As always, "The times, they are a'changin'"
In my upcoming At C-Level, I make mention of a survey I recently completed, in which many of you participated. The full results should be available shortly, but I did want to give you a sneak preview.
From a long-range perspective, with only senior executives (more than 20% were CEO/COOs) participating, here are the top 3 issues you identified:
1. Finding, hiring, developing and retaining talent,
2. Organizational changes, outsourcing, merger/acquisition assimilation, and
3. Compliance, poilitical change, legislation.
We've got work to do. Changing our focus to these initiatives -- on a long-term basis -- takes proactive thought and some simple change management methodologies. Change is simple; just close your eyes, hold your breath, and wait. It happens. Effective change management, on the other hand, takes some skill. From my view of the world, 3 things are necessary for senior executives to successfully drive positive change:
1. Belief and commitment. You gotta believe -- really believe -- that what you are doing is right and appropriate, using a variety of litmus tests. Mid-management and line employees will quickly detect if your commitment is anything but resolute. Change management isn't for the weak at heart, so strap in, point the way, and hold the course (I always wanted to use that line).
2. Provide direction. Even if people can believe in your resolve, and even if they understand the basic need, they need real direction, from YOU, to know where to head. Don't expect overnight adjustment and buy-in to your newfound commitment for change; until that real buy-in occurs, they need a really good map -- a compass is probably a better word -- to help them start off in the right direction.
3. Unqualified support for the cause. Pay attention here, this one's really, really important. Not only can you not afford to lose your focus (see "commitment" above), but you must insist others join in the quest. You must insist. Help them work through their issues, convince -- as best as possible -- for the need to change. At the end, though, the change must occur, and you must be prepared to make all those decisions necessary, some good, some tough, to make it happen. Naysayers can be a fatal distraction. Disbelievers can poison an effective team. Misdirected managers can ruin the entire effort. Make sure you stay aware, and be prepared to do whatever is necessary to ensure the focus is maintained by all.
2007 is upon us; we have work to do, and some unique challenges facing us.
Let's charge that hill...
Happy New Year...!
KB
Kevin Berchelmann
www.triangleperformance.com
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 D. Kevin Berchelmann View my profile here |
Friday, December 29, 2006
2007 -- is that a light or a train??
So, what does 2007 hold for the human resources community? More of the same (fortunately and unfortunately), and some new things to consider. Using my Kreskin-like powers (age-check...?), my crystal ball, and reading the Earl Grey leaves in the bottom of my Costa Maya coffee cup...
E-Learning will finally take hold. Content is rich, lower lost productivity costs are necessary and reasonable, podcasts and videoblogs make distribution inexpensive.
The war for talent will get worse. Executive talent is in high demand for the fourth consecutive year; companies must continue to add more incentives, including bigger bonuses, to their compensation packages in an effort to lure top talent from competitors and keep key leaders from walking out the door. Developing existing managers, via succession planning and professional growth initiatives, will be crucial.
Increased focus on non-executive staff development. In the face of the growing war for talent all industries, companies are spending more money to develop formalized training programs to ramp up staff more quickly. These programs can also help improve the odds of retaining employees, make companies more attractive to potential recruits, and can help firms get as much productivity as possible from a staff that may not be as large as they would like.
Outsourcing will continue to increase, particulary specific Business Process Outsourcing. Big market, getting bigger. Mid and small markets are underserved (or not served at all) by the big players, yet cost efficiencies are greater there.
Demographic issues will become even more important. Hispanics are our largest minority, immigration non-reform is emotion-laden, boomers are retiring (the workforce is aging), generational issues continue to grow, and work-life balance is becoming more important -- all of this in the face of the second prediction above. Medical cost increases will continue at a double-digit clip.
Continued M&A activity will lead to further downsizing/talent shifts, and significant bankruptcies will continue.
Employee productivity must increase. Talent shortages, earnings demands, heavy M&A activity... add to that a growing need for a positive link between pay and performance, a demand for flextime, and idiotic CA laws that potentially mandate additional time off. All point to the need for increasing indiviual employee productivity.
Ethics and social responsibility are replacing "cutthroat" as the official corporate badge of honor. Transparency in dealings, pressure on corporate socialism and philanthropy... ethics are no longer "soft" skills relegated to those who can afford them. They now include CEOs, sales people, and others previously exempt. The world is watching...
HR strategy will become a business unit objective. HR has become too important to be the sole purview of human resources. Strategic-focused HR initiatives -- staffing, development, succession, and performance -- will become part of general managers' lexicon. Corporate HR staffs could shrink accordingly, caught between increased strategy ownership in the GM's office and outsourcing at the transactional levels.
Measurement of all things -- including people-focused initiatives -- will become a necessity, not simply a differentiator. Someones' got to explain why we should do this over that, and when I can expect to see a return on my investment of limited capital. Measure or die.
