Strategic HR

The CHRO and CFO oversee the two main assets of a company. They have enormous opportunity to add value to the CEO. Yet, they sometimes fall short of expectations.

Their strategic  function is not about setting solid guidelines on depreciation of capital assets, or putting together employee handbooks. Those may be required activities, and if not done right, may cause enormous harm. However, they are not leadership activities.

A good CEO can chart the strategic plan for the company. He can even channel the money, but it is much harder to channel the talent and get everyone aboard. This is where the CHRO can help. However, this involves changing the tone of the HR communications from mandates and legalese to influencing and enabling.

The strategic function of recruiting is not to enforce pay boundaries; it is to get the right people to fill the right jobs. The strategic function of performance reviews is not to get 100% participation; it is to foster career growth. The strategic function of succession management is not to make sure all critical jobs have successors; it is to help find the right successors, wherever they are. The strategic function of benefits is not to pass top heavy tests; but to provide benefits that are best provided via group enrollment. The strategic function of time cards is not to keep record of attendance; but to compute gross margin per product, so we know which products to continue to build.

HR’s strategic function is to breathe, speak, and live this, and to be able to see everything from the lens of the business. The rest is to HR what accounting is to finance. It may sometimes be essential, but it is not strategic.

I have been super lucky to work with HR counterparts who get this. They keep me from the legalese and the HR policies.  They share information with me. They suggest ways I can avoid obstacles. And they focus on helping me get the job done. This is business execution.

Now we can – but are we ready?

I will admit it – I’m a gadget and “new thing freak”.

If anything new is better, cooler … or just nearly as good compared to what I have, I have no problem convincing myself, my wallet and my surroundings that I simply MUST have it.

But not everyone is like this (probably a good thing) – and all of us working with developing new things; making existing products better; changing organizations or managing a group of people should be very aware of this!

Often when a new product or a new way of doing things becomes a success, we think it is because we are now able to do it from a technical or theoretical perspective.

But things only become a success when we are ready for it in our heads!
Let me give you a couple of examples:

• Facebook became an overnight success because this kind of social software became available – WRONG (social software sites have been here for several years – anybody remembers MySpace?)
• The Internet became a success because we made huge progress in network technology – WRONG (the Internet existed for several decades before anyone noticed)
• e-learning became a success because we developed fantastic pedagogical principles and got the bandwidth to publish it – WRONG (e-learning lived for 20 years before becoming a widespread phenomenon)

These examples show us that until we are ready it doesn’t matter if we can.
Unfortunately I don’t have the recipe for deciding when someone is ready for something (would be worth a dollar or two…) but I still think this is important to think about when we are contemplating launching a new product or a new way of doing things.

So how can we use this realization in our daily lives?
Before launching something new try to put yourself in the place of whoever you are targeting.
How would you feel? Would you really like to buy it? Would you really like to upgrade to the new version? Would you really like to do things this new way?
If your gut feeling says “no”, then you might reconsider what you are doing, there might not be anything wrong with it – people might just not be ready!

PS: I’m happy to say that my gut feeling still tells me that our next new software release will be a huge success 😉

PPS: Don’t let this stop you from doing something new – good progress has made us what we are and we  need more of it – and for the more questionable items there are always us “new thing freaks”…

HR: Why Increase Your Financial Intelligence?

When in Rome…

si fueris Romae, Romano vivitomore; si fueris alibi, vivito sicut ibi*

My last post asked: how can the perception of HR’s function as being primarily about governance and compliance oversight be dealt with, in order to allow and encourage its role in maximizing the strategic impact of talent?

A key first step is to learn “the language of business” i.e. Finance. Why? Here’s a list from a book** I recommended a while back, outlining the benefits of financial literacy to HR:

• Move HR from a Tactical to a Strategic Organization – be trusted with organization and talent development investment decisions.
• Evaluate Your Company Critically – spot trends or problems and understand more of the stories behind the numbers.
• Understand the Business – knowing how your company makes money is key to your HR strategy.
• Understand the Bias in the Numbers – have the power to challenge, when called for, the assumptions made by the finance and accounting departments.
• Form Relationships with Finance – help to align more the efforts of finance and HR for their mutual benefit.
• Use Numbers and Financial Tools to Make and Analyze Decisions – improve your ability to make better investment choices regarding projects and programs.

