Episode Transcript
Speaker 1 00:00:08 Good morning everyone. Today I'm gonna talk about a really important and fun topic, which we call falling in love with the problem. It's a topic that has come up in every one of our big reset meetings and there's actually a book by the same name, written by the Founder of Ways. It's all about what we do in HR and how we do it. And the context for me is this week I had the most wonderful trip to New York. It was the first week of spring there was very beautiful out. We visited a lot of companies. We launched the academy for one of the largest consumer goods companies in the world. It was really interesting and actually met with Ariana Huffington and a lot of other cool people. And one of the things that came up at the launch was we had around 300 or so HR people involved and I started to get questions and I got the question, what are the top three things to consider in an onboarding program?
Speaker 1 00:01:05 And then I got a question, what are the top three characteristics of great leaders? And then I got a question, what are the three things you need to remember to build a performance management program? And as I was thinking about the answer to those questions, I realized that we needed to take a big step back and address this issue of falling in love with the problem. Here's the big idea, and it's not a new idea, but it's a really important idea. Cause we talk a lot about systemic HR and the interrelationships between the different things we do. We are really redefining what HR is all about. I was really struck last week when I was talking to our friends at Accenture that in the layoff that they just are completing, which is roughly almost 150,000 people, they are laying off a very, very significant percentage of the HR department.
Speaker 1 00:01:56 I also noticed that the Amazon layoff had a significant amount of HR roles eliminated. I noticed that the Facebook layoff had a significant number of HR roles eliminated. And I realized what's been happening is our business friends have been telling us, you know, maybe we don't need you guys as much as you think we need you because you're the first people to go when we have a layoff. And that to me is symptomatic of a big problem, is that the human resources profession as defined, and I'm not the one who defined it, it just sort of defines itself, is still living in the past. And I'm not blaming anybody or criticizing anyone. I know how hard you guys all work. But if you go back to my experience with HR in the 1970s and the 1980s, we designed HR around the model of a 1980s IT department.
Speaker 1 00:02:51 We are service delivery professionals. You call us and we will answer your question. You call us and we will give you the the solution that you were looking for. We will show you where the onboarding program is. We will give you a leadership development program. We will give you a performance management program. We will give you a coaching program. In other words, we're kind of like a store with a lot of readymade products ready to flip one out and deliver it to our customer. As soon as they ask, if they ask for something new, like a new onboarding program or a new performance management program or a new leadership development program, we will happily whip one up with all of the best recipes we have and roll it out to you. And, and that is the way HR has been defined. We are the developer and deliverer of programs, programs around different aspects of the talent lifecycle, around recruiting, around development and so forth.
Speaker 1 00:03:50 Well, unfortunately, or maybe fortunately for us, that go-to-market model for HR is falling short because the problems companies are facing are much more systemic in nature and uh, therefore more complex and difficult to solve. And let me give you three or four examples and you'll understand what I mean by falling in love with the problem. So let's talk about that question about onboarding. Of course, onboarding is important. I don't need to even, I mean we don't even need to talk about that. It's obvious. But the question I asked the woman who asked me the question was, what problem are you trying to solve? Are you developing onboarding because you have a productivity problem? Are you developing onboarding because you have a performance problem? Are you developing onboarding because you have a retention problem? Are you trying to do onboarding for the first week, for the first month, for the first year, for the first two years?
Speaker 1 00:04:44 Those are questions that need to be asked as we fall in love with the problem before we fall in love with the solution. And the example I gave her was the example of the Bank America, what is now called the Bank of America ca, the academy at Bank of America, the folks of Bank of America have somewhere around 60,000 people working in the consumer bank. I happen to be a customer of theirs and I know what the consumer experience is like. And these are somewhat low level jobs, but very important tellers, branch managers, various roles in the branches and over the phone. And the, the financial success of those roles is measured by the revenue and profitability from the consumer bank. And it turns out the revenue and profitability from the consumer bank is very correlated to the balance of your account. The more money you have in the bank, the more services you buy, the more fees they collect.
Speaker 1 00:05:39 And that's kind of the way consumer banking works. So the folks that were running the bank, not the HR department, were looking at the numbers and they had realized that there was wide variations in bank balances and fees and profitability across these different branches in these different regions. And so they did a study and they identified a important fact, something that a lot of you probably will know at your gut, which is that the financial performance of a branch is very, very deeply correlated to the tenure of that branch. If you have a lot of new people in the branch, it doesn't perform very well, which means that the branches with high turnover are financial problems, which means that turnover is a problem. So you could say, well, okay, let's fix turnover. We know turnover has to do with pay. No, maybe it doesn't. Maybe turnover has to do with training.
Speaker 1 00:06:34 Yeah, kind of maybe turnover has to do with management. Yes, of course. Maybe turnover has to do with who we hired in the first place, where we hired them from, what the expectations were that they had when they came into the job. Maybe turnover has to do with the workload in the branch. You see where I'm going? These are complicated problems. And if you assume that an onboarding program is gonna fix this, you're not gonna be viewed as a very strategic contributor to your company. So it happened at Bank of America to continue the story, and we have a nice case study on this, is the leader who was responsible for this project determined this issue of tenure. And then he said, well, let's just dig around, let, let's get dirtier with the problem. Let's dig around and look at why we have certain tenure problems or turnover problems in different branches.
