Talentism

Reorg or Regret?

Anyone who has ever been through a reorg, or run a reorganization process, knows the feeling. Things don't quite fit. It's like you are building a piece of Ikea furniture: what you end up with looks OK, but there are left over parts and you are never quite sure if you put it together correctly. The only way you find out is when it falls apart.

Your typical organization structure is based on the military, but instead of generals you have CEO's and instead of privates you have your average employee. Like most things that are currently broken about business, the system made sense at the time of its implementation but quickly gained a life of its own and now seems so critical to the smooth operation of a business that it is beyond the pale of questioning. Grandiose hierarchies were a critical control in a world where the ultimate risk is to life and limb and where you need to deploy large-scale resources in a coordinated fashion. Early companies needed to create long-supply chains across huge distances (like the trusts during the late 1800's and early 1900's that combined control rail networks with control of production of oil and refining capability), just like an army. Early companies also needed to have one coordinated resource deployment, making sure that hundreds if not thousands of employees would all pull the same lever in the same way at the same time to get the same specified result.

Times have changed, and most companies (at least in the U.S. and Western Europe) do not get competitive advantage from large coordinated workforces doing manual labor. Our economies are service and innovation systems, and there is nothing that kills the human spirit like control, group-think and managers who get to the top through tenure and corporate politics.

Reorgs are based on the theory that you can take different units of management, composed of people who perform tasks, and rearrange them to achieve some objective more effectively and efficiently. Some companies, like Microsoft, reorg frequently as a way to get their people focused on customers, ideas and problems rather than manager status. But most companies ossify their organization structures because changing them is difficult and often takes time away from productive work (at least that's the theory). In this way experimentation in organization structures rarely comes from the very place that needs org structure innovation the most: large companies.

Org structures should first and foremost be a tool to align what Henry Blodget calls business risk and investment risk. Simply put, you want your employees to win when the investors win, and you want your employees to lose (but especially management) when the investor loses. Sadly, this is rarely the case.

So what does our present org structures of generals and privates get us? A perpetual system that places employees needs, the personal goals of management and the monetary goals of the investor at odds. Here are two of the most significant examples.

Title = Status. There is an implied assumption in most organizations that the way to get to the next title, the next rung in the ladder, is to make money for investors. We all know this is the exception, not the norm. Even when promotions are not due to favoritism or negative corporate politics, the reality is that it is very difficult for a manager to know exactly why their employee is successful. The manager is left with their instincts (usually an emotional response subject to wide variation based on mood and factors not associated with employee success), the input of peers and the need to solve a problem quickly (i.e. "I need this task done because my boss is chewing my butt about it, and I think Susan is the best person to do it.") All of this boils down to a systemic gap between what the investors care about (sustainable competitive advantage that delivers predictable returns above the cost of capital) and what employees care about (making sure that the stars align so that I can get a promotion and a raise). This means that reorgs often become a competitive, rather than cooperative, exercise. Everyone understands that the potential chaos of a reorg provides an opportunity to put oneself in a better position to succeed. The basic military org structure will always reinforce this behavior, no matter how much a good manager tries to work otherwise.

Artificial Barriers: Because employees understand that they don't win by focusing on investor objectives there is a huge pressure to ensure that "ownership" (as opposed to accountability) is first and foremost in most reorgs. But the nature of work is changing, and there are many times when a work product or service must de facto be the result of multiple groups working as an organic whole. Organic group direction has been written about and spoken about for a long time, but in a company it tends to run headlong into the reality that "organic" is short-hand for "no one to blame when things go wrong" and "no one to get the credit when things go right." As we have discussed, this matters a lot in a military org structure because getting ahead (and therefore getting more prestige, money and control) means that the person who is going to make the decision about whether you should get ahead or not needs to like you and feel comfortable with you. So the present org structures create artificial barriers between groups that almost always increase inefficiency and decrease agility and speed of response.

