The Agile Organization

Several weeks ago I posted a blog on the ” The Agile Organization.” I used the content from that blog to create this word cloud in wordle.  Can you feel the change commin’. . . . . . Enjoy!

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Learning as Competitive Advantage in the War for Talent

After posting this blog, I’ve continued to come across some interesting talent practices in this space, so I have continued to ‘update’ as information comes across my ‘virtual desk.’  I’ve choosen to group the new information under the original post so that you can see how the ideas have continued to develop over time. 

As I said in an earlier post, I am convinced that learning will be a source of competitive advantage in the war for talent.   Tough sell, I know . . . but only if you think of learning in a traditional context.  We need to broaden our thinking . . . Need examples?

Finding talent and training them your way:  If you have read anything about the demographics, you know that there is a talent shortage brewing.  One way to open up the talent pipeline is to position yourself differently at the source. 

Leaving nothing to chance, IBM has invested serious dollars in the development of a Services Science, Management and Engineering (SSME) curriculum at North Carolina State University and UC Berkeley.  While many companies make their presence felt on the university campus, few approach the depth of IBM in creating and delivering curriculum designed specifically to support their business . . . a great bet given about 50% of their revenue comes from areas it considers to be in the services arena.  In this case, IBM is certainly accelerating the time to effective deployment of college talent . . . one could argue that they are using the college years to ‘train’ and ‘on-board’ even before students are employed.  Talk about speed . . . what a concept. 

This is game changing play in that it alters the relationship between academia and corporations from one that supports research, facilities, and scholarships, to one that drives specific education content.   Companies like IBM, BMW, and Credit Suisse are opening up the talent pipeline by tailoring courseware in graduate and professional schools.  Supporters argue that students are better prepared for work when the curriculum is full of real-world applications.  Critics suggest that this is an important step which may serve to compromise academic independence.  But let me add this thought . . . what critics have not considered is the impact the demographic changes are going to have on the talent supply for the faculty pipeline.  Just as this is an unabashed opportunity for corporations to co-opt a talent pipline . . . it is an opportunity for Universities to leverage an educated, experienced workforce in the same way.  As a large group of boomer faculty move to retirement, Gen X’s opt out of tenure race in favor of more attractive corporate opportunities, and Gen Y’s politely decine the opportunity to pursue advanced degrees, the academic pipeline is getting thinner too.  What better way to open up the talent pipeline for the University, then to create a stronger relationship with the corporate world to draw back their talent at a time when they will need it too.

But this is not just a talent play for knowledge workers.   The energy industry, for example, is scrambling to find enought talent to plug critical shortages in the skilled trades as boomers reach retirement age.  Their issue is perhaps more complex than others in that they have to overcome is the perception that ‘trade careers’ are less rewarding financially and from a career advancement point of view.   While a college education can be a wise choice, for some the opportunity to learn a skilled trade while you earn an income can be a viable rewarding alternative. Using techniques like YouTube and MySpace videos and celebrity endorcements from people like Mr. Rowe, from Dirty Jobs, companies are trying to reach young Gen Y’s with a different kind of message.  Similarly, companies like W.W. Grainger is investing in technical education programs around the country.  Others are dipping into high schools and even elementary schools with trade friendly programs. 

Extending the Learning Network: Wondering where to locate your corporate headquarters . . . how about your R & D facility?  or a small start-up or a remote workforce?  Why not do what Express Scripts, Inc. did and locate your new HQ on the campus of the University of Missouri at St. Louis . . .blurring the line between University and Corporate work even further.  In 2006, Clemson entered into a similar arrangement with BMW AG when they opened up a joint automotive research-and-education center in Greenville, S.C.   Again, what an interesting way to open up the talent pipeline with a ready population of students as a potential workforce.  Or think about the R & D possibilities . . . what a wonderful way to accelerate your innovation engine by leveraging the intellectual talent available at the university.   What’s in it for corporate employees?  Well, a campus atmosphere and access to University resources like the gym and day care centers.  An interesting way to recruit an experienced boomer population who want to segway into retirement near a university or a Gen Y population who never want to leave.  It’s not a hard sell. 

On the skilled trade side, think about deploying your learning organization on the road . . making it available to pools of ready talent.  Michael Arndt, the training director for the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the US and Canada, launched a pilot program for National Guardsmen awaiting discharge. And apparently the Union is also purusing an opportunity to offer a mobile welding program to the Marines. 