EXCLUSIVE PREVIEW
I interviewed several hundred senior executives -- all C-levels, and over 20% were CEOs. In order of significance, their top-5 short-term priorities came in as:
1. Talent management & acquisition.
2. Revenue & earnings enhancement.
3. Performance management, employee productivity.
4. Management/leadership development, performance and motivation.
5. Market pricing, share, and new product/service development.
I don't offer these things as private or special knowledge of mine; undoubtedly, many of you have arrived at some of these same thinkings. I wanted to put this in writing since that helps me, and maybe offer as help to you as well.
Pay attention to what's happening around you, your company, the country. It's not important whether you agree or disagree with my predictions; just arrive at your own thinking by using something other than simple "hope." As the author said, that's a lousy business strategy.
Stay alert, focused, and continue to add value.
Happy New Year...!
KB
Kevin Berchelmann
www.triangleperformance.com
E-Learning will finally take hold. Content is rich, lower lost productivity costs are necessary and reasonable, podcasts and videoblogs make distribution inexpensive.
The war for talent will get worse. Executive talent is in high demand for the fourth consecutive year; companies must continue to add more incentives, including bigger bonuses, to their compensation packages in an effort to lure top talent from competitors and keep key leaders from walking out the door. Developing existing managers, via succession planning and professional growth initiatives, will be crucial.
Increased focus on non-executive staff development. In the face of the growing war for talent all industries, companies are spending more money to develop formalized training programs to ramp up staff more quickly. These programs can also help improve the odds of retaining employees, make companies more attractive to potential recruits, and can help firms get as much productivity as possible from a staff that may not be as large as they would like.
Outsourcing will continue to increase, particulary specific Business Process Outsourcing. Big market, getting bigger. Mid and small markets are underserved (or not served at all) by the big players, yet cost efficiencies are greater there.
Demographic issues will become even more important. Hispanics are our largest minority, immigration non-reform is emotion-laden, boomers are retiring (the workforce is aging), generational issues continue to grow, and work-life balance is becoming more important -- all of this in the face of the second prediction above. Medical cost increases will continue at a double-digit clip.
Continued M&A activity will lead to further downsizing/talent shifts, and significant bankruptcies will continue.
Employee productivity must increase. Talent shortages, earnings demands, heavy M&A activity... add to that a growing need for a positive link between pay and performance, a demand for flextime, and idiotic CA laws that potentially mandate additional time off. All point to the need for increasing indiviual employee productivity.
Ethics and social responsibility are replacing "cutthroat" as the official corporate badge of honor. Transparency in dealings, pressure on corporate socialism and philanthropy... ethics are no longer "soft" skills relegated to those who can afford them. They now include CEOs, sales people, and others previously exempt. The world is watching...
HR strategy will become a business unit objective. HR has become too important to be the sole purview of human resources. Strategic-focused HR initiatives -- staffing, development, succession, and performance -- will become part of general managers' lexicon. Corporate HR staffs could shrink accordingly, caught between increased strategy ownership in the GM's office and outsourcing at the transactional levels.
Measurement of all things -- including people-focused initiatives -- will become a necessity, not simply a differentiator. Someones' got to explain why we should do this over that, and when I can expect to see a return on my investment of limited capital. Measure or die.
EXCLUSIVE PREVIEW
I interviewed several hundred senior executives -- all C-levels, and over 20% were CEOs. In order of significance, their top-5 short-term priorities came in as:
1. Talent management & acquisition.
2. Revenue & earnings enhancement.
3. Performance management, employee productivity.
4. Management/leadership development, performance and motivation.
5. Market pricing, share, and new product/service development.
I don't offer these things as private or special knowledge of mine; undoubtedly, many of you have arrived at some of these same thinkings. I wanted to put this in writing since that helps me, and maybe offer as help to you as well.
Pay attention to what's happening around you, your company, the country. It's not important whether you agree or disagree with my predictions; just arrive at your own thinking by using something other than simple "hope." As the author said, that's a lousy business strategy.
Stay alert, focused, and continue to add value.
Happy New Year...!
KB
Kevin Berchelmann
www.triangleperformance.com
Friday, December 15, 2006
Outsourcing Management
Outsourcing is a viable business option, and it's here to stay. And it's nothing new -- we've been outsourcing some or all of the human resources functions for decades (think 401k admin, for example). Having said that, to what criteria do we manage these providers? More importantly, what criteria do we/should we use when selecting outsourcing partners?
Normally, outsourcing human resources -- at any level -- is a balanced combination of task management and results measurement. In other words, we typically outsource those high-volume, repeatable tasks, and measure a provider’s efficacy on the demonstrated success of accomplishing those tasks.
And, from my view, we need to keep 3 things in mind when selecting these outsourcing partners:
Task management. Are they capable of accomplishing the full range of tasks that we require, specifically as we require them done?
In other words, will they, can they, do it “our way,” or will our employees have to adapt to “their way,” out of provider convenience and consistency?