As has been written in this blog before the cure to this is to replace managers with markets. Buyers can rarely afford to be as free with their money as managers can. Buyers have to specify the outcome they want, what that outcome is worth to them (cost benefit), how they will measure whether the outcomes are being achieved (contract and / or SLA), ongoing negotiations around payment based on delivery and direct feedback about performance (since the personal relationship that frequently develops between manager and employee is harder to sustain in a buyer / vendor relationship).

Final thought on this is that the present economic downturn will likely start sorting some of this out. We are likely to see the total regular full time workforce as a percentage of the population decline and never recover, as more people move to independent and contractor status. Managers will increasingly have to spend their time selecting the right vendor, and spend a correspondingly decreasing amount of time managing reorgs.

Getting the Right Stuff Done

(Thanks to those of you who reached out via email and phone and welcomed me back to blogosphere!)

HR often feels caught between two worlds. In the world of payroll and picnics, HR practitioners measure their importance by how busy they are and how they make employees feel. In the world of grand strategies HR looks for an excuse to “be at the table”, to be a part ongoing discussions and decisions that affect the business. In the world of "Strategic HR" we develop complicated programs to influence culture and long-range talent decisions. My experience has been that all too often these programs are really just smoke and mirrors; fancy PowerPoints and tricky language to convince executives of HR's business relevance. This leads to executive smiles and platitudes, and ends with boardroom conversations about cutting HR as a cost center.

Regardless of whether you live in the world of pinics or the world of strategies, your world is being abandoned. Picnics can seem silly when people are losing their jobs and critical corporate programs are being cut. And any senior HR practitioner approaching a business person with big plans for cultural change is likely to get a blank look and a speech about how those programs will be brought back in better times.

In an economic meltdown “making people happy” and “being at the table” are luxuries that the business can ill afford. Regardless of industry or geography, there is only one truth in the world of business today: fear has replaced planning. Business planners feel as if they are groping around with a lighter and a hand-drawn treasurer map in an unfamiliar dark place. This is leading the people responsible for operating the business to cut most high-level engagement programs, since the prevailing wisdom is that people can’t find jobs and likely won’t be leaving. When you can't tell your CEO what the next quarter is going to look like, your CEO isn't likely to want to plan multi-year change intiatives

In the end, it doesn't matter whether you are into engagement or talent strategies: today's economy means that HR is getting whacked.

Or does it? As we discussed, HR needs to Get Shit Done (let’s call that GSD from this point forward, and turn our profanity into “stuff” so the kids can read at home). HR needs to move from grand pronouncements about “culture is everything” and “being at the table” to focusing on getting work done. GSD is more important now than ever. In fact, I will maintain that HR is more important than ever. But that doesn’t mean that we need to be happy with payroll and picnics.

Economic challenges do not suspend the laws of business physics. If anything, a shrinking top and bottom line drives a greater need for focus on results and accountability, two things at which HR have not typically excelled. Going back to doing busy work that someone else could do faster, cheaper and / or better is not a recipe for HR success. We definitely need to GSD. But GTWSD (Getting the Wrong Stuff Done) is often more expensive than doing nothing. It would be far better to have to HR professionals dressing up in cheerleader outfits and doing yells in the hall than having a group of talented HR employees committing their time, money and attention to activities which actually hurt the productivity of the employees.

HR needs to GSD. But more importantly, HR needs to be Getting the Right Stuff Done (GTRSD).

Now is the perfect time to evaluate what exactly the "right stuff" is. Any entrepreneur can tell you that chaos brings opportunity. When things are going well people get into a routine and feel comfortable. Convincing someone who is enjoying their job and getting praise for their work that they need to rethink the way they doing things is a very difficult task. Four years of tilting at windmills on this blog have taught me nothing if they haven’t taught me that when times are good, change is hard, no matter how badly it is needed.

But times are no longer good, and many good HR practitioners are looking forward to what comes next. Over the next couple of weeks I will use the idea of “Getting Stuff Done” and the current economic calamity to talk about what HR can being doing now to set itself up for success in the future. No grand pronouncements, no picnics. Just a hard-nosed look at the best work to be doing right now for generalists and specialists, including comp, recruiting, training and systems.

