• Shifting the Organisational Pyramid
• The McLeod Review on Employee Engagement
• The Leader/Manager Debate
• Line Managers who Lead
• The Intrinsic Motivation of Autonomy, Mastery and Purpose
• The Irrationality of Human Behaviour
• Tomorrow’s HR Professionals – A Multi-Disciplinary Background

Articles are included from the likes of Harvard Business School, Henry Mintzberg, HR Magazine, McKinsey, the McLeod Review, the Partnership Institute, Personnel Today, Strategy + Business and TED.

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Shifting the Organisational Pyramid

The general consensus of commentators from a broad spectrum of disciplines is that the traditional organisational pyramid is not fit for purpose. See below to find out more. We are also seeing a notable increase in articles and blog posts focusing on recruitment in the upturn. Whether this is wishful thinking or a genuine sign of improving economic times remains to be seen.

On a continuing theme from previous updates, there can be no doubt that this year’s hot topic is employee engagement, whilst an acknowledgement of it’s importance is widespread, there remains considerable uncertainty around putting an effective engagement strategy into place. Furthermore as the discussion develops, it is becoming increasingly hard to separate engagement from other organisational issues such as; leadership, talent management and innovation.

The McLeod Review on Employee Engagement

July saw the release of the UK government backed McLeod Review looking into the impact of poor employee engagement in the UK. Undoubtedly this is a strong endorsement of the positive effect of engagement on performance. However, there has been criticism from some for the lack of new insight or practical suggestions. I think that this is slightly missing the point and the report is far from the “recycled rubbish” claimed by Nicholas Higgins. In a similar vein, Personnel Today explicitly criticises the lack of practical suggestions. In my view, the job of this report is to make CEOs sit up and take note and raise what is traditionally seen to be a “soft issue” up the corporate agenda. The report is also meant to raise the issue of engagement for businesses of all sizes, again I think this is something that it achieves. As a first step in an ongoing process, this report gives HR directors the evidence to support the case for taking a serious look at engagement.

Although short on new ideas there is no doubt that the Mcleod Review brings together lots of data and evidence supporting the argument for an increased commitment to engagement. A good summary by John Ingham can be found here. There is nothing revolutionary in the report and it is easy to see why some in the industry are frustrated by it’s lack of specifics. However as a document making the quantitative case for increased investment in engagement it is pretty solid and for those not directly involved in HR and its related disciplines, it is a good introduction.

Despite the shortcomings, the conclusions reached by McLeod are likely to resonate with many. In short, McLeod is calling for a more sophisticated approach to people management. The report openly argues that due to amongst other things changing demographics and technology, engagement is not something organisations can approach with a one size fits all mentality. True engagement is focused on the needs of each individual. Furthermore, if organisations buy into this assertion, the role of line managers has to evolve away from the traditional administration/assigning tasks role to a more collaborative/coaching type approach, as McLeod states;

“Many people we spoke to identified managers’ approaches and behaviours as key factors in disengagement – as one respondent said, they sometimes act as “a great impermeable damp-proof course.” Jeff Kelly, of the Partnership Institute, told us at a round table discussion for this review: “There is a territorial problem and a comfort zone problem. Many feel comfortable with managing staff on an adversarial basis and don’t want to give it up.”

My feeling is that what is being called for in the McLeod Review goes much further than encouraging organisations to adopt a formal engagement programme. If organisations are to fully realise the benefits outlined in the report it is going to require a complete rethink in the way corporations manage and engage their people.

Curiously enough there have been a number of other articles published this quarter that I feel more explicitly reflect the findings of the McLeod Review. Interestingly, these articles are all written by people from a variety of backgrounds or disciplines yet the underlying message is very similar.

The Leader/Manager Debate

To kick things off, Henry Mintzberg has created a buzz with a look at the perennial manager/leader debate. This was also a topic covered in the previous issue. In this article Mintzberg is critical of the traditional role of corporate leaders who he brands as aloof and disconnected from the workforce, therefore having little idea of what is actually happening in the organisation. It is this disconnection that hampers so many organisational initiatives. In Mintzberg’s view, corporate America is overled and undermanaged.

True leadership is something that may only be required on an ad hoc basis, in particular during times of uncertainty or dealing with specific challenges or unknowns. These are the challenges which we most associate and value strong leadership with such as charisma, determination and vision. Effective management on the other hand is something that requires a more mundane yet equally valuable approach.

“As Stanford University emeritus professor James G. March put it: “Leadership involves plumbing as well as poetry.” Instead of distinguishing leaders from managers, we should encourage all managers to be leaders. And we should define “leadership” as management practiced well.”

At the heart of Mintzberg’s criticism is that the traditional corporate pyramid encourages and supports this disconnection between leaders and the rest of the organisation. Jamie Notter has an good summary of the Mintzberg article and picks up on his assertion that organisations need to review the usefulness of the prevailing hierarchical model of organisational design.

Line Managers who Lead

The notion of line managers who lead is explored in this recent McKinsey article. An idea that is coming from a similar direction to Mintzberg, instead of training managers in process and administration, they can improve productivity by empowering the people around them. In this way managers can be seen as catalysts to creativity, innovation and devolved decision-making. In particular managers need to address the issues that are of particular relevance to them and their people. This can be anything from dealing with interpersonal issues to customer relationships. The article goes on to say;

“To unlock a team’s abilities, a manager at any level must spend a significant amount of time on two activities: helping the team understand the company’s direction and its implications for team members and coaching for performance.”

This prompts the question, is the traditional top down business model fit for purpose in the 21st Century? To highlight this confusion between management and leadership, one particular criticism outlined by Mintzberg in another article is what he refers to as leading through information or “deeming” as he terms it. This is where leaders deem that certain targets need achieving, such as sales need to rise by 10% or we need to cut 15% of staff. By any definition this is not leadership and as such is unlikely to engage or motivate employess apart from through fear.

Dismantling the organisational pyramid is also the topic of a Strategy + Business article. Ostensibly discussing talent management, the theme is the same as Mintzberg’s argument and calls for a fundamental reassessment of how organisations engage with their employees. The article argues that the traditional career progression structured through an organisational pyramid structure is outdated and not fit for current and future demographics. Instead organisations need to take a more sophisticated and flexible approach to career development based on the individual.

The Intrinsic Motivation of Autonomy, Mastery and Purpose

Further evidence to support a radical reappraisal in the way organisations structure themselves is outlined by Dan Pink who delivered an entertaining TED talk, well worth the 20 minutes if you have the time. In it he discusses the failure of bonuses and incentives to improve performance. Contrary to popularly held beliefs in the corporate world at least, the basis of Pink’s talk is that traditional monetary incentives fail to boost performance in all but the most mundane or mechanical tasks. Citing a number of scientific sources, Pink states that the traditional reward structure used by organisations is not an effective means of motivation. Clearly this view undermines many of the assumptions that organisations implicitly make about motivation and performance. In getting rid of the traditional carrot and stick approach, Pink focuses on three areas of what he terms “intrinsic motivation” of autonomy, mastery and purpose.