Results measurement. How will we measure the success of task accomplishment mentioned above? Again, will those measurements be a subset of what we already use and are accustomed to today, or will the measurements for success be those determined or offered solely by the new provider?
Best results, of course, come from integrating an outsourcer into OUR organization, including using established, valid measurements.
What else can they offer, that creates value in our world, that we may not have specifically been seeking? I have a large client who wanted to outsource virtually all task-driven efforts within benefits, compensation, and even some employee relations. The provider, however, demonstrated a method for outsourcing full-cycle recruitment that my client had never before considered. This value-added offering put that provider over the top.
In short, measure current and future outsourcers as you would any other business function: by a combination of the things they do measured against the results they deliver.
And hold their toes to the fire...
(I have no idea of the origins of that phrase...!)
KB
Kevin Berchelmann
www.triangleperformance.com
Normally, outsourcing human resources -- at any level -- is a balanced combination of task management and results measurement. In other words, we typically outsource those high-volume, repeatable tasks, and measure a provider’s efficacy on the demonstrated success of accomplishing those tasks.
And, from my view, we need to keep 3 things in mind when selecting these outsourcing partners:
Task management. Are they capable of accomplishing the full range of tasks that we require, specifically as we require them done?
In other words, will they, can they, do it “our way,” or will our employees have to adapt to “their way,” out of provider convenience and consistency?
Results measurement. How will we measure the success of task accomplishment mentioned above? Again, will those measurements be a subset of what we already use and are accustomed to today, or will the measurements for success be those determined or offered solely by the new provider?
Best results, of course, come from integrating an outsourcer into OUR organization, including using established, valid measurements.
What else can they offer, that creates value in our world, that we may not have specifically been seeking? I have a large client who wanted to outsource virtually all task-driven efforts within benefits, compensation, and even some employee relations. The provider, however, demonstrated a method for outsourcing full-cycle recruitment that my client had never before considered. This value-added offering put that provider over the top.
In short, measure current and future outsourcers as you would any other business function: by a combination of the things they do measured against the results they deliver.
And hold their toes to the fire...
(I have no idea of the origins of that phrase...!)
KB
Kevin Berchelmann
www.triangleperformance.com
Tuesday, December 12, 2006
More Manna on Mediocrity
Another input from someone regarding the "Mediocrity" piece in the newsletter At C-Level
Very interesting newsletter, Kevin. Thanks for keeping me on the distribution list. I liked the article on the dearth of management talent, but the piece on mediocrity hit home for me, and not just because I suspect that I might know the "secret" identity of your client.
Much of the frustration managers seem to have arises from the fact that management teams not only reward mediocrity, but we also seem to tolerate unsatisfactory performance and insubordinate behavior, even when those two deadly viruses infect the same host. That kind of culture makes it increasingly difficult to motivate star performers on a consistent basis.
What medicine could we use to cure our managers of this illness.
Thanks for the comments.
Interestingly, there are now 4 past or current clients who thought I was talking about “them.”
The necessary "medicine" for recovery is much like any other enabled behavior: First, you have to realize there’s a problem, then believe that removing the problem is a “better place.”
After that, it’s simply a process – a step-by-step (12-step??) process to alleviate the issue. Not complicated (as in ‘complex’) but not easy to pull off, either.
Mediocrity is typically so ingrained in an organization, it’s being substituted for “satisfactory” performance. Becomes quite insidious, and difficult at times to extricate surgically. Sometimes, it may take a "smart bomb" to laser in on the problem, blow it up, then start rebuilding.
The sooner the bomb drops, the faster we can move forward.
KB
Kevin Berchelmann
www.triangleperformance.com
Very interesting newsletter, Kevin. Thanks for keeping me on the distribution list. I liked the article on the dearth of management talent, but the piece on mediocrity hit home for me, and not just because I suspect that I might know the "secret" identity of your client.
Much of the frustration managers seem to have arises from the fact that management teams not only reward mediocrity, but we also seem to tolerate unsatisfactory performance and insubordinate behavior, even when those two deadly viruses infect the same host. That kind of culture makes it increasingly difficult to motivate star performers on a consistent basis.
What medicine could we use to cure our managers of this illness.
Thanks for the comments.
Interestingly, there are now 4 past or current clients who thought I was talking about “them.”
The necessary "medicine" for recovery is much like any other enabled behavior: First, you have to realize there’s a problem, then believe that removing the problem is a “better place.”
After that, it’s simply a process – a step-by-step (12-step??) process to alleviate the issue. Not complicated (as in ‘complex’) but not easy to pull off, either.
Mediocrity is typically so ingrained in an organization, it’s being substituted for “satisfactory” performance. Becomes quite insidious, and difficult at times to extricate surgically. Sometimes, it may take a "smart bomb" to laser in on the problem, blow it up, then start rebuilding.
The sooner the bomb drops, the faster we can move forward.