Making it Easy to Transition Careers. . Inside the Company:  One of the trends I think we will see accelerate is career switching . . . particularly as Boomer’s contemplate how to wind down their careers, as Gen X’ers contemplate their middlessence, and Gen Y’s explore what it means to work.  Making it easy to explore, learn and transition to different careers without leaving the organization can be a powerful tool in the talent wars and a way to keep important intellectual capital inside the company.  Companies like Accenture, IBM, Verison Communications, Inc., Microsoft, and Dow Chemical Co. are offering employees an opportunity to transition without leaving.  What a powerful way to keep top performers, keep them engaged and leverage what they know in a different way.  Companies offer a range of services including things like: competency and personality assessments, internal career counselors, and web based programs to transition. 

Are you prepared to deliver against your future talent needs?  How will you compete for talent . . . In what ways is your organization going to leverage learning opportunities?

10/28/08 Additions:

Learning as a way to Negotiate Through Tough Times:  Toyota, like the other major auto makers is facing tough economic times as credit remains tight and gas prices fluxuate.  But instead of displacing employees for a short term economic gain, they’ve taken the long view.  Toyota decided to use the manufacturing lull to invest in training.  By using this time to invest in developing individual and organizational capability, they have positioned themselves for effectively for the long run.  And imagine what this type of commitment has on engagement.  Already, Toyota has seen results . . . employees have used the downtime training time to redesign their manufacturing process, identifying opportunities to reduce costs and improve the quality of the product. 

Making it Easy to Transition Careers . . .from outside the CompanyThis week Sara Lee announced plans to offer a new program called . . . ‘returnships.’  Using input from the Women’s Executive Network, they are in the process of developing an internship program for transitioning midcareerists who are interested in full time opportunities.  What a wonderful way to help potential employees segway back into full time employment or transition into new careers . . .while learning new skills and networking.  These paid internships are designed to last four to six months in a broad range of corporate positions, including marketing, R& D, and technology.  Small commitments to learning can turn into great long term employee investments. 

CEO Imperative – Talenet Readiness – The Essential Strategic Intent

 In a period of global, recession it is easy to ignore the very real phenomenon of imminent  talent shortages.  As we enter the next decade, a perfect storm is descending on enterprise ability to access and retain the necessary talent to promote success.

 

nGenera research begun in 2003 suggests the following 5 trends  cannot be ignored as companies attempt to secure necessary skilled resources. 

 

 

The Aging of the Worldwide Workforce

 

The workforce is Aging,   in the United States, the fastest growing segment of the workforce are those over the age of 55.  The situation is similar in most developed countries.  Yet most Talent Acquisition and Development  processes target the younger worker between the ages of 22 and 35.  The ability to retain, and in point of fact access the talents of older workers is an enterprise Must!

 

Declining Employee Engagement

 

Worldwide those who would state they are “highly” committed to their companies is 21%.

The question for all companies is can an enterprise grow and sustain its business case if only 21% of its employee population is highly committed.  If the obvious answer is NO, why do companies continue to appear to take their employees for granted?.  nGenera research would also indicate that during this recession we can anticipate an even further decline in employee engagement.

 

Development of Talent

 

The first expense cut in any recession is usually Training.  What nGenera research suggests is that these cuts come at a time when investments are called for in all domains.  Our leaders for the most part have developed themselves.  This is a phenomenon of the Boomer and Older Generation X age cohorts and one that will be intolerable for the Generation Y incumbents.

One can quarrel with the bluntness of this statement but nGenera research supports this point of view.

 

The rain of the Perfect Storm will impact this area as well as a.) the demands on leaders are becoming more complex necessitating a renewed commitment to development, b.) the aspirations of Generation Y have as a core-expectation enterprise commitment to their development, c.) the paradigm shift that suggests that the enterprises now have to perceive themselves to be in the Education domain as Academia endeavors will not be sufficient.

 

Motivation of the New Workforce

The most generous interpretation of of the current portfolio of motivational vehicles is they are insufficient based on the emerging Demographic trends.  The demands of the new workforce will compel both practice and program modifications to human resources services. 

 

nGenera research Health Care insurance is a dominant desire for all employees, economic recognition for high performance is no longer a aspiration  it is a demand, the usefulness of long term incentives for Generation Y is questionable given what they initially see as tenure expectations, and all age cohorts are desirous of flexible time arrangements with their employers.

