Category Archives: Strategic HR

A sad, sad fable…

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About an American company. As told by Jason Corsello.

It’s an entertaining tale, you should read it even if just for a laugh. But it make you take note of the fact that Performance management ain’t a cure for stupidity, – that’s for sure.

It often occurs to me that some of the highly educated people that comprise the management ranks at our nation’s most highly regarded companies are so capable of strategizing that they never actually DO anything. They just think.

Not that there’s anything wrong with that by itself.

But, in that world, the people that are actually doing the work are just that – doers. Well what if the doers thought and the thinkers did? What a wonderful, productive world it would be. In some ways, I think that’s part of the promise of goal alignment in particular and performance management in general.

Just a thought.

From our research: Talent management is more than efficiency

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Note: This post was written by SuccessFactors’ Director of Customer Results, Erik Berggren.  Erik is leading a team focused on understanding - through detailed, data-driven analysis - how specific talent management behaviors drive business results – and then working to build those learnings into our product for the benefit of our customers. I’m excited to host his thoughts here, and I look forward to sharing more of our new knowledge via this blog in the future. So please enjoy Erik’s contribution and as always, I encourage comments. We want to know what you think. – Max

Talent management is about more than efficiency
Pull, don’t push your way to meaningful ROI

TugofwarI recently came across The 2006 talent management survey, conducted by IHRIM and Knowledge Infusion, which found that 77% of HR professionals think that talent management will only increase in importance over the next three years. In general, I think that’s great, because it means that people as an asset is a concept that’s making its way into the HR mindset. But, it also worries me, and here’s why: If HR Professionals think they can simply buy the software, put it in, turn it on and get full benefits, they are mistaken.

To maximize the return on investment in talent management, the solution isn’t just to put the processes out there and hope for the best, nor is it to push it out with smart internal marketing and hard selling. HR professionals need to make sure that their internal customers believe that there is value in using it the enhanced process, and get involved in making it work. That “pull” is critical, without it, organizations will not get a full return on their investment.
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“Groundbreaking” research

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GroundbreakingJason Corsello picks up on our recent research announcement – calling the approach “groundbreaking.”

You can see some early thoughts from SuccessFactors Research as previously posted here. Keep checking back for more of the “From our research” series.

Cascade hopes and caviar dreams

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Hh_cascade_prod02Not the dishwasher detergent. Actually I’m talking about the concept of the goal cascade. In most cases, this means a manager pushing her goals down to her employees. For many, that’s all it is. Honestly, that’s all I thought it was, too.

But earlier this week, I sat in on one of the all-hands training sessions we had and I realized there’s actually more to it. Technology enabled Goal Alignment doesn’t only have to be a mechanism for a manager that enables her to say “hey employee, this is what I’m working on – you work on it too.” It can actually be a far richer and more dynamic process.

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Nuts and Bolts of Succession

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I was directed to this very good article from WPS magazine called Succession Planning: The Nuts and Bolts of the Process which is sort of a primer on succession planning. A couple of its most enlightening observations are that 1. people often make the mistake of biting off more than they can chew with Succession – meaning that they try to collect too much data on too many people and 2. the best place to start a succession planning process is during the performance management process.

The author also points out an important decision: the one on which group will own the succession process. To me, the obvious place is HR, because succession fits so snugly with other responsibilities, but alternatives are a corporate strategy group or even a wholly separate succession group. A quote:

Once an organization has established all of the skills and competencies for every key leadership role and formulated a plan that works to take them from the current state of succession planning to the desired future state, the company must decide which department should own the process. “There’s not one cookie cutter answer in the sense that some organizations may have a corporate strategy group,” Kondo explained.

Managing motivation

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We’ve all experienced it. The loss of motivation at work. Sometimes it comes in waves. Sometimes in perpetuity. But why? What are the factors that influence motivation?

This is the question posed (and answered) by this article by David Sirota, recently reprinted in HBS’s Working Knowledge.  It’s often said that employees leave jobs because of their managers, but that’s just at the end of the line. Managers also have a tremendous impact on motivation levels. Regardless of whether organization wide policies are healthy or not, individual managers can, all by themselves, motivate or demotivate people.

But there’s lots that can be done to make sure things stay positive. According to the article, there are three separate and equally important spheres of influence for motivation – Equity (the need to be respected and compensated fairly), Achievement (to be proud of the job, one’s achievements and company) and Camaraderie (good relationships with coworkers).

The article goes on to outline 8 tactics for maintaining and enthusiastic workforce. They’re worth both reading and doing.

 

Pay for performance doesn’t apply – to the boss

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09value.graphic.190Over the weekend, the NYT (again) tackled the subject of top executive compensation. But this time, they added some cool charts and graphs to illustrate how utterly out of synch pay has become with corporate results.

My favorite is this one which contrasts some of the worst offending companies (where pay went up when a company’s performance went down) with some of the best values in CEOs (where performance went up but pay didn’t keep pace).

As more and more companies move to a system where performance is correlated directly to pay for their employees (as well it should be) it seems only logical that the same would be true for top executives. One would think that a scenario in which employees are denied raises of a few percentage points because the company didn’t have a good year, while the CEO walks off with bundles of cash would make “employee engagement” somewhat of a difficult job.

The Times also questioned the impartiality of compensation consultants in a separate piece, from which I truly enjoyed this particular quote from Warren Buffett:

Too often, executive compensation in the U.S. is ridiculously out of line with performance,” he wrote in his most recent annual report. “The upshot is that a mediocre-or-worse C.E.O. — aided by his handpicked V.P. of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet & Bingo — all too often receives gobs of money from an ill-designed compensation arrangement.