In discussing the role of autonomy, Pink is another to go against the orthodoxy and directly criticise the traditional organisational pyramid which concentrates decision-making in the upper echelons. By removing self-direction, organisations are undermining the ability of employees to fully engage with their work. At the same time feelings of unfairness are likely to grow. Clearly, Pink is suggesting that organisations need a fundamental rethink in the way that they motivate their employees. As Pink repeatedly summarises;

“there’s a mismatch between what science knows and what business does.”

The Irrationality of Human Behaviour

As if that isn’t enough, we are continuing to see an increase in articles focusing on the “irrationality” of human behaviour. In a posting on the Harvard Business School site Jim Heskett kicks off a decent discussion about a recent HBR article by Dan Ariely. Again, this has significant implications for our approach to management theory and assumptions about human behaviour.

“Reactions to our efforts as managers reflect what each individual receives in relation to what he or she perceives and expects. Because this is highly subjective, the argument goes, generalizations (many of them currently taught in conventional courses) about how to manage are practically useless. Instead, managers should encourage employees to set their own goals, appraise their own achievements, and reach their own conclusions about how to improve. Managers should also spend more of their time inspiring (through stories) and devising engaging activities from which employees may, to some extent, choose.”

Are you starting to see a theme here yet?

Whilst there is no shortage of new ideas being put forward, within the HR specific press, the focus has been more inward and arguably more pessimistic over recent months.

Tomorrow’s HR Professionals – A Multi-Disciplinary Background

In particular, HR Magazine in the UK has run a series of articles that have a generally pessimistic view of the furture for HR. The debate seems to have moved on from the rallying cry for HR to be provided with a seat at the top table to a questioning of whether the function can actually make a strategic contribution. For example, David Woods cites a Logica survey with the headline figure claiming that 70% of HR Directors feel that they do not have sufficient information to avoid a widening skills gap. Given new technology and information available to HR professionals, is there any excuse for this?

Elsewhere , Maurice Duffy muses on the future of HR. In a strongly worded article, he articulates a potential future for HR where it is able to contribute significantly to organisational effectiveness. Unfortunately, Duffy is sceptical whether the majority of current HR practitioners are capable of delivering this vision. As Duffy states;

“My view is that HR is populated with too many self-seeking, blame-shifting blockers and manipulators who kill the enlightened view and restrict and choke organisational progression. You know them – the pen- pushing administrators and positioners, who tell the business what it cannot do, build processes and systems that inhibit or dilute any sensible simplicity that is a key requisite in the current world where change, speed and innovation are the new business imperatives.”

On a similar note, Rhonda Eckert has a blog post asking whether HR is in danger of becoming extinct? She echoes Murray in her assertion that tomorrow’s HR professionals are going to come from a multi-disciplinary background. Maybe not the end of HR but possibly signifying a shift in the experience or requirements for HR professionals.

Likewise, Jan Kingsley at ASPEL talks about the fragmentation of learning and its possible resolution, saying;

“L&D is becoming more specialised with people developing specific competencies and skills in discrete areas, for example, becoming specialists in coaching, facilitation or learning design. This is being driven in part by customer and client expectations, but also the use of technologies which makes the whole issue of learning much more complex. Navigating this maze of information and techniques and overcoming their inherent complexities will be a major factor in making L&D much more effective.”

While debates on the specific themes will no doubt continue, the possibilities for HR and leadership going forward are intriguing and imply a number of changes. While the recession has almost forced people to reflect on their organizations and practice, the seeds of the future may well be taking route already.

Summary for Q2 2009

Reading through this quarter’s articles, there were plenty of pieces rehashing practical tips on how to deal with the recession. However, there are a number of interesting ideas and themes lurking beneath the surface.

• Intangibles such as engagement, networking and collaboration are hot topics but managing these issues is easier said than done
• New technologies have the potential to revolutionise the way we understand organisational behaviour, although the appetite for this information is as yet unclear
• Line managers can play a pivotal role in developing engaged employees and this has implications for how organisations approach talent management
• Firms are waking up to the importance of engagement, in these recessionary times, once costs have been stripped out, the need to do more with less is paramount
• Knowledge is key to value creation but how we educate and train for working with this often intangible and unpredictable environment is unknown

Comments and feedback are of course welcome.

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Engagement in the Spotlight

Following from Richard Beatty’s withering comments on the lack of quantitative evidence to support investment in engagement back in January, engagement remains one of the hot topics for discussion amongst HR and OD professionals. Interestingly, articles and blog posts are increasingly blurring the lines between specific discussions on engagement and how this impacts the wider issue of talent management. The one thing that is clear however is that, despite Beatty’s comments, an acknowledgement that these issues are of paramount importance in the current economic climate remains. Yet, given their intangible nature, control and mastery of these areas remains elusive.

So where does this leave HR? Many commentators are signalling the recession as a great opportunity for HR to make its mark on the business and there is no denying that the current state of flux points to opportunities for the brave. On the other hand, there is considerable evidence for poor morale and low levels of engagement in HR departments.

Better Understanding of Organisational Behaviour

In previous editions of this update I have noted an increasing trend in the number of people focusing on the role technology is having on our understanding of the complexities and subtleties or organisational behaviour. This piece by Marina Gorbis succinctly summarises the direction which our understanding of organisational dynamics is evolving and the possible changes that it will bring. In it, she discusses a forthcoming book by Douglas Rushkoff.

Gorbis states that in viewing organisations as complex ecosystems, we can start to understand the influence of groups on individual behaviour. This may lead to a more relevant and holistic understanding of the way organisations function and perform. As Gorbis states,

“In fact, we are making the invisible visible through use of data.”

The practical implications being that this understanding enables organisations to be better informed, able to achieve strategic goals and able to align their people to long-term objectives or outcomes. Of course, this also implies that businesses and HR departments in particular are going to have to acquire new skills and understanding into organisational behaviour. As Gorbis states, organisations are going to be recruiting not just from business schools but from university departments such as anthropology, ecology or zoology.

Gorbis also notes the growing importance of “amplified individuals” a concept discussed in previous updates. These are key people who are in a position to influence and shape the behaviour of others and who derive their power not from their position in the organisational hierarchy but from their connections and informal networks, often bypassing traditional organisational structures.

Increasingly, new tools are being brought to market that facilitate the identification of these individuals and provides organisations information on not only the brightest and most able but also on the more intangible aspects of organisational behaviour.

