Monday 30 June 2008

Top Consultant on Virtual Careers Fairs

Top Consultant Tony Restell at Top Consultant asked for a chance to respond to my slightly less than overwhelmed response to their recent virtual careers fair.

First, have a look at my post, then have a read through his in italics below, see what you think, and if you've got any relevant experiences of your own to share, please comment as well.

Cheers, Jon.


"Jon - thanks for the opportunity to post the other viewpoint, much appreciated.

Interestingly, the technology platform does provide the functionality for much more interaction between candidates at a fair like this, including the provision of a "Lounge" area where candidates can meet and network. The technology providers (iCongo) recommended that we deactivate this functionality, based on their experience at another careers fair they'd recently hosted. The feeling was that this would be a distraction from the main aim of the fair - namely putting candidates and potential employers in contact with one another and encouraging a dialogue between them.

I guess what the above indicates is that the technologies out there can enable a wide range of different events / experiences. So one key for companies such as ourselves is going to be experimenting and learning what format events should take to maximise the number of readers / candidates who leave thrilled with the experience and minimise the number who leave disappointed. Which is a similar conundrum to that faced in earlier rounds of internet technology of course. Lots of things are possible, but which are really going to bring value and be appreciated by readers and clients alike? We'll certainly be endeavouring to find that out as we run subsequent events!

Tony Restell ( "

Friday 27 June 2008

The Equalities Bill

It's now 12 months since vampire Gordon Brown stepped up as the UK's PM. He's had a difficult 12 months, one of the main criticisms being that he's not been able to explain his vision for the country, and even less to align the government's actions to this vision.

However, a key part of his strategy, as I commented last year has clearly been to increase social mobility: widening participation in the workforce.

And in this area at least, the vision is clearly being put in place - with the right to request flexible working, equal treatment for agency workers and the push for world class skills.

The latest initiative is the equalities bill.

The bill will try to tackle the ongoing gender pay gap by requiring public sector organisations (and any private firms doing public sector work) to publish details of their percentage difference in pay between men and women. I think this is sensible, and that it is also right to encourage rather than require private sector companies to provide similar reports. It's also been coming for a long time - with Denise Kingsmill's 2001 report and then her review into HCM reporting (Accounting for People).

Accompanying this is a move to stop companies from banning their employees to discuss what they're getting paid, which could involve some interesting cultural change.

More controversially, the bill suggests that firms should be allowed to apply a measure of positive discrimination / affirmative action to increase the proportion of women and people from ethnic minorities in their workforce, particularly at a senior level ("where candidates are 'equally qualified', it will allow employers to hire female or ethnic minority candidates" - I'm sure Hilary Clinton would have liked to have used this one!).

This idea is going to get quite a lot of flack. The actual legal change may be quite minor, but it involves a big psychological shift (which is of course the point).

But I would argue again that it is a sensible, and indeed overdue (being 30 years since the equal pay act), change. I was listening to a INSEAD leadercast (podcast) on the way home tonight and heard Sandy Ogg, Unilever's group HRD talking about their strategy to get more women onto their executive teams that they call "One More" - one more women on the board. It sounds a hugely sensible approach and one designed to "move the needle" much more than even the best development, coaching, networking etc.

And I think this is all that the government is trying to achieve.

In overview, the bill would almost seem designed to raise heckles from the UK's mainly right wing press. I think it's a courageous step that clearly links to Brown's vision and could signal that the government is finally getting back on track.

Thursday 26 June 2008

McKinsey: Multinational talent

McKinsey Multinational Talent

First, the findings:

There is a surprisingly tight relationship between financial performance, as measured by profit per employee and ten dimensions of global talent management (see graph).

Companies scoring in the top third of the survey (when all ten dimensions were combined) had a 39% higher profit per employee than those in the bottom third.

The correlations were particularly striking in three areas:

  • The creation of globally consistent talent evaluation processes
  • The management of cultural diversity
  • The mobility of global leaders.

"Companies achieving scores in the top third in any of these three areas had a 70 percent chance of achieving top-third financial performance (see graph). Companies scoring in the bottom third of the survey in these three areas had a significantly lower probability of being top performers, particularly if the company had inconsistent global talent processes."

Those are pretty remarkable findings. But there are some problems, and McKinsey themselves point out that:

"Although providing no evidence of true causality and lacking a longitudinal perspective, the strong associations between company financial performance and these global-talent-management practices strengthen our belief that these are important areas on which businesses and HR leaders should focus their attention."

But my main reservation focuses on their choice of profit per employee as a measure of the impact of talent management. This is clearly going to be much higher in knowledge based sectors where the 3 or 10 practices identified by McKinsey are going to be more common.

So the research basically says that companies which invest more in talent are often knowledge based (as talent is where their knowledge comes from). Knowledge based companies have higher profits per employee (as knowledge based work has higher margins than production based work). So, companies that invest more in multinational talent management will have often have higher profits per employee.

