Force strategic dialogue around people as business plans for 2012

As management starts planning for 2012, instead of waiting for the business plan to be handed over to the HR department to append the manpower section, its time to proactively get engaged in the conversation as the plan evolves. There are few potential entry points into the dialogue that can be exploited to be there!

Question the assumptions behind productivity gains and cost take-out programs: Enterprises will continue to focus on becoming more cost efficient in 2012, by targeting aggregate level savings from various cost heads such as procurement, process refinements and staff costs. Given the uncertainty and volatility of demand in market place, expectations may be to have a more linear relation between staff costs and scale of business, even when the business contracts. However, it is easier to gain scale efficiencies as business volumes go up than to take out costs as business contracts or stagnates. Also, with the last few years of belt tightening, easier options for cost take-outs may be hard to find. It is the responsibility of CHRO to ensure that unrealistic assumptions around staff cost maneuverability are not made at this stage.

Articulate people level dependencies as prerequisites for effective business program roll-outs: Various business unit programs are often conceived assuming the people enablement will be taken care of by the HR department, which is a legitimate view, provided HR is informed and cost of providing the program related additional interventions are accounted for. CHROs need to seek details about the programs envisaged by other departments early-on, conduct impact analysis and seek wherewithal to deliver their part of the deal. This is crucial, since examining aggregate impact of multiple programs on employees help HR point out any conflicting expectations from the employees across programs, besides warning against any change overload. HR can help in prioritizing and sequencing employee level interventions across the programs for effective roll-out and execution efficiency.

Gain specific commitments to proposed employee mix changes: Given the uncertainty in demand, management is likely to support any proposal that brings in labor cost flexibility. Changes in employee mix (by hiring more part-time workers, contract employees, retirees, low skilled workers, etc.) will require the business unit head’s support in managing resistance from managers within their units who are used to working with permanent employees with certain skill levels. This is the time to break aggregate level commitments to specific business unit levels so that execution does not encounter reluctance in the form of “this is too critical and can we have an exception, this time!”.

Capitalize on uncertain business environment to push for most compelling HR function transformational initiatives: Businesses are looking for greater operational flexibility, more variable cost structure, directed investments and speedier benefits realization from transformational initiatives to sustain in the prevailing complex and uncertain environment. Organization redesign for tighter strategy-structure alignment supported by effective performance management system, HR service delivery transformation (moving towards shared service set-ups), HR process standardization and application portfolio rationalization, Workforce strategy and optimization are some of the transformational programs that are likely to get management support. Success lies in choosing the right program, developing robust use case (including potential cost of not doing anything) and garnering requisite stakeholder support.

Offcourse, HR effectiveness in engaging in business plan exercise depends on how informed it is about business, how evidence based and data driven the arguments are and how much credibility HR has built with fellow stakeholders over the years.

The environment demands HR contribution in business planning more than ever before.
Are we ready? What are we doing differently this year as part of business plan exercise?
Do share.

Linking Employees Motivation to Business Benefits

It is almost a matter of faith that motivated employees lead to better business outcomes. Is it always the case? Are all enterprises equally effective in capitalizing on the employee motivation for business benefits? What are the intermediate variables that translate employee motivation levels to increased business benefits, and what if any, are the influencing variables that explain the variances?

Here is my take. All employees need to work enough to deliver on minimum commitment required to avoid any managerial pointing out. Any effort over and above this required effort is discretionary effort. Motivated employees are often associated with discretionary effort, as going the extra mile, beyond strict call of duty. For sake of simplicity, it is safe to assume that the more motivated an employee is, more discretionary effort (s)he is ready to spend. Another characteristic of the discretionary effort is the primacy of enterprise well being as the key driver instead of self gain (say in the form of more bonus and accelerated career growth).

The sum total of discretionary effort of all employees forms the discretionary effort account (DEA) available with the enterprise. Business outcomes depend upon the level of DEA available and enterprise ability to make its effective usage.

