Is HR for Me - Have You Asked Yourself That Question?

I am sure all of you have asked that question one time or another during your career. Some of you have stumbled into human resources and some knew that it was the profession you always wanted to be in from an early age or at least when you were in college.

The question is "do you really think it is for you or are you riding out your career in human resources because there is no other path for you to take"? Well here are a couple of thoughts:

• if you are not dedicated to HR - get out
• if you do not understand business from the ground floor up - get out
• if you just tolerate people - get out
• if you stumbled into HR and you are not a student of the craft - get out
• if you are not flexible and fluid in these trying times - get out
• if you do not add value - get out while there is still time.

If you are dedicated - stay in it and add extra value to your business.

This is all food for thought in these fluid and volatile times. Think about it and really have a heart to heart with yourself.

Your opinions and comments are welcome lease send them to wgstevens2@gmail.com

Matrix Organizations: When and How They Can, Can’t Work

NEW YORK—Matrix organization, or the idea of balancing multiple organizational dimensions and building the “organizational infrastructure” for success, was popular in the 1970s before falling out of favor.

“In the 1980s and 1990s, matrix organizations were toxic—you didn’t want to touch one, didn’t want your boss to know you were using one,” Jay R. Galbraith, an organization design expert, told attendees at a recent organizational development conference sponsored by The Conference Board.

In recent years, Galbraith said, top performing companies such as Nokia, Proctor & Gamble, IBM and Toyota have been using matrix structures to gain competitive advantage.

“Matrix is out of the closet, and you have to learn how to make these things work,” Galbraith said.

Most matrix implementations fail to meet their objectives, so companies conclude that matrix does not work. But it doesn’t have to be that way. “It’s that most managements fail at matrix,” Galbraith said.

Design Challenges, Matrix Solutions

During the session, Amy Kates, principal of Downey Kates Associates, a New York City-based organization design firm, highlighted the design challenges that many companies face and how matrix organization helps cut across those challenges:

• Customer-centric design: Matrix organizations design around the customer, segmenting markets and selling solutions. Matrix organizations address how to be “operationally excellent and a product leader.”
• Readiness for innovation, organic growth: Matrix organizations help companies maintain a stable base of business units while they build their capability to assemble and disassemble teams around opportunities and projects.
  Matrix effectiveness.
• Centralization/decentralization dilemma: Matrix organizations are able to gain value from the parent company, make smart centralization/decentralization choices and connect units laterally.
• Global expansion: Matrix organizations look at options for connecting international units to the home country, create truly transnational companies, and balance globalization and localization.

“The one that we will focus on ends up falling into all these categories and we end up with some sort of matrix organization,” said Kates, who has co-authored a book on organization design with Galbraith.

Star Model

Galbraith is founder of the Breckenridge, Colo.-based Galbraith Management Consultants and a senior research scientist at the Center for Effective Organizations at the University of Southern California.

In the 1960s, he developed a framework for more structured decision making dubbed the “Star Model.” It encompasses strategy, organization design criteria, people, structure, rewards and processes. According to Galbraith, organization design is more than just structure. Different strategies lead to different organizations. For an organization to be effective, all the policies must be aligned with one another.

“This is the model I’ve used, and today every consulting firm has something like this,” Galbraith said.

The essence of strategies leading to matrix designs is the pursuit of the “and” rather than the “or,” Galbraith said. In other words, global and local, functional excellence and fast time to market, and national accounts and local accounts.

The key when designing a matrix, Galbraith noted, is to start with strategy. “The keys for me are the business processes and management processes,” he said. “You want to minimize the levels [of organizational structure that] you have. I try to get the levels out and make the matrix as tight as possible. Don’t spend all your time on dotted and solid lines.”

Different Matrix Designs

Organizations have adopted several different types of matrix designs with various degrees of success. Galbraith said most companies have mastered the simplest, which are two-dimensional and include products and functions.

Other matrix designs can be three-dimensional and might include functions, business units and countries. “This type is far more challenging and encounters cultural differences,” Galbraith said.

Others are even more complex and include four or more dimensions, such as those that arise when serving global customers. “This type is the cutting edge,” Galbraith said.

