Who’s proud to be in HR? … [HANDS]
I was invited here today to share some ideas I think are really important …
You see, I have this crazybig vision. ..
I don’t understand why when I tell people I work in HR they sometimes make this face. [SLIDE]
Or why employees see HR as the vice-principal, managers see HR as a roadblock, and executives don’t notice us at all. I don’t understand why HR isn’t universally revered as the connecting link between strategy and results.
[SLIDE]
Business gets done for, through, and by people. This one simple statement is the foundation and premise of this entire conversation. It doesn’t matter what business, field, or industry we’re in. Leaders, employees, and customers (and shareholders) are all people and the decisions and actions of people determines business results. As common sense as it seems, weirdly, people (and therefore HR) are often treated as though they are separate from the daily business.
As though you could take HR and set it off to the side and the Business would do Business stuff and HR would do people stuff off on its own. I’d argue HR touches every aspect of business, actually underpinning the business and providing a foundation for a competitive advantage.
So what is a competitive advantage?
Michael Porter, a leading authority on competitive strategy at Harvard Business School, defined competitive advantage as: [SLIDE]
An advantage derived from attribute(s) that allow an organization to outperform its competition, such as superior market position, resources, or skills.
Of course, skills = people so the based on his definition, the right skills / right people enable a company to outperform by becoming efficient or to differentiating themselves.
Sounds obvious, but lots of companies only sort of get this.
This isn’t a new idea. Back in 1981, in an article in HBR, Wickham Skinner asked an important question: [SLIDE]
“Why do so few companies actually make use of the greatest competitive weapon of all – the powerful resources of motivated, energized, cooperative, trusting people?”
It’s a great question. Let’s talk about how HR can help do that. My intention is to share ideas and spark thoughts to take back and put to use in ways that make sense for you and your organization. [SLIDE]
Strategy. Who is in an HR dept striving to be more strategic? [HANDS] … Too often we talk about strategy like it’s abstract, theoretical, and static. Done right, strategy is real, practical, and dynamic – something everyone in the company lives and breathes every day.
So what is Strategy? The business world has worked hard to make strategy much, much more complicated than it actually is. I don’t want us to think about strategy like it’s this sacred unobtainable icon on a marble pedestal. Dictionary.com tells us a strategy is: a plan, method, or series of maneuvers… for obtaining a specific goal or result. So when we talk about being strategic, all we are saying is we have a plan. Kinda takes all the magic sparklies out of the whole thing, doesn’t it? Good. Because now we can get beyond the hype and be real and practical and meaningful.
Strategy Cycle in Real Life
To get us started I want to share a simple model showing how strategy plays out in real life and where some of the disconnects are in organizations. This model applies to whole businesses, teams, and individuals. In fact, whether you’ve thought about it this way or not, you’ve used this model your entire life every time you’ve tried to accomplish a goal or create a specific result. [SLIDE]
Here’s a quick overview: Results Strategy People Actions overlaid on Context. Let’s take a look at each piece in a little more detail.
[SLIDE]
Results This is simple: what do we want to accomplish (as an organization, team, individual, etc.)? Call it goals, targets, outcomes, whatever. This is what we are trying create. There’s a second part to this we often leave out: “why”. Why do we want to create those outcomes (vs any other outcomes)? What is the meaning or purpose behind them? Why is this so important it will be our focus?
How many work at a company where the company’s goals are well known to most if not all the employees? [HANDS] In other words, how many are at a company where the people doing the work understand what they are trying to accomplish and why? [SLIDE]
Strategy
Strategy is a plan it’s how we intend to create those results. Can’t have strategy until we know what outcomes we want. Strategic HR is simply connecting HR’s plans and actions to the business plan to help create the desired business results. We can’t operate separately from the business or in isolation and still be strategic. If your CEO asked, could everyone in your HR department explain how your programs and processes have changed over the last year or two to support changes in company goals and strategies?
In other words, are you an integral part of the business or are you off to the side in an HR cocoon? [SLIDE]
People This photo cracks me up and is a nice reminder that people are silly, goofy, and don’t always do what we want them to, yet the success or failure of a business is directly tied to the people involved and their daily decisions and actions. So, for HR to be strategic, the big question is “who”? Who is involved?
Let me ask this: Is your company attracting, developing, and retaining the people who will help it succeed today, next year, five years from now? Or is it attracting, developing, and retaining the people who would have been perfect for yesterday, last year, five years ago? More importantly: How can you be sure? [SLIDE]
(Actual) Action The best ideas in the world are useless until we put them into action. If I was into business-speak I’d call this “execution” but let’s make it real, it’s just: WHAT DID YOU ACTUALLY DO? WHAT GOT DONE? This is not what you wanted to do or what you put on your to do list, this is what you checked off the list. Action not intention. Important distinction. [SLIDE]
Results (2nd time around) The cycle then flows back to results and outcomes and starts again. The first time through we were identifying the results we wanted to create in the future; this time we’re looking back at what we actually created and then using that to decide what outcomes we need going forward.