It turns out that Trish McFarlane at HRRingleader is addressing this same step in an “HR 101” series on the Creative Chaos Consultant blog, devoted to what an HR professional really needs to know to be successful. There’s also a great article, “Do HR Managers Have the Skills They Need?” by the same authors of the book, which covers exactly the discussion Beth Carvin and I were having here. Namely, it isn’t all on HR’s head or senior management’s head to enable HR to have a positive impact on strategic use of talent, but a shared responsibility. Here are the factors they listed at the root of the problem:

• Avoidance – HR folks not “dealing with it” and learning about the numbers (as  Josh Bersin and Naomi Bloom said at last month’s HR Technology 2009 Conference(r) Talent Management analyst panel and Naomi’s closing keynote).
• Perception – Even when HR professionals do know the numbers, the business side still retains the outdated notion that they don’t.
• Assumptions – Exhibited when companies don’t encourage their employees to be on the earnings call, for instance, because “it’s too complicated” and “they wouldn’t understand.”
• Trust – A common theme repeated in this blog. In this case, not sharing financial data with employees because you don’t trust them results in people having nothing real to learn from or apply their learning to. Maybe that was the intended effect.

Note that some of the last two issues are not limited to HR, but can be universally applied to all company managers and employees. In fact, there is another article, “The Dismal Financial IQ of US Managers” that covers this pervasive problem and its consequences in more detail. Even though the authors have a vested interest in pointing out these problems (they have a couple of books and a consultancy that address them), the impact is unmistakable.

*”If you are in Rome, live in the Roman way, if you are elsewhere, live as they do there”

– attributed to St. Ambrose (from Wiktionary)

**Financial Intelligence for HR Professionals: What You Really Need to Know About the Numbers by Karen Berman, Joe Knight, and John Case. Despite the drab title, this book is actually quite fun to read (really!) and does not take very long to read (a few hours.) It’s written in a friendly style that comes right out and tells the HR reader which things matter, how they matter, and which things really aren’t as crucial to know so you don’t get distracted by them. Each section is loaded with examples from recent history (especially scandals) linking HR areas of responsibility to financial problems for companies.

Photo by pdbreen

The whole is greater than the sum of the parts

Many moons ago, in my youth (and I do mean many moons ago!), I belonged to a rowing club. On summer evenings, or early (and I do mean early) on a frosty winter morning, a group of us would set out from Putney, West London, for a training session on the Thames (usually with the annual Head of the River race in our sights). Depending on who showed up, we would often row as a ‘four’ or an ‘eight’, much more sociable than a single or double scull.

The ultimate was a group of eight competent, team-oriented rowers. The high that one gets from rowing in a well-balanced, sympathetic eight is utterly exhilarating – gliding through the water at more than 8-times the rate that one individual could achieve. OK, granted, the whole beautiful experience can be fouled up by one incompetent or thoughtless rower who’s not in perfect (or at least reasonable) harmony with the rest, but in terms of ‘bang for your buck’ there’s little to beat that feeling when you’re all pulling together in the same direction, at the same time.

Last week a team of colleagues, 20+ of us, helped out at a local shelter housing project…just a few hours…one short afternoon. I was blown away by what we were able to achieve in such a short time. As an individual, I played oh such a small part, but my sense of achievement was magnified 20+ times. We made a difference…I made a difference, but only as part of the We. The tasks we completed would not have been feasible if individuals had volunteered the same amount of time, but on different days. The whole was definitely greater than the sum of the parts.

The personal satisfaction I gained from that project was similar to my memories of rowing, in that it was measured by what we achieved as a group, not just my contribution.

If I stop to think about it, I’m lucky enough to have frequent, similar experiences in my regular working day. I’m part of a well-balanced team (yes, Ken’s one for all, and all for one team), and although I may feel my individual achievements are not that spectacular on their own, they contribute to the whole. We all pull together. My job is so much easier because of the collaborative and selfless efforts of those around me – those who’ve tackled a problem, and taken time to share the solution to save the rest of us the effort, or those who go out of their way to help a team mate in any area outside of their own expected responsibilities. The team as a whole is far more productive when each individual benefits xxx-fold from those combined efforts.

Of course, the positive and productive effect of a ‘we team’ can be even more powerful when extended beyond team boundaries to an entire enterprise. As the buzz continues around the emerging technologies enabling business social networking, David Wilkins’ article From Human Resources to Human ‘We’-Sources (this week’s issue of Talent Management magazine) points out that there has been a lot less talked about “how to successfully use these technologies in the enterprise”, and that “the main risk factor is not technology, but rather culture and change management” (my italics not his). A related comment was made by Meg in her post on Integrated Talent Management, good strategy or fad: “Solution is great, but please tell me that you are clear on what problems you want to solve” (her bold not mine!).

David summarizes: “a Web 2.0 company is not about “you and me;” it’s about “we.” It’s a company in which management taps the collective wisdom of its people; where openness and transparency leads to greater success than risk; and where connections between people matter more than intellectual property.”

