Human Capital Management 20/20

HR Armed with Data

Workforce Magazine's April 2011 edition has a great section in the back (p. 33) entitled, "HR Armed with data", which is a response to the march 2011 cover story entitled, "Numbers Game".  What a PERFECT title.  It again affirms the notion that not all HR folks should be in the C-suite unless you have what it takes to be a strategist. Here is my favorite reader quote...

"Analytics balanced with experience, insight and situational awareness lead to better business decisions in human resources, which lead to better business decisions throughout the company."

Last month I spoke at the Winchester (VA) chapter of SHRM on the HR vs HC: Who's in the C-Suite blog post I started here in HCM2020. I try to be very cautious when explaining exactly what I mean when I say that not all HR professionals should be in the C-suite.  Why would I say this?  Because not all HR folks have this data driven mindset or have the resources to get the data needed to drive business decisions.  But it's not all about the data, it's about the whole package.

The ultimate focus for the C-level executive in the people/human capital function is captured in the reader's quote above.  It says it all.

HC vs. HR - What's the Difference & Who's in the C Suite?

So after many conversations at SHRM10, Twitter, HCI and other venues, I've decided to write a post about my views on the differences between human capital management (HCM) and human resources (HR).  I think there are many different debates on which does what and how a HC/HR organization should be designed.  Considering I'm neck deep in the design and implementation of this now, I thought I'd share some of my views and rationale on the topic.

Fundamentally, I see human capital and HR as two very different functions. My organization is a human capital organization, first and foremost.  My background is primarily from business mangement, with strong knowledge in a range of HR and human capital functional areas.  As the Chief Human Capital Officer for a joint venture, and as the VP of Human Capital for a consulting practice, my role is one in the same.  My focus is to ensure that our People Strategy Aligns with the Business Strategy.

Under the HC umbrella I have four key areas:  Recruitment, Talent Management, Human Resources, and Workforce Planning.   The reason I divided it up this way is that each of these areas has unique skill sets and goals.  Recruiting includes sourcing, vetting and screening candidates, assessments, interviewing, and selection.  Our Talent Management group includes several subsets: onboarding, training, performance management, retention, etc.  HR includes all of the transactional activities associated with our people (I9s, FMLA, benefits, etc.).  Workforce Planning pulls all of this full circle so that we're looking at the metrics to report the "as-is state" plus predict future state activities. 

All of those areas roll up to help strategically create a gameplan that aligns our people with the business strategy.

May people are asking questions about why HR doesn't have a seat in the C suite.  My simple answer is that HR shouldn't - it's one transactional piece in the HC arena.  Human Capital should be in the C suite.  This doesn't mean, however, that some heads of HR don't have what it takes to be in the C suite.  What I'm suggesting is simply this...  someone who has only been heading up transactional HR activities needs to rebrand themselves to show a broader depth of knowledge, and strategic ability, to look at more than the HR transactions happening in an organization.  This rebranding takes the form of becoming a true Human Capital practitioner - with a strong focus on business principles and concepts.  Successful CHCOs/Chief People Officers, etc. have a strong understanding of the business and a solid understanding of all of the various components of human capital - well beyond just HR.

Personally, I've also found that great HR Directors are rock stars at process oriented procedures and fact finding (data and details).  I greatly value these people because they provide data and process-based structure.  The nature of that kind of work is not always conducive to the extremely strategic and entrepreneurial nature of CHCO/CPO work. 

For all of these reasons, and a few others, I'm not a proponent of the head of HR being in the C suite.  It is the true Human Capital Officer who serves the strategic needs of the business with a strong team of recruiters, talent managers, HR managers and workforce planners behind them.

Pivotal Employees vs High Performers

In preparation for a course at the SHRM10 conference, and in typical QuickStart style, I am perusing the "pre-readings" on the flight to San Diego this morning.  One of the concepts has struck an interesting cord, and I'm quite interested in pursuing this topic at the conference.  Here is my explanation thus far...

Organizations are looking to identify, reward, promote, develop, etc. "high performers". These rock stars, in however they are defined, are receiving significant resources from organizations in the form of bonuses, resources, perks, etc.  All of this is well and good, but the "high performers" tend to be small in numbers. Don't get me wrong, I'm all about taking care of high performers, but the reality is, high performers can't get all the work done themselves. And even in small organizations, if growth is going to happen, a deeper dive into the workforce is needed to really see where the organization stands.