 

The Optimum Culture

When the Culture of an enterprise is an  outcome lacking foresight  there is risk.  The unplanned therefore uncontrolled evolution of cultural vagaries may  result in optimal conditions, but just as easily create  a situation that is not conducive to enterprise values nor strategic mission.

 

Over the decades much has been written of, and spoken about culture, its importance,  intrinsic value, and strategic necessity yet the ability to influence, truly influence a culture remains elusive.

 

nGenera Research on Top 10 Management Challenges for the New Workforce

 

1.      Replenishment and Deployment – The ability to attract and retain sufficient numbers of skilled employees throughout  the Enterprise.  For many companies this will be a daunting task.  A case in point is Essar which has grown from 20,000 to 60,000 in 3 years!  55% of their employees have less than 2 years of tenure.

 

 

 

 

2.      Multi-Generational Value Proposition-For the first time, commerce now has 4 separate and distinct age cohorts coexisting within an enterprise. It would be intellectually dishonest and moreover a risk to assume that a “One Size Fits All” human capital posture is feasible. For example the constitution of the GAP has 157,000 employees the vast majority of whom are Generation Y yet their leaders are predominately Gen X and Boomers.  To be successful, the GAP must address the needs of its Customer and Employee base simultaneously.

 

3.      Robust Leadership Pipeline-The ability of an organization to assume “if cream does not rise to the top on its own we will buy more cream” is unworkable in the new Talent marketplace.  The  smaller numbers of Generation X managers when combined with aspiration levels that are substantively different than Boomers and Millenials will represent a compelling challenge.  The abdication of an organization in favor of predominantly self-directed leadership will likely be a self defeating response.  As would be the ignoring the Retention potential Development has for Boomers and affiliation quid pro quo of Generation Y incumbents.

 

4.      Critical Success Factor Reconstitution – The French were embarrassed during World War II when the Germans ignored the Maginot line.  A possibly overly dramatic analogy: but what nGenera research suggests is that the Competencies we currently assess, and periodically develop for, have been deemed suboptimal for the new Talent marketplace.  Noteworthy deficiencies are truly Global Orientation complete with cultural awareness and linguistic abilities, a Strategic Mindset that can identify the “next big trend”, Collaborative Behavior that is inherently persuasive vs. a “follow me model”, and Staff Development abilities that are Sensei in vs. Supervisory positional in orientation.

 

5.      Knowledge Management Mindset and Tools-Despite the existence of institutional memory preservation tools, the discipline and mindset to use them are lacking in most enterprises. This deficiency will be exacerbated by the restructuring aligned with the current recession and will be dramatically compounded by the imminent retirement of Traditionalists and Boomers.

 

6.      Reward Misalignment – The current focus of Total Rewards Design on Regulatory Compliance and Philosophy of Compensation being plotted between  Market Average and 75th percentile is emerging as problematic.  An enterprises inability to recognize that Long Term Incentive 5 year vesting is a disincentive for Generation Y, that High Performance employees know who they are and eventually feel marginalized by similar recognition as their less performing peers, that the tolerance of Compression with the hope that it will be a “secret” is insulting, and that there are those who would gladly forgo monies in favor of generous Health Care or a Flexible work schedule, will present  significant barriers in the future.

 

7.      Retention on Boomers-The undeniable truth is that there are more Boomers than there are Generation X workers Practices that suggest an employee should be thought of as being on the downward side of an Employment Curve at age 55 or even 65 is to ignore the demographic reality and opportunity prevalent in the sustainment of these incumbents.   nGenera research indicates that despite this intellectual awareness the progressiveness of practices to preserve this talent pool and candidly does not rise much above happy talk.

 

8.      Attraction and Retention of Generation Y-The point of view that “given time they will think just like me” has its limitations.  nGenera research suggests a more appropriate approach is to embrace the differences endemic to this cohort and create programs that are respectful, motivational, and flexible.  nGenera research indicates that there are many companies that are creating innovative approaches to attract and retain Generation Y’s as they recognize that a “one size fit’s all” approach is self defeating.

 

9.      Employee Engagement Improvement– Of paramount importance in the emerging Talent Marketplace is the improvement of Employee Engagement, a task made more difficult during recessionary times.  nGenera research indicates that Engagement goes well beyond the efficacy of Human Resources programs.  Our research suggests what appears to be lacking is awareness of the differences in aspirations and elements of the value proposition that are truly motivational.  Even sadder, our research indicates that there is a perceived lack of respect for an employee as an individual in many companies.  As the recession dissipates if there is no proactively to address this situation, the opportunities prevalent in the marketplace will create the phenomenon of “it is not that I am not working, or not working hard, it is I am not working for you”.

