Six Steps to Getting Employee Buy-In

Contributor:  G. Thomas Herrington and Patrick T. Malone
Posted:  12/02/2009  12:00:00 AM EST  |  3

Every organization has established policies and work rules, and healthcare providers are no exception. In order for Quality and Process Improvement initiatives in the healthcare industry to succeed, we need a level of compliance. Yet, most managers are uncomfortable gaining the level of compliance and the commitment required to live within the rules.

True performance issues center on quality or quantity of work and should not be confused with someone not following work rules. While guidelines can sometimes be stretched, policies and rules, such as starting times, safety, dosing instructions, etc. must be followed.

Adhering to and accepting hospital policies and procedures can sometimes be a problem for employees. Often, your best performer is the one who wants to bend the rules. Additionally, some employees might be able to stretch the rules without it affecting their performances, but others in your work group can create huge problems when they bend a rule. Allowing one employee to stretch rules can lead to the perception of favoritism and cause problems with other employees.

Hospital policies and procedures must be enforced. After all, rules and policies are an important part of an organization’s success. The difficult, but necessary, job of the supervisor or manager is gaining acceptance of acknowledged work rules. While it may not be enjoyable, it is necessary. How often have you wanted to say: “Just do it!” That’s the quick and dirty response but not exactly the most effective way to gain acceptance of company rules.

You can keep your employees committed to work rules by following specific Action Steps designed to generate buy-in.

Take this example for instance:

Your hospital has specific work hours for good reasons. One of your top performers recently started to show up 40 minutes late for her assigned shift. Her being late doesn’t affect her productivity, but if others adopt this work habit, you could have a problem with overall productivity and customer service. What do you do about this? If anything?

A situation like this doesn’t need to be difficult if you keep a few key points in mind. First, be committed to the rules and policies of the company. If you not committed, no one else is likely to reach commitment.

Next, define what you consider is an acceptable outcome before you ever have a conversation with the employee who is not following hospital rules. Ask yourself what optimally you would like to achieve and what your minimal acceptable outcome would be.

When you do talk to the employee, don’t make the discussion personal. If you do, the likelihood is that the employee will become defensive. Remember: It is about the rule and policy, not the person. Despite the potentially touchy nature of the situation, it will help if you focus on the behavior and not the person.

Also, recognize that occasionally, a temporary situation might be causing the problem, so you need to understand why your employee is not following the hospital’s rules or policy. Temporary situations can be worked around. However, for long term scenarios, you may need to find other ways to deal with the employee’s situation. But keep in mind, sometimes there is no work around, especially when not following the rules (such as safety regulations) could put the employee and/or others at risk.

Another step is to acknowledge and attempt to see the situation from the employee’s perspective. This allows you to focus the conversation on finding solutions to meet the work rule. Often it is the employees themselves who find a solution that is acceptable.

Finally, and most importantly, maintain confidence that together you and your employee will find a way for the rule or policy to be met.

Action Steps at Work

Let’s look at the specific Action Steps and examples demonstrating how the conversation might go.

1. Describe the exact behavior that would be in accord with work rules.
“Each shift has a specific start time and it is important that everyone is on time.”

2. Explain why.
“Our patients depend on someone being available around the clock.”

3. Ask for reasons the issue exists now.
“This has not been a problem until recently. Is there something that is causing the frequent tardiness?”
If there are reasons that cause the behavior that you can live with temporarily, then adjust. Sometimes personal situations dictate temporary measures, but they must be temporary with a timeframe that everyone involved can live with. Certain rules and policies, such as safety, sexual harassment, etc., have no such latitudes.

4. Restate the work rule and ask what can be done to change the behavior. 
“The hospital policy is that the shift start time is 8:00 a.m. What can be done in order to meet the policy?”

5. Discuss suggestions and select the best solution.
“Let’s discuss the different options that will meet the company policy and then choose which one ensures that the policy is met.”

6. Seek commitment not agreement.
“My expectation is starting Monday all hands on deck at 8 AM ready to work.”

 “I will try. I will do my best…” are not commitments. They are only good intentions. In those situations, keep the conversations going until you are able to obtain the employee’s commitment. While this may take a little longer, doing so is worth the effort and time.

Living within the rules is essential for any organization and the Action Steps we outlined here should help you gain the buy-in essential to following the policies set forth by your hospital.

First published in HR Pulse, Fall 2009.

G. Thomas Herrington, Senior Partner
Part of The PAR Group since 1993, Senior Partner Tom Herrington spent over 10 years at IBM in operations, training and sales management. He served as IBM National Accounts Marketing representative in Chicago, Marketing Manager for Illinois and the Senior Consultant for California, Arizona and Illinois’ Cook County. He also worked in IBM’s training and educational group, designing and implementing a financial criteria training program.

As a PAR consultant, Herrington has worked with clients on five continents and trained thousands of people, ranging from an African chieftain to corporate executives to entry-level employees, on the PAR skill set. Among his corporate clients are Honeywell, FirstEnergy, Thomas Cook, IBM, UPS, TLC Laservision, Western-Southern Life Insurance, Sunlife and American Management Systems.

Herrington, who has his MBA from the University of Georgia, is a frequent speaker at industry and management conferences, including key note addresses at the Six Sigma Conference in Atlanta, Ga., and Thomas Cook conference in Cancun, Mexico.

Patrick T. Malone, Senior Partner
Senior Partner Patrick T. Malone has over 35 years experience in operations and sales management. Before joining The PAR Group in 1989, he worked in a variety of positions from customer service to National Sales Manager with the American Greetings Corporation and The Scott Companies.

At PAR, Malone’s consultancy has taken him to Asia, Europe, South America and all over the United States. He has worked with a variety of clients including Hewlett-Packard, Ft. Dodge Animal Health, DuPont, the United Way, Coca-Cola, Delta Air Lines, Siemens Medical, Verizon Wireless, Sensient Technologies, Banfield: The Pet Hospital and the American Cancer Society. 

Educated at John Carroll University, he is a frequent speaker at industry and management conferences and at universities and business organizations across the United States. A member of Sales and Marketing Executives of Atlanta, the Professional Services Executives Roundtable, the CEO Action Group, he also served as the National Board President of The Compassionate Friends, Inc., and as a trustee of The TCF Foundation, Inc.

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The Aftermath of the Go-Go Economy

Contributor:  From the Editorial Staff at Process Excellence Network
Posted:  11/12/2008  12:00:00 AM EST  |  0

The Good News: If History Is Our Guide, Economic Growth Will Return Sooner Than Expected

Read just the corporate agenda to fit today's new realities. This is something that business people are thinking about constantly, and justifiably so.

The aftermath of our past go-go economy requires abandoning unproductive and obsolete activities, streamlining and re-engineering business processes, finding new sources of revenue growth and rethinking many of yesterday's decisions.

Management guru Peter Drucker noted that every 50 or 60 years there has been a time period where business people, economists and politicians conveniently rationalized speculative growth would continue at an exponential rate.

According to Drucker, "Every such era believed there would be no limit to growth. And every one ended in debacle and left behind a massive hang-over."

After every go-go decade, Drucker observed, prophecies of the end of world order, zero growth, slow growth, depression, recession and even the need for more government intervention became popular.

But except for the years between World War I and World War II, vigorous economic growth always either continued or resumed very soon after the economy fizzled. Further, the recuperative powers of our nation were always a subject of amazement and astonishment.

However, Drucker stressed, time and again, the message is that the aftermath of a fast-growth era always brings substantial structural changes in the economy. Economic growth always changes and shifts to new foundations.

For example, consumer spending fueled the recent go-go decades. Easy credit and home equity borrowings were the factors most responsible for enabling consumers to purchase goods and services at an astonishing pace. That's now fast history.

From now on, economic growth will be in areas that require massive capital investments—energy, rebuilding city and state infrastructures, the environment, transportation, terrorism prevention and response, utility grids, traffic management, food distribution, health care and the like.

Managing the Fundamentals and Managing for Tomorrow

Some of the inevitable changes that we can now expect are very much in keeping with the practices Drucker recommended for managing in a turbulent economy.

For starters, the balance sheet is quickly becoming more important than the profit and loss statement. Cash flow and liquidity are now more important than price-earnings ratios. The return on total assets will quickly emerge as a better indicator of the health of an organization than earnings per share.

Organizations of all kinds and sizes will begin managing the productivity of all assets with renewed vigor. This means making work productive and the worker achieving. It means doing the right things and doing things right. Further, it means shrinking to grow, that is, abandoning what no longer contributes.

