How Would Your Employer Stack Up: Jiibe

Check out a new company called Jiibe that seems to leverage user created content to help people evaluate potential employers.

Who knows how this company will do but the key point is that employers absolutely need to pay attention and do their best to positively influence their employer brand. For tips on this, read my past post on guiding your employer brand.

At times like this, employees pay special attention to leader behaviors and decisions. If you're concerned about your employer brand, start working on it now by talking with your employees. Once the recovery begins it'll be too late to make any notable progress against your brand because employers with better brands will drown you out.

Shadow Of The Leader: Intellectual Curiosity and Learning Organizations

Food For Thought: What role does a CEO's personal learning style and sense of curiosity have on the rest of his / her organization?

I believe there is an enormous impact and a truly successful leader creates an organizational culture that constantly learns and improves at all levels. If you've ever read the Fifth Discipline (a classic about learning organizations), then you know that successful companies win because they proactively change. Senior managers set the tone and key leadership practices that solidify into a "way" of doing things within an organization. It's this tone and these key practices that allow an organization to more easily "learn" and therefore create positive change for its stakeholders.

This article from the New York Times cites Jeff Bezos as a role model for CEOs because he has a healthy sense of curiosity and balances that with leadership practices (kaizen is one example) that emphasize ongoing productivity improvements.

The phrase "shadow of the leader" nicely sums up the power of a leader: it's not just about the things leaders intentionally do, it's the things they don't know they're doing (thus the reference to a shadow). My suggestion is for leaders to examine (a) how they personally absorb information (b) how they make decisions with that information and (c) how they translate those personal preferences into organization wide practices. Remember, just because that approach is comfortable for you doesn't mean it should be imprinted on the rest of your organization or that you can't employ different techniques for a more balanced approach.

Part of my practice is centered around improving organizational effectiveness and coaching executives on how to improve their level of self awareness for maximum organizational results. I'd be happy to sit down with you and discuss how these concepts apply to your world.

What's Your Cost of Turnover?

I was having coffee with a colleague today talking about the cost of employee turnover. Most managers simply do not understand the actual total costs of employees leaving your organization so I thought I'd do a super quick primer so you can calculate the costs yourself.

Most human capital specialists, like Dr. John Boudreau from USC's Center For Effective Organizations, believe the range is between .75x and 1.5x the base salary of the replacement hire. So if you employed replaced a worker with someone paid $100,000, your soft and hard costs would be roughly $75,000 to $150,000.

The reason is that you need to factor in both the hard costs (recruiter fees, relocation, sign-on bonuses, advertisements, etc) with the soft costs. The soft costs can manifest themselves in all sorts of ways:

• Poor sales performance against quota
• Missed deadlines
• Quality slippage (overwhelmed or new employees get no relief from workload but execution falters)
  
• Poor customer experiences which drives away repeat business and damages your brand (their employees are clueless...I had to show him how to do his job)
  
• Damage to your employer brand (don't work there...people leave all the time...)
• Key knowledge is lost
• Past investments in training get applied to your competitors
• Additional stress on remaining employees that could cause further employee turnover

I am seeing many organizations simply "lock up" their investments in their organizations which is really sad, because now is the optimal time to tune up your organization. I realize people are freaked out about spending, and the VCs have put the fear of god into CEOs regarding capital preservation but people are forgetting that they're already spending A LOT of money on employees and initiatives already. The key question is whether that's money well spent.

The best way to win in a recession and the upcoming boom is to work with your employees to reduce bureaucracy, deliver an amazing customer product or experience that is difficult to replicate, invest in your culture and employees, and build deep, authentic relationships with the best talent now (even if you're not hiring).

These investments may take time to bear fruit, but you need to invest. The boom will happen and in the words of Mister T, I pity the fool who isn't be strategic about talent!

When you start quoting Mister T it's time to sign off. Let me know if I can help you calculate your true cost of employee turnover and help create a talent strategy that works fantastic in a recession and a boom.

Thanks,
Brad (www.herberthrc.com)

Corner Office: Xerox's Anne Mulchay On Leadership

Here's a great interview from the New York Times with Xerox CEO Anne Mulchay on leadership and business. She started in sales, did a career change and ran HR, and then became the CEO. The interviewer asked what she learned while running HR and I especially enjoyed her answer because it mirrors my perspective (and post) on how to narrowly focus your talent management efforts and funds.