Clearly this has implications for how organisations go about their talent management processes. More on  this later. Perhaps the most interesting aspect of this article, to me at least, is the discussion on engagement and how an appreciation of what engages on a neurological basis is slowly being revealed.

“So much of our organizational practices and processes, however, have been based on simplistic carrot-and-stick approaches. In the next decade, much greater understanding of the human brain and principles of engagement will make us rewrite many of our management books and manuals. Do not be surprised to find many more neuroscientists and game designers among the human resource professionals.”

On a similar theme, the changing nature of the organisation and the skills required to thrive is discussed in a talk by Daniel Pink. In particular, the role of change and how we as individuals are trained to deal with this raises some interesting new challenges.

Pink argues that the organisation of the future, in the developed world at least, will require employees capable of extended right-brain thinking. This requires “Artistry, empathy, inventiveness, big-picture thinking” rather than left-brain skills such as logical and analytical processes. The big question Pink raises is how to train or develop these skills through the education system and into the workplace? In Pink’s vision of the future, the routine and mundane will be outsourced and only things that can’t be automated will remain in developed economies.

Defining Engagement

Moving back to engagement, despite Professor Beatty’s comments in January, there is considerable consensus on role of engagement as key to organisational performance, however, the difficulty of clarifying what engagement actually is and how it is measured is an ongoing cause of debate. In a solid round-up of the engagement field here, the IES HR Network, describe engagement in the following terms;

“Engagement is consistently shown as something given by the employee which can benefit the organisation through commitment and dedication, advocacy, discretionary effort, using talents to the fullest and being supportive of the organisation’s goals and values. Engaged employees feel a sense of attachment towards their organisation, investing themselves not only in their role, but in the organisation as a whole.”

Perhaps the reason why engagement is such a hot topic right now relates to the underlying economy and how it is likely to affect morale and performance. Companies are struggling to cut costs and in many cases this necessitates having to do more with less. Clearly once all excess costs have been stripped out, doing more with less requires an engaged and committed workforce willing to go the extra mile. Generating this in a climate of job losses and economic uncertainty only makes engagement more elusive. Furthermore, in order to capitalise on any economic recovery when it comes, organisations will need to have an engaged and motivated workforce to make the most of improving conditions.

While there is consensus on the importance of engagement, how to measure it is another challenge entirely.  Employee engagement surveys are one area that has fallen under the spotlight recently, the IES HR report goes on to say;

“There are a variety of measures of engagement available. However, the lack of a clear definition of employee engagement and the differing requirements of each organisation means there is likely to be considerable variation in what is measured in these surveys.”

The IES report also raises another interesting topic, namely the role of personality in engagement, stating that extroverts are more likely to be engaged than introverts. On the face of it, I think that this is an over-simplification, however there may well be some correlation between positive attitudes to work and personality type.

Human Resources magazine debates, the value and the way engagement surveys are structured, with researcher Peter Hutton claiming that two of the most popular surveys in the UK, the Gallup Q12 and Best Companies lack statistical integrity. The search for an accurate way to measure engagement is likely to continue.

Line Managers in Engagement

A Towers Perrin survey points to the role of line managers in the engagement equation. Given the emphasis on organisational-wide initiatives and taking a big-picture view of engagement, this is a topic that has not had sufficient emphasis and accounts for the wide levels of variability in engagement throughout the organisation. The article argues that the key levers of engagement lie in the team or at the micro level. By being sincere and developing an environment of trust, managers are able to encourage increasingly engaged employees. In particular, the article states that recognising and praising in a sincere and informal manner can accelerate productivity and performance.

An article by Julie Gebauer of  Towers Perrin focuses on another requirement for engagement, namely the wholehearted support of senior leadership.  In the article she emphasises the need for selling the business case for investing in engagement, rather than “something ‘nice to do’ that only HR is championing.” Again, the problem here is that this is easier said than done. However, by focusing on business outcomes and how engagement can help align the organisational strategy, a compelling case can at least be made.

Evidence for increasing focus on the importance of engagement is growing, indeed in the UK, July will see the publication of a government review on the subject undertaken by David McLeod. In this People Management article, practitioners are calling for some practical advice and actions into improving engagement, whilst acknowledging that it is not what it could be at the moment. Given the intangible and unique nature of engagement in every organisation, it will be interesting to see how much influence government can have on this area.

The Ongoing Talent Management Debate

It’s impossible to view engagement in isolation without discussing the wider talent management perspective. Again, as with engagement, a standard definition is elusive, however the ASTD (American Society for Training & Development) came up with a catchy epithet.

“Talent management is a holistic approach to optimizing human capital, which enables an organization to drive short and long term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development and deployment processes that are aligned to business goals.”

This article also raises one of the key contradictions or inconsistencies in traditional talent management practice, namely by focusing on key high potential employees or senior managers, talent management becomes a self-fulfilling prophecy that also runs the risk of being perceived as elitist. By focusing investment on the gifted few, their success and advancement through the organisation is all but guaranteed. There is also the danger that these “stars” will be enticed away to other organisations and the investment in their development is only ever partially realised.

One organisation appearing to have some success with a broader approach to talent management is financial services company Aviva. In a short piece, by taking an approach that benefits everyone “has so far led to 45 per cent of employees that had previously been identified as “languishing” moving into new roles and “thriving”.

Taking a broader approach and focusing on the many may make more sense in terms of networks, collaboration, productivity and succession. Whether there is any appetite for this inevitably more expensive approach is questionable.

Talent Management in the Current Climate

An interesting series of three articles (first one here) from Deloitte seek to examine the evolving attitude to talent management in the current climate. In particular, the diverging pressure to cut costs whilst continuing to invest in people.  This is a timely series of reports and throws into sharp relief the tricky if not impossible balancing act of minimising costs in the short-term and effective workforce planning. Without a systematic means of quantifying the benefits of a strong commitment to talent management, it is always likely to fall down the agenda.

This is evidenced in the second Deloitte report that also highlights the decision of many organisations to focus their talent management efforts on the few.  The figures quoted show that 37% of those polled expect to increase focus on high potential employees. While increased investment in this area is to be welcomed, this information plus the assertion that despite the increased availability of advance analytical tools, organisations are not making use of these services leads to the view that companies, at least at the moment, are not becoming more sophisticated in their identification and development of talent.

The second Deloitte report also highlights dwindling morale in many organisations over the first few months of this year, again a sign that employees are becoming less engaged at the exact time that organisations need them to increase their levels of engagement.

Interestingly, these issues are at odds with Deloitte’s own research last year under the catchy title The Chemistry of Talent. The report focused on the need for companies to develop their own bespoke talent management solutions and in particular use technology to develop more flexible and sophisticated career planning techniques. One year on, there seems to be little evidence of this investment from Deloitte’s own research having an impact and given the worsening economic conditions, this situation is unlikely to change.