Then it’s back through all the stages in a perpetual cycle, but there is one other important component to consider that has a dramatic impact on these four. [SLIDE]
Context …
1. Unique situation. Different = different. [COMPANY SIZE, ETC.]
2.Context changes. … Max: “You can plan for what might happen, but you have to deal with what does happen.” When context changes we have to adjust plan and actions accordingly. As HR, are we anticipating trends, business needs, industry changes, etc.? Are we seeking information to help us stay ahead of the change curve, running to catch up, or watching it pass by? [Three types of people..] [SLIDE]
This slide demonstrates both effects. 1) We can’t control when it snows, but we still have to deal with it. 2) How we deal with the snow depends on context – on our unique situation.
A quick quiz about context: How deep is the snow on this road? I’ll give you the answer: it depends. No, you say we can measure it. Sure, if we were there we could put a ruler in the snow and see how deep it is. Just looking at the photo, I’d guess it to be about an inch & a half. The depth is measurable, and 1.5” is the same everywhere, but the IMPACT of that depth is what matters most. For example, I’ve lived many places: Indiana, Colorado, Nevada, Texas and can tell you that in the mid-West that doesn’t even count as snow. In Texas it would shut the city down. Same amount of snow, different ability to deal with it. Context matters. [SLIDE]
This model is simple and also highlights disconnects that interfere with strategy turning into results, especially when we consider how this model plays out with three big stakeholders: executives, employees, and HR. The biggest challenges come from the perspectives and priorities of each group [NOTE: very broad generalizations]:
[SLIDE]
1. Leader view: Strategy and (=) Results/outcomes. This is almost a straightline equation where if we get the strategy right the results will follow. Often ignores people and the actions needed
[SLIDE]
2. Employee view: Action. People tend to focus on doing their jobs, often to the isolation and exclusion of other people, departments, and desired results. Ignores (or doesn’t know how it’s connected to) strategy and (sometimes) results and people and context.
[SLIDE]
3. HR/L&D view: The people component is our thing. But sometimes HR gets disconnected from overall business goals and strategy and it becomes checkbox HR where we are 100% compliant but completely disconnected from strategy and results. We know this can happen, that’s why there’s such a focus now on being more strategic.
Important point: none of this is criticism because no one is trying to do a bad job so. In fact, the bigger challenge is that everyone thinks they’re doing exactly what they need to do so we end up with this. [SLIDE]
And this is what’s happening in most companies. Business gets done for, through, and by people, so imagine the advantage gained from syncing all this up so it looks like this again. [SLIDE]
[Zappos is an example of a company that does this very well. They do a lot of things that don’t make sense for most businesses because they are ignoring “common practices” and doing things that directly link people and action to strategies and goals.]
[SLIDE]
So let’s talk about some of the things we can do to sync everything up. The first thing is understanding the company’s strategy. [SLIDE]
Understanding your org’s goals and strategy isn’t just for executive level HR. Everyone on HR team needs to be able to answer a few questions:
What are your org’s top goals and plans?
What is your org’s particular context (advantage/constraints)?
What is your org’s position relative to competition’s? Who are the biggest competitors? How does your org try to differentiate from the competition?
What are current and growing trends for your org’s industry? How might your industry be disrupted in the next 3-5 years?
What keeps your executives and managers up at night?
Once we have a good grip on strategy, we can align people to strategy by answering three questions: [SLIDE]
1. Do you have the right people for the plan?
2. Do they have the right knowledge and skills to implement the plan?
3. Are they taking the right actions?
Important point. I’m not asking if you’re hiring “good” people with “good” skills. I assume that’s the case. I’m asking about the right people taking the right actions to support the strategy to get the desired results.
Once we’re clear on the goals and strategy, how does HR connect to results? [SLIDE]
Story of stonecutters… Not filling slots on org chart…. most important job in company…
Valve: “Hiring well is the most important thing in the universe. Nothing else even comes close. It’s more important than breathing. So when you’re working on hiring – participating in an interview loop or innovating in the general area of recruiting – everything else you could be doing is stupid and should be ignored.”
This is not hiring to fill a position, this is hiring to ensure the future of the company. It’s not cutting blocks, it’s building cathedrals. So what does hiring for the future mean at your organization? How would your priorities and processes change if you were hiring as though each new hire determined whether the organization would be phenomenal, mediocre, or soon forgotten?
Many companies see it as a necessary evil that interferes with performance. .. Imagine a pro athletes: would a coach ever tell the team they are wasting too much time trying to improve their skills, fitness, or performance? NO!
