HumanMarkets

About a year ago I wrote about “communications climate“.    The idea was that some periods, maybe all periods, have a communications sensibility that needs to be respected.  The premise was the that the “Obama Effect”, from our then, brand-new President, demanded “authenticity” in communication.

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I thought it was worth checking in after a year to see if that observation held true.  It does, but there is a foundational truth.  Competence matters.  Prior to being able to ride the wave of a communication culture like authenticity, you need to know what you are talking about and you need to get stuff done.  Authenticity is a great theme of promise;  it is a great theme of the here and now as well.  If you are in the here and now however, it must be based in competence or it sounds too much like poetry.  Poets are great inspiration, but do not themselves lead, as poets. 

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Authentic

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Political commentators are spending a lot of time on the question of how successful the President’s administration has been.  I think it is fair to say that many agree that the President has achieved a great deal of his legislative agenda – health care, financial reform and the stimulus package.  These are facts – they are done.  Reasonable people can argue as to whether they are smart or effective.  There also seems to be however a sense that the public is simply not satisfied that legislative achievement is improving their day to day life.  “Stuff” is getting done; stuff that I care about, may or may not be getting done.  The economy is still very weak; the Deep Water Horizon spill is still not technically stopped and it is not clear where the spilled oil is.  The fact is that the President is not popular right now with the American public.

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So here is my take on the mood.  Authenticity is actually more important that it was last year.  It remains the key to credibility and gaining audience engagement.  The learning for me from last year is that getting done is always more important than getting said – nothing profound there.  However, it is also possible that the more articulate and elegant the communication, the narrower the room for error in the execution of the tasks at hand.  The opportunity may be that the people get that economic life in this country is more difficult than it has been for some time.  People get that some problems are intractable and resist simplistic or easy solutions.  People get that life is hard.  If you call that out early as part of your communication, the expectation becomes less about the outcome alone and becomes about the quality and wisdom of the effort.  If doing is better than saying, even saying authentically; trying is better than not trying.

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The best lesson I can think of about how authenticity needs the credible foundation of executing well, is former BP CEO Tony Hayward very authentically telling us that he “wants my life back.” 

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The HR lesson maybe that transparency of motivation and clarity and openness about execution complements your authenticity.  Your employees will respect it and it may provide you some cover when some of the news or the action is unpleasant and unwelcome.  What has not changed is that great communications still matters and is at the heart of great HR.

No Comments | In: Communications, How to do HR | | #

Source: online.wsj.com

  The past two summers I have written posts about compensation managers providing finance a planning number for next year’s budget.  So What’s The Number – Year II - last year’s offering encouraged compensation departments to be very conservative and help their organizations to preserve assets in order to be sustainable.  The specific suggestion was to start at 0% and then build based on facts about the competitive environment.  Amen brother.  Sing it again this year – loud and clear.

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The July Jobs report just came out.  There is a lot of press coverage (The Wall Street Journal has a nice review.)  The short version is that unemployment remains hig at 9.5%; discouraged and unemployment remains high at 16.5% ; long-term unemployment is still at the highest levels in the country’s history.  On the good news side, payrolls and hours worked are up about 0.2% (i.e., people with jobs are working a bit more).  Temporary employment however, is down – hard.  Temporary employment is typically seen as a precursor to “real hiring.”  Bottom-line – the employment market continues to be really bad and there are essentially no signs that it is going to improve.

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We could stop here and just say – keep the merit budget as low as possible and your CFO, CEO and CHRO (if that isn’t you) happy.  World at Work and other surveys are suggesting that the 2011 merit budget increases are going to be higher than last year.  See the good article on WorldAtWork.org  I continue to think those surveys are wrong.  They are based more on the conjecture of Compensation Mgrs. than real budgeting.  Most organizations are only now looking at real 2011 financials. 