Leadership

Moving on to leadership, there have been a couple of interesting articles that have brought together some of underlying themes above and how they are likely to impact the top of the organisation. A slideshow from Mary Adams at Intellectual Capital Advisors echoes many of the same concerns in the Pink article above. Principally, that intellectual capital or knowledge is the foundation of the organisation and should be the focus of value creation. The challenge facing leaders as she puts it is;

“…most managers don’t have explicit models for the role of knowledge in their business. They know it’s there. They know what to do with it. But they are dealing with it all on a gut level. But you don’t want to rely exclusively on your gut to manage your business.”

A further article focusing on leadership also draws parallels with the Pink article. On the Leadership Now blog, Michael McKinney revisits the age old distinction between leadership and management. In this piece, he brings back the distinctions between the two areas by referencing Bennis’ 12 distinguishing points in his 1989 book On Becoming a Leader.

The behaviours that Pink describes as right brained thinking are quite clearly analogous to what Bennis describes as typical management skills. Whereas Pink’s reference to left brain thinking are much more closely aligned to Bennis’ description of leadership. McKinney further echoes Pink by emphasising how the current educational system is geared towards management rather than leadership.

In his piece, McKinney argues that in order to be successful, both disciplines are necessary within the organisation but points out that most businesses are currently geared towards excessive emphasis on management rather than leadership.

“Management is based on the response to the questions we had yesterday. Today, some of those responses are still valid, many are not. Leadership is needed to address the questions of today and bring us to a different place. This is especially true in times of great change.”

As we have already seen, real engagement takes place at the level of small teams. By displaying typical management behaviour, it can be argued that line managers are simply going through the motions and neglecting significant opportunities to challenge not only themselves but also their people. The question that arises is how can organisations better equip line managers to develop these behaviours? And will this go some way to improving engagement?

The HR Conundrum

Where does the HR profession stand in all of this? Quite clearly, it should be front and centre. All these issues, whether dressed up as engagement, talent management or leadership all call for bold and imaginative HR-centric solutions. As if to emphasise this, support from an unlikely source comes from Benjamin Zander, conductor of the Boston Philharmonic Orchestra. Harking back to engagement, Zander claims that HR is responsible for the “spirit” of the organisation but that it is occasionally “downtrodden”.

I think Zander hits the nail on the head with one of the key issues facing HR at the moment. Namely that HR is in theory well positioned to have a significant impact on nailing down these crucial yet intangible problems. However, the big question is whether there is enough confidence, credibility, vision and technology to pull this off. On the face of things, morale in HR departments is not good. In this HR Magazine article, the results of a Baddenoch & Clark survey claims that only 57% of HR employees feel valued. Without reading too much into these results, the obvious question is how is HR going to engage the rest of the organisation when feeling demotivated or not valued?

To further emphasise the perceptions that need to be overcome, a HR Magazine article, cites a survey by Endaba, which claims more than a quarter of employees do not trust the HR department.

Furthermore, a Taleo report, cites a McKinsey survey which asked both HR and line managers “”Does HR lack the capabilities to develop talent strategies aligned with business objectives?” Only one-quarter of the HR participants agreed with this statement, while the majority (58%) of line managers agreed.”

Clearly, these attitudes do not exist in every organisation but where they do, they will not change overnight. However, if HR can gain confidence and trust, there is an opportunity to drive a new agenda. This is the argument made by Duncan Brown at the Institute of Employment Studies. In this wide-ranging piece, he puts forward the argument that recent events are leading to an underlying shift in the way in which rewards are distributed. Focusing on fairness and the perception of fairness as a way of improving organisational performance, Brown also weighs into the engagement debate.

“Professor David Guest’s research shows that perceived fairness and reciprocity, alongside of trust, are at the core of a positive, engaging and high performance generating psychological contract in the workplace.”

HR needs to be in a position to deliver the strategy but also ensure that conditions are conducive to line managers generating enthusiasm or engagement. HR’s responsibility is to track and measure strategy but most importantly, ensure that managers have the capabilities to execute the strategy and engage others, ensuring that people are actively working towards team and organisational goals.

The Last Word

A quick word on M&A, in particular the announcement of the merger as equals of Towers Perrin and Watson Wyatt. Two of the largest consulting firms in the HR sphere. Given the circumstances underpinning the merger, namely challenging market conditions, it will be very interesting to see how these two masters of integration manage the process!

Welcome to the second quarterly roundup of the latest thinking and developments around leadership, HR, innovation, talent management and organisational development. I have tried to pick out the most interesting or thought provoking of the high volume of articles, surveys, blogs and webcasts. In this issue, articles and examples have been included from the likes of Capital One, CFO.com, Cisco, McKinsey, Microsoft, Harvard Business School and Towers Perrin.

Summary for Q1 2009

Unsurprisingly, the financial crisis is still uppermost in people’s minds and new ideas and insights are slowly emerging, interestingly not always from organisations which one would term the “HR establishment”. Over and above this, other themes for this quarter include;

• Leadership development is going nowhere fast
• HR’s relevance to an organisation’s success
• HR acting more like a teenager, or not
• Command and control, enterprise 2.0 and amplified workers
• Successful recruitment via a self directing process
• A lack of creativity and death by data
• The big picture HR role
• Innovation, change and new ideas

As always any comments and feedback are welcome!

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Leadership development is going nowhere fast

It has not been hard over the past few weeks to pick out the negative or critical of the HR function, especially when it comes to leadership development. The 2008/9 DDI Global Leadership Forecast (pdf), which surveyed over 13,000 HR professionals and business leaders throughout the world, found that “leadership development is going nowhere fast.” This is compounded by further observations that include decreasing confidence in senior leaders who lack basic skills. The survey also finds that organisations are poor at leadership selection, have ineffective talent identification programmes and poor succession planning.

A further alarming tendency highlighted in this survey is that HR and managers are locked in a spiralling circle of blame as each blame the other for failures in leadership development. Where development programmes do exist there is a lack of effective measurement of their impact.

This focus on quantifying the HR impact is a common theme these days, however the difficulty in linking or measuring the impact of strategy on performance is highlighted by Kim Warren, who hits the nail on the head by stating that this will not be possible until the influence of intangibles on performance is fully understood.

HR’s relevance to an organisation’s success

Things don’t get a whole lot better for HR practitioners in an article on cfo.com. In a talk given to a conference of financial executives by Professor Richard Beatty of Rutgers University, he lambasts the HR profession for failing to prove the value of employee engagement and also accuses it of not being able to systematically recruit and retain top performers.

“…he (Beatty) claimed that typical human resources activities have no relevance to an organization’s success. “HR people try to perpetuate the idea that job satisfaction is critical,” Beatty said. “But there is no evidence that engaging employees impacts financial returns.”

