Category Archives: Leadership

Impact of HR at S-IV (Integration) Level of Work

From the Ask Tom mailbag –

Question:
I read, with interest, your post about the impact of HR at Stratum III level of work. What about Stratum IV?

Response:
When companies are able to pull the silent switch in HR from S-II to S-III, they shift HR from a cost center to a value add center. The shift in HR at S-III to S-IV drives HR from a value add center to a strategic center. Sounds glib and trite, but here is what that means.

Understanding tactical to strategic can be measured in time span. The shorter the time span, the more tactical, the longer the time span, more strategic. HR at S-III maintains a 12-24 month outlook, HR at S-IV maintains a 2-5 year outlook. We still call it HR, but the roles are very different. There are three challenges for the HR professional in search of the context for this S-IV role.

The first challenge is to get beyond the annual strategic planning retreat, because most annual strategic planning retreats are really tactical planning retreats. To prove this, look at any published action plan from any strategic planning retreat. No goal or objective is beyond 12 months time span.

The second challenge is that conversations have to happen at levels-of-work above S-III. Conversations with managers S-III and below still arrive at tactical issues less than two years time span. So, this conversation has to happen with S-IV managers and the S-V Business Unit President.

The third challenge is the futile reference to the company’s strategic documents, Mission and Vision statements. As they exist, they are rarely helpful, mostly filled with Pollyanna statements about premier providers and exceeding expectations. So, yes, we have a problem.

Most small to medium size companies don’t think out 2-5 years, at least, not very clearly. Specifically related to HR, here is a short list of S-IV workforce issues.

  • Aging of the workforce, succession planning at all levels of work, 2-5 years.
  • Workforce trends of generational transitions, boomers, Xers, millennials, 2-5 years.
  • Impact of technology on workforce, 2-5 years.
  • Market scarcity of workforce, 2-5 years.
  • Wage management, 2-5 years.
  • Skills training of workforce, 2-5 years.

A funny thing happened during the last recession in some construction markets. As constructions projects slowed and finished, with no new backlog, foreign workers returned home while others discovered air conditioning. Now, as construction resumes in a growing (albeit slowly) economy, there is a shortage of direct labor. Market scarcity of workforce is driving up wages for work inside fixed amount contracts. This is an S-IV HR issue.

Business models are shifting. McDonald’s built into their business model a young transient workforce. Using automation and with an emphasis on training, they were able to constantly recruit first-job employees with the knowledge that employee was going to leave in 1-2 years to their second job or college. Now, McDonald’s is faced with a work-force that chooses life-long employment in the fast-food industry, demanding a minimum wage of $15 per hour. This is an S-IV HR issue. McDonald’s is already testing self-serve kiosks to replace some of their fast-food workforce.

Technology is replacing labor. Robotics replace welders. BIM (Building Information Modeling) reduces labor hours, at the same time requiring new skills to run the software. This is an S-IV HR issue.

John Donovan, Chief Strategy Officer and Group President of AT&T Technology and Operations describes AT&T as a company with very little turnover, 3rd generation employees, now facing competition from Google and Amazon armed for war. Basic math tells them that “ten-thousand employees are behind the curve, about 50,000 are about to be behind the curve, and in the next 24 months another 20,000. 80,000 employees are in an alarm state of need to change.” That is an S-IV HR issue.

Greg Coppelli, CEO, Apollo Education Group says that most organizations who spend (billions) recruiting talent see an ROI on that effort less than 50 percent of the time. That is an S-IV HR issue.

Here are some HR S-IV questions to ask.

  • What do we see happening in our market over the next 2-5 years?
  • If we do nothing to respond in the next month, what will happen?
  • If we do nothing to respond in the next year, what will happen?
  • If we do nothing to respond in the next two years, what will happen?
  • If we do nothing to respond in the next five years, what will happen?