It's as good as saying this is research. Research is supposed to show you something. This is supposed to show you something.

Unfortunately, it doesn't.

Carnival #36

Carnival 36 The carnival is out again, back with its originator, Evil HR Lady.

My favourite post: Amit Avasthi's Talent Glocalisation on HR Bytes. Not as fun as some posts, but then you don't come to my blog for entertainment, do you? And it includes some great information / insight.

In fact, I'd meant to post on the McKinsey article ('Why multinationals struggle to manage talent') that informs Amit's post myself when it was published last month - following on from my earlier post on their war for talent update. Unfortunately, this was one of those that got away.

The other reason for not posting on it, given that it includes some fairly (if superficially) striking findings, is that I think it's a surprisingly duff piece of research.

But Amit's inspired me to post, so my own reflections will follow.

Wednesday 25 June 2008

Nick Jefferson guest post

nav1_logo Thanks to Nick Jefferson from Couraud for his guest post.

Couraud is a no-nonsense developer of HR architectures and provider of tools and training, and employs some particularly bright and sparky consultants. It is also one of very few UK based HR consultancies with its own blog.

Nick and I both think quite similarly about the world of work, and this was shown recently by us both commenting within the space of 5 minutes on the same Management Today post.

Do take a look to find out more.

What's the Point of HR?

Management Today Written by Nick Jefferson, Director, Couraud.

I laughed when Jon told me he was the other blogger who had almost instantly responded to Matthew Gwyther's piece in Management Today, 'What's the Point of HR?'.

I could equally have cried.

What is it with those of us in this world? Why are we making such a poor case of our chosen area of work, that we regularly get it in the neck like this? Luke Johnson wrote a not dissimilar piece in the FT not so long ago also.

We all know that there are lots of frankly low grade HR people kicking around, who couldn't articulate how HR adds value if their lives depended on it.

But we're not all that bad. I've met some truly fantastic, quality practitioners in my time.

Why aren't we standing up and being counted? It reminds me of the moderate muslims who for whatever reason don't get up and stay - 'STOP!, enough is enough'. We have a duty to fight for what we believe in - that if people matter, HR must matter.

It is time to take the fight to the cynics, and not simply react to next, inevitable 'why do these guys exist?' piece.

And let us begin today.

Productivity Guy guest post

i4CP_logo Thanks to Erik Samdahl and Jay Jamrog at i4cp (the Institute for Corporate Productivity) for their guest post outlining 5 challenges for HR.

It's great to have them contribute to this blog, partly I think the social nature of web 2.0 means that this sort of collaboration and knowledge sharing that blogging should be about. And also because I think they're a great source of intelligence research and commentary on the world of work.

I've tracked i4cp's outputs since they emerged from the Human Resource Institute, and their relatively new Productivity Blog provides a great resource for their members (corporate executives and human resource professionals from many of the world's top companies) and non-members alike.

I'm sure I'll be commenting on their research again soon.

Five Challenges for the HR Profession

Written by Jay Jamrog, Senior VP of Research, i4cp

Jon has asked i4cp to give our perspective on HCM. Since I’m a researcher, trend watcher and futurist, I thought I would write about some of the challenges the HR professions faces today and in the years to come. Many of these challenges have been around for awhile but the failure to address them will only increase the pain in organizations in the future.

First challenge: Figure out what talent management means. Today, too much is being written about integrated talent management – breaking down the silos in HR and developing a holistic strategy for HR – and not enough about how HR identifies the talent gaps that the organizations will face over the next 3 to 5 years. The objective of TM is not only to fix HR but also, and probably more important, to insure that the right people with the right skills are in the right place at the right time so that the business can execute the strategy. Integration is only a possible means to an end. The true goal is execution.

Second Challenge: Get beyond the multi-generational hurdle. Trying to develop procedures and practices to accommodate four or five different generations will drive HR crazy. People don’t fit neatly into a stereotypical generational cohort group. The key to retaining and engaging the best and the brightest today is to treat each individual as an individual and build trusting relationships between supervisors and employees.

Third Challenge: Get to the next level of HR metrics. If HR is going to move the profession forward, it needs to get beyond measuring the efficiency of HR programs – time to fill, headcount, turnover rates, training competed, etc. - and start measuring the effectiveness of those HR programs. For example, time to fill (efficiency) numbers has no meaning unless you can report that the quality of hire (effectiveness); turnover (efficiency) numbers have to be combined with the quality of separation (effectiveness). Even more important for HR is solving the great debate on measuring the “impact” that all of the HR programs has on the organization and its ability to execute the business strategy.