In summary, Beatty argues that HR’s focus on employee engagement is misplaced and instead of seeking to engage the workforce, more time should be spent on activities which show a tangible and measurable return on investment. In this instance, Beatty urges HR to focus on cultivating and retaining top performers through more effective selection.

Given his audience, Beatty’s talk is likely magnify the schism between HR and management in many organisations and the comment “the language of organizations is numbers, HR isn’t very good at data analytics” is likely to resonate and frustrate in equal measure. In many ways, Beatty echoes Keith Hammond’s controversial 2007 piece, which undermines the notion of “strategic HR” and the impact of the traditional HR function;

“HR is the corporate function with the greatest potential – the key driver, in theory, of business performance – and also the one that most consistently underdelivers.”

Unsurprisingly, these comments have not gone down well in the HR community. Notable respondents include Dennis Howlett and Kris Dunn who have both made considered responses to Prof. Beatty’s comments. Both state that although not agreeing with many of Beatty’s arguments, he does make a compelling case for a change in the focus or the way HR communicates with the business. Engagement is a much discussed topic and in the current climate is something many HR professionals are looking to prioritise. A recent survey by TalentDrain provides some evidence for the shifting priorities of HR departments. It is hard to argue that enthusiastic and committed employees are any less productive than the idle or disengaged, the key however is to be able to quantify this effect.

The practical difficulties of identifying future leaders is discussed in an interesting piece from James Heskett who casts doubt on the possibility of systematically selecting future leaders. In the article, he quotes Capital One’s CEO, Richard Fairbank, who said several years ago, “At most companies, people spend 2 percent of their time recruiting and 75 percent managing their recruiting mistakes.” At the end of the article, he leaves us with the following questions;

• “Are there leadership jobs in business for which it is simply impossible to select people with any degree of confidence?
• Do behaviors change when one is anointed with the power of a leadership position?
• Are we condemned to an on-the-job training approach, with the attendant obligation to correct mistakes quickly (which boards understandably are reluctant to do)?
• Or are there more affordable approaches to the problem?”

Further evidence of this “crisis of leadership” is in a blog post by Steven Smith who quotes a Rutgers and University of Connecticut poll, which found “58% of workers believe most top executives put their own self-interest ahead of the company’s, while 67% don’t believe their bosses have the team’s best interests at heart.” If your employees believe that you are acting in self-interest, it is hardly likely that they will put the organisation’s interests above their own.

HR acting more like a teenager, or not

The apparent failure of many in HR to fully appreciate the opportunity to rethink the HR role in light of the current crisis is illustrated by recent comments from Jackie Orme, CEO of the CIPD in the UK, where she states that “the profession is still in its teenage years and has some way to go.” In my view this exactly sums up the problems facing HR, if only HR acted more and not less like a teenager, then maybe they would have greater influence or impact on organisational development and strategy? For example if HR was more disruptive, idealistic, technology-focused, pushy and wilful then maybe things would be different.

So if the framework for the HR response to recent events is not coming from the establishment, where are the new ideas coming from? Unsurprisingly, these key issues are being addressed by the wider community. This quarter there have been some articles which focus on HR relevant areas such as recruitment, change, retention, innovation and talent management as a way to redefine the way organisations function.

Command and control, enterprise 2.0 and amplified workers

There seems to be a growing consensus that executives need to get used to less control and adjust their outlook accordingly. In a blog post Jon Husband writes about a talk given by Cisco CEO John Chambers who stresses how organisations are increasingly being built on virtual terms, technology means that collaboration is likely to increase while day to day contact decreases. In a further discussion around the role of Enterprise 2.0, these sentiments are also echoed by Léo Apotheker, co-CEO and a member of the Executive Board of SAP and Andrew Mcafee of the Technology and Operations Management Unit at Harvard Business School.

The growing importance of social networking is well documented, however this article at Deloitte raises some interesting questions on how this may impact on future leadership selection. In the article, the authors focus on the need for organisations to embrace new social media technologies and communication methods. Of particular note is the assertion that networks are being formed without the knowledge of management. In a section headed, the rise of the workplace “superheroes”. The article quotes research from The Institute of the Future in Palo Alto which forecasts that successful organizations will turn to “amplified workers” who are able to harness the latest technology and combine it with an ability to communicate and collaborate across a wide variety of platforms.

This raises a number of direct challenges to HR, firstly the requirement to fully embrace new technology and in particular social media and all the control issues that go with it and secondly to come up with ways to identify and engage with these “amplified workers”. In order to gain the maximum benefit from these workers, it is possible that organisations will have to remove layers of bureaucracy or bypass systems which have been used to maintain structure and control.

Similar sentiments are echoed by Keith Harrison-Broninski who in talking about Human Interaction Management (HIM) encourages every level of management to focus on and do what it does best. To enable this however is going to necessitate less top down control and a relinquishing of certain aspects of oversight by senior management. This is also something that encouraging the increased use of social media will also require as it will be impossible for managers to control or even be aware of the growing number of social networks and interaction. Coming back to the teenager analogy, the failure of HR to embrace new technology or Web 2.0 is also acknowledged in a report by the CIPD.

Successful recruitment via a self directing process

This moves things on nicely to recruitment, another bugbear for Beatty. I recently watched a talk given by Ricardo Semler of Semco at MIT Sloan, who has successfully implemented a number of interesting initiatives which have marked his organisation out as a beacon of innovation and forward-thinking. This is an inspiring talk and although it took place last year, I didn’t pick up on it until January and felt compelled to include it in this quarter’s material. In fact Semler goes as far as anyone has yet to articulate a new way of running organisations and I suggest anyone with 30 minutes to spend has a watch. One of the ideas which particularly struck a chord, particularly in light of Beatty’s comments above is Semco’s approach to recruitment;

“The [typical] process of recruitment and selection in a company is basically an internet dating process. You say your company is Brad Pitt and she says she’s Angelina Jolie and you go and meet at a bar…You get together for two quick meetings and then you decide to get married and hope it works…

[Instead of that,] we take qualified candidates, the ten that fit the bill, and ask them to come in together. Then we have whoever wants to be involved interview these people. This will go for hours. Then [the interviewers] write down the two people who they want to keep. The two who score highest come back and spend the whole day here and talk to anyone they want…The result is less than 2% year turnover.”

This figure I’m sure would make Prof. Beatty’s blood boil but from where I am sitting it looks pretty impressive.

