HILL culture, struc-
ture, and career opportunity as well, though her career played out differently than
Tuor’s. As she was re-inventing career development within the company, she found
herself reflecting upon her own career.

Jan Walstrom
Walstrom began her career with the Oklahoma Water Resources Board in 1985 after
doing graduate work in biology. She quickly became the project manager for a very
complex toxic cleanup site, Tar Creek. Having no experience or training in project
management, intergovernmental relations, or community relations, she dived right in.
She reported to a governor’s task force so the job had very high visibility. “ I learned to
be agile. It was trial by fire. The nature of the project required that we begin with the
end in mind and that is a lesson I have carried with me to this day.”

After a stint at a competitor, Walstrom was hired by CH2M HILL in 1992 and was
quickly asked to take an operations position rather than a project or program manager
position that would have built upon her Oklahoma experience. When she reminded
her soon-to-be boss that she had no operations experience, he commented that she was
there to lead a team. He would teach her how to manage the P&L. Once again, with
no experience or knowledge, she plunged into a new assignment, leading a region that
was doubling in size every two years. She recalled:

By 1999 I was in the top position in the southeast region in the environmental busi-
ness. I had 500 people in my organization and the business was still growing rapidly. In
March of 2003 I was asked to come to Denver to help close the Rocky Flats hazardous
waste remediation site. There was no specific job for me. The people in charge of Rocky
Flats just knew they needed someone with my skills in building and leading teams and
projects.

Once again, she found herself in a new position about which she knew little. While
she had plenty of project and program management experience, she did not know any-
thing about nuclear hazards and cleanups. She was reminded again that she was there
to build a team, not to be a nuclear expert.

By December of 2005 the cleanup was complete, years ahead of the government’s
predicted schedule. In March of 2006, she was asked to go to London to be part of the
leadership team to pursue winning and managing the 2012 Olympic infrastructure
and venues build-up. She admitted, “I needed an international stripe on my sleeve. I
had the right credentials.”

But Walstrom’s career hit a wall in early 2007. Her chronic illness (rheumatoid
arthritis) flared up badly, and she had to return to the U.S. for medical treatment. The
company was not expecting her. “The chessboard did not have me moving back to

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CH2M HILL: Reinventing Organizational Careers 109

the U.S. at that point.” Yet one of her mentors, Nancy Tuor, helped her find a role as
Senior VP of Program and Project Management, her first corporate position.

In July 2010 John Madia approached Walstrom to head up Learning and Devel-
opment for the company. Though she did not have much background in HR, she
accepted the assignment as a learning opportunity.

Reviewing her career so far, Walstrom was proud to work for CH2M HILL and to
have experienced a high level of career success with the company. She recognized that
although her accomplishments were due in large part to her own tenacity and ability
to perform well in high profile assignments, they were also supported by having men-
tors and champions along the way, as well as the luck of being in the right place at the
right time.

Nancy Tuor’s career was emblematic of CH2M HILL’s willingness to look in
unusual places for talent and to balance high profile positions with less visible assign-
ments that, in their own way, helped develop new employee skills.

Nancy Tuor
After graduating from Portland State University, Tuor started her career in the 1970s as
an administrative assistant in a small engineering firm. “The most significant obstacle
I overcame in my career, especially in the beginning, was being a non-engineer in an
engineering firm.”

When she joined CH2M HILL, her trajectory moved toward project planning.
She served in a variety of leadership roles over the next twenty years, including being
part of the team that established CH2M HILL’s environmental business in the 1980s
and overseeing marketing, operations, and financial results for the five-state region in
the southeast U.S.

Tuor’s signature position was as head of the decommissioning, cleanup, and closure
of Rocky Flats, the first large nuclear weapons facility to be cleaned up and closed
anywhere in the world. She recalled this memorable assignment:

Rocky Flats was the assignment of a lifetime. I worked with angry employees who were
going to lose their jobs at Rocky Flats as well as an amazing array of highly technically
trained staff on our side. I learned more about conflict management and creative prob-
lem solving than I ever thought possible. The ten-year, $7 billion project converted an
environmental liability into a community asset. Our team completed the project in
about 1/7th the government’s estimated time and less than 1/5th the government’s esti-
mated cost. We were fortunate to be recognized with numerous awards for our efforts.

