Innovators, innovation teams and the innovation process 3 – identifying, developing and supporting the individual innovator 2
This is my third installment in a series on innovators and the process of innovation (see Part 1: an organizational and functional story and Part 2: identifying, developing and supporting the individual innovator 1.)
• I began a discussion of working with individual innovators in Part 2, primarily considering there how innovator employees fit into and contribute to a business in keeping it competitive.
• And I sketched out very briefly how innovation and the work activities of innovators can be disruptive and how this can provoke pushback.
• But even as a business’ leavening of creativity and the push for new disrupts and creates new costs and risks, these employees also create that business’ long-term future too.
I finished that posting with recognition of what can be considered the first of a series of, and even a gauntlet of challenges that the innovative business faces:
• How do you as a business owner or manager identify creative and innovative potential in perspective new hires and in employees already in place?
• And beyond that, how do you best cultivate their potential?
I would argue that there are no set, absolute, universally applicable answers to either of those questions, and that point can be considered the first and perhaps most important part of my responses to both of them. Don’t just think in terms of rote standardization. Even if you do need to standardize your business and its operations, and for most businesses that is a necessity – always leave room for wild card variability and flexibility in identifying and managing innovation potential too, and approach innovation and innovators with an open mind. That said, I offer some general principles that I have found to work.
• Value and look for the novel perspective and for people who can view the issues and circumstances that they work with from unexpected directions.
• Particularly look, in this regard for people who can bring their perspective and understanding into sharable focus so others can see and understand it too. In this, a great idea that cannot be coherently developed and explained is not likely to go anywhere even if its creator is given full and active support. An idea or understanding that can be cogently and intelligibly conveyed, holds potential for being developed into practical and marketable products or services, or into functionally valuable new supporting business practices or approaches.
• Look for a balance of being able to communicate with and work with others, coupled with an ability and a willingness – and even a drive to seek out next possible steps and steps forward in unexpected directions.
• This places some very real demands on managers and at all levels, that they be willing to listen and with a more open mind. Managers who can only do things or allow things “by the book” and with no variations or deviations from standard and tried and true, do not work well in an innovative environment, and creatively innovative employees do not tend to work comfortably or creatively with them either.
• So finding and bringing in and supporting and cultivating creative and innovative employees, calls for a matching effort in finding and bringing in and supporting and cultivating managers who can create a more open and innovative work environment.
• Functionally, this is all driven by how both these hands-on employees and their managers are performance reviewed, and how this insight in turn is used in determining and allocating raises and bonuses, and promotions and other benefits.
• Even if every employee in a business is required to meet certain standard types of performance goals as a core performance objective and even if everyone at a business has a list of goals and stretch goals to work towards that fit into the business’ ongoing here-and-now, creative and innovative contributions that are made outside of that framework should always be rewarded too.
• And when these contributions make a clear and demonstrably monetizable contribution to the business, the reward shared from that with that innovator should be proportionate to the new and novel value created.
• At the same time, it is also important to remember that an innovative proposal does not always work out. They can die early in initial attempted development. They can appear promising at the bench testing and initial develop stage but fail to prove cost-effective or even fully functional at a more formal prototyping stage, or they might not be cost-effectively scalable to full production or implementation.
• Be quick to reward success but be much slower to penalize failure and particularly when the development and testing efforts employed were well thought out and well documented so this effort at least offered a real learning curve opportunity.
• And remember that innovators can be difficult to work with but so can your more rote-process and unimaginative employees too. Support and encourage open mindedness and creativity but require that everyone meet at least minimal and I add significant standards of civility and cooperativeness, and when working with in-house colleagues or with outside participants such as vendors and suppliers, or customers.
I am going to continue this discussion in a next series installment where I will return to the two questions at the top of this installment, but from a different direction. There, as a foretaste of that next installment I note here that some employees might best work as full time innovators and inventors, but that every employee is at least occasionally a valuable source of innovative insight and effort. Both ends of this innovative spectrum should be supported, and all points in-between. Making that work in a fundamentally lean and agile business context is the topic for my next installment.
Innovators, innovation teams and the innovation process 2 – identifying, developing and supporting the individual innovator 1
This is my second installment in a series on innovators and the process of innovation (see Part 1: an organizational and functional story.) I began this series with a basic orienting discussion as to how the issues I will discuss here connect with and follow from other postings and series that I have been adding to this blog. And in that regard I particularly note the series: Keeping Innovation Fresh (see Business Strategy and Operations – 2, postings 241 and loosely following for Parts 1-16.)
My primary goal in that series was to discuss and analyze how innovation can be built into an organization as a source of sustaining value for it, in return for investments made and with a focus on the organization itself. My goal here is to focus on innovation as a process and hands-on innovators themselves, rather than on the organizations that they work for.
• I stated at the end of Part 1 that I would focus on the issues of identifying innovative potential and fostering and developing it here, and with an emphasis on working with the individual innovator, and
• I begin that by noting that all innovation ultimately comes from the creative insights and efforts of individuals who are able and willing to look and to work outside of the standard and conventional.
• And all of what I would write in this posting and in installments to follow, stems from that basic fact. Some businesses see innovation as a cookie-cutter process and as a pattern that can simply be pursued by standardized procedures and on a set timetable, and with little if any risk of failure from any “legitimate” innovative effort. None of that is valid.