Having looked at Ricardo Semler’s entry on Wikipedia, his story is quite remarkable, becoming CEO of Semco at 21 following arguments with his father and threats to quit the company over its future direction. He embarked on a radical diversification programme which included firing 60% of the senior managers on his first day in charge. Clearly a man unafraid to challenge conventional wisdom and willing to accept the failure of some ideas, turnover has grown from $4 million to $212 million in 2003. One question that pops into my mind is, would Semler have been as successful or even have been identified as a potential leader if he had a more conventional business background? Or would his ideas and radical views have been squeezed out of him by a combination of office politics, poor talent management and a lack of leadership development? How many Ricardo Semlers are there out there who never get the opportunity to put their ideas into practice?

One of the reasons that I believe this process has worked for Semco is that because the company has such a clearly defined culture and set of values, this recruitment by committee essentially acts as a filter which ensures that only the candidates likely to fit in or align with the companies values get recruited. Understanding the skills and experience of each candidate is something HR has got down pretty well. The next stage is to understand the intangible impact of each hiring decision, issues such as relationships, culture and values are key issues but are often overlooked or pegged as ‘gut-feel’ when decisions are made. The Semco model goes a long way to overcome this. Also worth noting is the seemingly minimal impact of the HR function on this process.

A lack of creativity and death by data

In contrast, a recent profile of Google’s vice president of search products and user experience, Marissa Mayer in the New York Times recounts the following anecdote; “At a recent personnel meeting, she homes in on grade-point averages and SAT scores to narrow a list of candidates, many having graduated from Ivy League schools, whom she wanted to meet as part of a program to foster in-house talent. In essence, math is used to solve a human problem: How do you predict whether an employee has the potential for success?”

“A scrum of executives sit around a table, laptops in front of them, as they sort through résumés, college transcripts and quarterly reviews. The conversation is unemotional, at times a little brutal.”

“One candidate got a C in macroeconomics. “That’s troubling to me,” Ms. Mayer says. “Good students are good at all things.”

I was a little taken aback by this comment, perhaps naively it is something I would expect at a Wall Street investment bank (pre crash obviously) and not Google, with its reputation for creativity, innovation and developer of unconventional and leftfield ideas. I must admit that I had put this article to the back of my mind. That was until I saw this blog post from Google’s now ex-head of design Douglas Bowman.

“When a company is filled with engineers, it turns to engineering to solve problems. Reduce each decision to a simple logic problem. Remove all subjectivity and just look at the data. Data in your favor? Ok, launch it. Data shows negative effects? Back to the drawing board. And that data eventually becomes a crutch for every decision, paralyzing the company and preventing it from making any daring design decisions.”

“Yes, it’s true that a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see which one performs better. I had a recent debate over whether a border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that. I’ve grown tired of debating such minuscule design decisions. There are more exciting design problems in this world to tackle.”

This is very interesting and something at odds with the carefully cultivated public image of Google which suggests a far more intuitive and creative approach to new product development and design.

This begs the question, how does Google or any other organisation cultivate the creative or leftfield individuals who thrive in conditions of change or uncertainty such as we are experiencing at the moment? In other organisations the research suggests that large companies struggle to accommodate or reward these people. In a Strategy + Business article, the authors suggest that successful change agents are often ignored or fail to gain the recognition their efforts deserve. “Although 85 percent of the major change initiatives we studied met or exceeded the performance goals set for them at the start, fewer than 30 percent of the initiatives’ full-time leaders were promoted – and the same percentage were terminated or left their companies voluntarily at the conclusion of the change effort. The remaining 40 percent either remained in their positions or moved laterally in their organizations.”

A similar issue is raised by George Ambler in his blog, in this case he refers to the “mavericks” in every organisation who often find themselves marginalised, he quotes Hans Hans Finzel, in The Top Ten Mistakes Leaders Make; “‘Have we made it impossible for bright rising stars and maverick go-getters to live within our organisation?’ When we become too preoccupied with policy, procedure, and the fine-tuning of conformity to organizational standards, in effect, we have squeezed out some of our most gifted people.” Ambler goes on to conclude that;

“Mavericks are essential in every organisation. Giving them the encouragement and space to contribute makes all the difference. Mavericks matter… because they bring us the future.”

Given the current economic conditions this is a pressing issue which organisations, even ones such as the mighty Google may need to address.

Arguably, these are the people who will help prepare organisations for “The New Normal” which is tentatively explored in a McKinsey essay by Ian Davis. He claims that;

“For talented contrarians and technologists, the next few years may prove especially fruitful as investors looking for high-risk, high-reward opportunities shift their attention from financial engineering to genetic engineering, software, and clean energy.”

The big picture HR role

No doubt the current economic crisis places a number of organisational issues central to HR at the heart of the debate. In short, given their view of the organisation, HR practitioners are in theory well placed to help navigate a way out of the current mess. However, the question of whether existing HR executives are equipped or able to lead this discussion is one which has been posed by Donna Bear and also in a podcast. She points to examples of high profile companies, in this case Microsoft and LinkedIn who have both appointed HR executives with zero HR experience. The leadership vs technical skills debate is not a new one, however in this instance I think that it heralds a further dislocation between the HR process and systems role and what one could call the “big-picture” HR role. Bear quotes LinkedIn CEO Dan Nye;

“…when it comes to people, I always put a premium on people who are incredibly bright, who demonstrate strong leadership skills, and where they have strong critical thinking skills and really strong communication skills. I will always put a premium on that over functional experience.”

In order to step up, HR executives may have to put aside their previous procedural experience and demonstrate an ability to communicate and connect with their audience on a level that goes beyond the standard HR systems and processes. A grasp of organisational values and understanding of the role of culture and collaboration will mark out those with the ability to set the people agenda.

Perhaps because both companies recognise the pivotal role that HR is going to play in the future, they have hired these people who they believe are going to raise the profile and influence of the function. Not damning of HR in itself but recognition of the strategic importance of the role.

Innovation, change and new ideas

There has been a lot written about innovation and the role that it could probably play, as we have already seen many, particularly large organisations struggle to identify and accommodate those most likely to instigate change and new ideas. Given that this is often a barrier to innovation, a recent McKinsey article Amar Bhidé takes a look at the role or value of innovation to organisations and the wider economy and gives it a good shake. In summary he claims that it is not important where or by whom innovation takes place but who commercialises it. The role of licensing has always played an important part in the development of new products, however, encouraging organisations to essentially outsource their innovation is something which opens up a number of possibilities.

Licensing new technology or ideas is something which could potentially be of considerable organisational and national benefit. Licensing a new technology could potentially save companies considerable time and money that would normally be spent in acquiring a competitor or innovative start-up. As we have seen already, large organisations often struggle to accommodate the innovative or disruptive and by keeping this relationship at arms length rather than trying to combine two very different cultures may be an idea worth exploring.

Recent years have seen many organisations taking a more sophisticated approach to acquisitions, taking into account intangible issues such as culture in the integration process. However, given the recent financial crisis it seems as though these lessons are being forgotten. A Towers Perrin article, points to research which suggests that acquisitions are being increasingly rushed through. Clearly this is a case of short-term expediency taking precedent over long term considerations, with many of the issues likely to affect the success of the transaction glossed over.