Fourth Challenge: Understand the impact that technology will have and not have. Most of the HR profession has yet to reap the long-promised rewards that vendors are claiming for technology solutions. This is not because the HCM technology is flawed; it is because, in most cases, HR fails to have a comprehensive strategy for technology. Technology will make HR more efficient in the future but the question is how will HR become more effective. It has been said before that the more high-tech we become, the more people in organizations will need “high-touch.” HR needs a strategy for making their organizations more high-touch.

Fifth Challenge: Keep up to speed on the latest trends and issues. The rapid pace of change - coupled with information overload - makes thinking about the future a daunting task. How does the average HR professional get information on the forces of change (demographic, social, political, legal, economic, technological trends) and then find the time to analyze the possible impacts that they will have on the organization? HR needs solid solutions in this area.

Overall, I think that HR is at a tipping point and the biggest challenge will be to get beyond “fixing” HR (faster, better, cheaper) and to stop worrying about being a business partner and getting a seat at the table. The conversation needs to get to a level where the HR professional addresses the issues related to the impact that they are having on the organization and how they tell that story. Addressing that challenge and the five challenges listed above will take a combination of intelligence, accountability and curiosity, allowing HR to move from “How good do I have to be?” to “How good can I be?”

Tuesday 24 June 2008

Vampire Brown Sucking the Working Classes' Blood

Vampire Brown Well, I thought The Power of Mojo was a good blog heading, until I came across this one from my namesake's blog at the UK's Daily Express.

Now we know where Gordon Brown's rather strange facial contortions come from!

The power of Mojo

mojo A little while ago, I posted on the the need for organisations to have an internal purpose: a clear big idea about the organisation that increasingly needs to be internally rather than externally generated (ie about how the organisation's going to be rather than what it's going to do).

I linked this need to growing interest in self-actualisation and increasing cynicism over corporate messages within employees.

I want to use this post to extend on the idea, and will then further develop it over the next few days.

So firstly, why mojo? The word apparently traces its origins back to Congo, Africa from the word moyo, meaning 'soul' or 'life force'. More recently, it is often applied to that often elusive quality (magic, personal charisma, energy) that sets a person apart from everyone else.

This is what I'm talking about on an organisational level too - the organisation's real central essence that gives it its life and character and distinguishes it from elsewhere.

And I think there are two types of organisational mojo - the first of which is something absolutely central to organisational strategy and which is going to make this strategy real and achievable. The second is a complementary focus to the main business strategy - something that will fit beside and support (if not drive) the strategy, but which will be more motivating for employees.

More shortly...

Yahoo! loses human capital

An article in the Guardian has noted that shares of Yahoo! fell more than 3 percent on Friday due to concerns over its engagement and retention of human capital.

"Three more executives leaving the company, low morale and impending restructuring have raised fresh worries about the future of the company after it chose to partner with Google instead of Microsoft."

Standard & Poor have noted:

"With human capital historically having been one of Yahoo's greatest assets, we see these developments as a material negative."

One more piece of evidence to add to the collection...

Friday 20 June 2008

Virtual Careers Fair

Following my last post on the use of web 2.0 for recruitment, and one reader's comment on the low take-up of other recruitment technologies, I thought it would be fun to explore the use of virtual careers fairs.

So I've just been visiting Top Consultant's fair for management consulting candidates (not that I'm seriously looking for a job - but never say never).

And I have to say I found it a bit flat, perhaps because I had a virtual conference I participated in last year at the back of my mind as a comparison - and because I had found this one so much fun. But there's a lot of differences between the two events - firstly for me, I was speaking at the last one, which always raises my adrenalin, whereas this time I was lurking in the background (not having got the opportunity to attend as a recruiter).

And more importantly, the conference was largely about networking so there was loads of interaction with exhibitors, speakers and attendees. In contrast, Top-Consultant note that whole idea of a virtual careers fair is that:

"Going virtual addresses one of the biggest concerns that candidates have about attending a physical fair - that they'll be spotted by the current employer."

So by design, it's quite hush hush. But I did think there could have been more to give it a bit more focus and energy - perhaps some seminars providing tips on CV writing, interviewing etc, rather than just cheesy recruitment videos.

But even then, I'm not sure that I'd have found it that useful - or whether it would have provided that much more value than other sources of information on employment opportunities eg Top Consultant's existing jobs board.

Also see posts about virtual careers fairs on Fortify your Oasis and McArthur's Rant (this one didn't use virtual world technology eg Second Life, but I think this would have been good - even if just as an option to chat with the recruiters on the exhibition stands).

Wednesday 18 June 2008

CIPD: Web 2.0 opportunities when attracting and retaining staff

Looking at the use of social networking for recruitment, the CIPD's Recruitment and Retention Survey has found that over half of CIPD members responding to the survey believe that social networking sites are useful for engaging potential job seekers (56%) and welcome its ability to shed light on how they are perceived in the marketplace (52%).

