Friday, 6 March 2015

CIPD HR Operating Models



I read through the CIPD's recent report, Changing Operating Models, whilst at IQPC/SSON's HR Transformation Summit last week.

The report summarises a number of different peoples' contributions and shows that HR is still having  problems implementing the Ulrich model - see the graphs summarising research from Alan Boroughs (rather confusingly relabeled in the report.)

Why?, Well, the main point about HR transformation is that it is just like organisational transformation, but for HR.  I think Barry Fry and Anton Fishman makes this point well, eg that there is not point aligning with anachronistic enterprise models.  I try to get round this by always ensuring that HR transformations align with the broader context of the organisation, not just the business and HR strategy.  I like the way that Jill Miller and Paul Sparrow discuss this best fit approach looking at SMEs (Jill) and cross-organisational collaboration (Paul).  See this post on the need for organisation principles to support HR transformation too.

Once you've got this best fit position you can then build an integrated talent management architecture around this position and Alan Boroughs explains this well too.

And I also like how Dave Ulrich describes it:
"In recent years, some have tried to figure out ‘what’s next’ in how HR departments will be organised. The challenge again starts with the business and the most basic question is, ‘how will the business be organised?’  The basic business structure challenge remains grounded in the centralisation–decentralisation grid and debate, and so does the HR department challenge. Some have misinterpreted our work as advocating that HR should be organised through shared services in all business settings. One well-intended study interviewed HR leaders in government agencies and SMEs and they critiqued the shared services logic. Duh! These organisations were functionally driven and should not create an HR organisation that is different from the business organisation."

(Actually I think Dave has misunderstood what's been happening across UK government agencies but the basic point stands.)


This best fit approach means that Josh Bersin’s suggestion that there is a standard roadmap all HR functions need to go trough to transform is complete nonsense (as most roadmaps are.)

For one thing, business focus may be one future strategy for HR, but there are others - see my recent posts on people centricity (1,2,3), and also on the need to consider and select from multiple futures, not just the one that someone tells you to follow.

Secondly, whatever future you want to create, you should never copy the slow crawl progression that other organisations have been through but leapfrog over all this and work out how you go straight to the thing that you want.

One of the key aspects of OD is the use of an operating model (like an organisation model, but with more detail) and most of the CIPD’s report deals with the typical Ulrich model design of HR, and considers the relative weightings of the different parts of the model:


Centres / Networks of Excellence

Some of the writers suggest the centres of excellence (or as Josh Bersin suggests, networks of excellence) form the most important part of the HR model.

John Boudreau and Ed Lawler (who makes one of the best arguments for people centricity in his book Talent) use their HR survey data to argue this point.  But their data also shows that lower amounts of tailoring HR approaches for business units is correlated with an increased role in strategy.  I think they understand this to mean that HR shouldn’t fiddle and therefore doesn’t need HRBPs.  I read it the other way around - if HR doesn’t have a strategic role it won’t be successful in tailoring approaches.  So we need more, not less, focus on business partners.

Anyway, so much of HR effectiveness depends on how things are done, not just whether they are or now.  For example rotation in and out of HR can be positive or negative - it depends on why, in what way, and how it is done eg if it’s well planned and managed and for the right reasons.

But actually I don't think rotation is a key area.  Josh Bersin notes that companies are bringing in business people because HR needs to focus on outcomes and effectiveness.  Well actually that's why I think we need more deep people related specialism and specialists retained within HR (since I recommend a future which is people centric, rather than solely focused on the business.)

It’s a shame that Lawler doesn’t talk about the Organisational Effectiveness role (I suspect the article was written mainly by Boudreau.)  This is a newish and critical part of the HR model, but perhaps this is what they were getting at when they were suggesting more focus on the COEs. 
 
However, I’d disagree on this - for me OE is something all HRBPs should take on - one of the things we discuss in the HRBP training I run for Symposium.


