When You Undervalue HR, You Undercut Your Managers’ Effectiveness


desperationOne of the fastest ways to sabotage your business results is to hire the cheapest HR professionals you can find. When you saddle your executive team with under-staffed (or under-skilled) HR support, you hobble their performance. Here’s why:

  • More than any other person in an organization except for the CEO, the top HR executive impacts how much courage managers will show in hiring and performance management.
  • HR has an enormous impact on your budget. In many organizations, the lion’s share of the annual budget is spent on salary and benefits, and HR typically determines how strategically that money is allocated. (Good luck attracting great people when you offer lousy benefits and no clear way of measuring or rewarding performance).
  • HR has a huge impact on results. HR maps out the strategies that attract, retain, and inspire the staff to help you achieve your mission. (Good luck trying to achieve great things without great people. Even if you hired some great people, ineffective or bad HR strategies could end up demoralizing them just before you need their best work).
  • And when things really go sideways, HR helps you evaluate the legal risk of ushering your hiring mistakes out the door, before they cause even more damage. (Or do you enjoy making chit-chat with your former employees’ lawyers?)

But it’s a precarious business to be an effective senior HR executive. In a cruel twist of fate, doing the HR job well requires putting their own job at risk repeatedly, because it’s often their responsibility to speak the uncomfortable truths to power. Great HR people make the CEO less comfortable, not more comfortable. Consider how:

  • When you feel like your organization is already spending too much on salary and benefits, a top HR executive will tell you that your compensation still isn’t competitive, and you need to spend more if you want to hire and retain the best people.
  • When you think you’ve communicated enough about your performance expectations, great HR tells you the team is still fuzzy on the details and you need to do more for them to understand you clearly.
  • When you would rather dodge addressing a situation with a problem employee, great HR won’t let you shirk your responsibility, and keeps the issue on your agenda until you resolve it.
  • When you want to blow up in righteous indignation at someone’s failure, great HR instead cools you down and points out that there are environmental factors that set them up to fail.
  • When you make the workplace less productive by occasionally micromanaging, undercutting your executives, or not acknowledging high performance, great HR points out where and how you could improve.

Good ol’ HR, always the life of the party. (Mommas don’t let your babies grow up to be cowboys HR pros.)

If you are a CEO and your top HR pro does not make you uncomfortable, consider that you might have the wrong person for the job. Or consider that you may actually have the right person. But instead of letting them speak truth to power, you instead make it abundantly clear that they shouldn’t bring you tough information. Either way has the potential to put everything you worked for at risk; your pay practices, performance management, and maybe even legal compliance could be sorely lacking. You need to encourage HR to bring you the bad news. Take a Dramamine if you need to, because it will rock the boat.

But if you ever want to hear the truth, don’t make it your policy to shoot the messenger.

Chronic Employee Turnover Is Almost Never About the Employees


bad-adsSenior executives often call me when they are at their wits end with people on their team:

  • “I’ve tried to make things work, but my VP of HR is just not delivering the results I need.”
  • “My Communications Manager just won’t step up to the plate. We seem to only react to things without any strategy.”
  • “The world changed around us, but Finance is doing the same things we did ten years ago. I’m getting no useful information and feel like I am constantly dragged into the weeds. We need to rethink what we are currently doing, but frankly I’m more worried about all the problems we are not even thinking about yet.”
  • “Our IT department is a real bottle neck. We want and need streamlined processes, better information sharing, and improved productivity. But all we get are surprise expenses, empty promises, and long delays. Even simple requests seem to get buried in obfuscation and complexity.”
  • “Our Chief Marketing Officer is not doing anything that drives revenue. We’ve spent money to upgrade our social media presence, revamp our website, and conduct extensive customer surveys. But our revenue is still flat-lined.”

Some of these concerns might sound like people problems. But twenty years of experience as an executive recruiter has taught me that what looks like a people problem is often a situation problem. An occasional bad hire is nearly unavoidable. But if you churn through executives every few years, your chronic turnover almost certainly runs deeper than just one bad egg. When your department or executive team has a pattern of failure, it’s likely that your work environment sets people up for failure (however unintentionally).

