Tuesday, December 22, 2009

The Gift of 2008 and 2009

It’s hard to imagine what possible gift could have been spawned from the worst years of economic turmoil and fallout in most people’s lifetimes. While no doubt a disastrous set of circumstances for many, the turn of events was no big surprise to some astute observers of industry. Our cultural and attitudinal underpinnings that revolve around “what’s in it for me?” are perhaps now seen in a much different light.

To be clear, these underpinnings can also be beneficial, in that one byproduct of this attitude is that individuals and their employers have kept their eye on the important prize of improving financial position -- which does tend to improve quality of life.

In general, the gift of 2008 and 2009 is the universal recognition that these underpinnings are not long-term sustainable for either individuals, or the organizations that employ them, without being accompanied by questions like “how will our society, culture and our way of life (aka ‘the greater good’) also be positively impacted by our individual or corporate pursuits?” By definition, if something is not long-term sustainable, it eventually experiences a downward spiral or even perishes.

More specifically, the gift of 2008 and 2009 is the recognition that the benefit of the individual, the benefit of the organization and the benefit of society (the greater good) must be looked at together -- through the same lens.

For those still on the fence about whether large commercial enterprises should really care about alignment of these “sustainable value systems”:

- Kotter & Heskett studied the relationship between character and business performance across 200 companies over an 11 year period; and found that companies that formally and specifically focused on character in hiring and employee development experienced 682% revenue growth and 901% stock price appreciation in 11 years, as compared with 166% revenue growth and 74% stock price appreciation during the same period.

- Stanford Professor Jeffrey Pfeiffer's study on competitive advantage analyzed high performance stocks on the US market over a 30 year period … the 1970's through 2004. He found that companies that selected employees (at least) in-part based on character, and provided training to reinforce character and "good citizen" values – Companies like Southwest Airlines and Tyson Foods -- experienced a 16,000% to 21,000% appreciation in shareholder return (including dividend re-investment) over this period.

Saturday, December 19, 2009

Considering a job outside your home country?

I thought I'd mix it up a bit and take on a more generic topic in this blog posting ... working in another country.

As a native New Yorker and resident of 3 other states over the years, I knew an opportunity to live and work in Switzerland for 3+ years could potentially propel my career. I also knew that it was much more than a career-related opportunity. Any chance to get immersed in another culture is an opportunity that can’t be over-stated. It’s an obvious eye-opener in terms of really experiencing how other people live. It will also likely have an impact on you in ways you won’t realize for many years to come.

I started my career (many years ago) by taking a company-sponsored Dale Carnegie course that focused on “expanding your comfort zone” -- as that invariably helps you in demanding, stressful business situations. Working in another country is like taking that course every day for the entirety of your stay! By the end of it, you are surprising yourself in terms of how so few things make you uncomfortable.

On my very first day working in Zurich, I was rushing past the regional head of HR in the halls of headquarters and said “Hi Stefan, how are you?” and kept walking. Five seconds later and 20 yards away, I heard him say in a serious voice … “if you are so interested in how I am, why did you keep walking?”

Different idiomatic expressions, the absence of rampant consumption, taking trains and watching other people’s reactions to announcements in a foreign language, an unexpected 30-minute intermission first time at the movies, 5-year olds riding bikes alongside cars as if they were in the movie “ET”, getting a fine for mowing our lawn on a Sunday (considered noise pollution), 2 channels in English on TV, having an assistant that speaks 5 languages and pilots planes to Africa … all became routine experiences.

My strong recommendation for those preparing to work outside their home country (wherever that is) is to live among locals -- in their neighborhoods -- and try your best to learn at least some local language basics … vs. simulating your home country experience. Your ever-expanding comfort zone will translate into a far better work experience as well. Some of your new colleagues will be more inclined to “have your back”; i.e., collaborate effectively with you --- which is critical for your success.

Before you know it, you’ll be stopping long enough to hear the answer when you ask “how’s it going?”

Sunday, December 6, 2009

Enabling Line Managers -- The Holy Grail

As any of the very talented Product Managers around me at PeopleSoft back in 2000 and 2001 would attest, two staples in my HCM vision pitch were … “Line Manager Enablement” and “Line Managers are the stewards of Human Capital Management.”

The role of Line Managers in core HR processes like Recruiting, Compensation and Performance Management is quite obvious. What is perhaps not as obvious is the role Line Managers play in promoting work/life balance (i.e., healthy, engaged employees); promoting desirable behaviors, values and the target corporate culture overall; and getting employees to create and deliver value commensurate with their potential. So let's never forget that Line Managers hold the biggest key to realizing expected ROI from HR Technology.

