TrendWatchers

The Evolution of Diversity: From 'The Right Thing' to Business Strategy

Fri, 06 Nov 2009 17:12:00 GMT

We love it when our interviews and our hard data support each other, and that's just what happened in our recent major study on diversity. If you haven't read it, I recommend my colleague Mary Ann Downey's TrendWatcher from early October, where she writes about the interviews she has done with various diversity practitioners.

Now the hard numbers are out, and they reinforce Downey's contention that diversity is evolving into a bottom-line business issue. Although we're still analyzing results, the initial data shows some fascinating trends.

Take, for instance, information about the business case for having a diverse workforce. Companies at all performance levels seem to agree that diversity is integral to their business strategy. But high-performing organizations are more likely to say diversity is also a way to "reflect customer base/community demographics" (26%) than are mid-range (12%) and lower performers (10%). And, in a kind of mirror image, high performers (6%) are less likely than mid-range (13%) and lower performers (18%) to say they concentrate on diversity because "it's the right thing to do."

Mary Ann Downey, who oversaw the survey for i4cp's Diversity Accelerator group, argues this is an indication of an evolution. Back in the latter part of the 20th century, companies were almost shamed into diversity by the emerging cultural movements that demanded women and African Americans be given equal rights. That percolated into the business world as "it's the right thing to do" to hire women and minorities.

As women and minorities gained more economic clout, the diversity driver changed for many organizations to the 1990s' mentality of trying to reflect customer demographics. As the first decade of the 21st century comes to a close, the driver has now morphed into diversity as part of the corporate business strategy that's becoming more embedded in corporate cultures and will eventually, Downey believes, become a major component of talent management - that is, a way to entice the best talent to come into the organization and to stay there.

Stan Smith, a recently retired partner of Deloitte and a member of the i4cp Diversity Accelerator group, describes the reasons behind this evolution from the right thing to the necessary business thing as an acknowledgment of reality. Organizations that are knowledge-based and high-performing "have had to face the fact that, whether they like the way the world is set up or not, they have to compete for people for whom [diversity] is a big issue," Smith says. "I think they say, 'Well, there's a business imperative here.'"

Demographic changes are here to stay. Women are in the workforce and aren't going to leave. People of all races, genders and beliefs are redefining success. To be successful at attracting talent, particularly those younger than 35, companies have to pay attention to these things as a way to discover what will motivate workers. That translates into a "compelling business need" to foster diversity "whatever individual managers think," Smith says.

That all sounds good, but the tricky part comes in embedding diversity into the organization's culture and fabric so it does become something more than merely "the right thing to do." The best strategy to create that link between diversity and the overall business goals of the organization, Smith says, is to educate senior management.

"That's what I tried to do at Deloitte and was pretty successful at it," Smith says. He suggests aiming at the highest-level person possible and converting that person so he or she is speaking up for diversity at all times. "You have to have believers in management," he says.

That can start with demographics - showing the shifting ethnic and gender makeup of the overall population. In other words, it helps to graphically illustrate to managers what the reality of global and U.S. trends is. The goal is to make senior management understand that "reality is not optional," Smith says. "Reality is reality and has to be dealt with."

After education comes accountability. Accountability needs to be built into the business plan, Smith says. That can start out simply as collecting data and visiting managers whose metrics don't jibe with corporate goals. The attitude toward those managers shouldn't be condemnatory or "gotcha." It should be in a spirit of helping. If that doesn't work, companies can move to more elaborate methods of accountability, Smith suggests.

The i4cp survey suggests that many high-performing organizations are doing just as Smith recommends by placing more importance on CEO commitment than on any other driver of diversity program success. They also place great emphasis on "framing the issue to be business-relevant" and "creating accountability" as ways to drive successful diversity in their organizations.

Like any evolution, it sounds easy but can be filled with fits and starts, barriers and glitches. There's seldom a fast, direct line to success. The process, Smith says, is "gradual unless you have the good fortune of having a chairman who gets [it]." And Downey says it's simply hard to do unless you and your management team truly grasp what diversity can do for your company.

i4cp's 4-Part Recommendation:

Educate managers so they understand today's demographic and market realities.
Create the links between diversity and the overall business goals of the organization.
At some level, hold managers accountable for managing diversity well.
Make sure diversity initiatives are integrated into, and measured via, broader talent management initiative.

Okay, Okay, We Get It About Talent Management! But Do We Really?

Fri, 30 Oct 2009 14:02:00 GMT

This article is written by Lorrie Lykins and Carol Morrison.

So there's good news and not-so-great news about talent management (TM): On the positive side, organizations - especially top performers - recognize that operating in silos restricts their ability to respond quickly to changing business needs. A holistic approach to talent management has become mission-critical. Some organizations have already plunged full speed into integrated TM, but with mixed results. The bottom line is this: We get the message about the importance of TM, but when it comes to practical application, most organizations haven't yet gotten it right.

Most companies that say they are working in earnest at integrated talent management readily acknowledge that they don't do it very well. Commissioned by ASTD, i4cp's Talent Management Practices and Opportunities survey found only one in five respondents reporting that their organizations manage talent effectively to a high or very high degree, a clear indication that there's ample room for improvement in gaining proficiency in talent management. Sometimes the road to high performance begins with recognition of the obstacles that are holding us back.

i4cp's research has identified a handful of major stumbling blocks that are keeping companies from managing talent effectively. Addressed in detail in our new Talent Management Playbook, those challenges include slapdash strategic planning (if any), poor internal communication about TM, ambiguous leadership and insufficient training for managers.

Some may argue that it's the rule rather than the exception that most companies start down the TM path without a clear plan, making effective execution impossible. Successful TM implementation begins with clearly defined outcomes that align with the overall business strategy. Organizational strategy also dictates the focus on functions to be integrated: recruitment, retention, compensation, succession planning, learning and development, performance management, or more. Indeed, i4cp's survey revealed that the need to execute strategy is the leading driver of organizations' desire to improve at TM - even among companies that are effective talent managers already.

Clear messaging about the purpose, goals and value of TM is key: Companies need to first define what TM means, determine which employee groups should be targeted, and then communicate this clearly across the organization. For example, most companies focus TM on "pivotal talent," but the meaning of the term can differ widely from one organization to another. A company facing a looming shortage among skilled workers in a specific operational area might consider those employees pivotal talent. In another firm, high-potentials in line for executive positions could be pivotal. TM objectives and programming will vary accordingly.

Involved leadership is crucial - senior management's commitment to talent management must be communicated clearly and constantly. TM cannot be relegated to HR alone; a C-suite champion is vital to achieve companywide buy-in and drive long-term success. i4cp's research shows a direct correlation between senior-level support of TM and successful outcomes. Further, survey results showed a correlation between TM effectiveness and its inclusion as a strategic imperative for the entire executive team.

One i4cp member told us that his company has established a committee that addresses this: "We have an executive team who are members of a talent management committee. This includes executives from across business functions throughout the company. It also includes the CEO. We meet quarterly and set goals for the year for talent management."

Another example is Providence Health & Services, which began in 2008 to assess its resources in terms of what was needed to develop a plan. Their chief HR officer secured support from the executive council to build out a centralized talent acquisition organization and put dedicated staff and resources in place in order to define and develop a sustainable strategic center of expertise. The company doesn't approach its efforts as an initiative, but as a core function that must be sustained and connected to the strategic business planning cycle, and the firm credits its success with having a strong champion on the executive team.

Finally, survey responses pointed out that managers may need specific training in order to manage talent adeptly. All the program objectives and metrics in the world won't help an organization move forward if the expertise and capabilities required to constructively handle day-to-day interactions with workers aren't there. Arm managers with the know-how they need and greater talent management effectiveness will follow. And there's an additional benefit: Education and line managers' buy-in often go hand in hand.

i4cp's 4-Part Recommendation:

Don't jump the gun; invest time in strategic planning that identifies business outcomes and how talent initiatives support them.
Reach consensus on the meaning and value of talent management to your particular organization and its culture. Communicate this clearly and often.
Establish distinctive leadership for TM with accountability grounded in the executive team.
Involve line managers in the process and equip them with the training they need to manage talent effectively.

