There Is Only One REAL Customer

This past Thursday I had coffee with a longtime senior HR executive who has been working as an independent consultant for the last seven years. A former colleague who thought it would be valuable for us to meet introduced me to him. During our conversation, he was sharing a story about directing one of his teams and he was imploring them to be focused on serving the needs of their “internal clients” (the company’s employees).

This characterization of HR’s mission (and you hear it from IT people as well) always makes me cringe.

For any company there should be one client, one customer and those are the people and businesses that purchase and use your products and services.  To follow any mantra that is internally focused is taking your eye off the ball, which is ultimately serving the REAL customer or prospect.

Many HR folks will claim that they can’t impact the relationship with the real customer.  As an example, what do my compensation and benefit programs have to do with satisfying the person buying our products? Directly, there is likely to be little impact. But from a different perspective, the quality of these programs to attract top-notch talent, motivate them and reward them will have real consequences for a customer’s interaction with your company. A collective employee mindset that keeps the end user in focus no matter the distance from the direct engagement will undoubtedly benefit the business.

Many HR (and IT) groups will actually take it a step further and survey their “internal clients” to assess how they are serving them. Does it really matter if HR gets good grades from the other employees but the company’s sales are down and it’s losing market share? How about reconstructing the survey in a creative way to determine the effects of these functions for the real customer? If you are doing this, let me know. If you’re one who is working on behalf of internal customers and think I don’t get it, let me know that too.

Fueling Small Business Growth with Aligned Compensation

The natural dilemma of every small business is investing in growth ahead of realizing profitable and positive cash flow results.  It’s a constant push/pull realizing you need more resources – product, plant capacity, people, etc. – to deliver growth you have confidence will materialize, but don’t have the capital to invest.

Maybe there is a creative solution on the people side of the ledger.  These are tough times and the market is ripe with great people looking for work and a chance to prove out their worth.  Small businesses need great people resources and “can’t afford” the investment.

Consider an incentive laden “hiring” approach that is directly tied to “money coming in” for the firm:

  • Offer low to no wages.  Definition of relationship as contractor or employee with benefits depends on the ability and willingness to pay wages
  • Provide benefits as incentive to “hire” commensurate with lower wage scale
  • New business has associated Gross Margin attributes after Cost of Goods Sold (COGS).  Include in COGS a fee for marketing, sales, development talent for these people who can directly drive these new customers or new revenue growth.
  • The approach requires analysis to ensure that this new growth adds incremental margin that does not disrupt any current SG&A requirements or cash flow
  • Overpay market for the risk taken on by these individuals and you may find them hungry to deliver for future employment rewards and direct alignment of compensation with success for your business

This solution certainly is not for everyone, on the employer or individual side.  However, there are times when it’s an alignment of needs where this approach can be mutually beneficial.

From Mad Men to Today: Playing the Corporate Gender Role Game

HRI’s CEO, Shaun Emerson, recently published his first post as a guest blogger over on Women of HR.  His post revolves around W.C. Fields’ famous words, “it aint what they call you, it’s what you answer to.” Professional women, whether it is conscious or not, often “answer” to stereotypes and standards that, despite the great accomplishments in our history, still exist.  It’s important to acknowledge and appreciate what our female predecessors have overcome throughout their careers.  In doing this we pave the way for our own and future generations’ success.

With Mad Men returning to the airwaves for another season, I’ve been thinking a lot about the role of women in yesterday’s and today’s working world.  Mad Men is the quintessential example, and primary exposure we have today, to yesterday’s working world.  We casually gloss over the exclusion of women from positions of power and instead focus on the glamorous and fashionable lifestyle of the era.  Jackie-O sunglasses, 2-martini-lunches, and high-waisted pencil skirts may be sexy but sexual harassment at work definitely isn’t.  Just ask HR.

It might not be that Mad Men fans actively perpetuate, or believe in, gender based stereotypes but it seems that the show and commentary brings into glaring relief the work we still have left to do.  We may not be subjected to sexist jokes in the office, but what attitudes still linger?  As Shaun points out, women may feel compelled to clean up the conference room after meetings while their male colleagues do not.

Over at Venture Beat, Steve Blank provides eleven pieces of advice, gleaned from his own career, he’s given his daughters as they enter college and the professional work force.  His points, in summary are that for most companies, the “rules” are set by men and as women it’s our responsibility to learn these rules to be successful and climb the corporate ladder.  He further articulates:

Some find the idea of gender differences uncomfortable. Having fought to have men and women be treated equally, discovering that there may be gender specific hard-wiring for behavior sets up cognitive dissonance. Some simply won’t accept that there are workplace gender differences.