At the heart of true Line Manager Enablement via HR Technology (beyond providing supremely intuitive and agile solutions) is having solutions that are aligned with the way Line Managers think about and approach the people management aspects of their job.

Step 1 is to realize that Line Managers are a very diverse group. Some are “data freaks” and want to see, slice and dice as much (potentially relevant) data as possible, including market/competitor data, financial data, strength of competencies, planning and modeling scenarios, etc. Even within this group, some managers much prefer to work with visual or graphical representations, where others are fine with plain old numbers.

Then you have the subset of Line Managers that are minimalists when it comes to data requirements before making workforce-related decisions. They just want to get through the HR process (e.g., doling out increases or bonuses) and return to the other aspects of their job.

One implication of the above for HR Technology implementers is to consider having some type of taxonomy with respect to how different classes of Line Managers want to engage and leverage HCM solutions. Given how arduous and/or costly a task this might be for very large, dispersed organizations, the degree of HCM solution configurability achievable with minimal IT support should ideally extend to the Line Manager User Experience.

And a related suggestion for vendors in this space … consider hiring more product managers and product executives that have spent time working with -- and being answerable to --Line Managers within customer organizations.

Thursday, November 26, 2009

HR Software and the “Halo Effect”

As I am reminded of all I have to be thankful for this Thanksgiving, including the ultimate sacrifice made by the Turkey situated before me, I am also reminded of the old axiom – “one man’s meat is another man’s poison.” So how on earth does this relate to the Halo Effect?

Here’s how …

The Halo Effect, or when positive traits are over-emphasized to the point of not being objective about negative traits, is one of the potential pitfalls of the HR profession. Recruiters who get caught-up in a candidate’s positive physical appearance, energy level or even specific competencies might have a tendency to look beyond certain gaps the candidate also presents, or decide not to aggressively try to surface those gaps. In this situation, the Halo Effect helps the candidate (meat) but can very easily hurt the organization (poison).

There is perhaps another set of circumstances impacting the HR profession that has this quality of duality, namely, the Halo Effect that often applies to procuring HR Solutions. For decades we have witnessed customer organizations generously ascribing business benefits to the virtues of particular HR Technology solutions, when in-fact HR data and process standardization, well defined transaction processing rules, and any reasonably robust “System of Record” might be accounting for many of the business benefits they are enjoying.

Throw-in providing real-time access to data over the web, employee / manager self-service, reporting tools and the 4 “abilities” being adequately represented … i.e., configurability, scalability, usability and inter-operability … and one could argue that 70+% of the benefits of HR Technology investments will be achieved irrespective of the particular HCM solution being deployed!

So, on this Thanksgiving … the 388th Thanksgiving since the autumn of 1621 when the Pilgrims and the Wampanoag celebrated the colony's first successful harvest … the purveyors of HR-ERP’s and Talent Management solutions should maybe pause to exercise some humility … realizing there may not be that much difference in “business impact” generated by one proven solution over another.

Arguably, a lot of the business benefits customers derive from their HR Technology offerings (e.g., cost savings or efficiency gains, better data for workforce decisions, improved employee productivity, retention and engagement) may have less to do with incremental features and functions of the solution than with the foundational work the customer does to usher in its new technology investment (process, data and business rules standardization) – coupled with the business and technology foresight already reflected in the vendor’s early releases.


Sunday, November 22, 2009

Those employing Workforce Modeling tools should be good “onion-peelers”

While flexible workforce modeling tools and forward-thinking modeling frameworks are major determinants of whether an organization crashes, copes or creates business value during significant workforce re-alignment events, don’t underestimate the importance of “peeling the onion” before converting modeling outcomes into decisive actions.

Case in-point from the world of HCM-BI (Human Capital Management-Business Intelligence):

- An organization determines their turnover is lower than their competitors – good news.

- Same organization looks further and determines their turnover is lower, but they are losing more people to their direct competitors than their competitors are losing to them --not good news.

- Peeling the onion further … it is determined that very few of those employees leaving for direct competitors are determined to be upper quartile performers --- back to good news.

Workforce re-alignments, consolidations and other transition scenarios are ripe for flexible HR solutions offering “what-if” modeling capabilities. Optimize execution during these critical exercises and generally ensure the future health and success of the business.