From Our Research: Teamwork is a good thing. Sometimes.

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Note: This post was written by SuccessFactors’ Director of Customer Results, Erik Berggren.  Erik is leading a team focused on understanding - through detailed, data-driven analysis - how specific talent management behaviors drive business results – and then working to build those learnings into our product for the benefit of our customers. I’m excited to host his thoughts here, and I look forward to sharing more of our new knowledge via this blog in the future. So please enjoy Erik’s contribution and as always, I encourage comments. We want to know what you think. – Max

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B0000812I read the McKinsey Quarterly Article “Competitive advantages from better interactions” with delight today. It is a great article and raises a few interesting issues for me.

Let me explain.

Over the years, I have had the opportunity to work in numerous countries around the world on dozens of projects as a management consultant.  Sometimes, working in different industries and across disparate geographies makes you feel like you are traveling in time, as it occurs to you that some places are just so far behind others when it comes to business practices.

It is always correct and sometimes popular to promote the idea of relentless teamwork. But frankly, I don’t believe it.  My hypothesis is that there is a diminishing return on the margins when it comes to teamwork. There is such a thing as too much. I have had consulting experiences in which an idea or new concept was evaluated by senior executives based on a  “did she see it?” or “was he involved?” analysis. The obvious assumption in the thinking is that the more interaction, the more “teamwork,” the better the result.

Recently, we conducted some rigorous research leveraging our vast customer data on performance and talent management behaviors, including the aggregate usage of more than 1.5 million users. We studied in detail the financial performance of our clients both in terms of profitability (Return on Equity) and in terms of  top line growth. The idea was to understand what over and under-performers were doing in terms of steering and measuring teamwork as a core competency.

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Guest Post – Your Best Talent: Not Just an Asset, But a Machine

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A Note: this post was written by a guest writer, and does not necessarily represent my opinion. That said, I think it’s important to host a variety of thoughts and perspectives on the blog and thus, I give you the following article written by David Harper, Principal Member and Directing Manager of The Advisory Alliance. As always, please feel free to comment.

David_HarperYour Best Talent:  Not Just an Asset, But a Machine. 

If you’ve stopped repeating the mantra “Our people are our most important asset.  Our people are our most important asset.  Our people are…”, because you truly believe it and don’t need reminding, you’re in good company.  Six out of seven global business executives view talent as the leading contributor to their company’s profitability.  In their recent global survey of more than 5,800 business executives from 128 countries, McKinsey asked “How much does each of the following assets contribute to your company’s profits?”  The number one answer?  “Talent”, with 86% of respondents answering “moderately” or “substantially”.  This is doubly impressive in view of the fact that Talent came in ahead of “Brand” (74%) and “Intellectual Property” (55%).

However, notwithstanding the fundamental Profit – Talent connection, many U.S. employees are not feeling the consequences of being the most important asset.  In a recent survey of 225 U.S. middle managers, Accenture found a significant drop in their level of satisfaction with their own organization.  In 2004, two thirds of middle managers were extremely or very satisfied with their organizations.  This year?  Fewer than half are, 48%.

So what’s going on?  On the one hand executives say Talent’s important, but on the other hand, executives may not feel it.

We know there’s a fundamental connection between better talent and better performance.  And yet for many leaders, that knowledge is insufficient to drive their talent development decisions.  I’m reminded of a doctor I once knew, a radiologist who read and interpreted X-rays.  He also was a chronic smoker who ultimately died of lung cancer, a condition he diagnosed innumerable times.  The irony is tragic.  And although the issues facing our companies are not truly life and death, the consequences do have life-altering impact.  We know that talent affects corporate performance.  But does that knowledge make a difference in what we decide to do about talent?

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The “people” buzzword

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People_readyDon’t know if you’ve caught any of Microsoft’s spiffy, new $500 million business-targeted campaign.  Themed “People-Ready” it asks businesses to consider whether they embody that ideal. Or, in other words, whether they have the tools in place to enable their most important resource – their people. Here’s a press release and an article in AdWeek.

The TV spot I saw had a bunch of business people doing business-y things and talking about differentiation. They ask themselves about operations, about marketing, etc. And they find no opportunity for optimization or advantage. Then, they pose a question that goes something like: “so what IS our competitive advantage?” Then one of the business-y guys nods through the glass to the people working at their desks and says “them.”

It’s no surprise that the push is to convince CEOs and the like that “Microsoft technology can help them get their employees to succeed” in the words of the AdWeek article. But my (obviously skewed and probably simplistic) reaction is to wonder if more word-processing software and an upgraded operating system are really what’s going to help drive people to perform.

As a loyal PC user, I’m excited about Windows Vista and the new Office. They look cooler and seem like they will make some computer things easier and more efficient. But will they “get employees to succeed” in ways they haven’t been able to before? Probably not.

It’s very en vogue these days to focus on people. Companies do it in their annual reports, FastCompany’s “Why we hate HR” article spawned volumes of comment and criticism and software vendors like SuccessFactors are gaining popularity as we help organizations manage talent in new ways. “People” is popular in the business world. But let’s take a minute to understand that people + technology can = many different things.

Spreadsheets, databases, operating systems and word processing software help people do tasks better. Talent management software helps organizations do people better. With all the people-talk these days, don’t get confused. Only one type of technology is truly focused on driving success through people. The rest is just marketing.