Strategy and Planning Archives

Your Organization’s Last Differentiator: Human Capital

July 18, 2017 by Sharlyn Lauby Leave a Comment

(Editor’s Note: Today’s post is brought to you by our friends at Kronos, a leading provider of workforce management and human capital management cloud solutions. The Boston Business Journal recently named Kronos as one of the Best Places to Work in Massachusetts. It’s their eighth time on the list and third consecutive year in the top three. Congratulations to them! Enjoy the post.)

The weather wasn’t’ the best at this year’s Society for Human Resource Management (SHRM) Annual Conference. Lots of wind and rain. When I travel and the weather is ugly, I have a tendency not to explore the city as much and prefer to hang out at my hotel. Thank goodness, the service was great! The hotel bartender was friendly and made some great recommendations off their menu.

When I worked in hotels, we were keenly aware that our competitive advantage was our employees. All hotels have beds and showers. Granted, some of them are more luxurious than others. But their real differentiator were the employees. They make or break a guest’s hotel stay.

I was reminded of how much people play a role in our business strategy after chatting with Gregg Gordon, vice president of Kronos’ data science practice group. He has just published his second book, “Your Last Differentiator: Human Capital”. I asked if he would share a little bit of the book with you and luckily, he said “yes”.

Gregg, tell us briefly what sparked you to write this book. On some level, I’d like to think that organizations understand that people are a key differentiator. What is it about human capital that companies need to focus on?

[Gordon] It began with a curiosity around how these startups were using technology to upend existing markets. As I began learning about the history of the organizations, it was much less about technology than it was about people who have great ideas, are relentless in execution, and have the grit to overcome lots of obstacles. The most successful organizations, both startups and incumbents, have a clear purpose their employees and customers identify with and can get passionate about.

Your first book is titled, “LEAN Labor: A Survival Guide for Companies Facing Global Competition”. The reason I’m bringing that up is because I believe there’s some connection between the two. How do you see LEAN principles linking with human capital?

[Gordon] You are correct. In my first book, it was about applying a proven method of improving all types of work processes to workforce management processes. LEAN is a method that helps organizations identify wasteful practices and allows people to spend their time adding value to customers. It’s the scientific approach to working smarter not harder.

I’m sure many HR professionals hear LEAN and automatically think manufacturing. But LEAN can be applied to many situations/processes. What are 2-3 things everyone should understand about LEAN?

[Gordon] There are many continuous improvement techniques. The reason I chose LEAN as a framework for the book is that LEAN recognizes the people that do the work as the ones most likely to know what can be improved and how to improve it.

Respecting and empowering people is what HR is all about so LEAN is a natural fit.
LEAN doesn’t require big investments. It even promotes the idea of many small fixes, so it’s a budget friendly methodology.
It’s easy to understand so anyone regardless of background can begin applying it with just a small amount of training.

What do you see as the benefits of using LEAN with human capital management?

[Gordon] Many of LEAN’S benefits are gains in time utilization and empowering employees to make independent, in-the moment decisions by understanding the purpose of the organization. The idea is to not work harder or faster, but rather eliminate time spent on non-value-added efforts and instead use that time for value-added activities.

Disruptive organizations are improving time utilization but, they also go beyond traditional LEAN analysis and techniques. They go beyond their traditional resources by utilizing technology very effectively to incorporate new ideas such as crowdsourcing. In addition to utilizing the time of people and other types of capital more effectively, disrupters capture their employees’ ability to innovate.

They also improve the utilization of peoples’ skills more effectively by redesigning jobs and processes around the peak capabilities of a set of skills. They understand their customers better than others and are able to provide a rich and consistent customer experience. To do all of these things well, an organization must harness the intangible qualities of people and understand the same of their customers.

Traditional LEAN is about breaking down tasks and making them simple to perform so they are always performed correctly. Disruptive organizations capture both their employees’ and customers’ spirit so that they have a relationship with the organization that goes beyond the specific product or service delivered. These organizations have been able to harness the intangible quantities of people such as their emotions and passions. HR practitioners may identify closely with many of the traits of a disruptive company. They too want to capture the full potential of the people within their company.

The lesson learned here is that there is a business model and return on investment (ROI) for investing in these efforts that can be emulated. People who have made their careers in HR would be wise to study disruptive companies and see what they can learn about the cause and effect of investing into human capital and incorporate these findings into their own strategies.

Last question. During the conference, I mentioned that I’ve been hearing the “sticky” word a lot lately. The notion being that organizations need to adopt practices that are “sticky”. How can HR professionals use LEAN principles to create “sticky” practices?