What High-Performing Companies Are Doing Now to Retain Talent Later

Fri, 23 Oct 2009 17:51:00 GMT

There's a change in the wind. Most employers believe the poor economy has been key to employee retention over the last year or so. But now they're gearing up for a time when only solid retention initiatives will make the difference between keeping and losing key talent.

i4cp found that over half (58%) of those responding to their recent Employee Turnover and Engagement Pulse Survey said their organizations are "taking action today to prevent an increase in turnover when the economy turns around." In larger firms, the percentage was even higher, and in companies designated as high performers (according to self-reported revenue growth, market share, profitability and customer satisfaction), the number rose to over three fifths.

Why this sense that it's time not just to think ahead but to take action? After all, this same study showed that nearly three quarters of respondents said that turnover had stayed the same or even decreased over the past 13 months. It seems organizations are starting to worry that pre-recession predictions of talent shortages and waves of retirement may indeed follow on the heels of an economic recovery.

Some companies even believe that the reduced turnover they've seen is tied to some factors other than a poor economy and a tight job market. "Careful hiring, employee development and a high level of engagement" are helping to hold down turnover, said one respondent. Others pointed to "additional focus on hiring the right people for our culture," "a better rewards system" and "more stability with incentive plans." Essentially, these respondents are suggesting that the improvements in retention lie in better talent management.

i4cp's study asked, at the request of one of our member companies, "What are you doing now to avoid turnover when the economy improves?" A whopping 81% of companies are increasing communication to their employees, and 77% say they're increasing their emphasis on talent management, a term that encompasses a wide range of people-centered strategies. Greater focus on succession planning, leadership training for line managers, rewards-system improvements, and elimination of "toxic" managers were also among the efforts organizations already have underway. Of course, all are elements of an integrated talent management program.

When it comes to planned actions for the year ahead, respondents shook up the order a bit, ranking greater focus on talent management first, followed by increased employee communication, leadership training for line managers and succession planning. Compensation increases trailed other options.

High-performing organizations, in particular, have ramped up communication: 91% say they're using it to help retain employees. Such an interactive approach is affirmed by Dick Rogers, senior vice president of HR at i4cp-member company ConnectiCare, a health-plan provider. "We're a very transparent organization, and we share a great deal of information," Rogers explains. The company's intranet - called CareNet - provides a strong vehicle for maintaining employee contact. "Our intranet is very business-focused, though it has some social aspects, too," he adds. "We wanted to be sure that each employee has access to the information they need in order to help us be a top-rated organization." Employee recognition is featured on CareNet, too, publicizing workers' achievements, while reinforcing the value of performance.

Another i4cp member, PNC Financial Services, also leverages the power of communication. Jaime Elving, project manager for executive recruiting and onboarding, describes her company's New Employee Experience Program, a series of 27 email messages that go out to new hires during their first year on the job. "Messages might be reminders of key dates for the employee - time to sign up for particular benefits or a notice that they're now eligible to make stock purchases," Elving notes. "We also use the program to reinforce some of the ideas we worked to get across during orientation - underscoring our employment brand, conveying company values, and reminding new hires how they can refer others they know who are interested in becoming PNC employees."

The approaches taken by ConnectiCare and PNC demonstrate the power of an integrated talent management effort. Rogers' HR team actively and regularly communicates - using technology to share information, to further the company's business objectives, to provide recognition and to maintain contact with the workforce. At PNC, electronically delivered messages emphasize company values, encourage recruitment and describe available programs, while also addressing issues that speak to workers' individual concerns and well-being. In both companies' cases, multiple aspects of talent management are coordinated and work together to support employee engagement and retention.

i4cp's "4-Performance" Retention Recommendations:

Don't wait. Take steps today to avoid unwanted turnover when the recovery arrives.
Model high-performing companies' practices by putting the 3Cs to work for your organization: communicate clearly, comprehensively and continuously.
Deliver leadership training to line managers and supervisors - arm them with the know-how they need to carry out your company's retention mission.
Invest in succession planning - a favored tool for retention in high-performing firms. Find insights into starting or improving your succession programs in i4cp's Succession Planning Knowledge Center.

Does Your Firm Know What It's Getting from Corporate Giving?

Fri, 16 Oct 2009 15:42:00 GMT

Most corporate leaders say they believe in the social and business value of employee volunteer programs (EVPs), but it'd be nice if there were some good evidence. After all, we're living in an increasingly bottom-line world, a time when boards want firms to cut every unnecessary cost and reap a return on every investment.

The good news is that a study commissioned by the Pioneers, a nonprofit volunteer network made up of telecommunications employees across the U.S. and Canada, indicates there's a genuine link between volunteerism programs and corporate performance.

The Impact of Corporate Volunteerism study, which analyzed responses from 450 survey participants, found that a significant correlation exists between high-performing companies and the presence and support of a formal employee volunteer program. Moreover, EVPs are more likely to be seen as an integral part of the internal culture of high-performing organizations, based on self-report data.

However, financial data that directly quantifies EVP activity on the corporate bottom line doesn't usually exist in companies because it's not being formally measured. And even when it is tracked, the data collection is usually done inconsistently and is not integrated into strategic decision-making. So even though organizations may say that volunteerism benefits the company, if EVP outcomes are not tracked, the ROI clearly cannot be demonstrated.

This is an issue that employers need to be concerned about because interest in corporate volunteerism is increasing, partly due to its growing significance to employees (46.1%) and support from senior management (28.4%). There are two areas where companies need to improve: Most don't have formal programs to support such initiatives - such as a volunteer coordinator - and those that do fail to allocate adequate resources to support the programs in most cases.

This isn't an awareness problem. Among organizations that don't track EVP activity or its outcomes, most say they are aware that they need to.

The study also found there's a great deal of change to employee volunteerism initiatives these days. Activities are moving away from the traditional internal fundraising campaigns or once-a-year big, splashy events that involve large teams going out into the community to work on a one-day project. Instead, more companies are aligning themselves with nonprofit groups, allowing employees to leverage their core competencies by offering ongoing mentoring and assistance to organizations that otherwise don't have the expertise or could not afford to contract for professional services in areas such as accounting or IT.

Employers say that these sorts of initiatives are good for the community and also good for employees. Volunteerism is often looked at as a leadership development tool as well as an opportunity to build morale, says Kevin Engholm of Citi, where the talent management function encourages high-potential leaders to become involved in volunteer opportunities such as board work early on.

"We've seen an erosion of a lot of what we can expect and was once taken for granted in terms of the idea of lifetime employment, or assured economic prosperity - I do think people are looking for more transcendence from the volunteer work than their day-to-day life gives them, and so the opportunity to be part of something meaningful is significant. Maybe we're no longer in the golden age of giving but moving into a golden age of volunteerism," said Engholm.

PCL Construction Enterprises is an example of an organization that has mastered the ability to demonstrate the actual value-added impact of volunteerism on an organization. Employees report and track their volunteer activities through an interactive software program. Moreover, PCL leadership promotes volunteerism, and the organization regularly conducts employee surveys to gauge the impact of volunteer initiatives internally as well as externally.

"We know that we've been awarded contracts in instances where we were not necessarily the lowest bidder, but we got the contract because the differentiator in our bid package was how proudly we spoke of our commitment to community service and support. We recently got a 100-plus million-dollar contract partly because of this - they said that was impressive and they felt it displayed to them the sort of integrity we had and that it matched their level of integrity, and that was an issue that came up in their deliberations, and that's part of why we got the job," said Denny Dahl, director of HR.

i4cp's 4-Part Recommendation:

Define the goals of your organization's EVP; determine if it is more social or business-focused and if it aligns with the overall strategy.
Define metrics that are meaningful for your organization and develop electronic tracking to capture the EVP metrics.
Once metrics are in place, establish baselines for benchmarking the impact of corporate employee volunteerism programs.
Support employee volunteerism by providing the necessary leadership and the proper allocation of resources.

A New Era of Diversity: From Compliance to Business Impact

Fri, 09 Oct 2009 16:05:00 GMT

The year 2009 has been a watershed year for diversity issues in the U.S. From the inauguration of President Barack Obama in January to the Supreme Court decision in Ricci v. DeStefano, diversity issues have consistently been top of mind for corporations this year.

Given the changing landscape and rising interest among i4cp member companies, we adopted a comprehensive strategy to investigate organizations' diversity approaches, one that includes benchmarking practices, extensive interviews and literature reviews.

In April of this year, a group of such companies met in Atlanta to form a Diversity Accelerator group. This group brainstormed the challenges their organizations were having in approaching diversity. Based on the discussion and interviews with these members, i4cp developed a survey instrument to further explore these issues.

i4cp also interviewed a number of non-member companies to get a better understanding of the state of organizational diversity issues. Overall, the community of diversity professionals has been extremely generous with its time and insight. As a preview of upcoming reports, here is a quick look at two of the highlights.