• Many if not most organizations downplay the value of creativity and foresight, and of innovative potential in favor of a rigid adherence to here and now standards, visions, understandings and above all – procedure.
• Innovation breaks new ground and supporting innovation and efforts to creatively break new ground always carries risks. And it always carries with it a measure of disruption and of challenge to the status quo.
• Even the most successful innovation development efforts can and do run into and have to overcome unexpected challenges that can skew timetables and bring delays and cost increases. The operational and strategic goal of the innovative organization should be to find and pursue a working balance between tried and true and business as usual, and new and experimental and yes, even disruptively so.
• And in that, and addressing the venture towards innovation and change that takes place within a business that seeks to stay competitive, their goal there should be to skew the risk and benefits balance in their favor so prospective risk overall, is less than potential benefits as developable overall from the ongoing innovation effort – while supporting this effort and the innovators who create it, in the face of possible setbacks.
• In keeping with that, I note that Thomas Alva Edison is commonly thought of as being among the most prolific and profitable inventors in history and his invention of a practical light bulb is often cited as being among his best known, most influential and most important innovations. Yet he had to test out some 700 or more possible light bulb filaments before he found one that would produce light of a sufficient quality and intensity and with sufficiently low power requirements and that would last long enough for these new devices to be useful and marketable – and they had to be producible and marketable at a good, competitive price on top of all of that. (The number of tries here is arbitrary as you can readily find numbers quoted from the 700 that I cite here, well up well into the thousands. I decided to cite the most modest end of the scale offered, which is still more than enough to prove my point.)
So innovation and invention are important as their fruits create the competitive business’ future. The innovative process can be messy, and certainly as it can and does violate simple rote organizational planning and processes. And the innovative business has to find ways to be agile and lean and to keep things simple and focused while allowing for and supporting this.
This sounds simple and straightforward in the abstract and as a matter of general principle, but can become more complicated in practice and when dealing with individual employees in the context of actual day to day work flows and work priorities. And I add that even the most creatively valuable and innovative employees that a business has, start out as unknowns – and the more standard revenue generating here and now business practices and processes still have to go on, and with everyone contributing to the business and its ongoing competitive strength.
I am going to continue this discussion in a next series installment where I will discuss talent searching for innovative potential and excellence, and both from outside of the organization and from inside it and from among its current employees. Meanwhile, you can find this and related postings at HR and Personnel and also at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2.
I have been writing in this blog about innovation and capturing its value to the business for virtually as long as I have been writing to this blog at all. And in that regard, and with an organizational focus I cite, by way of particularly pertinent example, my series: Keeping Innovation Fresh (see Business Strategy and Operations – 2, postings 241 and loosely following for Parts 1-16.)
I developed and presented that series with a simple and immediately significant goal – helping organizations with innovative potential to both develop this font of value and to create sustaining value and wealth out of it. So I wrote about building systems that would support the innovative and inventors, and help them to navigate the processes and challenges of moving their ideas and prototypes into the more mainstream productive side of their business. But I did not write about the innovation process or hands-on innovators or inventors per se, except as needed in passing for purposes of discussing organizational systems.
My goal here is to flip that discussion around, and for the most part simply assume an existing innovation-supportive organizational system – and mechanisms and organizational structure for transferring new innovations from the lab bench to production. My goal here is to discuss innovators and the innovation process per se. And as a basic orientation to that discussion to follow, I begin by noting that innovators and sources of innovation do not readily fit into any single simple cookie-cutter pattern. And their diversity, and the way that innovation as a process and innovators who bring it to the organization disrupt standard and tried and true systems and processes, often leads to real resistance to creative change and to those who would bring it.
As a starting point for this, I focus on the innovators themselves, and by loosely organizing them as fitting into three basic categories:
• Individual and even idiosyncratic innovators with their creative and often iconoclastic spirits and approaches,
• Collective efforts at developing and refining ingenuity through organized research and development teams, and
• Crowd sourcing innovation, and opening up the creative potential of the more openly sourced community.
All three have their roles to play in the cutting edge, creative organization and all can effectively contribute to the overall organization and its ongoing success, while being supported for and rewarded for their creative and even disruptively creative contributions.
This is the first installment to a new series that I offer in a fundamental sense as if a direct continuation of my Keeping Innovation Fresh series, as cited above. And I will focus in my next series installment on individual innovators, and on identifying and talent scouting for them in new hires and within the organization. I will also discuss supporting and guiding the innovative effort in this context, and doing so without disrupting everyone else in the process or stultifying the creative endeavor – and while keeping the teams that those innovators are in working effectively and meeting their overall more standard goals and priorities too. That mix, I add, it not easy and that is why creative effort can all too often be blunted and its value potential lost.
Human Resources and adaptation to change 11: reconsidering HR in a changing, evolving business environment
This is my eleventh installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-10.)
I began this series by developing and presenting two baseline models for understanding the role of Human Resources in its business context: one based on startups and the beginning point for HR and Personnel policy and activity, and the other based on a simple, stable business in a stable and even static marketplace and industry (see Part 2 and Part 3 respectively.) I then proceeded to discuss a series of factors and contexts that would perturb the business and its Human Resources services, and their processes and policy from those expected in these baseline situations (see Postings 4-10.)