[Gordon] One of my favorite books is “Made to Stick: Why Some Ideas Survive and Others Die” by Chip Heath and Dan Heath. Its premise is that it is possible to design communication regarding almost any subject so that it is inherently memorable and therefore repeatable. We all know that the ability to execute a strategy is what separates good organizations from great organizations. Communication of the strategy is a cornerstone of great execution.

For example, if above average customer service is a goal, which statement would drive the behavior you desire:

“It’s critical we maintain a customer satisfaction rating of 99.9 percent.” OR

“When our customers contact us, treat them as if they were a beloved family member you haven’t seen in a year.”

By communicating in a way that is ‘sticky’ rather than in the language of business metrics, you are empowering employees to handle many different situations while still achieving the company’s goal. It’s not easy, but it’s a powerful technique that can support the company’s continuous improvement goals.

My thanks to Gregg for sharing his thoughts on human capital with us. If you want to learn more about how to use LEAN principles to differentiate your organization, I hope you’ll pick up a copy of his book. And check out his blog, “Your Last Differentiator”.

Regardless of whether your organization subscribes to a low-cost, differentiation, or focus strategy, every organization needs employees to perform at their best. That means communicating in a way that “sticks” with employees and giving them the tools to add value.

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A Senior Management Change Can Interrupt Company Culture

July 6, 2017 by Sharlyn Lauby 1 Comment

A key theme during this year’s Great Place to Work Conference was developing talent. Are organizations asking their managers the question, “What are you doing to develop talent? And specifically, your replacement?”.

You know I’ve always felt the primary role of a manager is to hire and train their replacement. It goes without saying that a big interrupter can occur in company culture when there’s a change in management. Organizations don’t always get to plan for management changes, so when they do, it’s a big deal. It’s a visible process that demonstrates whether the company really lives their culture.

During the conference, Plante Moran Managing Partner Emeritus Bill Hermann and current Managing Partner Gordon Krater shared their formula for successfully transitioning management responsibilities. The firm is the 14^th largest certified public accounting firm in the U.S. It has over 2,000 employees and has been recognized as a “best place to work” by Fortune Magazine for 13 consecutive years.

Their transition took 8-9 months. Let that sink in for a moment. Almost a year. Now I will admit that some of it could be attributed to the position of managing partner. But after hearing Hermann and Krater share their story, I can easily see the successful transition of managers taking months. Emphasis on the word “successful”.

The reason I say that is because of how they defined the goal. The goal of transitioning management responsibility was for the incoming and outgoing managers to maintain credibility. Both of them. Equally.

So many times, when we think of transitioning management, it’s because one person is leaving the company. In this situation, Hermann wasn’t leaving. He just wasn’t going to be managing partner anymore. It could hurt the organization if the transition didn’t preserve the individual’s credibility.

In today’s work environment, we are going to be faced with more situations where a manager transitions and doesn’t leave the company. Maybe they move to another department, division, or position. Maybe they retire and come back as a part-time consultant. Organizations have to put more thought into the transition process. Hermann and Krater shared three phases to a successful management transition that apply at any level of the organization.

Become knowledgeable about the company. This might seem like the easy part because it includes understanding the financials and the business. It might involve some technical training. But knowledge of the company means giving individuals the experience they will need in a future role. It’s allowing them to make mistakes while gaining knowledge. Remember the goal of maintaining credibility while creating a teachable moment. It can be tricky.

Take responsibility for the organization. Great managers should try to leave the organization better for their successor. They don’t “kick the can down the road”. They take care of business and do what’s in the best interest of the organization. Once a successor has been identified, managers need to step aside so the successor can start to assume responsibility. But not step so far into the background that it appears the new manager isn’t getting the support they need to be successful.

Maintain the company culture. I’d like to think we all know that culture is the number one reason people come to work for our organizations and the number one reason they leave. Managers should not only act in the best interest of the organization but also its culture. For example, in organizations where employees know the founder and remember the early days, it can be hard when a new manager takes over the reins. New managers need to understand and preserve the culture.

A lot of organizations do Phase 1 and 2 well. Managers know the company and their responsibility. It’s the culture component that can derail their success. Company culture is made up of those moments of truth about who the company hires, promotes, recognizes, and fires. If you want to learn more about how to maintain company culture during a management transition, check out Hermann and Krater’s book, “Succession Transition: A Roadmap for Seamless Transitions in Leadership”. It’s a super easy read that can provide a little creative inspiration for your organization.