Non-HR professionals are leading more corporate diversity efforts

Based on interviews, having professionals from outside the HR function lead diversity initiatives is a growing trend. We spoke with professionals who started their careers in sales, communications, labor relations, and marketing as well as the more traditional HR, compliance and legal functions.

For the non-HR leaders, there were several common themes. For one thing, this work is much harder than they anticipated but also more rewarding. The challenge comes in two forms: pace and building a common understanding. Leaders who have spent the majority of their careers within the business find the pace of diversity progress painfully slow and frustrating. They clearly see the benefits of diversity initiatives and the value such initiatives can bring to their organization, but they have come to recognize that showing business results can be elusive and people metrics such as representation move slowly. The reward is playing an integral role in changing the culture, complexion and impact of the organization.

Another theme from this group is that they tend to recognize the importance of consistently and constantly framing diversity issues in a business-relevant context. They're convinced that this approach leads to credibility, which leads to adoption and action.

One executive relayed the following story and advice. She was interviewing for a head of diversity position at another firm. After three interviews over a 13-month period, she asked the decision-maker point blank, "Is there something about my experience or credentials that is making you hesitate in making a decision to extend an offer?" The decision-maker welcomed the frank question and assured the candidate it was not her experience or expertise that was at issue but a desire to make sure that the candidate understood the organization's values and history and would be a good fit for the organization.

With this new understanding, the candidate talked herself out of the job but offered the following advice to the would-be employer: If that is the issue, then you need to find an internal champion. It is easier to develop the diversity expertise than to understand the organizational nuances, she advised. "By selecting an internal candidate, you will find a ‘diversity convert' to be both credible and highly effective," she said. This advice is potentially applicable to all organizations as a mechanism to get traction and achieve diversity goals.

Employee Resource Groups, or affinity groups, have become more common and effective

Employee Resource Groups (ERGs) - also known as Employee Networks or affinity groups - are corporate-sponsored associations that are united by the fact that members tend to share a similar attribute or interest. While open to all employees, traditionally ERGs were created around racial/ethnic or gender characteristics. Unfortunately, they developed a reputation of being mostly social in nature, and in some organizations they became viewed as a negative influence. These have been difficult legacies to overcome.

Today, the trend in ERGs is to diversify. For example, there are now groups associated with working parents, people with disabilities, veterans, new employees, and people from the same generation. They join the more traditional ERGs centered on issues such as gender, ethnicity, and sexual orientation. Another trend is for these groups to become more focused on business and career issues rather than social issues. Many have been transformed into business-relevant, action-oriented networks.

At financial services firm ING, an i4cp member company, the dollars spent to support the ERGs are achieving some of the highest return on investment of any people program investments, according to Laurin Cathey, head of multicultural affairs. ING has been recognized in many arenas for its work with ERGs, even winning the Catalyst Award in 2007. At ING, ERGs are critical to employee and leadership development. Each of the five ERGs is a branded unit that supports the ING external brand and the internal employee value proposition. Every unit has an executive sponsor, by-laws, elected officials and succession plans.

ERG participants and leaders benefit in various ways, including:

getting exposure to the ING leadership team
building annual business plans and budgets for their organizations
getting a chance to develop leadership skills in relatively low-risk environments
having added opportunities to demonstrate their ambition and develop skills
supporting ING's external outreach and community development.

Toy-maker Mattel is another example of an organization leveraging the business value of ERGs. Mattel recently used its African-American ERG group to assist with the development of a new doll line - So in Style (S.I.S.). According to Graciela Meibar, vice president global sales training and global diversity, the group served as an internal focus group, helping to name the dolls and making suggestions on packaging and other key features to market to a specific customer segment. It is through this type of contribution that diversity initiatives can make a true impact on the success of the enterprise.

i4cp's 4-Part Recommendation:

Understand and articulate the business purposes for diversity. Although the legal and ethical reasons for diversity should not receive short shrift, it often helps to know how diversity can be leveraged in areas such as marketing, sales, innovation and strategy.
Audit business processes and communications to ensure alignment with diversity realities. Organizations can quickly get a reputation of merely providing lip service for diversity unless their actions support their rhetoric. It is important for diversity to be perceived as "how we do business" rather than "on top of everything else."
Seek out internal business advocates and recognize their efforts in supporting the overall diversity strategy. Also, recognize managers who attract, select and develop diverse staff.
Where and when it makes sense, tap into the talent available in ERGs. These networks can have a positive impact on the business as a whole.

M&A Bounces Back: What Have We Learned?

Fri, 02 Oct 2009 16:16:00 GMT

Picture a graph of worldwide merger and acquisition activity since the 2000s began. The graph has a sharp slope up and to the right - until 2008, that is. Then, the economic collapse had a huge effect on M&A trends, bringing deal volume down from record highs and pushing deal values down even further. The credit market dried up, and companies couldn't finance a pack of gum, let alone a multimillion-dollar acquisition. The private equity firms that had created insane bidding wars while pushing strategic buyers to the sidelines packed up their piggy banks and went home to wait out the storm.

But just like forsythia signaling the start of spring, analysts are seeing a new crop of mergers and acquisitions poke their head through the snow left behind by the worldwide economic crisis. The panic-induced deals that were done during the meltdown are giving way to more strategic deals as healthy organizations find themselves surrounded by a vast array of good but financially injured companies, ready for the taking.

The hope is that these new deals will be more successful than the M&As that were hindered by the economic turmoil of recent years. Success rates have been far from stellar lately. A recent i4cp study of mergers and acquisitions showed that only one-third of companies said that their most recent merger or acquisition achieved its goals to a large extent, and only 9% said the goals were met completely.

As companies are forced to take a harder look at the bottom line for any potential deal, the people challenges that have doomed so many deals in the past are far more likely to present themselves now. Timelines are tighter, and demands to achieve synergies are stronger. In the meantime, so-called soft issues get pushed to the back burner to be dealt with later. Unfortunately, while they're back there, they burn and ruin everything.

What are some of these issues? Various studies have found that, following a merger or acquisition, productivity falls precipitously, engagement declines and companies bleed leadership. Any one of these problems can undo the benefits a deal is supposed to create, so why are companies historically so bad at meeting these challenges?

i4cp member company Johnson & Johnson faced these issues when undergoing the recent $17 billion acquisition of Pfizer's consumer healthcare division, the largest in J&J's history. According to Dottie Brienza - VP of Change Management, Communications & Education with Johnson & Johnson - the key for its successful integration team was to "encourage leadership alignment and invite employee engagement to positively impact organizational performance. You can't force alignment and you can't command engagement."

To meet this challenge, Brienza's team focused on six critical strategies:

Create a compelling, shared vision.
Build stakeholder and leadership alignment.
Deliver communications and build engagement.
Provide measurement and evaluation, and enable improvement.
Provide organization and resource planning.
Deliver learning, training and performance support.

One example of how Johnson & Johnson engaged business leaders in the new organization is how they presented all of the products the new business unit now offered, lined up in chronological order as they would be used throughout the day. The leaders saw this as they entered the launch event, and it gave them a visible, tangible look at what it was they were now a part of.

The importance of such alignment, culture change and communication efforts is also supported by other i4cp research. One major study, conducted in partnership with the American Management Association, found that more than 40% of high market performers said their most recent merger was highly successful in creating a unified culture, while only 7.5% of low performers said the same. That same study found an exceptionally strong correlation between maintaining proactive communication in the M&A process and having a positive corporate culture.

During due diligence, companies pore over financials, revenue streams, supply chains and physical inventories. But when it comes to people and culture, due diligence is often forgotten. While 60% of high-performing organizations performed a cultural assessment of the firm they last acquired or merged with, less than two-fifths of low performers conducted such an assessment. Having this type of information on hand for both companies during the due diligence process allows the integration team to identify potential challenges and prepare to meet them prior to day one. Waiting until after the deal is completed is a recipe for failure.

i4cp's 4-Part Recommendation:

Get key leadership positions filled quickly in an M&A, focusing on those leaders who are champions of the new culture. Employees will look to leadership for behavior models; confusion and discord at the top will not just trickle down but will flood throughout the organization.
Develop a strong, proactive communication strategy that is very clear about the goals and objectives to be achieved, as well as the strategy behind the deal. Giving all employees a set of common goals to achieve and common challenges to overcome can help unite the two cultures.
Pay special attention to compensation and benefit plans. These are the things that affect workers the most directly, and any disruptions and/or mistakes will only sour the outlook on the deal. Incentive plans, retirement plans and health benefits can be difficult to integrate, and cross-border deals only complicate this issue.
Create a dedicated M&A team that draws on talent from across the organization. By making M&A a core competency of the company, each successive deal becomes easier and more successful as lessons are learned.