Here are the key hypotheses:
1. DEA is probably the best assurance for the sustained above normal performance and risk managing ability of an enterprise

2. DEA reveals itself in day-2-day employees behaviors such as active volunteering on enterprise initiatives, continuous flow of suggestions, employees standing for each other when required without seeking managerial interventions, employee learning new skills in their extended time (after office hrs/week ends), and amazing sense of resourcefulness shown by employees while solving problems or managing challenging situations.

3. Absence of DEA shows in terms of need to monetize every additional commitment, frequent reference to rules and entitlements in all manager-employee conversations and continuous demand for better clarity around roles and responsibilities among staff.

4. DEA gets generated by right employee policies and empowering culture.

5. Leveraging DEA effectively depends upon managing the right influencing variables. 

6. IF the dominant management style of governance is “telling” type, ie detailing out in prescriptive manner what employees are expected to “DO”, key influencing variables are right supervisor behavior and perceived sense of fair play. In such a situation DEA helps manage variations in work load, and contingencies, as employees are willing to spend discretionary effort to help enterprise overcome the hump. It also comes handy when changing the procedures or adopting technology (ERP implementation), which often requires employees to spend time learning and practicing new ways of performing tasks.

7. IF the enterprise is more “outcome focused” with some level of autonomy given to employees on "how", DEA helps capture new opportunities and develop creative, breakthrough solutions. Sales force surely spends required effort to meet their targets, but DEA will include sales staff actively cross-selling and looking beyond their own sales target to uncover client additional needs and develop innovative ways by which enterprise can help meet them.

8. Influencing variables for DEA in “outcome-focused” enterprises include leaders sharing the bigger picture and goals, reinforcing guiding values (and what is not acceptable as means to an end!) and providing safe environment to experiment. Over enthusiastic employees in absence of shared value system and lack of purpose can create severe damage to enterprise reputation and make it vulnerable to unavoidable risks.

9. In essence, employee motivation as source of sustained advantage, needs well designed and coordinated interventions that help develop DEA and ensure its effective usage. Leaders, functional supervisors, HR staff have a definitive role to play. In the absence of integrated design and coordinated efforts by all stakeholders, either DEA may not get generated or may get frittered away without much business benefits.

10. There is need to trace path from employee motivation to business benefits, going beyond hope or faith. The above hypotheses is an attempt to provoke comments, suggestions and feedback to collectively define this path better.

Looking forward to your inputs, as always………..

Hiring RIGHT STARS - the Right Way!

Once in the market for talent, there is natural appeal to hire the best (Stars), given their easily availability (surfing for best deals) and enhanced affordability made possible by liberal compensation guidelines (better than for those paid within the system). However, the irony is, the repeated experience and extensive research reveal that “Stars suffer a performance decline when they move to new firms” and “mostly destroy value for the hiring firm” especially given the premium paid for their acquisition. Quite like M&A, this implies the need to acquire and integrate RIGHT Stars - the right way, to realize the potential Value.

It starts with recognizing that Star performance is outcome of three key determinants: Business Environment, Firm Specific Characteristics, and Individual Talent. Everyone in sunrise industry looks talented, when seen from mature industries perspective, and everyone working for well run companies may be performing better than staff from average company, not necessarily due to better individualized talent.

And often the relative contribution from each of these three factors towards overall outcome is difficult to ascertain, but is the key in choosing the right Talent and not lucky Stars. Recruiters explicitly recognize concerns about the potential portability and replicability of performance by Stars across firms, but often fail to test it well enough during the selection process. Why so?

One reason could be overreliance on what Stars tell them during interaction. Stars often tend to overstate their contribution, as part of self serving performance enhancing bias, and ignore the firm specific performance enablers. This may not necessarily be a projection but actual belief.

Second reason is an inherent assumption that when sourcing from competition, the firm specific enablers are likely to be of same order, and hence performance of the Star is likely to sustain in new firm setting as well. This is truer for companies, especially those with similar size and overall characteristics, and serving same customers/markets. While, the tangible hard characteristics like Resources, Brand, Market Access, Financial leverage, Process maturity, Work practices, may be of similar order, it is the intangible firm specifics like leadership, decision making, information sharing, collaboration, culture, which may vary a lot, and to that extent their influence as performance boosters gets ignored. Accordingly, it pays to investigate to what extent the firm specific intangible performance boosters will the new firm able to provide, to ensure replicability of star performance.