KB
Kevin Berchelmann
www.triangleperformance.com
Monday, December 11, 2006
Stop Mediocrity -- A 12-Step Program??
Interesting. In my newsletter as well as a blog posting here recently, I mention the growth and seeming acceptance of mediocrity in organizations today.
Must've struck a nerve.
I've received almost a dozen comments on that specific topic, and several emails from current or past clients who believed I was referring to their firm in my example!
This should give us some insight to the general ubiquity of mediocrity in the workplace, and its acceptance as a norm, or at least a tolerable cost of doing business.
One such email, from a highly-decorated senior military officer (edited/paraphrased for length):
Okay, so your management talent musings speak directly to those of us who are forced to hire someone based on how they look on paper and then have only a matter of months before we have to make a decision about whether they can go beyond management and into leadership. Sometimes we strike gold, but only if the individual’s talents were developed before we inherited them. More often than not, we end up with someone who “just doesn’t get it” and have to spend extra time keeping/getting them out of trouble. Too bad most of our informal mentorship efforts don’t occur until late in the process.
To that I must respond:
First, corporate USA doesn’t do much better than the paper instance you describe, even with headhunters, behavior interviewing and “free choice.” In fact, I could argue that they could potentially do worse, as they pull from a pool that doesn’t have a general – albeit sometimes inconsistent – initial standard.
And if my experiences are anywhere near "normal," the clear majority of executive hires “don’t get it,” and I can’t clearly say I know exactly why. I’m sure it’s institutional/systemic, but nailing down the precise cause is difficult.
Another...
You’ve done a good job of paraphrasing “First Break All the Rules.” I assume you’ve read the book… treating everyone the same may be conventional wisdom, but it doesn’t make an organization any more successful than fool’s gold makes you rich.
Treat your good folks like good folks and your superstars like superstars. If the slugs don’t like it, they can improve or move on. Like stratifying on performance reports, not everyone can be #1 or a “top performer.”
Well, I'm ashamed to admit I haven't read the book, but there's certainly nothing I can add to that last paragraph, except maybe, "Here, Here!!"
Great comments, Kev.
(No, I'm not complimenting myself -- the input above came from someone with the same equally distinguished name)
If the topic of Performance Mediocrity is so charged, why aren't we addressing it head-on??
Things that make you go hmmmm...
KB
Kevin Berchelmann
www.triangleperformance.com
Must've struck a nerve.
I've received almost a dozen comments on that specific topic, and several emails from current or past clients who believed I was referring to their firm in my example!
This should give us some insight to the general ubiquity of mediocrity in the workplace, and its acceptance as a norm, or at least a tolerable cost of doing business.
One such email, from a highly-decorated senior military officer (edited/paraphrased for length):
Okay, so your management talent musings speak directly to those of us who are forced to hire someone based on how they look on paper and then have only a matter of months before we have to make a decision about whether they can go beyond management and into leadership. Sometimes we strike gold, but only if the individual’s talents were developed before we inherited them. More often than not, we end up with someone who “just doesn’t get it” and have to spend extra time keeping/getting them out of trouble. Too bad most of our informal mentorship efforts don’t occur until late in the process.
To that I must respond:
First, corporate USA doesn’t do much better than the paper instance you describe, even with headhunters, behavior interviewing and “free choice.” In fact, I could argue that they could potentially do worse, as they pull from a pool that doesn’t have a general – albeit sometimes inconsistent – initial standard.
And if my experiences are anywhere near "normal," the clear majority of executive hires “don’t get it,” and I can’t clearly say I know exactly why. I’m sure it’s institutional/systemic, but nailing down the precise cause is difficult.
Another...
You’ve done a good job of paraphrasing “First Break All the Rules.” I assume you’ve read the book… treating everyone the same may be conventional wisdom, but it doesn’t make an organization any more successful than fool’s gold makes you rich.
Treat your good folks like good folks and your superstars like superstars. If the slugs don’t like it, they can improve or move on. Like stratifying on performance reports, not everyone can be #1 or a “top performer.”
Well, I'm ashamed to admit I haven't read the book, but there's certainly nothing I can add to that last paragraph, except maybe, "Here, Here!!"
Great comments, Kev.
(No, I'm not complimenting myself -- the input above came from someone with the same equally distinguished name)
If the topic of Performance Mediocrity is so charged, why aren't we addressing it head-on??
Things that make you go hmmmm...
KB
Kevin Berchelmann
www.triangleperformance.com
Wednesday, December 6, 2006
So, I Built it, They Came... Now They're Leaving... What Gives??
We spend no small amount of money on employee retention. Do we spend the right money on retaining the right employees?? Hmmm, I wonder...
Employee retention, the RIGHT employee retention, is a significant issue for businesses today.
Retention is personal; there are some things we can do to create a generally favorable environment, but that’s a small piece of the big puzzle.