Is Job Shadowing Ignored in Your Organization?

Fri, 25 Sep 2009 16:18:00 GMT

Maybe it's the name. "Job shadowing" has a slightly ominous, film noir ring to it, as if Sam Spade is lurking in the corners of the workplace, digging for secrets and casting a cynical eye on pernicious personalities.

How else to explain why such a useful tactic is employed by less than a third of organizations?

Of course, the real explanation is probably much more prosaic; that is, it's a valuable practice that a lot of companies just haven't adopted yet, or are using only on an informal basis.

In essence, job shadowing occurs when an employee or prospective hire watches an experienced worker as she or he performs a specific job. A recent study i4cp conducted on behalf of a major global organization found that just 31% of respondents said their firms use job shadowing.

But there are several reasons why its use may be an up-and-coming trend.

First, if the economy continues to improve, many employers will cautiously hire new personnel. When used with prospects, job shadowing can help determine whether there's a good fit with the organization, potentially lowering attrition costs and boosting quality of hire.
Second, among companies that have had hiring freezes or have recently gone through downsizings, workers must often take over new job duties without losing their old ones. Job shadowing is a way of helping employees develop new skills, according to about three-quarters of study participants.
Third, there's a great deal of interest in leadership and high- potential employee development today. Job shadowing is seen as a way to facilitate succession planning by about two-thirds of study respondents, while nearly nine out of 10 respondents from large companies say it's a way to provide others with a better understanding of the organization.
Fourth, as the economy improves, organizations will place a greater emphasis on retention, and over half of respondents to the i4cp study view job shadowing as useful for this purpose.

It turns out that about 14% of respondents said that, although their firms don't have a job shadowing program, they have plans to implement one over the course of the next two years.

"There are a number of reasons why job shadowing will probably become more common," says i4cp senior research analyst Carol Morrison. "But, like any emerging best practice, there's not yet a consensus about who owns the process or even how to use or implement it."

Indeed, among respondents whose companies use job shadowing, 35% said individual business units are responsible for the programs, 28% said the learning function is, another 28% said HR is, 1% said corporate is, and the rest are in the "other" category. Higher market performers, based on self-reports, are less likely to say that individual business units are responsible for these programs and more likely to make training or HR responsible.

Morrison, the author of an upcoming i4cp report on the subject, believes there are some good reasons for a lack of standardization in regard to job shadowing. "A crucial starting place for implementation of a job shadowing program is a complete understanding of the program's objectives," she notes. Is its main purpose onboarding, recruitment, development, succession planning, engagement? Function largely determines form.

And even if it's being used for a single purpose, such as new-employee orientation, there are several ways to approach it. Morrison notes,"Some firms choose to have new workers shadow existing employees as a part of their first-day-on-the-job experience. In other cases, new hires undergo orientation before job shadowing starts. In that case, new hires build on company or job information they've already been given with subsequent observation in the shadowing portion of training."

Higher-performing organizations tend to be more organized about how they structure job shadowing programs. For example, while half of higher performers said they followed up with new employees to see if they benefited from such programs, only 23% of lower performers did. Higher performers are also much more likely to introduce the program to new hires during the onboarding process. But the most striking difference is that while 41% of respondents from high-performing organizations said they allow employees to shadow only their strongest employees, just 9% of low-performing organizations said they do the same.

Some organizations have had extensive practice in job shadowing, with one study participant noting, "This has been a tradition and in practice for 100 years" and another calling it "a historical process in operations" that is integrated into the overall training and qualification process.

i4cp's 4-Part Recommendation:

Don't implement a job shadowing program until you know what your organization wants to get out of it.
If your organization decides to use it, add some structure without making it bureaucratic. For example, follow up with those who have engaged in job shadowing to see how effective it's been.
Consider allowing participants to follow only your best performers. Learning from the best usually pays dividends in terms of productivity.
Consider using job shadowing as part of both your onboarding and mentoring programs.

Uncovering the Secrets to Higher Productivity

Fri, 18 Sep 2009 16:39:00 GMT

If you could use some hopeful business news these days, then we've got just what the doctor ordered: an injection of higher confidence in future labor productivity.

Why is this such good news? Nobel Prize-winning economist Paul Krugman has stated, "Productivity isn't everything, but in the long run it is almost everything."

Confidence in productivity is, to a large degree, confidence in the future of the economy. And results from i4cp's latest Productivity Confidence Index (PCI) show an index increase from 20.3 in April to 22.1 in July. Specifically, respondents were asked to predict the degree to which they thought their organizations' productivity rates would rise six months into the future. The study found that, overall, 62% of respondents expect productivity to rise in the coming six months, compared with only 53% the last time we did the study.

Meanwhile, U.S. government data has also shown positive productivity news, with productivity in the nonfarm business sector rising by a 6.6% annual rate in the second quarter, up from .3% the quarter before. That was the highest rate of increase of any quarter since 2003.

Especially critical in this equation is a sharp upturn in output per hour in U.S. manufacturing, which had previously seen four consecutive quarters of decline.

i4cp's research suggests that larger organizations are especially optimistic about productivity over the next half year. In fact, the larger the company, the higher the expectations. Organizations with 10,000 or more employees saw the largest growth in workforce productivity expectations.

Of course, such data begs the question "Why are productivity and productivity confidence on the rise?"

There's no single right answer to this question, but the PCI study does shed some light on it. The classic economic answer is that productivity is rising because many employers have conducted downsizings, requiring more work to be done per employee. No doubt, this explanation has some validity. But downsizings alone don't explain rising confidence about productivity. In fact, among respondents who expect productivity to rise in their companies over the next six months, "reduction in headcount but maintenance of production levels" was only the sixth-ranked reason for productivity increases, cited by 21% as a factor.

The most commonly cited factor was "redesign of work process" (39%), followed by "quality and/or continuous improvement efforts" (35%). In other words, many organizations are rethinking their work processes to enhance both efficiency and quality.

But the study also shows that enhancing productivity isn't all about reengineering or Six Sigma. In fact, the next two factors are "strong leadership" and "increased employee engagement," cited by 33% and 29%, respectively. Among respondents from organizations with 10,000 or more employees, the issue of leadership was seen as being just as important as work redesign for productivity increases (40% in both cases).

One interpretation of the data is that, compared with their smaller counterparts, larger companies are more dependent on leadership as a tool for boosting productivity. Perhaps that's because strong leadership becomes an increasingly powerful lever in companies with more workers to manage and engage. In a large organization, leadership can be just as effective as, if not more effective than, work redesign because such redesigns can take longer to implement on a grander scale.

The idea that work redesign, leadership and engagement are all critical aspects of raising productivity came across loud and clear in a recent i4cp interview with David Whitehorn, VP of HR at Pelco by Schneider Electric, an i4cp member company and a world leader in the design, development and manufacture of video and security systems.

Like many companies, Pelco by Schneider Electric has taken steps to reduce costs, including cutting back work for some employees to four days per week. But it has also focused hard on everything from lean manufacturing endeavors to engagement and leadership initiatives. For example, Pelco has recently done the following:

implemented a new internal communication program using a variety of ways to communicate with employees globally, including quick turnaround to improve and speed up all-company internal communication
organized social events that include activities from "dunk your boss" to soccer tournaments
leveraged a program that allows workers to present new ideas and to get feedback on those ideas within a week or less
provided monthly recognition and rewards for employees who have given excellent service to customers (both internal and external)
involved employees in the company's Green and Community Partnership programs
implemented a special vacation donation program for employees who had been placed on furlough status
ensured that the executive team is very much engaged in new strategy and innovation initiatives
implemented a program for identifying performance issues, one of which tries to address these issues with specific employees
modified its vision and mission statement to emphasize fresh ways of looking at its business and establishing its priorities
started work on new initiatives to help it raise the company's profile as an Employer of Choice

Whitehorn notes that Pelco by Schneider Electric is continuously considering what it can do to "keep people emotionally engaged" and to make sure that they have "skin in the game" on a wide range of critical business issues, from seeding innovation to providing "fanatical customer satisfaction."

i4cp's 4-Part Recommendation:

Try to gauge the efficiency and effectiveness of your current work processes.
If those processes can be improved, put together a team or teams to decide which issues should be addressed and which practices can be used to optimize them.
Ensure that leadership is engaged not only in any redesign efforts but also in achieving "buy-in" for those efforts from the employee population as a whole. Leaders must be both motivators and change experts.
Emphasize engagement efforts during tough times. Improving productivity means winning hearts as well as redesigning processes and operations.