Recruiters may like to ask Interviewees the following (and reflect on similarities between the responses given and what’s true for your firm) as a quick check:

- What role did Manager play in your success? (Nature of relationship, dependence, supervision, etc.)

- To what extent did you leverage your colleagues support and informal inputs in meeting your objectives/improve quality of outcome? (Colleague role in success)

- What is the preferred approach to access information required to deliver? (Information is available freely on shared platforms/strictly on need to know basis/heavy reliance on knowledge bank)

- Share an instance wherein you have taken decision (risk) beyond your regular mandate.. (Is your firm ok with that kind of risk/deviant behavior?)

- Discuss any cross functional initiative and approach taken towards solving conflict between competing priorities (gives insight into decision making, escalation management, credit sharing etc)

Often discussions around the above help understand the role firm specific performance boosters have played in Stars performance and provide good indication of the extent to which the performance is replicable in the absence of these boosters. This may be revealing to candidates as well!

Of course, choosing the right Star is only half battle won, the other half lies in developing right integration strategy that help Stars overcome natural resistance from incumbents, and quickly assimilate specific advantages/ performance boosters associated with new firm. There are quite a few challenges in doing this right as well.

Happy to know your experience with Hiring Stars and tricks that work?

Three tricky questions to evaluate Proposals

  

Leaders are regularly inundated with proposals seeking sponsorship, be it for business growth (say entering new markets/new product line) or organizational strengthening (say restructuring, ERP implementation etc.).  Almost all of these proposals promise significant pay-offs- supported by some sort of financial numbers and assumptions that are acceptable (but not likely to be showstoppers). It is quite clear that proposal owner has developed a case and is interested in winning sponsorship by bringing all convincing abilities to board.  How does one ensure that right decisions are made without getting sucked in well rehearsed story telling?  Here are three questions that help:

WHERE is the payoff?  Is it directed to solving comprehensively the top most problem/ capture most promising opportunity?  Or is solving partially motley of problems/ capturing list of mediocre opportunities?  The second scenario happens, when the main payoff falls short of the hurdle rate, and peripheral payoffs are attached to make the overall proposal acceptable.  Management often agrees to the second option, with a view to handle multiple situations in one go and please multiple stakeholders, but it rarely works out that way. 

Why will WE succeed? Is it because we have the execution capabilities – technology, geographical spread, expertise, access to capital/market  or because we generally believe we are smart enough to make it work and optimistic in our planning? Amusing, but true, how often proposals reveal embedded beliefs that we can deliver better than competition and that what made us successful ensure continued success.  Lessons learnt and best practice knowledge only enhances the probability of success but provide no guarantee.   

WHY pilot?  Is it to test the efficacy of an idea or refine the execution plan before overall roll-out?  Pilot is often a compromised formula proposed by the proposal owner, so that it is not all or nothing as an outcome on something on which he/she has invested time and energy.  Similar logic tends to influence leaders as well, who seem to be more comfortable going the pilot route.  Pilots centered on testing an idea, often become battleground for competing egos, getting disproportionate attention, with both sides amplifying early signs of success or shortcomings.  Also remember, if the idea is truly revolutionary, by pilot testing, competition is also given the heads-up to match up, when you roll-out completely.  Piloting is different from developing solution iteratively (beta testing/agile way) in a well defined staged-manner with risk and return evaluations at various milestones, which seems to be sensible preposition given the high cost of failure and associated reputation risk.

No matter how rigorous the evaluation criteria are, the decisions of go/on-go can still go wrong.  The above three questions can help understand the logic better.  It may still be ok to take a counter view, even if the responses to above are not convincing enough- it could be context, power equation, culture, or leaders’ inherent preferences that can tilt the decision, but it pays to know.

Happy to know your views on above, or other questions that may help?

  

Consulting Business witnessing shifts in Clients expectations

Surely, Consultants are getting more calls from and appointments with clients these days.  Business is looking up, but with a difference.  Clients in the new world of business have distinct demands/expectations from Consultants, and it has direct implications on how Consultants need to deliver.