HR and Levels of Work

From the Ask Tom mailbag –

Question:
I was hired in an HR role about six months ago. So, I have settled in. I know who the players are and have made a bit of headway. I published a new employee handbook, negotiated the renewal on our health insurance plan and straightened out a very messy vacation policy. But, I still don’t feel like I am part of the company. There is so much more to be done, but, I don’t get invited to meetings with top management. Most often, I find myself in my office listening to some teary eyed employee who feels they were mistreated by a co-worker. Is this all there is to this job?

Response:
This trap is set in most companies I visit. The HR role feels necessary, but most organizations do not know how to define it, and settle for a role below the level of work they truly need, or outsource this function to their payroll company, from a lack of understanding or simple frustration. A recent article in Forbes, describes the problem.

CEOs identified talent supply and retention as their No. 1 “hot button” issue in 2016, and talent shortages are cited as one of the primary constraints on corporate growth. Coupled with the pricey tab that employees’ salaries represent – salaries can account for up to 80% of operating costs – HR cannot afford to cling to its compliance and administrative heritage instead of shifting to a more strategic contribution. Most organizations concur – 85% of global companies believe that HR must undergo a transformation in order to adequately address emerging business priorities.

The article continues with some generic thoughts, but nothing to assist you in an emerging HR role.

Looking at levels of work will bring us more insight into what is necessary. If people are our most important asset, the organization has to figure this out. Otherwise, the search for talent will become the biggest constraint, choking off growth and creating chaos.

HR role, Stratum I level of work (Time-span = 1 day to 3 months outlook)
This is all the compliance filing that must be completed and properly organized. I-9 forms, employment applications, health insurance registration, COBRA forms. It is enough to make your head spin, but has to be done. The good news, there are many software platforms (cloud-based) that can help store all this stuff. Payroll services can be helpful by providing the necessary forms and a place to electronically keep them. But recognizing this level of work does not mean the company would survive an audit or actually have the documentation to defend a claim or lawsuit.

HR role, Stratum II level of work (Time-span = 3 months to 12 months outlook)
This is the minimum level of work that will assist the company in surviving that audit or defending that claim. Stratum II managerial level of work is described as make sure work gets done. It is one thing to have a health insurance form available to be filled out by a new hire, but it is at level II, that we ensure the form was filled out correctly, completely and within the time deadlines required. It is this level of work that conducts self-audits, that creates a filing system (using cloud-based software or a payroll service) to make sure that all compliance issues are accurate, complete, on-time and appropriately filed. Do not entrust this to an outside service or software. This is an internal role. If a health insurance form is not filed on-time and a new hire is diagnosed with cancer, it is the company that is on the hook.

But if this all that HR is, the company is missing the boat and truly does not understand what is necessary.

HR role, Stratum III level of work (Time-span = 12 months to 24 months outlook)
This is where the leverage for HR begins. If Human Resources is really about humans, then it is time to dig in and create the system of acquiring talent. This is a system like any other system in the organization, yet one that receives the least attention (except by the HR professional in the role). Most companies can see the necessity of a capital equipment purchase. They look ahead, create flow charts and make budgets to buy that capital equipment. Most companies overlook the necessity of workforce planning, defining the level of work in necessary roles. Most managers are too busy getting work done to spend sufficient time on the people side until it is too late, the project is under contract and we suddenly do not have the personnel capacity to perform the work. The biggest contribution from HR is to instill the discipline, with every functional manager, to make sure they anticipate their human capital needs looking 1-2 years into the future. That look-ahead must be backstopped with a talent acquisition system that delivers the right team at the right time, with the required capability, trained up and ready to go.

HR role, Stratum IV level of work (Time-span 2 years to 5 years outlook)
But, for HR, this is where the real game is played and most companies never see this. Stratum IV managerial roles contemplate all the existing systems and sub-systems and integrate them together. This is an integration role looking out 2-5 years in the future. This is a strategic role. HR professionals that work at this level, DO get invited to senior management meetings, not to sit in the back of the room, but front and center. The success of any company in building a business model, shifting strategy, responding to new markets, depends on the right people in the right roles.

Funny, that is what Jim Collins told us in Good to Great. Unfortunately, he shrugs that off. “I am not going to belabor all five levels (of work) here, as levels 1-4 are self explanatory and discussed extensively by other authors.”