Prior to this position, Tuor had focused more of her career in the wastewater area.
She knew nothing of nuclear cleanups but was asked to do the job because of her lead-
ership and project management skills.

Following this very high profile assignment, Tuor moved to corporate headquarters
as Vice Chair of the Board, in charge of strategic planning, governmental affairs, stra-
tegic communications, and technology commercialization. This fluid position, out of
the spotlight, allowed her to contribute in a different, lower visibility way, consistent
with her skills.

Her next position was back in the spotlight, as project director for MASDAR, the
carbon neutral city in the Middle East. She then returned to headquarters as President
of the Sustainability business before announcing her retirement in 2012.

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110 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

The first new blood to be hired at a very high level by Peterson was Bud Ahearn,
a retired Air Force general. Though his career at CH2M HILL was shorter than
Walstrom’s and Tuor’s, it also embodied the flexible, fluid culture at CH2M HILL.

Bud Ahearn
Ahearn was hired in 1992 after a thirty-four-year career in the Air Force, the first of
Peterson’s external hires. As an Air Force officer, he had worked with CH2M HILL, a
contractor and consultant for projects he was managing. When he retired from the Air
Force, he said, “It was natural for me to seek out CH2M HILL. I had an interest in
innovation and growth shared by Ralph Peterson, Nancy Tuor, and others. A lot of us
liked doing big, exciting projects.”

Ahearn began his career with CH2M HILL in a corporate position, strategic plan-
ning. His philosophy was to never “print the plan” but to hand it off as soon as possible
to give more people input. After three years in that position he became an operations
leader in the Northeast Region, then moved back to headquarters as the Group Presi-
dent of Transportation. These two line responsibilities gave him cross-business expo-
sure in the regional job and more in-depth business exposure in transportation. He
explained his approach to his career as, “Do it better than anyone has done it. When I
felt like I was getting flat in the job, I gave it up.”

After his stint as Group President, he became Vice Chair of the Board from 2002
to 2007, a position that Tuor held after Ahearn. In this fluid role, he took on a num-
ber of assignments that matched his skills and interests with company needs. Perhaps
the most important of these was as the customer liaison for the largest U.S. Army
relocation in history. Taking place in Korea, this project benefited from Ahearn’s mili-
tary experience that gave him a unique perspective and significant credibility with the
Korean government, contractors, and population.

Finally, as Ahearn was winding down his full-time career, he held a position called
Director of Human Capital Initiatives, another fluid position that allowed him to use
his passion for leadership and human development internally and externally. Inter-
nally, he forged a relationship with faculty at the University of Michigan that led
to 600 CH2M HILL employees undertaking executive development courses there.
Externally he engaged in the greater Denver community’s STEM (Science, Technol-
ogy, Engineering, and Math) education initiatives in K–12 schools. Ahearn continued
to be engaged at CH2M HILL after relinquishing his formal responsibilities, through
its Emeritus Program for retirees. Ahearn reflected on his career:

I have found that dexterity and diversity have been important features of my career—
the ability to move and adapt on the one hand, and a wide variety of experiences and
people with whom to work and from whom to learn on the other hand. It’s been a
satisfying and productive career. I feel respected by the company and I respect the
company deeply.

doIng The groundWork for reInvenTIng Career developMenT

Walstrom’s charge from Madia and McIntire was to reinvent employee career devel-
opment at CH2M HILL. In their charge to her, they cited two bits of evidence that
career development needed reinvention—increasing turnover particularly among new
hires, and lack of qualified internal candidates for top positions. Neither problem had

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2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 111

been solved by early 2012, but Walstrom had been busy for the last eighteen months
doing the necessary groundwork and now was poised to move forward.

Understanding the Problem
Walstrom had gathered and verified a good deal of data during the previous eighteen
months to help her develop a thorough understanding of the situation:

• Voluntary turnover rates for 2010 and 2011: Increasing and concentrated
among new employees, despite the recessionary business climate. Though
turnover was not high by industry standards (according to one HR profes-
sional it was about average), CH2M HILL aspired to a lower level of volun-
tary turnover than industry averages.

• Composition of top management: Fewer than 25 percent were legacy
CH2M HILL employees.

• Costs of turnover: Staff estimated over $10 million per year in hiring and
new employee orientation costs alone.