One of the articles I've read focuses on just this concept, looking at your workforce through a different lens, that of the Pivotal Employee, a far larger group within the workforce and key to organizational growth and success. "Pivotal employees are segments of the workforce that are expected to create value and determine the success of the company," per the Saratoga white paper from PriceWaterhouseCoopers (PWC). Pivotal employees are defined based on the organization's mission. For example, a restaurant's success depends on good customer experience, therefore the pivotal employees are cooks and servers. For a consulting firm, high impact solutions and customer service are key, so consultants and project managers are pivotal employees.

Once pivotal employees are identified, it is important to know how engaged they are in the organization's work. This is where things get interesting. (and leave it to a consulting firm to put it in terms of a 2x2 chart). Through a series of interesting employee engagement survey questions, not unlike the Gallup Organization's Q12, an organization can determine which of four quadrants employees sit in.

1. Champion: have high levels of loyalty to the organization, strain identify with corporate objectives and positive, active initiative to inspire and motivate employees
2. Tenants: very satisfied employees, their view of work is straightforward yet sometimes need to be directed, but they lack a connection to the organization
3. Captives: Rather critical and difficult to lead, individualistic, ready to change jobs when the opportunity becomes available
4. Disengaged: dissatisfied employees that feel disconnected from the organization, they are more frustrated than dedicated and are under-utilized resources within the org 

This conceptual framework speaks volumes for the need for human capital planning in organizations of all types and sizes. If an organization can effectively capture this information in a meaningful way, then HC practitioners play a critical part in strategic organizational planning, workforce planning, and employee satisfaction. A human capital strategist can then take a look at the populations of employees in each of the four quadrants and make decisions about rewards, employee engagement activities, corrective actions, or releases. All of these activities and data points leads to better understanding and decision-making around our most important resource, our people.

The Importance of Culture

Recently I have been spending some time exploring the issue of organizational culture and looking at it from a range of perspectives.  It still astounds me that some C-level executives feel that it is their sole responsibility to "set the culture" of their organization while others leave it to organically grow within the organization. 

I would suggest that it is much more like creating a new garden than setting a firm stake in the ground and walking away from it.  Executives help lay the foundation but have to leverage their people in order for a culture to define itself and become sustainable for the long term.

Creating an Organization's Culture - laying the foundation with guiding principles

Guiding principles, articulated by a senior leadership team are critical in setting an organization's culture.  This is critical during the start-up and early stage years of a growing company.  Some may call these "values" but frankly, an organization could have tens of values to live by.  Setting guiding principles and rules of engagement may better suit a smaller firm in their early years and create a solid foundation for cultural growth.  The catch is that the leaders themselves have to follow the principles they set. They, along with employees, must have mechanisms to be held accountable for adherence to these principles.   Just like gardening, creating a nutrient rich environment, clear boundaries and spending some time in thoughtful planning will help ensure a long-term, thriving environment for growth.

Nurturing the Culture's Growth - an organic process

People are the center of your organization's culture and as such, it will organically morph over time.  As an organization morphs, or as new departments or groups are formed, the cycle starts over again.  Leaders must ensure that the right people are brought into the organization to continue positive growth of the culture.  Over time, the guiding principles get worked out and may even change or become more clearly defined. As this begins to happen, employees will begin to help define the culture.  Leaders need to watch, but not interfere with this activity.  I've seen some organizations embrace this beautifully and even encourage the ongoing growth of the culture, with the guiding principles in mind.   At times however, "weeding and pruning" may need to happen, but choose wisely who does this.    Weeding allows the organization to fine tune the culture and provide more space for growth.  Pruning allows for further shaping of the culture.  But gardener beware, too much or too little of either may have disastrous results or unintended consequences.

Merging Two Cultures - the garden expands

If your organization is lucky enough to experience a merger, and most successful ones do at some point, there is a lot of attention required, and more planning and weeding/pruning to do.  Bu t the basics remain the same - communication about the guiding principles has to be frequent and often, and it is more important than ever that the dominant culture is strong and well maintained.  Again, choose wisely who is leading the cultural merging efforts of the organization.  And to continue with the gardening theme, the timing may be key.    Your "culture gardeners" need to actively weed and prune, but they must do so with significant care and thoughtfulness.  Respected members of both cultures should be tapped to help with this effort.  Keep in mind that those people are not always members of the leadership team.