Finally, I thought that I would highlight an interesting talk given by Umair Haque of Havas Media Lab. Here Haque talks about the need to reinvent capitalism, stating that competition is obsolete and that it fundamentally destroys value. He calls for a radical rethink in the values and motivation of organisations. Whilst I don’t necessarily agree with everything he has to say, people like Haque are likely to increasingly influence the focus of organisational development.

We discussed the idea that people-based issues can be managed in a systematic and structured manner, something that Bruce is firmly in support of. 4G represents a proprietary approach developed by his company to understand and predict intangible aspects of people’s personality, interaction and values. However, our conversation was not so much about 4G itself but about taking a holistic approach and the how’s and why’s of it.

The full piece can be found here and our thanks go out to Rowena Morais and Isabella Chan for bearing with us!

The introduction is below.

Is 2009 the year the HR function finally enters its ascendancy as organizations place greater emphasis on talent management and putting strategic HR activities at the heart of the business? Or is HR destined to remain a transaction-based cost center as leaders still struggle to rise to the challenge?

If you’d like to read the full version, it can be found here.

I recently commented on the Nature editorial that made a case for “the responsible use of cognitive-enhancing drugs by the healthy.”

The writers of the editorial, a distinguished group of academics, had noted that artificial “cognition enhancement” could boost the performance and productivity of many workers: “From assembly line workers to surgeons, many different kinds of employee may benefit from enhancement and want access to it.”

In a posting today, the law professor Frank Pasquale takes the next logical step, offering a modest proposal for also allowing the use of “cognition-dulling drugs” by the healthy.

It brings a whole new meaning to work-life balance!

(at least according to Seth Godin)

Here’s the full piece…

Is everything okay? Unless you work in a nuclear power plant, the answer is certainly no (and if you work there, I hope the answer is yes.) No, everything is not okay. Not in a growing organization. Not if your company is making change happen, or dealing with customers. How could it be? And yet, that’s what so many managers focus on. How to make everything okay. We spend so much time smoothing things out, we lose the opportunity for change, or for texture or creativity. Instead of working so hard to make everything okay, perhaps it is more helpful to work hard at living with a world that rarely is.

Reading it again, do we really want things to be just ‘ok’ or do we need to revisit the mission statments again?

I think it was Henry Ford or was it Barack Obama who said;

Being OK is what makes America great

Can anyone remind me please?

Welcome to the first issue of the Four Groups Leadership, Intangibles and Talent review. The purpose is to try to distil and comment on some of the more interesting and articles shaping the field. That said, the subject matter is not strictly defined but takes into account wider economic issues, particularly given the challenging climate. In this issue, articles have been included from the likes of Deloitte, IBM, McKinsey, The Hay Group and Towers Perrin.

There is no set criteria for inclusion, just that an article, survey or blog entry should be thought provoking, challenging or state more than the obvious. Comments and feedback are of course welcome

Summary – Q4 2008

Unsurprisingly, many articles are focusing on what it will take to emerge from the current downturn in a position of strength. As such the main themes focus on;

• Is creativity and intelligence being filtered out of the system?
• The need to let go of many of HR’s traditional functions
• The need for senior level sponsorship
• The psychological change agenda
• Managing talent
• Ethics and employee branding

There seems to be considerable agreement that the organisations likely to manage and emerge from the downturn in the strongest position are ones which are; flexible, promote clear and consistent communication, are innovative and exhibit consistency between their internal and external behaviour. The theme tying all these attributes together is developing the ability to manage the intangibles of organisational behaviour, such as; social networks, collaboration, innovation and change.

Tag Cloud

Is creativity and intelligence being filtered out of the system?

Obviously the economic downturn is the hot topic. However, the article which really caught the attention, on the face of it, has nothing to do with the current economic situation. Bruce Charlton blogs about a book he is currently writing. Focusing on structural deficiencies holding back the pace of scientific progress, Charlton argues that the way the scientific process is organised is best suited to ‘plodders’ rather than the ‘creative’ but sometimes ‘erratic’ thinkers who may be capable of genuinely revolutionary insight. Charlton points to the fact that success in modern science is often down to an ability to navigate the bureaucracy of academia as much as scientific ability and this has a serious impact on the pace and levels of innovation. Indeed, this leads Charlton to argue that creativity and intelligence are being filtered out of the system.

“We can only conclude that science is dull mainly because its requirements for long term plodding, perseverance and social inoffensiveness have the effect of ruthlessly weeding out too many smart and interesting people.” Charlton, Why are Scientists so Dull?

This is all good stuff and got me wondering whether a similar dynamic is impacting the ability of organisations outside of the scientific community to encourage innovation and manage change? In particular do large organisations actively promote people to senior positions who are likely to struggle with the twin challenges of innovation and radical change? As will be shown below, the consensus is that change is the new normal and companies are going to have to exhibit an agility and flexibility that has historically been difficult to implement. Maybe one of the reasons for this inability is the presence of senior managers who are fundamentally unsuited to work in this type of environment?

The need to let go of many of HR’s traditional functions

Elsewhere, a number of broad themes are emerging. Many articles have sought to put a positive spin on recent economic events and articulate a number of opportunities which could potentially reshape the role of the HR function. One of the most comprehensive surveys (opens as a pdf) this quarter is the Towers Perrin, People, Change and Performance: Emerging Issues in HR Service, Delivery and Technology. This survey covers a wide range of HR issues, one of which concerns how the HR function could develop over the medium term. The report draws attention to a number of evolutionary issues which may shed light on the perennial conundrum of how HR can play a more strategic role in the organisation. For instance, the report provides evidence that the focus on HR technology is moving away from the process or delivery side and is more focused on managing talent and performance through systems. In effect, HR practitioners are no longer slaves to automation and time saving technology, but are instead are placing more focus on the systems and technology which can deliver on a strategic level. This is welcome news and potentially marks a key transition in HR being able to develop a more sophisticated and valuable dialogue within the organisation.

Before this can happen however, the Towers Perrin report argues that HR practitioners will need to let go of many of the traditional HR functions;

“HR must relinquish some control over mundane administrative processes and grow comfortable with line managers and others playing a more active role in decision making. Second, HR must learn to do more with the technology that it already has — making it more effective and more integrated across disparate HR processes or technology platforms. Finally, success requires a well-planned and well executed change management process. Unless these three key areas are adequately addressed, HR will continue to struggle to find the time — and the invitation — to make a more strategic contribution.” Towers Perrin, People, Change and Performance: Emerging Issues in HR Service, Delivery and Technology

The need for senior level sponsorship

This perspective is reinforced by an interesting interview in the McKinsey Quarterly with Beth Axelrod, head of HR at Ebay. In this interview, Ms. Axelrod discusses the difficulties that companies have in hiring and retaining women, strategies she has seen succeed, and her view of how HR can become a strategic partner with businesses.

