Xavier Meulemans (XM): Rafael, can you please introduce yourself, and maybe start by explaining how you ended up working in HR?
Raphael Torfs (RT): Sure. It's a fun story. I studied political science and after that, I did an extra degree in HR because my future wife wanted to study HR. So, I decided to study with her, and that's how I ended up in HR—about 26 or 27 years ago.
XM: That’s an unconventional path. I know from working together that you’ve been involved in restructuring at Owens Corning and other companies. It’s a sensitive topic, and I’d love for you to share your perspective. Why did you get involved in restructuring, and what are your key learnings?
RT: Yes, I’ve been involved in 19 restructurings across 8 different countries. It's not something I originally wanted to do, but I had to. I was hired by Owens Corning to help grow the business by acquisition, but six months after I joined, we hit a crisis. We were losing about a million euros per month, and something had to be done. So, I worked on my first restructuring plan, which involved closing a facility in France and reducing staff at another.
At first, I was really scared. Letting people go is hard, but you have to learn to stay calm, respect the people you're speaking to, and make sure they feel that they are being treated fairly. The restructuring plans I’ve been involved in were always necessary due to serious conditions. It was never about increasing company profits—it was about saving other jobs and making the company sustainable.
XM: And is there something you found particularly helpful during the process that might be undervalued?
RT: One thing that really makes a difference is building individual relationships. While a restructuring might be a collective process, at the end of the day, you're dealing with individuals. Each person has their own needs and will respond differently—some will take the cash and move on, others might use it as an opportunity to start something new. If you take the time to help people on a personal level, it can make the process less painful.
XM: What about the "survivors"—the employees who remain after a restructuring? How do you handle their mixed emotions, like guilt and fear for their own jobs?
RT: It’s really important to prepare for that. In most cases, we follow specific criteria to decide who stays and who leaves, and sometimes people volunteer to leave to save others. You need to ensure that you retain critical competencies for the future. It also helps to bring in external companies to support the survivors emotionally and to be transparent about the company’s future.
XM: You’ve worked in several different countries and contexts. What’s your advice for HR leaders trying to define key positions in an organization, especially if they’re starting from scratch?
RT: Start by identifying the unique competencies in your organization—skills that are hard to find and critical for your business. These key positions aren’t always management roles; sometimes they’re technical positions or specialized operators. You can also ask yourself: How long can we survive without this position? If the answer is less than a few months, it’s probably critical.
XM: That makes sense. But how do you manage positions where the value creation is less immediate, like in research and development (R&D)?
RT: In those cases, I’d ask: What happens if we stop this development for 12 months? If the company can’t survive, then that role is critical. You’re looking for a sense of urgency in determining what roles are key.
XM: I’m curious about your views on talent reviews and high-potential employees. Some companies focus on fast-tracking the top 5% while others aim to develop everyone. What’s your take?
RT: I’ve mostly seen companies focus on a small group of high potentials, but I believe the best teams perform well because of the collective strength. You don’t need a team full of superstars, but you do need a balance. I’ve seen high potentials crumble under pressure while others, who weren’t identified as high potentials, emerged as leaders during tough times.
XM: You’ve alluded to performance management several times. I’ve seen some companies moving away from individual performance ratings and adopting a more team-based approach. What are your thoughts?
RT: My personal philosophy is to get rid of traditional performance management—having one conversation per year doesn’t make sense. I prefer regular discussions with clear KPIs. I also emphasize evaluating both the “what” (results) and the “how” (behaviors). You can have someone who delivers results but damages the team in the process, and that’s not sustainable.
XM: Speaking of performance, how do you deal with the “talented jerk” — someone who delivers great results but disrupts the team?
RT: That’s where company culture and boundaries come into play. For me, the team always comes first. I’ve let go of people who were great individually but toxic to the team. You can have a talented individual contributor, but if they’re negatively impacting the organization, you need to address that.
XM: I’ve read about Netflix’s approach to performance and pay—they pay competitive salaries and link incentives to stock appreciation. What’s your take on this approach?
RT: Compensation strategies depend on company culture and objectives. There’s no one-size-fits-all. Some companies prefer lower base salaries with higher bonuses, while others prioritize stability with higher base pay and smaller bonuses. It depends on the company’s goals and values.
XM: Let’s talk about the living wage. How did you approach this at Stanley Stella?
RT: At Stanley Stella, we calculated the living wage for our workers in Bangladesh, based on the assumption of a family with two kids. We’re working with our production partners to ensure they pay this wage, but it’s a long journey because we don’t own the factories. It’s political and requires collaboration with suppliers, but it’s a step toward fairness.
XM: You mentioned the importance of transparency in pay. With the upcoming EU pay transparency directive, how do you see this playing out?
RT: Transparency is key. When we implemented our salary policy, we held open sessions to explain our grading structure, salary ranges, and how we correct discrepancies. If a company is ashamed of how it compensates employees, something is wrong. It’s important to be open about how pay is determined, so employees understand the criteria.
XM: Any final thoughts?
RT: Yes, the people make the difference. Treat them with consistency and fairness, and they will give their best. It’s not about saying “yes” to everything, but about creating an environment where people know what to expect. Most people can handle difficult decisions if they feel the process is fair and transparent.