Blacksmiths and Wordsmiths

Have you been down to your local blacksmith’s lately?  Unless you’re reading this post through a hole in the space-time continuum, you probably haven’t.  Actually, blacksmiths still exist, but they are now a rare, highly-specialized group of skilled workers.

Compare this to the 15th through 19th centuries, when a blacksmith was one of the focal points of every community.  As our societies and technologies evolved, the skills of the blacksmith became less and less pervasive.

Now compare this to the wordsmith.  I couldn’t find any significant history on the wordsmith, so I’ll make something up, and then go post it on Wikipedia.  The wordsmith was also around in the 15th through 19th centuries, although they kept a low profile.  This is because as children, future wordsmiths were routinely beat up by future blacksmiths

This may explain why so many wordsmiths are able to rear their ugly heads (and ply their treacherous trade) today.  With the diminishing number of future blacksmiths, future wordsmiths don’t receive near as many beatings as they should to discourage them.

You probably know a wordsmith – although they set-up shoppe in the most unlikely places.  The wordsmith is the one who ensures that any meeting that could have been done in 30 minutes, goes for at least two-hours.  These are the people who will argue incessantly about subject-verb inversion, and how it may affect the organization’s vision statement.

If you find yourself organizing or facilitating the articulation of organizational goals, strategies, mission or vision statements, you need to root out the wordsmiths early.  Send them on a business trip, or tell them there’s a newspaper somewhere that needs to have a letter written to the editor because the sentence structure of a headline was inappropriate.

The bottom line is that missions, visions, goals and strategies are all useless documents, unless they move people to action of some sort.  If the wordsmith gets her way, these documents will all be grammatically and politically correct, but so general and generic to the point of being useless.

So… if you have any of these documents, that sit high on a shelf for 11 months of the year, until the dust is blown off them for the next planning cycle, you can blame the wordsmith.  To address this problem, you have two options:

  1. Distract the wordsmith long enough to rewrite the documents in a concise and meaningful way.
  2. Hire a blacksmith to take out the wordsmith.

 

What Gets Measured, Gets Mismanaged

Well, that title should upset a few people – particularly the folks in finance that love their spreadsheets more than they do their children.  Don’t get me wrong… I like the idea of measuring things so you know where you stand.  My problem is the way in which some organizations execute their metrics.

Performance metrics often provide an excellent illustration of how a really good idea can be made difficult and useless by poor implementation.  It’s a lot like watching your favourite sports franchise consistently snatch defeat out of the jaws of victory.

Usually it goes down like this:  someone in some position of authority will read the first fifteen pages of a book about measurement.  Without reading the following 250 pages, he concludes that his organization needs to get everyone on the measurement bandwagon.  Then he strikes a committee, or hires a consultant to go forth and make this happen.

Fast forward in time six months, and a significant portion of everyone’s work week becomes dedicated to counting the number of paper clips they have consumed since last week, and calculating the annual impact of that paper clip consumption.  They then have a meeting to discuss how to reduce paper clip consumption, thereby reducing annual operating costs by $48.50, or roughly 1/100th the cost of the first meeting about paper clip consumption.

OK… that might be a bit harsh.  But here are some actual examples of performance metrics gone horribly wrong:

  • The technology company that measured sales success exclusively on dollar volume at the end of each quarter.  THE RESULT:  A whole bunch of clients went somewhere else because they were tired of being sold things they really didn’t need.
  • The grocery retailer that measured check-stand effectiveness by calculating the frequency of cashiers using customers’ names.  THE RESULT:  the customers went to stores where they measure how much time was spent waiting in line – something the customer actually cares about.
  • The restaurant owner that attempted to reduce cost by reducing the number of paper napkins provided to each customer.  THE RESULT:  I don’t know… probably sticky fingers and dirty tables – this one just seemed really silly to me
  • The lumber manufacturer that measured how much fibre it recovered from each log, as opposed to how much money they made on different dimensions of lumber.  THE RESULT:  Very few wood-chips, but a yard full of garden stakes that no one would buy (and a whole bunch of trees unnecessarily harvested)

Some people will tell you all that matters at the end of the day is how much money you make.  Not true – if you focus exclusively on this, you are in a never-ending cycle of sub-optimized decisions that forbid any long term success.  Most obviously, if you ignore safety while focusing exclusively on how much money is make, it is only a matter of time before you injure or kill someone, which beside being ethically reprehensible, is very expensive.

Here’s the bottom line about measurement:  The great thing about measuring performance is that people will adjust their behaviours to affect the outcome of the measure.  Unfortunately, the really scary thing about measuring performance is that people will adjust their behaviours to affect the outcome of the measure.

