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Blog: The Business of Management October 2008 Archive
 

October 31st, 2008

Boss Basics: Dealing With Departures

I’ve left a lot of jobs over the course of my career, and I’ve had a lot of people I’ve supervised leave me. If there is one thing I’m found from all these departures, it’s this: Quitting a job is almost always awkward and difficult for all involved.

Advertising Age, a sister publication of Workforce Management, tackled this issue recently with an interesting story on “The Right Way to Tell Your Employer You’re Leaving.” It gave some great “tips for leaving [your job] without severing your relationships,” and while that’s important for employees, it brings up a different question for the readers of this blog: How do managers and executives successfully deal with departures of the people who work for them?

It’s a relevant question because how an organization deals with departing employees sends a powerful message to the rest of the workforce about how they can expect to be dealt with when the time comes for them to walk out the door. And if workers don’t believe that their employer will treat them as well on their last day of work as they do on the first day on the job, well, you can kiss your employee engagement scores goodbye.

So, here are some Business of Management Boss Basics you should consider when it comes to employees and dealing with their inevitable departure:

• Make sure you’re never surprised by a departure. There are probably always going to be times when someone’s departure is like a bolt from the blue, but a critical part of your role as a manager is to stay in close contact with your staff to know how they feel, what they’re doing and who might be likely to depart. If you find that you are often caught off guard when people leave, you just aren’t as engaged with them as you should be.

• Always work on your “What if?” planning. Managers always need to be thinking three or four steps down the road, always asking themselves, “What if?” It means having a contingency plan in place for what you might do if someone decides to leave. Just like a football team knows who will step in at quarterback if the starter and backup both get hurt, you need to have plans, if not on paper, then at least in your head, for what you will do— no matter who might leave your staff. Succession planning is part of this, of course, but this goes beyond that, and it basically means having done some thinking on how to replace, or cover for, every single member of your staff.

• Focus your compensation and rewards on your “can’t lose” people. You want to keep everyone on your staff, but face it: There are some people who are so critical to what you do that you just can’t afford to lose them. So make sure you treat them that way. Can only give limited raises this year? Well, make sure you find a way to get the lion’s share of the raise pool to the “can’t lose” group. Yes, you want to reward everyone, but if you have to make tough choices, center those choices around keeping the “can’t lose” crowd happy, because you would much rather lose a good but nonessential person than the employee who is helping to hold everything together.

• Think through how you will handle departures before people depart. I’ve worked at places where managers were schizophrenic in how they dealt with departures. One person resigning had to pack up and be escorted off the premises within the hour. The next week, another person was allowed to give a two-week notice and had plenty of time to wrap things up and say goodbye. Others on the staff wondered—rightly—why these situations were handled so differently. No one had a good answer. Figure out how you are going to handle departures and let people know what the policy is. If you have to change the policy for some reason, even for a special case, have the decency to let the rest of the staff know why.

My experience is that departures are always tough, even when someone is leaving for a better opportunity. Too many managers don’t think of them as a management opportunity that needs close attention, so they handle them badly, if they handle them much at all.

Managing is easy when times are good, the organization is hiring and everything is positive. Any idiot with a modicum of brain activity can manage reasonably well under those circumstances. The real test of management skill is dealing with the tough stuff that gets tossed on your plate, and successfully handling the ebb and flow of workers is part of that.

So make sure you handle departures with as much time and energy as you give arrivals. It will help build a culture of dignity and caring in your workplace. More important, it will tell everyone in your workforce that they are as important to you on the day they depart as they are on the day they begin. And that is a powerful message that makes for a workforce that everyone will want to be a part of.


October 27th, 2008

From the Department of Silly Titles: Chief People Officer

Want to know how little respect HR gets? So little that a Sunday New York Times story about job-title inflation takes a prominent and pointed shot at HR and its “chief people officers” the first chance it gets.

The premise of the story is that everyone these days gets some sort of overinflated title to call themselves, and here’s the first quote: “Now you find instead of the head of human resources, it’s chief people officer,” Steven E. Gross, the global rewards consulting leader at Mercer, told the newspaper. “The role hasn’t changed. There is this upward pressure for everybody to have bigger titles.”

And this is the funny thing: The New York Times story isn’t about HR, or chief people officers, at all. No, the business story is actually titled “Maybe everyone will be a CEO,” yet the first real example and the first quote in the Times story takes a prominent and dead-on shot at those who lead HR departments. And why is that?

Here’s a wild guess: Maybe it’s because the title chief people officer is not only incredibly pretentious but also vague and terribly overdone. Plus, it’s laugh-out-loud nutty—like something from the “Department of Silly Titles” in a Monty Python skit.

HR always seems to be a punching bag in the business world, and surveys and research done year after year always seem to highlight the shortcomings of the human resources profession. Frankly, I would be getting awfully tired of it if I were working in HR, and I would be really sick of it if I saw myself as a high-powered human resources executive who was deeply focused on business strategy and driving the organization’s bottom line.

