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!

Tag Cloud

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.

Values go beyond ‘what you can get away with’ and that values are, in the end, critical to value – to sustainable value, that is

Green goes on to say;

“For companies, where does the responsibility for this begin? With their boards, of course. It is their job to promote a culture of ethical business throughout their organisation. It is true for banks at this time, but also true for all our businesses at all times.” Most of his industry colleagues wanted to do this and to be able to look at themselves in the mirror and know they were doing the right thing, he added.

Evidently, very relevant advice, if perhaps acknowledging that the horse has already bolted. That said, such sentiments go a long way to endorsing the opportunity and recognising the potential value that comes from successful leadership development.

Quotes via People Management

• Self Awareness
• Relationships
• Systems
• Culture

I spoke a bit more about our own, Wilber inspired perspective on the topic. If you fancy a listen, the podcast is here.