Q. What did you learn from running human resources?

A. One was that you discover quickly how little honest feedback people get in companies, and how important it is for people to have a sense of candid assessment. It became very much a mantra for me, to kind of influence a culture that assessed people accurately and really dealt with people fairly.

The other piece is the importance of talent development. Not everybody is created equal, and it’s important for companies to identify those high potentials and treat them differently, accelerate their development and pay them more. That process is so incredibly important to developing first-class leadership in a company.

I think sometimes companies get confused with egalitarian processes that they think are the fairest, and that is not what companies need. Companies need to be very selective about identifying talent and investing in those leaders of the future.

Six Universal Principals of Influence

Robert Cialdini, a psychology professor at the Arizona State University and author of Influence: Science and Practice (Allyn & Bacon, 2000) has some fantastic ideas around improving the way we influence others.

He calls them the six universal principles of influence:

• Reciprocation: People give back to you the kind of treatment that they have received from you.
• Scarcity: People will try to seize the opportunities that you offer them that are rare or dwindling in availability.
• Authority: People will be most persuaded by you when they see you as having knowledge and credibility on the topic.
• Commitment: People will feel a need to comply with your requests if it is consistent with what they have publicly committed themselves to in your presence.
  
• Liking: People prefer to say yes to your request to the degree that they know and like you.
  
• Consensus: People will be likely to say yes to your request if you give them evidence that people like them have been saying yes to it.
  

He shares three types of influence "practitioners":

- Bunglers: These people screw up their chances to influence positively either because they don't understand the principles or how to engage them properly.

- Smugglers: Unfortunately, these people know the principles all too well but use them for evil, meaning a win-lose situation. These people get short term wins but lose over the long term because people will avoid them or not trust them in the future, thus narrowing their potential influence.

- Sleuths: These people use the principles properly and, like a good detective, uncover details about the person and the situation for maximum benefit to all.

Influence is a part of everyone's daily lives and can be the difference between success and failure. How do you think you employ these principles?

Improving Productivity

No one intentionally gives birth to inefficiency, but it quickly happens when people do not actively adjust the mechanisms of the organization as things change. We've all had this happen to us: the one time report that takes forever to compile manually that suddenly needs to happen every month without automation assistance; etc. Eventually you realize that you've slowed down, your effectiveness and impact on the organization has lessened and, like quicksand, there is no apparent way to break free. These inefficiencies tend to create emergencies which further hamper your ability to focus on the most important issues.

Today's world demands that everyone on your team be able to dedicate the majority of their energy towards creating value. The problem is that many organizations simply do not systematically address improving efficiency and productivity and as a result you fall further behind your competitors. Why? Each year you most likely give merit increases to your employees, inflation creeps up, and your competitors automate and engineer more efficient ways to do things. All of those things impact your relative productivity and, therefore, value in the eyes of investors.

Remember the three roles from my last post (value creators, value protectors, and required)? Every role, or job, has elements of them and the key is to help your employees maximize the time they spend creating or protecting value. Here's a very high level outline of how I've helped other organizations make their employees more productive and happier.

1. Start with a group within your organization that seems to be either frustrated, struggling to scale, or is going to be asked to do more in the future. They will have a motivation to rethink their function and their roles for maximum impact. Once they have success, another group will want to volunteer.
   
2. Help them understand the big picture of your organization: strategies, key objectives, their role in achieving them, etc. Talk about what you'll need differently from them going forward, and do it in a really positive, supportive way. If people think this is a way for you to eliminate their jobs it won't work. If they believe you're going to help them make a bigger impact on the team and enrich their jobs, you'll have willing participants.
   
3. Have the group rethink its main contributions to the organization and how to start / stop / refine processes or deliverables for most impact to the organization (as defined in #2). This involves employees analyzing how they spend their time, what their true role should be, and creating a project plan for putting these ideas into practice.

There is a ton of detail behind these three steps and I'd be very happy to do this for your organization.

How To Improve The ROI Of Your People Investments: Not All Roles Are Equal

Every organization needs to constantly improve the value it offers to customers or risk extinction. Our economic heartburn has caused many leaders to overreact and curtail many organizational activities when in reality they should be smartly investing in their future. I thought I'd offer some tips for leaders on how to rethink the way they evaluate investments and the resulting impact on long-term competitive differentiation.