This is where the Society for Human Resource Management should step in. Rather than wasting big chunks of money on vague image advertising (with no discernible ROI) during the presidential debates, SHRM should work on improving the image of HR professionals by focusing on their skills and expertise as strategic businesspeople. For example, maybe the “I Am SHRM” print ad campaign could be changed to something like “I Am a Strategic Business Partner.”

Yes, that may sound a little stupid, but certainly no more so than “chief people officer.” And if SHRM were to do it right and spend anywhere near the many millions that have been pumped into the SHRM ads broadcast during the debates, it might find that HR people get a little more respect. Plus, it may make newspapers like The New York Times think twice before taking gratuitous shots in print that do nothing more than make HR executives the bad example in yet another business story.

One more suggestion while I’m here giving advice: Get rid of “chief people officer” as a title. No one wants to be the punch line to a Monty Python sketch.


October 24th, 2008

Managing in a Turbulent Economy

With each passing day that the stock market gyrates wildly on some new bit of negative economic news, it becomes increasingly clear that we’re going to be dealing with an extremely tough business environment for some time to come.

This isn’t a media-created crisis as some shallow thinkers would have you believe, but the product of a lot of suspect decisions made for a number of years that are now showing their true impact on the global economy. And for everyone who manages talent and worries about the impact on people, it means we are in for a long, bumpy ride.

“This is an equal-opportunity recession,” says Cathy Paige, a vice president at temporary staffing firm Manpower, which has seen softening demand from clients. “Everyone is feeling it.” Paige was quoted in a recent BusinessWeek story headlined “The Coming Pink Slip Epidemic.” 

It’s a sobering read.

“As nervous lenders cower and credit contracts,” the story says, “virtually every industry is likely to be scathed in the widely predicted downturn starting this autumn. Nearly every business relies on credit to operate—just as they need customers to have spending power.” And, it continues with this prediction: “With lending trimmed, and companies and consumers tightening their belts, jobs will be cut across broad swaths of the economy, from the tech sector to investment banking, and from manufacturing to soft drinks.”

I’ve been managing people for a long time and have seen a number of economic ups and downs, but I can’t even recall as gloomy and difficult a period as we are now in. Managing talent and helping to keep your organization going through all of this will take skill and patience, but some experience and perspective would help too.

Here’s one way to get some of that needed perspective: from a breakfast seminar next week in New York titled “Managing Talent in a Turbulent Economy.” 

Workforce Management and Crain’s New York Business (one of our sister publications) will be hosting the breakfast event from 8-10:30 a.m. at the Roosevelt Hotel in Manhattan.

We have a great keynote speaker—Kevin Ryan, the founder and former CEO of global Internet advertising company DoubleClick will talk about how you manage talent through the ups and downs of various economic cycles. In addition, I will be moderating a panel discussion with three executives who have also had to deal with managing people through difficult times:

• Renee Russell, the executive director for global talent management at Avon Products. She had to work through a period when Avon completely changed its business model and turned the company upside down.

• Ron Thomas, the former vice president of organization development at Martha Stewart Living Omnimedia. Ron had a challenge that very few managers have had to face: how to manage a workforce that is rattled when the company’s founder and guiding presence gets sent off to jail.

• Janet Hanson, founder of 85 Broads, a global network community of 18,000 women  who want to leverage one another’s connections, relationships and intellectual capital to increase the ROI on their education and their careers. As a former managing director at Lehman Brothers, Janet has firsthand experience with Wall Street and can speak to the turmoil that is going on there today.

Believe it or not, this is an event that was planned long before the current impact of the economic downturn became clear. If you are in New York and want to hear from some seasoned executives who have dealt firsthand with managing through tough times and lived to tell about it, sign up now for this October 29 event. I know they will have some very insightful observations and strategies for helping to get through the downturn ahead.


October 22nd, 2008

A Bad Trend for Workers Who Smoke

Let me be clear about this: I don’t smoke, I have never smoked, and I have serious questions about people who, in this day and age, continue to smoke despite years of warnings about all the bad things that tobacco does to your body.

But I don’t agree with the misguided notion that passive smoke is some sort of crime against humanity. As a nonsmoker, I don’t like smoke in my face but I also don’t think it’s fair that our nanny society seems to want to treat smokers like they’re lepers by making it harder for them to find a place to puff.

I find the over-the-top anti-smoking zealots to be far worse for my health than any passive smoke I might run into. Their holier-than-thou rhetoric and action increases my blood pressure, and it fails to recognize the basic principle of dealing with humans: We’re human. Stopping smoking is tough for even the most motivated person to follow through with, and I am reminded of my winters in Great Falls, Montana, when the smokers congregated for a puff outside the back door of the newspaper in 15-below temperatures. Think they would be out there freezing to death if quitting was all that easy?

The push to get smokers to quit has changed over the years, and the newest trick is also the most insidious: Don’t hire smokers. We’ve reported on this in Workforce Management, but what started with a trickle of organizations taking this approach is now spreading, as this story from The Cincinnati Enquirer seems to indicate.

Although most companies still try to use smoking-cessation programs as the way to get employees healthier, Cincinnati-based USI, an insurance and financial services company, now tests new employees when they’re hired. If you smoke and show no signs of trying to stop, you don’t get the job.