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Regardless – let’s take a quick look at other considerations.  American companies are holding more cash on hand than any other time in history.  Check out the article linked to the graphic to the right.  The common interpretation is that companies are concerned about where revenues will be and the extent to which they will be able to access the credit markets for liquidity.  For most companies – big and small – it’s not the earnings that get you, its the lack of cash.

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Base salary is cash.  When it goes out the door it goes.  When you talk about a merit budget, understand what the cash position of the company is.  If you talk to the C-suite demonstrating that you have a feel for liquidity issues and the reliance of the organization on credit to finance its operations, your opinion about merit increase budgets will carry more weight – I guarantee it. 

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Human Markets has written before about the role of productivity in the current labor market – its impact on unemployment.  (Workers are working more; they are absorbing new work.) The simple fact is that virtually no organization in this climate can blithely accept making their workforce less productive (from the sense of reward spend relative to profit).  Before suggesting a merit budget – look at what it will do to productivity year over year.  The fact is that your workforce, may be more productive than they have been.  Investments are still being made and tools may have come online this year, or will next year, that will make the group more productive.  Sadly, one aspect of this analysis might be to consider, have positions been eliminated that free up money to spread to others.

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One final consideration – pricing.  There is talk of deflation in the air.  Is that happening in your world?  Are prices stagnant?  Rising? Falling?  A quick look at your market power to maintain or increase price is a great shorthand to include in the analysis of what the number should be for 2011. 

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Finance will very frequently take a simplistic view that we should have as low a budget as possible.  The more you are knowledgeable and using the metrics that they use and understand to create context for your recommendations, the more you can pull them up to a level of sophistication about this decision.  If you fall into the trap of X% of increase is Y$’s and that’s it – you have lost the game already.  You look like you a 12 year old going to Mom and Dad for an allowance.  We can do better.

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At the same time, if you go and say our budget should be X% because SHRM survey says so, or worse, the Quad County SHRM Chapter survey says so – you are going right to the “I need the allowance because everyone is going to see Killer Zombie Babes” so let me go too!  Surveys are for followers – analysis is for leaders.

2 Comments | In: Compensation, How to do HR, Multiple Markets | tags: Merit Increase, Productivity, Surveys. | #

Source: The US/Mexico border

You go into a staff meeting today and someone, maybe casually in the pre-meeting chit chat, starts talking about immigration reform and the Arizona state law.  Your colleagues then look at you and ask – “Hey HR, what should we be thinking about Immigration Reform? From your perspective, are we for it?

Do you have an answer?

Human Markets is not a political blog and immigration / immigration reform is in the most part a political topic.  However, it is also a labor market issue for some employers.  Here are a few thoughts that we might consider about forming an HR point of view in advance of being asked and looking ill-prepared.

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On the surface, the connection is that Federal policy has used employers as a significant enforcement mechanism for immigration.  I-9s; e-Verify, Work Visas, are all examples of employers having to take responsibility for denying employment to illegal/undocumented workers.  Some in HR focus on this as the totality of the HR issue within the immigration debate. 

The verification issues at point of hire are expensive and open employers up to risk that is uncompensated by the market.  That is, when we take risks in business, we should get paid for managing those risks well.  Here, managing regulatory prosecutorial risk is simply the price of admission.  (In other words, if a customer as two widgets, yours and your competitor’s.  All else being equal, will they pay you more for having a cracker jack I-9 process versus the other guy having a few illegal workers on board?  I am guessing they will not.

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Maybe the more important perspective for HR to have is how immigration reform will impact hiring.  It would be great to have a more holistic view that includes the impact of immigrants as customers or clients for our organizations, but that is likely the purview of the marketing group.

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A few questions that might be helpful in forming a point of view about the impact of immigration on your workforce :

• Does your workforce include a material number of people who are working in the United States illegally already?  (If this is true, you as HR should know this and know the risks your are accepting on behalf of your company.  They may or may not be acceptable risks depending upon your firm’s situation.  However, like Bristol herself – you can’t be a little bit pregnant on this.)