You know how to retain key employees?? You ASK them what it takes to keep them. This isn’t rocket science, though we sometimes try to make it as difficult as possible.
Now, most managers would prefer it not be so ‘personal,’ since that brings them in close with employees, and puts them – as managers – squarely in the bulls-eye if the retention efforts don’t work out.
Sure, there are some foundational things we can do; Frederick Herzberg called them “Hygiene Factors.” [Shameless commercial plug: I identify these "Input Assumptions" in my Performance Triangle model] Acceptable compensation and benefits, a safe work environment, generally free from harassment, etc. All these are necessary, but simple. They aren’t, however, “satisfiers.” They merely remove the “DIS-satisfiers.” Not nearly the same thing, but significant nonetheless.
I sincerely believe that key-person retention and development should be a significant part of every manager’s accountabilities, and a central component of his or her incentive program. Succession plans are neat; employee and managerial development programs are great. All of these initiatives, of course, hinge on us KEEPING those employees. It’s time to take retention seriously.
Also interestingly, I have two clients who have retained me to find quality engineering and process-consulting professionals. These have become challenging searches, to say the least. Finding “bodies” is simple; online postings, a few databases, and you’re there. Finding QUALITY candidates, however, who can add value to these organizations, has become incredibly difficult.
Where did they go? 6-7 years ago, we couldn’t find technical talent, since it was all absorbed. 5 years ago, there was a glut. Today, there’s a shortage… did they all change fields? I suspect they are still there, just not as open to discuss leaving an organization that has hired and been good to them – much different than the “free agent” thinking that brought chaos to hiring in the late 1990’s and 2000.
Curiously, the things that retain workers today – development, skill enhancement, advancement opportunities – are those things that can create the vacuum necessary for an organization to get those workers to consider their opportunities.
Keep an eye on your workers, and develop necessary plans to keep them. Someone else -- your competitors, likely -- are looking at them as a potential trained talent pool...
KB
Kevin Berchelmann
www.triangleperformance.com
Employee retention, the RIGHT employee retention, is a significant issue for businesses today.
Retention is personal; there are some things we can do to create a generally favorable environment, but that’s a small piece of the big puzzle.
You know how to retain key employees?? You ASK them what it takes to keep them. This isn’t rocket science, though we sometimes try to make it as difficult as possible.
Now, most managers would prefer it not be so ‘personal,’ since that brings them in close with employees, and puts them – as managers – squarely in the bulls-eye if the retention efforts don’t work out.
Sure, there are some foundational things we can do; Frederick Herzberg called them “Hygiene Factors.” [Shameless commercial plug: I identify these "Input Assumptions" in my Performance Triangle model] Acceptable compensation and benefits, a safe work environment, generally free from harassment, etc. All these are necessary, but simple. They aren’t, however, “satisfiers.” They merely remove the “DIS-satisfiers.” Not nearly the same thing, but significant nonetheless.
I sincerely believe that key-person retention and development should be a significant part of every manager’s accountabilities, and a central component of his or her incentive program. Succession plans are neat; employee and managerial development programs are great. All of these initiatives, of course, hinge on us KEEPING those employees. It’s time to take retention seriously.
Also interestingly, I have two clients who have retained me to find quality engineering and process-consulting professionals. These have become challenging searches, to say the least. Finding “bodies” is simple; online postings, a few databases, and you’re there. Finding QUALITY candidates, however, who can add value to these organizations, has become incredibly difficult.
Where did they go? 6-7 years ago, we couldn’t find technical talent, since it was all absorbed. 5 years ago, there was a glut. Today, there’s a shortage… did they all change fields? I suspect they are still there, just not as open to discuss leaving an organization that has hired and been good to them – much different than the “free agent” thinking that brought chaos to hiring in the late 1990’s and 2000.
Curiously, the things that retain workers today – development, skill enhancement, advancement opportunities – are those things that can create the vacuum necessary for an organization to get those workers to consider their opportunities.
Keep an eye on your workers, and develop necessary plans to keep them. Someone else -- your competitors, likely -- are looking at them as a potential trained talent pool...
KB
Kevin Berchelmann
www.triangleperformance.com
HR Leadership -- Alchemy or Oxymoron??
First, my bias -- I "grew up" in Human Resources, finishing my coprorate stint with successive roles at the VP/SVP HR level. So, I somewhat "know from which I speak..."
The skills required of senior HR leadership of today and the future are so incredibly different than those required in the past, that the job almost seems to be a different profession.
Gone are the days of employee advocacy, pseudo-ombudsman, and feel-good party-planners.
Present & future HR leaders must have consummate business skills, including sound, educated, financial acumen. Additionally, HR specialist managers must maintain that specialty expertise (compensation, benefits,recruiting) while learning and leading with those same skills listed above.
Organizations must be able to look to their HR leaders for financial information on the human capital efforts, emphasis, and directions. Simply determing "cost" isn't enough -- we'll need to show, demonstrate and explain real "VALUE." In other words, why the hell should a company give you money and resources instead of putting those same resources to work in marketing, product development, or R&D??
