Barometer of Trust

Momentum continues to build around the idea that internal use of social media and social networking in particular has a place in and can benefit the enterprise.

 

So let’s say you accept the notion that internal social media (blogs, wikis, social networks, etc.) will benefit your company. You believe that it will make your employees more productive and engaged, resulting in higher profits and improved retention of some of your best talent. You’ll have a more agile and innovative company. So, you start providing the technologies, announcing their availability, and wait for the improvements to begin.

 

Trust is key to participation.

 

What good is it if people don’t participate? As “Groundswell” by Forrester analysts Charlene Li and Josh Bernoff points out, participation is essential for the effort to pay off in achieving your objectives. What level of participation is required to make it worth the effort varies depending on the industry, the roles of the participants, etc. But whatever that level is, it will more likely be achieved if there is sufficient trust by employees that by their participation, not only will good come of it, but just as important, no harm will come from it.

 

Management is key to creating trust.

 

This trust factor is a key prerequisite in your company culture prior to the introduction of internal social media. There are two directions in this trust. The first direction of trust is that management trusts that employees will generally use these new tools constructively. Clear objectives, policies, and guidelines can clear up most potential misunderstandings here. The second direction of trust is that employees trust that management will also use these new tools constructively as well. That means that not only is management prepared and actively supporting the initiative, but also actively participating in it in an authentic way. Not only does this demonstrate to employees that management really values participation, but it also engenders trust by putting management’s virtual skin in the game along with everyone else’s. Otherwise, employees will get the feeling that they’re just being watched, and in the absence of genuine positive feedback from management, you can’t blame folks for feeling that management is just waiting to bring the hammer down for a mistake. Of course, there will always be a part of the employee population (“early adopters”) that will participate regardless, but if you want to see participation climb up the “S curve”, trust must be built up.

 

Participation as barometer of trust.

 

Getting trust to a sufficient level may take time. Management participation may take a while to build; there will be the inevitable miscue, and so on. Rather than see this as just an obstacle to getting sufficient participation for the productivity, innovation, etc. benefits to start, look at this as another way to take periodic readings on the corporate culture and see how it changes over time. Recall that internal predictive markets can be used to not only get valuable information directly from the prediction market, but can also be analyzed to see how information/knowledge/bias moves through the organization. Similarly, internal social media can be used not only directly to foster collaboration, innovation, and engagement, but can also be used to measure indirectly how engaged employees are over time.

 

50th Post Milestone Reached – Author Wins Olive Garden Gift Certificate

We’ve just had our 50th post, by Kathi, our resident Social Connections Product Manager (of course). She can pick up her gift certificate the next time she’s out here. Since our start last November, we’ve built our team of bloggers to six, we’ve had many comments, we’ve developed a great presence for Oracle HCM in the blogosphere, and we’ve made many connections as a result of this blog.

So, what do the numbers tell us? Which of the posts have been most popular, or at least (in this day of RSS readers), had the most pagegviews? Here are the top five (as of today):

1. Starbucks: Growth, Trust, and Risk
2. If you love someone set them free
3. About
4. Ode to Fusion Middleware
5. Encourage Job Hopping

Clearly this shows folks aren’t paying any attention and they think we know a lot about Starbucks as it relates to their investment strategy ;-). In addition, it appears we’ve been taken for an advice column on relationships. After finding out neither was the case, people are then reading who we are and what we do, and that appears to have naturally resulted in curiosity about our Fusion Middleware Platform. Finally, it all makes sense when people read that this seemingly eclectic blog is due to our support of a rich, diverse set of experiences.

Thank you to our readers for giving us your time and attention. We will continue to strive to be interesting, entertaining, and informative.

The TalentedApps Crew

Sharing Ideas = Value

How do you view Talent? How do you see it contribute value through ideas? 

A recent post described how the Clinton campaign claimed Obama copied her “second stimulus” package, calling for a $30 billion package after she did. Obvious political maneuvering aside, this strikes as having a very “fixed mindset” perspective on the value of ideas. Is the idea itself really the thing of value, and just how much does it reflect the ability of a staff that decides to propose it? What we can do is look at this and reflect on how we view (and treat) ideas inside our organization, and what impact that has on how well we create value through Talent. 