The Leadership Competencies That Matter Most in Today's Trying Economic Times

Fri, 11 Sep 2009 17:25:00 GMT

The context for leadership is dramatically different from what it was even five years ago. Customers are harder to get and to keep, profit margins tend to be slimmer, and lots of employees live in a state of anxiety, stressed by overwork and worries about their jobs.

What's a leader's role in these trying times, and what competencies do leaders need to succeed? i4cp recently conducted a major new study in partnership with the American Management Association (AMA) to find out.

In August 2009, i4cp received responses from about 600 employees working at the manager level or above in a wide range of industries. We found that three competencies clearly came out on top: knowing the business, knowing the customer, and having the ability to execute strategy. In tough times, companies need leaders who know the nitty- gritty details of their companies, and none of the details is more important than knowing the customer. They also need to be able to act on this knowledge, and that means excellent execution of the strategies that serve those customers.

But these aren't the only critical competencies today. Respondents were asked to identify, from a list of 14 leadership competencies, the six that best characterize the most successful leaders in their organizations currently. Among the other most widely cited competencies were these:

building good relationships
having good communication skills
creating an environment of trust and respect.

These three competencies were more widely cited than such important issues as being able to develop strategy and knowing how to align the organization well.

A similar leadership survey was conducted by i4cp in 2005, also in partnership with AMA. It is interesting to note that while knowing the business and knowing your customer were also important a few years ago (that is, when the economic pressures weren't as intense), "building relationships" has gained significant ground in importance. Taken together, these results suggest that while technical competence is still paramount, there are softer skills that leaders cannot ignore, especially during the tough times.

One of the companies that has weathered the economic downturn well is McDonald's Corp., a longtime member of the i4cp network. When Slate magazine recently looked at "who won the recession," its answer was that McDonalds did. No doubt McDonald's business model was largely responsible for its success, but it's probably no coincidence that the corporation has also been in the forefront of identifying and developing leadership competencies that are helping to build bench strength around the world.

Developing a strategic perspective and maximizing business performance are two key leadership competencies at McDonald's. Additionally, coaching and developing others and improving the performance of teams are critical components of the leadership mix. That is, the corporation emphasizes the "hard" skills such as maximizing business performance even as it leverages "softer" skills such as coaching and communication.

What's more, McDonald's knows that leadership competencies must change with evolving business circumstances, so management constantly scans the external and internal environment to make sure the firm's leadership competency model accurately reflects current needs.

i4cp's 4-Part Recommendation:

Ensure your leaders understand your business and, especially, your customers. Employees attribute competency to leaders who demonstrate superior knowledge in these areas. By retaining close relationships with key customers during a down economy, good leaders reassure their employees that the organization will weather the storm.
Leaders must have the skill of making the right things happen. This is what strategy execution is all about. It isn't enough to simply tell people "execute this plan." Good leaders know which people to involve, which processes to promote, how to track progress, and how to untangle situations where progress isn't being made.
Leaders need to be able to do more than interpret the balance sheet. They need to know how to communicate well and build relationships. Leaders can easily forget what it's like to not be in the information loop. They need to be able to share information and explain why decisions were made. Even an explanation that isn't well liked will be perceived more favorably than a decision that apparently comes down without rhyme or reason.
In a tough environment, good leaders must still be able to create an environment of trust and respect. For example, employees must believe that layoffs and restructurings are motivated by the best interest of the organization instead of pet projects and personal agendas.

Documents used in the preparation of this TrendWatcher include the following:

Gross, D. (2009, August 11). Who won the recession? Slate.
Sutton, R. (2009, June). How to be a good boss in a bad economy. Harvard Business Review, 42-50.
Williams-Lee, A. (2008, May/June). Accelerated leadership development tops the talent management menu at McDonald's. Global Business and Organizational Excellence. Published online in Wiley InterScience (www.interscience.wiley.com), 15-30.

Are Your Health-Promotion Programs Really Saving You Money?

Fri, 04 Sep 2009 18:28:00 GMT

Good ol' Ben Franklin said, "An ounce of prevention is worth a pound of cure," but Ben never had to run his folksy wisdom through the buzz saw of a national healthcare debate. If he had, it would have likely set off a firestorm about the cost-effectiveness of preventive services, a subject that has major productivity implications for U.S. businesses.

"It's a debate we should watch closely," said Mark Vickers, VP of research at i4cp. "Regardless of the outcome of today's national healthcare initiatives in the U.S., this is a chance to have a large-scale dialogue about the cost-effectiveness of such programs, and some of this information will be very helpful for employers. After all, our research shows that most large companies are offering wellness programs, and some are striving to become true employers of choice in these areas."

Preventive services have been a prime component of the Obama administration's vision for healthcare reform. Underlying it is the idea that prevention adds up to billions in savings by boosting patient wellness and providing early detection of conditions that, if allowed to go untreated, could wind up costing more in their advanced stages.

But not so fast. Douglas W. Elmendorf, director of the Congressional Budget Office, sent a letter to the U.S. House Energy and Commerce Committee citing a 2008 study in the New England Journal of Medicine that showed that "slightly fewer than 20% of [preventive] services that were examined save money, while the rest add to costs. ... [S]creening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would become ill in the absence of preventive measures."

Others remain less skeptical of the ROI of preventive programs, saying that researchers need to look at data from further back to get a longer-range view. And some experts argue that not only does wellness/prevention pay off, but only a relatively minor reduction in risk factors - less than 1% - is needed to reach a positive ROI. Dr. Ron Goetzel of Cornell University has even come up with an ROI calculator that reportedly allows him to figure out the break-even point on wellness initiatives and to predict any savings (or losses) that might be realized from a specific proposal.

Even as the battle over prevention and wellness programs heats up at the national level, many corporations have adopted these ideas to some degree for their employees. A survey by i4cp found that nearly two-thirds (62%) of participants said their companies offered some form of wellness program. Smaller companies were less likely to offer them, but the percentage rose to 82% among those with 5,000 to 9,999 employees and to 96% for those with more than 10,000 workers.

Of course, there are lots of different kinds of wellness and preventive services, and sometimes we're really talking only about covering the basics. For example, the most commonly provided wellness services are flu shots, offered by 73%, and health information (65%). These aren't exactly high-cost/low-return initiatives.

Some companies, however, go considerably further. For example, 70% of large companies offer on-premises gyms and 65% offer on-premises classes such as yoga, exercise, and health or nutrition information.

And then there are firms, such as i4cp member company Target, that go the extra mile in the area of wellness. Target became a founding member of the Alliance to Make US Healthiest last May. The alliance is a non-partisan organization that, among other things, "fosters innovative actions" designed to "spark a nationwide social movement to make the U.S. the healthiest nation in a healthier world." At the same time, Target announced a partnership with Redbrick Health to pilot a wellness program that includes what Target calls advocates to help the company's employees in all their health-related goals.

The Redbrick partnership was merely the newest component of a companywide focus on wellness and prevention. The overall program includes such components as a 24/7 toll-free NurseLine designed to help employees decide what level of care they might need for any medical problem, a website devoted to health and wellness with online health coaches, a health-risk assessment tool and health information, on-site clinics, and employee discounts at fitness centers and Weight Watchers classes.

"We firmly believe that healthy team members create a more successful business and vibrant communities," said Jodee Kozlak, Target's executive vice president of human resources. "We want all team members and their families to focus on prevention - the key to access and affordability."

Target has even provided federal legislators with a list of suggestions for improving the U.S. healthcare system. Number 1 on the list: "Adopt specific and meaningful cost containment measures and offer choices that focus on prevention and wellness."

i4cp's 4-Part Recommendation:

When considering which, if any, wellness and preventive services to adopt or retain in your organization's benefits programs, examine the picture from multiple angles. Certainly, the ROI of these services in terms of reducing healthcare costs is one crucial angle, but other perspectives should also be considered. These include the impact on employee satisfaction, retention, recruitment, and productivity.
Start with the "low-hanging fruit" that is both inexpensive and likely to have a positive impact. Providing health information and helping to cover the costs of flu shots are likely to be low-cost/high-return practices, especially in today's H1N1 influenza environment.
Consider offering employees health incentives. These can range from offering salads at a lower cost than burgers and fries in the company cafeteria to providing actual cash incentives for losing weight or quitting smoking.
Investigate best practices in these areas and network with companies that seem to be using them. Ask those companies what seems to be working best. Also, find out what your employees and prospective hires want in these areas. Look for the win-win practices that allow your firm to reap benefits at multiple levels.