“The leadership at the top sees mastering the requisite complexity as a source of advantage,” Galbraith said. “They keep it simple for the customer.”

High-Performing Matrix Organizations

A lot can be learned from companies making it work, Galbraith said. Here are some key characteristics of successful matrix-driven organizations:

• They have sophisticated leaders who grew up on both sides of a matrix, manage conflict, work as a team and spend time “getting clear roles and understand power balancing,” he said.
• They create organization designs “that aren’t just about structure,” which are complete, and completely aligned. “It takes a complete design to make this work,” he said.
• They manage an effective change process that’s incorporated into the matrix.
  Matrix is inherently a team-based design that runs on open debate and dialogue.
• The high performers use the same techniques to guide the change process.

Kates added that “matrix is less of a structure problem and more about the other parts of the Star [Model].” Rewards result from more subjective assessments of performance, she said. The assessments result from top management’s discussions of what people achieved and how they achieved their results.

“Hire hard, manage easy” is the key guideline, according to Kates. “Some people thrive in a matrix, while command controllers do not.”

Assessing Matrix

Selecting the right people to be in a matrix is critical. “If you build a critical mass of people who have a similar mindset, you get to a tipping point,” Kates said.

There are several steps companies can take to assess their matrix and get it back on track if it’s not where it should be. It pays to look first at interpersonal skills and work and management processes.

“There isn’t really magic to making this work—it’s about the basics,” Kates said, adding that companies that succeed at matrix design “do all the basics all the time and pay attention to making all of them work.”

When it comes to interpersonal skills, make sure there are opportunities to build networks and relationships. Staff can use the tension created by the matrix to collaborate rather than compromise, ensuring that managers who share resources can work well together. Also, make sure matrixed positions are at the right level and that there is a culture of teamwork, with joint accountability when things “go well and when they go wrong” and frequent giving of credit to others, Kates said.

“If you don’t have a good team-based organization to start with, matrix shouldn’t even be on the table,” Kates said.

Work processes should be clear and streamlined, and there should be clear information flows and clarity around roles, responsibilities and handoffs. And when it comes to management processes, Kates said, there should be governance mechanisms “to force dialogue” and resolve issues quickly and at the right level, efficient and effective meetings, a minimum of management “rework” and “a robust process for objective setting, performance management and feedback.”

More on Organizational Structure

During another session, Michael G. Winston, former managing director, global head and chief leadership officer for Countrywide Financial Corp., said you can take two companies that are structured identically, with the same skill sets and same market conditions, and “one will skyrocket and the other will plummet.”

What makes some succeed? “The common denominator is that people seem to be the catalyst for great things to happen,” Winston said. “Leadership is the ultimate arbiter of organization success.”

Winston cautioned that no matter what organizational structure is put into place, “it will almost always be out of date” shortly after its inception if companies don’t organize and reorganize because the rate of change environmentally or technically “is usually fast enough to force distortions in that structure.”

Winston, a consultant who has held leadership positions in high tech and aerospace, shared several “personal convictions” about effective organization design. Among them:

• Proper structure facilitates performance but doesn’t guarantee successful performance. Meanwhile, improper structure leads to “doing it the hard way.”
  
• Changes in structure are disruptive—be careful.
  
• All structural benefits cannot be gained at the same time. Tradeoffs are needed to get the optimum balance of benefits.
  
• Proper staffing is critical to the success of the revised structure. Improper staffing frequently undermines sound structure.
  
• The most neglected aspect of organization design is the allocation of power.

Do Your Job Postings Work for You?

Are your ads succeeding in attracting the right kinds of candidates for your openings? Recruiting firm Dice, which specializes in technology and engineering employees, recently conducted a survey among more than 650 passive and active information technology (IT) candidates, which yielded some valuable tips.

Dice asked what kinds of facts or descriptions are often missing from IT job postings that they would find most helpful. When we saw the results, it seemed to us that the responses might apply equally well to all kinds of job applicants, especially those with skills that are much in demand. For example, Dice also seeks out candidates in accounting and finance. More than a third of respondents said that information about the actual work they would do is missing from most job postings. Here's sample language from a real job description that Dice offered as a good example: "You will be responsible for improving our foundational software to enable our company to scale to hundreds of thousands of concurrent users. You will collaborate with operations to steadily improve the scalability of the current service without suffering downtime."