Image capture by Sharlyn Lauby on the streets of Charlotte Amalie, St. Thomas USVI

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Employee Engagement: The Best Time To Do It Was 20 Years Ago

July 2, 2017 by Sharlyn Lauby 2 Comments

Mr. Bartender mentioned what is believed to be an old Chinese Proverb the other day. “The best time to plant a tree was 20 years ago. The second-best time is now.” It reminded me that the same philosophy applies to employee engagement.

The ideal time to deal with engagement was decades ago. Developing organizational culture takes time. Training managers takes time. But you know that. So, what do you do if employee engagement hasn’t been priority number one?

Don’t let it keep the organization from taking action. Like the proverb says, “the second-best time is now”. Here are seven tips and resources to get you started:

Start with a definition. I believe many organizations struggle with employee engagement because they don’t know how to explain it. Ask yourself: If I had to explain employee engagement in one sentence, what would I say?

RESOURCE: Employee Engagement Defined

Get the entire company onboard. With all the talk about “full employment”, employee engagement is more important than ever. Retaining and attracting the best employees requires a great company culture. And that’s everyone’s job.

RESOURCE: Employee Engagement Is Everyone’s Job

Train managers and employees to communicate well. Feedback and one-on-one meetings are more important than ever to grow engagement and improve employee retention. But those things don’t always come naturally. Give managers and employees the tools to communicate.

RESOURCE: Increase Employee Engagement and Retention with Better 1:1 Meetings

Build engagement strategies into company culture. Businesses want an engaged workplace culture. That starts before an employee’s first day on the job. Our friends at Kronos show us the essential elements of a highly engaged culture.

RESOURCE: A Highly Engaged Workplace Culture – The Essential Elements

Take a pulse on the work environment. We know the value of employee engagement and using surveys to develop programs. Proper planning and execution is crucial in employee engagement surveys. Our friends at Readex share four survey planning and execution strategies.

RESOURCE: Employee Engagement Surveys – 4 Planning Must-Haves

Tell your company story to candidates, employees, and customers. Storytelling has become the cornerstone of marketing. So, it’s no surprise that storytelling can be effective in growing employee engagement. A few tips.

RESOURCE: Use Storytelling to Create Employee Engagement

Measure your results! Yes, it’s possible to accurately measure employee engagement. Our friends at Workify have developed Employee Net Promoter Score (eNPS), based on the net promoter score concept, to link engagement and candidate referrals.

RESOURCE: The Key to Employee Engagement is Your Net Promoter Score

Even if your organization has made employee engagement a priority for years, your work isn’t done. Engagement is a top priority – today, tomorrow, and in the foreseeable future. That means it’s not about when you start making engagement a priority, but the fact that you are.

Image captured by Sharlyn Lauby outside the Cirque du Soleil big top in Miami, FL

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The Best Way to Study for an HR Certification Exam – Ask #HR Bartender

June 29, 2017 by Sharlyn Lauby 2 Comments

I’ve written before about the importance of HR certification and recertification. Today’s reader question has to do with a different part of the process – studying for the exam.

I am interested in obtaining a HR certification and had a few questions for you. What do you recommend is the best way to prepare for the exam besides professional experience? I’ve been in the HR profession for about 4 years now and studied human resource management in college. Do you recommend buying study guides? What about the weekly courses/classes?

First things first, I believe that it’s helpful to study prior to taking a certification exam. That being said, I also believe that study habits are very personal. What worked for me, might not be the best path for someone else. If you’re considering any kind of certification, here are a few things to consider:

Get a copy of the competency guide to understand the exam. The first step to putting together a study plan is knowing what subjects will be covered on the exam. Then, do a little self-evaluation. Are there topics that you know a lot about? Topics you don’t feel as comfortable with? This will tell you how much you need to study and what topics to focus on.

Find study partners to share experiences. The great thing about taking a certification exam is you don’t have to do it alone. There are other people who have taken the exam and people who are studying just like you. See if you can find a group connected to your professional association or on social media – it can help you stay focused on your study goals. And being a part of a study group allows participants to share stories using their practical experience.

Do research about books and tutorials. There are a wide variety of opinions about books and study guides. Here’s my two-cents: I felt that taking a certification exam was just as much about test taking as the mastery of knowledge and skills. So, I like the study guides, books, definitions, tutorials, etc. because I was able to practice test taking. Other people might have a totally different opinion. You’ll have to decide what’s best for you.

Look for affiliated courses and classes. Like books and tutorials, there are many options available. I’ve found there’s a difference between an HR course and an HR certification prep course. Review the course syllabus to ensure you’re signing up for the right program. Also, check with your employer to see if prep courses are covered under tuition reimbursement or professional development.