Thankfully, today's Six Sigma/process improvement diagnostic tools, techniques and technologies provide management with a step-by-step methodology for putting into action many of the ideas and concepts originally formulated by Drucker.

Productivity Will be the Major Economic Challenge of the Next Five Years

Continuous productivity improvement is the key to managing the inflation that may occur in all developed countries as a result of the financial crisis. (It should be mentioned—indeed, emphasized—that many economists believe inflation will not run rampant.)

To have price stability, wages cannot rise faster than productivity. For example, if wages rise by 10 percent and productivity increases by only 3 percent, prices would be predicted to increase by 7 percent (wage increases minus productivity increases equals price increases).

The bulk of our workforce is knowledge workers. They have received advanced educations and work in knowledge jobs—as market researchers, search optimization specialists, quality-control experts, managers, X-ray technicians and so on.

The cost squeeze that we are beginning to hear about is really a productivity squeeze. The only way out is to make work and knowledge workers more productive.

This can be done in a variety of ways, namely improving and re-designing business processes, improving customer feedback systems, providing better training, redesigning organizational structures and having effective utilization of today's social media technologies for enabling formalized sharing of best internal practices.

Further, the use of measurement and internal benchmarking is proving to be a powerful weapon in maintaining and growing profitability. Studying what successful units within an organization are doing to get superior results/measurements and having the worst performers learn from the best performers is a sure-fire way of increasing individual and organizational productivity.

Most importantly, making organizations more effective requires the reallocation of resources from low-yield activities to high-yield activities. In many instances this will require the creation of new and different businesses, funded by established organizations that are unified with the core mission of an organization.

This is our interpretation of Drucker's primary prescription for a world turned upside down. Organizations have to face up to the fact that yesterday's reality is over.

Companies will have to specialize/create niches/differentiate. They will have to organize around the flow of customer information. They'll have to provide superior service. They will have to pursue fast-paced innovation In order to accommodate today's new customer needs.

Every organization must prepare today's business for the future. As Drucker asked, "What do we have to do today to deserve tomorrow?"

First published on Human Resources IQ.

*Process Excellence Network is not affiliated with the Peter F. Drucker School of Management or the Peter F. Drucker Institute. Any mention of Peter F. Drucker School of Management or the Peter F. Drucker Institute is solely at the discretion of the authors.

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Serious Games for Serious Learning

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Who's Responsible for Employee Engagement?

While we can all agree that a constant responsibility for employers is to ensure that they have a productive and engaged workforce, we cannot all agree on how to get there. Who is responsible to ensure that employers have maximum productivity, morale and customer satisfaction? What steps would you take to improve an organization in this area? How do we get there?

Some people are of the opinion that the sole responsibility rests with the employee. If she doesn’t want to get the work done, fire her. There are a hundred people who want to fill that position so why keep her? Others feel that it is the responsibility of management to engage the employee and to literally entertain that person so that he shows up for work every day. Others view the responsibility as shared between the employee and the employer.

One cannot overemphasize the importance of employee engagement. Mark Herbert, a principal with New Paradigms, LLC in Arizona, maintains that data suggests that less than 30 percent of employees internationally would describe themselves as highly engaged and over the last few months that number is going down. According to Herbert, data also suggests that the more engaged the employee is the more productive they become.

According to Rebecca Lacy, a principal with Pinnacle Management Group in St. Louis, studies show that in highly productive work environments, there is only 65 percent productivity. That is a frightening statistic. Imagine how poor it is in the vast majority of organizations?

We should all be able to agree that these figures are unsatisfactory. So the central issue is what can be done to motivate employees? We are of the opinion that it is a shared responsibility between employee and employer. To that end, we firmly believe that it is necessary for a business to change its approach and to embrace new ways to govern the behavior of employees in all levels of the organization.

Shared Responsibility

Ideally, supervisors are responsible to help the employees become more productive through a variety of techniques. This comes down to having properly trained managers and strategies that hold both managers and their reports accountable for their actions.  This can be done by having human resources team up with department heads and, where necessary, consultants, to create an effective performance management program. In essence, a team will be formed that will put together a state of the art management program.

A solid program with properly trained managers and supervisors can greatly enhance engagement and productivity. The desired outcome would be to ensure that the program results in clearly defined messages, realistic goals, methods of teaming with employees to generate strategies for identifying goals, techniques for coaching employees during the year, strategies for effective documentation, discipline, employee management and proper use of incentive programs. At the same time, proper lines of communication, effective utilization of human resources and complaint processes are essential.

Finally, it is critical to recognize steps that can be taken to empower employees where appropriate. Employees need to understand that they have to set aggressive and realistic goals for themselves, properly and objectively view themselves so that they can reach their full potential and not become stagnant, bored or ineffective which translates into unproductive. They need to understand that they are an integral part of the process. Finally, there must be open dialog both ways, between managers and employees throughout the year along with coaching, feedback, encouragement and direction.

Laura Ryan, the Director of Knowhow HR in the UK, believes that in order to enable employees to be productive employees need to have a say in the business, share in the success of the organization, be given the tools to get their job done, work in an environment conducive to success and have the freedom to be effective.

Andrew Avery, an experienced inventory and demand manager from Portland Maine, is of the opinion that once the employer has met their obligation to train the employee and to provide the employee with the tools they need to be successful, the responsibility transfers to the employee.

Kim Huff, an experienced human resources executive from Dallas, Texas, finds that many employers fail to do an adequate job in training their employees, identifying what employees’ talents are or where they can be best used in the organization. Ms. Huff agrees with Ms. Ryan that by giving employees a say in the business (listen to and implement suggestions that make sense) and sharing in the success of the organization, we are more likely to have loyalty.   Ensuring that employees have the right tools and skills and the empowerment to work with them will create a more productive workforce.

Avoiding Turnover

It should be the goal of your organization to have a workforce composed of longstanding employees. The longer productive employees remain with your organization the more likely you are to be productive. Turnover costs money. Turnover created by the failure to work towards successful engagement is avoidable. Weigh the cost benefit and decide how to proceed with managing your organization.

We can all agree that it is critical for the success of our companies and economy to have an engaged and productive workforce. The key comes in accountability. It is not enough to simply blame others when things don’t go so well. Instead, we need to examine what we are doing, what we can do better and, where necessary, who can help us to get there. To that end, we can go a long way towards satisfaction by taking the following steps including the following:

1. Define the responsibilities for each position
2. Review reporting structures
3. Team up to create effective performance management plans
4. Partner with HR in preparing the plan and strategies for implementation
5. Ensure that the plans in each department do not create conflicts
6. Engage in the proper training of all employees and management in furtherance of the plan
7. Ensure that you have effective communication from management to employees, from employees to management, between HR and management and between departments
8. Implement the plan and hold all (management and employees) accountable
9. Create realistic goals
10. Remember that positive feedback, soliciting input from employees and strategies to demonstrate respect are important  
11.  Have consistent and clear follow-up meetings to ensure employees are on track to meet goals.

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Effective Management Toolkit: Get Rid of the Performance Review

Put the performance review out of its misery!

“This corporate sham is one of the most insidious, most damaging, and yet most ubiquitous of corporate activities. Everybody does it, and almost everyone who’s evaluated hates it. It’s a pretentious, bogus practice that produces absolutely nothing that any thinking executive should call a corporate plus.”

So says Dr. Samuel Culbert in his book Get Rid of the Performance Review! How Companies Can Stop Intimidating, Start Managing—and Focus on What Really Matters. He believes that ultimately, performance reviews are useless.

Performance reviews are intended to help employees improve their skills, develop talents and leverage their strengths in a manner that helps them individually while increasing the company’s performance as well.

However, the performance review actually does exactly the opposite. It focuses on what the employee is doing wrong and how to fix it, based on the boss’s criteria, and it does not focus on achieving results. Performance reviews use unnecessary “grading” scales, which most times are altered because the boss must not give a perfect grade, as per HR. Therefore, employees can receive a lower grade than they deserve…all for the purpose of having the review stuffed into their file.

“It’s dehumanizing and leaves workers demoralized, unwilling to address their weaknesses. It makes them hate coming to work, let alone inspire them to turn themselves into better employees,” Culbert says.

Dr. Samuel Culbert, Professor, UCLA’s Anderson School of Management and author discusses with Human Resources IQ why performance reviews are cruel, wasteful, and an insidious practice that speaks volumes about the mindless management practices that plague so many workplaces today. 