I believe the sole purpose of training is to increase performance. Anything else is just bonus. It sets expectations and provides skills, knowledge, and experiences to enable people to make better decisions, take better actions, get better results.
What would happen if we approached all training - even compliance training and new hire orientation - from the idea that the sole purpose is to increase performance? How would that change content and delivery? How would that change our ability to impact the organization?
We bring in great people and help them be even better so of course we want to make sure they stick around. Turnover is expensive, creates more work, and can be a symptom of deeper issues so we try to minimize turnover.
But if less turnover is better, that doesn’t mean that none is best. In fact, some turnover is not only good, but necessary.
There is an old joke that says everyone brings joy to a room – some by entering and some by leaving. Off the top of your head can you think of anyone at your company that would create immense joy and an increase in productivity if they left? Can you also think of anyone who would be a great loss to the organization if they left?
Retention is important, but we have to focus on the people who are important to retain. There are two important questions we should all be asking ourselves:
1. Are you keeping people you want to lose? Why? There are some important choices that need to be made around employees who are no longer or never were a fit:
we can help them improve;
find a more suitable role within the organization; or
help them move on – especially if they are toxic or actively disengaged. I believe people deserve our full support as long as they are part of the company, and once we choose to help them move on it’s done with respect and dignity. The real danger is:
we keep them around BUT DO NOTHING. Every day that sends a message about what is acceptable, what isn’t, and what people have to put up with.
2. Are you losing people you want to keep? What about the people who were engaged and a fit, yet chose to leave? These are the people whose turnover really matters. This is where turnover really costs. It’s not just the price of filling the position, it’s the lost performance and lost future performance. What could that person have done if they stuck around? More importantly, are there patterns and root issues that need to be addressed before many more leave?
Keeping too many we need to lose and losing to many we need to keep puts us at a competitive disadvantage. Attracting, developing, and retaining is at the core of HR AND there are several things we can do to go further.
Let’s talk about Engagement, Culture, and Employer Branding. They are three big, important issues. Much has been said about them, except we don’t hear much about where they overlap. Let’s take a quick look at each and talk about how we can address them at the same time.
There are lots of ways we can define engagement, so for this discussion let me give you the definition I use. I like to keep it simple. Engagement is about discretionary effort. My father was a farmer for much of his life and he would describe engagement as just giving a damn – caring about results. Disengagement costs money and hurts performance. The Gallup Organization tells us 70% of US employees are either not-engaged or actively disengaged with estimated costs of $450-550 billion a year for US employers.
Obviously there is a huge advantage to having more people engaged. But I sometimes wonder if we’ve been approaching it backwards. We worry about how to get people more engaged, but a big challenge with engagement is that much of it is internal to the individual. It’s really difficult to take someone who is disengaged and get them to care BUT unfortunately it’s really easy to take someone who was really engaged and make them shut down and stop caring. Perhaps we should spend our time focused on making sure we don’t do the things that disengaged our engaged employees.
Culture has been described simply as “how things get done around here” and it’s been said culture eats strategy for lunch. That is, a great strategy won’t do much good if the culture – the way we do things – doesn’t support or gets in the way of the actions that create the results we want. That’s a key part of HR as a Competitive Advantage – helping ensure culture is aligned with efforts. HOWEVER, culture has inertia and momentum and it is difficult to shift cultural norms, expectations, beliefs, etc. quickly.
Employer branding is just what people think of when they think of working for your organization. We can create, promote, and reinforce a brand, but it’s not what we say, it’s what people think is what defines the brand.
These are three important topics and the one place all of these overlap and the one place with the most bang for the buck to address them is the employee experience. [SLIDE]
The employee experience can reinforce engagement or destroy it. Culture – how things are done – is built on the employee experience and while culture can be tough to shift we are creating a new employee experience every day. And that experience contributes heavily to your brand. After all, what matters more about employer branding – what HR says or what every single employee is telling their friends and family about their jobs?
And if that’s not enough, consider this:
Business gets done for, through, and by people. It’s been said that the customer experience never exceeds the employee experience. It’s a simple formula: (cx<ex). And common sense would say it’s true – how we think about and treat our employees determines how our employees think about and treat the customer (which determines how the customer thinks about and treats the company, which determines business results. And that brings us right back to employee experience as a source of competitive advantage.
The one sentence summary: When we can create an employee experience which results in trust, a sense of belonging and feeling valued, and the ability to do meaningful work I don’t think we’ll have to worry as much about engagement, culture, or branding.
When we talk about the employee experience we have to talk about leaders, managers, and supervisors. Managers make or break the employee experience. They are also the day-to-day connection between people and action. The credibility and relationship we build with managers directly affects the ease or difficulty of our jobs and our influence and impact through the organization. So much of our ability to impact results of org flows through managers:
David Ayre, vice president of global human resources, for Nike: HR Executive December 1, 2011 edition: " our job [as the HR function] is to help leaders make great decisions" around growth. But that’s the essence of HR isn’t it – helping leaders and the organization make great decisions when it comes to people.