Shame on you, Jim Collins, this is where the game is played. Most companies fail because they do not truly understand levels of work and fail to field the team required to execute.

And this is where HR professionals can make great contribution, sitting at the strategic table, asking the questions and defining the people system required to support the best laid plans of mice and men (and women). -Tom

How Big is Your Story?

Sitting across the table, I could tell Brett was thinking.

“Brett, let me ask you, how big is your story?”

“What?” he replied.

“How big is your story?” I repeated. “You are building a department inside this company. How big is your story?”

“Well, the company has been pretty successful, so far. We are holding our own against competitors. Lots of market opportunity.”

“So, how big is your story? You see, Brett, the bigger your story, the higher the level of work. The higher the level of work, the more you will depend on finding competent people. The most important decision you will make, as a manager, is who to hire. The people you hire will make you successful or will be the crucible of your downfall. The bigger your story, the more critical this decision.”

Brett continued to stare.

“As a manager in this organization, you are writing a story of the future. The people you cast into the roles of your story will determine its ending, intentional, or otherwise.”

How to Destroy Development Opportunities

“You will never, ever get what you want,” I was calm. “You will only get what you focus on. How will you focus? You think you can determine your future, but you can only determine your habits and your habits will determine your future. How can you build focus into a habit?”

Meredith replied. “I know what my business plan lays out. My goals are well defined. There are three. I will print those out, on card stock, tape them to the bottom of my computer screen. So, when I feel compelled to get buried in my email, those objectives will stare me down.”

“And what is the first of those three goals?” I asked.

“It’s funny,” Meredith smiled. “Develop my two lead technicians to take over supervisory tasks so I can focus on our system of production. And, every time I follow-up on a project detail, I destroy a development opportunity for my lead technicians to follow-up.”

How Will You Focus?

“Quick breakdown,” I pushed. “What are the three things you have to get accomplished this year?”

“Well, that’s easy,” Meredith replied. “Those three objectives come from my business plan.”

“And, you have your three objectives for the year broken down into quarterly goals?”

“Yes,” Meredith nodded.

“So, how do you keep those three objectives in front of you when you stay buried in your email, handling all the traffic and details of your projects?”

“It’s tough,” Meredith shrugged.

“I know it’s tough, but if it wasn’t tough, how would you do it? How would you focus on your top three priorities each and every day?”

“One thing is for sure,” Meredith smiled. “I won’t find them buried in my email.”

“You are correct,” I agreed. “For many managers, email is counter-productive to focus. Email is efficient, it is self-documenting, but it can also be a distraction. How will you focus?”
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Which Details Demand Attention?

“Those problems come to me because I am the manager,” Meredith protested. “Being a manager is a big job and I take it seriously. That’s why I am so busy.”

“That is why you are so busy, or that is why you are so distracted?” I wanted to know.

“These are not distractions, these are important details,” she continued to push back.

“Don’t you have people on your team to handle these details?” I asked.

“Yes, but I am accountable. Sometimes, these details demand my attention.”

“How can you tell the difference, between the details that other people should handle and the details that demand your attention?”

Meredith sighed. “I don’t know. I guess that’s why I stay buried. I am trying to handle all the details.”

“Meredith, when you were a supervisor, you WERE handling all the details, but you are a manager now. We expect you to take a step back and look at the patterns in your team, the patterns in your work flow. Yes, there are some details that demand your attention. The way you lay out your system should surface those details that demand your attention. But, your system should also allow for most detail to be handled and tracked by your team. There is appropriate decision making at every level of work. Let your team be busy, so you can look at the pattern of work.”

Twelve Months From Now

I repeated my question. “What things do you need to pay attention to, that will have an impact one year from now?”

“This company is pretty stable in what it does,” she replied. “We may replace a machine or our volume might go up or down. But what really changes, is the people. You never know what is going to happen with the people.” Melanie’s mind began to race like she had just discovered uranium.

“You’re right,” she continued. “The biggest thing that always changes, is the people.”