Other inclusions that job seekers said they like to see are the particular skills they will need, a salary range for the position, a list of the benefits and perks the company offers, including any that are unique, what they will have the chance to learn on the job, how their work would serve the company's overall mission, and more. Dice also advises employers to show the zip code where candidates would work and include information about the culture, so seekers can tell if they'd be a good fit.

Says Dice regarding work culture, "Is your organization an aggressive Web 2.0 company with a start-up feel and an open-cube environment where flexible IT folks, who can wear many hats, thrive? Or are you more 'big company,' with private offices, well-defined jobs, and a culture that offers great work-life balance and excellent formal career paths?" We can think of lots of examples of work culture advantages that would appeal to all kinds of candidates. For example, if many employees have long tenure, you could highlight the presence of potential mentors to share their institutional knowledge.

If employees seldom come into personal contact with customers, you might highlight the casual, relaxed atmosphere. By contrast, if customer contact is routine, stress employees' roles in creating a friendly and professional atmosphere. Intrigued by the idea of podcasts or blogs to attract candidates? Dice advises that you avoid making them too slick; candidates are suspicious of hype.

So you have to ask yourself these important questions:

• what differentiates you from other employers
• is your culture nurturing
• is there job path creation
• are you getting the cream of the crop
• are you spending your recruitment budget in the right places

Your comments and suggestions are appreciated.

'Our senior leaders just don't get it!'

We all want our senior leaders to "get it"—to support, participate, and buy in to the organization's leadership development initiatives. We know for sure what it looks like when senior leadership is not bought in—fragmented communication, unclear direction, and few breakthrough results. But what does it look like when senior leadership "gets it"?

A senior leadership that "gets it" incorporates the leadership development needs of the organization into its strategic planning process.

What leaders are learning and the ways in which they are being developed should be a reflection of the organization's strategic goals. For instance, if a major strategic initiative is to dramatically grow the business, leaders should be trained on how to lead during times of growth and how to deal with capacity issues.

Development planners should actively seek senior leadership's input on what the most pressing business needs of the organization are and how the leadership development efforts can work to meet these needs.

At the same time, senior leaders should ensure there is an active linkage between the organization's strategic plan and the leadership development curriculum.

A recent Baptist Leadership Institute Web poll showed that about 65 percent of the respondents agreed or strongly agreed that senior leaders in their organization are taking active steps to make sure the strategic plan and the leadership development efforts are aligned.

A senior leadership that "gets it" is visibly engaged in leadership development, including teaching and actively participating in course work.

At Baptist Health Care, one of our leadership development mantras is that "Baptist leaders should teach Baptist leaders how to be Baptist leaders."

If senior leaders are not actively engaged in teaching, then they are not truly committed to leadership development. Taking the time to teach and develop other leaders is the price of leadership. A healthy culture will allow no compromise on this point.
Slightly more than half (53 percent) of poll respondents agreed or strongly agreed that senior leaders are visibly engaged in leadership development.

A senior leadership that "gets it" holds leaders accountable for implementing skills learned in the organization's leadership development journey.

On this item, we saw less optimism reflected by our web poll respondents. Only 41 percent agreed or strongly agreed that their senior leadership applies accountability to leadership development.

Leadership development without accountability is just "putting butts in seats" and expecting our cultures to change as a result. That doesn't bring breakthrough results.

Esteemed executive coach Marshall Goldsmith says, "A lot of what passes for leadership development in companies can be a waste of time." See if you recognize this process, he says. At a convention, you're entertained by a parade of speakers, and afterward you're required to critique the speakers and rate how effective they were. And you may be asked to critique the hotel and the food. But nobody is critiquing you. Nobody is following up to see what you learned or if you have actually become a more effective leader.

So who's learning (and changing) the most? The speakers, the hotel staff members, and the cooks.

Do the Senior Leaders in Your Organization "Get It"?

I hope so. In my experience working with organizations and helping them create healthy cultures, I have seen that a strong commitment from senior leadership is absolutely necessary to create anything more than casual, cosmetic change.