HR Certification: A Few Things to ConsiderClick To Tweet

Professional certification is a big step. It takes commitment of time and resources to study for an exam. But the rewards are worth it. Not only do you learn as you’re preparing for the exam, but you’re making the commitment to continue learning afterward (as part of recertification.) For those readers who’ve taken a certification exam, what advice can you provide?

Image captured by Sharlyn Lauby after speaking at the SHRM Annual Conference in New Orleans, LA

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How Your Small Business Can Attract and Retain Top Talent

June 19, 2017 by Sharlyn Lauby Leave a Comment

(Editor’s Note: Today’s post is sponsored by Massachusetts Mutual Life Insurance Company (MassMutual), a leading provider of insurance, annuities, retirement plans, and other employee benefits. They were recently recognized by the Ethisphere Institute as a 2017 World’s Most Ethical Company. Many congratulations to them. Enjoy the post!)

All businesses face the same challenges. From an operational perspective, every business deals with maintaining product quality, customer service, marketing, technology, and cash flow. Plus, a whole lot more. It’s the same with people issues. Every business is faced with recruiting challenges, employee morale and engagement, retention, training, etc.

As someone who has worked for big businesses and now owns a small one, I feel like we do everything large companies do. We budget, plan, and strategize like any business. However, I know that sometimes it feels like big corporations can fix challenges by throwing money at their problems. Big companies can have more resources at their disposal. It’s true. Some big companies have more resources and they choose to spend those resources to address issues. That doesn’t change the difficulty of the issue. But it can often mean the solution is more readily available.

The Advantages of Being a Small Business

However, when I start thinking about the advantages big businesses have, I’m also reminded of the reasons that we chose to keep our company small. According to the U.S. Small Business Administration, there are 28 million small businesses in America, and they account for 54 percent of all U.S. sales. Small businesses provide 55 percent of all jobs and 66 percent of all net new jobs since the 1970s. And small businesses are growing. Since 1982, the number of small businesses in the U.S. has grown 49 percent.

There are plenty of reasons to start a small business and keep it that way.

Small Business Concerns about Employee Loyalty

I recently got my hands on the MassMutual Business Owner Perspectives Study. It’s a very interesting read worth checking out. While the study covers issues like business valuation and transitioning ownership, I immediately homed in on the section about employee loyalty. Because even though business valuation and transitioning ownership are important, employee loyalty was ranked the number one issue facing small businesses (81 percent).

Interesting, eh? The very same thing that’s keeping the Fortune 100 up at night is disrupting the sleep of small business owners. The question becomes, how can a small company retain employees? In my experience, employees leave for two reasons.

Reason #1 – Their manager.

Employees want to feel that their manager is there to support them. That means managers should set expectations, teach employees what they need to be successful, offer regular coaching and feedback, and give recognition for excellent work.

Small businesses have an advantage in this area because it’s easy for employees to get noticed in the organization. There are fewer organizational layers and employees can build stronger relationships with people at every level of the company. Also, employees can potentially learn more because they are exposed to all aspects of the business, not simply the department they work in.

Reason #2 – Their job.

Employees want to do interesting work. I’ve often heard employees at small companies say they feel more connected to the mission of the organization because they can directly see how their role impacts the bottom-line.

Employees also want to be paid fairly and competitively. This includes their benefits and perks package.

Small businesses can have an advantage here because they don’t typically have all the policies and procedures that larger companies do. So, things that employees like such as casual dress codes, flexible schedules, and working from home could be possible. And many of these things have a low cost attached to them. That’s not to say that big companies aren’t adopting them too – they are. But small businesses often have the agility to quickly expand upon them. They can identify employee wants and needs and adapt their offerings accordingly.

The key for small business owners is understanding what their employees want and developing a plan of action to make it happen. Just because Google employees have a foosball table doesn’t mean your employees want one.

Get Some Creative Inspiration from Others

When faced with a challenge, I’ve always thought one of the best places to start is by getting some creative inspiration from others. Think of it as benchmarking or best practices.

MassMutual is hosting a realBUSINESS™ webinar focused on “How to Overcome the Top Challenges Small Business Owners Face” on Tuesday, June 20, 2017 at 1:00 p.m. Eastern. The highlight of the webinar will be a live question and answer period with small business owners. It’s the perfect opportunity to find out what others are doing. I do understand you might already have plans for Tuesday. If that’s the case, sign up anyway and get the recording.

The webinar is one in a series of realBUSINESS™ webinars for small business owners. You can find more on the MassMutual YouTube channel.

Small businesses can attract and retain top talentClick To Tweet

Small business owners have real advantages that they need to leverage when it comes to attracting and retaining the best talent. There are lots of people who would prefer to work for a small company. Take advantage of the opportunity! Your employees (and future employees) will thank you for it.