Documents used in the preparation of this TrendWatcher include the following:

Brady, B. (2007, May 4). Workplace wellness programs: Can they really pay a 300% return on investment? HR Daily Advisor.
Fey, C. T. (2009, September 1). Preventive medicine does help to keep costs down. San Francisco Examiner.
Health care. (2009). The White House.
Institute for Corporate Productivity. (2008, September). Taking the pulse: Healthcare.
Montz, E., & Seshamani, M.. A success story in American health care. Healthreform.gov.
Petrecca, L. (2009, June 16). Cost-conscious companies re-evaluate wellness programs.
President Obama's fiscal 2010 budget. (2009). Office of Management and Budget.
Target Corporation makes getting and staying healthy easier. (2009, May 18). Target Corporation.
Terry, K. (2009, August 10). CBO brings Obama back to Earth on preventive care. Bnet.com.
U.S. health reform estimates need long view: Study. (2009, September 1). Reuters.

Digital Shadows: The Rise of New Workforce Productivity Issues

Fri, 28 Aug 2009 16:53:00 GMT

Don't look now, but you're casting a digital shadow, one that looms larger with each passing hour. Every e-mail, voice mail, text message, digital photo, search engine query, music download, and DVR recording increases the magnitude of your shadow. And don't forget the surveillance cameras constantly monitoring many private as well as public spaces. Everyone, with few exceptions, casts a digital shadow these days. When you think about it in such terms, it feels as if the whole world is casting a digital shadow so enormous it threatens to eclipse the moon.

"Our digital universe is expanding at an amazing rate," says Kevin Oakes, CEO of i4cp. "And our research with the world's top companies shows that most are struggling to adapt to it on many levels, from what is appropriate social networking regulation, to hiring, developing, engaging and retaining the internal talent who knows best how to utilize these new tools and processes. The myriad of issues facing companies today - from the current economic environment to how to adapt to this expanding digital universe - is unprecedented. The agility of corporate leaders and the ability of companies to adapt to change are the primary skills needed to be successful in today's environment."

Your digital shadow is made up of computer-mediated information that you generate and that is in turn an archive of data created about you. It "lives" in this fast-expanding digital universe along with a growing multitude of shadows from the rest of your environment, from the home you live in to the roads you travel and the organization in which you work.

Other sources confirm the critical nature of this digital universe, which is a kind of doppelganger representation of our own. That universe expanded even as the global economy shrank in 2008, according to a study commissioned by EMC Corp. In fact, the amount of digital information created in 2007 exceeded the total amount of storage available for the first time, averaging out to about 45 gigabytes of data for every person on Earth.

This exponential expansion has serious potential implications on workplace productivity, creating a number of new issues for managers to deal with.

As i4cp noted in 2008, digital shadows allow employers to track the efficiency and effectiveness of knowledge workers as never before. Employee profiles can be discerned from these shadows, divulging work habits, reward preferences and engagement levels. Companies such as IBM and Microsoft are already exploring these concepts. But digital shadows also allow for the unparalleled invasion of much of what has traditionally been considered private space. HR professionals will need to become considerably more expert in how these technologies are used to measure work performance and will also need to learn how to best manage the potential minefields that such technologies may represent. "This enlarging digital shadow is going to force a change in how we think about privacy," says Paul "Sandy" Sanders, HR researcher at i4cp member company Intel Corp. "Information about us is gathered and shared, and often we don't even know it's happening, let alone give consent. The balance of privacy and the rights of those who can gather data is shifting and will have profound consequences."

Another implication for productivity is that digital shadows can increasingly be seen and interpreted, both by humans and by digitized "sensory" technologies. Augmented reality is an example in which the real world is overlaid with digital information. In Amsterdam, for example, it's possible to download an application called Layar onto certain kinds of cell phones and then look through the camera to see digital information relating to everything from the food served in certain restaurants to the jobs available in certain corporate buildings, layered on top of real-world images. iPhones are also getting into the act, with one application showing, for example, the location of the nearest subway stations in London superimposed on the view from the camera.

Clearly, such applications can help boost employee productivity in the real world, providing a kind of just-in-time learning experience and allowing workers to find and assimilate information much more quickly. Yet, such applications are just the beginning, with technology pioneers such as Pattie Maes and colleagues working on "sixth sense" technologies that literally overlay information on the real world in even more seamless ways.

There are also implications for using these new technologies to boost efficiencies and effectiveness in various industries, including health care. For example, new healthcare technologies may be able to use digital shadows to reduce medical costs. One company is working on taking data from CAT scans and combining it with blood flow simulation software. Such technology might be able to reduce angiography costs while improving the health of patients. Medical augmented reality might also reduce the need for other invasive and costly procedures when combined with existing technologies such as ultrasound echography imaging. Improved worker health, and methods for controlling healthcare costs, are, of course, among the highest priorities of the day.

Digital shadows are already being used by recruiters, and this trend will likely gain momentum. Last year alone, the percentage of employers using the social networking sites to screen candidates more than doubled over the previous year. Today, about 45% of recruiters use social networking sites to find information on job candidates' backgrounds, and an increasing number have been prompted to either hire or pass over candidates based on what they discover.

As people's digital footprints grow, recruiters will have ever more information on which to draw, but they'll find this is a two-way street. Controlling brand messaging will become more difficult as it will become easier for disgruntled former employees, for example, to post information about their employers via augmented reality. It's possible that someone viewing a street-level image of a firm's corporate headquarters may be shown harsh comments about the company superimposed on the building.

As technologies grow more advanced, the combination of image (including facial and object) recognition software, search technologies, and automated data mining will allow people to gather data on a just-in-time basis. This will deliver a deluge of information about businesses, people, products and services, a flood that will also require advanced information-filtering tools.

Although these technologies will provide workers with digitized senses akin to "e-ray" vision, telepathy, and augmented intelligence, they will also have productivity-hindering downsides. Multitasking is already a challenge in today's workplace, fragmenting the focus of employees. Such problems will probably worsen. Along with "super senses" could come super preoccupations: continuous online game playing, constant seamless access to friends and family, a flood of entertainment media increasingly more customized to individual tastes, online betting or other addictive activities that are hidden by ever more miniaturized display technologies, etc. The race between corporate policy and emerging technologies is about to get much more difficult to win.

The problems and potentials associated with these technologies are not terribly "futuristic." For the most part, they already exist and will quickly become a part of the mainstream corporate landscape. The sooner that planners and managers figure out how to successfully leverage them, the more benefit they'll derive in terms of productivity. But with so many organizations still struggling to catch up with yesteryear's technologies, it's likely that those who proactively manage these trends will derive a sizable competitive benefit.

i4cp's 4-Part Recommendation:

Put together a multifunctional team to study the workforce implications of the expanding digital universe.
Have the team list the many drivers of these trends, both external and internal to your organization.
Use scenario planning to get an idea of how these issues could play out over the next three years.
Create a sustainable process for tracking these trends, gaining insights into which scenarios are closest to playing out, and respond as strategically as possible to events as patterns emerge.

Fighting the Flu (and Other Challenges) Flexibly

Fri, 21 Aug 2009 18:11:00 GMT

We're still in the inferno phase of what's been an especially hot summer in most parts of the country, but with back-to-school ads dominating the insert section of the Sunday newspaper, autumn can't be that far away.

With the approach of fall comes new warnings about the serious threat - "an explosion," as one scientist termed it - posed by the H1N1 ("swine flu") virus. It's more than likely that employers can count on plenty of workers calling in sick during Q3 and Q4 if (or when, as some experts predict) the flu begins to make the rounds (Stein, 2009).

One strategy in planning for this possibility is looking to alternative work options to ensure continuity in the event of an outbreak. Having employees work remotely certainly makes much more sense than risking the rampant spread of a virus that could quickly level an office. With this in mind, it's quite possible that organizations that have been slow to embrace (or have outright resisted) flexible work arrangements in the past may find themselves, by necessity, finally taking the leap.