• Reasons for voluntary turnover: Exit interviews pointed to perception of
little opportunity for career advancement (Exhibit 8).

• Employee satisfaction: Based on biennial employee engagement surveys,
lowest satisfaction was with advancement opportunities and clarity of direc-
tion on the job.

Based on her research, Walstrom had satisfied herself that careers did need to be
reinvented and that the most pressing problem was with new employees. She had
already set in motion a number of initiatives to help make that a reality.

Implementing a New Structure
Walstrom’s first task was to breathe new life into the Learning and Organizational
Development function that she inherited. She saw her task as creating a learning and
development culture in CH2M HILL such that people would choose to learn every
day. Her function had three entities, talent engagement and development (career
development, engagement and retention, organizational development); curriculum
and program content (leadership and business training); and learning systems support
(events, technology platforms, vendor relations). She created a board of advisors from
the business groups to ensure that the programs she offered met the needs of their
businesses and to help change the image of her organization from “training is a paid
vacation” to “learning is a vital part of every day.”

Instituting a New Philosophy and Framework
She began by looking at the big picture, the context within which employee career
development would occur. Her first action, after reorganizing and reorienting her
function, was to develop a simple framework for employee development that was dis-
tributed to all managers (Exhibit 9), along with three supporting videos. She envi-
sioned the employee development process as encompassing three steps. First, execu-
tives established and communicated a vision, strategy, and priorities that indicated the
overall direction for the firm going forward. Second, individual employees identified
their interests, their passions, and their strengths. These defined their opportunities
to contribute to the company. Finally, and most importantly, managers connected

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2021 to Jun 2021.

112 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

employees’ interests and skills to the company’s vision and strategy so that employees
would be energized and motivated.

Walstrom noted:

The onus is on individuals to identify their interests and strengths and then for employ-
ees and managers to work together to chart a path in alignment with corporate priori-
ties. This is consistent with our culture of autonomy and problem solving.

Exhibit 9: Employee Development Model at CH2M HILL

Execu&ves
 

Vision
 
Strategy
 
Priori&es
 

Opportuni&es
 
for
 the
 

Company’s
 
Future
 

Employees
 

Interests
 
Passions
 
Strengths
 

Ways
 I
 Can
 
Contribute
 to
 
the
 Company
 

Employee
 
+
 Manager
 

Match
 person
 
to
 company
 
priori&es
 

Opportuni&es
 
for
 Engagement
 

and
 Energy
 

Source: Jan Walstrom

Identifying and Developing Leadership Competencies
Walstrom explained her approach to leadership development:

We hire most people for their technical skill, not their interpersonal skill. Some of them
have rather esoteric and rare skills such as nuclear waste remediation. In any case, many
do not want to assume leadership positions, which is fine. But for those who do, we
needed to define what leadership meant. We had never developed leadership compe-
tencies, those things that employees had to be able to do before they could be promoted
to supervisory and managerial positions. Nor had we measured and rewarded manag-
ers for their people development skills. If you don’t measure and reward managers’
employee development skills, the skills are not likely to develop. So we developed a
new set of leadership and management competencies that will be the foundation of our
employee development process (Exhibit 10). We identified five levels of leadership,

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2021 to Jun 2021.

CH2M HILL: Reinventing Organizational Careers 113

beginning with leading one’s self. At each level, one of the required job competencies
for promotion is related to employee development. Only by measuring and rewarding
employee development are we going to succeed in making it part of what we do on a
daily basis. Promotions and raises will depend partly on the ability to develop people
going forward. Now everyone knows that talent development is the responsibility of
every level of leader in the company.

Investing in Management Training
To demonstrate the company’s commitment to its new employee development initia-
tives, Walstrom invested in new training.

We changed our first line leadership training program to emphasize career develop-
ment of subordinates. In fact, the training now emphasizes people development as the
number one responsibility of managers, including effective onboarding. It’s one thing
to get employees to plan their careers and quite another to get managers to have the all-
important developmental conversations with their people. More career conversations
and more mentoring will take place as a result of this new emphasis in our training.

The company’s commitment to training and development was evident within a few
months of Walstrom taking the job. Average annual hours of training per employee
increased from 7.5 in 2010 to 10.7 in 2011. And this was just formal classroom train-
ing. It did not include increased informal coaching and mentoring.