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• Do you compete for labor in a market that pays close to the minimum wage?  In other words, are you competing for labor in a market that is influenced by ultra low wages?  (If immigrant labor dried up, would your cost of labor be directly impacted, even if you do not yourself employ a large population of immigrants?)

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• Do you provide benefits in a community with a significant level of immigrants? Do you understand the relationship between your “unit costs” for health care and whether or not it is influenced by immigration?  (So across the range of recent immigrants there is a range of experience in how they are able to finance their health care – both those working legally or illegally.  Ask your broker or consultant to explain to you if local health care providers have higher costs because of the cost of unpaid services.

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• Do you operate with a labor model that is dependant or high volume or high skill within your workforce?   

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• If you operate on a wider geographic scale, do you see differences in your employment issues in areas closer to large illegal immigration? 

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I would stay away from politics and from the broader economics of immigration.  Unless you are really expert at it, for example, I am not, making political assessment on the job is not so smart.  However, as the Barons of Talent within our organizations, we should understand the labor markets in which we compete.  If immigration policy impacts your labor market, you should have a point of view about it.

No Comments | In: HR Strategy, How to do HR, Multiple Markets, Recruiting, Talent Management | tags: Immigration, Labor Markets. | #

Source MSNBC.com Credit: Getty Pictures

By now, you undoubtedly know that Shirley Sherrod is an ex – but likely soon to be current, mid level offical in the United States Department of Agriculture.  She was recently fired by someone, maybe the Secretary of Agriculture, Thomas Vilsack.  Just to put this into context, the USDA has a budget of $149 Billion.  That is about the same amount as the 2009 annual revenue at GM.

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The short version is that Ms Sherrod gave a speech to a local NAACP group in which she told a story from 24 years prior.  The point of the story and the speech was that she was tempted to indulge her racist feelings and provide, “less than the full force” of her position to help a white farmer save his family farm.  The full speech is inspiring.  A blog and then cable television programs publicized a short, edited clip which portrayed Ms Sherrod as being a racist.  She is not and is in fact pretty obviously, quite the opposite.  In the rush of the media furor over the clip and its deceptive indications, Ms Sherrod was contact by her superiors.  As she tells it, she was driving several hours back to her office from across the State of Georgia.  She was called multiple times but was not making progress satisfactory to her manager.  So, on the third or fourth phone call she was asked to pull over and she was asked to submit her resignation via text message.  She was allegedly told, because tonight you are going to be on [the] Glenn Beck [show].

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In a turn of events as sweet as a Georgia peach, the next day the tape of the full speech was aired, the farmer came out to declare that Ms Sherrod in fact did help him save the family farm, and has been a dear family friend for 20 + years.  The message of the full speech (that we are all capable of overcomming bias and that we need to look beyond race in matters of economic and social justice) was revealed. 

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Since then, Ms Sherrod has been offered reinstatement in a new, unique position by the Secretary of the United States Department of Agriculture; she has been apologized to by Robert Gibbs, the Press Secretary for the President of the United States, from the Secretary’s podium in the press briefing room at the White House; and, main stream media have rushed to resurrect their own journalistic credibility telling her side of the story after having told the accurate story of the original disingenuous smear.

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So… where the hell was the Human Resources leadership in this fiasco?  Probably nowhere.  This was about politics and managing the media reaction to what smelled like a great story – dead on proof that there really is deep seeded bias and that this administration is somehow racist.  I will leave the sociology and political science to others.

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It seems from the outside that there were several fundamental HR errors here -

• Most obviously, a critical decision was made without looking at the full body of information.  There was a full speech, but only the clip was viewed.  In hindsight, that is an obvious error.  However, if only the clip was shown, where a woman makes a credible testament to her own racist thoughts and actions, might you have reached a conclusion about her?  I know that I might have.  I think I have made that mistake – rushing to judgement based on what appears to be incontrovertible evidence.