Linking Culture to Performance

Forward-thinking organizations are wrapping their heads around this concept.  Once the culture, values and guiding principles are defined, how do you hold everyone accountable?  How do you link the culture to individual and organizational performance?  I was recently discussing this very topic with and EVP of company in the southwest.  They had just spend some time working with employees to figure out this exact issue.  Employees drove this effort with great success.  They came up with performance evaluation metrics, behavioral indicators and proficiency levels to demonstrate an employee's "buy in" to the culture through observable behaviors.  Those behaviors rolled up to team and department goals, which supported the organization's business objectives. Through this bottom up approach, the organization's leadership has been amazed at the results thus far. Although its too early to get the quantitative results, employees are active in the ongoing dialog and seem to have bought into the evaluation process at a whole new level.

In summary, culture is critical to all organizations and your people are at the center of it.  While the foundation of successful cultures are seeded by the initial founders and perhaps the leadership team, the employees themselves foster the longevity and fruitfulness of the culture itself. 

Solid Foundations - thoughts on how leadership styles emerge

After a very hectic and fun 2009, I'm finally finding some time to get back to my blog, and the associated research involved in writing.  This is something I'm quite passionate about.  In cleaning up this blog I found five half-baked blog posts on everything from Principle Centered Leadership to an exploration of my leadership style and how a style emerges.  There is the whole "born versus learned" argument about where leadership styles emerge from.  On any given day I can be persuaded to join either side of that fence (which is rare).  But frankly, it probably is a bit of both.  One has to have an innate ability or drive to lead.   Regardless of that argument, however, is the core of what creates one's leadership style....a solid foundation.  So for me, here is what that means.

Successful leadership is about gaining a deep understanding of yourself, your drivers, and the ability to know yourself better than anyone else.  It is about continual learning, in a range of contexts and situations.  This includes reading about leadership styles, contexts, patterns.  It is about drawing on your past and reflecting on your experiences, both as a leader and as a follower.  What motivated you to follow or lead?  It is about hands-on leadership experiences.  It is about leading successfully and unsuccessfully - then transforming both into good learning lessons for yourself (and if you're truly humble - for others too).   It's about watching others lead and learning from their successes and challenges as well.

A big part of leadership is listening, asking questions first, and trying to gain a true understanding of where others are coming from.  Then having the ability to shift gears if it makes sense.  Iron-fisted leadership may work well when you're leading only yourself - but when leading others, it's rarely a dynamic for success.  

Self realization that you don't have all of the answers.  That hiring really smart people to work with you is a great way to get even more accomplished.  Hire them, set the course and let them get there the best way they know how (get out of their way).  Be confident in  your leadership and let your folks run with it.  A side note: I find that leaders who can't do this well micromanage or pass significant judgment when they haven't set a clear course for their team - thus lacking in confidence.  If you are unsure of a course, share what you do know then let your team help set the course.  Perhaps their path will create exciting new opportunities?

 

I have a four year old daughter who is learning all about these concepts in pre-school.  Her teacher tells me often that she is a leader in her class.  I recently asked what she means by this and she said, "Your daughter senses her classmates and helps guide them in a way that they appreciate."  This is what I strive for in my daily leadership activities.  I'm not always successful, but in a consistent and Zen-like way, I am always striving to establish this solid foundation for leadership.

HCM Metrics - what is really important?

I have been spending a lot of time lately researching and thinking about what human capital metrics are really important for organizations.  There is no shortage of opinions (and books) on this matter, and many of these opinions are completely situational.  The answer to this question has several variables that impact the decision about your organization's metrics.  On one hand this question totally depends on the type of organization you have (large company, small business, government agency, association/non-profit, etc.).  Another factor would be the organization's philosophy about its people.  Yet a third would be the importance that your people have to your product(s)/service(s).  Being a human capital specialist, I think people are incredibly important, and most executives will tell you the same thing.  "Our people are our first priority", etc. etc. etc.  But what I find interesting is not what a leader "says" about its people, but the actions and activities the organization's leadership "takes" in regards to its people  AND what the everyday workers say about the organization's commitment to its people.