So measurement (like other recreational drugs) should be used cautiously and in moderation.  Second, you should never have only one number you are tracking.  And finally, you need to understand why numbers are trending the way they are, as opposed to (over)reacting to one data point.

Let’s be careful out there.

The Balanced Scorecard Approach

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The Balanced Scorecard approach is a system of measurement, that when implemented properly is brilliant in its simplicity.  Below we discuss the four standard perspectives of the Balanced Scorecard approach, and how you can implement it in your organization or department.

About the Balanced Scorecard Approach

The Balanced Scorecard approach was created by Robert Kaplan and David Norton in the early 90s.  Kaplan was a professor at Harvard with a background in accounting and finance, and Norton was a consultant that worked primarily in the Information Technology field.

The original article on the Balanced Scorecard approach, “The Balanced Scorecard – Measures that Drive Performance” was published by Harvard Business Review in 1992, and was voted one of the ten most influential articles of all time.  Several more articles and books followed entrenching the Balanced Scorecard approach into standard business lexicon.

The Four Standard Perspectives of the Balanced Scorecard Approach

There are four standard perspectives to the Balanced Scorecard approach:

  1. Financial Perspective:  How do we look to shareholders?
  2. Customer Perspective:  How do customers see us?
  3. Internal Business Perspective:  What must we excel at?
  4. Innovation and Learning Perspective:  Can we continue to improve and create value?

Examples of Each of the Four Perspectives of the Balanced Scorecard Approach

The Financial Perspective of the Balanced Scorecard Approach

  • Financial perspective does a lot with profitability, growth, and shareholder value
  • Tends to look “backwards”
  • Shareholder Value Analysis is an attempt to help financials look forward
  • Such things as:
    • Return on capital
    • Cash flow
    • Profitability
    • Reliability
    • Sales
    • Return on equity

The Customer Perspective of the Balanced Scorecard Approach

  • A complete blend of time, quality, performance and service, which are of more concern to the customer
  • Benchmarking is sometimes used for industry comparison
  • Ensures your business is not excelling at something that has no value to the customer
  • Such things as:
    • Quality
    • Service levels
    • Timeliness
    • “Walletshare” of key customers
    • % of sales from new products (proprietary products, etc.)

The Internal Business Perspective of the Balanced Scorecard Approach

  • Business processes that have greatest impact on customer satisfaction
  • Often measures are “deconstructed” to a local level
  • This is where information systems and tracking become critical
  • Such things as:
    • Cycle time
    • Unit cost
    • Yield
    • Efficiency measures
    • Schedule versus plan
    • Safety
    • Risk Management
    • Loss control

The Innovation/Learning Perspective of the Balanced Scorecard Approach

  • Incorporates notion of continuous improvement
  • Setting targets for improvement and continual learning
  • Measures company’s ability to innovate, learn, and improve
  • Such things as:
    • Time to innovate next product
    • Time to market
    • Employee retention
    • Employee satisfaction
    • Employee skill levels

Implementing a Balanced Scorecard Approach

Organizations make a few critical mistakes when they first attempt a Balanced Scorecard approach:

  1. Don’t make it more complicated than it needs to be.  Start with the data you have on hand, and refine it as you go along.  If you are spending more time measuring your work, than you are doing your work, you’ve got it wrong.  The Balanced Scorecard approach is most effective when it is clear and simple.
  2. Adjust the perspective to meet the needs of your department or organization.  The Balanced Scorecard approach should be tailored to your situation, however the standard perspectives are an excellent starting point.
  3. Don’t forget about “leading” indicators.  When implementing the Balanced Scorecard approach, many organizations have no problem with the financial, and service measures, but when they get down to the innovation and learning perspective, it becomes much more difficult for them.  Do your best to find predictive indicators as well as lagging indicators.

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Can’t Decide? Flip a Coin

Part of what makes my job so much fun is being exposed to a variety of organizations in a wide variety of industries.  The culture of these organizations vary widely, and is probably best manifested in how people make decisions.  In some places, people gather as much information as they can, they discuss possible courses of action, and then they pull the trigger on a decision.

Other organizations have rambling, unfocused discussions, refer things to subcommittees, defer decisions seemingly indefinitely, and then wonder why their organizations consistently fail.