In a team meeting this week, Meg took time (in fact, pretty much the entire meeting) to acknowledge our achievements, not in the number of technical issues resolved, check boxes checked, or lines of code written, but in terms of team collaboration and support – the number of times someone gives thanks to another for help above-and-beyond, or kudos for a job well done that benefited others. It’s important to take time out to recognize how much our individual contributions affect others. In doing so, it encourages everyone to do their best, despite individual set-backs or frustrations…and, when we all do our best, we each reap additional benefits from the whole team doing their best together. In HR parlance, I and many of my colleagues are termed ‘individual contributors’. It’s easy to think sometimes that, as an individual contributor, one’s efforts pale into insignificance in the great scheme of things, but they sure can add up when you’re a team player.

Integrated Talent Management, good strategy or fad?

As you can imagine being a Talent vendor gives us an opportunity to talk to a lot of different customers, partners, analysts, etc.  This is probably one of the reasons I love what I do.  I really can think of nothing better then geeking out with a customer about innovative things they are doing to bring real value to their companies.  I realize that there might be some therapy for this condition, but for now I’m content knowing that I am a real geek and just happen to be fortunate enough to get paid for it.

I’ve been reading Jim’s retrospective on the talent coverage he has done since 2002 and finding interest in his view of the suite and how it has evolved in the past 5-ish years.  Was also talking with Bill Kutik about his HR Technology conference and how the shoot-out this year is about talent suites. To be honest, all of this talk about “best of suite” and “integrated talent management”  has not been sitting well with me lately.  I’ve been struggling to figure out what my beef is, since I do believe in the value that can be realized with a suite.  So why do I feel so negative about all the talk of integrated suites?

I expect that this topic will take me a few posts to figure out, but I decided that getting additional opinions might provide some help, so I decided to blog about it in half-baked form and see what discussion happens.

So what’s the deal?  Isn’t it true that companies can get more value from an integrated talent solution then they can from a silo’d solution (for example in Recruiting or Compensation or Performance Management).  Of course they can.  

But is the real discussion the integration or the vision?  That’s my issue.  I want to talk vision and we all seem to jump into solution. Solution is great, but please tell me that you are clear on what problems you want to solve.  All to often, I find people are wanting a talent management solution because they think that it’s the thing to do.  When I attempt to get more information, I find that they are struggling on some very tactical issues and a vision or a strategy is not even on their radar.  

Let me be clear, I am a big believer in solving tactical issues but I am a bigger believer in having a strategy so that as you solve tactical issues you can avoid having to re-solve them to achieve your strategy.

Here are some things that I would like to see more HR leaders talking about

1. How do I provide value to the business to achieve their objectives?  Do I have the data and systems I need to do that?
2. How do I provide a framework for our business to grow and adapt to changes in market conditions? demographics? regulatory requirements? etc?
3. How do I grow the skills and capabilities of my own HR department to better provide for our business?
4. How do I build a business case to show the business the value in the programs that I want to offer?
5. How do I provide value to the C-suite with the products and services we provide?

Instead, I am seeing people mired in definitions of competency libraries or complaining about how hard it is to get reliable analytics.  Sure, an integrated talent solution will help you, but will it help you enough?  I’d argue that technology can only help you if you have a plan to use it effectively.

So, am I just channeling Sisyphus here on a pointless mission, or should I keep hoping for the day that we can have an adult conversation here? 
 

Please sound off in comments, what do you think we should be talking about instead of (or in addition to) a suite?  Or should I just get happy about all the suite discussions, figuring that the value can come later and at least people are headed in the right direction?  Thoughts?

Does this job make my butt look big?

Thanks to David for reminding me that the blog title is important.  Just for the record, I am not covering that job you had that gave you an extra 15lbs, by making you work 80 hours a week and fed you, round the clock, all kinds of processed snack foods.  That is a topic for another post all together, or a therapy session (or both).

What I am talking about today, is more on the idea of engagement and what I learned at the conference I attended. 

The session was hosted by the Conference Board and it was a preview into their 2008 engagement research .  In a nutshell, they found what we here at TalentedApps have been saying for awhile.  The most critical element of engagement globally is:

A well structured, well designed, inspiring job.

This is not just having a job that provides you with growth opportunities, but also a job that fits well into your broader life, balancing the demands of both your personal and professional needs. 

What is so interesting about this study is how consistent this is across a global population.  The four questions that “worked” in every geography to measure engagement were about:

1. variety and challenge of the work itself
2. interpersonal relationship with the manager
3. shared company values
4. opportunity for career growth

In the US, there was also a strong correlation between goal alignment and engagement.  My personal guess is that this is evidence that the focus on strategically aligned and managed goals is beginning to take root. 