*Editor's Note: This podcast based on the book Get Rid of the Performance Review! How Companies Can Stop Intimidating, Start Managing—and Focus on What Really Matters.

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Who Are We Talking About?: The Necessity to Identify the Subjects in Performance Review and Employee Evaluation Documentation

June 1,2009 by Devora Lindeman I cringed at the performance review documents my client, an employer, had claimed would win the case—two recently discovered memos supposedly demonstrating that the employee’s termination was not discriminatory. The typed memos stated: “Talked to her 5/8, 6/2, 9/1 and others re: multiple performance issues.”
“Met with her again regarding the same issues. JT told me he’d had the same conversations.”We needed to show that the former employee, Rose, had been terminated for poor performance issues and not her age or race. She claimed she’d never been told of performance issues. I, however, was not thrilled with these performance review documents, especially after asking the client: “Who wrote these?” The client didn’t know. The performance review documents were found in a file in a desk occupied by one of Rose’s former managers, with “Rose” scrawled on top of the file.“Why did she think the performance review documents applied to Rose?” Her response: who else could they be referring to?“Who is JT? Is that person still employed?” My client thought that it could be Jane Thatcher, who had died. Or possibly Joanne Taylor, who moved. Maybe John Titus or Jason Thorn, both of whom had worked in Rose’s department.Instead of being helpful, this performance review documentation, potentially vital to an employer’s defense against an employee’s discrimination claim, is practically useless because it is incomprehensible. If only they had been properly drafted, there would be the potential that these employee evaluation documents could have won the case for the employer! But as provided to me, they were useless.

When your managers document employee behavior or performance, they are writing for a future reader who does not know the players. Nevertheless, that future individual should have no questions about the events in the employee evaluation document, including knowing who wrote it and who it is about.

So that you do not fall into the traps into which this client dived, here is some guidance for how to get it right: Sign the employee evaluation or performance review document with your full name and job title: Remember that a future reader might not know who you are, let alone who other players are. Too often internal reports are unsigned, or signed with initials only. This can be especially troubling if the report is typewritten so that there is no handwriting to use as an authorship clue. Past authors have often left the company at the time of a future lawsuit and documents remain unidentified. A typed “signature” is better, but insufficient—anyone can type a name.Identify the person the performance review document is about: “I’ve spoken with her repeatedly and still her performance does not improve.” “She was late again on Monday.” While the author may presume that future readers will understand that a report in Samantha’s file was written about Samantha, that report may be separated from the file in the course of a lawsuit or otherwise. Performance review documents should stand on their own and be understandable without reference to the file in which they were stored or otherwise.Identify the people in the employee evaluation report by full name and job titles: Referring to colleagues and co-workers by initials or nick-names may be understood at the time but become incomprehensible in the passing years. Don’t write “BJ told me that Robert turned in the report not only late, but incomplete.” State that “Bruce Jay Sanford (BJ), our project manager, told me that ...”Do not abbreviate job titles unless generally understood, and even then be cautious: Everyone knows that CFO means Chief Financial Officer, right? Or does it mean “Central Files Officer”? Or “Chicago Facility Operator”? Or “Company Flight Officer”? It could mean anything particular to your business. Always define an abbreviation (especially a job title) the first time it is used in a memo or employee report.Do not use “company slang” without explanation: Your copies of sales receipts may be called “pinks,” from by-gone, multi-layer invoices, despite the fact that they are no longer pink. Similarly, the action to log them in a customer’s account may be called “Josephing,” after a long-gone, long-term employee who performed that function. However, writing an employee up for “failing to Joseph the pinks” will be incredibly confusing to anyone (perhaps even a future company manager not clued into the slang) who later reads that report.Do not fall into these traps that can render potentially vital documents unusable in the company’s defense, giving your defense counsel unnecessary headaches. Train your managers to identify who they are writing about when documenting employee performance reviews and conducting employee evaluations so that reports and memos become assets to the company and not liabilities down the road.

Devora L. Lindeman is a Partner with Greenwald Doherty LLP, a labor and employment law firm exclusively representing management in relationships with employees and unions, with offices in New York, New Jersey, and Connecticut. She provides management training to employers and employer associations on these and other topics. Lindeman joined Greenwald Doherty in 2007 with many years experience in management-side labor and employment law. Previously an attorney at Proskauer Rose, LLP, she divided her practice between human resources consultation and court and agency litigation. Lindeman spent a number of years at a labor and employment boutique firm prior to that. Since she has a business background, she understands employers’ needs and works with them to creatively solve employee issues. Much of her practice involves counseling clients on issues that arise daily, such as responding to workplace discrimination or harassment complaints, dealing with wage and hour compliance issues, accommodating individuals with disabilities, dealing with leave laws such as the Family and Medical Leave Act and routinely addressing the other myriad of situations that arise on a daily basis when one has employees. She also reviews and drafts employee policies and handbooks and assists employers with employee agreements, such as non-compete and confidentiality agreements, as well as those involved with reductions in force. Lindeman lectures to trade and business associations on various employment law topics.

Lindeman received her undergraduate degree from Sarah Lawrence College and graduated from Rutgers School of Law—Newark with Highest Honors. During law school, she served as the Notes & Comments Editor for the Rutgers Law Review. On graduation, she was inducted into both the Order of the Coif and the Order of the Barrister. She then clerked for the Honorable Stanley R. Chesler, U.S.M.J., in the District of New Jersey. Lindeman has practiced management-side labor and employment law ever since. She is admitted to practice in New York and New Jersey.

function submitCommentsOrder() {var commentsOrder = $('#commentsOrder').val();$('#setCommentsOrder').attr('action','/columnarticle.cfm?externalID=826&commentsOrder=' + commentsOrder);$('#setCommentsOrder').submit();}  Comments Sign in or Sign up to post a comment HRNY 04/30/2010 12:21:45 PM EDT

I am a Director of HR for a manufacturing co. with union members working under a CBA. A number of years ago as an HR Manager, I learned the hard way through arbitration that flimsy documentation like you illustrate - hurts, not helps, in working to get a result in our favor. Sure, managers and supervisors find this tedious and most of all time-consuming, but when you need it the most there is a payoff.
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DLindemanEsq 06/11/2009 5:47:51 PM EDT

R: I've not lived in an ivory tower, if that's what you're getting at. I've milked cows and cleaned other people's toilets (not in the same job), and had a number of other careers before becoming a lawyer. I understand that on-the-job realities sometimes devalue the importance of proper documentation, but have you ever had to defend an employer that was facing a 7-figure judgement in a lawsuit for lack of any, let alone appropriate, documentation? D. Lindeman
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sevenby54 06/02/2009 1:52:55 PM EDT

Ms. Lindeman, Have you personally had to fire or release a fellow co-worker? Have you had to keep personnel files on hundreds of employees in a union environment? Have you ever held a position in manufacturing? Interested in your candid response? Thank you, R. Snyder
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C-Level Business Leaders: Find Your Voice in This Economic Crisis

February 25,2009 by Doug Wilwerding

Typically I use this column to write about the management skills and experiences necessary to successfully execute a C-level job. On any given day in business, being a C-level executive is about leadership, vision and an astute ability to execute a strategy.

And then there are the other days. Days when the leader needs to step outside of the business and lead from a different platform. CEOs, CFOs, COOs, Chief Human Capital Officers, CIOs, etc. are often called on to be advocates. Many times they advocate their specific industry, a strategic initiative, their clients industries and offerings for their employees and shareholders. In this economic crisis, I believe, we as C-level executives are required to let our voices be heard loud and clear for the survival of business in general.

In the midst of this economic crisis, I believe it is time for C-level executives to stand up and be heard. We are being far too quiet and letting a few “villainized” spokesmen do our bidding for us. I don’t want to appear alarmist, but I sense that if C-level business leaders remain silent we will quickly find ourselves in a more difficult, if not untenable, situation.

Governments around the globe, and most dramatically here in the United States, are heading down a path that will not only not solve the economic crisis but will in fact likely exacerbate and protract the issues for years, maybe generations to come. This issue can be addressed, but not with silence from C-level business leaders.

This is not a partisan argument. Throughout the course of history, successful business leaders have been Democrats, Republicans, Libertarians, Green party advocates and anarchists. The box one checks on the ballot is not the issue. What is the issue is that we, as C-level business and C-level human resources leaders, understand business, and we understand that business is the engine of our economy. It affords our citizenry the ability to maintain independence and self-determination. Without business there is no freedom and there is no democracy. As the saying goes, “Capitalism can exist without democracy, but democracy cannot exist without capitalism.” Think about it.