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Onboarding: Your Connection Between Recruiting and Learning

June 18, 2017 by Sharlyn Lauby Leave a Comment

We’ve all seen the headlines lately about the U.S. being at “full employment”. On the surface, full employment might sound like a good thing, right?

Well, not so fast. Full employment can create a couple of challenges.

Over inflated compensation and benefits. I’m all for a competitive job market. Top talent should be able to get what they deserve for their skills and experience. However, too much competition can cause employers to throw money at their recruiting problems. I know what you’re thinking, “Is that a bad thing?” I hate to say it, but it can be. Employees don’t want to be underpaid. They also don’t want to be overpaid.

Less turnover. I’m not advocating for high turnover. But some turnover is good for business. It brings in fresh perspectives. In my experience, when recruiting gets tough, organizations might be reluctant to terminate employees for fear that they won’t be able to find a replacement for months. It’s the philosophy that it’s better to work with the devil you know than someone new.

As a result of these “full employment” recruiting challenges, the recruiting and training functions must work together to fill the talent pipeline. Recruiters must be able to tell the organization what roles are better to develop in-house (versus recruit from the outside). Trainers have to do the same thing. Let the organization know what jobs would be better to hire from the outside (instead of developing from within).

In addition, training and recruiting also have to work together to ensure that new hires are set up for success. The way to do that is with onboarding. It’s the intersection between recruiting and training that creates employee success. According to TLNT.com, one third of new hires quit their job in the first six months. And we all know turnover is costly.

When it comes to onboarding, I’m starting to hear more about a format called talent center. The idea is that talent centers are dashboards where employees, managers, recruiting, and training can monitor and measure onboarding progress. Within the talent center are resources and checklists that new hires and managers can use during the onboarding process.

Now, before declaring checklists as evil, hear me out. On some basic level, we all work with checklists on a regular basis. We need them to remind us because we’re not perfect. Checklists can be used to:

Outline what it takes to be successful in a new role (i.e. competencies)
Document compliance requirements

The tricky thing about checklists is making sure they’re used. That’s the difference between a boring, outdated checklist and an interactive talent center. Here are a couple of things to consider:

Employees and managers must be trained on how to use the talent center. Organizations should not make the assumption that everyone knows how to effectively use a checklist. That’s probably one reason that they’re used badly – no one has ever received training. We’re not talking about hours or days of training here. But do provide managers and employees with guidance on how to make the most of the resource.

Regularly survey managers and employees. The other reason that checklists are not used effectively is because they can quickly become outdated. An outdated checklist is worthless. Managers and employees should be surveyed quickly to make sure onboarding resources are current. (And on a side note: training and recruiting should work together to put a maintenance program in place for talent center materials.)

It could make a lot of sense to transform a traditional onboarding process into a talent center, bringing together recruiting, learning, and performance. They key is getting everyone to participate at a high level. That includes HR.

Image captured by Sharlyn Lauby after speaking at the 2016 MBTI Users Conference in San Francisco, CA

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Don’t Overthink Your Data – Friday Distraction

June 9, 2017 by Sharlyn Lauby Leave a Comment

The purpose of collecting data is to take some action using the data. And, taking action is often one of the most challenging steps in any type of data collection process. Obviously, it doesn’t make sense to collect data and not do anything with it. Taking action is implied. The data might help us make a decision, notice a trend, or monitor our effectiveness.

But when we get lots of data, it can be tempting to spend ridiculous amounts of time studying it. Today’s Time Well Spent from our friends at Kronos is a reminder that sometimes technology can help us analyze the data. So, we don’t need to overthink it.

To avoid overthinking the data (sometimes known as “analysis paralysis”), consider these three things:

Have a target in mind. I often think that this step isn’t given enough attention. There’s a reason that the data is being collected in the first place. It might be to understand where the best recruiting sources can be found. Or how to schedule employee coverage that meets customer needs. Before getting into the weeds with data, understand the goal of collecting the data.

Realize you might never have all the data. Alas, as much as we love technology and its capabilities, we need to cut technology some slack. Technology is only as good as the data we give it. Which means, if we give our systems incomplete information, we should expect incomplete data analysis. The good news is that we can identify these empty pockets of data and figure out how to fill them.

Be okay with making a wrong decision. I’ve worked with a couple of people in my career who thought the way to never make a wrong decision was by never making a decision. Simply not true. One of my favorite quotes from John F. Kennedy says it best. “There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction.”

Data brings tremendous value to business. But only if we do something with it. Overthinking the data can stop individuals and organizations from moving forward.

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