These opportunities are described quite well by the CIPD:

"Through the richness of multimedia and connectivity, web 2.0 technology provides an opportunity to bring the employer brand to life and create experiences online that allow potential employees to experience what it is like to work within the organisation. Using technology like Facebook or Second Life, an employer brand can have a global impact."

However, only about 20% of organisations are using web 2.0 technologies to attract and recruit employees (favoured sites include Linkedin (62% of those using web 2.0), Facebook (58%) and MySpace (11%)) with another 8% planning to start using the technology in the next year.

The fact that a majority of CIPD members are concerned that damaging comments might be posted on their organisation (62%) points towards one reason for this disconnect - HR hasn't figured out the amount of information which is already published online (for example, on Vault).

Another inhibitor is likely to be the CIPD's guidance not to use the technology to its full:

"Encouragingly, the majority of organisations that do use social networking (85%) do not use it as a tool to vet candidates during the recruitment process.

Organisations should be careful when using these technologies to vet candidates. In the quest to find the right person for a job, social networking sites could be at best irrelevant and at worst misleading. Good practice requires that every candidate is treated equally, which means all candidates would have to have similar profiles before information is used, and this poses challenges as not everyone has a social networking profile."

This is complete tosh surely?

I might not bother looking at Facebook if I was recruiting for a manufacturing job. But If I was recruiting for customer service or any knowledge based role, the way a person presents themselves will be a key part of my selection criteria. Their personal brand, and the way they might contribute to my corporate brand is going to be very important. And I'd be failing in my responsibility not to use available information on how the person presents themselves.

What do you think?

PS Also see my comments on the CIPD's discussion paper, HR's use of Web 2.0.

Tuesday 17 June 2008

Organisational wellness

Some reading over the weekend left me feeling a bit more optimistic about the future of HR.

Firstly, interviews with Jackie Orme (the new head of the CIPD - pictured) in Personnel Today and People Management. In both publications, Orme notes the need for organisations to think long-term about people management:

"Factors such as the impact of technology, globalisation and the influence of emerging economies are all contributing to a context of change which HR must be mindful of, Orme warns. 'I have seen HR done really well and not so well. When it’s done well it’s about building capability, not only for today but also tomorrow.'

'Chief executives now want HR people who know how to pull the levers of competitive advantage. The future will mean pulling those levers even harder in a more technologically enabled, globalised context. HR needs to build capability for today and for tomorrow.' "

This capability, of course, is human capital.

Secondly, I finally got round to reading Bradley Hall's book on the New Human Capital Strategy. Whilst this includes quite a few things I don't agree with, there is quite a bit that I do.

Hall defines HCM as a system designed to create sustained competitive advantage through people. The book explains:

"In addition to reacting to annual business challenges, companies must create the business analogue to a wellness programme - a systematic and disciplines approach for year-over-year human capital growth."

I quite like this analogy. I wrote an article on health and wellness in Strategic HR last year. In this, I linked individual health support to the three levels in the value triangle - suggesting that Personnel tends to focus on avoiding illness and meeting basic safety needs, HRM on general health requirements and HCM on ensuring wellness.

The same applies to the organisational level too - with HRM being about developing organisational fitness to achieve certain objectives, and HCM creating a well organisation that has the capability to be effective longer-term.

If Orme can help develop more well organisations, then I think she'll be doing a good job.

Wednesday 11 June 2008

The super sexy HR carnival (#35)

Welcome to the 35th edition of the HR carnival which I’m delighted to host at my Strategic HCM blog.

This carnival has three particular areas of focus. Firstly, it includes quite a few posts from few new or less regular contributors to the carnival, so those of you who are regular readers will I am sure be delighted by some additional perspectives into the world of HR. Secondly, it’s a bit more UK-centric than normal (although we’ve also got posts which concentrate on India, China and the US) which obviously means that the carnival is of a particularly high quality this time!!! And thirdly, I’ve devoted this edition of the carnival to the need to increase the ‘sexiness’ of HR. The last two of these points are the reason I’ve headed this carnival with a photo of sexy police officers and a reveller from the UK’s Notting Hill Carnival!

The need for HR to become more sexy is explained by Jessica Lee at Fistful of Talent. Jessica lists a number of areas in which development could make us sexier, for example by making more investment in social media. And helping up us gain a better understanding of this area are Larry Dunivan at Perceptive HR Technology, commenting on an earlier post by Jason Corsello, and Janet Walsh at Strategic Thinking.

Still confused by what sexy HR means? Well, some good examples of definitely not sexy HR are provided by HR Wench and Laurie Ruettimann at Team Building is for Suckers and some suggestions for being sexy in the downturn are offered by Frank Roche at KnowHR.