My goal for this posting is to step back from the specifics of any particular perturbing scenario to consider Human Resources and Personnel in general, and with a goal of outlining at least some of the key areas in which this department needs to be agile and flexible, and where it has to retain a fixed and stable core – essentially regardless of what it and its business face in the way of immediate challenge, opportunity and change.
• I begin this discussion from that stable core, and note that the primary long-term function of Human Resources has to be in supporting the business it is a part of,
• And that means supporting the effective fulfillment of operational and strategic goals and priorities, as set out in the business model and through day to day and ongoing experience.
• The stable core of Human Resources should be a settled and agreed to set of operational and general strategic policies and principles, that can help the business keep on-track, and as a business, and in accordance with its overall corporate culture. And with that I add in, what for issues of personnel policy and practice, is one of the most important elements here.
• Corporate culture sets the standards as to how people relate to each other interpersonally, and to the business. And it sets expectations as to what is and is not done at the business, and both internally and when reaching out and dealing with members of the public, representing the business. Perhaps writing poetically here, a functioning and supportive corporate culture that is actively maintained and adhered to can be like the soul of the business.
• Support of and adherence to the mission and vision and corporate culture of the business, and support of its overall arc of operational functioning and strategy and its business model comprise the fixed compass point core for Human Resources as a department, and as a core functionality of a business’ basic infrastructure.
Change happens and the challenges and opportunities of change happen too. And Human Resources as a department, has to be ready to help the business overall, to adapt and to maintain sustaining value and competitive strength in the face of all of this. I have at least touched upon and briefly considered seven possible and even common perturbations from the baseline in this series. But the next really significant event or circumstance facing any given business might be a “none of the above” and it might even be completely new and emerging.
It is prudent to consider that: the emergence of completely new and novel challenge and opportunity as more than just a possibility, as we are undergoing profound change in businesses, business systems and even in entire economies, and both regionally and nationally and also globally.
• Identifying and operationally and strategically understanding a new and emerging form of perturbation, as being distinct from the stasis and stability of the baseline models in place,
• And finding effective and novel ways to capitalize on it as a source of opportunity can perhaps best be seen as an operational definition for recognizing and moving into a blue ocean strategy opportunity.
• Every department or service in a business holds in its hands the capacity to either facilitate or to hider this. And that definitely applies to Human Resources and to its Personnel policies and practices, and its basic mind-set in place.
So I would argue that effective HR policy and strategy and mind-set have to be grounded in a deep awareness of where the business is, and both as it does and does not fit a baseline model and where it might be dealing with change and different. And it needs to build and operate from an awareness of what it does and should hold constant and where it can and even should change and be flexible and adaptive. I will add as a final though that the boundaries there can and will change so thinking this through is not and cannot be a do-it-once then set it aside exercise. This process of analysis all needs to be repeated and reexamined, and as a basic component of the business’ recurring operational and strategic assessments and reviews, and whenever planning forward.
This is my last installment in this series, at least for now. Meanwhile, you can find this and related postings at HR and Personnel.
This is my tenth installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-9.) This is also the posting where I look into a seventh set of operational and contextual factors that would lead a business to deviate significantly from the baseline models presented early in this series, in Part 2 and Part 3.
The specific shaping factors that I address here, as they would impact on Human Resources and its role in a business, come from that business entering into a merger or acquisition. To keep this discussion simpler and more straight forward, I only assume for either case that two businesses are involved in a merger or acquisition event, and that one is significantly larger and stronger overall in its marketplace and in its financial reserves than the other.
• So if the event in question is a merger, one of the businesses entering into it is a definitively stronger partner, and
• If this event is an acquisition, a larger and more robust business is taking over a smaller business that has up to now been a separate business entity, bringing it in as a part of its overall system.
These assumptions might not strictly speaking be true.
• One business might serially acquire several or even many smaller businesses, with each bringing in a proprietary product or service resource, a customer base or some other gap-filling capability needed by the larger acquiring business if it is to address its operational and strategic goals. In this case, one business might have very systematically standardized acquisition processes in place, which is definitely not always the case.
• As a second deviation from these assumptions, one of the businesses involved might in fact be larger, but be weaker and heading towards even greater weakness – for lack of what the second business involved would bring to the table. So even with a big business/smaller business distinction remaining in place, the smaller and nominally weaker business might wield a significant amount of influence and even control over its partner in this combining.
• For that matter, and here primarily just considering acquisitions, a larger business might acquire not a separate smaller independently run business, but rather a spin-off division or other portion of a second larger business that is trimming back through a sales and divestitures process.
For purposes of this discussion, the primary effect of these and similar deviations from the assumptions I start with, is that they would skew the proportions of influence and control that the HR and personnel departments of participating businesses would play, going into a merger or acquisition. I start out at least assuming a particular balance of disparity of voice and influence for the business entities involved.
• I begin that with consideration of acquisitions, and with a larger and stronger business A taking over and acquiring a smaller business B, that has resources A needs, and that would be easier for A to acquire, than to replicate from scratch.
• A and B each hold at least some complementary strengths and weaknesses, where any weakness in the one could be covered by corresponding strength in the other and where combined, A+B as a single business entity would be stronger overall than the sum of the two businesses taken separately.
