Why some critical HR / HR Technology projects under-perform – or outright fail

As some of my blog followers have commented to me about my reduced blogging frequency the last few months, “blogger guilt” has clearly set in.  The result is to write about an important and relevant topic I’ve been thinking about for a long time – namely, why some critical HR and HR Technology projects under-perform against expectations – or outright fail.

Yes, the unfortunate facts from leading research, consulting and advisory firms over the last 20 years are that MANY complex or broader-scope systems implementations (including HR / Talent Management systems), M&A deals (including addressing people and HR-related issues), and corporate restructurings to support business transformations eventually wind-up in a post-mortem or “what went wrong” discussion.

So let’s look at a dozen (project derailment) causal factors, but break them into 3 groups:

- Four causal factors that were probably more of an issue in past years

- Four still relevant causal factors, even though they likely get ample attention, and

- Four causal factors that should probably be garnering more attention

4 causal factors that were probably more of an issue in past years:

(1) Visible executive sponsorship … after decades of many thousands of people identifying this as a major causal factor in derailed strategic initiatives, this issue seems to be getting addressed in most key initiatives at this point.

(2) Competent project management … due to so much attention in recent years being paid to the need for professional project management, including certifying people as capable project managers, this ‘top 3’ consideration in planning key initiatives is now somewhat less of an issue in derailing or compromising strategic HR / HR Technology initiatives.

(3) The “don’t boil the ocean” mindset … the number of senior people uttering these words has seemingly reached critical mass in recent years. This idiom essentially translates as “break larger initiatives into smaller, more controllable initiatives to minimize risk and unforeseen threats to project success.”

(4) Rounding out this group of 4 is the growing recognition that successful project management - at senior levels - requires solid leadership skills; and that leadership is much more than keeping team members on-task, accountable and hitting their deliverable targets on-time. It also involves sustaining the motivation, commitment and energy level of all team resources needed to achieve project success over a long stretch of what will likely include several bumps in the road, possibly team or inter-personal conflicts (small or large ones), etc.

4 still relevant causal factors, even though they likely get ample attention:

(1) Competing initiatives (for project resources, management support, necessary behavioral or process changes, etc.) is perhaps the area where project risk is most fluid – and therefore what is going on within the organization that can potentially impact the project must be monitored (and coordinated with) very closely.

(2) Communication is absolutely the key to successfully implementing new programs requiring operating or perhaps behavioral changes; and it is especially critical to communicate effectively during periods of de-stabilization (e.g., right after an M&A, major re-structuring or new technology rollout is announced) … EVEN IF all there is to communicate is ‘when’ and ‘what’ leaders will be communicating. Honest communication builds trust, even when all the answers or details are not known.

(3) Lagging indicators and metrics are important, but probably not as important as leading indicators in terms of monitoring the need to make course corrections in projects. One key leading indicator is the result of periodically surveying impacted employees and managers on how they think the changes are going, what they expect, how they believe their lives will change or benefit, etc.

(4) Finally, while change management programs and models continue to get more attention (e.g., Change Management is a large part of the $350-400 billion dollar management consulting market), there are at least 2 key elements of change management that typically get neglected: Change Readiness – and Change Sustainability!

4 causal factors that should probably be garnering more attention:

(1) “Critical competency integration at the project governance level" … All competencies needed to drive successful initiatives must be present in those leading (or even advising) key projects or undertakings – INCLUDING the competency to ensure that all key competencies are somehow brought to bear – and well integrated. This is particularly true if the project or initiative leader gets high marks on some but not all critical project leadership competencies. These include but are not limited to effective project planning, risk management, cost management, change management, project communications at all levels, vendor management and key subject matter expertise -- at least enough to corroborate or question what the official SME’s on the project team are representing.

(2) Speaking of project risk management … not being absolutely vigilant in regards to surfacing and mitigating both direct and indirect project risks, continues to plague many key projects, certainly including within the HR / HR technology domain.  The best project and program managers combine experience in a broad range of project contexts -- ALONG WITH "productive thinking" about what can possibly go wrong – something broad experience allows.

(3) The false notion that the successful implementation of a new program, new technology, new set of processes or new org structure occurs when the implementation goes “live” and is very stable. This mindset totally short-changes the need for follow-on programs to continuously drive user adoption of what has changed or been implemented.

(4) Finally, project leaders – like all leaders in general -- MUST have the confidence to course-correct when necessary, and as soon as deemed necessary. First of all, course corrections don’t necessarily reflect poor decisions or strategies. As we often hear politicians say, and they are sometimes even right in saying it, the decision was made based on what we knew at the time. And if that rationale can’t be invoked to explain a project course correction, it’s probably ok just to say that the project is complex, not everything can be anticipated -- and unlike sophisticated computers, humans sometimes make mistakes.