Business Partners

Several of the contributors suggest the HRBP is the key role.  Gareth Williams suggests that HRBPs are becoming thought leaders in their own right so we won’t need so much focus on COEs.  I’m not sure about that as it sounds a bit too much like a return to HR generalists.

Nick Holley notes that organisations becoming leaner and more matrixed so the partner role becoming more central - like a knot in a bowtie.  This shift means that HRBPs often lack intellectual capability and prove unable to step up.  I don’t agree with Nick on this.  For me business partner failure is more often about lack of development support and organisational guidance for new HRBPs to move upwards.  Plus Elliott Jaques (also called Elliott Franks in the report) had some interesting ideas and I do use his ideas around requisite organisation for organisational layers and grading, but I wouldn’t use career path appreciation as it doesn’t fit with what we now know about the plasticity of the brain.

I also don’t agree with Nick about the most important capability needs for business partners.  For example Nick reviews some SHRM research which asked HR professionals about the “worth of various academic courses toward a successful career in HR.  83% said that classes in interpersonal communications skills had extremely high value.  Where was change management?  At 35%.  Strategic management?  32%.  Finance?  Um, that was just 2%.'

Nick finds this disturbing.  I don’t.  For one thing, SHRM were asking about what HR finds useful not just what they do.  And I don’t think he has any justification for ignoring our views.  We find interpersonal skills useful, OK?

Secondly, I think its completely appropriate that we find interpersonal skills important, and for exactly the same reason that Nick suggests the HRBP is the key, knot in the bowtie, role.  Increasing ambiguity, complexity and matrixed organisations means that it’s people to people relationships which make the biggest differences to our effectiveness.  This is why the Symposium HRBP training focuses on relationship management skills.

HR does need to understand Finance.  But once we’ve got understood the basics and established our credibility as business people, further financial savvy doesn’t help that much.  The difference that makes the difference is understanding and influencing people.  Interpersonal skills.


Service Centre and Outsourcing

Andy Spence writes about the positive impact of cloud and outsourcing on service centre operations.  I’d agree with this, though I’d suggest the impact of new technology is a little less about cloud and a lot more about generally better functionality and especially usability.

Andy also suggests that cloud is enabling outsourcing because cloud requires standardisation which makes HR easier to outsource.  Yes, but it also makes it easier for organisations to do HR themselves.

Standardisation can be a problem too.  I think an important piece of the HR jigsaw which is missing in many organisations is greater clarity over what parts of an individual organisation’s HR architecture is strategic, and which is transactional.  The transactional piece just needs to be delivered well by an efficient system, and potentially outsourcing.  The strategic piece is more difficult and more critical and may need a different, specialist best of breed system / module on top of the integrated platform.   If you just standardise everything you’re not going to be able to differentiate your HR architecture and you’re not going to be able to compete based upon your people.


Summary - the need for HR Capability and One HR!

So what's my view on the relative importance of the legs of the Ulrich 3 legged stool?  That it's a dumb question.  The answer depends on your own business strategy, organisational context, HR organisational principles, etc, etc.  Plus they're all likely to be important.

Jill makes the point that structure doesn't count as much as skills.  It's a good point and I think all the commentators have focused far too much on structure and nowhere near enough on the other elements of the organisation model, particularly skills.

So I do like Josh Bersin's suggestion that more than the current 8% of organisations need to have a professional development programme for HR.

The other thing which is really important and is completely missing from the report is the need for a 'one HR' focus and culture.  As actually the relativities between the three groups in the model is a lot less important than that the three groups get on and work together to produce great people and organisational outcomes for the business.

Focus on skills, culture, and build a model based on a sound OD approach, and my best is you'll get a much better impact on talent management as well as operations.

And let me know if you'd like any support in doing this - eg in developing your own HR development programme, or you just need some more general guidance on effective, people centred HR transformation.