• A and B each have their own corporate culture and history, and their own full and balanced table of organization and personnel, and for all basic organizational positions they would need (e.g. they each have their own book keepers and accountants, their own IT technicians and sales and marketing staff, and their own managers and C level officers for each of the principle functional areas such as Finance, Information Technology, and Marketing and Communications, and so on.)
One immediate consequence of any combining is that the new, enlarged business is going to at least potentially find itself holding a personnel roster that is filled with unnecessary duplicates. Some types of position would simply scale up for required numbers in keeping with the increased overall size of the business. Some, and here I would consider essentially any of the C level executive officers but also a wide range of specialists, will show duplication where one of the two candidates for moving forward might be excess. Here, and with an acquisition per se, this can be easier to manage and certainly if a goal is to retain where possible. One of the two Chief Financial Officers going into an acquisition, for example, might stay on in that role for the now larger organization and the other become a senior manager reporting to them, with direct oversight control of the acquisition as a now subsumed business division.
• There are as many ways for this to work out in detail as there are situations where this type of staffing decision would have to be made, but bottom line: decisions have to be made as to who to retain as is, who to retain but with a change in position or title or both, and who to let go.
• And an overriding goal in all of this has to be in retaining the value that this perhaps very expensive acquisition has brought to the table.
I have definitely seen situations where a large business pays a very high price to acquire a smaller business that holds sources of value it needs, only to crush and lose those sources of value by:
• Steamrolling over its corporate culture and its value creating processes and methods,
• Dumping all of its leadership and installing people from the larger acquiring company who primarily see their goal as one of mainstreaming this new acquisition into “proper company ways”
• And by not really monitoring what was happening out of all of this until everyone left over from the now-acquisition had become so demoralized and stymied that they could no longer create the value that made this a worthwhile acquisition in the first place.
I would argue the case that the primary role that HR has in making an acquisition work is to smoothly bring this new part of the organization and its staff in, while studiously preserving the value that it held as a separate organization and that made it valuable to acquire.
In this, most of the Human Resources department coming out of the acquisition will likely be from that larger company A, but some should also come from the acquired company B too. And that definitely includes at least a leavening of manager level HR staff who can continue working with employees from the acquisition to help them make this transition and to help the entire organization experience this more smoothly too. So this is about value creation, but it is at least as much about value retention and preservation too.
• As a distinct warning sign, HR has to look out for employees, and particularly highly rated employees in key positions who suddenly give notice that they have found other jobs and are leaving.
• A part of this process of business acquisition may involve layoffs and downsizings, but retentions are just as important, and long-term they may be more so.
• And if HR is not preparing to limit this loss from the beginning, and if it waits until good people have started leaving, it can only react after the fact with damage control. This is where good acquisitions-integrating Human Resources and Personnel practices really need to be proactive and preparatory.
I began this with a discussion of acquisitions. In a merger and when the two businesses joining are more equal in size, with each bringing in a fuller range of defining value as a complete business, the balance of who stays on, and in what positions shifts. In any merger or acquisition, the goal should be on retaining the right people in the right seats for the long term good of the now larger organization. And as a core HR and Personnel objective in that, everyone involved needs to feel they have at least been listened to, even if they are not retained and even if they do move to a lower position on the combined table of organization if they are kept on.
I am going to conclude this series with one more installment in which I will look at the role and responsibilities of Human Resources in general, and in a changing business environment. Meanwhile, you can find this and related postings at HR and Personnel.
This is my ninth installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-8.)
I began this series by outlining two baseline business models:
• One centered on startups and the initial hiring and onboarding of employees, and the beginnings of need for HR and Personnel policy and processes, (see Part 2: building a baseline for comparison for organizational opportunity and challenge 1),
• And the other centered on a stable, ongoing business and its Human Resources (see Part 3: building a baseline for comparison for organizational opportunity and challenge 2.)
Since then I have been adding and discussing a series of business lifecycle stages and circumstances that can arise, and how they impact upon Human Resources and its operational and strategic position in the overall organization. My goal for this posting is to add to that list of perturbing business situations, to consider what might be thought of as the emblematic evolutionary step for the business model paradigm going into the 21st century: the ubiquitously connected business. And I begin that by noting what should be the obvious:
• When a business is globally, real-time connected, and to its supply chain and other partner businesses, and to its marketplaces, its employees are also real-time ubiquitously connected too.
• So in a real sense the walls that have traditionally separated a business from its outside context have become porous, and in some respects they have even at least functionally evaporated away.
I developed and presented my stable, ongoing baseline business model of Part 3 as an essentially pre-internet, and certainly pre-web 2.0 and pre-ubiquitous tablet and smart phone phenomenon. I add in all of the changes and complications that they can bring with them here.
Human Resources has traditionally held responsibility for, and hands-on day to day ownership of personnel policy, and of managing what is and is not allowed and expected as far as attendance and work participation, and terms of employment. In this enlarged and more open-ended context that means setting and managing personnel policy where employees who are physically present at work might effectively be anywhere but there, and legitimately as well as inappropriately. And with telecommuting and distance working that goes way beyond the scope of managing in-house and present employees plus perhaps some road warrior sales and technical support staff, this means developing and managing policy for employees of all types who might be physically away from the business’ workplace but effectively be there and full-time.
• Business strategists and senior management tend to focus on one half of this larger and interconnected set of issues: strategically and operationally developing and maintaining effective value-creating relationships with partner businesses and with outside marketplaces.