The good news is that with senior leadership's involvement and commitment, nothing can stop the organization's pursuit of excellence!

What do you think? Do the senior leaders in your organization "get it"? Share Your Comments

Public vs. Private Company Managers: Which Are More Likely to Impact the Bottom Line?

Executives who hone their skills at the helm of private companies tend to be more driven, more bottom line-oriented and have much more flexibility than CEOs at publicly owned companies, who are constrained by their need to balance multiple objectives in a corporate ecosystem.

That was the consensus of four panelists who discussed the management challenges at private equity-backed firms during the recent Wharton General Management Conference. The panel was titled, "Managing Public vs. Private Companies in an Age of Buy-outs."

Today, private equity is facing "an industry transition from competing on capital [and] financial engineering to competing on value creation and access to the best management talent," said panelist Elena Botelho, a partner at ghSmart, an executive assessment and talent management consulting firm for investors, boards and CEOs. "This is driven by the need for these firms to get maximum improvements in their portfolio, especially now that the market is tough."

Botelho noted that this affects the way CEOs are hired as well as how top executives perform in an era of increasingly common corporate buy-outs. The result is a blurring of the lines between public and private firms, with shifting expectations of senior management. Although the current credit freeze has limited the number of recent private equity deals, the situation has created a unique set of pressures for managers, since so much attention -- from the media and the federal government -- remains focused on financial performance. At publicly traded companies, the normal expectations of shareholders about quarterly earnings have been ratcheted up with the significant increase of federal regulatory involvement. But as private equity firms gain more investor interest as an alternative to the public markets, CEOs at private companies find themselves expected to reap quick gains in a rapidly changing environment.

Gone, however, are the days of private equity "strip-and-flip" buying and selling, a period that many see as having ended with the collapse of two Bear Stearns hedge funds in July 2007 -- the beginning of the ongoing credit turmoil. A key question now is whether private CEOs, accustomed to taking greater short-term risks to maximize long-term returns, can thrive in a new, more transparent environment under unprecedented demands.

"Private equity firms get measured on IRR (internal rate of return), which is highly sensitive to the time they hold an investment, so every extra year means they have to drive more EBITDA [Earnings before Interest, Taxes, Depreciation and Amortization] improvements," Botelho said. "Before, if they bought the company, took on leverage and flipped it in two years, especially in an environment where multiples [or] valuation was expanding, it was a lot easier to show attractive IRR. Now they need to attract the best managers to improve the business."

More Science than Art

According to panelist Mark Brownlee, associate vice president at Infosys Technologies, CEOs in publicly traded firms necessarily practice business as more of an "art" compared to the top executives at privately held entities, where expectations and results are uncluttered by the corporate "ecosystem." In public companies, this ecosystem comprises "their trading partners, shareholders, their public culture and brand, and ... far too many people to answer to," Brownlee said.

At the private companies he has worked with, however, executives "don't care about an ecosystem," Brownlee noted. "[They] are much more isolated and can make more independent decisions. Management teams can be more like business technologists -- they understand the science of running a business. With a public company, you need to be the face of the company, dealing with analysts and [having] a constant interaction with the media. [Private] companies are great places to be because that's where you can work with people practicing the science of business."

Jonathan Hsu, CEO of New York-based 24/7 Real Media, a digital marketing firm, agreed. The comparison is "pretty stark," Hsu said. "Running a mid-size company and [being] responsible for everything makes you tougher than someone entrenched in a large public company."

Increased liability for public company executives and enforcement of the Sarbanes-Oxley Act, in addition to the comparisons shareholders have made with returns garnered by hedge funds -- fair or not -- have only exaggerated the distinction, Hsu added. "These trends have made public company executives more short-term focused [on] quarterly earnings targets, and in general, more risk-averse."

"For us, the title of CEO doesn't really exist," said Jude Tuma, founder and managing partner at Geminus Capital Partners. "When hiring a CEO, I do not look to a public company, [where a candidate would have] a very defined role. At private enterprise, we're looking for someone who can do a lot of different things."

Hsu suggests that the time it takes to interact with a public company's board and its shareholders -- what he called "a glorified cocktail party that you have on the road, all the time" -- detracts from a CEO's performance. At private companies, "quite frankly if you do well with the bottom line they leave you alone." Not so with public "corporate overlords," he said.