Other posts on HR Business Partnering:




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Thursday, 5 March 2015

People centricity, obliquity and engagement




NGA and Ceridian have been head to head over the last couple of days with conferences in Granada and London.  I've been in Granada but I've been following the tweets from #Cconf15 too.  There seem to have been some excellent sessions, particularly from Kate Russell of the BBC's Click on the opportunities for new technology, and from the ever insightful CRF.

However, I did strongly disagree with the CRF's Mike Haffenden regarding the tweet I've shown above.

As you might have seen, I've been posting about the need for people centricity in learning, but this same focus is needed across the full spectrum of HR.  It's good to see that Josh Bersin is behind this agenda too:



But if there was one area that shouts out the need for a people centric stance it's got to be engagement.

Why?  Well if you don't do this, if you support Mike and Rob Briner's desire to do engagement to fix something in the business then you're not going to get engagement.

This type of engagement would be better called manipulation and it's just not engaging!

I think Brian Solis expressed this point well as well.  If we carry on trying to engage people fto fix something in the business, we're going to keep on these results:
1. We aren't actually trying to inspire employees in our day-to-day work even though we say we do.
2. We don't really know what employees value or how they truly want to work yet we make investments and changes as if we are in touch with them.
3. We force employees through systems, processes, and exercises that were invented in the mid-to-late 20th century.

And we'll deserve the title of 'Human Resistance' too.

The way to meet Mike's business objectives is to focus on engagement for its own sake.  Create happy employees.  Then you'll generate a better business as an oblique outcome too.

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Wednesday, 4 March 2015

#AtdMENA - The need for people centricity in learning / 2







This is the second part of a discussion on the need to focus on people - rather than technology or the business - when developing an organisation's approach to learning.

See the first part here.

I'll be speaking about the topic on Sunday at ATD's MENA conference in Riaydh, Saudi Arabia.



Shifting from governance to culture

The ongoing, general shift in focus from formal to informal and social learning has been hugely positive for learning practitioners, learners and their organisations.  As you will probably know, informal learning encourages ongoing, real-time, self directed development of knowledge and skills supported by the rise of Google as what was for a time our most powerful learning tool.  Social emphasises learning with, rather than just from, other people so that we can create new meaning together and is supported through the use of Twitter and other social technologies surpassing Google as the top tools for learning.

These newer approaches provide substantial benefits for efficiency, effectiveness and potentially even competitive advantage.  Efficiency comes from cost savings, often from lower travel expenses due to not having to bring everyone together into a training room.  Effectiveness is provided by people learning what they need rather than being mandated and directed to learn a certain thing.  It also helps people learn better, forget less and transfer more because learning is more connected to the work people do and the people they do it with.  This also avoids the new learning being rejected by the rest of the organisation.  But the biggest benefit and the one which has the potential to provide a direct contribution to competitive advantage is that learning shifts from the individual level to the team and organisation as a whole.  Organisations in which people learn together can become learning organisations which are more agile and adaptable, flexing organically and avoiding the need for mechanistic change.

The use of modern technology is an essential part of this shift and as well as Google and Twitter includes corporate social communication tools like Yammer and Jive, social learning tools like Saba and informal / social tools like Coursera.

As well as enabling learning, these technologies often provides useful and easily accessible measures of learning activity.  This might include, for example, the number of times a performance support app has been downloaded and accessed on a mobile device.  However even using technology, the move to informal and social learning makes it harder to measure the outcomes of these development activities, that is the increased knowledge and skills.

Informal and social learning are more organic - development is happening out there in the organisation somewhere but as learning practitioners you do not always know what or when something is being learned.  This provides an interesting paradox for the learning professional - as the potential of learning becomes more powerful so does the risk that it will not focus on the most important things or potentially may not even happen at all.