Do you see Talent as largely a “fixed and invariant” quality in people? Or do you see that while people can have different strengths (and weaknesses), Talent is not completely fixed or determined and can be influenced by factors such as motivation, experience, management, and leadership? Check out Chapter 4 of Pfeffer and Sutton’s “Hard Facts, Dangerous Half-Truths, & Total Nonsense” if you aren’t sure. Viewing Talent as a fixed quality originates from, and perpetuates, a “fixed mindset” in the organization vs. a “growth mindset.” One result is that people in that kind of organization have no incentive to contribute in the open sharing and collaboration of ideas; the downside is simply too great. A fixed mindset organization sees only the ideas as the unit of value, which in turn originate but are separate from the minds that brought them forth, and that the goal is to extract as many of them as possible that can be successfully transformed into profitable pursuits. Most measurements in that environment are around how much knowledge a person has, how many ideas they’ve come with, etc. People quickly learn to not share knowledge or ideas with others (i.e. the competition that copies your ideas), but instead fight for as many resources as possible to turn their ideas and knowledge into value before someone else does. This kind of culture breeds fear; fear of failure because that means less likelihood of obtaining future resources. 

A growth mindset organization recognizes that through everyone’s contribution, not hoarding, of knowledge and ideas does the maximum value get created. This doesn’t mean all ideas are equal in value and it doesn’t mean all ideas get the resources to move forward. Instead, the incentives are such that all contribution is recognized and performance is measured more on how a person collaborates with others to find and promote the ideas that hold the most promise for creating value. The notion of “copying ideas” just doesn’t factor in. Instead, it’s about turning knowledge and ideas into action. True, there will still be disagreements and competition for resources, but the open exchange and development of ideas are rewarded. In many cases, ideas will start from anywhere, possibly change the way people look at things, and trigger input from a diverse and informed set of supportive coworkers. Then, through discussion, experimentation, and testing, they will get developed and transformed into a sustainable competitive advantage for the company. In addition, a growth mindset organization sees there is value even in failure because something is learned that results in increased understanding. Since the failure is not hidden, everyone benefits from the greater understanding. 

Are you recognizing your Talent, wherever it is, for sharing ideas, contributing to their development, and assisting in their successful transformation into action? 

Are you providing the collaborative tools (like wikis, blogs, forums, and networks) to let them share their ideas, comment on other ideas, synthesize ideas, and be recognized for it?

The Mismeasure of Talent

A recent column from WSJ highlights the challenges facing us when dealing with the intangibles that often dominate talent work. It shows that measuring this “invisible work” is a challenge that often leaves talent without a sense of achievement. Moreover, when measurements are insufficient or incomplete, or when the wrong measurements are being used by management to compensate, it can cause more harm than good. When something is hard to measure, we know it often doesn’t get measured and what’s easier to measure gets measured instead. Since intangibles such as “quality”, “productivity”, “satisfaction”, etc. are seen as too difficult/impossible/imprecise to measure, they often don’t get measured. But we’ve seen in books like Patrick Lencioni’s “The Three Signs of a Miserable Job: A Fable for Managers (And Their Employees)” that immeasurability is a key destroyer of engagement. So what does that mean for your talent, where a lot of what they contribute isn’t easily measured, often doesn’t get measured, and thus makes it so they can’t assess their contributions or success?

There is a joke about the drunk who dropped his keys in the dark alley but spends all his time looking under the streetlamp “because the light is better.” That joke often comes up in discussions about measuring the intangibles related to talent. The column has several examples showing folks being measured on things that are readily available like timeliness and budget, but not on harder to measure things like ”doing things right” for instance. Measures like timeliness and budget can be very important but often only describe part of the picture and are insufficient to making good business decisions. For example, how can you make the tradeoff between timeliness and “doing things right” that is acceptable from a risk/reward perspective if you aren’t measuring “doing things right”? What ends up happening is people start to focus only on the timeliness measure and both customer satisfaction and employee engagement falter because “doing things right” just isn’t happening like it used to, but nobody is really sure by how much or why (if it’s even noticed at all.)

