5Don’t Be a Waiter…. We must stop acting like the old “personnel departments”of the past and we must stop being afraid of CHANGE A waiter will just maintain the same ole’ same ole’ Sit at the table … take your role seriously… act likethe manager that you WANT to be and become the leaderthat you NEED to be Remember… Business = Money!!
6Sit at the Table!!“A leader has got to show their troops theroute of the march and the destination”Frank PacettaXEROX Sales Manager
7Don’t Be a Waiter …“You can rule by divine right, or you can create andbe a leader, promote an atmosphere of learning,creativity, and positive energy. That kind ofthinking brings gratification and high morale”Mary Ellen HiattSouthern Home Furniture
8Sit at the Table! We must be sure that we are COMMITTED to theorganization’s core purpose and objectives and we mustalso ensure that we line our people up behind us. The table is NO place for a pencil pusher or a papershuffler. It is a place of decision and action. Take your seat by earning it and by showing that youdeserve to be there and that HR can make a difference
The Missing Link for HumanResources?Business Acumen9
10Take your seat …..Six Steps to Building aProfit Center
Six Steps Business Problem Cost of Problem HR Solution to Problem Cost of Solution Dollar or Percent Improvement Amount for Solution Cost-Benefit Ratio 11
12Six Steps to Building a Profit Center1) Identify and analyze business problems from aprofit-oriented, not just service-oriented, point ofview This could be a problem with productivity,turnover, managerial effectiveness, sales, or anyother issue that every business must successfullyhandle in order to be more profitable This problem must be clearly stated and clearlyunderstood
13Six Steps to Building a Profit Center2) Cost of Business Problem It is not just important to identify the problem andnot do anything about it We must determine how much the problem willcost or what it is costing at present This will allow you to measure the cost-effectiveness of the solution
14Six Steps to Building a Profit Center3) Solution to the Business Problem What specific HR oriented solution couldovercome the problem? Ex: Productivity is the problem Possible solutions Better selection methods Incentive pay systems Attitude surveys Suggestion boxes Teambuilding
15Six Steps to Building a Profit Center4) Cost of the Solution Simple cost accounting to determine what dollarsit will take to implement the solution Important check at this point – will the solutioncost less than the problem??
16Basic Cost Accounting Jot down each possible expense or benefit Calculate the dollars associated with each expense orbenefit Take as many costs and benefits into account as possible –this will help provide the measure of how effective theendeavor has been Use conservative figures This will help a cynical executive admit that the HR deptefforts did indeed improve profitability Keep it simple – do not create a mountain of paperworkto carry out the solution! Remember … we are trying NOT to be the stereotypical HRdepartment regarded already as paper pushers! Get measurable results without the stigma
17Six Steps to Building a Profit Center5) Improvement Benefits from the Solution This should show the improvement value from thesolution I.E., sales go up, costs go down, absenteeismreduced, etc. This dollar improvement amount should be more thanthe cost of the problem and the cost of the solution If the cost is more than the above, the solution was/isnot worthwhile from a cost-benefit standpoint
18Six Steps to Building a Profit Center6) Cost-Benefit Ratio Proves the bottom line measure of how successfulthe solution was Similar to a ROI Tells us how much money was earned comparedto how much was spent Ex: If a $100,000 improvement resulted from a$10,000 solution the cost-benefit ratio was 10:1 For every one dollar spent on the solution, $10 wasreaped in benefits
Example of Planning Model Business Problem Decreasing sales at a steel products company Cost of Business Problem Sales dropping 10%/year Current sales $90 million down from $100 million Solution to Business Problem Change salespeople’s compensation from salary-only to salary +commission Commission = 5% of each salesperson’s sales over$1,000,000/year19
Example of Planning Model Cost of Solution Number of Salespeople X Avg. Commission paid 100 X $2,500 = $250,000 $ Improvement Benefit Benefit = Sales increase – commissions paid $15 million/year less $250,000 (cost of the solution) $14.75 million/year (Improvement Benefit) Cost Benefit Ratio 60:1 $14,750,000:$250,00020
Planning Model The planning model is elegant in its simplicity KEEP IT THAT WAY! No mountain of paperwork to carry out the HRProfit Center Remember … K.I.S.S (Keep it Simple Stupid) Get measurable results in a simple, effectivesolution21
22Sit at the table ….The Five Elements ofBusiness
23The Five Elements of Business1) CASH IS KING! The oxygen supply of any company and allowsyou to stay in business Cash Generation Or cash flow is the difference between cash thatflows into the business and the cash that flows out ofthe business in a given time period. How can HR impact cash flow in your company? What single action can you commit to, topositively impact cash flow in your company?