Successful organizations smartly select an industry and identify a unique set of activities or outputs that set them apart from other organizations in the minds of customers. These processes involve people in specific roles using skills, knowledge, and experience (ie, the intangible or human capital) in combination with tools, equipment, assets (ie, the tangible or organizational capital) to produce a service or product. Different processes require different mixes of organizational and human capital, and also allow performance differences in individuals to have a wide range of impact on that process.

The problem for most organizations is that they don't have a clear strategy or differentation in the marketplace, and therefore lack a sense of the highest value processes and roles inside their organization. This lack of clarity means that investment analyses are generally too narrow or consider each possibility as equal, when in reality the organization would do dramatically better if certain processes and roles received a disproportionally larger amount of investment.

These critical processes comprise your organization's core competency, although that term has been so overused that I'm reluctant to use it. Executives can struggle with this concept because they speak to characteristics, or outcomes, but have a more difficult time understanding what the customer truly values, how that compares and contrasts with competitors, how that value proposition must evolve, and how that translates into your operational goals for the year. If you don't have this kind of clarity, you may end up over or under investing, or simply miss an opportunity completely. In addition, leaders lack a framework for comprehensively and simultaneously evaluating human and organizational capital investment options.

While I was at EA, we worked with the Capital H Group to create a framework to understand:

• The distribution of performance potential across certain roles (ie, do extremes in performance matter equally across all roles, or do certain circumstances blunt the impact of notable performance variations?)
  

• The degree of skill specificity required for certain roles (ie, should supply and demand of certain skills matter in organizational investment decisions?)

• The relative value contribution between individuals and organizational capital (ie, as you evaluate whether to spend money on people or automation/technology, should your investment decisions consider which percentage was attributable to people versus technology or machines?)
  

This is a very helpful way to analyze your current work processes and is fantastic input as you create your talent strategy. You can look at current state and how things must shift and allocate investment dollars and time accordingly. Let's take a look at each of these decision filters to get a better sense of how they work:

Distribution of performance potential across certain roles
Categorize the roles inside your organization into three types. Ask your current or potential customers for their perspective on your core processes and key roles to see how they'd categorize the roles. You might be surprised!

Value Creators - When these folks are successful it has a huge upside impact on your company. A superstar software engineer in a software company is widely thought to add 6X the value of an average engineer; they have giant upside potential.

Value Protectors - When these employees screw up, it can drag the entire organization down. Easy examples are the patent attorney who does a bad job, the Health Inspector at the Peanut Factory who allows salmonella to infect the population, or the QA Specialist who doesn't catch a bug and the product is panned as a result.

Required Roles - These people can be great but it's really not going to matter all that much to the overall picture. A factory worker in a highly automated plant has a pretty narrow standard deviation to her performance, just like the call center employee where fantastic performance matters to a limited degree.

Note that all roles have duties that carry with it upside or downside risk, or are simply required so for simplicity categorize roles based at the activity level (ie, this role has more specialist aspects to it, so for ease of use categorize it as a Specialist role).

The degree of skill specificity required for certain roles
This second attribute clarifies how social capital (network of relationships and behavior within those relationships), knowledge capital (accumulated learning and experience) and technical capital (systems and processes) are required for certain roles inside your organization. The more specific or longer to acquire, the more valuable that skill is to your organization and presumably the more you'd want to invest in it to ensure you have adequate supplies. You could do this through talent development or through the open market via external recruiting. Let's use the roles above to help us generalize some concepts:

Required roles - These are likely to be generic skills used to meet standard operating procedures that will generate a narrow performance distribution. The focus here is on utilization and efficiency.

Value protectors - These folks will have skills applicable across your industry but they become really valuable to you when you layer on organization specific knowledge, especially as it relates to protecting the most important customer processes or outcomes.

Value Creators - These people are your home run hitters. They're creating the future so your services and products can continuously upgrade the value proposition offered to customers. These individuals are educated, connected, and experienced and leverage that knowledge to push boundaries.