• Apparently no one asked Ms Sherrod what happened.  Have you ever been approached by a manager, a security department, corporate counsel, a customer, told a story about an employee and then reached a conclusion before speaking to the employee?  I have.  It is easy to extend the general trust that we have in our co-workers and in authority.  Generally speaking, that trust is probably well placed.  However, there is no better means to establish a framework for your investigation, than the simple play ground rule of hearing both sides.  Note that I don’t say to establish a conclusion – that is really a bit down the road, the best gift of two sides is getting the proper context for real investigation and subsequent determination of a conclusion.

• Here is the tough one.  It is exhilarating to make the grand, snap decision.  See the evidence of racism – bang – “she’s outta here!”  It feels like bold moralistic leadership.  Snap decision can be leadership – however you better be damn sure that you are correct in the decision.  Know that the decision is unassailable.  Better yet, ask yourself a question, who is the audience to whom I am showing my boldness?  It gives context to evaluate where the boldness is in fact leadership, or, if it is mere show boating.  I have no idea what the motivation was here.  I do know that it backfired tremendously.  Typically, HR is enhanced by bold communication of throughly deliberated decisions, as opposed to snap decisions themselves. 

• One unknown here, in fact is, was HR part of this process or, did general executive management make this decision “alone”.  For all I know, there is someone in HR at USDA that stood on a table and shouted that this lack of process would lead to undue risk.  I don’t know.  I do know that our job is to bring decisions to the center of reason because that is the essence of our professional standing.  Professionals do their job against established standards, even when others want to rush because it seems expedient.

• Finally, don’t do HR in public.  HR makes for bad theatre.  People’s careers, their reputations, their livelihoods, deserve sincere, professional practice.  When HR is done for public consumption, bad policy and bad decision can find their way into the process too quickly.

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Careers, livelihoods and reputations – the ones you save may be your own.

Frank Roche also got this way right at KnowHR

14 Comments | In: How to do HR, Multiple Markets | | #

4 Comments | In: Communications, How to do HR, Multiple Markets | tags: Air Force One, Communication, Influence, Travel. | #

Source: bmcplanning.com

My assistant sent in the renewal solicitation from the Wall Street Journal.  The note asked if I wanted her to renew using her company credit card.  “No. Thanks.”  It reminded me that one of the most persistent fights I have watched in professional offices over the years is whether on not subscriptions to the WSJ should be reimbursed by the company.

I have never had an employer pay for my Wall Street Journal during the probably 20 years that I have had one.  I have never denied paying for a subscription to a subordinate who asked to have one provided. 

When I am challenged from time to time, employer to employer, about the decision to reimburse for my team, I get some credibility by showing that I am not benefiting.  It is not about me.  Having my team broadened and informed, even if just a bit, every day is a winning strategy in my book.  Staying engaged with broad business thinking is essential to be competitive in the market for attention within an organization.  If you can’t speak to the issues of the day in the capital and customer markets – and the impact of government, you are just a waste of people’s time. 

There is also a personal policy that I have followed for 25 years which I highly recommend.  I invest about 1% of my gross income into my professional development every year.  I pay for and read the WSJ.  I take courses, read books, suscribe to professional journals (especially those outside of HR – for the sake of breath). 

When someone tells me that they could not do something for their development because there was no company budget for it, I always wonder why if it was important enough for your employer to fund, why wasn’t important enough to you?  Your career is your biggest asset.  You will literally own it the rest of your life.  Why wouldn’t you make personal investments to manage and maintain such a critical asset.  (By the way, another reason to respect those that are in business for themselves, they are looking to anyone to fund their development other than themselves.  This whole question is function of being an employee and the inherent agency costs.  Next time someone goes on about HR “professionals” think a bit about how other “professions” like doctors, lawyers and accountants tend to be self-employed or in partnerships.  I digress.)