24The Five Elements of Business2) MARGIN What is left over after expenses are paid Can be dollars or a % Most common are gross and net Gross margin deducts costs of goods sold Net margin deducts all expenses How do you improve Margin? Increase the price or decrease the cost on a single productor service Increase sales or decrease expenses to improve companymargins How can HR affect margin in your company? What action are you committed to, to increase margin?
25The Five Elements of Business3) VELOCITY Means speed – decreasing cycle time and improveemployee productivity How fast and how hard can you make your assets work tomake more money The more increase in an asset’s ability to make money, thehigher the velocity Improve Velocity in two ways Decrease the amount of assets used to get results Improve the results you get from assets How does HR impact velocity in your company? What action can you commit to, to increase velocity?
26The Five Elements of Business4) Growth Measured in three ways Top-line (sales) Bottom-line (profit) Earnings per Share Types Organic – growth that comes from existing business In-organic – from mergers and acquisition No growth = lagging behind in the business world
27The Five Elements of Business Growth If your company is not growing … You will beovertaken by competition Forces a company to change and to anticipatecustomer needs, as well as to look for newopportunities How does HR affect growth in your company? What action are you committed to, to impactgrowth?
28The Five Elements of Business5) Customers End user of your product or service Can be another company or individual Could also be internal customer We must know our customer’s every move in preference,emotion, and action. We have to anticipate them or lead them in all areas How does HR anticipate customer’s needs in yourcompany? What action are you committed to, to better anticipatecustomer’s needs and expectations?
29The Five Elements of BusinessWithout customers’ trust,the rest doesn’t matter
30What do you know about yourcompany? Understand Your Company How much cash is on hand? How much cash is generated from operating activities? What is the net income? What is the net profit margin? How is that margin compared to competitors? What are your company’s sales during last year? Is the company growing? What is your inventory turnover? Is your cash generation increasing or decreasing? Are you gaining or loosing to competition?This is the language of TOTAL BUSINESS
31Understanding Your CompanyAnnual Reports/Financial Statements Do you know where they are? Can you read them? Can you interpret and explain them?∆οεσ ιτ λοοκ λικε Γρεεκ τοψου???