Jessica points out that sexy isn’t the same as strategic, but I think there are opportunities for combining the two - if you define sexy as being something which others will find attractive then my blog is specially focused on developing sexy strategy, or perhaps strategic sexiness. And becoming more sexy by being more strategic shouldn’t be too difficult if you keep in mind the findings from Alice Snell at Taleo's Talent Management Solutions blog that less than a third of businesses (in the UK at least) currently have a talent management strategy in place.

While developing your strategy, it’s important, as John Philpott on his CIPD blog notes, not just to redefine existing recruitment and development processes as talent management and - see the post from Wally Bock at Three Star Leadership - also not to assume that what worked ten years ago will still work today. For example, Stacy Chapman at Strategic Workforce Planning suggests that you might need to segment your talent, although Rick at FlipChart Fairy Tales cautions that you should be careful in looking for evidence when segmenting based upon generalizations like generational differences eg around Gen Y.

Of course, sexy strategy isn’t going to be enough on its own – this will need to be supported by sexy HR processes and practices too. A good example of sexy HR practices in operation comes from the incredibly sexy Zappos. Their policy of paying people $1000 to quit is explained by Mark Bennett at Talented Apps although Kris Dunn at the HR Capitalist suggests that maybe they should pay a bit more. And my own nomination for the organisation with the sexiest HR practices is Toyota.

So how can you make your own organisation's HR practices more sexy? How about putting more effort into workplace design – suggested by Carol Morrison at i4cp or alternative work schedules - suggested by Mark Stelzner? Or becoming more green - Susanna Cesar Morton at Advorto suggests how we can appeal to the green side of graduates.

Don’t think reward can be sexy? Have a look at posts from Ann Bares at Compensation Force on sales compensation; Michael Moore at Pennsylvania Labour and Employment blog on overtime payments to non-exempt employees in the US and Julien Dionne at Incentive, Compensation and Sales Performance Management on purchasing an incentive compensation management system.

Of course, whilst there are undoubtedly generic attributes of sexiness, what makes people and organisations click often differs from person to person and organisation to organisation. So, as Art Petty on Management explains, you need to listen to your people and more generally, according to John Agno's Coaching Tip, to communicate with them effectively. To do this, Nina Simosko encourages leaders to reflect on the concerns of their employees.

David Zinger at Employee Engagement Zingers and Dan McCarthy at Great Leadership both offer more advice on developing sexy leaders and Michael Haberman at HR Observations suggests that HR should follow one of Dan McCarthy’s suggestions and get experience on the board of a community group.

By the way, even when you’ve listened to your people, you shouldn’t automatically offer something just because they say they like it – as Paul Herbert of Incentive Intelligence (actually posting on Fistful of Talent) explains, you need to understand your own objectives too.

And don’t take this approach too far - Chris Young at Maximize Possibility offers four signs that you may be guilty of loving your employee too much. And as Susan Heathfield at points out, love contracts don’t solve the problem. And I’d certainly agree with Peggy Andrews at the Career Encouragement blog that sharing hotel rooms isn’t going to be a good idea. After all, as Nick Jefferson notes, you dont want to get sacked.

Bill Strahan at Human Markets notes the particular attractive qualities of transparency which are lost when using corporate gobbledegook. Commenting on a Steve Roesler post, Gautam Ghosh Management Consultant describes how this provides problems for change management, and Scott McArthur at McArthur's Rant and David Zinger at Slacker Manager both provide some more good examples for use in buzzword bingo.

One expression that definitely deserves to be binned is ‘just relax’. Providing his own contribution to the carnival, Steve Roesler at All Things Workplace shows how suggesting that people should relax can actually increase stress. So just sit down with Frank Mulligan at Talent in China for a nice cup of tea instead, or join Amit Avasthi at HR Bytes for a slow game of cricket. And if you're still feeling stressed, take comfort with the observation from Prasad Kurian at Simplicity at the other end of Complexity that we are not our job – HR may not be sexy, but this doesn’t stop us being sexy ourselves.

One final thought, perhaps we can help each other be more sexy? William Tincup recommends joining an underground HR forum, The HR Net, and of course, keeping up with the HR carnival should help as well. I hope you have enjoyed this edition of the carnival and have got some good tips for making HR more sexy. The carnival will be back home next time, with Evil HR Lady on 25th June.

Toyota's nerve system

There’s a great example of best fit people management in this month’s Harvard Business Review. The article proposes that Toyota’s ability to manage contradictions (along with the Toyota Production System) is the main source of the company’s success.

I don’t deny that dealing with paradox is an important capability, and in fact it is increasingly so, but my reading of the research identifies Toyota’s development of social capital as the engine of the company’s growth.

This social capital is a result of a web of relationships that can be seen as a “nerve system” which allows Toyota to transmit information swiftly across the entire organisation so that “everybody knows everything” and Toyota can “gather ideas from everyone and everywhere: the shop floor, the office and the field”.