The First Law of Holes is, “If you find yourself in a hole, stop digging.” In the face of chronic turnover, don’t hire anyone new until you fix the underlying issues. Chronic turnover problems won’t be solved by blaming individual employees and then going out to immediately hire more. As Einstein noted, “We cannot solve our problems with the same thinking we used when we created them.” Instead, chronic turnover is best solved by looking beyond the individual people and exploring any issues in the work environment. Before you move forward with another round of hiring, step back and look at your own role in these seven common causes of employee failure.

1)      Are you using an outdated business strategy? Maybe the way you’ve always done things no longer works. Nothing runs on autopilot forever. If it’s the wrong task for the times, it won’t matter who you assign to do it — they will fail. The skills required for success ten years ago are not nearly enough to achieve success today. Almost every job has an increased demand for results, coupled with dramatically higher complexity and ambiguity in the work. You can’t just use old job descriptions and salary budgets to hire new people … but many people still try to.

2)      Maybe the best people are just not that into you. Do you have trouble attracting great people to your open jobs? Or do you interview great people, only to see many of them withdraw from a second or third interview? That’s a signal that you, your job, your organization, or your industry are just not that attractive to the people you want to hire. No one stands in line for an iPhone 3G anymore, even though they did a few years ago. Have you considered that the job market might have changed around you and the best people have better options elsewhere? When was the last time you benchmarked your salaries against the competition? Do you really understand who is available in your job market and who you are competing with to hire them? (Almost nobody does this kind of market research when hiring.)

3)      Are you still placing .22 caliber people in a .357 Magnum job? Growing organizations outgrow people. Your internal positions inevitably become more complex as you grow. So your next HR Manager will face dramatically different challenges than your last one. Just because the last HR Manager was willing to work for $90k does not mean you can use the same salary budget to replace her. When you hire, you need to think about the future, not the past. And if you need a new business strategy (see #1), are you ready to pay a salary premium to hire someone with those skills? Strategy never comes cheap, but far too many managers hope (in vain) to find it in inexpensive candidates.

4)      Are you disappointed with everyone you interview? Perhaps your recruiting team is only considering the people who fit your salary budget, or perhaps your recruiting strategy only reaches the people who respond to job advertising (only about 18% of the total candidate pool responds to recruitment advertising). If you want different recruiting results, you need to align your HR practices with your business strategy.

5)      Do you hire new people to shake things up, only to be disappointed after you hire them? Do you find that your people will not step up to the plate? Do you give new people big audacious goals, then disappear while they get stuck in the thicket of executing? Do you hover at the big picture level, never getting in the weeds with them, making them feel like they are going it alone? Do you ask new people to build consensus with your overworked, understaffed current team, or do you help pave the way? And when it comes to conflict — be honest with yourself — do you reward your team for encouraging healthy debate, or reward them for getting along and not rocking the boat? Change agents need more support than senior leadership usually provides them, and they always cause more chaos than their managers prefer. You can’t say you want to hire change agents and creative thinkers and then not facilitate their ability to foment change.

6)      Do your new employees charge ahead, or freeze like a deer in the headlights? There’s an old saying, “The fish stinks from the head.” Do you share the credit and take the blame? Or vice versa? If your new hires know that they will be blamed for every error, how many risks do you think they will take? Do you swiftly make gutsy judgment calls in the face of uncertainty, or do you expect your subordinates to take those risks instead? If you are always traveling or behind closed doors, is your team forced to guess at what you are thinking? Do new employees have to figure out their mistakes from group emails or other employees? Or do they get honest, direct, and regular feedback?

7)      Do you have a rule for everything? Are your employees trusted to exercise good judgment or do you have a thick set of policies for everyone to follow? Maybe your HR policies were initially designed to mitigate your legal risk, but after years of adding small edicts to your employee handbook, your office now exudes the depressing atmosphere of a police state, repelling the very people you want to attract. Police states are rarely nimble or fun. (And in a sad bit of irony, some employment attorneys suggest that all those oppressive policies might actually increase your legal risk.)

If you find yourself blaming the person who failed in a job, you’re probably looking in the wrong place. You’ll almost never find the solution there.

Before you look at new people, look at yourself. Chronic turnover problems are best solved by looking long and hard at how you might be contributing to the very problem you are asking someone else to solve.