There seems to be marked evolution and constant movement where workforce flexibility is concerned, which is one of the reasons i4cp has been tracking the issue closely. For a long time, flexible work options were viewed as a softer, work-life balance issue. In some arenas there's been an emphasis on flexibility as a management tool to get work done efficiently - but not necessarily as an employee perk. But ongoing economic challenges have some employers looking to flexwork as a way to reduce costs and to reward employees, especially when salary increases are not feasible (Galinsky & Bond, 2009).

The release of several studies on workplace flexibility in recent weeks, including i4cp's 2009 Flexible Work Arrangement Pulse Survey, reflects a clear consensus that - besides playing a potential role in business continuity planning - giving in even a little bit on the subject of flexibility is reaping returns for organizations in many ways.

The i4cp survey - a follow-up to a similar 2008 survey - found that employers who offer flexwork arrangements report improved morale (84%, up from 76% in 2008). And 78% of polled companies said flexwork options improve retention, up from 64% the previous year (Institute for Corporate Productivity [i4cp], 2009).

We found that "flextime" (flexible start/end times) is the most widely used flexible work option, with 76% of companies overall selecting it as their top option. Working from home was the second-most favored, at 59% overall (that figure jumps to 70% in companies with more than 10,000 employees), followed by part-time work, pointed to by 56% of organizations (i4cp, 2009).

Similarly, a study conducted by the Families and Work Institute found that most U.S. employers "are either maintaining the workplace flexibility they offer (81%) or increasing it (13%) during the recession" (Galinsky & Bond, 2009).

Home Shopping Network (HSN) and Sun Microsystems, both i4cp member companies, are two examples of organizations that maintain their agility by successfully leveraging flexible work arrangements to meet their needs. HSN improved customer satisfaction, increased productivity and elevated its status as an employer of choice by using telecommuting (Albright, 2009). Sun Microsystems' mobile work program has significantly divested itself of real estate holdings and overhead by allowing over half (56%) of its workforce to telecommute at least once a week.

But can flexible work really deliver bottom-line dividends such as reduced costs for an organization? According to Cisco, it can save a truckload of money. A lot of hoopla followed the release of Cisco's study on telework this summer. The finding that had media outlets hyperventilating was the annual cost savings that Cisco attached to its own flex policies: $277 million. The savings reportedly came in the forms of reduced fuel consumption, lowered business travel costs, decreased greenhouse gas emissions, and increased efficiency and productivity.

Granted, with the increased focus on flexible work arrangements and its evolving role in business, many concerns persist. Concerns include decreased morale among workers not offered flexwork - 64% of the i4cp survey respondents said that flexwork arrangements tend to frustrate workers who cannot utilize the benefit - and frustration among managers, reported by 42% of respondents (i4cp,2009).

Employers can consider flexible work arrangements in planning for the unthinkable, such as pandemic influenza, weather catastrophes or other disasters. They can also use it to reduce costs in times of recession or to motivate and reward employees when money is tight. Either way, it's clearly a strategy that by its very nature can bend and flex based on the needs and goals of a company. It's worth having the conversation about what it can do for your organization.

i4cp Recommendations:

If your organization has not had a meeting to discuss contingency planning for the 2009-2010 flu season, schedule one today.
Consider flexible work arrangements in disaster planning.
Approach flexible work from a strategic perspective, determining how it can be used to reduce costs and increase engagement, retention and productivity.
When considering flexwork arrangements such as telecommuting, assess network readiness and technology needs such as training and development.
Engage your employees in a discussion about how flexible work can help your organization.
If there's resistance to considering flexible work arrangements in your organization, arm yourself with research and share it with your colleagues.

Documents used in the preparation of this TrendWatcher include the following:

Albright, M. (2009, February 27). No place like home for HSN. St. Petersburg Times. Retrieved from sptimes.com
Cisco. (2009, June 25). Cisco study finds telecommuting significantly increases employee productivity, work-life flexibility and job satisfaction. Retrieved from www.cisco.com
Galinsky, E., & Bond, J. (2009). The impact of the recession on employers. Families and Work Institute. Retrieved from www.familiesandwork.org
Institute for Corporate Productivity. (2009). 2009 flexible work arrangement pulse survey. Retrieved from www.i4cp.com
Stein, S. (2009, August 10). World gears up for swine flu's return. MSNBC. Retrieved from www.msnbc.com
Sun Microsystems. Open work is for everyone. Retrieved from www.sun.com

Web 2.0 and Learning: Too Informal?

Fri, 14 Aug 2009 16:32:00 GMT

There's some bitter irony in that it seems many training and development professionals have taken so long to come up the Web 2.0 learning curve. Even as other experts look beyond current technologies to the next stage (variously termed "Web 3.0," "Web Squared," etc.), some learning professionals are still trying to catch up. It's possible that a number of training professionals may simply think it's too late to get on board. Perhaps they have been burned by technology fads in the past and figure that by the time they adopt Web 2.0 technologies, lightning-speed advancements will render the tools antiques destined to go the way of the abacus and the slide rule.

A recent study commissioned by the American Society for Training & Development and conducted by i4cp found that the vast potential of Web 2.0 technologies has not yet been realized by the learning functions in most organizations. In fact, many are still just getting familiar with these technologies, which tend to rely on user collaboration and include specific applications such as Web services, blogs, podcasts, and online social networks.

That's not to say that most learning professionals don't at least see the handwriting on the wall. The majority believe that the learning function will use Web 2.0 technologies more in the next several years. So far, however, only a minority of firms are among the vanguard - actual "power users" of these technologies for the purpose of enhancing learning. Just 9% of respondents to the i4cp study said that Web 2.0 technologies play a major role in the learning function in their company, and 32% said they play a minor role.

The study included a survey of 743 respondents, most of whom are learning or HR professionals. About 87% of respondents predicted that, in the next three years, their organizations were more likely to use Web 2.0 technologies in the learning function than they currently do. Meanwhile, a minuscule 2% predicted that their firms would use these technologies to a lesser degree.

There's clearly a great deal of work to do before most learning functions have successfully integrated such technologies into their organizations. Only about 18% of responding organizations that use Web 2.0 for learning said that such technologies contributed to the effectiveness of the learning function to a high or very high extent. And the survey found that in no case did a majority of companies use a specific Web 2.0 technology to a high or very high extent.

But some technologies are a lot more commonly used than others. Instant messaging is the most common Web 2.0 technology, followed by shared workspaces, social networking, RSS feeds and podcasts. Wikis, blogs, mash-ups and virtual worlds make up the bottom of the list. Again, no one technology is used to a high or very high extent by more than half of the respondents. It turns out, though, that some of the least-used technologies are the ones that may contribute most to the effectiveness of the learning function. As an example, Web services are used to a high or very high extent by only 22.7% of companies, yet this technology is the most positively correlated to the extent that it contributes to the effectiveness of the learning function. While none of the technologies were negatively correlated, blogs and virtual worlds were the least positively correlated.

So if these technologies can help make learning more effective, why don't companies use them more?

The biggest obstacle is concern about confidential information leaks. Companies are also wary of the spread of inaccurate or incomplete information. Other obstacles include the risk of damaging the company's brand/reputation, increased legal issues, loss of management control and loss of productivity. For companies that strive to control messaging and information, commercially available tools are especially anxiety-producing. It's not surprising that companies get nervous when the flow of information involves a third party.

These barriers to adoption highlight the difficulty learning professionals are facing in grappling with this new technology. Learning has traditionally been a one-way street, with content providers pushing information out to learning consumers. The advent of Web 2.0 technologies, or the "two-way Web," blurs the lines of content control, and the list of concerns reflects that. Learners can now access content on their own terms, look for alternatives and even provide content of their own. Companies struggle with keeping information flowing while ensuring an authoritative stamp on the content provided. Learners can become confused if they receive content and are unsure if the source is legitimate.