We cannot stress enough that future HR leaders must know -- KNOW -- the business. I don't mean the HR business or profession, but the "business." They have to get their hands dirty; be willing to take on a multitude of non-HR responsibilities and accountabilities -- HR is merely a specific background for a top executive, it doesn't define their over-arching role and deliverables.
The best example I can give is that the largest private employer in free world -- Wal-Mart -- selected someone with NO human resources background to lead their human resources function. They clearly needed a "leader" first, an "HR expert" second. I believe this is the future we are going to realize, and their will be many incapable of getting on that bus.
The most significant skills -- bar none -- that these future HR leaders must have include:
1. Real business understanding -- get their hands dirty enough to understand HOW and WHY we make money,
2. Financial acumen, and
3. Talent management: identification, development and recruitment.
This train is leaving; get on, get off, or get run over. Organizations have a right to these expectations, and I believe they will insist on receiving them in the not-too-distant future.
See you around campus...
KB
Kevin Berchelmann
www.triangleperformance.com
The skills required of senior HR leadership of today and the future are so incredibly different than those required in the past, that the job almost seems to be a different profession.
Gone are the days of employee advocacy, pseudo-ombudsman, and feel-good party-planners.
Present & future HR leaders must have consummate business skills, including sound, educated, financial acumen. Additionally, HR specialist managers must maintain that specialty expertise (compensation, benefits,recruiting) while learning and leading with those same skills listed above.
Organizations must be able to look to their HR leaders for financial information on the human capital efforts, emphasis, and directions. Simply determing "cost" isn't enough -- we'll need to show, demonstrate and explain real "VALUE." In other words, why the hell should a company give you money and resources instead of putting those same resources to work in marketing, product development, or R&D??
We cannot stress enough that future HR leaders must know -- KNOW -- the business. I don't mean the HR business or profession, but the "business." They have to get their hands dirty; be willing to take on a multitude of non-HR responsibilities and accountabilities -- HR is merely a specific background for a top executive, it doesn't define their over-arching role and deliverables.
The best example I can give is that the largest private employer in free world -- Wal-Mart -- selected someone with NO human resources background to lead their human resources function. They clearly needed a "leader" first, an "HR expert" second. I believe this is the future we are going to realize, and their will be many incapable of getting on that bus.
The most significant skills -- bar none -- that these future HR leaders must have include:
1. Real business understanding -- get their hands dirty enough to understand HOW and WHY we make money,
2. Financial acumen, and
3. Talent management: identification, development and recruitment.
This train is leaving; get on, get off, or get run over. Organizations have a right to these expectations, and I believe they will insist on receiving them in the not-too-distant future.
See you around campus...
KB
Kevin Berchelmann
www.triangleperformance.com
Turnover...?
The most critical skill for managers today is finding, hiring, and keeping highly competent talent.
But frankly, we need to a significant amount of “weeding out” when we don’t make that perfect hire. Welch and GE received dubious press for their “forced rankings” process, but more organizations today are doing that same thing – directly or indirectly. Taking a hard look at the bottom 25% performers and asking, “can we do better?”
Additionally, some turnover is always “good.” When a hiring mismatch occurs, the discomfort and feelings of responsibility in hiring usually just create an uncomfortable environment, and both the company and employee are usually better served by finding a better match, whether that means resignation (voluntary turnover) by the employee, or termination (forced turnover) by the employer.
And sometimes it’s not simply performance on a 1-10 scale. If the business changes, restructures, or re-engineers, it may create an obsolete employee from one who was satisfactory before. Again, if the match isn’t “right,” the quicker the turnover, the better. Additionally, some of the old axioms about turnover are still true; we always need “some” rotation of talent to provide for new thinking, new ideas, and new approaches.
Also interestingly, I have a client that recently lost its top engineering manager. The leadership team had, for some time, realized that this person was not a good fit for the role, mostly for interpersonal (not technical skills) reasons. This engineer finally realized he was ill-suited and, frankly, not really welcomed, and he resigned. Is the organization better for it? Certainly. Is the employee? Probably, as he now has a position at a company that – hopefully – better matches his personal skills, knowledge and abilities.
Turnover isn't necessarily bad -- it just "is." Manage the bad, make the "good turnover" happen timely, and it will all shake out in the end.
KB
Kevin Berchelmann
www.triangleperformance.com
But frankly, we need to a significant amount of “weeding out” when we don’t make that perfect hire. Welch and GE received dubious press for their “forced rankings” process, but more organizations today are doing that same thing – directly or indirectly. Taking a hard look at the bottom 25% performers and asking, “can we do better?”
Additionally, some turnover is always “good.” When a hiring mismatch occurs, the discomfort and feelings of responsibility in hiring usually just create an uncomfortable environment, and both the company and employee are usually better served by finding a better match, whether that means resignation (voluntary turnover) by the employee, or termination (forced turnover) by the employer.