Of course, the question arises of what does “doing things right” mean, but that doesn’t justify ignoring it. In fact, it misses an opportunity to actually figure out what it means so that it can be measured. Something like “doing things right” or “calming an angry customer” might be activities that produce the very outcomes the company really needs to achieve strategic success. The outcomes are something that can be measured and if you can find a relationship between those activities and an increase in desired outcomes, then you are on your way to making the intangible more visible and measureable. In addition, this helps the employee feel relevant by showing how their job really makes a difference. Measurability and relevance go together and support each other. They are employee engagement concepts that fit directly into a framework for making better decisions regarding talent.

It’s really management’s responsibility to provide the connection between the impact talent has on strategic success and what measurements should be used for determining talent’s effectiveness in achieving that success. Not providing a way to measure that contribution objectively and in the context of the company’s goals exacerbates employee disengagement. However, it’s also management’s responsibility to accomplish this by listening more to both employees and customers and tackling the challenge of taking that input and transforming it into useful measurements. Imagine what benefits would be gained if management listened more to the employees who knew about “doing things right” or to customers who were once angry but now satisfied, as described in the column.

Measurement does not have to be an “all or nothing” affair either. At times, it is sufficient to just know with reasonable confidence that something got better or worse (e.g. went up or down, perhaps) when an input changed. Other times, it’s enough to know with reasonable confidence that something went above or below a certain threshold, or cutoff point, without having to know by how much. Both of those can be determined with lower cost, for instance, than trying to determine exactly how much an outcome changes when an input factor is altered by a certain amount.

In addition to Lencioni’s book that shows how relevance and measurability impact employee engagement, check out “Beyond HR: The New Science of Human Capital,” by John Broudeau and Peter Ramstad. It shows how those two concepts fit very well into their HR Bridge framework that improves your strategic success through better decision making regarding talent. Also check out “How to Measure Anything: Finding the Value of Intangibles in Business” by Douglas W. Hubbard, which shows how to avoid the trap of trying in vain to be overly precise when measuring intangibles when in actuality the most relevant, useful, and actionable information might be obtained at a fraction of the effort. Much of that is enabled by having a purpose to the measurements defined by the framework presented in Beyond HR.

Starbucks: Growth, Trust, and Risk

A lot of questions have already been asked on what PR/Marketing effect Starbucks’ brief barista re-education will have. However, there are also other things to consider regarding how these actions affect their frontline employees. In particular, consider how decisions regarding talent impact on their strategic success are affected by operational and marketing decisions. For instance, how does introducing an automatic espresso machine that could theoretically reduce line wait for your customers affect in unintended ways the crucial interaction between the barista and customer? How does introducing an expanded breakfast menu affect not only the customers’ experience directly, by replacing the aroma of ground coffee with burnt cheese, but also the employees’ ability to bring a quality experience to customers when their time is spent cleaning ovens?

Starbucks’ strategy hinges on trust; not only customers’ trust that Starbucks will deliver a high-quality product and a high-quality experience, but on Starbucks’ trust in its employees to be the key element in the successful delivery of that product and experience. “Beyond HR: The New Science of Human Capital“, by John W. Boudreau and Peter Ramstad, shows how Starbucks connects the culture of trust with employees as a key element towards achieving strategic success in their attempt to simultaneously grow and yet also maintain the unique differentiators that set them apart from their competition. Much of that trust is manifested in giving baristas a lot of decision power in how they deliver a quality experience to customers. The result had fit very well with Starbucks’ original strategy of high growth while at the same time not becoming commoditized as a result of scale. Lately, though, signs of this commoditization began to show and revenue and stock price were reflected in it. The barista re-education was in part a response to that, but the question is whether this was an effective response, given the other data around what issues are really affecting customers.

On the one hand, a re-education announcement can reassure customers of Starbucks’ commitment and re-energize employees by devoting the time to their development. On the other hand, a mixed message about what the problem is that’s being addressed by the re-education runs the risk of confusing both customers as well as employees. The law of unintended consequences holds here. Customers can end up hearing only about “quality problems in product and experience.” Employees can end up feeling like they’ve been singled out for public pillory, when it’s actually operational decisions driven by cost efficiency, market penetration, etc. that have undermined the very strategic differentiator that Starbucks had so carefully nurtured. Given that the special interaction between barista and customer is so important, not only should it receive attention, but the attention should be very carefully considered. The problem may really lie in the operations that should be in support of that relationship but actually work against it.

What’s in a name?