As C-level business leaders we know the burden of over-regulation and its associated expense. Seemingly innocuous programs like the Community Reinvestment Act of 1977, the Bank Services Modernization Act of 1999, Sarbanes-Oxley and Gramm-Leach-Bliley are prime examples. They have done precious little to foster job creation or business growth, stimulate investment in new technology and new markets or anything so productive (with admitted deference to the lawyers who have made a fortune due to these little windfalls and the ubiquitous expansion of bureaucrats who now have permanent job security).

So, my readers, it is time to fulfill your complete C-level responsibility. It is time to advocate for business to the powers that be—those whom you elect and whose salaries you pay with your hard-earned tax dollars. Be heard and make it known that C-level business leaders don’t need more government to help us run our businesses, we need less. That we won’t create more jobs because of a stimulus check, we will create more jobs when we are allowed to make a profit, invest in our business, conduct research and development and compete with other worthy business operators and business leaders.

Our new president recently said, “There is a time to make a profit but now is not that time.” Au contraire, Mr. President, now is exactly the time to make a business profit. The equation is simple: Business profit equals ability to reinvest in business and grow. Growth equals job creation for more people, and less layoffs and unemployment. Growing businesses are good credit risks and stimulate money lending. Both jobs and profitable companies create tax revenue. We need profits because, my friends, we are going to have a huge bill to pay when this economic crisis is all said and done.

C-level business leaders, advocate and defend your business, your employees, your community and our country. It is time to be heard. Remain silent, accept what is being foisted upon us, and we shall in fact actualize Ayn Rand’s prophecy about the virtue of selfishness a short 52 years after publication.

Doug Wilwerding joined Omnium Worldwide, Inc. in 1986 as Director of Marketing and Field Sales. After positions in marketing and operations, Wilwerding started Accent Insurance Recovery Solutions as a division of Omnium in 1990. Wilwerding was president of Accent Insurance Recovery Solutions from 1990 through 1997. In 1998, Wilwerding completed a leveraged buyout of Omnium Worldwide, Inc.

In the spring of 2007 Wilwerding sold Omnium Worldwide, Inc. to West Corporation. He was appointed president of West Asset Management-Receivable Services, a division of West Corporation. West Asset Management is the second largest provider of accounts receivable management services with over $350 million in revenue and over 3,000 associates.

In 2008, after completing the post transaction integration, conversion and leadership transition, Wilwerding left West Corporation to found The Optimas Group, LLC.

The Optimas Group is focused on working with middle market businesses to build clear, actionable strategy, supported by high performance cultures and develop and facilitate wealth creation programs that integrate the owner’s objectives with associates' objectives.

Wilwerding holds a BSBA and MBA from the Daniels College of Business at the University of Denver in Denver, Colorado.

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How Workplace Surveys Make Knowledge Workers More Productive

January 26,2009 by From the HRIQ Editorial Desk

In knowledge work and in most service work, productivity improvement requires the elimination of whatever activities do not contribute to performance. Non-productive activities sidetrack and divert from performance.

Eliminating such work may be the single biggest step towards greater productivity in both knowledge and service work. Generally speaking, most problems can be converted into opportunities. That's the guiding principle underlying the proper use of employee surveys.

Examples abound. Peter Drucker tells how one survey achieved jaw-dropping gains in knowledge worker productivity in an article in the California Management Review.

He provided an excellent example of how nurses in a major hospital were asked these questions in an employee survey: What is your task? What should it be? What should you be expected to contribute? What hampers you in doing your task, and should these obstacles be eliminated?

According to Drucker:

“The nurses were sharply divided as to what their task was, with one group saying ‘patient care’ and another saying ‘satisfying physicians.’ However, they were in complete agreement on the things that made them unproductive.

They called them ‘chores,’ paperwork, arranging flowers, answering the phone calls of patients' relatives, answering the patient bells and so on. All—nearly all—of these could be turned over to a non-nurse floor clerk, paid a fraction of a nurse’s pay.

When the nurses were freed of chores, their productivity nearly doubled, as measured by the time at the patients’ bedsides. Further, patient satisfaction more than doubled and turnover of nurses (which had been catastrophically high) almost disappeared, all within four months."

Another Example and Its Lessons

In today's modern department store a great many controls are required. Each sale has to be recorded. There is need for information for inventory control, billing, credit, delivery and so on.

But Drucker reminded us:

"In far too many department stores the salesperson is supposed to provide all the control information. As a result, he/she has less and less time to do what he is paid for, that is, selling. Indeed, in some large American retail stores, over 50 percent of the salesperson's time is devoted to paperwork...with only one third left for selling.

The remedy is a simple one and works whenever tried. Once the salesperson has done his or her job, which is to serve the customer, the entire paperwork is turned over to a separate clerk who services a number of sales people and does the paperwork for them. The impact both on the ability of salespeople to have more time to sell and on their morale is astonishing."

Knowledge workers—engineers, project managers, sales representatives, call center managers, quality specialists and the like—must be continually surveyed if obstacles to their performance are to be identified and eliminated.

The result? The quality of service increases, individual and organizational productivity soars and employee retention increases.

The Power of Asking the Right Questions

Knowledge workers and service workers should always be asked: Is this work necessary to your main task? Does it contribute to your performance? Does it help you do your job?

If the answer is “no," according to Drucker, the procedure or operation must be a “chore” rather than “work." It should either be dropped altogether or engineered into a job of its own.

Improving the productivity of knowledge workers and service workers demands well-constructed, first-rate surveys and focus groups. It demands an understanding of the right questions to ask, a methodology for obtaining truthful (i.e., unbiased) answers and a command of simple statistical tools that enables collected data to be correctly analyzed and interpreted.

Learn how to get the truth out of employee surveys. Equally important, redesign the work process to maximize productivity. Once the "information" is obtained it must be acted upon, that is, converted into action. Otherwise it remains an exercise in expensive data collection.

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HR Shared Services Professionals Meet in London to Discuss Practical Cost Cutting Steps

Contributor:  Press Release via HRIQ
Posted:  09/14/2010  12:00:00 AM EDT  |  0

The business of shared services and outsourcing has become progressively more challenging, and with global economic recovery lagging behind, industry action has become necessary. To this end, shared services directors from global corporations such as GSK, Diageo and Coca-Cola will meet to share their positions on outsourcing and shared services contributions to their businesses.

Experts in the field of shared services and outsourcing will join directors of worldwide corporations to share policy details and find common solutions to shared problems at SSON’s HR Transformation: Outsourcing and Shared Services conference this October. Now more than ever cooperation between large firms and experts is necessary to ensure profitability. As the SSC Director of Becton-Dickinson said, it is “Very valuable to compare the actual trends to what my company is doing and see lines of vision for the future.”

The summit will benefit from presentations from world leaders in the field, and state institutions, covering topics from future closer industry collaboration to global resource optimisation to manage costs. It will also invite input from newer members of the shared services community through various round table and panel discussions, where it is hoped a fresh perspective may provide novel solutions to the mounting challenges that face shared services organisations.

With budgets becoming ever more tightly scrutinised, the Shared Services sector, “Must align itself with the business units and work like hell to identify and produce the services they need,” says Jack Cooper, CIO of Bristol-Myers Squibb Co.

For any more information please contact:

+44 (0)20 7368 9300

enquire@iqpc.co.uk

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Personal Integrity � Its Risks and Consequences

April 9,2010 by William Cohen, Ph.D. Drucker felt that personal integrity had to be a part of everything that a manager did, and that without it, a leader had no legitimacy to lead. Personal integrity frequently plays a major role in a professional becoming a leader, and personal integrity is important as a basis for all of Drucker’s views on leadership and management.

My Personal Integrity Challenge

I first wrote about this incident in one of my books. Some of the individuals who I interviewed preferred to remain anonymous. I decided to do the same and identified the protagonist not as myself, but as “Herb.” However in a speech after publication, I told the story in the first person. Someone in the audience who had read my book thought that I had stolen “Herb’s” story—pretty ironical for a story that was supposed to be an example of personal integrity. Since then, I’ve explained that I was “Herb.” Anyway, here is “Herb’s” story and how it affected my future in a way I never expected.