People can argue whether the greater evil is in making decisions to quickly or too slowly, and you can probably guess which side of equation I will argue for with the following list:

Things that delay decisions:

  1. Needing perfect information before committing.  It would be nice if you had all the available information at your disposal, but by the time you gather and process all that data, it’s possible your decision won’t matter anymore.
  2. Being too risk adverse. When people are deathly afraid of making a mistake, they will hesitate to make decisions.  What is not part of their calculations is that their delay carries a certain amount of risk too.
  3. Trying to keep everybody happy all the time.  Making decisions usually means having to make trade-offs of some sort.  By saying yes to one course of action, you are saying no to another, and in the process, you are going to upset someone.  This is a key reason why the public sector often fails to make timely, quality decisions.
  4. A top-heavy or micro-managed business.  In this case, only one person, or a small number of people are permitted to make any decisions, and as such become a bottleneck.  Organizations that push decision making down the hierarchy to the most appropriate level are much more agile, and ultimately perform much better.
  5. Poor decision-making process. Sometimes, people fail to recognize a decision point when it appears in front of them.  If they don’t recognize the fork in the road, they certainly won’t know which turn to take.
  6. Fear: Contrary to popular belief, it is sometimes better to make the wrong decision today, realize it tomorrow and then correct your course of action, than it is to delay a decision for weeks or months.

Now I’m really having a hard time deciding which video clip to include this week.  One of the candidates is a Monty Python bit (People’s front of Judea) that contains foul language that might offend some.  The other is a clip of George W. Bush talking about being a decision-maker, that may offend some American viewers.

I could ask everyone to weigh-in, and then make my decision, or I could just flip a coin, but I can’t decide which decision making process is better.

 

 

 

If HR Sucks, it’s Your Fault

Here’s a quiz:  In my organization HR is/are:

a)    A highly professional service provider that partners with managers to maximize shareholder value through effective people management practice.

b)   The people who organize our Christmas parties and picnics

c)    Where people who couldn’t make it in the core business go to be marginalized to the point where they do a minimum of damage.

OK – maybe HR’s an easy target in many organizations, but if beating up HR is a fun way to relieve some tension mid-day at the water cooler, you really won’t like what comes next:

If your HR group truly sucks, then your organization most likely sucks, too.

Yep, that’s right.  I’m suggesting there is a direct correlation between highly effective HR, and a highly effective organization.  Furthermore, I’d suggest that organizational managers get the HR departments they deserve.  If your HR group is solely administrative in nature, and generally not very high performing, then that is exactly the quality of service you as a manager, or an organization has asked for.

You may like or hate Jack Welch, but it would pretty hard to argue that GE wasn’t a high performing organization when he was running it.  Just about any time you heard Welch speak, he would talk about what he was doing, and he’d also talk about Bill Conaty – his HR guy.  For GE, the HR portfolio was extremely important.  Some other Jack Welch quotes about HR:

“A high quality senior HR person is as critical as the CFO”

HR should “get out of the picnic business”

And his advice to HR people:  “Don’t be a victim”

Every organization has its version of the “People are our most important asset” speech, but Welch actually lived it.  People will jump all over this, because Welch had an impressive record of firing people.  But valuing people necessarily means that you remove barriers to a team’s success, and sometimes this means removing people.

The strongest organizations I have worked with have highly-competent, business-focused HR people.  They also insist that every manager in the company is an HR manager.  HR is not something that is delegated to a central group – it is actively managed by every leader, every day.  The HR group’s role in these high-performing organizations is to set organizational leaders up to be outstanding managers of the human asset.

Picnics and Christmas parties need to be assigned elsewhere – perhaps the marketing department isn’t busy.

HR as a Strategic Partner: Why HR Often Sucks

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HR as a strategic partner is something that many people have written about, many organizations talk about, and few companies actually achieve.  Below, we discuss some of the variety of reasons why HR departments fail to become a management strategic partner, but if people really are an organization’s most important asset, then this is a problem that requires attention urgently.

Why Care about HR?

Why should organizations care about having an HR strategic partner?  In many cases HR is viewed a necessary evil in a company, and is simply part of the overhead cost of doing business.  This is the case in poorly run companies that do not have HR as a strategic partner.  There are no world-class companies with weak HR departments.  Excellence requires great HR, or an HR strategic partner.