Clients are looking at “Speed to Value” underlined by greater sense of urgency.  The eagerness to compensate for lost time due to recent slow-down, and enhanced gains associated with “being first in the market place” mean clients are expecting Consultants to deliver advise/results in much shorter time.  This means the traditional liberty of Consultants learning about biz on clients paid time and taking detailed approach to problem diagnosis are no more acceptable.  Consultants with sufficient understanding of clients business armed with rapid but effective diagnostic tools and agile way of delivering value iteratively will be in demand.

Consultants’ uniqueness to contribute will be tested in terms of Value Delivered, which span both “thinking” and “helping do”.  Given the frequent talent movement between clients and consulting firms, standard industry frameworks, logical thinking (excel sheet based analysis) and industry best practices repository are no more sufficient for ammunition with Consultants to serve clients.  The compelling Value Add has to come from intellectual assets (encapsulating collective wisdom of earlier experiences) and implementation enablers (tools, accelerators etc) that promise unique insights, rapid diagnosis, and speedy, risk managed execution benefits.

Clients are ready to partner with consultants to experiment in creating Value.  It means that the business share from “Possibility centric services” is going to increase at the cost of “Problem Solving services”.  Creativity has gained immense importance with clients and all proposals are tested on their creativity quotient.  Accordingly, clients are ready to bet on new experiments with associated risks as long as potential gains are high and the proposition, if found successful, is scalable at global scale in short time.  Consultants need to continuously develop radical proposals with sufficient promise and seek Clients that are ready to partner.  This also means that Consultants need to be more comfortable in betting their share on Value Delivered.

In short, the traditional Consulting Business of advising clients on solving problems, using generic approaches while learning during engagements and charging for time spent is getting replaced by upfront ideas driven, possibilities centric, assets assisted, value-sharing linked pricing approach to Consulting Business.

Have you also witnessed the above shifts in Clients expectations?  What other changes have you noticed?  Happy to hear, as always!!!

Decision Making Mechanism: The Core Competency that Matters Most!

Behind successful stories, be they acquisitions or product launches, there are a series of decisions that have been taken which proved to be right. These decisions could have turned out right by chance or by design, through the support of a robust decision making mechanism embedded within the organization. Given that we all are aware of the cost of making wrong decisions or the gains derived from making right decisions, we still don’t focus enough on improving Decision Making capabilities within the organization.

Different Decision Making Mechanisms can emerge based on the combinations of options around four key decision making elements: What? When? How? Who?

Decision Making Mechanisms and four Elements

Each of the four ‘Decision Making’ elements present two further options, thus providing theoretically sixteen Decision Making Mechanisms to choose from (Diagram above depicts combinations related to strategic choices).

Decision taken about an operational matter (say replacing a tyre) by an individual (driver) provoked by the dip in the reported performance (car mileage) is a decision making mechanism that is most prevalent in all enterprises and most easy to execute. It also provides limited differentiation potential.

Strategic Choices (say adding features to new product launch) made proactively by a group based on facts derived from analyzing nontraditional information sources (pattern recognition from text, speech, blogs news, taken from social media) is a decision making mechanism with immense differentiation potential, but not widely leveraged among organizations. Employing this relatively sophisticated decision making mechanism demands certain execution capabilities (say collaborative tools, web 2.0 technology, business intelligence tools, text analytics), transparent, creative and bold leadership and enabling culture (valueing experimentation, openeness and performance driven approach ). Not easy set of pre-conditions, but justifiable given the significant pay-offs!

Here is my hypothesis: Organization that has the ability to leverage more Decision Making Mechanisms, coupled with framework and discipline to choose right option to suit the context and derive desired outcomes, enjoys sustainable advantage in this uncertain, volatile, hyper-connected and demanding business environment.

Implication: Organisations should conciously work towards increasing its capability to leverage more decision making combinations.

So where does your organisation stand today? Let us do a quick check:

- Is there a preferred, predominant Decision Making mechanism promoted by your organization’s leadership, emboldened by culture that comes as a default choice?