Seth Godin’s idea about changing the name of “HR” to “Talent” might work best when combined with the notion of branching HR into a professional practice (”HR”) and a decision science (”Talent”.) “Talent” would focus on what Seth describes - doing “something amazing” by figuring out how to get the most out of talent. “HR” would focus on delivering the best programs for making that happen. Each is important in what it focuses on and they depend heavily on each other, This focused approach also helps address Seth’s point that a name change can end up just being spin unless you change what you do.

The idea of branching HR into a professional practice and a decision science has been getting more attention recently and more companies are beginning to adopt this approach. Mercer Human Resource Consulting published a 2006 point of view, “HR Transformation v2.0: It’s all about the business“ that suggested “bifurcating” HR as a way to provide better focus on both the strategic talent decision needs of the company as well as the continued needs of the company for improved programs and services. “Beyond HR: The New Science of Human Capital“, by John W. Boudreau and Peter Ramstad, discusses the development of a decision science for talent, evolved from the HR professional practice, with the objective of improving organizational decisions regarding talent. It draws a parallel with the development of the finance decision science from the accounting professional practice and of marketing from sales. Both finance and marketing have enabled more effective decision making, while accounting and sales continue to improve delivery of programs, measures, practices, and so on.

What’s interesting that Boudreau and Ramstad note, and relates to Seth’s (and others’) observation of what needs to change in HR, is that the development of the finance and marketing decision sciences occurred when the markets they work in started to become an increasing source of competitive advantage. Many recognize that we are now at the stage in the history of business where the talent market is becoming more the source of competitive advantage. While some can question whether a name change can help at all, Seth is correct that a name change can trigger the change in thinking required in order to focus on what needs to be done differently. That change, with the right leadership, could be best done in the context of a new Talent department that functions in synergy with the HR professional practice.

Yes, We are All Individuals

Number 6: What do you want?
Number 2: We want information.
Number 6: Whose side are you on?
Number 2: That would be telling, we want information, information, information.
Number 6: You won’t get it.
Number 2: By hook or by crook, we will.
Number 6: Who are you?
Number 2: The new Number 2.
Number 6: Who is Number 1?
Number 2: You are Number 6.
Number 6: I am not a Number, I am a free man!

The Prisoner (1967-196

We know that part of being able to improve business results through talent is being able to measure talent in the first place. There are challenges not only in being able to do that, but also in the resistance to doing that. A recently published book, “How to Measure Anything: Finding the Value of Intangibles in Business” by Douglas W. Hubbard, covers three common objections to the measurement of intangibles. The first, and perhaps only truly valid one from a business perspective, is the obvious economic one where the cost of measurement exceeds the benefit. The second is based on the common misunderstanding of statistics that it can be easily manipulated (”Lies-damned lies-and statistics”), which can be addressed through better understanding of statistics, probabilities, and risk. The third, and perhaps most relevant to the topic of talent management, is the ethical objection, based on the perception that it is dehumanizing and threatening to measure certain things about people, such as their value to the company (current and future), their risk of loss, and other touchy subjects that are often brought up in HR predictive analytics.

Hubbard argues that decisions are still being made regardless and that making those decisions under intentional ignorance could be worse, so measurements need to still be made. Of course, the question is which measurements are really useful and pertinent to the decision. That at least gets the ethical discussion going in the right direction. In fact, it bolsters the argument that:

1. The decision should be connected to achieving business goals (i.e. the impact on success).
2. The decision in turn should be driving what measurements are needed.

If the measurements are pertinent to the decision being made and the decision helps achieve business goals, there is at least a logical purpose to the measurements and therefore the benefits can be weighed against the ethical issues. This is better than mindlessly gathering data for its own sake, especially if the data sheds unflattering light on the population being measured.

What gets people upset is if the measurements have an error factor (and almost all do), then a member of that population runs the risk of being described unfairly or worse yet, completely false. In addition, if there are correlations between the measurements made on a person and some undesirable outcome, condition, or risk factor for the population, then people are afraid of being pigeonholed, ejected, or otherwise unfairly labeled.