• Human Resources policy and practices help or hinder that as they address or fail to address how all of these higher level considerations play out at the individual employee level, as all of those individuals use or misuse the tools and opportunities provided to connect out and to everywhere and anywhere, real time and all the time – and connect in from the outside too.
As a starting point, this is all about finding and bringing in the right people, who can stay focused and effective and who will do so, in this porous interconnected environment. And performance measures and even a basic understanding as to what effective performance means, have to be reconsidered. As a starting point to that, and just as a starting point:
• A simple measure of amount of time physically present in a business owned or managed space – a traditional measure of presence there as a baseline performance criterion, becomes essentially meaningless and certainly as a universally applicable standard when employees can and do connect in and out of the business, for the business from anywhere to anywhere and at any time of the day or night (remember time zone differences there, if nothing else.)
To summarize a key line of reasoning that I have been developing here, and to bring it into explicit focus:
• It is a fallacy to simply assume Human Resources to be an entirely internal part of the organizational infrastructure, and with an area of focus and responsibility that is limited to being entirely internal to that organization.
• HR’s operational and policy walls have to become porous and open in keeping with corresponding shifts and changes that the business as a whole face and adapt to.
I am going to follow this with a discussion of one more perturbation from the baseline models that I have offered in this series, with a discussion of the role of Human Resources in a merger or acquisition context. Meanwhile, you can find this and related postings at HR and Personnel. I also include this posting at Ubiquitous Computing and Communications – everywhere all the time 2.
This is my eighth installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-7.)
So far in this series I have developed two baseline models for normative HR processes and functionality as they would play out in standard, consistent ongoing business contexts. I then began considering how Human Resources would be affected for businesses that systematically deviate from these baseline models, and in a series of specific ways. See:
• Posting 2 for a startup-oriented model and Posting 3 for an established business baseline model,
• Part 4 for an innovation-driven, rapidly changing business scenario,
• Part 5 for a scenario driven by significantly changing headcount requirements,
• Part 6: a multinational business scenario, and
• Part 7 for a lean and agile business scenario.
I add a fifth business scenario that would significantly deviate for its Human Resources from that of the baseline models with this posting where I consider an explicit change management scenario. And I begin this by noting that this scenario, and perhaps more than any of the others considered so far, is driven by uncertainty.
As I have noted in previous and ongoing discussions in this blog, when I cite change management per se, I am explicitly and specifically referring to businesses that are in trouble, and that face a need for significant change in order to regain competitive strength and even in order to survive.
• So the scenario I address here is very different from that of Part 4, for example, where the underlying business may be very strong and business strategy and its operational execution are more about maximizing competitive strength and competitive advantage in the face of industry and marketplace change and challenge.
• Any viable change management resolution to the problems that a business faces is likely to involve significant staffing changes, with downsizings and staffing realignments – a combination of changes that are sometimes euphemistically referred to as right-sizing. But this is very different from the situation discussed in Part 5 of this series with its headcount requirement shifts and reliance on short-term and temporary hires, too.
• A business in need of significant change management might in fact be a multinational, but the scenario I address here is very different from the stable, effective multinational scenario of Part 6.
• And in a fundamental sense the situation faced by a business in the type of distress that would call for change management is probably close to be diametrically opposite to that of the lean and agile business of Part 7. In a Part 7 modeled business, ongoing effort has been to keep everything functioning effectively and with minimal structural or operational excess of any kind. Here, the change management-requiring business is in most cases bloated out with ineffective, redundant, and inconsistent organizational and operational structures and systems, and it is all but certainly burdened with operational and strategic disconnects. The immediate goal of change management approaches, besides securing reprieves from creditors is most likely to identify and begin cutting out the toxically dysfunctional, and with a focus on identifying and strengthening core capabilities needed to effectively provide a value proposition to a stable marketplace.
Human Resources needs to play a crucial role in making change management work, and I begin my discussion of that here, with the issues and challenges of staffing levels and balance, and with “right sizing.”
• A business that is in sufficient crisis as to need change management solutions, but that shows sufficient promise of being recoverable for that effort to make sense, is in most cases a business that needs to rethink and reorganize its staffing.
• But if the business as an organization simply starts to let people go, in individual and mass downsizings, the immediate result can be so demoralizing that the people most needed for a recovery, start heading for the exits too. Very often, those most-needed staff members are the ones who would find it easiest to find new opportunities with other businesses, and even with direct competitors, as they are the employees with the skills and experience that would most easily sell in the jobs market.
• So communications and reassurances as to the business’ overall stability and prospects are important, and for individual employees who are to be kept on this means reassuring them that if they stay they will have a job that they can count upon.
• For those leaving, this means managing what can become an employee separation-process production line, with development and management of any outplacement services and other separation offerings that might be provided and with all of the systematic paperwork involved.
• For those who stay this might, in a range of strategically select cases, mean job changes and reassignments within the organization with some people performing the same tasks but at different levels within the company, and some reporting to new managers and with table of organizations realignments and simplifications, and with some people moving on to do new types of tasks.
• Human Resources can play an important facilitating role in all of this for making these changes run more smoothly. HR managed and involved personnel decisions and processes can enable smoother change management resolutions. And the managers in HR responsible for their department’s part of making this overall change happen, can provide the direct feedback on how the personnel management side of this process is proceeding, that would be vital for developing, tuning and adjusting, and executing overall operational and strategic oversight through this transition process. And all of this, of course, falls outside of the usual and normal patterns of the baseline models of Parts 2 and 3 of this series.