And sometimes it’s not simply performance on a 1-10 scale. If the business changes, restructures, or re-engineers, it may create an obsolete employee from one who was satisfactory before. Again, if the match isn’t “right,” the quicker the turnover, the better. Additionally, some of the old axioms about turnover are still true; we always need “some” rotation of talent to provide for new thinking, new ideas, and new approaches.
Also interestingly, I have a client that recently lost its top engineering manager. The leadership team had, for some time, realized that this person was not a good fit for the role, mostly for interpersonal (not technical skills) reasons. This engineer finally realized he was ill-suited and, frankly, not really welcomed, and he resigned. Is the organization better for it? Certainly. Is the employee? Probably, as he now has a position at a company that – hopefully – better matches his personal skills, knowledge and abilities.
Turnover isn't necessarily bad -- it just "is." Manage the bad, make the "good turnover" happen timely, and it will all shake out in the end.
KB
Kevin Berchelmann
www.triangleperformance.com
Tuesday, December 5, 2006
Mediocrity Kills...
In my upcoming (tomorrow) newsletter, "At C-Level," I address this topic in some detail. I'd like to cover some additional points, and since this is my forum, I figured I'd just use this...
From leadership and performance perspectives, mediocre performance -- particularly among managers or key positions -- is certainly a critical situation.
There are three real problems with accepting mediocrity:
First, it slows organizational performance. We know that intuitively, though we frequently feel we can “get past that.” We make processes, even hire people, based on some mediocre log-jam that we seem to accept for no rational reason.
Second, mediocrity breeds mediocrity. In other words, if the prevailing culture accepts substandard efforts (in fact, REWARDS those efforts), then those efforts will continue. A basic tenet of compensation: “That which is rewarded is repeated.” In other words, if bad things don't come to bad people, you can bet their steadily value-sucking performance will continue.
And third, we cannot even KNOW our capabilities or potential when mediocrity is pervasive in the organization. What we view as a challenge – a ‘stretch goal” – may be child’s play for a high-performing organization, yet we’ve accepted that degree of difficulty as a DIRECT result of our culture of marginal performance. Shame on us -- we don't even have a full grasp of where we could be or how high we could go, merely because we allow mediocrity to add weight to performance scales.
Additionally, mediocrity points to two obvious shortcomings with us in senior leadership:
First, the organization cannot be performing at a significant level with mediocre performers. The financial and productive results, then, are obviously less than the potential. Given today’s scarcity of resources, shame on the organization’s leaders for wasting them this way.
More importantly, the leadership team has proven unable or unwilling to manage performance correctly and effectively for the organization to truly realize its success. We have to ask ourselves, if some members of the leadership team are incapable of eradicating pervasively lackluster performance, what else are they “not” doing? What other gaps do we have, that we may not even realize? How much money has flown through the door unchecked?
Mediocrity, either in terms of absolute performance or at least acquiescence/acceptance, begins at the top.
To borrow from some other cause's tagline: We can eradicate mediocrity in our lifetimes.
And we should.
Cheers,
KB
Kevin Berchelmann
www.triangleperformance.com
From leadership and performance perspectives, mediocre performance -- particularly among managers or key positions -- is certainly a critical situation.
There are three real problems with accepting mediocrity:
First, it slows organizational performance. We know that intuitively, though we frequently feel we can “get past that.” We make processes, even hire people, based on some mediocre log-jam that we seem to accept for no rational reason.
Second, mediocrity breeds mediocrity. In other words, if the prevailing culture accepts substandard efforts (in fact, REWARDS those efforts), then those efforts will continue. A basic tenet of compensation: “That which is rewarded is repeated.” In other words, if bad things don't come to bad people, you can bet their steadily value-sucking performance will continue.
And third, we cannot even KNOW our capabilities or potential when mediocrity is pervasive in the organization. What we view as a challenge – a ‘stretch goal” – may be child’s play for a high-performing organization, yet we’ve accepted that degree of difficulty as a DIRECT result of our culture of marginal performance. Shame on us -- we don't even have a full grasp of where we could be or how high we could go, merely because we allow mediocrity to add weight to performance scales.
Additionally, mediocrity points to two obvious shortcomings with us in senior leadership:
First, the organization cannot be performing at a significant level with mediocre performers. The financial and productive results, then, are obviously less than the potential. Given today’s scarcity of resources, shame on the organization’s leaders for wasting them this way.
More importantly, the leadership team has proven unable or unwilling to manage performance correctly and effectively for the organization to truly realize its success. We have to ask ourselves, if some members of the leadership team are incapable of eradicating pervasively lackluster performance, what else are they “not” doing? What other gaps do we have, that we may not even realize? How much money has flown through the door unchecked?
Mediocrity, either in terms of absolute performance or at least acquiescence/acceptance, begins at the top.