The problem is not in the measurements themselves, assuming they meet the criteria of being pertinent, but the way in which they are acted upon, which is usually management’s fault. For instance, a company might find that certain factors correlate highly with employee theft across a sample size of the company’s workforce. Used properly, that would help the company develop effective programs, policies, etc. that would lower the amount of employee theft. Used improperly, managers would target or otherwise treat employees differently who, while they might exhibit some or even all of these factors, never stole from the company. The point the managers missed was that the measurements and correlations were useful tools to see if the programs and policies were effective and that’s where it ends, period. They are not about predicting any one individual’s behavior, nor set them apart as “high risk”, etc. That’s the marvelous thing about people. They’re all different and managers have to remember that fact when they study population data. There is no shortcut in managing people.

How Much Investment is Needed to Win?

In wrapping up the series of questions described in an earlier post, the answers to how your talent helps you win leads to answering where to invest in your talent, which in turn leads to answering the question of how much to invest in your talent. Why is how much to invest so important? Just as answering where to invest in your talent recognizes the opportunity cost of applying a “peanut butter” approach to investment across all roles and competencies, so does answering how much address the same issue at the individual role or competency level. As the talent science described in “Beyond HR: The New Science of Human Capital” shows, the best answer looks at how the level of investment in a given role or competency affects its impact on the successful execution of your strategy.

Why is the level of investment at the role or competency level so important? This is because not every role or competency creates the same increment of value to the organization for a given increment of investment. We tend to look at input-output relationships as linear by default. For instance, our mental model might assume if a single hour of training would produce a 5% increase in ability, then 2 hours of training would product 10% increase in ability, 3 hours produces 15%, and so on. This is natural, intuitive, and reflects a lot of our experience. It also has the benefit of being a very simple, easy to understand model that can usually be captured with just one number - the slope of the line that describes the linear relationship. While we are aware of exceptions to this relationship, our default perspective is linear and it can actually shape our thinking of how systems operate. For more about this, “The Fifth Discipline: The Art & Practice of The Learning Organization,” offers a good introduction into systems thinking, feedback loops, and non-linear models.

As “Beyond HR” shows, many factors can affect how much value an organization derives from a role or competency for a given level of talent investment. For instance, how a job is engineered can greatly affect this “response curve.” Here, it may be that the policies and procedures, etc. of the job are well-defined, clearly laid out, and individuals are trained to strictly follow those policies and procedures for the bulk of the job. Alternatively, the education credentials and experience requirements, coupled with standards of quality, etc. may be very rigorous. In situations like this, the response curve is such that a minimum threshold in performance must be met (through training, experience, etc.) before the individual is even allowed to perform the job. In addition, because of the policies, procedures, and standards, there might not be a lot of leeway in the way that job’s main function is performed. This would cause the response curve to start off steep as you invest in training, pay, or whatever to reach the minimum required performance, but then level off beyond that point. In fact, jobs that are more “critical” or “important” to an organization can sometimes be engineered the most as insurance against major mistakes. This is a risk reduction strategy. Whatever the cause or reason, the result is not necessarily zero value gained beyond that threshold investment, just not as much increase in value as was previously observed. Competencies within a role can exhibit similar properties. “Critical” competencies may be trained or filtered for to such a degree that again little discretion is provided for in a risk reduction tradeoff once a threshold level of investment is made.

Other roles, however, or competencies within roles, can continue to provide the same or similar increases in value to the organization for a given increase in talent investment. These are what “Beyond HR” calls “pivotal” and the authors’ definition is a little more specific than what several others have defined as pivotal (i.e. as being a synonym for “important”), which can be a source of confusion. It’s easy to see how one could view “important” roles and competencies as “pivotal.” That definition comes more from the notion that an important role or competency is the role or competency upon which success “pivots.” However, it doesn’t go into depth around how that success is really generated by how the role or competency continues to positively impact the successful execution of strategy the same amount regardless of how much talent investment has been made. That is what differentiates “pivotal” talent. Of course, it is entirely possible that an important role or competency could also be pivotal, but we’ve seen how sometimes the way a job is engineered can put risk mitigation at odds with being pivotal for important jobs or competencies.

So what does that mean in terms of answering the “how much” question? Start off by not assuming that even though you have differentiated roles and competencies in terms of their impact on the successful execution of your strategy (i.e. you’ve answered the where question), that you’ve found the magical, fixed priority for talent investment. You should view those roles and competencies in terms of how the level of talent investment relates to the actual value they contribute to successful execution. Determine at what point further investment to improve performance in a given role or competency no longer results in an optimal increase in value to your company. Beyond that point, prioritize investment to more pivotal roles and competencies where investment continues to generate the most benefit to successful execution.