The majority of concerns over Web 2.0 technologies can be mitigated rather easily through policy implementation. Many of the respondents to the i4cp survey who offered best practices recommended clear procedures that include specific permissions and restrictions. The nature of these technologies means that they cannot be too tightly controlled, otherwise they will never flourish. Too much policing will drain the usefulness right out of the tool. Sensible, proper guidelines can help maintain a level of consistency and accuracy. Employee training needs to take place, and the use of these tools should be included in the daily workflow. Employees who have never used these technologies may see them simply as added work to an already full plate. Companies who use these tools successfully note that it takes time for adoption to take hold. If learning professionals are too quick to pull the plug because a tool is not catching on, an opportunity can be missed.

i4cp's Recommendations

Create a business case for using Web 2.0 technologies, and garner support from early adopters, usually IT. Support from a C-level advocate can make all the difference.
Plan strategically for the technology roll-out. A system full of glitches delivered to a group of users with no training is destined to fail.
Develop clear and consistent guidelines for usage. Without directions or parameters, users will either abandon the tool or use it improperly. Not only can this render the tool ineffective; it can actually cause more harm than good.
Don't control too tightly. The very essence of these technologies is that they are informal. Too much constraint will choke off any of the benefits of using them.
Give it time. People need an adjustment period to adapt to new tools. It can take time for technology to take root. Identify early adopters and individual power users to help champion the cause to the rest of the organization.

New Managers: Alone and Out of Their Depths

Fri, 07 Aug 2009 16:55:00 GMT

Being a new manager is a lot like learning how to swim. You can watch others, study a chart about it or even read a book on it. But ultimately, you learn by doing.

That's not to say that you just jump in the deep end by yourself and hope for the best. Far from it. There's usually a transition period where you paddle around the shallow end, helped and safeguarded by a teacher or coach.

If your instruction is any good, you hit the deep end only when you've learned a stroke or two. And, even then, there's somebody there to support you if you need it.

But when people are first promoted into management, a different approach is often taken. Sure, they may get some training, if they're lucky, but then they're often just thrown into the deep water. Sink or swim. There's not much of a transition and, even if there is, there's nobody really keeping track of success in any meaningful way.

At least that's the way it seems, based on a new survey conducted by i4cp on behalf of one of our member companies. The survey found that only about a quarter (23.5%) of respondents judged their organizations to be "good" when it comes to how well workers make the transition once they've been promoted from individual contributor status to manager.

Another 16% say their companies are actually "poor" at these transitions, while most (60.5%) rank their firms as "fair."

The idea that management development is, generally speaking, pretty mediocre is supported by other recent i4cp studies. For example, our So, How Do You Really Feel About Managers study found that slightly fewer than half of respondents think that the overall management in their organizations is above average, a number that drops to two-fifths when only non-managers are asked.

And preliminary data from a major new study on leadership competencies, conducted in partnership with the American Management Association, found that only a fifth of respondents agreed to a high or very high extent with the statement "My organization is strong at developing future leadership talent."

In short, there appear to be a lot of managers in the workforce pool who are floundering and flailing, maybe dog-paddling, to get by. Not exactly the managerial version of a Michael Phelps.

Unfortunately, most companies don't even know where they stand in terms of managerial talent. Our Management Transition Tools survey found that only about a third of respondents said their companies use tools to gauge how effectively a non-manager transitions into a management job.

Even among most of the organizations using such tools, there's nothing fancy going on. About three-quarters use standard performance appraisals, and 59% use 360-degree feedback instruments. Meanwhile, only 40% (of those who do such evaluations at all) use leadership competency assessments, and even fewer use coach or mentor evaluations.

Correlation isn't necessarily causation, but we also found that higher-performing organizations (based on self-reports) were more likely than their lower-performing counterparts to use 360s and less likely to use standard performance appraisals for the purpose of evaluating transitions. The higher performers were also more likely to use leadership competency assessments.

There's no widely adopted silver bullet out there. Tools are more likely to be developed internally than purchased from a vendor, and that's probably because lists of leadership competencies tend to vary from company to company. Most HR professionals and managers ad lib and customize or simply go without.

Going without seems pretty scary. After all, people are often over their heads when they take on a management job for the first time. It will be harder, and probably much more time-consuming, for them to improve if nobody is measuring how they're doing or establishing their strengths and weaknesses. If this is typical of the experiences of first-time managers, then it's little wonder that so many companies are worried about their leadership ranks - they aren't developing their neophyte managers very systematically or, it appears, very well.

i4cp's Four Recommendations for Improving Productivity of First-time Managers

Train first-time managers before their first assignments. Make sure they understand the behaviors and competencies expected of them.
Evaluate them both prior to their assignments and afterward. Evaluate them within four to 12 months of getting their promotion.
Don't just use conventional performance appraisals unless you're sure they're good for management development. Consider using 360s if they fit your culture; 360s often provide more well-rounded information about how new managers are faring.
Provide new managers with support. This should not be a throw-them-into-the-deep-end, sink-or-swim experience. Train, support and evaluate so they have the confidence they need and so you know where their strengths and weaknesses are.

Why Should Employers Just Say Yes to Drug Screening?

Fri, 31 Jul 2009 08:13:00 GMT

The issue of employee drug testing doesn't garner much attention - with the possible exception of incidences in which the employees in question are professional athletes.

It's safe to wager that plenty of sports fans would eagerly weigh in on the latest drug testing debates involving NASCAR driver Jeremy Mayfield and Major League Baseball's Manny Ramirez, for instance. Or they might participate in speculation about cyclist Lance Armstrong - does he or doesn't he dope? And while the emphasis in professional sports is most often placed on performance-enhancing drugs, there's always Olympic hero Michael Phelps' bong debacle to point to. But when is the last time you participated in a fervent discussion about drug testing in your workplace?

Why should we care about workplace drug testing, and why should we be discussing the issue more often? Because it has an impact on performance and productivity, according to the Department of Health and Human Services' Substance Abuse and Mental Health Services Administration [SAMHSA] (SAMHSA, 2009). It seems that many of the arguments that proponents of drug testing in professional sports put forth can also hold true in the mainstream workplace. First and foremost is the argument that employees are individuals compensated for their performance, so the expectation on the part of corporations is that employees will bring their "A game" every time they report for work, whether it's on a playing field or behind a desk.

And experts say that effective drug-testing initiatives present opportunities to employers.

Beyond compliance with drug-free workplace policies and initiatives, SAMHSA says that testing, as part of a well-run drug free workplace policy, can reap benefits in the forms of increased productivity, profits, customer satisfaction, employee health status and morale. Moreover, workplace drug testing can contribute to lowered incidences of absenteeism, turnover, accidents and injuries and the accompanying downtime, and Workers' Compensation costs (SAMHSA, 2009).

It looks like most employers are already on track: Even though most U.S. employers are not required by law to drug-test employees, a recent survey conducted by i4cp found that the majority of companies have drug-screening policies and almost all of those with a program say that pre-employment testing is the most common type of screening performed.

Most (95%) of the companies that screen employees for drugs do so prior to hire, increasing to 100% in organizations with 10,000 or more workers. Seventy percent test when there is "reasonable suspicion" of drug use, 62% test following an employee accident, and 41% say they do random testing.

Among companies that do pre-employment drug screening, the largest share (47%) requires that the test be conducted within four days of the applicant's acceptance of a position, while 30% say it can be done at any time before the new employee's start date.

Drug testing obviously plays a significant role in recruitment in the current tight job market, giving employers additional means with which to draft the best possible first-string players. Case in point, the i4cp survey found that not all companies will give applicants a second chance if they fail an initial drug screening. Of the companies that use screening programs, only about half (49%) allow a re-test following a positive result. Why? Because they can afford not to.

"Most companies aren't messing around anymore with the drug issue," said Jay Jamrog, Senior VP of Research at i4cp. "They can afford to be picky in the current climate, and one of their demands is applicants who are squeaky clean. Not only is it a legal concern in some cases, there's also employee health and productivity issues that can't be ignored by organizations either."

And senior-level employees shouldn't expect a pass on drug testing. When asked about specific work groups that are likely to be screened for drugs, the majority of respondents (84%) said that the entire workforce is fair game. Thirteen percent specified as testing targets workers who drive as part of their job, and 10% of companies pointed to those in administrative, clerical and professional roles as likely candidates for testing.

i4cp Recommendations:

Review and update your organization's substance abuse policy, if needed. Workplace drug testing is most effective when implemented as part of a concise written policy that is communicated across the entire organization.

Employers should offer employee education about substance abuse as well as access to confidential counseling through an Employee Assistance Program (EAP).

Make literature and electronic information about substance abuse accessible to your employees, via handouts, bulletin board flyers, wiki postings and e-mail.

The U.S. Department of Labor (DOL) offers a free Web tool, Drug-Free Workplace Advisor Policy Builder, that can help employers establish policies.

Documents used in the preparation of this TrendWatcher include the following:

U.S. Department of Labor. (2009). Drug-free workplace advisor, section 7, drug testing.
U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration. (2009). Why do some workplaces test employees for drug use? Drug-free workplace kit.