As we look at strategies for getting the most from ourselves and our teams we must focus closely on how we define and measure jobs.  That, to me, should be the strategic agenda of anyone interested in turning the employee engagement focus from a fad to a result.

__________

Note to the clueless: There is only ever one answer to the question posed in the title — honesty is not at all the best policy where this question is concerned.

The answer is 42

For those familiar with Douglas Adam’s The Hitchhikers Guide to the Galaxy, you may recognize the number 42 as “The Answer to the Great Question of Life, the Universe and Everything” given by Deep Thought after seven and half million years of computational analysis; and, as I’m sure you will recall, not everyone was happy with the answer. Poor Phouchg (probably the VP of HR) grasped the seriousness of the situation right away, “We’re going to get lynched, aren’t we?” While Loonquawl (I’m guessing he was the CIO) was sure the problem lay with Deep Thought (and by association the software vendor who supplied its programming), “Is that all you’ve got to show for seven and half million years’ work?”  But the problem, as Deep Thought explains, was not with the answer: “I checked it very thoroughly and that quite definitely is the answer. I think the problem, to be quiet honest with you, is that you’ve never actually known what the question is.”

Like those who were present on the great day of The Answer, many of us look to our software applications to answer the really hard questions around performance, potential, risk-of-loss, and succession. The promise of predictive analytics and the possibilities associated with data mining lead many to the false hope that the answers to these difficult questions lie buried deep within their data warehouses. Many C-level executives believe it is possible to quantify a persons potential or risk-of-loss in the same way a mathematician uses a predefined formula to discover an unknown variable. They long to replace the personal (subjective) aspects of the appraisal process with a dispassionate (objective) analytic tool. But the human experience is anything but objective. Our experiences, relationships, thoughts and feelings are as unique to each of us as our fingerprints; and the practice of measuring qualities like job satisfaction, potential, and performance requires a distinctly human touch.

Now before I get escorted from the building, let me clarify what I’m saying. Well defined competency models, clear organizational goals, and well integrated talent management applications are critical tools, which every manager should utilize, especially those who are new to their role. But managers must not abandon their responsibility in bridging the gap between the objective statistics generated from a data warehouse and the subjective nature of the human experience. As a colleague of mine is fond of saying, “managers need to have some skin in the game.” Calculating and calibrating a person’s performance and potential should be the natural outcome of a manager’s relationship with their employee and not a task to be completed once annually. Manager’s need to provide clear, honest, sincere feedback well before the appraisal period begins. This means meeting regularly with the employee, getting to know them, understanding what they like and dislike about their jobs, and helping them play to their strengths. These are tasks that can only be done by a person. Analytic tools may provide a good starting point for the evaluation, but they cannot replace the relationship between the manager and employee; because it is the manager, and not the application, who will understand that getting the right answer means asking the right question.

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.

HR Transformation — are we sick of it yet?

I’ve been thinking about HR Transformation for quite some time and I’m starting to wonder how we can move on from HR transformation to “Beyond HR” when we never actually transformed in the first place. 

I have some concern that maybe we are just distracting ourselves to avoid actual measurement and accountability.  Are we witnessing a real desire to change the role of HR or are we just a manifestation of Corporate ADD?

It’s an OD problem, no it’s a recruitment (excuse me talent acquisition) problem, no it’s a performance management problem, wait it’s a succession planning problem, oh no I think it’s a web.20/community problem.  And don’t even get me started on the idea that it might be an analytics problem!

The more I study this market and talk to companies attempting to truly transform their organizations I come to realize that it is, and always was, a leadership problem.  I know I risk a good ducking here, but I believe that chasing the latest software fad without real vision and leadership will fail.  Not dissimilar to how a weight loss program that doesn’t involve diet and exercise  will ultimately fail for you (it might work for someone else, but it will not work for you, trust me on this one!).

So where to start and what to do?  First and foremost you need to find leadership.  Hopefully you can find that leadership in yourself but if not there, find someone who has it first.  Once you have acquired the will to lead then you can begin to benefit from the flywheel effect and realize results. 

If you cannot find the will to lead then I suggest you stop now before you spend important resources and energies on the hard part of a transformation (the starting) and never actually receive the benefits of the work.  At the risk of stating the obvious, I also suggest you use the same philosophy for your holiday (or post holiday) diet plan. 

Quit spending your time trying to find the silver bullet out there, you know that it doesn’t exist.  Instead, first analyze your own capabilities and then look to see how you can use technology to implement your vision.