Steve Goldberg
HR Technology & Transformation Advisor
February 2013

Strategic HR Risk Management Model (with 10 'value levels')

The model, replete with examples of increasingly strategic value across many HR Risk Management areas, can be found at:

http://www.hreonline.com/HRE/view/story.jhtml?id=534354685

The Emergence of Strategic HR Risk Management … Finally

HR Risk Management, as a functional area within the broader Human Capital Management domain, seems poised to evolve beyond defensive (i.e., mostly compliance-related) strategies, programs and capabilities.  Since this is an area that I’ve thought about and operated within since the mid 80’s, I will be focusing my remaining blog posts in 2012 on the opportunities that exist for organizations to turn potential risks into major sources of strategic or competitive advantage. 

Proactively managing the Human Capital risks inherent in building, running, re-structuring and/or transforming a business is arguably as important to having a successful enterprise as having winning products and services, the best sales and marketing machines,  highly efficient back-office operations etc.

So here is a list of 4 "Strategic HR Risk Management" opportunities that most organizations can still focus more attention and resources on to drive improved business results:

1.       Strategic, Advanced Human Capital Due Diligence … in the context of hiring new business leaders,  M&A transactions (pre and post deal closing), corporate re-structurings around key executives, investing in businesses largely due to key personnel or people capabilities, etc.  As two concrete examples:

·         Confirming previous accomplishments or the scope of former positions that a key employee decision is partially or largely being made on … since the average person exaggerates at least to a modest extent when promoting themselves, and some embellish in ways that place personal integrity (and possibly the health of the business) in question.  A type of claim such as … “grew the business from $10M to over $50M” is often made by multiple people talking about the same company during the same time period!

·         Assessing degree of culture or “work style” fit, as well as the fit with a direct manager’s style or particular team dynamics … while most people intuitively recognize these issues to be legitimate areas to think about, many organizations simply do not make a serious attempt to evaluate these factors – PARTICULARLY when other factors such as revenue production history or impressive credentials are creating a “halo effect.”  Moreover, while validated assessment tests can be employed to identify some of these potential risks or gain assurances that there’s no major cause for concern, proven techniques and processes which look at work history patterns using the right analytical models/ frameworks can often serve the same purpose as sophisticated assessment tests while perhaps covering a broader area of potential risk.

2.       Leadership Risk Management … including ensuring an adequate bench of future leaders and successors from both inside and outside the company, since externals bring new perspectives, internals should ideally measure up to the best people the external market has to offer, and very few organizations have enough “potential successor coverage” for all key positions relying exclusively on internals – particularly when unplanned vacancies occur in critical roles at the same time.  Leadership continuity issues = business continuity issues.
 

3.      Ensuring that all major sources or indications of “actual or potential business value” associated with each employee are known, catalogued on an appropriate system (e.g., as “Employee Value Indicators”) and considered when making employment or career-impacting decisions about that employee.  As an example, an employee may only be a “slightly above average” performer in a non-mission critical role but (a) could be a much better performer if they could bring some of their other competencies to bear in a different job; or (b) is perhaps a major contributor in non job-specific ways such as referring many new employees each year who are ‘A’ players, or is considered a mentor by many younger employees, or is a key ‘connecting node’ within that organization’s internal social network.
 
4.  And finally, not just identifying key employee retention risks, but predicting key employee retention risks and taking appropriate steps to mitigate.  Similarly… not just identifying employee engagement downturns, but predicting employee engagement downturns.  Both retention risks and engagement downturns are typically triggered by a workforce-related event -- such as changes in Comp and Benefits plans, the announcement or aftermath of an M&A transaction (which might result in staff redundancies in particular areas of the business), change in HR policy (e.g., eliminating a work from home policy), payout of deferred bonuses, etc.  Some organizations have the analytical models ready before the event so that risks can be appropriately mitigated.

Steve Goldberg
HR Technology Advisor
October 2012

Getting Headcount Reporting Right -- How Napkins and Yankee Stadium Helped

It goes like this ... in the 90's I was brought to Zurich as an expat to run global HRIS for the investment banking division of 1 of the 'big 3' Swiss banks at that time. I spent the first month gathering the perspectives of my key internal customers and was then summoned to Basel to meet with the #2 executive in the overall bank. The first half hour of that meeting focused on what the bank was paying in expat costs for me (and my family) to be there. The exec then lit up his cigar, took out a napkin, drew criss-crossing horizontal and vertical lines on it, and said the following: "If you can help us get and maintain a truly accurate headount by business unit / by region (filling in the boxes on the napkin with illustrative numbers), your 3-year stay here in Zurich will be well worth the cost." We then each had a small cognac in his office for good luck and off I went.

In retrospect, that astute executive knew that the global rollout of an HR-ERP, innovative comp planning and workforce planning tools, and even HR process re-engineering to leverage the new tools (i.e., the global HRIS function's mandate) would all be compromised if consumers of headcount and 'people cost' data didn't believe the numbers ... or the numbers didn't match the excel s/sheets they felt compelled to maintain. Fortunately for me, I had been down this road before. In the late 80's I received my one and only call from the Chairman of Paine Webber as I ran HRIS there as well. He said the following ... "I would like you and your team to suspend all headcount reporting until we can get all employees in the company to Yankee Stadium to raise their hands -- so we can finally get an accurate headcount." We were obviously forced to get it right.