Lambs and Cheetahs

Botelho stressed that the panel was discussing private equity-backed firms, not necessarily private companies in general, and that top CEOs at publicly traded firms can be just as nimble and focused on the bottom line as their private counterparts. "Jack Welch is probably one of the best examples," she said.

To fine-tune the comparison, she referred to a study that ghSmart did in collaboration with economists and finance professors at the University of Chicago. It analyzed in detail assessments of more than 300 candidates for CEO jobs at firms funded by buy-out or venture capital investors. Candidates were rated on more than 30 specific abilities under three leadership categories. The "Hard" category included leaders who are efficient, aggressive, persistent and proactive. "Soft" was characterized as being flexible, a good listener, open to criticism and a team player. The third group was neither particularly hard nor soft, but seen as being persuasive, organized, analytical and calm. These are all positive traits, of course, but the "hard" and "soft" candidates were later re-defined as "cheetahs" and "lambs," making it clear which group made for better performers in terms of the bottom line.

A surprising finding of the study was that buy-out investors are twice as likely to invest in lambs, probably owing to their interpersonal skills and the level of comfort they instill. The cheetahs made board members nervous with their aggressiveness and willingness to move forward without waiting for direction.

The "success" of the candidates who won the jobs at the firms ghSmart studied was determined in two ways, depending on if the CEO was still in the job or had left. If still with the firm at the time of the study, success was measured as meeting or exceeding targeted EBITDA. If he had exited, an attractive return on the investment was deemed successful.

The bottom line? According to the study's metrics, lambs achieved success only 57% of the time. The cheetah outpaced even the most bullish expectations, with 100% of those in the study earning their money in a "successful" fashion, according to investors' expectations.

"Where [the cheetahs] really spiked was what we call 'PEP talk' -- persistence, efficiency and productivity," Botelho said. "They drove hard, made the right decisions and went at it pretty relentlessly. The other group is [the one] we'd like to have dinner with. What made them special was consensus-building."

Given the results, she said, "When looking at CEOs, you're probably going to go for a cheetah." Later, in an interview, Botelho said she would never suggest that the best public company CEOs are not talented, driven and bottom-line oriented. Though the panel focused on private equity-backed firms with assumed profitability, it was also true that "there are scores of private companies that are family- or founder-owned, or are partnerships that don't have the performance pressure that comes from having public shareholders or active financial investors.... Some of those fall far behind public companies in quality of talent, business practices and results."

Still, Brownlee's point about corporate ecosystems rang true to her. "The point is that the set of issues a public company CEO has to deal with is broader than that of a private company," Botelho said. "Therefore, their balancing act between different objectives is more complex.

She added that firms that take a long-term view -- public and private -- use down markets like the current one to grab talent they otherwise couldn't afford or attract. "For example, in the last downtown of 2001, American Express hired a lot of people out of top strategy consulting firms when those firms were struggling with decline in demand. We see the same with our clients now -- they are actively looking for strong performers that are 'poachable.' In private equity in particular, it's typically difficult to attract senior talent from other firms because of carry (the executive's financial interest in the portfolio companies when they sell the company). In times like this, some of the portfolio companies are starting to struggle, and therefore carry is not looking as valuable as it did 18 months ago. The challenge for these companies is to have strong assessment processes to differentiate truly strong performers from thousands of average players."

Have You Organized to Maximize Business Partnerships?

For years I have organized my HR group around the departments/business groups they supported. As you look at all the discussion lines, websites, and blogs relating to HR being a business partner one could only wonder why we have centralized HR departments. Sure, there are come corporate needs but at the divisional, subsidiary, or non-corporate locations at are not noted beforehand here why is there a need.

Well some will say that is how we are organized and that's that. I can only say you who say that are not the HR leaders of today or in the future. How better can your HR managers/directors get more involved in the business, outset of issues, than when they are embedded in those groups they support. CENTRALIZED OFFICES ARE OUT!!!!!!!!!!