Getting Shit Done

As my friend Jerry Garcia would say “What a long strange trip it’s been.”

Many moons ago I was an HR generalist in the fastest growing manufacturing start-up in history. Things moved fast… really fast. Until you experience growing from $100 in revenue to $1.3 billion in revenue in 3 years, you really don’t know the meaning of the phrase “just get it done.” I was responsible for workforce planning, which (and this is not a joke) was adjusted every 6 hours based on what orders were coming in from Compaq computer. Our long-range plan covered two weeks.

Then I took a break from the helter-skelter world of start-up HR and started my own companies. When you are the CEO of a start-up you don’t have much time to think: everything is a panicked reaction to some angry customer or some new sales opportunity. You put your head down and you pray that you make it through the week.

After a couple of CEO rounds, I needed a break. So I started my own consulting firm. I worked with customers who were trying to develop and ship new products, or package themselves for a fire sale. Sometimes I would fly into a city in the morning and have a new product design late that evening. I once lead a team of 6 people that created, shipped and sold an entirely new product set in just 3 months. I always seemed to be on the hook for some fantastic, impossible new deliverable.

In short, I was always getting shit done.

And then I went back to HR. I have to be honest… part of the reason I did it was that I needed a break. Hyper-fast start-ups, CEO gigs where you sweat making payroll twice a month and harried customers demanding the impossible was starting to get to me. Not understanding what “take a break” really meant, I went to a fast moving video game company going through a major technology overhaul.

Then a couple of years ago I made a new friend. She had worked for some of the toughest CEO’s in Silicon Valley. She forgets more about HR every day than I could learn in a lifetime. But that didn't stop me from giving her my opinion. Thinking I was pretty smart, I would tell her my latest theory about HR (many of which I have blathered on about in this blog). And she would just smile at me and say “That’s nice Jeff, but you just don't understand. HR is about getting shit done.”

Getting shit done? At first I was insulted. “Hey!” I would think to myself “I fly all over the world and talk to people about HR and tell them its strategic and important and they listen and tell me I’m great! What the hell is this ‘Getting shit done’ stuff?”

Then, after a couple of months, as I started to read more David Ulrich and other leading-edge HR thinkers, I thought to myself “Getting shit done is just the way that HR justifies its existence – CEO’s don’t know what they really want so they send the CHRO on all these fool’s errands to make the board think that they get the whole ‘talent is important’ crap that everyone espouses and nobody believes.”

I stuck with that thought a long time. It made me feel better as I moved through various HR jobs (first Talent Acquisition, then HR Services and now Talent Management and L&D), smug and superior. “I am better than this shit" I would think to myself.

But today I had an epiphany. I think I get what my friend has been saying all along.

Strategies and missions and visions and grand pronouncements are all well and good. Sometimes they work; most of the time they mean shit. But it really doesn’t matter. Because business is people: customers, employees, vendors, shareholders. And people change every day. Some days they need more money to pay the bills; some days they need an emotional pick-me-up; other days they need to know where to get a question answered so they can get their job done; most of the time they just want to know how to deal with constant, never-ending change that seems to turn their life upside-down every day. It doesn’t matter: when the shit counts, they turn to HR.

Some people think that the daily tactical “shit” that happens when people change is frivolous and without value. I was one of those people. But getting that shit done is where the rubber hits the road. It is where employees feel better and decide to come back to work the next day. It is where managers learn to chill-out and think of their employees before they go on another pointless tirade. It is where someone goes home and looks their kids in the eyes and thinks “I got paid today.” It is where the board of directors says “This place is going to be all right, because we have the right people and they can make this happen.” It is where HR works.

Getting shit done is not only what HR is about. Getting shit done is what HR SHOULD be about. My friend is right.

Now I still fancy myself a big thinker, and I still like my big ideas and my lofty ambitions. Everyone needs their illusions of importance. But hopefully my friend has taught me the humility to realize that in these troubled times, when people need our support and our craft more than ever, sometimes my big ideas don’t mean shit.