 

10.      Capability on Demand – the emerging Talent Marketplace will soon move beyond Job descriptions, Career Stages, and Alternative Sourcing.  Alternatively nGenera research indicates that the definition of “work” will be reinvented and so will the definition of “worker”.  The nGenera point of view is that the new model will be Talent Capability on Demand supported by sophisticated Collaborative Tools and Technology Platforms.  The reality that we see as imminent is the strategic use of employees, contractors, aligned SME’s (i.e. thought leaders, retirees who possess a certain skill), vendors, and the world at large as accessed by the Internet will become the Future State Employee

 

We are entering a new and exceiting period in Human Capital management requiring new mental models and innovative programs to promote Enterprise success.

 

If You Listen Closely You Can Hear the Hoofbeats!

Those of you who read USA Today July 15th may have caught an intriguing article.   It highlighted the challenges faced by a consortium of universities and companies to promote technical degrees among today’s students.

 

The target for this group was to induce 400.000 students to major in the math or sciences.  Their record of success is approximately 250,000.   Their efforts are to be applauded….but their challenges are daunting.

 

Isolating one degree track, computer science, there has been a decrease of 39% since 2000.   Other disciplines have also seen a significant decrease.

 

So where are the students?  When you look at the declining birth-rates and you come to realize they were never born…..it is self evident.  When you add the fact that there is a real question in the mind of the Gen Y cohort as to a sense of urgency and/or the necessity to matriculate you have additional considerations restraining success. 

 

The questions that are being raised by academicians and thought leaders like Tammy Erickson are:

1.      What can be done to induce those who are attending college to major in these disciplines?

2.      What alternatives exist to train non matriculating Gen Y’s in technical disciplines?

3.      What is the role of academia in support of non degree granting endeavours?

4.      What is the role of enterprises in concert with/or independent of academia to insure a steady flow of talent?

 

The need for technical talent will be unabating!  Any and all initiatives are necessary for any company to address their talent needs

 

Talent Practices for a Tough Economy

11/09/08

In the course of my normal early on-line shopping for the holidays, I ordered shoes from Zappos.  Being curious, I followed the CEO on Twitter.  For those looking for a great example of how to talk about tough issues with employees check out the CEO blog at Zappos.  This is a company known for developing an exquisite culture of customer delight that extends back inside the company.  They have just had their first lay-off in 9 years and it hurts.  But they’ve done a beautiful job of articulating (inside and out) why they are taking this action now, their financial condition and what they expect in the near future, and how they are going to treat their employees.  Most notably, the are: (1) providing higher than normal severance for ‘short-term’ employees, and (2) assisting with COBRA benefit payments for those impacted employees.  Equally important, they are encouraging people to ‘talk’ or in this case ‘twitter’ about the situation inside and out of the company.  I was struck by the outpouring of care for impacted employees that was coming from the loyal customer base.  As I have said before, as employees, we can deal with tough issues if (1) we understand the logic behind the decision, and (2) believe impacted employees are being dealt with in a caring and compassionate way.  I look forward to continuing our relationship Zappos . . . I’m impressed. 

8/28/08  Update

When I wrote this blog, I thought I had a very nice array of talent practices.  After posting it, I’ve continued to come across some interesting talent practices, so I have continued to ‘update’ as information comes across my ‘virtual desk.’  I’ve chosen to group the new information under the original post so that you can see how the ideas have developed.  Interestingly, the most active searches by readers have been in the compensation space . . . so I’ve added some examples as the financial performance information has evolved through the back end of this year.

Jim Borgman’s cartoon in the Chicago Tribune last week was priceless . . . because it spoke volumes.  Set aside the question of are “we really in recession or just how bad is it,” the current US economy presents some significant challenges for organizations.  So what are some of the interesting ways organizations are responding:

Recruiting Previously Unavailable Talent: Seizing an opportunity is easier said than done.  But for financial institutions, this is the time to recruit top talent . . . talent you could not touch before. And none know this better than the Chicago financial market.  Wall Street talent who would never have considered career opportunities in Chicago are now finding the comfort of a steady security and commodity market attractive.  Seizing opportunity is not just about sourcing talent from organizations in distress.  Employees impacted by rising cost issues and unrealistic organizational demands are evaluating their current employment propositions very carefully and making strategic choices about their future.  Gas prices and long commutes give way to considering attractive opportunities to work closer to home or even in the home.  Even the most resilient of road warriors are looking for relief from the grind of tough air travel while suffering the burden of over restrictive cost cutting travel policies.  Indeed, this is the time to put your unique employee proposition to work in the recruitment of talented employees.  This is a great time to strategically up-skill the organization.  Likewise, internally it’s a time to make sure that you are not eroding what is important about your employee proposition as your own organization responds to tight economic times — your ability to recruit and keep top talent is most certainly at risk. 