As a newly minted lieutenant, Herb was a new navigator on a B-52 nuclear bomber. Among Herb’s responsibilities was the programming and launch of the two air-to-ground “cruise” missiles called “Hound Dogs.” The missiles were new and there were still many problems with them. Those in Herb’s squadron that had flown with them got mixed results. Sometimes the missiles were right on target. More often they went far from where intended.

The aircrew really didn’t really launch the missiles. That would have been much too expensive, as each missile cost millions of dollars. The navigator programmed them in the air, constantly updating their information. This took several hours. About thirty minutes from the target, he put the missiles into a “simulated launch” mode and then instructed the pilots to follow a compass-like needle indicator on their consoles. If the needle turned right, the pilots turned the aircraft right. If the needle turned left, they turned the aircraft left. When they did this, the aircraft followed the course to the target according to information in the missile’s computer and inertial guidance system.

Fifteen seconds from the target Herb turned on a tone signal which was broadcast over the radio. On the ground, a Ground Control Intercept (GCI) site tracked Herb’s aircraft on radar. At the point where the missile would normally dive into its target, the missile would automatically terminate the tone signal. The course the missile would take to the ground once it started its final dive was based on predetermined factors. Using this information the GCI site calculated where the missile would have impacted if it had actually been launched.

These practice impacts had a major effect on the crews’ careers. Those that got good scores got promoted. Those that did not, were held back.

Herb’s five crewmates were all far more experienced than he. They were more senior in rank and were combat veterans of both World War II and Korea. Herb was fresh out of flying school. Herb had never been in combat and had never even served on an aircrew before.

All aircrews were having problems with these new missiles. However, it hadn’t mattered because all were given six months to learn to work with the missiles without penalty, so, the bad scores didn’t count. What no one knew at the time was that it was not the aircrews that were causing the problems, but the extreme sensitivity of the missiles and the more complex techniques required by those who maintained and serviced the missiles’ computer and navigation guidance systems on the ground.

However, the six months period of learning had expired. While on seven day alert, Herb’s aircraft commander called the crew together. “When we fly our first training mission after alert, we have missiles that will actually be scored for the first time,” he said. “We’re not going to debate this. We’re going to cheat to make sure we get reliable scores. All I want to know from the navigators is how to do this.”

The senior navigator who was also the bombardier responded: “That’s easy,” he said. “Don’t follow the missile needle. I’ll figure out an adjustment for the ballistics, and I’ll “bomb” the target using my bombsight. All you have to do is ignore the missiles directions and follow the bombsight’s needle as we normally do. The tone is the same for the bombsight or the missile. The GCI site will not know that we’re actually bombing the target. It will be simple, and no one will know.”

Herb was shocked and speechless. As a West Pointer he had been taught that you do not lie, cheat, or steal, or tolerate anyone that does. Some classmates terminated their own careers for the ideal of honor and integrity. This was expected. Honor and integrity were considered more important than success, and there was no compromise with it under any circumstances.

Herb’s crew was released from their duties after a week on ground alert. They had three days of time off with their families before getting together to plan the twelve hour training flight with the missiles. The mission would include the simulated missile launch, some regular bomb runs, some navigation and bomb runs at low level, an aerial refueling, and a celestial navigation leg.

The three days were terrible for Herb. He was new to the crew and the squadron, but he had heard rumors that cheating sometimes occurred. Now he was being ordered to do it with the very missiles for which he was entrusted. He talked it over with other more experienced officers in his squadron. They advised him not to rock the boat. They told Herb that this sort of thing happened and that many cheated occasionally. If he refused to do this, they said, it would likely end his career.

Herb had worked long and hard to join the Air Force. He had studied hard for an appointment to West Point, and with difficulty managed to make it through his four years there. Herb had spent a year in navigation school, six months in bombardier school, attended Air Force survival training, and more weeks of B-52 ground and flying training. It had taken six years altogether. How could Herb let it all slip away for this small act of cheating which was apparently generally accepted?

 “I was taught integrity first and that this was the essential of being an officer and a leader. This lie was contrary to everything I had been taught and believed in,” said Herb.

When Herb’s crew met to plan the mission, he asked to speak to his aircraft commander privately. As soon as they were alone, Herb told him: “If you want to cheat, that’s up to you. But get yourself a new navigator, because I’m not going to do it.” Herb’s commander was furious. The verbal abuse was extensive, and he was left literally shaking in his boots, thinking that his hard-worked-for career was at an end. After trying unsuccessfully to convince Herb to cheat, his commander left the room and slammed the door. Said Herb: “I was plenty scarred, and I thought it was the end.” He knew nothing about any other career to support his family, and like today, there was a recession and jobs were scarce. The airlines had long since stopped using navigators, so even this wasn’t a work option.

An hour or so later, Herb’s commander was still angry when he said he wanted to see Herb alone. Once alone he said, “Okay. We’ll do it your way. But those missiles better be reliable.” “I’ll do everything possible to make them so, but I won’t cheat,” responded Herb. He heard later that this commander told someone, “I don’t know whether Herb’s a good navigator or not, but I trust him. He’s honest and he’s got guts.”

The missiles were reliable. Herb didn’t know if he were skilled, lucky, or whether his more experienced crewmates had found a way to fool their inexperienced young navigator and cheat anyway. One thing Herb did know. He knew how far he would go for what he believed to be right. He would go all the way. Out of two hundred officers in his squadron, Herb was one of only three to eventually become a general. “I believe what I did then helped me immensely over the years and it still affects my thinking today. Had it ended my career then and there, it still would have been worth it for this priceless piece of knowledge about myself.”

Over the years I have seen and worked with many leaders in and out of the military. Some have demonstrated great personal integrity and gone on to great things. Others have demonstrated great integrity and it cost them their careers. And yes, I have seen some with no integrity at all get promoted. But as I’ve heard Drucker say, although followers will forgive a leader much, they will never forgive him for a lack of integrity. And as Shakespeare wrote: “This above all: to thine own self be true, And it must follow, as the night the day, Thou canst not then be false to any man.”

Adapted from Drucker on Leadership (Jossey-Bass, 2010)

Bill Cohen was Peter Drucker’s first executive Ph.D. graduate at what is now the Peter F. Drucker and Masatoshi Ito Graduate School of Management. His latest books are Drucker on Leadership (Jossey-Bass, 2010) and Heroic Leadership: Leading with Integrity and Honor (Jossey-Bass, 2010). Cohen is the president of The Institute of Leader Arts and a vice president of the 26 Peter F. Drucker Academies of China and Hong Kong. He is also a retired Air Force general. He can be reached at http://www.stuffofheroes.com/.

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Improving Government Performance: Recommendations for the New Administration

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Turning Internal Benchmarking into High Payoff Training and Continuous Learning Projects

March 4,2010 by From the HRIQ Editorial Staff

Editor's note:

Most people who manage prefer to dive right in to our Drucker Perspective articles. This editor's note or preface is rather long, and may appear not to get quickly to the point.

We're sorry, but please hang in there with us to its termination. We believe our devoted readers will appreciate this Drucker-based historical background... and may result in altering ever so slightly the way you perceive the article's core content.

As Drucker reminded us: "When a change in perception takes place, the facts do not change. Their meaning does." In short, how we view the facts influences how we understand them and how we can meaningfully respond to them.

To Begin...

Peter F. Drucker frequently commented that among the "makers of the modern world," Frederick Winslow Taylor (1856- 1915) is rarely mentioned.

Taylor created the field of scientific management, that is, the systematic study of work and tasks. Using today's terminology, he believed quantum leaps could be achieved in worker output if work processes could be streamlined and/or reengineered.

And he was correct. Scientific management took the world by storm. It transformed societies and provided tremendous increases in the standard of living worldwide.

Before Taylor, no one studied work. It was assumed that "working harder" was the only way to increase worker output. Taylor demonstrated that by "working smarter" productivity of the workforce could be dramatically increased.

The result? Workers could produce more in less time, with less effort, and receive higher wages for their increased output. He made the poor working-class population more productive. And as a result increased their standard of living.

The Impact of Scientific Management on Training

Drucker often said: "Taylor's greatest impact all told was probably in training." Taylor-based training became the one truly effective engine of economic development the world over.

Taylor methodologically mapped out the right way to do given kinds of work. In many instances, he redesigned the tools required for maximum output.

Once this was done, he discovered he could compress years of so-called apprenticeship (or exposure to the experience of master practitioners) into days, weeks, or at most months of organized and systematic learning. He, in essence, put together in desired sequence the repetitive steps that had to be performed in many types of work to achieve maximum output.