Determining Salary for a New Hire? Think Like a Compensation Pro


woman with stack moneySalary negotiations with top performers are a pivotal time in the hiring process. As an employer, it’s easy to forget that the candidate is not yet one of your employees. You can create or destroy trust, and set the tone for your entire employment relationship by how skillfully you negotiate salary. Sadly, salary negotiations are also where hiring managers risk snatching defeat from the jaws of victory. Job seekers now have access to credible salary information, so you need to assume they know the market for their skills as well, or better than the hiring manager.

Early in a new search, and again at the offer stage, we talk with hiring mangers about what kind of salary they plan to offer the candidate. In those conversations, it appears that many hiring managers struggle to find a framework to talk strategically about compensation. Fortunately, most experts agree on what factors you should consider in discussing compensation. I’ll share some of those factors below, but remember that salary is not everything–it’s also important to understand how salaries fit into your total reward strategy. See, “Are You Ready to Explain Your Compensation Strategy (Coherently?)” 

Before we start with the expert recommendations, let’s first dispense with two common, but really counterproductive salary negotiation tactics:

The weakest logic I hear from hiring managers is when, in generating a job offer, they say, “I just looked at the candidate’s previous compensation and added 10%.” This flawed approach demonstrates that the manager has no compensation strategy of their own. They are simply hoping the candidate’s last company had a smart compensation strategy; otherwise they compound the very mistake that caused that employee to consider leaving.

Another salary negotiation tactic that’s certain to backfire is to low-ball a job offer to a top performer and expect that they are either: a) poorly informed enough to accept it; or b) willing to keep negotiating after a bad-faith move from the hiring manager. Taking this approach overlooks the big picture of compensation–you need to pay fairly because other employers are hotly competing for the very same people. Only desperate people accept a low-ball job offer. Top performers will simply go elsewhere–to find an employer that understands their market value and does not play games with their pay.

You simply can’t wing it in these conversations – money is too much of a hot-button issue. Follow Dan Pink’s advice from his book Drive:

“The best use of money is to take the issue of money off the table . . . Effective organizations compensate people in amounts and in ways that allow individuals to mostly forget about compensation and instead focus on the work itself.”

Read the rest of this entry »

And Now, For a Completely Different View of What Management Could Be


Future of WorkIn the late 1970’s Tracy Kidder captured a new kind of work ethic and (at the time) a novel kind of management when he wrote the business classic, “The Soul of a New Machine.” It was a rollicking good story about engineers building a new computer. The story was really about people, and teams, and how management could create a completely new culture where amazing work could occur. Long before we were using phrases like “knowledge workers” or referring to part of California as “Silicon Valley” he gave us a preview, a new choice really, of what leadership could look like.

Scott Berkun has done the same with his new book, “A Year Without Pants, WordPress and the Future of Work.” With warmth, humor, and finely crafted prose Berkun shares the story of his time working for Automattic, the tiny company behind WordPress–the 15th most popular website on the planet, hosting almost 20% of the top 10 million websites in the world.

Berkun is no passive observer in this story. After a decade working successfully as an author, he gave up that glorious life of freedom to work as a Project Manager at Automattic. He did actual work, and apparently did it well (having worked at Microsoft on Internet Explorer during the browser wars, he knew how to lead a technical project). His experience brings us gems of insight like, “The bottleneck is never code or creativity; it’s lack of clarity.” And, “Ambiguity makes everyone tolerant of incompetence.”

If you run a small firm, or manage people, or care about what the future of work might be, you’ll want to know this story. It should be required reading in business school. Not because Berkun makes any claims to know the future. There’s no way of knowing whether this book predicts the future, as Tracy Kidder did. Perhaps the set of open-source management principles he outlines will forever remain a wild outlier to traditional management theory. Frankly, it doesn’t matter. Because his book will make you question assumptions you have not thought about in a very long time.

What’s it like to work in an open source culture? Berkun says Automattic is, “not managed at all in any conventional business sense.” The founder of Automattic, “went to great lengths to keep support roles like legal, HR and IT from infringing on the autonomy of creative roles like engineering and design. The most striking expression of this is that management is seen as a support role.”

Berkun illustrates both the bad and the good of working at Automattic with penetrating clarity. He shares that, “Meetings at Automattic were always qualified disasters. They happened so rarely, certainly in-person ones, and had so little urgency there was little pressure to get better at running them.”

There are also worthwhile insights into innovation and project management, “It’s never a surprise in great projects to find grueling work somewhere along the way … It sometimes takes ugly effort to make beautiful things.”