Essentially, gender differences exist in the workplace.  And this may not be all that bad.  It is, according to Blank, a reality that needs to be accounted for as we operate in our professional lives.  I tend to agree.  Sure, the Mad Men made the rules in the 1950’s, restricting many women from rising past the rank of receptionist, and their sons, according to Blank, may still be making the rules today.  It’s not so important who makes the rules but how we, as women, respond and adapt to these rules.  In any professional situation, for both men and women, there is a “game” that needs to be played.  If we disagree with the rules of the game, then we need to change them or find a new game.

I don’t really consider myself a feminist.  I do, however, think too few women realize and respect how far we have come in so little time.  To put it in perspective, women won the right to vote less than a century ago and it was only 50 years ago that shows like Mad Men (and Leave it to Beaver) were a reality.  Today we don’t just vote, we hold political office; and we don’t just make coffee in the office, we own and run successful companies.  Acknowledging the great strides we have made in living history is the first step to overcoming the obstacles we still face.

Think about your own office and what “game” is being played and what reality exists.  Do Mad Men run your office?  Are your female employees aware of the rules of the game and afforded equal opportunities?  Even more broadly, are you looking at all of your team members equally?  Thinking about your team outside of gender (and age, and racial, and any other) stereotypes is the first step to overcoming any professional barriers that are left to break through.

Maybe I am a feminist after all?

DON’T CREATE DOUBT

I received a call this past week from a former colleague.  She is in the HR profession and she told me her boss had left the company and she wanted to be considered for the position.  We reviewed the responsibilities of the position and I whole-heartedly agreed that she was qualified and would be a great fit for the position.  What intrigued me was that this very skilled and confident HR professional needed affirmation that she was good enough.

As our conversation continued, I learned a new GM had joined the company a few months ago and he would be responsible for hiring the HR Manager to support his organization.  He had specifically told her that he wanted to consider external candidates in addition to any internal candidates.  Of course, this immediately made her doubt her qualifications, skills and experience.  Interestingly, I had to remind her of all the great work she had done when we worked together and the positive impact she had on the business.  How quickly she forgot in the wake of doubt!

The reason I am writing this, is because I can’t help but wonder if the GM realizes the impact he had on her?  Imagine if he had approached her differently or even if he had explained why he wanted to consider external candidates.  Perhaps she would not have started to doubt herself and would have understood the business reasons.  The good news is that she quickly got herself back on track by utilizing her professional support group.  But what about those people who are not outgoing enough to reach out for perspective or those that may not have a support group?  They could be a great fit for the job too but missed out on some extra encouragement.

This really made me think about how influential senior executives can be even in the simplest of interactions.  It made me remember that senior executives can be intimidating just because of the position they hold and not even their actions.

This is just something for business leaders to think about as they communicate with employees.  Don’t “over-egoize” yourself remember employees will read into everything you are saying; be thoughtful about what you say and how you say it.  I don’t have any articles to quote, just my recent experience offering a dose of encouragement to a confident, skilled and outstanding HR professional.

Ounce of HR prevention worth pound of legal cure

A quote known to all of us, “an ounce of prevention is worth a pound of cure,” manifests itself daily in routine parts of our lives.  In business, there are clearly times when practicing this “rule” can have enormous impacts on eliminating costs.

This is certainly true in the area of managing HR practices.

Good Human Resource practices simply prevent problems with employees and avoid other costs.  How often could better safety awareness procedures in the plant have prevented an accident or proper firing process eliminated a wrongful termination suit or better hiring practices prevented a hiring mistake or …?

Finding ways to manage HR inexpensively, but effectively, will control costs and create a better work environment.  Not following the changing compliance rules and regulations in HR can also cause issues.  The ounce of cure resolving HR issues often results in unnecessary legal costs.  The current national average for an hour of legal counsel is $284.  And legal costs are on the rise.  71% of US law firms increased rates in the poor economy of 2008 with some reaching $1,200 per hour.

How can better prevention practices in HR eliminate these costs, especially in small to medium size businesses where having an HR practitioner on staff can be a luxury or a single person in charge of the function can’t keep up with changing regulations?  There are means to satisfy this need, and inexpensively.  Check out www.hrinsights.com where for an annual membership fee of $485, a business can have access to up to date forms and an ability to check on best HR practices real time with expert advisors.  Potential legal fees saved are worth the cost of prevention.