By rendering explicit how a given work task should be executed, he made skill-based work capable of being taught, capable of being learned, capable of being practiced. And all this could be done quickly and successfully.

To reiterate: Before Taylor's immense contribution, it was erroneously assumed it would take years of apprenticeship learning to acquire a variety of craft skills. What formally took years could now be accomplished in weeks or months.

Most importantly, Taylor showed that by using a "black bag" of tools and techniques the productivity of work and workers could be dramatically improved.

The Military Converted a Peace Time Work Force onto a War Economy Work Force Using Taylor's Methodology

Indeed, Drucker reminded us, that the United States military in World War Two applied Taylor's Scientific Management to train, that is, convert, totally unskilled workers into first-rate welders, shipbuilders, electricians, carpenters, navigators, pilots and the like with unprecedented speed.

This, more than any other factor, said Drucker, explains why the United States was able to defeat both Germany and Japan. We understood the skills that were required. Taylor's methodology enabled ordinary people to acquire those goals quickly and easily.

"Further, the post-World War Two economic powers—first Japan, then South Korea, Taiwan, Hong Kong, Singapore—all owe their rise to Taylor's training. It enabled them to endow a still largely pre-industrial and therefore still low-wage work-force with world-class productivity in practically no time."

Today's Business Process Management and Six Sigma are similar in mission to Taylor's scientific management. They all involve the discipline of analyzing and organizing work processes for maximum productivity ... and to achieve desired measurable outcomes.

The goal today is to increase the productivity of knowledge workers.

Internal benchmarking is just one of many methodologies for accomplishing this objective. This article discusses how internal training organizations can find high pay off training projects by collaborating with Six Sigma/business process management groups. It is a positive sum (win/win) game for both.

Introduction

In the summer, 1999 issue of The Wharton Magazine, Laurence Prusak, former Executive director of the IBM Institute of Knowledge Management, told the following story about how British Petroleum identified and transferred best practices knowledge.

"Some years ago executives at British Petroleum—now BP Amoco, a $5 billion oil giant—noticed an unusual fact. While studying the company’s performance, they discovered significant disparities in the productivity of oil wells in different parts of the world.

"Intrigued by the discrepancy, John Browne, British Petroleum’s CEO, asked his associates to find out what was going on. The team that investigated the phenomenon soon found the answer."

It's the Differences that Make the Difference

"It turned out that tiny, seemingly insignificant innovations, that the workers practiced—for example, the method they used to remove barnacles from a ship’s hull—cumulatively made a huge difference in results and ultimately oil well productivity.

"Enthused by this discovery, British Petroleum set about trying to introduce these high-yield work techniques at all of the company’s oil wells.

"The initiative should have led to a massive, across-the- board increase in productivity, right? Wrong!

"British Petroleum learned, to its dismay, that productivity did not rise at all. The reason was simple."

As Expected: Resistance to Change

"The oil workers, who saw these changes as dictates imposed from above, resisted them. British Petroleum had to spend large sums educating/training the oil workers and persuading them of the need for change.

"This time, the effort paid off. The company slashed drilling costs by $47 million per oil well."

Like most stories, notes Prusak, “this one had a moral: Companies that capture knowledge about best internal practices and share it across the organization can sharpen their competitive edge.”

Whether or not British Petroleum’s corporate training group was involved with this project is not known, but they should have co-ventured with the group that identified the best practices.

As Prusak indicated, the first attempt to transfer best practices to under-performing units failed. Once the best practices were converted into a systematic, well-organized learning program, productivity and profits soared.

Another Example

Still another illustration of increasing productivity and profits through internal benchmarking that leads to re-skilling is provided by Prusak and Thomas A. Davenport who co-authored Working Knowledge: How Organizations Manage What They Know.

"At Texas Instruments, sharing best practices became a strong focus after the concept was strongly endorsed by Jerry Junkins, then the firm’s CEO.

"Junkins noted: 'We cannot tolerate having world-class performance right next to mediocre performance simply because we don’t have a method to implement best practices.'

"In response to Junkins’ exhortation, the company developed a common set of terms and methods around best practices sharing called the TI Business Excellence Standard (TI-BEST).

"Early best practices sharing across the firm’s 13 semiconductor fabrication plants (known as 'fabs') had substantially reduced cycle time and performance variability, leading to capacity improvements equal to building a new fab."

The Message is Clear...

It's not the responsibility of internal training groups to systematically identify best internal practices that produce significant performance variations. That's the job of Six Sigma/BPM groups.

But it is the responsibility of the internal training organization to identify high-payoff training/continuing learning projects—and to construct meaningful learning programs that increase both individual and organizational productivity.

Neither e-learning nor any other “breakthroughs in the training process” are nearly as important for the future of the training function as the need for identifying high pay off training projects and developing customized learning programs (and continuing learning forums via social media) to successfully transfer these practices.

Training executives would be well-advised to link up with the appropriate groups in the organization that are involved with making work productive and the worker achieving.

Technology-assisted learning (games, social media, simulations, blended learning and the like) is quickly becoming standard in many internal training organizations. This competency is desperately needed by many Six Sigma/BPM groups.

Organized Improvement Involves Organized Learning Activities

Whether it is recognized or not, the organization and practice of continuous improvement management is derived largely from the early pioneering work of the Bell Telephone System.  

Years ago the Peter F. Drucker wrote:

"Continuous improvement is considered a Japanese invention—the Japanese call it Kaizen. But in fact it was used almost (90) years ago, and in the United States.

"From the First World War until the early '80s, when it was dissolved, the Bell Telephone System applied 'continuous improvement' to every one of its activities and processes, whether it was installing a telephone in a home or manufacturing switch gear...

"For every one of these activities, Bell defined results, performance, quality, and cost.

"And for every one, it set an annual improvement goal. Bell managers weren't rewarded for reaching these goals, but those who did not reach them were out of the running and rarely given a second chance."

Measurement and Codification

Every year Bell compared the performance of an operation or a division with the performance of all others, with the best becoming the standard to be met by all the following year.

What was the basis of the comparisons? Bell pioneered the use of measurement as a way of spreading best practices. In other words, Bell used measurement to identify top-performing units and, then, studied the processes used to obtain superior results.

Now organizations of all kinds and sizes routinely benchmark themselves... and compare the performance (through measurement) of different divisions to ensure that the worst performers learn from the best.

Knowledge gained in one part of the company (or governmental agency) is increasingly being used to gain productivity improvements in another. But knowledge must be packaged, that is, codified. Davenport and Prusak define codification as follows:

"The aim of codification is to put into a form that makes [knowledge] accessible to those that that need it... codification converts knowledge into accessible and applicable formats... "

The Point?

As organizations drive change and performance improvement through measurement, the internal training organization must stand ready to determine and measure what really counts.

Training measurements, in many cases, can be related to specific process improvements and process outcomes.

For example, if one division within an organization has significantly lower costs associated with scrap, rework, field inspection and warranties...and it was discovered competent usage of statistical process control (SPC) is the reason for superior economics, then other divisions must be trained in SPC.

What's the objective of the SPC training? Scrap rates and rework rates of the under-performing divisions must be lowered to the level of the best performing division with respect to those measurements. Further, field inspection and warranty costs must also be correspondingly reduced or aligned with the best performing division.

Oral and written mastery of SPC is fine and dandy. But if the SPC program is to be considered a success by CFOs and CEOs it must result in a significant improvement in business-based measurements. 

Many of the outcome/process improvement measurements internal training organizations need to judge, from a business perspective, as to whether or not given training/continuous learning programs are succeeding can be derived from internal benchmarking and other studies.

Using Social Media Technologies to Transfer Best Internal Practices

Today, training executives now have at their disposal many ways to transfer best internal practices. Live Instruction, web seminars, informal online discussion groups and more.

Sometimes there is a need for very formal instruction due to the nature of the subject. And other times organized (but informal) discussion groups led by a star employee or group will work wonders in transferring productivity boosting knowledge. (In a forthcoming article, we will discuss the difference between training, continuous learning and education.)

Meeting the Needs of Top Management

Much of senior-level executives’ discomfort with the training function reflects the lack of a clear economic framework for judging the linkages between training/continuous learning and profitability.

Therefore, training executives seeking high payoff training projects would be well-advised to convert the findings of Six Sigma/BPM groups into meaningful training and/or continuous learning programs.

*Human Resources IQ is not affiliated with the Peter F. Drucker School of Management or the Peter F. Drucker Institute. Any mention of Peter F. Drucker School of Management or the Peter F. Drucker Institute is solely at the discretion of the authors.