This has of course been the big problem with action learning for decades.  Where action learning sets have been properly introduced and people understand their value these can provide some of the most powerful types of learning for the learners and their organisations too.  But our experience is often not like that.  Most attempts at using action learning end in failure.  People attend and enjoy their first couple of action learning sets whilst these are facilitated by a learning practitioner but when told to keep the sets going by themselves organisations often find that a few people will attend a few more set meetings but then the initiative collapses and the learners and organisation moves onto other things.

We are now seeing the same thing with social media based learning.  People may, with the right encouragement, start to use our sexy new learning tools and technologies but without ongoing support, and especially good community management, people soon lose interest and the learning communities turn into virtual ghost towns.

This is one of the reasons that learning practitioners need to focus on the individual learner and helping motivate item to learn which was the topic I wrote about in my my article in October’s edition of Learning Technologies magazine.  However we also need to get much more serious about organisational culture - ensuring that this recognises the importance of learning and supports an environment which is conducive for learning to take place.

We all know that anything to do with technology in HR and Learning is always more dependent on culture than the technology itself but I am still not sure that the central importance and full role of culture is always understood.

So yes, we need to develop cultures which encourage people to meet their own learning needs, value social communication and collaboration, and enable people to speak freely - all basic requirements if informal and social learning tools are going to be used.

But we also need to create organisational cultures in which people prioritise investment in their own and others' capabilities, reflecting on learning required to support overall business and individual needs, making time for learning to take place and participating in learning with some understanding about the way they learn as well as a desire to generate new knowledge and skills.

We can no longer count courses or people attending them, or quality assure their delivery to ensure people are learning the right things.  We can survey people about the learning which is going on but I would suggest that even this is more useful as a cultural enabler, helping people remember the need for a focus on learning rather than as a true means of measuring and managing learning activity.

We therefore need to shift our focus from control of learning to ensuring the organisational environment encourages people to invest time appropriately in their own development.  We then need to trust people to do this.  Culture is the new governance.

This shift needs to take place in tandem with the more general one if the benefits of informal and social learning are to be realised.

To achieve success against this requirement we need to communicate clear messages about what is important.  This should include the high level purpose, mission and values of the organisation (hopefully one of those values will relate to learning), its key business priorities and possibly even more importantly, its main learning and development priorities.  All of this is essential in helping people choose to invest their time in the right learning for them and their organisation.

By the way, this is not necessarily about injecting simplicity into the organisation.  I personally believe we need to help people understand how complex businesses are these days so that people can respond to opportunities and challenges more artfully.  But we still need to provide some focus and given that we can no longer even try to impose this on people we need these clear messages and communications to help people focus for themselves.

Another requirement is to integrate learning into the rest of HR and organisational management.  We need to recruit people who value learning and have shown the ability to change based upon their experience during their careers to date.  We also need to ensure that performance management encourages learning and identifies learning needs effectively, which probably means separating it from reward.  And we need to recognise peoples’ participation in learning and development and the benefits they and our organisations obtain from investing in it.

One opportunity to support this may be gamification.  For one thing we know that people learn better when they are having fun.  However gamification can also be used to ensure that people are intrinsically and, where appropriate, extrinsically motivated to learn.  Also if points, badges and leaderboards are used, this that does give some additional basis for monitor the amount of learning which is taking place.

Finally but probably most importantly we need leaders to act as role models of learning, to encourage learning in other people and to conduct some of the checking and validation which traditional governance would have done before. Achieving this is is something that HR and Learning professionals need to work together on.

If we do these things well we will have a good chance of creating cultures that not only support informal and social learning but which help focus and sustain it too.  And it is only then that we will truly understand just how powerful these newer approaches to learning and their associated technologies can be.


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Tuesday, 3 March 2015

The need for people centricity in learning / 1




The need for people - rather than business or technology - centricity in learning

There has never been a more important time to focus on the role and opportunity of learning.  This is due, firstly, to the increasing amount and pace of change in the business world meaning that the need for learning has never been more important.  This is leading to increasing disquiet about the ongoing difficulties we find in getting people to develop new skills, change their behaviours and improve their performance.  And the second reason that focus on learning is so important is that today’s tools and techniques mean we have never had a bigger opportunity to impact on this intractable organisational problem.  But most learning practitioners also realise that we need to do more than to focus on new tools.