Here are some other reasons to strive create an organization that has an HR strategic partner:

  • Employees are expensive, and good leadership/management maximizes the value of organization’s investment in people.
  • Great HR has better firm performance*
    • 63% less unwanted turnover
    • 400% greater sales per employee
    • Over 3 times greater Market Value:Book Value

*Becker, Brian E., Mark A. Huselid and Dave Ulrich, The HR Scorecard – Linking People, Strategy and Performance (Harvard Business School Press, Boston, Mass. 2001)

Top 10 Reasons HR Often Sucks

There are a variety of reasons that people become frustrated with their HR departments.  Here are our Top 10 reasons why organizations end up without an HR Strategic Partner:

  1. Organizations don’t know what they want/need from HR. As companies evolve and grow, the focus of HR and what management needs them to do changes.  Often, there is no thought given to what are the key drivers of human performance.  Being an HR strategic partner requires a clear understanding of what the HR group will do, and what they will not do.
  2. In the absence of clear direction, HR is reduced to arranging picnics and Christmas parties.  Because there is no direction from the organization, the HR group ends up becoming a “catch-all” where all the administrative jobs fall into.  Once the HR group becomes overwhelmed with useless trivia, they do not have the time or talent to conduct more vital and valuable work.  Being an HR strategic partner requires elevating above mere administration.
  3. We make HR the policy-cops. There is no doubt that HR should be involved in the drafting of policy, but their role in enforcement should be that of an advisor, not an enforcer.  It is the job of individual managers to enforce policy.  An HR strategic partner coaches, supports and advises managers through the enforcement of policy issues.
  4. There is no HR business plan. HR needs to have clear deliverables and measures just like any other business.  The HR business plan needs roll out of the greater organizations strategic, tactical and action plans.  An HR strategic partner enables the achievement of the overall business plan through superior people practice.
  5. Managers like to use HR as a scapegoat. It’s much easier for managers to tell their people unpleasant news if they can pin it on someone else.  Usually the target of such finger-pointing is either higher-level management, or the HR group.  In either case it is inappropriate.  Managers need to take responsibility for the leadership and management of their human assets.  An HR strategic partner is a trusted advisor to getting this done well.
  6. HR is not properly staffed.  If your HR group is filled with able administrators, but not people with any real business training or experience, you will not have an HR strategic partner (although your staff picnics will probably be great).
  7. HR reports through finance. The practice of having HR report through Finance is far too common.  If you want an HR strategic partner, HR needs to report to the people responsible for executing the strategy.  If HR isn’t at the senior leadership table, then it is highly hypocritical to claim that “employees are our most important asset.”
  8. HR people do not know the core business. In order to provide quality, professional advice to managers in the core business, an HR strategic partner needs to understand that core business.  It is not necessary to be expert, but there are many organizations where the HR people do not fully understand how the company operates, or how it manages and measures its success.
  9. HR should be a place for high performers, not the company ghetto. If an organization expects outstanding performance from its HR group, it needs to staff it with outstanding people.  If HR becomes the ghetto of the organization where we put people who couldn’t make it in the core business, or a place where we hire less than the best to try to meet diversity requirements, you won’t have an HR strategic partner.
  10. HR needs to be better at selling itself, and influencing others in the organization.  An HR strategic partner is an influencer more so that s/he is a decision-maker.  As such HR needs to become much better at “selling” its viewpoint.  Moreover, for organizations that don’t’ know how they should best use HR, it is up to the HR people to define and sell its role in the company.

What’s to be done?

If you find that your organization has an HR department that sucks for any or all of the reasons above then action needs to be taken right away.  As a starter:

  1. Have an HR business plan that is attached to the organization’s strategic plan. Without a clear focus, there is no chance of having an HR strategic partner.
  2. Get skilled business people into HR. If you staff your HR department like an organizational ghetto, your results will match.  An HR strategic partner is a highly skilled, high-potential human asset.
  3. Get HR to the table. An HR strategic partner needs to be included in all important discussions.  If HR’s not at the table when those discussions take place, there is no change of maximizing the value of the human asset, and no change of truly being a high performing organization.

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Why HR Often Sucks

Bob and Jed discuss the Top 10 reasons why HR often sucks, and what you can do to begin to fix it.

Watch the ‘Why HR Often Sucks’ Video (14 mins 59 sec):

Download the ‘Why HR Often Sucks’ Video (mp4)

Download the ‘Why HR Often Sucks’ Audio (mp3)

Why HR Often Sucks Podcast Slides (.ppt)

Check out the ‘HR as a Strategic Partner: Why HR Often Sucks’ Cheat Sheet

The SMART Goals Acronym, BHAGs, and Other Silliness

“My goal now:  to be the all-being ruler of time, space and dimension….  And then, I want to go to Europe.” – Steve Martin

For the low price of about $5000, you can spend the weekend with some screaming hucksters (who you would run far away from in a normal social setting), who will guide you to the perfect collection of personal and professional goals that will change your life, and provide the happiness that has always alluded you.  Your registration also includes a coffee mug, and a handsome leather portfolio for all your hand written notes.