Interesting Talent Management Use of Internal Prediction Markets

Thanks to Jake for pointing out this recent post about a different and interesting talent management approach to prediction markets, showing how they can be used to gain a better understanding of the flow of intangibles in your organization. That is key for both getting the most out of your talent as well as helping your talent feel engaged.

Bo Cowgill at Google and two economists, Justin Wolfers (Wharton) and Eric W. Zitzewitz (Dartmouth), have been for the last two and a half years studying Google’s internal prediction markets. As the NY Times article states regarding the markets:

“At Google, they are used, of course, for business. In the last two and a half years, 1,463 employees have made wagers with play money (Goobles, as in rubles) on questions like: will Google open a Russia office? will Apple release an Intel-based Mac? how many users will Gmail have at the end of the quarter?”

People typically look at prediction markets for the most part as a “Wisdom of Crowds” tool (where they are also known as “decision markets”). Internal decision markets can provide value to the company by, for example, getting a jump on the competition by spotting something or some trend sooner to generate new business ideas, saving costs by shutting down projects that sales forecasts predict will do poorly, etc. The prediction market acts as an aggregation mechanism for the collective wisdom of the people participating in the market, and it is most effective in its direct application to making informed decisions when the group members are diverse, independent, and decentralized.

Even when those properties aren’t fully present, like many other things where people are involved (crowds, surveys, etc.), the value in the prediction market isn’t just in the answers to the direct questions you ask of it. There is value from what those answers are telling you about other things regarding the people you are studying. That’s exactly what the paper, “Using Prediction Markets to Track Information Flows: Evidence From Google,” drills into, and it applies very much to ways in which companies can derive more value from their talent. Here’s what the paper’s authors summarized:

“…we illustrate how markets can be used to study how an organization processes information. …We find strong correlations in trading for those who sit within a few feet of one another; social networks and work relationships also play a secondary explanatory role. The results are interesting in light of…recent work on the importance of geographical and social proximity in explaining information flows in firms and markets.”

These kinds of findings are very useful from a Talent Management perspective. Using internal prediction markets as a way to understand how information flows within your organization is an area to pay attention to, especially in conjunction with tools like social network analysis, which also help you understand the flow of knowledge in your organization. Knowing how intangibles flow within your organization is a key competitive advantage, both in helping to find ways to improve that flow as well as helping to increase employee engagement.

8 Things

I’ve been tagged by Meg, so here are 8 things about me:

1. I am very fortunate to have a wonderful wife and a terrific daughter, both of whom I am very proud of for the quality of their character and for their accomplishments.

2. I was heavily into science when I was growing up. I had microscopes, telescopes, electricity experiment kits, crystal radio kits, steam engines, chemistry sets, etc. I was also big into Lego and building model airplanes. Imagine a ceiling with about a dozen or so airplanes hanging from it and a floor with buildings, cars, machines, etc. I thought I would study chemical engineering in college (credit an excellent high school advanced placement chemistry professor), but switched to computers and business instead.

3. I had a paper route when I was 12 (delivering papers at 4:30 AM). I stocked shelves for a grocery store chain (at 3:00 AM) through high school and college. My first job out of college was writing application modules and a self-service terminal for a hotel management system (at more normal hours).

4. Although I grew up in San Diego, I spent my summers in San Francisco, helping my dad in his downtown auto repair shop near Market Street. I learned to drive manual transmissions and motorcycles on the hills of the city. Quite a blast.

5. I played baseball growing up, and then tennis, soccer, and golf. I broke my leg playing soccer, which apparently is not an uncommon occurrence. The doctor who saw my x-rays immediately guessed, “Were you playing soccer?” saying the fracture had all the indications of originating from a soccer mishap (a v-shaped fracture coming out from the point of impact on the tibia.)

6. We’ve traveled a lot. We enjoyed every place we visited, but Paris, Venice,  and all of New Zealand hold a special place in our hearts.

7. I like to listen to music, especially classical and world music. I love to read, a lot. I spend most of my time trying to find quality business reading, but I also squeeze in both history as well as historical fiction (and yes, sometimes that line is blurred, but that’s how history is.)

8. I like to spend time sharing and discussing ideas with friends, family, and acquaintances.

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