Changing the nature of work: Law firms are not known for their innovation, particularly when it comes to a very traditional career path . . . but even that is changing.   In tough times, organizations tend to farm out project based or seasonal work more aggressively rather than hire regular employees to manage through what appears to be a limited engagement.  But leveraging consulting from traditional legal firms can be quite expensive.  Enter a new kind of law firm — Axiom, Outside GC LLC and Phillips & Reiter PLLC are examples of legal organizations who act more like talent brokers than law firms.  What’s different?  Well at Axiom, lawyers are employed full time and receive benefits, but no pay between assignments.  According to the Wall Street Journal, the cost to clients is about 50% less than traditional law firms.   So what’s attractive from an employee point of view?  Some people are in transition.  But even more people are thinking about alternative work arrangements wanting a break from the pressure of traditional large organization career.  Others are ‘slash workers’ and want project based opportunities while they pursue a variety of different work experiences.  Others simply want more family time.  And some are Gen Y’s right out of law school who are looking for engaging opportunities right out of the box.  I think we will continue to see more ‘talent brokerage’ with high end niche knowledge workers as a way to flex talent pools in general and as a way to tap into top talent who are in transition in a cost effective way.  This is, of course, a type of workforce in transition . . .meaning, most hiring managers have not yet caught up to the real nature of the talent opportunity and are still thinking of ‘brokered talent’ as low level temps. And time will certainly tell, but I think we are seeing an important talent trend emerging. 

Offering Flexible Work Place Practices:  Tough economic issues have offered flexibility advocates a golden opportunity to push new work place practices into place in ways that demographic challenges of the talent pipeline have not.  Helping employees squeeze more out of a tight family budget have prompted a whole range of flexible workplace practices.  Examples include . . . “4 day work weeks” or other forms of compressed work weeks and regular telecommuting or “work from home Fridays,” or van pools.  Talk about taking work at home to the next level, at Write2Market, an Atlanta based marketing firm, employees must ask permission to ‘drive into the office’ for work.  There are even novel programs like “bring your child to work.”  While I certainly applaud flexibility, there some challenges.  Woe to the manager who uses this as an excuse to abuse employees . . . disengagement will certainly follow.  Thank you Jim for your comic reminder.  Likewise, flexible practices can be great solutions when they are not imposed.  Bringing your child to work is not appropriate for every environment . . even in the same organization.  And requiring all employees to work from home on Friday’s without thought to customer needs, is not an effective long term business response.  ‘Rigid workplace flexibility’ becomes an burden when it is not driven by real employee need and does not effectively facilitate the requirements of the business.  Flexible workplace practices are just that . . . they are supposed to be flexible and they do require a plan . . . a plan that serves both the organization and it’s employees.  And finally, managers often need help understanding how to effectively manage in flexible arrangements. 

Changing the Compensation Game: Need to put a bit more skin in the game to accelerate growth in a tough market . . . well, Skyline Construction, Inc.  offered managers an opportunity to pick their own salaries with in a range.  The deal?  The lower the salary, the bigger the shot at a large bonus.  What’s different? Skyline let their managers put a portion of their salary at risk.  The idea has proven popular . . . now in its second year, 12 of 15 managers choose lower salaries this year, increasing their personal motivation to succeed. 

A while back Best Buy, started an experiment in performance management called ROWE (results oriented work place).   No more fixed schedules, no mandatory meetings, no impression-management or forced face time . . . Best Buy reshaped it’s work place practices to focus performance on output instead of hours worked.  Putting employees in charge of their own work — time, place, and results — places responsibility where it belongs.  Yes, it means managers need to be crisp and focused when developing performance objectives, and that’s not a simple task.  But look at the results — productivity is up 35%, average voluntary turnover has dropped dramatically, and employee engagement is up.  What started as an experiment is now becoming the norm. 