Ostensibly the interview focuses on the difficulties companies have in hiring and developing women in the workplace. As a McKinsey alumnus and co-author of “The War for Talent” Axelrod unsurprisingly takes an analytical and research-based approach to the problem and urges organisations to focus on getting the basics right before anything else.

However, the most salient points focus on Axelrod’s assertion of the need for senior level sponsorship and support for HR initiatives, a universal theme in whatever you are hoping to achieve. Without this key component, HR is not going to be able to leverage any of its specific knowledge, insight or view of the organisation. There is no doubt that the level of senior level sponsorship and communication determine the success of any corporate initiative, the challenge in these tough times is for HR practitioners to ensure that their colleagues prioritise these issues highly enough.

Relationships are paramount to creating a connection between people and the organisation and Axelrod notes the importance of informal networks within the organisation in encouraging the development and success of individuals. The development of social networking is another theme emerging from recent articles which is seen as a key tool for leveraging expertise and collaboration throughout the organisation.

Dovetailing nicely with this theme, over at Deloitte there is an interesting discussion about the relevance and commitment of executives to the “our people are our greatest asset” mantra. The discussion succinctly highlights the additional challenges to living up to this statement which current economic circumstances present.

The psychological change agenda

The speed with which the unravelling of the global economy has taken placed seems to have focused minds on what I would loosely refer to as the new change agenda. In the current climate, change is not something which can be thought of as taking place on a periodic basis. In the future and in order to maximise flexibility and innovation, change is something which will be a constant and to achieve this organisations will have to engineer a considerable shift in workforce attitudes and perceptions.

Across the board there is acknowledgement that managing change is as much a psychological challenge as it is a procedural or systemic one. Focusing on behaviours and reaction to change is a key issue. This is likely to become more important over time as market conditions require companies need to constantly evolve. This is echoed by a couple of reports from IBM. In the first, the executives surveyed said that in the future successful companies will be “hungry for change and disruptive by nature”. Once again, the need for innovation and enabling greater collaboration across the organisation is widely acknowledged as a key component in the ability of organisations to successfully deliver strategic goals.

The second IBM survey focuses on what they describe as “The Change Gap”. This is the discrepancy between the CEOs expecting substantial change, a number increasing dramatically and the apparent effectiveness or outcome of change programmes, a number staying roughly the same. The report also discusses the relatively low level of success in change projects;

“What accounts for these vastly different rates of project success? We found in our detailed analysis of study results that achieving project success does not hinge primarily on technology – instead, success depends largely on people…..

Change challenges: The soft stuff is hard

The main obstacles identified were:

Changing mindsets and attitudes (58 percent)
Corporate culture (49 percent)
Underestimating project complexity (35 percent).” IBM, Making Change Work

Furthermore, the report goes on to echo the view that “change is the new normal.” As part of this assertion, people are going to have to get used to less hierarchy, control and supervision. Dealing with this is going to present considerable challenges, particularly when it comes to communicating information across complex organisational structures and geographies.

Managing talent

Another key aspect of managing in the downturn is likely to be the approach taken to talent management. The Hay Group published an interesting take on this particular issue . Advocating an approach based on the US Mutual Fund industry, the report highlights the danger of placing all your eggs in one basket rather than a more balanced broader brush approach.

Meanwhile a Towers Perrin report (opens as a pdf) on managing in the downturn advocates a three-pronged approach to managing talent.

• Effective senior management
• Taking a targeted and consistent approach to dealing with cost and risk issues
• Keeping employees focused and engaged

The report argues that organisations should see the downturn as an opportunity to focus on their most profitable activities and develop a consistent internal and external culture. All good advice but considerably easier said than done.

On a wider level and slipping somewhat under the radar is the Government sponsored DIUS report into developing our brains from cradle to grave. A wide-ranging report, it focuses on three key areas; learning in the early years, wellbeing at work and an ageing population. Of particular interest in the wellbeing at work, the report identifies absenteeism and presenteeism as particularly pressing problems in the workplace.

Ethics and employee branding

Another area which can potentially help organisations manage the downturn is employer branding and organisational identity. The argument goes; the companies whose values are either inconsistent or lacking clarity are going to struggle to effectively manage, communicate and engage with their people. Particularly when one takes into account the earlier assertion that in the future there is going to be less hierarchy and direct supervision. The first step in ensuring that information is understood across the board is to ensure that everyone is clear and understands the organisation’s key values and direction.

A good example of how an employer brand is likely to develop is the future role of CSR, most commentators agree that this is something which is likely to gain in importance and it is down to organisations to show employees that their words are backed up by their deeds. The role of ethics within the organisation over the coming years is discussed in a Deloitte webcast (registration required) . There is the suggestion that this is another key lever in the search for employee and customer engagement. This is an interesting area and again a key intangible, how best to measure the ethical climate of an organisation? Something that is likely to require considerable senior level commitment. The discussion advocates that now is a good time to put this theory into practice. Naturally there is a questioning of whether managers have the desire to engage in this subject at the moment. There are also some good tips on how to overcome resistance and apathy.

Finally, how important is innovation going to be during the downturn? Innovation is another of those key intangibles which are naturally difficult to measure and quantify. A McKinsey report gives it a go. The headline figures suggest that organisations which take a balanced portfolio approach to innovation are more likely to achieve high performance. There is also correlation between the number of metrics used to measure innovation and successful outcomes. Will companies spend the time and effort to pursue this?

Conclusion

The clear message from these articles is that HR is potentially in a very strong position to play a key role in developing the way organisations operate and how they will emerge from current economic difficulties. A focus on the intangibles such as relationships, networks, culture and change is also likely key for long term success. The big caveat however is the level of sponsorship and support that is available from senior management. At times like this, it is easy to see how issues not specifically tied to the bottom line may well be given short shrift.

Thanks to Coby, a video with some interesting reflections on economic circumstances from 2006 and 2007 … sweet for Peter Schiff, sour for everyone else?

Outliers focuses more on the social and cultural context of individuals to explain their extraordinary success… Gladwell explains how success in the 21st century is less about sheer intelligence and more about collaboration and hard work

We’re always in favour of collaboration, although concerning Gladwell, the BPS blog linked to a wonderful interview with Gladwell and Katie Couric in which Couric asks Gladwell if he is stating the obvious. Gladwell’s reaction before answering is well worth the three minutes and preceding advert!

However you perceive Gladwell, it is wonderful to watch someone who has been so closely entwined with the zeitgeist for so long.