32Annual Report Statement of Income P&L, Statement of Operations, Statement of Earnings Indicates profitability Balance Sheet Statement of Financial Condition or Position Indicates Financial Strength Statement of Cash Flow Details Cash flow between the business and the outsideworld Indicates CASH sources and uses
Where is YOUR Seat? Where does Human Resources fit in thetotal business picture in your company? Do you know?“Step back and get a total picture ofbusiness. As you cut through thecomplexity, you will get a clear fix onwhat is happening in the real world”Ram Charan 33
34Be a Leader … Build Relationships Become a leader in your business Focus your department efforts on being a leader of people. Make decisions … right or wrong … make a decision! Find the right people for the right job and take personalresponsibility for developing their skills and focusing theirenergy Why is it that no one ever flunks a company trainingprogram?? Be a conduit for linking people’s effort to business priorities BUILD THE TEAM that will support and run the company Be a part of the BUSINESS that is your business
35Be a Leader … Build Relationships Maximize every employee’s level of contribution Treat them with the same way a hospital treats its doctors,the airline treats its pilots, and a law firm treats itsattorneys … as professionals Success in any given employee might just hinge onwhether or not you know their name and whether or notthey are treated as if you care about them and that theyhave the talent needed to be successful Positive people success and positive relationships willensure your seat at the Table … they will equate withYOUR success! “Relationships are the glue to which hold teams together”John Maxwell
36Grow Relationships with People“What really distinguishes trusting relationshipsfrom distrusting ones is the ability of thoseinvolved to make a leap of faith…they mustbelieve that each is interested and committed tothe other’s welfare, and that neither will actwithout first considering the other” ….Contented Cows give Better MilkRichard Hadden
37Grow Relationships with PeopleA Brief Lesson in HumanRelations
39Growing People The right person in the right job Dealing with mismatches Are you afraid of making or recommendingchanges? Why? Coaching For success For business For behavior We must help people expand their abilities andsynchronize their work efforts
40Grow Relationships with People The Least Important Word: I The Most Important Word: We The Two Most Important Words: Thank you The Three Most Important Words: All is forgiven The Four Most Important Words: What is YOURopinion? The Five Most Important Words: You did a greatjob! The Six Most Important Words: I want tounderstand you better
41Grow Relationships with People Take these to heart … everything we do relates to wordsand our choice of them. Put them together in the proper way and we can reachout not only to each other, but to our employees. Use these as priorities in dealing with others and it willallow us to see things from the OTHER side. The key to growing relationships lies in these words …we are all human beings and we all want to be treated assuch Bottom line …. Become a servant leader in yourorganization
42Grow Relationships with People“Sincerity is the most important part of positivetreatment. The only thing worse than a coach orCEO who doesn’t care about his people is onewho pretends to care. People can spot a phonyevery time. They know he doesn’t care aboutthem, and worse, his act insults theirintelligence”Jimmy Johnson
43Let Your Principles Be Your Guide“A people that values its privilegesabove its principles soon loosesboth”Dwight D. Eisenhower
44To Certify or Not to Certify? If you do not take the time to earn yourPHR/SPHR/GPHR/CEBS then why should youget a seat at the table? Seats at the table are earned through hardwork and measured success Certification is a true indication of YOUR hardwork and a measure of YOUR success These designations speak volumes in ourprofession www.HRCI.org
45HAVE FUN! Choose your attitude … you must provide the contagious good attitude and help itflourish Be a servant leader …. Understand it and live it Stay involved and give good honest feedback Commit yourself to helping others succeed Make their day as fun as yours … it works!“If its to be … its up to ME!”Dr. Tim Lautenheizer
46Tomorrow and Beyond … What are you going to do differently tomorrow? Are you going to do anything differently tomorrow? What actions did you commit to during this presentation? What is going to be your first move? Talk to your partner and exchange e mail and phonenumbers … commit to a specific date to get back togetherand review what you did to make an impact. Don’t back away from the challenge … pick three or fouritems to focus on and go beyond the normal HRdepartment and build a department that can executebusiness priorities and watch you career and yourdepartment take off!
47Final Thoughts“Do or do not … There is NO TRY”Yoda“Blessed are the flexible for theyshall not be bent out of shape”Michael McGruff
48Don’t Be a Waiter …..CHANGEIts time to embrace, accept, and lead!
50www.thehrdude.comMichael Brady, M.Ed., SPHRmichael.email@example.com@thehrdude.comTwitter: LaHRDude Linked in:Michael Brady“When someone shares with you something ofvalue, you have an obligation to share it”Chinese Proverb
51References Charan, Ram. “What the CEO Wants You toKnow”. 2001 Merecer, Michael. “Turning Your HRDepartment into a Profit Center”. 2002 Hadden, Richard. “Contented Cows Give BetterMilk”. 2001