- When was the last time your organization consciously changed or experimented with alternative Decision Making mechanism?

- Out of the potential Decision Making mechanisms, which combinations are not feasible within your organization that have potential to add value? (If only, we could..........)

- Have you consciously benchmarked differentiating Decision Making mechanisms employed by your competitor or leader in other industry?

- How many investment proposals are examined for their ability to enhance organization Decision Making Mechanisms? And tracked to its realization?

As leaders, it is time to take some tough decisions with regard to increasing the Decision Making Mechanism Choices we leverage.

Happy to hear about initiatives or programs your organisations have taken up to strengthen its Decision Making Mechanism, the core competence that matters most!

Beyond Rationality and Authority: Influencing tricks that Work

The quest for techniques that enable one to influence others to do what one wants (especially when there is no formal authority or unquestionable rationale backing the expectations) is near universal.
Several researchers from behavioral sciences, experienced management professionals and successful executives have discovered or realized few tricks that seem to work. These tricks have proven effective in different contexts: increasing sales, garnering support for social cause, or driving transformation agenda within an enterprise. 

Let us consider the most common five tricks:

1. Anything Limited has unlimited appeal : Limited editions/designs, trial period, discount window etc. accelerate decision making and often to desired outcome. The potential loss of perceived missed opportunity seems to enhance appeal. Fear of Loss provokes action more often then scope of potential gain. Deadline tactics restricts procrastination game– another natural tendency with most of us. Make it scarce, it will be perceived valuable.
2. Associate inferior comparative to get chosen : The easiest way to look slim, without dieting, is to select a fatter friend. It is all about being relatively better. On a school 25 th year reunion, if you choose the silent character near the bar than the one in the centre of the room tasting wine to all, that will make you feel good about your accomplishments and go home feeling good about life spent so far. So to sell something that has no off-take, it may be worthwhile to consider introducing an inferior option than a better one - experiments seems to suggest so!
3. Unleash the irresistible allurement of FREE : Zero cost upsets all calculations and comparisons and fail all economic rationale decision making. We seem comfortable to pick-up trash if it is for free (recall pencils and pads you brought along from last conference you attended) but will do sufficient due diligence if it costs even one cent or may choose a costlier option, even if we have to pay extra. We can accept any quality of tea as long as it is free, but will walk to nearest Coffee Shop if canteen charges even Rs 2 for it. There is no downside associated with something that is for free and so there are not much performance expectations either. But loosening purse strings comes with lot more due diligence, no matter how meager is the amount.
4. Leverage power of passion, commitment and guilt if you can not pay enough: We live in two worlds simultaneously- one run by market rules and another driven by social norms. Position the request in right world to get compliance. When attending party thrown by too affluent, gifting bouquet is safe, for flowers are priceless and best wishes are too valuable! Provoke emotions of being responsible citizens that care for the city, to get lakes cleaned up through voluntary kar seva, if you can not afford to pay everyone sufficient for their labor. Ask doctors for free service to the poor but not discount on their consultation charges - off-course they will like to pay back to society that has given them so much.
5. It is all about “give to get” : Treat reciprocation as given, for the receiving parties can not sit idle till it has returned the favour you have done to them- even in cases where the favour was thrusted on them in unsolicited manner. We have all seen sudden endorsement on social website for us from someone we barely know, and beware this comes with hidden expectation for reciprocation. Worst is the exchange of concessions; if you seek concession for being late to the meeting, rest assure other party would expect you to gloss over their minor mistakes related to quality aberrations.

Now that these tricks have been pointed out, I am sure on reflection, you may be able to appreciate their wide spread application in our daily personnel and professional lives. You may also be using some of them, may be intuitively then in a designed fashion!

Share interesting instances, where you have seen these tricks being applied, and what are the effective counter-strategies. I will also be happy to hear from you any other tricks that you realize work well in enhancing compliance power,

Lets Reflect!

( Readers serious about enhancing their influencing power are suggested to read: Influence- The Psychology of Persuasion by Dr Robert B Cialdini )