For many practitioners, the perceived need seems to be to increase focus on our businesses, ensuring that learning needs are tied back to business needs and that learning is embedded within the workflow so that learning activities are related to peoples’ day-to-day jobs and will definitely impact on their performance.  Personally, I am not too sure this will provide the difference which will make the difference.  Compare it to creating an ethical business for example.  I think most businesses would agree that it will never be enough to cement ethical behaviour into their business processes - they need people to behave ethically all the time, not just whilst they are following the workflow.  So why should things be different when we are trying to create a learning organisation?  I would suggest that we do not in fact just need people to learn at certain points in a process, we need them to be searching for, reflecting on and taking action against learning opportunities wherever these present themselves.

As an HR consultant, I see the same tensions and challenges in other areas of people management and development as well.  For example in recruitment there is similar disquiet about our ability to attract and select people who will remain engaged and stay in our businesses and focus their discretionary efforts on business performance whilst they remain employed.  And for many, the solution once again is seen to be to focus more clearly on business needs, perhaps by limiting the length of time that someone spends in a job, for example by building on Reid Hoffman’s concept of tours of duty.  However, once again, I am unconvinced that this change offers a true solution.

To me, the solution to all these problems is for learning and other areas of HR to focus much more on the individual.  Yes, we need to be interested in the needs of our businesses, but to link our people related activities too closely to these needs limits and curtails what we are capable of as people.  Instead, or at least as well as this, we need to become more interested in how we work as people - for example in what causes our engagement, how we deliver on our potential and how we learn deeply rather than just superficially from our life and work experiences.

The stretch on this, once we have already increased our focus on people, is to also become more interested in how people learn in groups.  How we we encourage people to share relevant information, support each other and construct new meanings across teams, communities, networks and even whole organisations?  And note that even whole organisational learning rests on an understanding of the learning of people within the organisation more than it does on understanding the business needs which the whole organisation needs to learn.

Recent experience of MOOCs offers a practical example.  We know that for those employees who engage in MOOCs this new learning format offers an amazing new opportunity.  However we also know that very few employees will ever engage, and that most who do so will not sustain this engagement.  As discussed in this years Learning Technologies conference, the few people who do engage tend to be those who are already highly motivated to invest in their own learning.  So to me, the need is not about designing MOOCs to connect more closely to what people do in their jobs, it is to excite people about learning.  If we do this then the rest will follow - employees will start to take up more of the opportunities we put in front of them, including MOOCs and other informal and social learning opportunities too.  Some, if not all of these opportunities, will relate back to peoples’ jobs and performance so this performance and business results will improve.  But these results will be an oblique outcome - they will be achieved by focusing on the individual employee not by paying more direct attention to the business.

Developments in neuroscience can definitely support this increased focus on the individual.  We are learning (or at least we are hearing and reading about - I am less sure we are truly learning) more and more quickly about the way people learn now than we have ever done before.  I am particularly struck by neuroscience’s findings linking learning with emotion - and the way that associating skills development with an emotional experience opens the door for for deeper learning to take place.

Yet to me, this finding also shows why it would be a mistake to try to make learning or other elements of HR into a science.  We can learn from science but this does not mean learning should actually become a science.  In fact I think this perspective on science comes from the more general focus on business.  The belief seems to be that if the rest of the business works largely as a science (based upon the science of Finance and Accounting) and if we are going to be more closely focused on the business, then we should operate more along the lines of a science as well.

But if we are focused on the individual and especially when we understand that learning comes most naturally when we provoke an emotional reaction, then it is clear that learning needs to be an art.  It is something that takes place when we inspire, excite, challenge and provoke - when we help people see new things, or at least existing things in new ways.  And this means we need to respond and react to each new learning opportunity, rather than to seek too much consistency and standardisation.