More often attributable to Benjamin Franklin, the famous quote is traced back to the early 13th Century.  Henry de Bracton was a famous English jurist and author of De Legibus et Consuetudinibus Angliae (On the Laws and Customs of England).  His influences on law are considerable.

Netflix Nixes its Vacay Policy: Read Between the Lines…

Earlier this week, I read a truly fascinating article about the corporate culture over at Netflix, specifically their unconventional vacation policy.  Being a hyper-successful company easily outstripping it’s competition, I was intrigued by the details.  Netflix has completely eliminated their vacation policy:

Salaried employees can take as much time off as they’d like, whenever they want to take it. Nobody – not employees themselves, not managers – tracks vacation days.

My first skim of the article had me disbelieving that any such policy (or lack thereof) could result in anything less than chaos and a routinely empty office – especially on the days surrounding every minor holiday and 4-day weekend.  My second, more thorough, read had me officially convinced of their reasoning.

Bringing Work to the BeachBased on my own professional experiences, I think the vacation policy Netflix follows, while exceptionally bold, is also relatively  sensible considering how individuals work in a modern world.  Managers at any and all levels should be most interested in work being accomplished efficiently, creatively and on-deadline and less interested in where specifically that work gets done.  As I sit here on my couch at 10:53 pm, I am acutely aware of working outside the confines of the office.  The freedom to work whenever and wherever gives an employee a higher level of responsibility and more opportunity to prove his or her dedication to and passion for the company.  Contrary to popular belief, it actually sets a higher standard for employee performance.  Working only nine-to-five is a practice that is becoming more obsolete and can (sometimes) indicate a disengaged employee.  Without overtime pay for salaried employees and with the advent of telecommuting, employers can proactively seek out individuals who can be held accountable for deliverables, regardless of time and place.

One of the primary principles I learned in college is that communication technology, from the telegraph to the iPhone, reconstructs time and space for society.  People easily connect across continents and the final barrier to communication really exists only in time zones (and this may be deconstructed as time travel becomes possible).  It’s imperative that employers adjust workplace norms to reflect this high-degree of flexibility.  As Netflix aptly points out,

We should focus on what people get done, not how many hours or days worked. Just as we don’t have a nine to five day policy, we don’t need a vacation policy.

I encourage you to re-evaluate your own policies to determine if they match with where your employees fit along the spectrum.  Not every company can adopt such a liberal policy, nor should they.  Each company and employee is unique for a reason.  But maybe it’s time to address your employees needs and provide them with the freedom to choose their own responsibility.  At the end of the day, you may find more engaged and productive employees, leading to more innovation and more growth within your organization.

What I Learned this Summer, and it wasn’t Making Coffee

Nearly three months ago, I walked into the offices of HRInsights with an open mind and a shaky hand of nerves.  To be honest, the anxiety of working full-time began a week before when going over the typical intern questions in my head: What do I wear? Who’s my boss? How long is my lunch? Isn’t 8am a bit early?  After entering the welcoming doors of HRInsights that VERY EARLY morning (I am a college student, after all), I assumed I would be embarking on a typical internship- Do this….Do that.

Here I am, my last week with HRI, and I am a new, enriched pre-professional.  This weekend, at a seminar, I realized the most valuable piece of thought I will take away with me – collaboration and a fresh mind can go a long way.  The HRI team has immersed themselves into perfecting their product, and being biased was difficult to avoid. In need of a fresh look, they trusted their interns: Lizzy Rewalt and myself.  After 3 months, I know we have contributed a lot of effort and improvement to the product AND the team.

If you haven’t figured it out yet, making coffee, dropping letters to the mailbox, and filing were not apart of my internship (which can  happen a lot for a college student).  Through my internship at HRI, I challenged myself and learned the way of the road in a start-up business.  I wasn’t just an “intern,” I was a “Marketing Analyst Intern,” which may sound silly but it set the tone for the level of responsibility I had.  While our contributions were much appreciated by the team, I appreciated the amount of responsibility and leadership I was able to take on over the summer.  Being accountable for the execution of a project, the communication with a possible customer, or the administration of a sales team speaks volumes.  And I’m grateful for these experiences.