I am going to turn to an increasingly important scenario that significantly deviates from the baseline models for Human Resources in my next series installment, where I will delve into issues relevant to heavily supply chain-dependent businesses, businesses that operate co-dependently in complex business ecosystems, and the impact on a business of its functioning in a globally ubiquitously interconnected community. Meanwhile, you can find this and related postings at HR and Personnel.
This is my seventh installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-6.)
I began this series by developing a baseline, standard model of a business and how Human Resources would connect into and support it (see particularly Posting 2 and Posting 3 of this series.) I then delved into a succession of complicating perturbations from that where a business might have to:
• Competitively operate in a very rapidly changing innovative industry and marketplace (Part 4),
• Operationally accommodate significant and even extreme shifts in headcount requirements (Part 5), or
• Meet due diligence requirements that arise when operating in several or even many national contexts, each with their own legal frameworks governing employee rights and other business law issues (Part 6.)
My goal for this posting is to at least begin a discussion of how a lean and agile business and its staffing and operational requirements affect Human Resources and how HR connects into such a business. As basic background material on lean and agile businesses per se, I begin this by citing:
• My 10 part series: Virtualizing and Outsourcing Infrastructure (at Business Strategy and Operations, postings 127 and loosely following),
• Developing a Business to be Both Lean and Competitive, and Some Thoughts on What That Means, and
• Strategic Planning and the Process of Strategy 7: keeping a business strategically young and agile.
For purpose of this discussion, I focus on lean and agile as structurally and operationally small and simple, and with anything that is not essential to directly maintaining core competitive strength, either outsourced or done without. In an extreme case, lean and agile can mean outsourcing essentially all HR functions, which obviously deviates from the model presented for baseline comparison in my stable business in a static marketplace model of Posting 3. Here, I assume that at least some core HR processes and recordkeeping capabilities are effectively maintained in-house, even if that means storing personnel and related records in the cloud but with direct in-house access-control and oversight.
• Then the primary question that I would start this type of systems analysis with is that of determining precisely which HR and personnel functions and operations would be considered core and kept in-house, which would be maintained but through outsourced service providers, and which might simply be dispensed with,
• And how would this balance change as the business grows and evolves, and according to what strategic considerations?
I have already been discussing prioritization as to what to keep in-house and what to outsource in HR functionality in general, in my series: When and If it Might Make Sense to Outsource Human Resources (see HR and Personnel, postings 134 and loosely following.) My focus here, is that whatever the balance of functions to in fact keep in-house, outsource or dispense with, this has to be considered as a significant part of overall business strategy and planning, and in ways that support both ongoing prioritization of tasks and goals, and the business model in place. And this is a type of consideration that can and will change with time, and in accordance with basic due diligence needs. So in the lean and agile business, Human Resources has to show a systematic flexibility that would not be needed in a more settled business.
I am going to continue this series in a next installment, there considering the across the board perturbations and differences from the normal and baseline that change management requirements bring – in how they impact upon Human Resources policies and practices and decisions made, and on how HR in turn influences overall policy, strategy and business execution. Meanwhile, you can find this and related postings at HR and Personnel.
An addendum to Part 6 of this series:
As a final thought here in this posting, I want to go back to Part 6 and its discussion of HR in the multinational setting, to add an addendum. When I wrote that series installment I focused on worker’s rights and related due diligence issues where across the board consistency and uniformly demonstrable fairness are of paramount importance. While writing that, however, I kept thinking about a second type of issue too where diversity and systematic protection and even encouragement of differences are equally crucial. When a business has offices and staff dispersed across a range of countries, each with its own languages, cultures and customs it is important to both allow for and support this diversity. This is more than just permitting differences in dress code, or acknowledging differences in when legal holidays would be observed – as important as those points can become and certainly if they are not allowed for. This is also about differences in the way employees traditionally and by cultural orientation approach their managers and how their managers in turn lead and manage. This is about communications styles and approaches and how what works and well in one place and for employees from one culture might fail and badly if forced into the wrong context. So if the operational and strategic goal is that operationally and strategically important tasks be performed and priorities met, then allowance for differences in the How of employee and manager performance have to be allowed for and supported too. And this also provides a rich source of potential examples as to how Human Resources would differ in this setting than from the HR of the baseline model businesses of my earlier postings. Both sides of this coin, in maintaining overall consistency and supporting ongoing diversity and differences are equally important and the trick in this, that has to be strategically and operationally established as ongoing business practice, is in knowing which is which and which should be which.
Human Resources and adaptation to change 6: issues that arise for internationally and globally distributed businesses
This is my sixth installment to a series on business and marketplace change and on the impact of this on Human Resources as a department. And as a crucial part of that I also seek to delve into how an effective HR department and its functionalities in turn help to shape the business and its operational planning and strategy (see HR and Personnel, postings 137 and loosely following for Parts 1-5.)
• After developing baseline, simplest case models as a foundation for discussing complicating factors, I turned to consider Human Resources in a rapidly changing innovation-driven industry and marketplace, in Part 4.
• I then proceeded to consider businesses with widely and significantly fluctuating headcount needs, such as agribusiness operations with their seasonal hiring requirements (see Part 5.)