Some of these obvious action items are included in HR policies and procedures.  But just because the policies are in place doesn't mean they are implemented equitably.  It also doesn't imply that the culture truly supports them. There are issues that play a much more significant role to your organization's HCM strategy, yet all of them point to getting real about your people.  Here are just a few metrics to consider.  Each organization needs to pick the ones that make the most sense based on their organization's context.

1. Organizational Culture. The perceived versus stated culture of an organization.  If people on the ground could be completely free to speak their minds, how would they describe the organization's culture?  How does your leadership "describe" the culture?  What are the gaps? How are you measuring this? 
2. Right People, Right Job.  Do individuals love their work and know they are valued for their contributions and efforts?  Can you easily identify teams that are less productive than others?  Does your organization easily know about each employee's strengths so they can be leveraged across the organization?  (This isn't just job satisfaction) [We use the Kolbe Wisdom for this.]
3. Turnover rates. Capture both voluntary and involuntary turnover and the context around those numbers.  Why are people leaving your organization?  Are you conducting effective exit interviews with unbiased third party individuals?  And an even better question, why are your people staying with your company?
4. Succession Planning. How many people are eligible to retire from your organization this year and what is the game plan to succeed them?  How do those retiring individuals truly impact the knowledge capital of your organization?  How are you measuring that, if at all?  (and you can btw)
5. Cost to hire one employee.  Are the trend costs going down?  With the brilliance of social media, they should.  If your hiring costs are going up, there should be a really good reason why, especially in this market.
   
6. Cost of losing one employee.  What is the cost to the organization for one employee leaving?  What is the impact to productivity for the teams they may be on?  What knowledge goes out the door with them?  What does it cost the organization?
7. Professional development investment costs.  How much are you investing in each individual's professional development?  Does your organization have solid professional development plans (PDP) in place for every individual?  Are performance-based bonuses impacted by successfully executing a PDP?  What is your organization getting out of that investment?
8. Employee Evaluation Process.  How often do your employees receive meaningful feedback on their performance?  Is this feedback comprehensive, objective, measurable? 

Each of these 8 metrics are important for every organization.  But not all organizations seem to understand that capturing this information, discussing it, and taking action to adjust issues as necessary, are a critical part to retaining the best and brightest employees.  HCM is not only a science but an art.  It is all about keeping the ongoing pulse of the organization, trending that, and making adjustments as necessary.

If you don't take a really good look at these numbers, once the economy picks back up, you may find your best talent finds a place that truly values their contribution.

Leveraging Kolbe Wisdom for Innovation

Today is the first day that my peers and I are sitting down (independently) to create and develop new concepts for the company.  This "Innovation Day" as it's been titled, was suggested by our CEO based on her reading of Daniel Pink's book, "Drive".  In full disclosure I haven't gotten to the part of the book that discusses the innovation day concept, but I'll get there soon.  The concept is pretty simple, give employees time to disconnect from daily work to explore the new ideas, activities, topics, etc. that excite them and then report out on the efforts of the day.

So as a QuickStart/FactFinder (according to the Kolbe Wisdom) exploring concepts and taking risk are right up my alley.  So I'm really enjoying the day and exploring some concepts that I simply haven't had time to explore in the last nine months.  But for all of those peers of mine who are Kolbe Certified Consultants, we know that some people simply don't want to do this for a whole host of reasons.  For those unfamiliar with the Kolbe concept, it is a tool used to identify people's unique abilities and strengths.  In particular, it identifies how people will naturally take action when left to their own devices.  

What I am finding so interesting is how people with a range of Kolbe strengths approach the day, or don't.  In particular, as a QuickStart/FactFinder I have no problem generating a ton of ideas.  Just please don't ask me to go into micro detail as to how the idea would be implemented.  I'll leave that to my stellar team of FactFinder/FollowThroughs :)   But what happens when you ask a FollowThrough (who has a need to categorize and define processes) to create new ideas?  Or a FactFinder (who needs to get into the research and details)?  Or the Implementor (who needs to see it in tangible form)?  What part of the process of innovation do each get bogged down in? 