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Broadening the Benefit Portfolio:  Not a surprise, in an effort to keep top talent who may be challenged by difficult commuting conditions, organizations like Grossbard & Associates are offering just a little extra in the paycheck to offset rising gas prices.  Some companies are increasing their mileage rates in reimbursement policies while others are offering higher cost of living raises.  EFC International is being even more proactive by subsidizing employee fuel costs on a ‘miles commuted’ basis.  Maritz, on the other hand, decided to offer employees a discount on Sam’s Club memberships as a way to help employees access lower prices at the pump.  Finally, TransitCenter, Inc. helps employees use pre-tax dollars to pay for parking and public transportation needs. 

In some cases, simply having access to benefits is important . . . especially for an employee population who may impacted by downsizing.  Companies like Starbucks and Border’s who offer benefits to part-timers fill a very important employment niche.  Paying attention to employees well being in tough times pays off.  They tend to be more committed and engaged.

“Off-boarding” with Care:  Sometimes the business is such that we need to say good-by, even to valued employees.   I am convinced that how we transition people out of the organization speaks volumes to those impacted — those who are left inside as well as those who are leaving us.  One of my clients has changed their HR job to include ‘on-boarding and off-boarding.’  Putting the same amount of care into helping people transition in and out of the organization can pay large dividends in your ability to attract and keep top talent over the long haul.  And who knows, today’s internal talent may be tomorrows key client.  Off-boarding with care, also keeps current talent engaged.  We can handle tough news . . . if we think it’s fair (meaning we understand the logic behind the decision)  and it is handled with compassion.  It’s important to remember, whether employees continue with us or leave us, they will always be alumni of our organization.  And those alumni can be valuable long term assets for the organization.

Finally, when we change the composition of our workforce, let’s remember to also think about the impact of the re-structuring on the work of the organization.  This is where I put the plug in for all of those who are left absorbing additional work when we loose valued colleagues.  Doing more with less?  Not really . . .there’s a limit to what any organization can do with resource constraints. So when re-structuring think not just about those who leave, also think deeply about the impact to those who stay.  Remember to also take work out of the system. 

As culture expert Edgar Schein reminds us, what leaders do in ‘tough times’ often speaks more loudly about the character of the organization than what leaders do in ‘good times.’  And employees do listen . . . very carefully . . . and take action on what they see. 

What is your company doing in these tough times?  In what ways are you seeing companies respond to the challenges of this economic climate?

08/11/08 Addition: Listening to What Employees Think

A survey in USA Today’s weekend addition asked: Should employers help workers with surging gas prices? Interestingly the responses were . . . 66% with a “no” response, 32% with a “yes” response, and “2%” don’t know.  What do you think?

08/12/08 Addition:  Changing the Compensation Game

Today’s Wall Street Journal reports more changes in compensation.  Given the economic and company performance turndown, one would expect that bonuses would follow.  Not so . . . according to Mercer and Hewitt. In an effort to keep top talent and employees engaged,  companies are still offering large bonuses.  In fact, the number of companies who offer one time bonuses has increased.  So, what’s changed?  Well, employers are starting to use their dollars more wisely, reserving the bigger payouts for higher performing talent.  Instead of rewarding the broader population with the usual average ‘feel good’ bonus, companies are going for ‘higher highs’ and ‘lower lows’ to distinguish and drive increased performance in tight economic times.  For example, highest rated workers may see upwards of 14%, while average workers may see 3.5 to 3.8%.  For the average workers, inflation, gas, and grocery increases may simply eat up any gain in the paycheck.  What’s your company doing?  What are you seeing and hearing in the area of performance management?

8/15/08 Addition:  Changing the Structure of the Organization

Doing more with fewer staff?  Very interesting article in the Wall Street Journal again today.  Dana Mattioli reports on a new ‘tough times job trend.’  Companies are not eliminating jobs altogether . . . they are creating what I call “job mash-ups.” In this case, they are combining job levels and types into new mash-ups. . . and yes, you guessed right. . . at lower salaries.  In an effort to stretch their assets, companies are combining jobs vertically . . .and horizontally.   

Not a surprise, tough economic times prompt us re-think the fundamentals . . . and one of those fundamentals is how the organization is structured.  It’s the moment to confirm what is core to the organization and what should be left behind.  It’s an opportunity to reinvent the what and how of work . . .to eliminate the redundancies . . . or streamline.  What’s interesting about the trend is the blurring of functions and roles . . . offering people an opportunity to develop cross functionally by moving into white spaces or to seize more senior roles based on capability or appetite.  Job mash-ups have real appeal from a development point of view.  And sometimes, job mash-ups propel us into finding new growth engines for the organization. . . opportunities we could not have imagined until we see what could be combined.