• My goal for this posting is to add in the complexities of global reach and the need for HR processes and practices, and underlying HR strategy to connect into and support the business there too – when that company expands out internationally.
As a starting point, I begin with the legal frameworks that businesses have to work within, and how they vary from country to country, and from legal jurisdiction to legal jurisdiction. Legal frameworks and their requirements impact on businesses in a multitude of ways. One obvious one, as recurringly cited in the news arises where law mandates standards and even specific processes for collecting, using, storing and distributing personally identifiable information (see for example, my series Big Data at Ubiquitous Computing and Communications – everywhere all the time, postings 177 and following.) Here and in the context of this posting, relevant law deals with and legally specifies employee rights and employer obligations as to how those rights are addressed.
• I have already been actively discussing one set of issues where this side of business law plays a crucial procedurally and policy defining due diligence role, with the issues of workplace discrimination and harassment (see for example, my series: Confronting Workplace Discrimination at HR and Personnel, postings 57-60.) Basic mandated requirements that businesses need to satisfy in what they offer at minimum in addressing these due diligence issues are all laid out in nationally and more locally applicable law, and it is the requirements of meeting legal standards in this that cause this set of issues to be a crucial area of risk limitation and remediation concern for most businesses.
• Legal rights to organize and to unionize enter into this overall discussion here too, and so do legally mandated rights to communicate workplace conditions and particularly where those communications are directed towards a goal of improving factors such as wages, benefits or workplace conditions. And this is a very rapidly and actively evolving area of law as online social media such as Facebook and Twitter are increasingly turned to as venues for employee discussion and opinion sharing. In the United States, the National Labor Relations Board (at NLRB.gov) has recently, as of this writing, passed a sweeping update to its governing rules as to what types of employee social media messages are protected by law. And this is going to force a significant rewriting of social media policy in place in many businesses, as their policies mandate what is and is not allowed for their employees to post that might not favorably reflect on the business or its managers. And I add that these new rulings cover all employees in the United States, unionized or not. Other countries are also reconsidering and changing their relevant laws for this to, and finding their own resolutions as to where employees should have legal freedom of speech protections here.
• Insofar as these laws all address employee and personnel issues, and personnel policies and practices followed, understanding and operationally meeting their legal requirements and standards must involve Human Resources as a service. And this is where the complications of multinational corporate reach, and of potential multi-jurisdictional responsibilities and liabilities enters this discussion. When a company begins working across national boundaries and with a staff that is covered by two or more distinct and separate legal systems of employee protection, it has to actively begin looking for consistent, company-wide approaches to personnel policy that are robust enough for risk remediation so as to avoid legal challenge in any of the legal jurisdictions involved – while still meeting the goals of helping to keep the business lean, agile and competitive, and unencumbered by unnecessarily cumbersome personnel policies and practices.
The requirements for meeting a diversity of legal mandates in personnel- impacting law calls for HR participation and the active participation of corporate legal counsel. And HR practices developed in response to this law would both help to shape overall business operations and strategy, and in turn be shaped by them too. Any disconnects here would simply create avoidable risk and liability exposure. And with that I turn back to my last bullet point above, and to the juggling act of meeting legal guidelines while keeping the business flexible and agile in its personnel policies and practices so it can stay focused on bringing in and keeping the right skills and experience balance to meet its needs. This is becoming an increasingly important area of concern for businesses and an increasingly commonly faced source of deviation from simply following an HR baseline model of the type I presented in Posting 2 and Posting 3 of this series.
I am going to turn to the issues and challenges of the lean and agile business as pursuing that business model shapes HR policy and practice, and as Human Resources policy and practices in turn help to enable and shape overall business policy and strategy. Meanwhile, you can find this and related postings at HR and Personnel.
This is my eighth installment in a series in which I discuss issues and considerations that would go into determining whether Human Resources functions and processes should be retained in-house, or whether they should be outsourced to third party providers – and if so for which services (see HR and Personnel, postings 134 and loosely following for Parts 1-7.)
I ended Part 7 by noting that:
• Capacity to readily monitor systems and processes in place, and not just as a matter of written and intended policy but as they are carried out in practice is essential. And this is where the potential challenges of in-house versus outsourced enter this story, and within the in-house paradigm locally distributed versus distant and centralized in-house. And managing this as a due diligence matter means maintaining positive operational control based on a clear understanding of what is being done and how and for whom, everywhere in the business’ organizational systems and for all of its personnel. And this brings me to the second, closely connected set of issues that I proposed as topic for discussion at the top of this posting: monitoring and tracking HR performance itself as a due diligence and risk remediation exercise.
And I turn to that here, beginning with some basic observations:
• For most Human Resources processes and their applications, consistency and transparency are vital. Individual employee privacy and confidentiality have to be protected but there is an overriding need for employees to see themselves as being treated fairly and consistently with others in their workplace, and without possible grounds for claims of bias.
• Business operations and processes, and internal methods carried out through third party providers can often be hidden from the hiring company in their details with only input and direct output visible, and this applies to outsourced HR and Personnel processes and their implementation as much as it does for any other types of business processes.
• A lack of transparency and resulting inconsistencies can arise in-house too. But these issues are usually easier to identify and characterize when everything is being done in-house then when they are outsourced.