He offers insights into how to evaluate people, “The real story behind some people you meet with fantastic reputations isn’t notable talents or skills, but merely an exceptional ability to choose the right time to join and leave particular projects. The work of managers everywhere is rarely evaluated with enough consideration for the situation they inherited and the situations they faced that were not in their control.“

The book is a primer for how to be a project manager in an open source world. But don’t read the book today and expect to apply these lessons to your company tomorrow. Berkun cautions, “A great fallacy borne from the failure to study culture is the assumption that you can take a practice from one culture and simply jam it into another and expect similar results.”  And this gem, “Often acquisitions create a paradox: they’re hard to fit into a company for the same reason they’re attractive to acquire. The thing you want to buy reflects a different way of thinking, which has value, but that difference is at odds with the culture you already have. Like an organ transplant, natural antibodies will fight against having the new organ fit in. And the more you do to force it in, the less of what you wanted to acquire in the first place remains. The vast majority of acquisitions fail for this reason.”

Fair warning, once you start the book, it will be hard to put down. And once you finish it, you’ll need some time to go away and think about it.

Want to use a Feedback Sandwich? Don’t You Dare.


two businessman with laptop discuss somethingIn a recent post in the Washington Business Journal, I interviewed Dr. Alice Waagen about how to be more effective when managing employee performance. She had some great insights into how the context of the performance conversation matters as much as the words you say. It’s a good read, check it out.  But we also talked about how much she detests the “Feedback Sandwich.”

Some managers struggle with praise, but more struggle with delivering criticism. One of the most commonly recommended techniques for more easily delivering criticism is the “Feedback Sandwich.” Simplistically, the idea is that you open your feedback meeting with praise of some aspect of your employee’s performance, follow it up with some criticism, and then end the feedback on another high note. It’s an idea Mary Poppins and her Spoonful of Sugar would love.

But Alice is no fan of The Sandwich. Here’s the problem as she sees it:

“According to research on listening and perception, after a lengthy conversation, the thing that is best retained is what is said last. If I sat you down for a meeting and said, “Bob, your customer is very happy, I love your enthusiasm and dedication…by the way you messed up the budget on this project. And I’m recommending you for a new project.” Which parts do you hear and remember? I’d remember the new project! You’re not improving performance, because your staff member will gravitate toward and focus on the compliments, while simultaneously shrinking the importance of your criticism.”

For different reasons, most researchers have arrived at the same conclusion: The Sandwich is a fundamentally flawed way of delivering performance feedback.  Much of the research comes down to how your brain interprets both positive and negative feedback. Some people are very focused on any praise they receive – which may also depend strongly on the management style of their supervisor. If the feedback provided by their manager is typically negative, then any positive praise may stick out. Or by contrast, maybe the positive feedback would go unheard if it’s surrounded by constant criticism. Stanford professor Clifford Nass makes this point:

“One fascinating side effect of the power of negativity is that you remember less of what is said before receiving criticism because negative remarks demand so much cognitive power that the brain cannot move the prior information into long-term memory”

No matter which cognitive theory you accept, it’s pretty useless to open with a small positive thing. It either won’t be remembered, or remembering it will potentially contribute to forgetting your constructive feedback.

The approach recommended by Dr. Nass sounds to me more like an Open-Faced Sandwich…maybe a Reuben. He suggests that you start with the important negative feedback, and then move onto a long list of praise (key word: long). Opening with “criticism will bring people to attention in time to listen to the praise,” but positive remarks are both less memorable and more readily disregarded in the face of criticism, so you’ll need that longer list of praise. The Open-Faced Sandwich grants you the opportunity to negate some of that natural anxiety that comes from receiving (and giving) criticism.

But even the Open-Faced Sandwich brings to mind what George Burns said, “Sincerity – if you can fake that, you’ve got it made.”