When you look at the competencies for HR professionals now and in the future, as Issac Dixson notes how better to hone these skills than to be in the thick of things with the managers, directors, and employees an HR person supports. Again these competencies are:

• Business Acumen
• Financial Savvy
• Quality Decision Making
• Managing Diversity
• Learn on the Fly
• Sizing People Up

These competencies are more in demand than ever in our businesses. So, take a look at your organization and think hard about your structure and how you can better develop your staff. Move them into the firing line to learn, grow, and develop into the HR leaders of the future.

Your opinions and thoughts are welcomed. Challenge this premise and let me know your thoughts.

HR Competencies for Today and the Future

If I had to look at competencies for HR professionals now and in the future Issac Dixson says these are important:

• Business Acumen
• Financial Savvy
• Quality Decision Making
• Managing Diversity
• Learn on the Fly
• Sizing People Up
  

These competencies are more in demand than ever in our businesses yet he still finds people entering the field that have little to no background or experience in any of these areas. If we add to this the significant legal exposure it makes me wonder why many organizations still feel that “anyone” can do HR stuff.

As a profession we must continue to insist on excellence, shun party planning and gift basket preparation (employee committees can do this stuff). Focus on strategy, get our staff’s tactically proficient and push information out to managers, leaders and employees.

Halloween is Tough This Year Huh !!!

What Current HR Issue Will Become Irrelevant in 5 Years?

There has been a lot of banter around HR sitting at the table as a strategic business partner and most recently was an asked question on Linkedin. A commonly shared belief around HR & corporate executives was that HR will no longer be asked whether it has a seat at the executive table. Why you ask, because HR will be and more commonly is today viewed as a valuable business partner who has demonstrated its value and ROI. As the business and world environment increases in competition and complexity, being strategic will become a must for those HR executives still vying for a seat. It is my feeling that the issue of the HR executive making it to the C-suite will become irrelevant in 5 years for those companies that want to remain competitive in today's world.

I think that another current HR issue that will become less relevant or irrelevant in the next 5 years will be the process changes HR makes. In the world of connectivity, outsourcing, and tools at hand, HR can hand those process issues off to operations partners and continue to outsource those administrative tasks. In the information technology world of today, there will be more self-service options, managers taking greater control over what has been an HR bastion. With these changes it will become increasingly important for HR professionals to have knowledge and understanding of the various business functions within their organizations, as they relate to the organization as a whole. To quote Dennis Roberts of Bush Industries, Inc. " transactional HR activities currently outsourced in many organizations will likely disappear off the radar screens of most HR executives in the next 5 years".

SHRM has listed 5 key issues that they feel, based on research, will become irrelevant:

1. perceptions about the value and role of HR
2. changes in health care/cost management and employee benefits
3. alternative work arrangements
4. influence of technology on the workplace
5. other human capital issues.

Well, all these are very key issues but if you were to pick 1 or 2. I would nominate the ones noted above. As for these, the election may take care of the health care issues, we should be addressing alternative work arrangements already (read my blog post dated 7/708), technology has already made its way from the PC to the web and we should all be there by now, and other human capital issues is a catch all for things HR should be doing now strategically for their organizations (i.e.: recruitment, retention, compensation, succession planning, workplace ergonomics, etc.)

You comments and thoughts on this subject are welcomed.

How to Build HR Credibility

Credibility—it's hard to establish and it's easy to lose. Yet, it's critical for HR success. Today, one expert's take on how to lose it.

The respected HR Competency Study, conducted by the University of Michigan Business School and its partners, has identified six core competency domains for HR managers:

• At the basic "relationships" level: Be a Credible Activist
• At the mid "systems and processes" level: You Must Be an Operational Executor & Business Ally
• At the top "organization capabilities" level: You Are The Talent Manager/Organization Designer, Culture and Change Steward, & Strategy Architect

While it's clear that all these functions play important roles for HR managers, the study identifies the "credible activist" as the most important. You need both parts, the study suggests—you must be both credible (respected, admired, listened to) AND an activist (offers a point of view, takes a position, challenges assumptions).

With only credibility, HR managers are admired, but have little impact. And on the flip side, activists without credibility may have great ideas but they will not be listened to.

The study notes that this credible activist combination is often called "HR with an attitude."

Your comments and ideas are welcomed.