As I leave to continue my studies in Austria, I will take a mind full of knowledge, a firm hand, AND a textbook for the Global Human Resources class I will be taking (an interest that developed from working here). After all, I have invested three months in HRInsights.  It’s probably safe to say that I’m no longer unbiased.

In the words of Jack Reich, “P.S. I love HRI.”

Focal or Anniversary Review Date – Does It Matter?

As we approach the fall of the year, it is a good time to assess how your organization is performing and to review how you administer your employee performance evaluation process.

If you are like most companies you either do performance reviews on the anniversary of an employee’s last review or on a common date for all employees (typically called the common review date or focal review date).

Most companies are moving toward a common review date.  The literature indicates that over 80% of companies have moved away from the anniversary system.  There are pros and cons and the transition can be tedious but the advantages of a common review date outweigh the costs in my opinion.

A common review date allows for simple, more focused management of the process.  Business related performance periods rather than arbitrary anniversary based intervals are achieved and employee expectations are better managed.  Additionally, a focal review date gives an organization a sense of measurement and accomplishment with regard to specific objectives.  Management can evaluate success during a specific time period and communicate common time-based objectives for all employees, thus leading to shared objectives for the entire organization.

I ran into a good summary of the pros and cons as well as conversion methodology.   In addition to this information, HRInsights can help you customize the transition plan that best fits your culture.

Whichever you choose, make sure you are diligent, thoughtful and timely.

It smells like…

The smell of fresh cut grass reminds me of football. Every time I smell it, I immediately have fond memories of my youth: running, sweating, hitting, and learning about hard work, discipline, and team play. You might know that there is a whole science that studies this tie between the sense of smell and memory and this type of memory is often referred to as a “Proustian Memory”. It’s named after Marcel Proust, the novelist. He describes this phenomenon, spurred by madeline cake and tea, in the opening chapter of Swan’s Way, the first novel in his work, Remembrance of Things Past.

So the other day, I was walking the neighborhood and due to the circumstances explained above had my recurring Proustian Memory.  And it got me thinking are there other smells that provoke clear memories for me? I realized that there are plenty of “smells” that have provoked certain memories throughout my business career.

  • The smell of a poorly performing employee and the memory that I thought they would get better
  • The smell of a difficult, slow paying customer and the memory that I thought we could work things out
  • The smell of a not quite perfect job candidate and the memory that we hired them because we needed to fill the seat.

There are plenty more of these Proustian-like Memories throughout my career both good and bad. Oh, by the way, the complete memory for each of these scenarios is that I was completely wrong. The poor performer didn’t get better. The difficult customer got worse. And you should never fill a job just to fill it.

Unlike my football memory, those cited above are not fond. Sniff through your business. The smells of today will bring back the memories of yesterday. While you can’t change the past, you can learn from it and change the future.  What Proustian Memories do you have?

Termination Thru Email?!

Employee's Response to Email TerminationThe whole idea of firing a person over email is incomprehensible.  Writing for CareerBuilder.com, Kaitlin Madden recently published True Tales: Fired Via E-mail.  Quoted in Ms. Madden’s article is Kerry Paterson, co-author of Crucial Conversations.  Both authors comment on how an employee should act in response to a firing by email.

As for employers, simply don’t do it – ever!  There are times when a large lay-off communication can be done through an email or other media communication with immediate follow-up process for individuals or sub-groups.  However, I can’t imagine a situation where an email firing an individual or even a small group in a small to mid-sized business makes any sense whatsoever.  Every company’s success is attributable to attracting, developing and retaining the best possible talent for your firm and building a culture to support winning in the market place.  Your reputation with employees has external implications as well with future candidates, vendors and customers.   Word of this kind of insensitive process of termination will spread like wildfire within your organization, and with customers and competitors.  Your employees will become easy targets to leave.

Also, Ms. Madden quotes Mr. Paterson in her article:

“First, ask to talk with your boss in person. Explain that you’d like to learn more about what led to your termination. If your boss is unwilling to hold the conversation, request a discussion with the HR manager. It’s actually their job to hold exit interviews.”

This is sound advice for an employee.  However, a termination should never be a surprise to an individual unless part of a broader layoff.  Documenting discussions where an employee’s under performance is necessary to ensure that termination is for cause or if the individual is not meeting discussed plans for improvement.   Terminating an employee should come after a plan for improvement fails to deliver results or if there is immediate cause for wrongdoing.

Photo Courtesy of Close to Home