Critical to the development of the nerve system and the resulting social capital have been the following factors:

Setting impossible goals

Toyota sets near-unattainable goals to raise peoples’ consciousness and self-worth, and to push people to break free from established routines. These goals relate to its BHAG: “a full line in every market”, as well as more people oriented goals: “enhancing the happiness of every customer as well as building a better future for people, society, and the planet we share.”

These later goals are “purposely vague [beyond SMART], allowing employees to channel their energies in different directions and forcing specialists from different functions to collaborate across the rigid silos in which they usually work… For example… Zenji Yasuda, a former Toyota senior managing director, points out the wisdom of painting with broad strokes. ‘If he makes [the goal] more concrete, employees won’t be able to exercise their full potential. The vague nature of this goal confers freedom to researchers to open new avenues of exploration; procurement to look for new and unknown suppliers who possess needed technology; and sales to consider the next steps needed to sell such products.’ ”

Deeply embedding common values and beliefs

The company’s values have been developed over time and are now deeply embedded in the way that things are done:

“The values include the mind-set of continuous improvement (kaizen); respect for people and their capabilities; teamwork; humility; putting the customer first; and the importance of seeing things firsthand (genchi genbutsu)."

Developing organisational capital

“Another element in Toyota’s nerve system is the practice of converting experiential or tacit knowledge into an explicit form to be shared throughout the organization. When Fujio Cho was president, Toyota put into writing the founders’ wisdom that had until then been passed down orally. Senior executives evaluated sayings and anecdotes and identified two core values as the pillars of The Toyota Way 2001: continuous improvement (kaizen) and respect for people.”

A focus on experimentation

Toyota is only able to reach its near-impossible goals by being eager to experiment, encouraging all employees to move out of their comfort zone into unchartered territory:

"Toyota has found that a practical way to achieve the impossible is to think deeply but take small steps—and never give up. It first breaks down a big goal into manageable challenges. Then it experiments to come up with new initiatives and processes for handling the more difficult components of each challenge. This pragmatic approach to innovation yields numerous learning opportunities. Consider, for instance, Toyota’s path for developing the Prius. In 1993, the company decided to develop a car that would be environmentally friendly and easy to use. The development team, called G21, first came up with a car that delivered a 50% improvement in fuel efficiency. Toyota’s senior executives rejected the prototype and demanded a 100% improvement. That was unachievable using even the most advanced gasoline and diesel engines or even fuel cell technology–based engines. The G21 team had no choice but to tap a hybrid technology that one of the company’s laboratories was developing. Sure enough, the first engine wouldn’t start. When a subsequent model did, the prototype moved only a few hundred yards down the test track before coming to a dead halt. In later models, the battery pack shut down whenever it became too hot or cold. Despite these setbacks, Toyota didn’t stop working on the project and unveiled a hybrid concept car at the 1995 Tokyo Motor Show. Its executives knew that alternative power train technologies were emerging, but the fact that the Prius would be an interim solution didn’t deter them. They believed the project was worth the investment because Toyota would learn a lot in the process."

In addition, Toyota “encourages employees to be forthcoming about the mistakes they make or the problems they face. By encouraging open communication as a core value for decades (see below), Toyota has made its culture remarkable tolerant of failure”.

Developing individual human capital.

Toyota views employees not just as a pair of hands but as knowledge workers who accumulate chie – the wisdom of experience – on the company’s front lines:

“Toyota prefers on-the-job training to off-the-job programs. During their initial training, employees are given the freedom to make judgment calls. They have to adhere to a broad set of guidelines rather than follow a strict set of rules. The company adds more context to employees’ perspectives by asking them to think as if they were two levels higher in the organization. Toyota trains employees in problem-solving methods during their first 10 years with the company. Another feature of its people management policies is the role exemplary employees play as mentors. They shoulder the responsibility of developing a cadre of managers who learn through experimentation, and pass on Toyota’s values by sharing personal experiences—a modern-day apprenticeship system.

When Toyota evaluates managers, it usually emphasizes process performance and learning over results. The company looks at how managers achieved their goals; how they handled issues; how they fostered organizational skills; and how they developed, motivated, and empowered people. The company uses five kinds of criteria, all of which are fuzzy and subjective. For instance, one category it employs is personal magnetism (jinbo), which captures how much trust and respect the manager has earned from others. Jinbo is a vague criterion that is open to interpretation and impossible to quantify; you can evaluate people on it only if you have worked closely with them. Another quintessentially Toyota measure of manager performance is persistence or resilience. The company sees this as part of its DNA, describing it as nebari tsuyosa, which translates, literally, as adhesive strength.”

