June / July 2016 Reading

Playing blogging catchup ... some notes from books I was reading last year...

Beyond HR: The New Science of Human Capital by John Boudreaux and Peter Ramstad

Written in 2007 ..from the preface “This book describes our vision of a future where the issues of talent and how it is organised get the attention they deserve, the kind of deep and logical attention worthy of a resource that’s vital to strategic success.”

In the book the authors argue for a new decision science for HR and provide frameworks to guide its introduction.  They note that rather than having a clear focus on business strategy outcomes the HR function is instead focussed on score cards that focus on costs and activities… HR cost per unit of revenue, ratio of total headcount to HR headcount etc

They make the interesting observation that in the early 200’s lots of organisations adopted performance management systems that were based on stack ranking ( 20% top performers, 70% middle, 10% low).  What could the strategic or economic shift be that caused all of these companies to adopt the same approach?  Answer of course is that it was actually the publication of Jack Welch’s book on management at GE which included this approach.  GE was successful, we want to be successful so we should have the same performance management approach seemed to be what happened.  What was it though about finance and marketing departments that meant they weren’t expected to adopt GE’s approach in those disciplines - why the focus on HR.  Could it be down to a lack of frameworks in HR for determining how decisions like this should be taken?  

I also particularly liked when they suggested that organisations should ask themselves how worried they would be if their competitors had a copy of the company's HR strategy?  How would that feel compared to them having a copy of the finance or marketing strategy?   If you aren't as concerned about the HR strategy being known does that say something about how strategic you view it to be?

Human Resources in the 21st Century edited by Marc Effron, Robert Gandossy and Marshall Goldsmith

The book is a collection of chapters by different authors drawn from the editors' contact lists.   The theme is around how HR will change as it comes to terms with forces that are driving change across the corporate world.  Issues of speed, technology, complexity, globalisation, demographics etc all substantial changes to the dynamics of organisations.  How will HR evolve and morph in the 21st Century.  Includes a chapter by IBM’s Randy MacDonald, as I read more books in this area it is interesting how often I come across case studies/quotes/chapters relating to IBM.

Is this the End of HR? by Stan Davis p 240   Talks about how in the mid 1960s industrial relations was starting to morph into personnel.  The shift in wording linking to a more enlightened era for company’s approaches to the people who worked there.  “Industrial Relations” had been the theme since unions were formed around the 1920’s-1930’s.   From then through to the 60’s the concern of firms was on their “labour relations”.  In the 60’s we see emergence of a focus both on the administration of employees entitlements - pensions, benefits etc and a focus on training and development for the staff.  The personnel label lasts through to the 1980’s where we see emergence of human relations.  Here again the name change reflects a shift in attitude.  Underlying philosophy now recognises that employees are very important to the success of an organisation.  “Trust, cooperation, and Theory Y replaced confrontation, negotiation, and Theory X."

How to Manage by Jo Owen

I was asked to read this book as part of the Chartered Management Institute’s Management Book of the Year award.  I liked it and was pleased to see it make it onto the shortlist for the Practical Manager category.

The book covers 3 areas of management, providing sensible advice in each.

• Rational Management concerns the skills to deal with problems, tasks and money
• Emotional Management concerns the skills to deal with people
• Political Management concerns how you acquire the power to make things happen

The author’s thesis is that all three are needed for success and that all can be developed.  Concepts are presented but the clear focus is on the practical challenges faced by managers and what steps can be taken in response, this is particularly true in the section on political management.   The writing is clear, succinct and refreshingly candid, which means that a lot of valuable advice and guidance is fitted into the text.  Relevant mini case studies are included to illustrate key points and demonstrate how the concepts can be applied.   I would certainly recommend this book to anyone starting out in management and to anyone with experience of the role who wanted to take a step back and consider how to further develop their capabilities.

One sentence I particularly liked on the importance of keeping things simple ... “The best strategic thinking is very simple: clever people make things complicated; really clever people make things simple.”

Notes from "Managing & Leading Through Challenging Times" - part 3 of 4

Third installment of my notes from the recent Chartered management Institute's conference (part 1, part 2).  In this episode we will meet Prof Lord Eatwell, have lunch and then hear from Lord Bilimoria.

Prof Lord Eatwell is the chief economist for the CMI and is responsible, amongst other things, for the production of their "Economic Outlook".  He discussed the second edition of this publication which is based on survey responses from the CMI membership.  During Aug/Sept 15,000 members were invited to respond and the report brings together the responses from those who took part.

Couple of points of interest that I noted down.  A year ago there was a strong sense of commitment from managers to trying to preserving the workforce and retain investment in skills growth.  Twelve months later the continued recession has had an impact and managers are being forced into making redundancies and have reduced investment in skills. On the positive side, though things are bad, the perception is that we are getting through.  A year ago the responders thought that the recession would last for 2 years.  This time they are expecting it to last another year or so.