Having said that, what is disconcerting about the trend is the potential for abuse.  Jobs poorly combined don’t help the individual or the organization.  Pushing employees far beyond their capabilities leads to burn-out, turnover, and taint your ability to recruit top talent.  Can one experienced professional do the work of a team — not without changing performance expectations or the fundamental nature of the work itself.  So my challenge to HR is to act as that ‘voice of reason’ for those who don’t have a voice in this conversation. . .make sure ‘mash-ups’ make sense for everyone.

8/20/08 Addition:  Creating Employee Engagement: A Reason to Believe in the future

“Ford Offers Workers a Ride” . . .  interesting article in the Chicago Tribune today.   One of the toughest ‘sells’ we make is not to customers but to our own employees, particularly in tough times.  And Ford is certainly weathering some tough times.  The hard part of the ‘sell’ to employees is creating confidence in the future . . . as Rosabeth Moss Kanter says, when you are in the middle of a turnaround, everything looks like a failure . . . (and I’ll add my own thoughts here) because you aren’t close enough to the future to touch and feel it.  So Ford is doing just that!  It’s giving employees a reason to believe in the future.  In an effort to engage employees, they are letting them drive their new vehicles around the test track.  Pulling 4,000 of their workers from their Dearborn HQ desks to the test track, Ford hopes to show employees that their new models are going to put them on the road to success.  Engaging employees by letting them ‘touch, feel, and drive’ the new 2009 to 2010 vehicles, Ford hopes that they will then ‘talk up’ the vehicles to others . . . engaging their social network as a potential growth engine.  Giving people evidence of a positive future serves to reinforce confidence which can become a powerful platform for positive performance.  And as Kanter says, confidence can become infectious!

8/26/08 Addition:  Paying Attention to Employee Mental Health

Today’s Wall Street Journal article on health by Elizabeth Bernstein was a good reminder that in tough economic times people get worried . . .and that fear will work its way into the organization in unexpected ways.  As the economy continues to tighten, people worry about job security for themselves and other family members, their ability to pay the mortgage or other loans, the cost of gas and just plain living expenses. . .never mind worrying about the value of their homes and their ability to pay for college in the future, and so on.  Not everyone can handle stress effectively and we may see it in general morale, illness or absenteeism, productivity, or disengagement.  This is the time to pay attention to the subtle and not so subtle changes in those around you.  HR can take the lead.  Look for the warning signs that something might be wrong and offer access to the various policies and program available inside the organization . . . options might run from expressing concern to changes in workload, vacation, fitness programs, unpaid time off, employee assistance programs, and so on.  If you are tempted to ignore it . . . remember, morale issues are contagious. 

8/27/08  Addition:  Workforce Planning

What have you done to protect your talent today?  In general US companies are not giving much thought to workforce planning according to a new Watson Wyatt study, referenced on Workforce Management.  Meaning, they are not giving much thought to protecting their talent should the economy worsen . . . protecting key talent when times are bad, you say.  Indeed, this is not about restructuring or downsizing the organization.  This is about identifying critical constituencies (those essential to the core of the business) and putting contingency plans in place to make sure you don’t loose them . . . period.  And a lack of planning puts US firms at a disadvantage to their global counterparts.  Asian counterparts for example have been dealing with this issue for some time . . . currency crises, coups, or just plain competition for the same key talent across Asia Pac.  According to the same study,  84% of employers in Asia-Pacific and 80% of employers in Europe have workforce contingency plans in place.  Do you?  If you don’t do workforce planning in the tough times, when the good times come again you will be at a distinct disadvantage . . .chasing top talent paying premium dollars.  When you loose top talent, you have also lost the seeds of your future growth.  So, I ask again . . . what’s your organization doing?

8/28/08 Addition: Senior Leader Compensation

Finally, some interesting compensation information on the senior leader front as challenging financial results continue to pour in through the back half of the year.  We are starting to see more interesting compensation plays . . . ones that are more closely tied to performance . . . ones that are giving higher highs and lower lows . . . ones that are extending senior leader time horizons beyond the quarter or year in an effort to drive effective long term performance.