An emphasis on teams over individuals (“Toyota places humans, not machines, at the centre of the company”)

But this is not a place for independent stars:

“By any standard, the company pays executives very little. In 2005, Toyota’s top executives earned only one-tenth as much as Ford’s. Their compensation was lower than that of their counterparts at the 10 largest automobile companies, save Honda. Toyota managers also rise through the hierarchy slowly: In 2006, the company’s executive vice presidents were on average 61 years old—close to the retirement age at many non-Japanese companies.

Toyota rarely weeds out underperformers, focusing instead on upgrading their capabilities. In fact, Toyota is still committed to long-term employment—as all Japanese companies once were. During the 1997 Asian financial crisis, for instance, Toyota’s Thailand operation weathered four straight years of losses with no job cuts. The order had come down from then president Hiroshi Okuda: “Cut all costs, but don’t touch any people.” In August 1998, Moody’s lowered Toyota’s credit rating from AAA to AA1, citing the guarantee of lifetime employment. Even though the downgrade increased Toyota’s interest payments by $220 million a year, company executives told the rating agency that it would not abandon its commitment.”

Toyota does have a strict hierarchy but it enables employees to push back against senior managers:

“Voicing contrarian opinions, exposing problems, not blindly following bosses’ orders – these are all permissible employee behaviours…Toyota’s communication system works because the organization is open to criticism. Employees feel safe, even empowered, to voice contrary opinions and contradict superiors. Each individual in Toyota is expected to act according to what he or she thinks is right. Every employee enjoys the prerogative to ignore the boss’s orders or not take them too seriously. Confronting your boss is acceptable; bringing bad news to the boss is encouraged; and ignoring the boss is often excused. In many of our interviews, employees told us how local operations had succeeded by refusing to obey orders or ignoring what headquarters had advised.”

A huge investment of time, money and energy in connecting, teaming and open communication

“Information flows freely up and down the hierarchy and across functional and seniority levels, extending outside the organization to suppliers, customers, and dealers… Senior sales people share information with dealers and learn about customer tastes by visiting them.

Even in a Toyota plant, executives deliver and receive information by going to the front lines in person. For instance, the head of the Takaoka and Tsutsumi plants, Takahiro Fujioka, is on the factory floor every day and joins workers for drinks in the evening (nomikai) sometimes as often as four times a week [of course, there are some major disadvantages in this approach too!].

The slogan “Let’s yokoten” is often heard in the corridors of Toyota. Yokoten, which is short for yokoni tenkaisuru, literally means unfold or open out sideways. At Toyota, communication is viral and knowledge is diffused in all directions. The company has found that one of the best ways to ensure good communications is to have everyone work together in a large room with no partitions (obeya). Project teams also post information on the walls of a dedicated situation room for everyone to see—a practice known as mieruka (visualization).

It’s an unwritten Toyota rule that employees must keep language simple when communicating with each other. When making presentations, they summarize background information, objectives, analysis, action plans, and expected results on a single sheet of paper.

You would be amazed to see how many people attend a meeting at Toyota even though most of them don’t participate in the discussions. The company assigns many more employees to offices in the field than rivals do, and its senior executives spend an inordinate amount of time visiting dealers. Toyota also uses a large number of multilingual coordinators—a post that Carlos Ghosn abolished at Nissan soon after he became CEO in 2001—to help break down barriers between its headquarters and international operations.

The company develops horizontal links between employees across functional and geographic boundaries, grouping them by specializations and year of entry; creates vertical relationships across hierarchies through teaching relationships and mentoring; and fosters informal ties by inviting employees to join committees (iinkai), self-organizing study groups (jishuken) and social clubs based on birthplaces, sports interests, hobbies, and so on., of which there are close to 20 in the company. This helps create a multilayered communication network at Toyota.”

All of these practices are supported by formal best practice sharing led by the Toyota Institute in Japan and the Global Knowledge Centre in the US.

In summary

I think the article(*) shows how Toyota’s success is largely due to the connections, relationships and interactions between people within and outside of the organisation, ie its social capital. Interestingly, all of this seems to have been achieved without the use of social media!: “Toyota’s networks are human rather than virtual”.

The article’s authors explain that they are often asked: “Tell me one thing I should learn from Toyota.”. They respond: “That misses the point. Emulating Toyota isn’t about copying any one practice; it’s about creating a culture. That takes time. It requires resources. And it isn’t easy.”

But wouldn’t it be worthwhile!

* Apologies to HBR for quoting so much of it - but it's great stuff.

Sunday 8 June 2008

Roll up, roll up

Dear HR bloggers,

Please let me have any further submissions for the next HR carnival on Wednesday 11th (you've got until about 2.00pm UK time that day to do so).

For those of you who are new to this, HR Wench has a good explanation of how to submit your post to the carnival on her blog.