The relative value contribution between individuals and organizational capital
Look at your most important processes and roles and think about what percentage of the value is through organizational capital versus human capital. The greater the percentage attributed to organizational capital, the more likely it is that you'll want your investment decisions to focus on efficiency of assets. The more that human beings create the value, the more you'll want to help them create value by getting them whatever they need (tools, coworkers, knowledge, protection from bureaucracy, etc). Let's look at our roles again and make some broad generalizations about where the value originates:

Required Roles - Value is more likely to come from organizational capital than human capital. These roles have a low performance potential, which is why they'll be more standard operating procedures, tools, and rules employed. Example: a line worker at the Coca-Cola bottling plant is probably a 95% organizational capital / 5% human capital value combination.

Value Protectors - Probably an even split between human and organizational capital, because discretion, aided by business specific knowledge and experience, must be employed effectively with organizational capital to avoid undesirable events from occurring. It's rarely going to be just technology protecting value. Example: QA workers at a surgical products unit could easily be 50% organizational capital, 50% human capital.

Value Creators - Likely a much higher percentage attributed to human capital because they're applying, sharing, and creating knowledge in new and unique ways that give the organization more options strategically. Investment banking may be 80% human capital and 20% organizational capital because the value comes from individuals analyzing the data and making decisions. Sure, they have to have fantastic IT set-ups but the value is created when their investment bankers are more correct than the other firms.

Note that as the world continues to become more technical, the floor, or minimum level of automation for any role is bound to increase, so this analysis must be contextual to your core process but also to other organizations (not just in your marketplace, by the way).

Key Take-Aways:

1. Organizations constantly need to raise the value proposition they offer to customers
2. Value propositions are a combination of processes, roles, skills, and organizational capital employed in specific ways that create value for customers and differentiate them from the competition.
   
3. Leaders should analyze internal investment decisions at the process level and should examine roles in specific ways (value potential, skills specificity, and mix between organizational and human capital employed).
   
4. This information should produce clarity on the highest value processes and roles for an organization which can then be the basis of your strategic HR plan, HR programs, or initiatives (like job or process redesign to maximize time spent on value creation activities). Too many organizations simply have generic leadership or talent programs when in reality they should be laser focused on key processes, roles, and individuals, helping them maximize their potential and performance.
   

This is the kind of strategic HR that CEOs should be demanding from their staff, but it's especially urgent given the economic heartburn we're dealing with. Now is not the time to stop all investments....but you do need to be really specific about what you're investing in, base it on data, and then measure progress.

In my next post I'll share some easy ways to use this framework for job and process redesign / improvement.

Pivots For Change - Seth Godin Article

Lots of leaders struggle with how to continuously evolve their organization's offerings to stay competitive. If you want your organization to be able to execute properly, you need a very clear, actionable strategy that everyone can understand and that truly sets you apart in the marketplace. This is a great article from Seth Godin with some simple suggestions to spur thinking.

Leading Through Crisis

The global economic meltdown has presented a huge challenge for organizations to not only survive but to also emerge stronger for Canada’s eventual return to prosperity. I was lucky enough to attend a Knightsbridge Human Capital Solutions discussion on the topic of "leading through crisis” that explored the impact of uncertainty on people and organizations, the key actions for leaders, and the most common mistakes that emerge during crisis. Panelists included Marc Bélanger, VP & GM, Canada Bread Western Canada; Larry Blain, President and CEO of Partnerships BC; and Lois Nahirney, EVP, Corporate Resources for Teekay Corporation.

Key insights:
- Ensure you have the right strategic vision and contingency plans and make the tough calls early, decisively, and accurately. Align leadership actions with organizational values, especially with impacted employees.

- Be empathetic, accessible, transparent, and model the right behaviors.

- Focus your employees on the most critical outcome so that cuts and changes can support that goal. Bélanger reminded his employees that everyone was in the business of selling bread and that all organizational processes needed to align to that goal.

- Positively position this as an opportunity for transformation and constant improvement versus a one-time crisis. Give your employees tough problems to solve and use it as an opportunity to design flexibility into your culture, roles, and processes.

- Approach the transformation comprehensively with investments in strategy, communication, leadership skills, and structured change exercises so that employees can clearly understand the overall plan, modify their roles and processes, and partner with the leadership team to uncover new opportunities for positive change.

- HR professionals should model the values and leadership practices, be a change champion and source of insight for senior managers, and help transform the skills and practices of your organization.

Lastly, remember that this crisis will pass. As one panelist remarked, “Be like an eagle and use the storm to fly higher!”