• This clearly has due diligence and risk remediation implications where both consistency and demonstrable consistency are desired goals, and where opacity in the What and How can foster discrepancies in process and outcomes and at the very least create perception of unfairness. And this brings me to the point I cited above as topic for today’s posting: seeing and evaluating HR systems, and course correcting and evolving processes and practices in place so as to systematically lessen the likelihood of this bias.
The points of this discussion become particularly important here because most businesses and their Human Resources services in fact systematically and widely violate the basic principles of consistency and transparency that I have been discussing up to here and for at least one core functional area and with a range of impact that spans essentially their entire personnel rosters. I intimated at this when I wrote Part 7 of this series and I present and discuss it here: specific employee by employee salary levels.
• Most every business with employees and a headcount that go beyond that of a single owner, has at least something of a list of defined employee positions that need to be filled. And each of them generally has at least a loosely defined set of employee qualification requirements and a list of responsibilities that would have to be fulfilled to meet at least minimal required performance standards for employment.
• And bringing this into focus for purposes of this posting and discussion, most every such defined position also carries with it a set allowed compensation range, and with minimum, maximum and average salary levels that employees in those positions would hold. An employee, according to this compensation model, would never be placed in a position with the business at a compensation level below that minimum as determined for the position, and if their compensation were to rise to and exceed the maximum set, they would have to be promoted in order to stay within range – assuming they stay with that company.
• The difference between lowest and highest can be fairly big, and this is important as it means an annual salary increase does not automatically and always have to mean a promotion due to pay exceeding a set maximum. And the salary ranges in place for all employees can be and generally are adjusted up periodically to account for inflation and salary increases that are provided simply to maintain at least the same real income levels received.
• This is where things get interesting. There is often some overlap between the compensation ranges available for one position and the next level up (e.g. with some programmers at least potentially being paid more than some senior programmers.) When a new employee is hired (say a new senior programmer) the business generally seeks to bring them in towards the low end of their position’s pay range so they will not have to be promoted for at least a few years. A more junior level programmer who has been with the company a while might actually be getting paid more than the more experienced and higher level senior programmer they report to. And of course there can be significant salary differences between same level and same position type employees – and in patterns that do not necessarily match up with current job performance review scores.
• What happens if someone with access to this information as to who is getting paid what, gets careless and leaves a printout of it in the photocopy room and employees involved get to see it?
• That, I add is a very explicitly real world example that I have seen played out, and a lot of people were very upset as a result of it. In this case the salary list covered the entire Information Technology department and the HR staff member who made copies of this listing for a meeting was in a hurry and left the original in the photocopier – and for convenience they had used an IT department photocopier as it was closer and not blocked from use by a long line of other waiting users. So this posting is about consistency and transparency where that is what is needed, but it is also about confidentiality and opacity where that in fact is seen as required too.
• There is a reason why individual salaries can and do differ in this way. Most businesses seek to negotiate the lowest compensation package they can when hiring a desired best fit job candidate, and negotiations can lead to different starting salaries from day one that can diverge father apart as raises are set as a percentage increase over current salary. 5% of $80,000 is a larger number than that same 5% level but of only $65,000, and annual increases cumulatively expand the differences – and even without additional exemplary performance based increases being added in.
• There is a reason why individual salaries received by a business’ employees constitute one of that business’ most closely guarded secrets – and this is not just to limit what competitors would know when trying to hire away best employees. This is also to limit conflict and ill-will as current employees compare notes and see how their compensation levels compare with those of their colleagues.
One of the core, foundational reasons why consistency and transparency are so important is that inconsistency and opacity do not work, long-term and people do find out. HR and business policy in general seek to preserve privacy and confidentiality over personal employee information and for a variety of reasons. That is required by law in most countries and legal jurisdictions and it is good business practice anyway. Salary and other compensation details are seen and rightly so as protectable in this way. Many and even most businesses conflate that with a strategy to keep their overall payroll expenses down and the result is this opaque and unbalanced policy and practice.
And with that as a pervasive if negative-example case in point, I turn back to the issues of in-house versus outsourced. The overall goal of HR managed and tracked processes might be transparency and consistency but this takes place in the context of need for individual confidentiality and privacy, and both to protect the individual employee and as this situation highlights, to protect the business too. Monitoring and tracking, and course correcting and adjusting as needed are important and even vital. Any outsourcing agreements with HR or related providers have to allow for and even actively support this.
If a business is to violate, and even systematically and pervasively violate the core principles of operational and process consistency and transparency it needs to have very specific reasons for doing so. And it needs to know where this is being done and where there is operational risk from discrepancies arising and certainly where any veil of opacity might be lifted, intentionally or otherwise. And where differences do of necessity arise as for example where employees based in different countries get different benefits such as health insurance coverage, it is important that this be understandable and that it seem reasonable – and that it not be just a source of potential unpleasant surprise if someone leaves the wrong papers in the Xerox machine room. Identifying possible friction points that can arise here through outsourcing and resulting loss of hands-on control and oversight need to be considered when contemplating any business process outsourcing, and that certainly applies here for Human Resources outsourcing.
I am going to finish this series here at least for now, though I fully expect to continue several lines of discussion that I have at least touched upon in these postings. Meanwhile, you can find this and related postings at HR and Personnel and also at Outsourcing and Globalization.