Next we had lunch which provided an opportunity to talk with other delegates.  On hearing I had worked for IBM for over 21 years one person amusingly remarked "but I didn't think people like you were supposed to exist anymore".  As ever things aren't quite as cut and dried as they may seem.  We hear a lot of attention on changes in patterns of careers with people moving between companies more than they did before but of course there are still those who will remain with one company for many years.

Lord Bilimoria (Chairman of Cobra Beer) was first up after lunch and spoke about "Leading your business through challenging times".  He spoke about the history of Cobra Beer from its creation through to where it is today working with Molson Coors.   He provided lots of examples and insights but for me the thing that shone through most was the need to be responsive to change.   He talked about some key moments where external events had impacted his business and had the potential to destroy much of what they had built.  There would have been no way to forecast these changes and so the ability of the organisation to adapt to the new circumstances was critical to their survival.  This chimed well with some of Brent Hoberman's comments in the morning.  In another nice link to an earlier talk he listed Molsen Coors' definition of what makes for an extraordinary brand :-

1. Tell a compelling story based on an undeniable brand truth
2. Live by & refuse to compromise on your principles
3. Be instantly recognisable
4. Provide a unique, relevant and consistent experience
5. Inspire people to become loyal brand champions
6. Deliver enduring extraordinary profits

Notes from "Managing & Leading Through Challenging Times" - part 2 of 4

Part 2 of my notes from this year's Chartered Management Institute Conference covering talks by Rita Clifton and Brent Hoberman.  In part 1 I talked about the adresses from Sir David Howard and Ruth Spellman.

Rita Clifton is the Chariman of Interbrand and was the first of the non CMI speakers to take to the stage.   Her topic was "How to build a world class brand".

She starting out by talking about the importance of a good brand and to help convince us of this told us that Warren Buffet's investment criteria include (in increasing order of importance) a good balance sheet, the management team and the brand. (Note - since attending the conference I happened to see a TV programme on Warren Buffet and they also listed that in order for them to invest the business needed to be something they could understand and to have a sustainable competitive advantage)

She referred disparagingly to companies that were just interested in "logslogs" ie logos and slogans and not in understanding what the brand stood for and ensuring that the brand promise is delivered consistently across the organisation.  If your brand is all about excellent customer service it would be a good idea to make sure this is communicated to the people who answer the phones.  Ultimately, what makes brands work isn't the visible bit.

She offered a definition that I liked ..."A brand is a central organising principle, symbolized in a trade mark, which if used correctly creates value".

She noted that of the top 100 brands ("by value" but I'm not sure how that is assessed) 8 come from France, 11 from Germany, America racks up 51 but UK only manages 4.  ( During Q&A someone asked which ones they were and they are ... BP, HSBC, Smirnoff and Burberry).

As an IBM employee it was nice to see us get a mention as the second most valuable brand.  Significant risers up the league table in 2009 include Google, Amazon and Zara.  Fallers included Morgan Stanley, Amex, Citi, UBS (spotted a pattern yet?) and Harley Davidson.

Made the interesting comment that one of the banks that has survived better than most is Goldman Sachs which has a clear brand and she said was also the one that had Warren Buffet as an investor.

For the final part of her talk she turned to the question of how we could think of ourselves as a brand.  To do this successfully we need to get clarity of what we stand for and how this makes us different.  Next we need to ensure that we are consistent across everything that we do - internal has to match how we portray ourselves externally.  This is an interesting comment as I am sure that many people see themselves as different in their work environment to how they behave at home/with friends.  With the increased emergence of social networking sites that bring together people from different aspects of our lives into one "place" I think this issue of behaving with consistency and integrity will become more important.

After a break for coffee we had Brent Hoberman - co-founder of Lastminute.com talk about Entrepreneurship and innovation in difficult times.  The original programme had listed Martha Lane Fox but she had been called away elsewhere.  Intriguingly the switch had happened early enough that the printed programme showed Brent as the speaker but the website still showed (and indeed still shows) Martha.

The talk was more a series of interesting thoughts than a narrative flow and some of the bits that jumped out for me were....

Don't over intellectualise - if in advance they had known how hard it was going to be to get lastminute.com running they could well have argued themselves into not doing it.  Sometimes you've got to "jump off cliffs and build your wings on the way down."

React as circumstance change ( a theme that was also called out by Lord Bilimoria later in the day) - He would receive basic sales data updates every 15 minutes and more detailed info every hour !  Key thing is that whilst reports are good what matters is how you react to the data.

Make each mistake once

Take decisions quickly - if you get it wrong you can change (see reacting as circumstances change...) very easy to not spot the potentially huge cost of failing to take a decision

Understand and communicate the behaviours you want from your employees

Put your smartest technical folks on the most boring and repetitive tasks - they will find ways to automate them away.

Be courageous - say what you think, take smart risks, question decisions that are inconsistent with company's values.

Constantly recruit the smartest people - means you can run company less formally, in buzz word speak .. "increase the talent density".

If you find that the company / department/ ... can only manage to handle 3 things at once don't restrict what you do to 3 but rather figure out what the inhibitors are that are stopping you from getting on with 20 things ar a time.

Keep changing ... as Benjamin Franklin put it "When you're finished changing, you're finished."