It seems that the SMART acronym (Specific, Measureable, Attainable, Relevant, Time-phased) is not the stuff of which great goals are based.  You can also dispense with BHAGs (Big, Hairy, Audacious Goals) made famous by Jim Collins.  Nope, the only way to achieve greatness is to pay your $5000, and lose a weekend of your time.

I’m thinking about advertising on the same forum a one-hour seminar on how to avoid rip-offs, but only charging $2500.  I would assume I would be marketing to the same clientele.

Don’t get me wrong – I think goals are important.  However, I don’t believe their commodification is necessary.  You can write your goals in whatever format you wish on the back of a napkin, and get everything out of it your would by paying your $5000.  The reason most goals fail to be achieved is because people lack the discipline to follow up on their goals – not because of how they are written.

I do believe everyone should have goals, and I do believe you should write them down.  The SMART acronym can help you write higher quality goals, and Jim Collin’s idea of BHAGs can help you to write something inspired.  If you don’t buy into either of these, write them as you see fit – just write them.

Ace Your Annual Performance Review

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Why Things Go Wrong With Performance Appraisals
  • They are treated as an annual “event” rather than part of the ongoing feedback process.
  • People don’t prepare or dedicate the time necessary.
  • The giver and receiver of the feedback are from different planets
How Discrepancies Occur
  • You don’t fully understand the expectations
  • You measure performance by different “yardsticks”
  • You are delusional
How to Address Discrepancies
  • Know how performance is evaluated:
    • Goals & Objectives
    • 360
    • Behavioural Observation
    • Unstructured format
  • Ask to see the forms/format prior to review
  • Articulate expectations in writing
What If You Don’t Agree?
  • Raise objections professionally and stay calm
  • Ask for specific examples that led to a particular rating/comment
  • Escalate the matter if you have to, but be careful
Manage Perceptions All Year Long
  • Agree in advance on performance goals and metrics
  • Proactively upward manage your boss
  • Keep your own performance feedback file
  • Ask for feedback regularly and act on it

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A Guide to Ace Your Annual Performance Review

In many organizations, Annual Performance Reviews are about as popular as Ike at the Tina Turner Fan Club meeting.  They are done sporadically, if at all, and they typically have very little impact on organizational performance.

The last big multi-national corporate organization I worked for as an employee had a fascinating “system” for the annual performance review.  I would suggest it’s very typical to what is seen in other companies, so in the interests of demystifying the whole process, here is a list of definitions and translations to sort out some of the vernacular that accompanies the annual performance review:

Annual: In the case of the annual performance review, “annual” means maybe once every 18 to 24 months, or maybe never at all.

Performance Review Meeting: This is where both manager and employee avoid eye contact and share some awkward small talk before the boss launches into his/her diatribe of the last year in review.  Similar to a bad sitcom in format.

Coaching: This is the organizational equivalent of Batman.  You might see it late at night after a signal (usually a corporate memo) has been flashed, but if you see it at all, it will be in a poor light, and you’ll never be sure if it happened or not.

Developmental Opportunities: These are the things you will get fired for, if you don’t fix them.  If there were no employment laws, they would revert to what they used to be called: threats.

Pay for Performance: Managers who get along well with people, take the amount of discretionary salary dollars they have, and divide by the number of direct reports they have.  Managers who don’t care how well they get along with people give it to the people they like the most.  In the rarest of cases, there is a good measurement system in place that everyone understands, and it truly is pay for performance.  It is about as common as spotting a unicorn at the fall carnival.

Performance Appraisal Documents: This is a template that bears little resemblance to your actual job, written by someone in HR who has never worked in the core business.

Performance Review Meeting Preparation: This describes the immediate 30 seconds prior to the meeting starting

The Sandwich Method of Feedback: This is where poorly trained managers slip some “constructive” feedback in between two compliments.  For example, “Nice shoes; you’ve got some significant improvement to make on your analytical skills, but I like your socks.  Also known as the “Sh*t Filled Twinkie” method.

Performance Management Philosophy: This is the same affliction that causes writers of annual reports to declare, “Employees are our most important asset” without the implied disclaimer, “unless they cost us money, or otherwise inconvenience us.”

Seek the Employees View: This is the final 30 seconds of the meeting where the employee is expected to thank the supervisor for the constructive feedback, and declare his/her intentions to act on it.  Only trouble-makers would disagree with the feedback.  Under no circumstances should an employee ever speak his mind here.

I hope this translation helps.  For ideas on how to cope with, and ultimately succeed at your Annual Performance Review, download this week’s podcast.

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