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How to Innovate During an Economic Downturn

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HR's Make-or-Break Moment

HR's Make-or-Break Moment

It's merger-and-acquisition time. You've been invited to take the proverbial "seat at the table." Now what?

By Shari Yocum

So you're merging, are you? This is your make-or-break moment, where you'll either forge a strong relationship helping guide many deals to come ... or you'll blow it. Having talked to a number of corporate-development leaders, their experience with HR during M&As ranges from horror stories to those who rely on HR for delivering a tailored well-thought out plan for integrating employees that works.

The clear theme that emerges in those talks is that HR leaders need to understand where they can add value. Too many of them look at the process through the lenses of clients facing HR. They are used to being gatekeepers and process followers, and keeping everything shrouded in secrecy. These behaviors, which can help in client-facing work, can hinder the process before it even begins. Your role requires the ability to deliver true value according to each deal's specific circumstances.

Many HR leaders welcome the opportunity to be invited to the early stages of strategic planning on an acquisition, but they aren't sure where to insert themselves or how to provide value. Understanding the first steps of the deal process and where HR can help provide needed guidance is the key.

Before a deal starts, set up time to meet with key players in corporate development to understand their focus and needs. Ask them what they've struggled with in the past and where they would like to have more involvement. Use this time to get to know the internal players you'll be working with on deals. Gain an understanding of their personalities and styles prior to being thrown into the heat of a deal. Educate them on your experience and value in the deal process. Share your plans and the key elements that you'll own in the process. Sometimes, corporate-development specialists try to do everything in a deal because they don't realize there are other resources that can help pick up some of the work.

Once you've started to build that relationship, you can start having discussions about potential companies in the pipeline. From an HR M&A perspective, the focus is usually to provide guidance on any potential big challenges if the company chooses to pursue a specific target. For example, would there be union hurdles or excessive costs to be considered? Or, would you need to relocate the organization, and is this even feasible? The analysis is on a very high level at this point, but it helps better assess costs and risks that aren't always incorporated early enough. Do not use this as a time to shoot down the potential target company, but rather to make its people aware of potential challenges and provide workable solutions.

The Nuts and Bolts

Once a company is selected as a potential acquisition target, a term sheet or letter of intent is drafted. This document is critical in identifying key terms of the deal. It should be used to capture the big-ticket items, whereas the definitive agreement can later capture further details. Key focus areas for HR on the term sheet include:

1) Structure of the deal: Is this an asset purchase or are you buying the entire company? From an HR perspective, you will want to understand how the employees will transition over and who will be responsible for the termination of any employees who are not part of the transaction. Also, this is a determining factor in how you will treat benefits upon the deal's close. Each country has different employment laws that impact severance, carryover of seniority or pensions, or benefits, depending on how the deal is structured. Understanding the different impacts of the sale on benefits and employee obligations is critical for understanding your costs, timing of employee movements and, eventually, the integration plan.

2) Key employees: There will be a section that will allow you to name the key employees or call out an agreed-upon number of keys to be named later. These individuals will need to sign as a closing condition. You can always waive this term later but, as a buyer, it is critical to ensure you lock in the talent you need to ensure you gain the full potential of the deal post-close. Typically a deal has five to 10 key employees. Depending on the size of the company, you may create a Tier 2 of critical talent, which can encompass a broader set of employees. Typically, a company will ask for 100 percent acceptance of the keys, but then maybe 80 percent to 90 percent of Tier 2. However, the differentiator between the two groups is usually whether you have them sign an employment agreement. Most companies will have the key employees sign such agreements with noncompete clauses, whereas the Tier 2 group will get a regular offer letter but with a special retention letter or incentive to ensure they sign.

3) Change in control terms: Today, most executives have terms in their employment agreements that provide special payments upon a change in control of the company. They can be "single-trigger," which means just the change in control needs to take place, or they can be "double-trigger," which means both a change in control and termination needs to occur to obtain a special payment. Usually, the special payments include predefined severance, cash bonus or acceleration of stock. I recommend negotiating the removal of these terms for any employees moving on to the new company. It's hard to manage individual special terms within a large company, so it's wiser to negotiate out and bring the executive over with your standard company terms.

4) Retention pool: Predefined funds that will be used to help employee retention need to be established. Now's the time to round up the cash needed to help retain critical talent. You can build a retention pool into the deal price by setting aside a portion to be used for employees. This is a great tactic to help bridge some of the differences between the buyer's price and the target's price. Or you can use the target's outstanding shares to be distributed prior to close. These options impact the deal price, so it's critical to work closely with corporate development and finance on the structuring of the retention pool, whether cash or equity.

Identify who will own the decisions on how the retention pool is distributed. Though the target should have some input on the distribution, the buyer should be the decision maker on the retention pool. Many target companies try to use this pool to "reward" employees for past work, whereas the goal for the buyer is to retain critical talent going forward. Make the goal and ownership clear from day one to prevent the wrong messaging and misaligned perceptions.

5) Transaction payment: How is the company paying for this transaction? It's important to understand what happens to current equity the employees hold. Will this equity be transitioned over or cashed out? This decision could drive the amount of money needed for the retention pool. Many deal makers are only thinking about getting the deal done, but as an HR leader, you need to think longer-term in retaining the employees.

6) Other show-stoppers on the employment side: These include items such as requiring the team to relocate, employee reductions prior to close or anything else that is very out of the ordinary that the target will be required to do as part of the transaction. If an item is required in order to do the deal, get it out on the table early. If the item is negotiable or you are open to other options, then save it for the definitive agreement.

The only way to play a key role in the term-sheet discussion is by understanding the business needs and by partnering with your corporate-development team, which is responsible for managing the business transaction. Members of that team do not want an "HR person" telling them what they can or cannot do. You can build this relationship by partnering to share both the pros and cons of the current decisions, and sharing the impact of the decisions, i.e., added costs of one decision versus another, or the political or internal impacts.

If you become a roadblock, the corporate-development team will simply go around you. You also need to be a problem-solver. Many HR professionals are good at identifying what you can and cannot do, but they aren't always as strong in finding the best way to accomplish business needs. As you build your credibility over time, then you will be able to more effectively influence the early stage of the acquisition process.

Being part of these early discussions for the term sheet will guide both due diligence and integration planning. Rather than being the recipient of the decisions made in this process, you can help define the trajectory of the deal by playing an integral role in term-sheet discussions with your corporate development partners.

Shari Yocum is the managing partner of Tasman Consulting, a strategic M&A human capital advisory firm based in San Francisco.

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Choosing Your Talent Wisely: A Look at the Hotel Industry

Contributor:  Kyle Salem
Posted:  09/23/2009  12:00:00 AM EDT  |  3

When it comes to finding new employees in the hospitality industry, there’s a pervasive opinion: Good people are extraordinarily difficult to find. But once you do find and hire the right person, retaining them becomes even more challenging.

Why Do Hotels Struggle To identify and Keep Talent?

Seasonality and the fact that transient students often appear on the payroll contribute to the problem. However, with the battle for talent tougher than it’s been in years, employers must accept some of the responsibility. You need to determine not just who is most likely to succeed, but who will enjoy the job enough to stay and thrive in the long term. Smart hiring decisions lead to reduced turnover, ultimately increasing productivity.

“Hiring winning talent is a complicated process, but one that’s much easier when you take the time to understand what you need and who you are interviewing,” says Michael Gravelle, managing director of The McQuaig Institute, an Toronto-based organization that teaches companies how to hire successfully.

“When working with hotel clients who are hiring for anything from front-desk associates to account executives and finance, it’s imperative they understand the successful behaviors needed for the job. But they must also assess each candidate’s behavior traits to see if they are indeed a match. A résumé and an interview simply do not suffice.”

If you ask hiring managers what they look for in a candidate, typically they list the required education, previous work experience and other hard skills necessary to do a particular job. They fail to mention the personality traits needed in order to be successful. But in reality, while companies hire based on hard skills, they fire based on soft skills—or a lack thereof.

While companies regularly hire people who are technically capable of doing a job successfully, they don’t consider a candidate’s temperament, attitude and motivations. The result: a mismatch between a new hire’s traits and what the role requires. Then the employee disengages from the job, and ultimately, the relationship fails.