Bottom line, career is about competition.  Career is an asset that you hold and which you use in that competition.  Showing some economic smarts here, means making consistent, on-going investments to maintain and grow that asset.  If your boss want to buy you the Wall Street Journal, good – beating him to it, better.

No Comments | In: How to do HR, Multiple Markets, Professional Development | tags: Career, Personal Development, Wall Street Journal. | #

Many years ago (Ronald Reagan was President), I was the Employment Manager in a Macy’s in East Brunswick, NJ.  The Store Manager called me in one day and asked for an analysis of our Jewelry business.  Could I make the quantitative case that more staffing would result in more business and more net revenue (sales less selling cost).  I could and I did. 

It took hours to get the numbers right.  The analysis needed to show our sales productivity at different levels of staffing.  As I recall, I did offsets for the time and day and for day of the week (some times are busier than others); I offset for weeks of the year (simplistically more jewelry is sold the first half of February than in August).  I offset for the quality of the staff (vetern vs. rookie).  After many late nights doing this analysis after I had done my “day job”, I had it.    Retail is a quantitative driven environment – even in this context, this was a tour d’ force.

The day came.  The store manager was scheduled to be in New York at Herald Square meeting with the President of the company.  He was going to review my analysis, make the pitch and see if he could could sell at the same high level that I could crunch the numbers.  I only hoped that he could.

The next day, I wander over to the Store Manager’s office.  I was half waiting to hear if he was able to explain the numbers enough to make the case and half waiting for the flood of thanks that was sure to usher forth from his lips.

“How did it go?” 

“It went great, we got budget to hire the staff.”

“That is excellent!  What did he think of the analysis?”

“I never took it out of my brief case.”

The look on my face must have been one of the great expressions of dumbfoundedness and self-pity ever shown by a human being.  It must have been bad because as I began to ask why, he launched into a lesson that I try to remember, and frankly, relearn, to this day.

 

Bill, I got there and we talked about a lot of things.  We have known each other a long time.  At some point, I told him that we could improve our jewelry business with more staffing because I thought we had customers bailing out without purchasing.  He said fine.

 

 

Bill, when you go to an executive and ask for something, and they give it to you, sometimes, all you do is say, “Yes sir.”  Thank you sir.”  “Good-bye sir.”

The lesson I learned is that being smart is not usually the objective.  Getting it done is.  Sometimes, you need to put the ego show away and focus on winning in the market for resources, or policy or whatever.  It is not about you; it’s about your objective.

Thanks Jeff.

13 Comments | In: How to do HR | | #

Source: Bestsportsphotos.com

Part of delivering HR effectively, is actually getting stuff done.  Sometimes a necessary part of getting stuff done, especially in a big organization is knowing how and when to take a punch.

People who are only looking for positive reactions, broad active and passive receipt of their work and projects are almost always underachievers.  In an organization with any size, any complexity, any dynamism, there is disagreement about change.  Making important change therefore requires conflict, compromise and persistent management.

If an HR group (or any group) is unwilling to occasionally stand there and have someone punch them in the nose, shake it off, and simply continue on with what you were saying, they will not succeed in the organizations I know. 

Now you may say, why not punch back?  Why not take them on when they attack and prove the wisdom of your position.

Taking a punch and then immediately refocusing on your message of change makes it clear that your priority is the important work of the day and not your being right.  Taking a punch and continuing with your agenda projects power.  If your message of change is in fact the correct path for the organization to take, having taken that punch and yet prevailing, makes you stronger.

One caveat – there is a world of difference between taking a punch and being pummeled.  If you attacked not by one or two people, but by the entire group, you need a different strategy.  You have already created your failure by not having done your pre-work.  You need to go back and pick off people in smaller units and come back to restate your message.  The “take a punch” theory only works in small doses.

There is a market for influence in your organization.  Influence is a scarce commodity – influence moves around an organization in trade for credibility and value creation.   The paradox is that in the right circumstance, taking a punch and moving forward helps you compete in that market than fighting every fight, or worse appeasing every constituent.