Are we making decisions for them (aka “HR says NO”) or helping make better decisions? Are we providing good processes, training, and support to help them understand risks, costs, and how to get the sustainable results they want.
Another question: are we helping them be better leaders? Leadership is hard. I have huge respect and admiration for those who lead well, but shows that supervisors/leaders are generally not set up for success. Some (many? Most?) of the leaders in your organization are not very good at leading. They often don’t realize how bad they are or don’t know how to improve. And why would they?
Chances are, they were promoted into leadership because they were the hardest workers with the best technical skills. Obviously, those are the ones we want to promote. But leadership is a completely separate skillset.
It seems weird that organizations expect people to spend years learning their technical skills through college, trade schools, or on-the-job experience and then expect people to be good at the unfamiliar skill set of leadership on day one. It just doesn’t happen that way. Leadership skills must be developed, supported, and refined over time.
Currently, the deck is often stacked against leaders, especially inexperienced ones. Helping leaders get better at leading and make better decisions about people is a key part of how HR can function as a crucial link between strategy and results
When employees call or stop by the HR department do they feel like they’re at Nordstrom’s or the DMV? ..
The quality of service has a direct connection to our credibility and our ability to influence. If we get poor customer service when shopping what do we do? …
I believe HR has the opportunity and responsibility to provide the best customer service possible. ... When people come to HR, things are either well or terrible. What might be no big deal is amplified by stress, fear, change, and the unknown. What might be a simple, routine process for us might be their career, their family, their quality of life, their pride and dignity, their future.
How do we provide great customer service? Care. Empathize. Be Human. Understand the customer experience and make it easy for them to get the information and support they need from us. Help them understand their options.
Customer service is not just what we do, but how we do it. Great service is mostly a philosophy or attitude. Checkbox customer service is painful (ex: convenience store clerks saying hello).
Basically, great customer service is simply a result of treating our customers as though we need them more than they need us (because we do).
I’ve heard it said that too often HR falls into the trap of waiting for permission to change or improve things. We hold back and play small. I was offended… We do need to push for improvement. Even if we’ve got it right today.... Change can be tough in HR…
So what do we need to do different? Play bigger, act boldly, and experiment often. Best practices aren’t best... 3 things to keep in mind:
It doesn’t have to be all or nothing. Small scale experimentation and rapid iteration are your friends.
Very few new ideas are popular from the start
You can’t perfect it in your office. Need feedback
So…
Partner with a willing manager and/or volunteers.
Start small and call it a pilot.
Release it in beta and be really, really clear with everyone involved that it’s an experiment and you’ll be wanting a lot of feedback. (Gmail was in beta for 5+ years)
Be clear that it’s an experiment (I can’t repeat that enough). It sets people’s expectations and people are more likely to play along, be forgiving of bumps, and give good feedback.
Iterate – try something, get feedback, make small tweaks, repeat until ready for prime time.
Keep everyone updated and engaged.
Offer it as a volunteer program and let demand for it grow naturally.
[SHARE HIRING MANAGER TOOLKIT?]
Business gets done for, through, and by people.
HR links strategy to results.
With attracting, developing, and retention, ask: do you have the right people with the right skills taking the right actions?
(EX) is the crossroads of engagement, culture, employer brand, and performance.
Help your leaders make better decisions.
Customer service matters. A lot.
Experimentation is crucial for improvement.
What if we followed Nelson Mandela’s advice and focus our efforts on what we hope to create with our organizations? This is the essence of HR as a competitive advantage. So much of HR is done out of fear – fear of getting sued, fear of violating the law, fear of being wrong, fear of not being respected. We absolutely need to do the right thing – legally, ethically, morally, humanly.
But our chance to make a difference doesn’t come from playing defensively, it doesn’t come from blocking progress, or saying what can’t be done. Our true impact is based on what we create, how we help, on making everything we touch better, on humanizing work and connecting people to actions to plans to hopes and dreams and results.
My vision, my dream, my hope is that everyone in HR sees it for what an amazing field it is. It’s broad and deep and touches all parts of the business and touches lives. It’s not easy work – dealing with people never is – but it can be the foundation of an organization’s success. We’re not a function off to the side of the business, we’re woven throughout.
I’m intentionally leaving you with more questions than answers. Everyone’s situation is different and there aren’t necessarily quick, one size fits all solutions
My final question: what if people were the sole factor to your organization’s success? Not product, price, sales, or marketing. People. In other words, how would you do HR if your company’s future was determined by the people HR attracts, develops, retains, and supports? (It actually is, isn’t it?)