The same is true, once again, across most other areas of HR.  For example, recruitment is also becoming much less concerned with scientific placing of job ads and much more about artful conversations with individuals in order to attract and engage them into deeper relationships with an organisation.

I have emphasised the similarities in changes within learning and the rest of HR as I do not think the art of learning can emerge from learning practitioners on their own.  Engaging and exciting individuals about learning is as much about communicating with people about the importance of learning, and rewarding people for having the right attitudes and demonstrating the right behaviours to learning as it is about putting the appropriate learning interventions and environment in front of them.  And the good news is that as the rest of HR moves towards a greater focus on the individual, it will also become easier to integrate individually-focused, artful learning, into this broader new approach to people management and development as well.

This is also why I try to speak and write about the role of the individual rather than about the learner.  I think that as soon as we start to think of someone as a learner we have already closed down our thinking about that individual.  People learn but they do all sorts of different things as well.  The more we can think about people as holistic, rounded individuals, the more expansive and useful our thinking about them can become.

None of this should be taken to mean that learning cannot draw some benefits from science or from greater alignment with a business - especially as new scientific fields like big data analytics offer us huge new opportunities to improve the effectiveness of learning.  It is just that we should not expect the growing gap between the strategic opportunity for learning and current delivery to be filled by these any more than they are going to be filled by wonderful new technologies.  The secret sauce is still what it has always been - a better understanding of our people, more focus on engaging them in learning and the artful creativity to generate and take advantage of opportunities for learning when they occur.


This article was previously published as The People Vs The Organisation in the 50th edition of Learning Technologies & Skills magazine.

I'm going to be talking about the topic at ATD MENA in Riyadh on Sunday.

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Thursday, 26 February 2015

IQPC HR Transformation




I've spent the last couple of days at IQPC / Shared Service & Outsourcing Network's HR Transformation in Brussels where I've been speaking.

It turned out to be quite a unique if rather select event for a number of reasons:
  • I've not been back to this hotel since Teneo's Talent Management Summit in 2013 and realised once I'd sat down that I'd brought with me one of their red pens - impressive durability!
  • It was great to see one of my models presented in a session from Anand Silvashankar from InMobi - about the 5th time this has happened to me but the 1st time someone has included my name on the slide (thank you!)
  • We had a big focus on financial services (including Dexia, Skandinaviska Enskilda Banken, Barclays, ABN AMRCO etc) which meant lots of sessions looking at the aftermath of the recession - most powerfully in connection with Dexia's downsizing from 30,000 to 1,300 employees.
  • There were quite a lot of good inputs about change processes, and I particularly liked the visuals which accompanied them (see below for DHL, Barclays, ABN AMRO)


I'll be blogging more about HR transformation early next week and will follow-up with some notes from my own session too.






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Wednesday, 25 February 2015

Marcus Evans HR Analytics in a Big Data World




I'll be running this training session on HR analytics in Sydney on 28th and 29th May:

Analytics can be used to confirm our understanding about the way that our particular HR practices and organisations work. Common examples include identifying the most important talent in a business and how these people can be recruited, managed and paid more effectively. Analytics can also be used to add further intelligence to the metrics and KPIs which have been chosen to help monitor new workforce strategies.
Whether or not you believe that HR needs to become a data science there is no doubt that we need to make better use of data at our disposal.
Attend this 2-day master class to learn how HR analytics can be developed in a way that helps to drive the success of your HR strategy, your people and the organisation.

Come along if you can or let me know if you just want to meet up.

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Tuesday, 24 February 2015

HR capabilities Decoded




Most of the posts in this blog deal with the huge transformation underway within HR at the moment.  Obviously, and given the scale of this transformation, our own capabilities need to change alongside this too.