The answer or solution was twofold: Data Standards and Effective Education -- including mandatory education and training for all consumers of HR data / reports / metrics ... so they (a) understood how ALL numbers were being arrived at; and (b) understood why Finance, HR, Payroll and Business Units might report numbers that were different -- even though all might still be accurate based on their reporting methodology! The training also included real-time 'learning tidbits or booster shots' in how to properly interpret every report or specific data when delivered.

There are appropriate reasons and purposes for counting or not counting employees on salary continuance, or on paid or unpaid leave, or long-term or short-term contractors, or summer interns, or part-timers under or over 20 hours/week ... and on the comp costs side, whether to count deferred comp, or sign-on's, or employee referral bonuses, or other imputed income (e.g., club memberships) or whether to blend different salary rates if multiple assignments for hourlies, etc, etc.

There are 2 choices for getting this right as I see it: Let your line managers, sr execs, HR, Finance and other admin staff throughout the organization spend untold hours (and perhaps millions of dollars) forever reconciling and explaining why numbers are different depending on who reports them (the "1 source of the truth" notion is not enough ... purposes will vary) --- or aggressively attack this near-universal problem with HR-related data standards and very effective training for all consumers of the information.

Steve Goldberg
HR Technology Advisor
July 2012

Next 3 (of 5) Often Overlooked Questions to ask your HR Technology Provider

Again, based on procuring and implementing the solutions of over 20 HR Technology vendors as a global HRIS practitioner (in the 80's and 90's), and then moving over to the solution provider side in various executive roles, I would urge all companies evaluating HR technology vendors to ask the following 5 often overlooked questions.

The last 3 questions below are discussed in this post ... the first 2 were discussed in my previous post.

(1) Can you provide some data on how you've executed in recent years against your product roadmap?

(2) How do you define the word 'solution'?

(3) What are the various ways that you specifically ensure customer success?

(4) Which of your product capabilities would you say are "truly game-changing" if any, and can you provide examples of customers that have experienced this type of business impact?

(5) How do you deal with a situation where a large and strategic customer requests product changes or enhancements that would likely not be applicable to -- or leveraged by -- many other customers?

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What are the various ways that you specifically ensure customer success?

A comprehensive program for ensuring customer success is one of the key things that separates solution providers that otherwise have comparable technology and people capabilities.  Such a program typically begins with fully understanding -- and then tracking to -- the customer’s definition of success.  The ‘tracking to’ part of this relates to having a variety of mechanisms and means for effectively intervening (ideally as a partnership) when the trajectory of success metrics does not foretell a good outcome.  Those various "mechanisms and means" are the heart of any customer success program and should be fully understood and well documented.  It should also be noted that success metrics might appropriately look different for the “initial go-live” phase than for a broader roll-out phase, a solution optimization or maximum adoption phase, etc.  Finally, the role that “driving user adoption and understanding adoption impediments” plays in ensuring customer success cannot be over-stated.

Which of your product capabilities would you say are "truly game-changing" if any, and can you provide examples of customers that have experienced this type of business impact?

Game-changing is, of course, beyond “wow factor.”  We’re talking about a solution or suite of solutions that fundamentally if not radically changes the way a business operates – leading to new (and often material) sources of value and/or competitive advantage.  One example in the world of HR/Talent Management technology is the ability to better understand cause and effect in the context of what people-related factors are behind a precipitous decline in sales, or an exodus of some strategic customers.  While this “game changing” capability relies on leveraging science or sophisticated statistics in HR/HCM, a game-changing impact can also be the result of a simple feature or capability that allows the potential benefits of a system to be unlocked or fully realized. 

An example from my background was the introduction of a “Challenge Feature” in a Global Workforce Planning & Decision Support Tool which allowed global line managers the ability to easily flag and comment on questionable or incorrect data on employees in their charge.  Due to a combination of well-designed workflows and internal service level agreements involving all data owners, “challenges” were automatically routed to and addressed by the appropriate data owner within 24-48 hours.  The manager’s free-form comments in a “Challenge Box” also helped the data owner – wherever they resided in the world -- research the problem if necessary.  This fairly simple feature totally elevated confidence in the data … inextricably tied to confidence in -- and use of -- the system, which drives ROI of course.  

How do you deal with a situation where a large and strategic customer requests product changes or enhancements that would likely not be applicable to -- or leveraged by -- many other customers?

There is probably no correct or perfect answer to this one; rather it’s perhaps a “test of vendor integrity.”  The vast majority of solution vendors will have to deal with this situation at one time or another to win a very large/strategic account or generally take their business to the next level, so it is probably wise to be dubious about claims of “our roadmaps are never hijacked or dominated by any one customer.”  That said, a SaaS multi-instance or "secure SaaS" architecture is often able to solve this dilemma for the vendor and their ‘unique’ customer.  When this is not an option, the feature could perhaps also be tied to a particular customer/user profile, so other SaaS customers would not even see the particular functionality.  

Steve Goldberg

HR Technology Advisor

July 2012