CONDUIT

Brazilian firms are investing in employees

On a recent fact finding trip to Brazil, I was quite surprised to see that Human Capital planning has become a major plank in the business growth strategy. Over a busy and jam-packed 4 day excursion, I visited several companies across a variety of industry groups including medical devices, energy production, insurance, and transportation logistics.

Across each business model I found that both individual and team-based pay-for-performance variable pay schemes are being utilized. I listened as executives spoke of safety and wellness programs being used to not only slash operating costs, but to instill and sustain a “caring” and “paternal” culture across the firm. In both office and plant work environments, I was told that idea generation programs are important because they not only encourage suggestions, but the open solicitation of new ideas also generate a sense of inclusion and involvement among all workers. Most surprising was the wide spread use of co-worker recognition programs. Peer-peer nomination programs, ranging from web-based to traditional paper programs, were designed with the intent of promoting best practices across work groups while acknowledging local leaders. 

In the U.S. economy it’s not uncommon to hear companies say that their people are their greatest source of competitive advantage and the source of continuous innovation. What a revelation it was to see such highly supported and visible Human Capital initiatives in action so far from home. Should I have been so surprised? “No” said my hosts. To a person they all acknowledged that the world has indeed become flat and that doing business successfully in the global arena requires a productive and highly engaged workforce. Said one executive, “If you are not treating your employees as your most precious resource, then do not plan to be in business for too long.”

To that I can only add, “O direito que você são!” 

A century of change...

I’m doing a presentation on the role employee engagement plays in driving adoption and utilization of new business practices at The Motivation Show in Chicago next month. And while the subject of change management can be serious for executives who’s careers are on the line, I thought I’d have some fun today looking at how far we as a society have come as a result of all those hundreds of thousands of things that have changed in our world over the least 100 years. 

This will boggle your mind, I know it did mine! The year is 1906. One hundred years ago. What a difference a century makes! Here are some of the U.S. statistics for that year.

In 1906 :

• The average life expectancy in the U.S. was 47 years.
• Only 8 percent of the homes had a telephone.
• A three-minute call from Denver to New York City cost eleven dollars.
• There were only 8,000 cars in the U.S., and only 144 miles of paved roads.
• The maximum speed limit in most cities was 10 mph.
• Alabama, Mississippi, Iowa, and Tennessee were each more heavily populated than California. With a mere 1.4 million people, California was only the 21st most populous state in the Union.
• The average wage in the U.S. was 22 cents per hour.
• The average U.S. worker made between $200 and $400 per year. A competent accountant could expect to earn $2000 per year, a dentist $2,500 per year, a veterinarian about $4,000 per year, and a mechanical engineer about $5,000 per year.
• More than 95 percent of all births in the U.S. took place at home.
• Ninety percent of all U.S. doctors had no college education. 
• Sugar cost four cents a pound. Eggs were fourteen cents a dozen. Coffee was fifteen cents a pound.
• The population of Las Vegas, Nevada, was only 30 people
• Two out of every 10 U.S. adults couldn't read or write.
• Only 6 percent of all Americans had graduated from high school.
• Eighteen percent of households in the U.S. had at least one full-time servant or domestic help.

Try to imagine what it may be like in another 100 years.

Go beyond maintaining a relationship—shape it instead.

Jack Welch says HR must also help organizations maintain their relationships with employee stakeholders. This quote brings to my mind the importance of personalized communication within reward and recognition programs. More and more we see smart companies employ a direct marketing mentality and avoid mass-messaging their employee audiences. These firms have learned how to converse with different employee groups effectively and as a result their messages are acted upon.

What do I mean? Following a segmented campaign formulated award propositions are generally geared to an employee’s relevant place within the organization.

Here is a simple framework to start with;

1. Show off your top performers. Give them the recognition they crave while using their stories to promote best practices and localized leadership across the organization.
2. Grow rising stars. Give them manageable goals and expand the hurdles as each is reached. This is the best way to gain momentum that leads to the type of reliable incremental growth you can build your business case on.
3. Teach those with identifiable performance gaps. Isolate where they are lacking and reward them for completing steps that will lead to success. Examples could include; becoming recertified in a particular product line, passing a refresher customer satisfaction training course, or submitting a business or territory plan.
4. Reach underperformers. These are the folks who showed promise once and for one reason or another have become disengaged and ineffective. Re-recruit these people through communication components that stress their importance to all stakeholders; the firm, its customers and their colleagues. Ask them to nominate others that they consider successful. You will be surprised how that small step can create a renewed awareness and help reverse a pessimistic mindset.   

Using database mobility mapping, messages are created, managed and delivered via the web. As employee attributes or business conditions change so can your message and reward scenarios.  If you want a much more relevant and self-sustaining way to capture the attention and guide the behaviors and attitudes of all your employees try this approach.

Jack Welch High on HR?

In my last post I said there was no killer app on the horizon and that innovation and not invention would ignite the next growth wave. Leave it to Jack Welch to do me one better.

In an interview published last month in The Telegraph, Mr. Welch says “HR should be every company’s killer app.” He also goes on to say that many HR executives have yet to earn a seat at the planning table equal to that of finance even though the importance of people as a production asset has never been greater.

How can they contribute more? According to Mr. Welch, HR should play a dual role by first, creating “effective mechanisms such as money, recognition and training to motivate and retain people.”  He goes on to say that HR must also help organizations maintain their relationships with employee stakeholders. 

I can’t help to comment here that this new thinking is coming from a man who perfected forced ranking to the delight of the investor community. While once popular management tools, these rather cold and impersonal methods of managing employee contribution have actually disenfranchised and alienated work forces.   This according to a recent article in Fortune Magazine that ‘tears up the Jack Welch playbook’.

How does Mr. Welch reconcile his new perspective? I'm perfectly prepared to change," says Welch. "Change is great."

Of course the increasingly strategic role of HR in a market society where people are almost always referred to as a ‘company’s most precious asset' is not new. But what is remarkable is the almost universal belief that HR has a chance (responsibility even) to be a major contributor in the modern economy. 

Mr. Welch’s comments are a less than subtle nudge to anyone in the Human Capital field that hasn’t taken the opportunity to seize the day to do so.

Employee ingenuity—the new value engine

Ok, we are a few years removed from the dot.com boom and some web-based business models have fizzled. But most enterprises took advantage of the new internet tools to ignite growth spurts. But with technological solutions now ubiquitous, what is going to drive the next wave of productivity? Where is the next spurt of value expansion going to come from? The question begs asking. There appears to be no killer app on the horizon and growth pressures fueled by rising investor expectations have not subsided. 

Some pundits don’t think the next wave of growth will come from technological advancement, but rather will result from personal innovation. Richard Florida (for one) in his recent book The Rise of The Creative Class, suggests that the next wave of value creation will not come from invention but from innovation. Florida sees employee imagination as a growth catalyst.

That transforms the meaning of “application” doesn’t it?   When employees apply the right side of their brains big things can happen. Want proof? Look at all those Ipods (ummm… MP3 players). It was innovation that led to the commercial viability of that technology.

What does all this have to do with employee reward programs? Compensation and reward systems set the cultural tone and can foster or undermine an employee’s emotional and intellectual commitment to the firm. Reward systems that encourage and celebrate creative exploration as a best practice are building the foundation for future growth. Employees that think of their job not simply as a place they go or a thing that they do but as their business are more likely to come up with schemes that give the organization a competitive advantage. Today ingenuity and not technology is the new value engine.