My own capability development programme - areas I'm still fairly to new to, or are just finding out more about - includes innovation, story telling, graphic facilitation, design thinking, new technologies, coding, R, behavioural economics and neuroscience.

Thank goodness for MOOCs!

But on Friday I'm stepping back into the learner seat of a classroom based training session for the first time for a while (albeit a very modern one with MacBook Airs etc) to do a spot of coding with Decoded on their Code in a Day course.

I actually learnt to code in Cobol nearly 30 years ago - mainly in St Charles, just outside Chicago (I'm sure there'll be a few other former Androids or former / current Accenturoids? amongst my readers who remember the Hard Code experience too.)  Ah, the joys of batch processing!

Or I could go back even further to learning Fortran as part of my Engineering degree or Basic before that.

But of course things have moved on today and the apps which make the world - including recruiting, learning and other areas of HR - work are based on languages like HTML, CSS and JavaScript, so these are what I'll be focusing on at Decoded too.

And the main reason I'm taking the session is that I often tell recruiters and trainers that this is the new world.  Who cares if you can deliver a course or design a job advert these days? (I'm exaggerating clearly) but if you can design, or at least understand, the basics of a recruitment or development app then that's still something to take notice of.

The need applies in other areas of business as well as course - and my wife, who is a marketeer, actually attended the training last week - she's blogged about it here on our company's new (actually largely unfinished) website, which she'll now be much better positioned to finish off.

So of course that's another reason for HR to know their functions from their variables - so that they're better positioned to help the development of the rest of their employees too.

And after Friday I'll be better places to help HR practitioners think about your capability development programmes.

But whether I'm any better placed to help my 12 year old daughter program in Python on her Raspberry Pi we'll just have to wait and see...



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Why HR must focus on the future(s)




HRZone have launched a great new site this week and to support it, I was asked to input something future focused - the result is an article explaining why we do need to focus on the future, or futures, as I think there will be, or should be, multiple versions of this, and a suggestion for why navel gazing, not analytics, is a necessary part of this.


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Monday, 23 February 2015

Addressing wealth inequality




I hope you enjoyed my post and linked article on pay differentials.  I now want to focus on the broader issue I also referred to which is wealth inequality,  This may be a harder issue to impact as HR practitioners, as most of the increase in inequality is due to appreciating assets rather than high reward though I think I have a solution to this! - see below.

However I wanted to start with a few more thoughts on the issue.

Firstly I think the big issues, here, as with pay differentials, are trust and collaboration.  Today’s huge inequalities destroys the fabric of society and stops people working with each other effectively.

There are of course other issues too, particularly around economic inefficiency.  Very wealthy people run out of sensible things to spend money on.  So they keep more of their money, meaning that there is less in circulation, putting brake on the economy and reducing any trickle down effect (which is largely theoretical anyway.)  This keeps everybody’s wealth lower than it would be if the wealth was more evenly distributed.

But I still think reduction in trust and collaboration are more important problems.  I remember in Jaques Peretti's excellent BBC documentary on the super rich that a woman polo player was suggesting that concern about inequality in society is all down to envy and lack of understanding of how hard rich people work.  Well it’s true that there is envy.  We are human and part of what it means to be human is that we don’t always think positively about each other.  We should try to improve this.  But envy isn’t going to go away, it’s real, it exists and we need to manage society in a way that recognises this.  Huge inequality leads to many people being envious which isn’t a healthy or productive state.  We can’t tackle envy and therefore we need to reduce inequality.  The point about hard working rich people simply isn’t worth responding to.

In terms of how we respond to the issue, I support proposals made by Thomas Pikety and others to increase tax on wealth rather than just incomes.  However we are still left with the problems that many of the the rich don’t want to pay eg Griff Rees Jones threatening to move out of the UK if his pad in Fitzrovia becomes subject to a mansion tax.  The most repugnant thing I’ve seen on this was Lord Bell on Channel 4 News complaining that proceeds from higher taxation just ‘get wasted’ (waste presumably being anything that isn’t spent on him.)  This, together with the control that wealthy people have over society, means that no government, at least in the UK, is going to do much to change the status quo.