It's fun to watch, not only from a QS innovator perspective, but to watch my peers and how they simply approach the day.  What is also going to be fascinating is when my peers (mostly FactFinder/FollowThroughs) have to dive into the vetting process.  How quickly will they want to pull the plug on ideas before concepts are even fully explored?  Or will they so fully explore something that needs to be canned that they get into information overload?  Or will their inquisitive fact finding and categorizing actually get us to quicker go/no-go decisions?

We will soon find out.  The first debrief for today's activities is on Monday.  

Prepping New Generations or Retraining Managers/Leaders for Workplace of the Future?

The Social Media Club offers up a great question this week which has me really thinking about how we "prepare" future generations for the workplace of the future.  Here is a link to their original blog post: SMCQ11: How do we educate the younger generation to prepare for the modern workforce?

A great question indeed.

One of the most interesting things happened to me between 1995 when I finished undergrad and 2001 when I started my first serious company.  In 1995 the field of eLearning (as we know it today) didn't truly exist.  Yet in 2001 I founded a consulting firm to focus on strategic eLearning for associations and non-profits.  My undergraduate program didn't necessarily prepare me for my chosen profession.  So the question that Deborah Crooks poses on the SMC blog is a really good one indeed.

I think there are two sides to this question. One side is how can our education system teach students abstract concepts like change management, creative problem solving, and critical thinking or other important concepts around collaboration (in the broadest sense), teamwork, etc.  And at what age is learning about these concepts appropriate in child development?  I leave this to the experts in the education world who have to tackle the major institutional obstacles that keep our public education system stuck in the industrial age.  As a parent of a pre-K and Kindergartner I see this first hand every day and honor parents that home school because of it.

The other side of this coin is how can we teach managers and organizational leaders to become "guides on the side" instead of the "sage on the stage"?  Meaning, when can we get leaders to truly transform management styles so that we embrace and welcome learning from younger members in a professional population.  When will companies get the idea that sometimes true leadership comes from following, learning, and listening (servant leadership)?   When coaching and mentoring is led by the younger of the pair or group, not by the older?

In the human capital world there is a constant message that leaders and managers attempt to get Millennials to conform to the current way of doing things.  Policies are created to limit the use of social media in the workplace.  If someone is "caught" in IMs or surfing the Net it's assumed they are "slacking".

Perhaps what leaders and managers need to do is give up the Industrial Age leadership and management practices for those of the Knowledge Economy.  Create new styles of leadership that acknowledge and embrace collaboration through the Internet, embrace teamwork and knowledge gathering using all means possible.  Back on the flip side, educational systems need to be completely revamped to address the fact that many children today will be working jobs in the future that haven't even been created yet.

Comments on: 10 of the Smartest Big Brands in Social Media

Samir Balwani is a social media marketer who helps businesses create effective web strategies.  He's written a fantastic article on the Mashable website entitled, "Presenting: 10 of the Smartest Big Brands in Social Media".  For anyone who is looking for the "rock star" of great social media branding examples, this list hits it. 

But it's more than just reading the examples.  It is about learning WHY these companies did what they did, noting their clear focus on the audience, how they creatively crafted their "presentation", and why their campaign or social media program was successful.

If you think you can take one of these examples and simply toss your product or service into the model and have the same success, think twice.  Each of these examples is successful because they are highly tailored keeping the message, the audience, and the technology in mind.

For bonus material, be sure to read the "Comments" section for the blog post and RSS track it.  There is more great info there!

Organizational Network Analysis (ONA)

Very simply, ONA is about the people in your organization and who they are connected to and how.  This is a key component of organizational structure and a rather new tool that most executives don't know about.  It's very powerful and allows leadership to see communication and network flow.  I came across a very cool software tool today called TouchGraph Navigator.  The thing I like about this tool in particular is that you can actually use it for products as well as people.  They have a few very cool examples on their website, one takes books or products from Amazon and let's you see the connections between them.

TouchGraph has added a network analysis tool to Facebook so you can see your Facebook network visually.  Here is an example of my top 300 contacts from Facebook (which is all of them :)

When you are in the tool in Facebook, you can actually mouse over people and see a thick line connection.  You can also move it around to look at central nodes (connectors to groups).  It's really fascinating stuff and a cornerstone of the work we are doing at HCM2020.  Enjoy!