There are no further guidelines - just send in whatever you think I should include. Some bloggers do have forms for their carnvials, and vet submissions to ensure they're suitable. I'm not intending to do this - I think one of the main attractions of the blogosphere is the broad range of peoples' opinions and perspectives that are available. So if you think something's relevant and you want to submit it, I don't think it matters whether I agree, it will still go in.

Dear everyone else,

If you want to get involved in this blog, you have the chance to input on what I blog about. Just comment (those of you reading my feeds will need to click through to the blog itself) on this post, and let me know what you'd like to see me post about.

Saturday 7 June 2008

Employee Communciation Summit

I've spent the last couple of days at Simply Communicate's Employee Communicate Summit.

Communication is a key element of HCM but the conference was largely about social media so I've posted on this event on my social business blog and you can also see my tweats on the event.

Thursday 5 June 2008

Josh Bersin guest post

Thanks Josh for your guest post.

Josh is the first of a number of bloggers that I've asked to contribute a post to my blog, firstly as something a bit different in way of celebration during the month leading up to the first anniversary of this blog on 2nd July. And this is also a result of a desire, following on from a number of posts on HR2.0, to make this blog a bit more social.

I'd like YOU to contribute to this too, particularly of you're a regular reader of this blog. I'd like to know what you'd like me to post on - for example, this might be an HR issue you're particularly interested in, and on which you'd like to know my opionion. Just comment to this post to let me know.

One more thing - do check out Bersin's website and Josh' insightful blog. Bersin produce some great research that I've commented on several times over the last year and which I think would be useful for any organisation attempting to develop or improve its HCM strategy and in developing the new disciplines of HR.

The New Disciplines of HR

Hello, Jon asked me to contribute a few high level thoughts for the upcoming HR Carnival. In support of this event, here are some thoughts on some of the big changes taking place in the world of HR, specifically focused on the new disciplines and skills needed to succeed in this important profession:

  • Understanding integrated talent management: it is no longer enough for HR specialists to focus in specific topical areas, such as compensation, diversity, compliance, benefits, performance management, coaching. Today's integrated talent management strategies demand a holistic view of people management. (For more information please review our talent management framework.)
  • Focusing on strategic competencies: all our research indicates that the highest value HR solutions focus on identifying strategic competencies, assessing such competencies, developing people to improve these competencies, and developing compensation and support systems around these competencies. If you do not understand the pivotal roles and the critical competencies (or capabilities as we call them) in these roles, none of these HR programs can be focused and strategic. Our Top 22 high-impact talent processes illustrate how powerful this focus can be.
  • Developing processes for talent planning: the biggest challenge we find in HR and talent management strategies today is the lack of detailed, integrated people planning data. Fewer than 5% of the organizations we research have an integrated view of the current and future talent gaps in their organizations. And a talent plan, as we describe it, goes far beyond a headcount plan - it must include skills, competencies, management behaviors, culture, and far more. We are working with several major organizations to help them build such integrated planning processes and the results are critically important.
  • Rethinking leadership development: by far the biggest focus area for the organizations we study is the need to rebuild and improve their leadership pipelines - and the two essential elements of this solution are leadership development and succession management. Again, fewer than 10% of the companies we talk with feel expert in these two areas. It is now important to build leadership development programs which are holistic, reach through all levels of the organization, are built on strategic leadership competencies, and are supported by the top business leaders.
  • Thinking like a business consultant: many books have been written on the HR business partner, performance consulting, and more. Again and again when I meet with HR leaders and managers I find a need for them to dive deeper and deeper into their own organization's business strategies and help line management implement talent solutions which encompass and improve strategic business plans.
  • Understanding the needs of multi-generational and global workers: finally, I find again and again that organizations now face significant challenges in the recruitment, development, and support of younger employees -- and in bridging the gaps in skills and styles between the generations. We have a fantastic opportunity to take advantage of our rapidly changing workforce, but only if we understand it and build programs specifically focused on meeting these new needs.

The HR profession is poised to become more strategic and important than ever - in today's slowing economy, increasingly tightened skills market, and changing demographics, our role is becoming more strategic than ever. Remember that everything we do in this profession should be focused on making our organizations' business strategies more effective - and if we build our HR processes to last, our organizations will see tremendous success.

(For more information, please feel free to email me directly or visit our website.)

Monday 2 June 2008

Coming up in June: engagement, Dubai, social media

June looks like it's going to be another interesting month.

I'm working with a couple of clients on areas connected to people strategy and engagement, including exploring themes around internal purposes and meaning (see my last few posts).

I'll be back in Dubai and Abu Dhabi from Sunday 8th to Tuesday 10th - do get in touch if you'd like to meet while I'm there.

And I'll be continuining my focus on HR2.0:

And look out for some special features on my blog leading up to its anniversary at the end of June:

  • Strategic HCM hosting the HR Carnival on 11th June

  • Posting on your topics that you suggest I write about

  • Guest posts

  • And maybe a few more surprises too.