“We decided not to hire smokers because they add additional expense to our health plan and our ongoing operation,” said Dennis Curran, chief human resources officer for USI’s Midwestern region.

The Enquirer story points to a USI job candidate by the name of Jamie Holleman. She had applied for a commercial lines account manager position, “interviewed in March, then withdrew as a job candidate after it became clear that the smoking policy would be an obstacle. But the company called again in July and asked if she would enter a smoking-cessation class. She now takes weekly classes at St. Luke Hospital. ‘I was shocked,’ Holleman said of her reaction when she first heard USI’s position. ‘But I had actually been talking to a friend of mine about quitting.’ ”

Here’s an interesting side element to this story: Although you can deny a smoker a job in Cincinnati, it’s illegal to do so across the Ohio River in the tobacco-growing commonwealth of Kentucky.

The Bluegrass State considers smokers to be a protected class and according to The Enquirer, “a law on the books for several decades in Kentucky, one of the nation’s leading tobacco-growing states, says it would be illegal for an employer ‘to require as a condition of employment that any employee or applicant for employment abstain from smoking or using tobacco products outside the course of employment, as long as the person complies with any workplace policy concerning smoking.’ ”

The story also points to another issue in this debate: that the laws about using workplace hiring policies to regulate behavior such as smoking are evolving. “Courts haven’t quite figured out what to do with it,” Justin Flamm, a partner at Taft, Stettinius & Hollister, told the newspaper.

If you’re like me and feel that the anti-smoking zealots have run amok and gone too far, perhaps the better approach is the one most sensible companies follow: Encourage workers to do whatever they can to take better care of their health, whether it be losing weight, exercising more or giving up the smoking habit.

Some companies have even gone so far as to offer financial encouragement to workers who try to get healthier. That’s certainly a more sensible approach and one that is more likely to work. In my many years of management experience, policies that punish people for all-too-human behavior are doomed to fail. That’s something I wish the anti-smoking zealots would remember. You get more positive action by encouraging people to change their ways than you do by wasting brain cells in pursuit of new ways to punish them.


October 20th, 2008

Stupid Management Tricks: Slashing Staff

I always want to give credit where credit is due, so I would be remiss if I didn’t credit CBS late-night talk show host David Letterman as the inspiration for my latest Business of Management blog feature—Stupid Management Tricks.

Although Letterman may have stupid human and pet tricks on his show, they’re generally lighthearted and a good laugh for everyone. Stupid Management Tricks, on the other hand, have the opposite effect. They’re the result of brain-dead management practices that are shortsighted and regressive, and of course, are only laughable in the sense that no one in their right mind could possibly think they would work.

So, here’s the first of what I promise will be many tales of Stupid Management Tricks: slashing staff to improve company performance.

Yahoo, a company that seems to be redefining the notion of brain-dead management, has been gearing up for big staff cutbacks for quite some time. In fact, the company even brought in consultants Bain & Co. to help “improve and accelerate our performance,” according to CEO Jerry Yang.

This is code, of course, for slashing staff, and Bain & Co. has a reputation for being particularly effective at this. In fact, the consultancy earned the nicknamed the “TaliBain” for the work they did in this regard at Intel, and I speculated here that Yahoo brought in Bain & Co. because Yahoo executives didn’t have the cojones to buck up and do what they knew needed to be done—i.e., get rid of a chunk of people.

And that’s why today’s Wall Street Journal story on Yahoo getting ready to do some significant cost cutting “to try to reverse its fortunes from the inside” isn’t particularly surprising. What is surprising is the notion that big staff cutbacks (rumored to be at least 1,000 out of a workforce of 14,300) will actually help the company “accelerate our performance,” as Yang previously put it.

Marianne Wolk, an analyst with Susquehanna Financial Group who was quoted by the Journal, said that a 10 to 15 percent budget cutback would be sensible for Yahoo given the current economic climate.

 “But she added that such moves would do little to address the company’s bigger problems such as an exodus of employees and a broader ‘graphical advertising business that appears to be in freefall,’ ” the Journal story said.

In other words, Yahoo’s problems aren’t really about staffing, but rather, about key employees the company wanted to keep, but who are bailing out because the basic business model is melting down.

So what’s the Stupid Management Trick here? It’s the one that they caution you about on the first day of business school: thinking you can cut your way to success.

Budget and staff cuts CAN work, but only for a limited time and for a specific purpose. Cuts can certainly get a business over a short-term hump, but too many organizations do it as a matter of course and fall back on it whenever they get in a bind. Circuit City tried to go down this road by getting rid if its most experienced and highest-paid floor workers, and all that did was speed up the pace of the company’s demise, which in turn led to the board firing the CEO who pushed that plan and now may end up putting the electronics retailer in bankruptcy court.

Slashing staff (or reorganizing, as some executives like to call it) is one of those Stupid Management Tricks you’re always told to avoid, but all too many managers embrace as the answer to their problems. It’s not, of course. It’s simply rearranging the deck chairs on the sinking ship. That’s what makes it so stupid. And mark my words: In the end, all the cutbacks and layoffs in the world won’t help Yahoo in the slightest



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