To borrow from some other cause's tagline: We can eradicate mediocrity in our lifetimes.
And we should.
Cheers,
KB
Kevin Berchelmann
www.triangleperformance.com
Monday, December 4, 2006
Incentive Compensation -- Make it Work!
I’ve worked with many organizations, both as the in-house compensation expert as well as an outside consultant, and determining the economic return for incentive plans is clearly a significant effort – and there’s sometimes nothing simple about it.
Incentive plans do not work in a vacuum; even with potentially great compensation plans, outside forces can be such that the results are almost anecdotal. This doesn’t mean we shouldn’t make every effort to measure the results, but it does mean that any specific measurements will have “assumptions” built in to the equation.
Some client examples:
I implemented an extensive gainsharing plan for a $100M division of a $1B manufacturer/smelter of zinc ingot. In less than 18 months, we reduced the average production cost per pound by well over 35%, and split the dollar savings evenly with employees, some of them nearly doubling their typical hourly wage. Now, was it simply the incentive plan? Well, as part of that effort, we conducted extensive training, constant follow-up, intense metric evaluation and trending… in short, we implemented a process “around” that incentive effort.
So, did the gainsharing “cause” the improved performance?
It certainly played a significant part.
With a small, fast-growing bio-tech firm, we implemented significant incentives for management’s leadership in driving research & development and time-to-market. The incentives paid out fairly handsomely, and time-to-market for new products was reduced by almost 15% in less than 12 months.
Was that caused entirely by incentives?
Hard to say; time-to-market had become an incredible focus before implementing the incentives, and was reflected in many management efforts, hiring, etc. Clearly, the incentives played a part, but how much?
Finally, with a $120M industrial services firm, we implemented sales incentives that had the most generous “upside” in the industry. 12 months later, we realized an increase in revenue of almost 15%, with margins equal to or better than before. Yet the company still entered into Chapter 11 bankruptcy, and the strategic buyers immediately discontinued the plan, saying it was too “rich.”
Did it play a part in the company’s slide into Chapter 11, or did it stave off that bankruptcy for several more months? Again, it’s difficult to determine, given the pressures on the entire organization at the time to reduce costs, increase revenues, and bolster margins. It certainly made more in earnings than it cost in incentives, by a factor of almost 13x.
Again, these plans don’t work in a vacuum, and are usually part of an organization’s current strategic focus. As such, measuring ROI aimed squarely and solely at a particular incentive plan will always be difficult.
Can we measure the total impact of the effort, INCLUDING incentive plans? Of course, and that’s likely the most successful way to run a railroad anyway.
Cheers,
KB
Kevin Berchelmann
www.triangleperformance.com
Incentive plans do not work in a vacuum; even with potentially great compensation plans, outside forces can be such that the results are almost anecdotal. This doesn’t mean we shouldn’t make every effort to measure the results, but it does mean that any specific measurements will have “assumptions” built in to the equation.
Some client examples:
I implemented an extensive gainsharing plan for a $100M division of a $1B manufacturer/smelter of zinc ingot. In less than 18 months, we reduced the average production cost per pound by well over 35%, and split the dollar savings evenly with employees, some of them nearly doubling their typical hourly wage. Now, was it simply the incentive plan? Well, as part of that effort, we conducted extensive training, constant follow-up, intense metric evaluation and trending… in short, we implemented a process “around” that incentive effort.
So, did the gainsharing “cause” the improved performance?
It certainly played a significant part.
With a small, fast-growing bio-tech firm, we implemented significant incentives for management’s leadership in driving research & development and time-to-market. The incentives paid out fairly handsomely, and time-to-market for new products was reduced by almost 15% in less than 12 months.
Was that caused entirely by incentives?
Hard to say; time-to-market had become an incredible focus before implementing the incentives, and was reflected in many management efforts, hiring, etc. Clearly, the incentives played a part, but how much?
Finally, with a $120M industrial services firm, we implemented sales incentives that had the most generous “upside” in the industry. 12 months later, we realized an increase in revenue of almost 15%, with margins equal to or better than before. Yet the company still entered into Chapter 11 bankruptcy, and the strategic buyers immediately discontinued the plan, saying it was too “rich.”
Did it play a part in the company’s slide into Chapter 11, or did it stave off that bankruptcy for several more months? Again, it’s difficult to determine, given the pressures on the entire organization at the time to reduce costs, increase revenues, and bolster margins. It certainly made more in earnings than it cost in incentives, by a factor of almost 13x.
Again, these plans don’t work in a vacuum, and are usually part of an organization’s current strategic focus. As such, measuring ROI aimed squarely and solely at a particular incentive plan will always be difficult.
Can we measure the total impact of the effort, INCLUDING incentive plans? Of course, and that’s likely the most successful way to run a railroad anyway.
Cheers,
KB
Kevin Berchelmann
www.triangleperformance.com
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