Modeling examples from the world of M&A include making informed decisions about who to keep when there’s a workforce redundancy (e.g., consider multiple data points including relative value in the context of the new business), determining the best retention, incentive and engagement hooks for different classes of key employees, balancing cost savings from possibly accelerating the timing of terminations with the need to avoid escalating business risks (e.g., unsatisfactory customer service or product quality).

Another re-alignment scenario that will be more prevalent over the next few years is “baby boomer exit planning and associated risk mitigation” … where the same core issue will be on the table as in most other workforce re-alignment situations, namely, determining whether it’s best to address key skill/competency gaps through training, re-deploying, hiring a regular employee, hiring a contractor, or doing nothing.

Peeling the onion further on game-changing workforce planning and modeling scenarios reveals other key nuances that should be considered:

- Understanding the impact of factors such as management style, work schedules, team-based vs. individual work models, and formal vs. informal work environments on employee productivity, engagement and retention

- Predicting which employee's performance would be most adversely impacted by uncertainty and extensive organizational change ... perhaps even formalizing “copes well with uncertainty and change” as a foundational competency for the business

- Including “Y” factors (i.e., motivation, attitude and personality) when evaluating internal/external candidates for positions … “Y” factors are now considered by many to be as important as the existence of certain skills or competencies

- The dimension of “latent competencies” … when workforce capabilities exist but are not obvious or being leveraged by the organization, since they are not relevant to performing within assigned positions / roles ... another reason to track competencies at BOTH the person and position level!

- The modeling of “cascading gaps” caused by re-deploying internal employees to address workforce gaps

- Including the cost of downtime when modeling the cost of training vs. other options to address a workforce / competency gap

- Including the cost of hiring manager time in screening, selection and/or training activities to address workforce / competency gaps

"TRV" -- or Total Realized Value -- on HR Technology Investments

[Blog written by this author and originally posted on Starr Tincup]

There's no denying that HR technology solutions continue expanding in both sophistication - and intended usage by a broader community of diverse stakeholders. Consumers and purveyors of transactional HR systems have transformed themselves into consumers and purveyors of strategic HCM solutions used to effectively acquire, deploy, assess, develop, reward and engage talent. If it weren't for the worst economy in 70 years, this might have been a good time to be an HR or HR Technology professional.

Notwithstanding the various industry studies over the years that found higher than expected dissatisfaction rates and lower than expected utilization rates of major brand HR-ERP's and Talent Management suites, many if not most HCM solutions in the market do what they say they do ... namely automate, enable and (in some cases) link HR processes, transactions and events, while also improving and (in some cases) optimizing workforce-related decisions and outcomes.

The bottom-line reason why "HR basics" ... like truly knowing actual and potential workforce costs, impending HR risks, and the supply and demand for certain competencies and skills under different business scenarios ... have been shortchanged among some of the "higher-order" benefits of HR technology is perhaps aptly framed by a new concept that may be the answer to finally getting HR basics right --- Total Realized Value or "TRV."

"TRV" on HR technology investments, simply defined, is the degree to which the broad potential value that a robust HCM solution can deliver gets translated into a more narrow range of tangible value, due to such factors as system underutilization, improper utilization, ineffective change management (causing lower system adoption) and other "value inhibitors or dependencies" ... such as the need to painstakingly maintain standard job families and competencies when leveraging a particular talent management suite, or the need to account for different data models across the spectrum of HCM systems in use.

The "TRV' concept might be just what the doctor ordered to replace the long beleaguered "ROI" metric in HR technology circles, a metric which has perhaps outlived its usefulness. Indeed, TRV = ROI - Reality.

Saturday, November 21, 2009

Functionality vs Usability Trade-Off

I would unflinchingly do without 25% 'additional functionality' for a 25% uptick in HCM solution usability any day of the week.

This position relates to HR-ERP's, but is even more applicable to niche Talent Management Solutions (e.g., LMS, Compensation Management, Recruiting, Performance Management, Succession Planning) ... because the latter class of solutions are geared for a broader and more diverse user community. Also, since HR-ERP's are leveraged mostly as data repositories/systems of record and administrative processing engines, usability expectations have historically been quite modest.

Presumably, any HR/HCM solution on the market for years is commercially viable -- often measured by whether core business requirements are accounted for within a fully tested product. Commercial viability of an HCM enterprise solution is rarely based on a usability (or even utilization) metric, even though low marks on usability will always undermine broad-based solution adoption, ROI achieved, and the leveraging of that extra functionality you are likely paying for.