“And even if the people don’t change, the people change. Even if it’s still the same people, they are not the same people.”

Melanie’s discovery of uranium was shifting to panic. This new world that opened up just a few seconds ago, suddenly got very scary.

“So, I am responsible for knowing that, a year into the future?” she asked.

I nodded.
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Watch for the release of our online program – Hiring Talent 2016, scheduled for Jan 15, 2016.

Leadership is Observable

The group worked for ninety minutes in a simulation to complete a complex task. Once the task sequence and its steps were decided and practiced, the test was to complete the entire sequence in a twenty minute time frame.

I stopped the simulation to ask a simple question. “Which of you is the leader?” There had been no formal selection, but the group immediately looked at Sam.

“What is it about Sam, that made him the leader?” I asked.

The team members exchanged glances, wondering if they were all thinking the same thing. “Well, Sam seemed to know how to organize this thing together,” Marvin volunteered.

“How did he do that? You have not worked together as a team before.”

There was a brief moment, then Kyle piped up. “Sam pulled us all together, asked questions about what each of us thought. Within three minutes, he had a plan, assigned some individual responsibilities and we started working.”

Sam was chosen as the leader because he understood the complexity of the situation better (at least faster) than the others.

At that moment, Emma stood up. She was sitting on the sidelines, in fact, I wondered if she was paying attention.

“I think we can complete this task in five minutes, instead of twenty,” she said.

All eyes turned. In an instant, a new leader emerged. Leadership is an observable phenomenon.

If I Only Had People Who Were Smarter

“We have plenty of people to do the work,” Max explained. “I have written all the steps for them to follow, a nice flow chart as a visual on the cover of the binder. As the projects move through, I have Gant charts to help me understand the status, so I can explain to the customer.”

“It all sounds very organized. So what’s the problem?” I asked.

“The problem is, the production team doesn’t follow the work instructions. I walked by a work cell yesterday and the work was clearly being done out of sequence. I suddenly knew why we were having QC problems on some of the output.”

“And?” I pressed.

“I asked them why they were doing it that way, when we had just completed a training program on the correct sequence. Do you believe this? They told me the training program was wrong, that they had been doing it their way for a long time and they didn’t see the need to change. Besides, it was easier to do it their way.”

“And they had just been through training?” I wanted to know.

“Well, yes, it wasn’t like a class. I spent ten minutes with the four of them. It was really common sense. I don’t see why they didn’t get it. If I had smarter production people, they would have figured it out on their own,” Max was clearly frustrated.

“You see something they don’t see?”

“Yes. And how.”

“Did you ever think, you see something they cannot see?”

Operations and Command and Control

“If only life and business were that simplistic,” Scott said. “If you work in operations then your job is about commanding and controlling the time, labor and technical resources towards an agreed output. For the jobs in operations, your vision makes sense. But, I think it is only a functional perspective, not a universal one.”

“You seem to think that operations is all about command and control,” I replied. “It sounds a bit mechanical. Tell me more.”

“Operations is operations. Pretty cut and dried. We have defined processes inside efficient systems. Line up the people, line up the machines, line up the materials. Pop, pop, pop. Predictable output. Yes, it is a bit cut and dried.”

“If that is all there is to it, then why don’t we have robots do all our work?” I probed.

“In some cases, we do,” Scott raised his eyebrows in a subtle challenge.

“Yet, even in the midst of defined processes and efficient systems, even in the midst of robotic welding machines, we still have people engaged in operational work. And in that work, as defined as it is, aren’t there still problems that have to be solved and decisions that have to be made?”

“Well, yes,” he nodded.

“So, inside a process you describe as command and control, there is still discretionary decision making?”

Scott continued to nod.

“So, it’s not all neat and pretty,” I said. “Not all tied with a bow. In fact, some days, the work gets downright messy. Even mature processes are subject to variations in material specs, worn machine parts, delays in pace. Command and control short-changes the discretionary judgement required to effectively operate a well-defined system.”

Inspired by a comment posted to Responsibility, Accountability and Authority