No Comments | In: How to do HR | tags: How to do HR, Influence, markets, Take a punch. | #

Someone asked me for some advice about regarding how to be effective as an executive – what are the unwritten rules. Based on the person who asked me, and the seriousness of the ask, I gave some advice that I had not really considered before. It was unknown to me as a principle of operating effectively. I thought I would share it and ask what you think.

The short version is that senior executives trade social capital and commercial capital – not one or the other to the elimination or virtual elimination of the other.  Executives trade in both markets simultaneously. 

By commercial capital I mean – resources, risk, time, and ideas, that are essentially tactical elements of operating the organization.  I will pay that invoice because I have budget; however will I still get my carpet replaced in the spring.  Yes, my department will use your valuation methods and rely on your reports – do you still agree that we can exclude the XYZ transaction.  No, we will not purchase out side services, but will you will agree to staff after 6 pm?  In other words – the puts and takes of items under managerial control with the mutual intent of increasing shareholder value.

By social capital – I mean work friendships.  Loyalty, fidelity, kindness, and protection.  “Yes, I will get the server provisioned next week – you know it normally takes six.”  “Mike, I want to call you to tell you about a memo that is coming out next week.”  “I need to go to Theo’s basketball game – can we move this meeting to Friday?”

Executives bond themselves to each other and not simply to the organization.  Effective executives open themselves to the experience of trading social capital as a means to exchange information, spread risk and create mitigations to unexpected obstacles.  To be clear – I am not talking about collusion or dishonesty.  This is not politics in the sense of aligning with a group to oppose another group or another person.  I am talking about a market dynamic – there is a scarcity of time, resources and attention.  When you give a little now to get a little then, you are playing in this social market.  When you do it generally to make you and your trading partners more effective for the and in the organization – that is a net good.  It makes the place tick.

My point is that some people while personally competent, capable, hardworking and the rest, only trade commercially and do not open themselves up to playing the social market.  My argument is that they are typically less effective that those who effectively play in the social market.

Maybe this is obvious – nice people are more effective than a loof, cold people.  The insight that I had was that, this in fact a skill.  It can be learned and practiced.  Furhter this is a real market dynamic, it is not per se a personal characteristic.  In other words, you can be good and trading social capital, without being nice.  Market action is rarely about nice or not nice.  It is about knowing how to value assets and being effective about exchanging them.

I think that to be effective as an executive you need to be effective in the market.  Executives manage risk – they play in the sandbox of the future unknown.  Social capital mitigates that risk by spreading it across a network of other executives trading in that same social market.

I shared.  Now, what do you think?

2 Comments | In: How to do HR, Multiple Markets, Professional Development, Talent Management | tags: capital, Executive Captial, Executive Effectiveness, Politics. | #

Today’s Wall Street Journal had a couple of good stories about REITs in “The Property Report” section of the paper (page C8).  They triggered a couple of thoughts I thought were worth sharing.

If your company uses a lot of real estate or if it has a mega cool enormous corporate headquarters – the building(s) is probably owned by a REIT.  It is common for even janormous companies to be “renters” for their big office buildings with a REIT as their landlord.  In fact, many companies that would otherwise have large assets in land and buildings have REITs that are actually or essentially captives to them.  Why?

REITs are a special form of corporate organization that are designed to deliver some of the tax benefits of a partnership in a vehicle that is more effective for stock trading and broad ownership.  A REIT is largely defined by the requirements to hold real estate (which gets stretched pretty hard by some players) and to pay out 90% of its earnings in the form of a dividend.  (The article today talks about how there has been an exemption granted last year and this year to the dividend rule.)

So what is the point?  If you are in HR and the real estate of your company is owned in the form of a REIT – by you or someone else – you get more cool if you know why and a bit of how.

No Comments | In: How to do HR | tags: REITs. | #