“At Marriott, hiring the right person for a position in revenue management is critical to a hotel being able to drive profitable revenue and show the value of revenue management,” says Chris Holter, Regional Vice President, Revenue Strategy, Caribbean and Latin America for Marriott International. “One hotel was very successful because within a month of hiring a revenue management leader, the property was able to find 13 percent more revenue for the year. In the eyes of the general manager the position paid for itself, which speaks to the value the right person in the right job can provide.”

Putting Assessments into Practice

Once you determine the personality traits necessary for the role you are seeking to fill, the next step is to screen résumés and assess candidates. You should whittle the list down to eight or 10 people.

At this stage, a simple 15-minute telephone conversation with each person will help weed out at least half the remaining candidates; some won’t have the hard skills required for the job, others will have unrealistic salary expectations and a few will realize the position is not for them. You can be confident the remaining candidates on your short list are qualified as far as skills and competency go. But before you begin interviewing, narrow your options even further by considering the most important factor—soft skills.

According to a Michigan State University study on predictors of performance, “Some 90 percent of hiring decisions are made as the result of the interview, but interviewing is only 14 percent accurate.” During an interview candidates are naturally on their best behavior, acting to impress. However, it’s their true behavioral patterns you should focus on. A personality assessment tool used prior to an interview can provide such invaluable information.

Personality assessments offer a window into a candidate’s core temperament, preferred work style and personality traits. Understanding what they offer and how that compares to what is needed for success on the job will go a long way in helping you choose who to hire. Marriott International uses assessment tools to create benchmarks, which help define ideal candidate profiles. Potential candidates are compared against these profiles, which gives the hotel confidence they’re hiring people who fit the roles they are filling.

Of course, it’s still important to do an interview to ensure there’s a rapport between the hiring manager and the candidate, and to confirm the sought-after traits are exhibited the way you need them to be. Continue checking references for your short-listed candidates, too. Just be sure their core behavior traits match those needed for the job, since this is the stage most employers frequently omit.

JoAnn Cordary-Bundock, Senior Vice President of International Revenue Management for Marriott International, explains how important assessment tools are in the hotel’s overall talent management solution. “We have moved our interview, selection and development process to a whole new level. It’s imperative we select and develop the right talent for this competitive discipline. Assessments are very valuable and integrated in the way we do business today.”

As the hotel industry continues to fight the seemingly never-ending battle to reduce turnover and increase productivity, look no further for the solution than inside your own organization. Take time to identify the behavioural traits needed for success in each job you are filling and understand the traits each candidate brings to the table. If you do, you’ll hang on to the good people and they’ll be far more productive and engaged.

Adapted from an article in hoteliermagazine.com, June 2008.

Kyle Salem is a Senior Consultant with The McQuaig Institute®, an International Organization committed to helping companies assess, select and develop talent. Salem began his professional career in Executive Search, including running his own organization, the Salem Search Group.  Focusing on mid to senior level searches, his clients included BMO Nesbitt Burns, Cedara Software, CIBC, The Globe and Mail, Lifecapture Interactive and Molson Breweries.

In 2003, Salem followed a personal passion and earned a position with the Cincinnati Reds Baseball Club, working in their baseball operations department. Following his baseball sojourn, Salem joined one of Canada’s leading independent marketing agencies, developing new business and handling all corporate communications efforts. This led to an opportunity with a Draft FCB company, a member of the Interpublic Group of Companies, where Salem became Director of New Business Development. Armed with a Master of Business Administration from McMaster University, and a Bachelor of Arts in Psychology from the University of Western, Salem brings a depth and breadth of experience to the McQuaig team.  His mission, to ensure every client is well equipped to make wise hiring decision, resulting in measurably reduced turnover and increased productivity.

For more information, contact Kyle Salem at KSalem@mcquaig.com.

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Reach of Supreme Court�s DOMA Decision Extended

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Stances and the HR Professional

July 16,2008 by Hugh MacDonald How do you stand with your client? No, I don’t mean how good is your working relationship—although that’s a good question too. I mean, have you given any thought to how you choose to provide advice? Think of a stance as a physical act. A stage actor takes a certain pose to convey how he wants to be perceived by the audience. In the case of an human resources or other internal consultant, our stance models are how we want to be perceived by our client—how we are going to engage with them. There are four basic stances: direct, indirect, neutral and side-by-side.
A direct stance is the approach we take when we are dealing with an individual or group head-on. Think of it as a face-to-face, eyeball-to-eyeball, frank and honest conversation. We would use phrases such as, “I’d like to talk with you about …,” “When you do that I feel …,” “What would be wrong with us trying to …?” The voice is active not passive, the thought is definite not tentative. The advantage is that we are up-front and to the point—hence the name. The disadvantage is that some people feel that this stance is confrontational—and they’re right. The direct stance surfaces conflict and puts truth on the table where it can be dealt with. Using it enables the parties to confront difficult issues head on.
An indirect stance, on the other hand, is more subtle. Like Judo, meaning "the gentle way," this stance goes with the flow. It approaches issues indirectly by means of stories, parables, jokes, anecdotes and metaphors. In physical terms, the body positioning is informal, casual. If for using a direct stance you are on the opposite side of the table or desk for using an indirect stance you sit angled slightly to the side—which is more disarming. You would say things like, “You know, that reminds me of the time …,” “It seems to me that this proposal is similar to …” This stance can also be used to engage in a little reverse psychology: “The more I think about it, the more I wonder if this is right time to do …” The advantage of the indirect approach is that it helps get around some of the tension or opposition that we might face with the direct approach. Wayne Fagan, Director of the Centre for Conciliation and Arbitration at St. Mary's University School of Law, once told my grad school class, “It’s amazing how much you can get done if you don’t care who gets the credit.” The indirect stance is great for those times when you are working in situations like that. On the other hand, if not done with skill, integrity and respect, this stance can appear manipulative and cynical.
A neutral stance is one that presents alternatives. In physical terms, if we were in an office, we might take a chair to the side of the desk. We’d sit at right angles to the other party. We’d say things like, “We seem to have at least two options …,” “Given the choice of X or Y, what do you think we should do?” or “What are your preferences?” It has the advantage of involving other people in the decision process and obtaining their buy-in. On the other hand, it takes longer, and we may lose some control over the dialogue or agenda. We also may appear not to have an opinion, which can be confusing or frustrating to others.
The final stance is known as the side-by-side stance. I once saw Allan Slobodnik, the principal of Options for Change, demonstrate this stance’s power and use during a consulting session. Trying to bring someone on-side, he got up out of his chair, moved around the table, sat down next to the other party and pointed into the distance as he described a vision of some future state. It was only natural for the other person to start looking into the distance with him and join in the imagining. Soon he was pointing too. Working side-by-side signals that we’re on the same team. We might say things like, “I’m with you on this …,” “I see what you see and I’m concerned about …,” and “I was thinking about our plans last night and I’m interested in your views on how we’ll handle …” The advantage is that our counterpart will see us as really committed to a joint effort. The potential disadvantage, especially if we get caught up in the emotion or euphoria of the moment, is that we have become fully engaged and have made a commitment. Having done so, we have to deliver, or we lose trust as well as the ground we’ve gained.

Hugh MacDonald is an HR professional and an expert in managing inter-group relationships. For more than thirty years, MacDonald has provided trusted advice to c-suite executives in major firms and coached and developed hundreds of HR and OD practitioners. He has worked on numerous M&A and joint venture projects and, as vice president of Strategic Alliance Management for one of Canada’s largest financial institutions, he implemented and managed anHR managed services arrangement . For his pioneering work he was recognized by the editors of HRO Today as one of the outsourcing industry’s “superstars.” Over his career, his work has been the subject of three MBA case studies and has been cited in over 100 academic and business articles. He has an MA in conflict management and is the author of The Arts of Influence, a manual for relationship managers. MacDonald now manages his own firm, based in Toronto.

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Social Network or Online Community?

Contributor:  Stephanie Huff
Posted:  07/20/2010  12:00:00 AM EDT  |  0

While the desire to connect with others is not new, over the past decade new technologies have emerged at an accelerated rate to serve our need to build stronger connections, for personal and business purposes. A potential (active or passive) candidate’s ability to connect and learn more about a company before being hired has become not ...

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A talent acquisition specialist with LexisNexis, Stephanie Huff describes herself as "a corporate recruiter who is wildly passionate about all aspects of the recruitment process. My goal is to achieve the most optimal results for my company with the most favorable experience as possible for those interested in employment with my company."

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Making Workplace Relationships Work

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Effective Management Toolkit: Creating a Workplace Team

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