The most devastating criticism of any kind of Sandwich is the insincerity of the conversational structure itself.  Roger Schwartz, writing in the Harvard Business Review, finds the Sandwich ridiculous, as it’s “designed to influence others without telling them what you’re doing — it is a unilaterally controlling strategy — in other words, a strategy that revolves around you influencing others, but not being influenced by them in return.” He then offers a simple thought experiment for determining whether the Sandwich (or any similar “non-transparent” strategy) is an effective way of doing things:

Imagine that you plan to use the sandwich approach with Alex and Stacey, two direct reports who just gave a presentation to your senior leadership team. To understand why you’re reluctant to share your strategy, take the transparency test — a thought experiment with three simple steps:

  1. Identify your strategy for the conversation. Your strategy is to start with some positive feedback to relax Alex and Stacey, then give them the negative feedback — the purpose of the meeting — and then end with more positive feedback so they won’t be so disappointed or angry.
  2. Imagine telling the people your strategy. You would say something like, “Alex and Stacey, I have some negative feedback to give you. I’ll start with some positive feedback to relax you, and then give you the negative feedback, which is the real purpose of our meeting. I’ll end with more positive feedback so you won’t be so disappointed or angry at me when you leave my office. How does that work for you?”
  3. Observe your reaction. Do you find yourself laughing at the absurdity of making your strategy transparent? If you think “I could never say that,” it’s because the strategy is unilaterally controlling: it is an attempt to control the situation without letting Alex and Stacey in on the plan. Unilateral control strategies only work when the other people don’t know your strategy or are willing to play along. And they are less effective than transparent strategies.

So if all forms of the Sandwich are a ridiculous way to give feedback, what do you do instead?

Consider the recommendations outlined in these two short articles:

But you probably want to grab a sandwich before you read them.

What Really Engages Employees?


GrawitchA while back, the Washington Business Journal asked me to write something about the Gallup 2013 State of the American Workplace report. I’ve long thought that Gallup has it backward and said so in a post titled “For Better Employee Engagement, Ditch Your Engagement Projects.” In my post I stated that engagement projects are not the path to success. It’s better to manage your people well, but chase victory. Engagement will likely follow success, not the Gallup formula of success following employee engagement.

But hey Gallup is very well-known and I am not, so I didn’t expect widespread agreement with my post. I was simply satisfied with joining John Sumser in taking the contrarian viewpoint on this important topic.

Well, last week, Dr. Matt Grawitch posted something on the site of the American Psychological Association Center for Organizational Excellence.  The title of the piece was, “I Agree, Bob Corlett: Ditch Those Engagement Projects.”

Yeah, I admit, that felt pretty good. I really did not expect that kind of validation.  Naturally Doc Grawitch was more eloquent that I. Here is a snippet from his post:

” … organizations don’t need “engagement initiatives.” They need effective structures and processes that allow workers to excel and make a positive contribution, that recognize those contributions and that allow workers to meet their professional goals. And they need to do so in a work environment that is respectful of all the demands they face and whose primary output is something other than stress and strain. If you develop sound business structures, processes and work environments, you don’t need to worry about engagement, because it will naturally occur.”

If you like that argument, you’ll find quite a bit more to like on the APA Center for Organizational Excellence Good Company Blog, check it out.

Are Your People a Drag or a Sail?


We staff a lot of new initiatives. And we’re often brought in when executives want to rethink how they have staffed a position.

So I regularly hear how executives talk about the intersection of strategy and people. And some executives describe their current staff like a tractor pull–a powerful engine (strategy) is dragging a heavy sled behind it (the current staff).

Organizations often say “people are our most important asset” but people are also the source of most of your problems.  People often disappoint you. Top performers quit. Average performers often fail to deliver. Bottom performers threaten to sue. Departments go to war with each other. You spend less time than you want leading new initiatives and more time than you want refereeing internal squabbles. And when I see that, I usually see an understaffed, underfunded, underwhelming HR department awaiting further instructions from the executive team.

It does not have to be that way. In great organizations the culture fuels the strategy. The HR strategy supports the business strategy. Your systems, processes, expectations and rituals give lift and propulsion to your strategy, like a sail pulling you forward.

People are not your most important asset. People come and go. How you harness human achievement is your most important asset, and your only enduring source of competitive advantage.

The systems and processes of dealing with people are where the magic happens.

  • How you attract great people, and how you recognize and deploy the internal talent you already have
  • How you align the people to the mission.
  • How you consistently inspire top performance from your people.
  • How you retain the most valuable and drive away the least valuable.
  • How you gracefully exit the people who no longer drive results.
  • And how you do all this at a price you can afford.

Competent HR keeps you in compliance with the law. Great HR practices transform people from a drag into propulsion.

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