Going Forward
Despite all she had accomplished, Walstrom knew there was much left to do. Turnover
persisted, as did vacancies in top jobs. By the beginning of 2013 she wanted to have
multiple systems in place to address the task of reinventing employee career develop-
ment at CH2M HILL and achieve the goal of reducing turnover and vacancies at the
top. What more could she do? She reflected:

I am a project manager at heart. I like to begin with the end in mind. I like to look at
complete systems, macro and micro, real and symbolic. I have laid the foundation for
renewed career development at CH2M HILL, but I have not yet built the structure.

I have been lucky that this problem has the attention of top management. I have a lot
of support in the organization for reinventing careers in the company. Do I have all the
resources I could ever need? Of course not. That’s not reality. For example, I don’t have
the resources to build a more robust intranet to help with social networking. But I do
have significant resources and I firmly believe I can accomplish the goal of reducing
turnover and developing our best people with the resources I have.

She also wondered what would happen after she had finished building the necessary
structure:

I don’t know what is next for me. Should I return to program management? Should
I stay in HR? Should I try something completely new? I find it a bit ironic that I am
charged with reinventing career development in the company yet I don’t know how my
own career is going to develop in the future.

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2021 to Jun 2021.

114 Case Research Journal • Volume 33 • Issue 1 • Winter 2013

Exhibit 10: Leadership and Management Competencies*

Level of Leadership Competencies Expected
Leader of Organization Political Savvy

Talent Identification
Succession Planning

Leader of Business Function Strategic Ability
Organizational Agility
Aligning People Around Vision and Purpose

Leader of Managers Dealing with Ambiguity
Building Effective Teams
Negotiating
Priority Setting
Decision Quality
Motivating Others

Leader of Individual Contributors Global and Inclusive Mind-set
Managerial Courage
Timely Decision Making
Delegation
Directing Others
Organizing
Composure
Developing Direct Reports and Others

Leader of Self Interpersonal Savvy
Conflict Resolution
Problem Solving
Listening
Planning
Oral Communication
Process Orientation
Written Communication

Foundational Competencies
Business Acumen
Client focus
Drive for Results
Self-Development

CH2M HILL Vision, Mission, Values and Strategy

*Items in italics indicate talent development capabilities for managers and leaders.
As a consultant to CH2M HILL, the individual competencies listed in this chart are
based on materials developed by Lominger International: a Korn/Ferry Company.
Copyright © 1992–2012. ALL RIGHTS RESERVED. The identification of the indi-
vidual competencies as distinguishing characteristics of CH2M HILL leaders and the
aggregation of these competencies into the groupings and defined leadership levels
shown are the property of CH2M HILL. Copyright © 2011–2012. ALL RIGHTS
RESERVED. Reprinted with permission

Source: CH2M HILL
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CH2M HILL: Reinventing Organizational Careers 115

noTe

1. Glassdoor.com was an independent Internet site that, among other things, col-
lected comments from company employees, past and present. It did not pretend
to be representative. It was a collection of thousands of individual comments
and ratings of companies. Quotes used here are to illustrate points made in the
case. They are not necessarily representative of all employees’ opinions.

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2021 to Jun 2021.

[Type text]
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This is the first step in your analysis of HBR Case CH2M Hill: Reinventing Organizational Careers. You will use your completed worksheet in F2F Class #2 as part of a class discussion. Use this form to do your initial analysis. Remain open to the fact that your interpretation of the facts may change – you should continually revisit your answers. This blank worksheet is one page. Your completed worksheet will be longer. Use as much space as you need to document all your thinking and ideas.

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See How We Helped 9000+ Students Achieve Success

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We Analyze Your Problem and Offer Customized Writing

We understand your guidelines first before delivering any writing service. You can discuss your writing needs and we will have them evaluated by our dedicated team.

  • Clear elicitation of your requirements.
  • Customized writing as per your needs.

We Mirror Your Guidelines to Deliver Quality Services

We write your papers in a standardized way. We complete your work in such a way that it turns out to be a perfect description of your guidelines.

  • Proactive analysis of your writing.
  • Active communication to understand requirements.
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We Handle Your Writing Tasks to Ensure Excellent Grades

We promise you excellent grades and academic excellence that you always longed for. Our writers stay in touch with you via email.

  • Thorough research and analysis for every order.
  • Deliverance of reliable writing service to improve your grades.
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