Starbucks just announced that it will slash bonuses for senior leaders this year as it continues its reassignment program in an effort to increase profit.  According to the WSJ, Chief Executive Howard Schultz will not get a salary increase this year . . . nor will any US employees Vice President and above given year-to-date performance.   Moving lower in the organization, eligible district managers, store managers and most coffee-roasting plant workers in the US will get a 3.5% annual pay increase.  For all employees in the US, the plan calls for a 2% flat salary increase for those whose performance is at the meet or exceeds level.  This excludes store baristias who are on a separate compensation plan that adjusts salaries on a 6-month basis.  Now that’s a statement. 

Might I add as we move toward year end, the company to watch on the Senior Leader front will be American Express.  You may remember Amex received well deserved praise for their CEO compensation play at the beginning of the year.  They have given CEO Ken Chenault an options bonus schedule based on clear aggressive financial metrics over a 6 year time horizon.  The financial hurdles as laid out are quite high for EPS, revenue and ROE, and a lesser performance will only give him a fraction of the total grant.  Furthermore, the total return to shareholders must be at least 2.5% above the S&P 500 average — so he cannot simply ride the market.  A senior leader compensation play clearly tied to performance over time — what a concept. 

8/28/08 Addition: Off-Boarding with Care

Earlier I wrote about the importance of ‘off-boarding’ with care.   There are times when we need to say goodbye to valued employees . . for a variety of reasons.  In those cases, it’s our hope that at some time down the road, our paths will cross again. 

The best examples of off-boarding come from companies trying to keep top talent . . . in the hopes of their return.  Deloitte and Touche (USA) makes it easier for employees to return after career breaks of up to five years, whether family or education related, by offering a range of benefits like . . . access to the company intranet, subsidized training to keep skills current, access to a mentor or career coach.  Cost effective, the program costs a fraction of the cost to recruit and develop a new employee.   Likewise, Gensler welcomes talent back via a return program . . . symbolically welcoming talent back with a ‘boomerang.’  Other companies keep in touch with previous employees through formal alumni networks using vendors like Select Minds. . .while others leverage grassroots social networks that spring up when companies are forced to downsize groups.

Increasingly we need to be comfortable with the fact that talent is unlikely to stay with us for their entire careers . . . there will be a series of ‘on and off ramps’ for a variety of reasons . . . some company driven others will be driven by individual needs and wants.  Keeping in touch with great talent can be a source of long term competitive advantage.  Whether employees continue with us or leave us, they will always be alumni of our organization.  And those alumni can be valuable long term assets for the organization.

9/13/2008 Addition: When Times get Tough, Increase the Travel Budget

I just returned from the Network Roundtable meeting and had an opportunity to listen to Larry Prusak talk about the power of culture and networks.  A colleague asked Larry a question . . .”in tough economic times, what would be your #1 recommendation for the organization.”  His reply . . . increase the travel budget.  Interesting . . .certainly not what most organizations do.  First thing to go is the travel budget.  His point, if knowledge is truly the driver in your growth engine, why would you cut the travel budget ?  Knowledge is massed in networks where people share trust, perspective, and a culture over time.  Knowledge is a social thing . . . not an individual thing . . . which requires care and feeding.  The cost of knowledge is the ability to create shared experiences so that people can share . . .absorb . . .and build anew.  Can technology do this for us . . . yes, to an extent. . . it can certainly accelerate information sharing and even knowledge development.  But ‘being together’ is key at critical points is key to a network’s ability to develop trust . . . enable collaboration . . . create knowledge . . . to drive innovation.  It’s hard to create a shared culture of ‘asking for information and sharing knowledge’ when you are physically isolated. 

Ok, so who really does that in tough times . . . well MWH Global did.  In fact, they rearranged the travel budget . . . they decreased executive travel and increased travel at the mid-level in the organization where the dollars could have the greatest impact.  And the outcome . . . a measurable increase in organizational capacity and ultimately revenue.  Interesting indeed.  What do you think? 

10/28/08 Addition: Leveraging the lull to develop skills and spark innovation

Like many of our organizations, Toyota is facing a significant lull in manufacturing for a significant portion of their workforce.  With a tight economy and changing gas prices, Toyota like the other car makers is experiencing the same challenges as the other auto makers.  Their response to that challenge is what makes them unique.  Rather than send workers home like the other auto makers, Toyota is keeping their workers on the line to sharpen their skills and look for innovation opportunities.  And they are already seeing the potential cost savings benefits to keeping employees engaged in processes they have redesigned.   What a concept . . . use short-term idle time to keep employees engaged, trained, and looking for incremental productivity savings and innovation opportunities.