This leaves individual philanthropy which has obviously got to be encouraged.  The most important initiative in this area is the Giving Pledge, founded by Bill Gates and Warren Buffet and requiring wealthy individuals to commit to giving more than half their wealth away during their lifetime or in their will.  Some do even more eg Buffet has committed to giving away 99% of his wealth but he still uses an expensive private plane.  Gates does amazing work in philanthropy but still has a $150m house on Lake Washington named Xanadu 2.0 and owns a private island in Belize.  So whilst initiatives like this will have an impact they’re limited and long-term.

How then do create a fairer society - and do so before more people start to take up their pitchforks?

Well, the only way of making a difference that I can think of is to show the rich the way forward by demonstrating that we don’t value what they have and the way they’re living.  At the moment they hold onto their money because they think we’re envious of what they have and aspire to be like them.  No wonder they keep on doing what they’re doing.

Speaking personally for a moment, I have no desire at all to be super wealthy.  I see no advantage at all in having millions of pounds when other people are sleeping on the streets.  In fact some years back I committed with my wife that if I ever become a much more successful consultant or speaker than I am now, or my daughter becomes a pop star, or marries a football player, or we just win the lottery etc, that the first thing we’ll do is give away the excess amounts we don’t need (which we’ve set at the future equivalent of £5m in 2013 terms).

Given that wealth inequality is becoming ever greater and the issue therefore more and more important and also topical, with Barack Obama focusing on it in his State of the Union address; Mark Carney promoting inclusive capitalism; Justin Welby linking to to abuse and corruption; etc; etc; I thought it would be a good time to encourage other people - including you - to agree to follow the same approach.

I’ve therefore set this up as a change.org petition.

I somehow suspect this idea may not become massively popular - the current celebrity culture is just too strong for that.  But it would be nice if it could be more than just me and my wife!

So if you’re willing to, please go over there to and sign up to commit to give anything you generate over £10m (to give you a little leeway) to a better cause than just yourself.  It won't cost most of you anything, at least not yet!, and could potentially play a role in creating a more equal planet - and productive organisations too.


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Friday, 20 February 2015

Pay differentials and the Edelman Trust Barometer 2015



I posted yesterday on the arguments for introducing pay transparency, based upon a new survey from Glassdoor which I had commented on as their HR expert.

I argued for transparency largely on the basis that if differentials are justifiable we should be able to justify them.

However, one of the key reasons I think transparency would be useful is that I don’t think very high differentials are useful or appropriate, and think transparency would help to keep them in check.

So the two main additional reasons for suggesting that we need to reduce differentiations are:
  • Trust.  We know that trust has been decimated all around the world.  The best global survey on trust, which you probably know about and hopefully look out for each year as I do, the Edelman Trust barometer shows trust falling this last year once again.  In this environment it doesn't matter what the real reasons for high differentials are, they simply don't work.  People will read arrogance, greed and self serving into the high pay, and disrespect and contempt into the low pay, even if these intents aren't there.

  • Collaboration.  The one type of relationship which has seen an upswing in trust during the 13 years or so which Edelman has been producing the barometer is the PLY - People Like Yourself - someone you have a personal connection too.  This is hugely important because it provides the basis for trust, learning and collaboration.  If you don't see someone as a PLY you're going to be much less likely to work with them, support them or learn from them.  And what's the chance of seeing your CEO as a PLY is they're earning 130 times as much as you?


I’ve also written more about these issues in an article published by HR Magazine which you may want to take a look at.

This article also pulls in my other recent blog post on HR professionalism.  From a professionalism perspective, the fourth main reason we should be wanting to reduce differentials is because we care about people and society, not just the businesses we work within.

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