Speaker 1 00:07:24 And what he found was sort of a bunch of problems, a whole bunch of them. The first was that the recruiting was taking place locally. So each local recruiting group or manager or recruiter was doing their own sourcing and their own recruiting. And they were recruiting people one at a time. Some were going to universities, some were going to colleges, some were doing events, some were doing other things. And once people joined these branches, they were joining as one person at a time. In case you don't realize it, it's a very complicated job to suddenly become a branch teller. You have to learn all about banking, the systems and the customer service and many, many compliance things and all sorts of stuff. And they don't pay a lot of money for these jobs. So getting the right person and explaining what the job is in the role in your career at Bank of America is a big part of getting the right people there.
Speaker 1 00:08:10 Then they found out that once you joined the bank, there was all sorts of very complex training. Of course you have to learn all the things that been involved in your job and in the bank and in the industry. And that took a long time. And that was run by a different group. And then of course there was the issue of what happens when you get a little bit tenured and you're ready for a promotion, you've been there for a year or two. Is there an upward path? Maybe not, maybe the branch manager, somebody who's been there for 10 or 15 years and he or she's not leaving their job. So what is the career path for these people? And he realized that there were a whole chain of issues that were contributing to this thing that looked like a problem of onboarding, but was manifesting itself as a problem of tenure and turnover and resulting in a problem of profit and revenue.
Speaker 1 00:08:57 And so what they basically ended up doing is by taking this systemic problem solving approach, as they said, well, we gotta look at all of this stuff. We've gotta hire people in cohorts. We've gotta get our sourcing strategies figured out so we know where to get the right people. We need to look at our employment brand. We have to think about the onboarding. And by the way, one of the things they've found is that the onboarding in the consumer branch is a periodic thing. There's the first week of onboarding that requires a certain amount of attention. Then there's the first month, then there's the first six months, then there's the first year. And we need a different groups in the service delivery center to address these different journeys that people were going through. And by the way, the second and third year you're working in the branch, you have completely different demands and issues and interests and maybe people need to move around and we need to have a mobility program for them.
Speaker 1 00:09:47 And then when you have a kid or you get married, you have another set of issues with your job and you need more flexibility. So we need another group for that. So they ended up at the end of all of this, redesigning the service delivery groups, the wake employees were surveyed to understand what their issues were. Obviously they're recruiting the onboarding and everything. That is an example of falling in love with the problem and using your rate experience and your cross domain groups in HR to solve them. Second example I want to give is the one that we all deal with and hate performance management. So a very well-known large tech company called me a year or two ago. You know who they are, I'm not gonna mention their name. And they said, we, we, we've gotta redesign our performance management program. Would you give me your tips?
Speaker 1 00:10:36 Same kind of question as before. What are the three things we need to know? Should we have a three point scale or a five point scale? Should we have performance management monthly, quarterly, or annually, et cetera, et cetera, et should we do development planning during the process or separately for the process? What is your relationship bet between pay and performance and how do we think about that? So in listening to all these questions and I'm thinking, there's no way I'm gonna just answer them. They're too difficult. And I said, well, before we get into all of that, what is the problem you are trying to solve in the performance management process? And what do you think your senior leader's philosophy is of performance? How do they define performance? I mean, is it innovation? Is it execution? Is it teamwork? Is it revenue? Is it profit?
Speaker 1 00:11:25 And they all looked at each other like, we don't know. We never asked those questions. I mean, nobody even talked about those things. So sure enough, I didn't hear back from them for six months or a year. I know that. I know they needed to think about this. They rolled out this new thing, this new process. They bought a piece of software, they developed a bunch of software, they done a huge amount of work. It ended up coming out in the Wall Street Journal and the new process, which they spent a lot of time building to replace the old one, one, which was about 15 years old or maybe 10 turned out to be not so good. And I think it was an example of not digging into the problem. And we do this all the time in our company. You can do knee-jerk reactions to everything that happens in hr, but 90% of the time you're gonna be chasing the wrong issue.
Speaker 1 00:12:11 And until you dig in and understand what the problem is, you're never gonna know if it's a management problem, a training problem, an organization design problem, a pay problem, maybe it's a diversity inclusion and equity problem, et cetera. And that is the essence of what we have to do. That is the essence of your job. That is the essence of systemic hr. And that is the essence of why a bunch of HR people get laid off during a downturn. If you are viewed as the group that bought Workday or whatever you bought and you're rolling it out and forcing everybody to use it and we're not sure what we're gonna get out of it, you're not gonna be everybody's best friend. By the way. That goes for tech too. Just because you like Workday or you like load or you like eightfold or you like whatever tool you just found.
Speaker 1 00:13:01 If you can't frame that technology in the context of a problem that everybody knows we have that is in the interest of the company and the employees to fix, you're gonna have a hard time rolling it out cuz they're gonna see it as one more distraction. And so this idea of falling in love with the problem is existential to what's going on in hr. Now, what does that mean for you And for the HR function, first of all, it means you need to be a good problem solver. You need to learn how to be a consultant. We have an entire course on that in the jba. It's the most popular course we have, and it's about a four hour program and I really recommend you take it and you have all your employees take it. The second is you gotta decide where to prioritize. There's a lot of problems in every company.
Speaker 1 00:13:48 Every company has problems with productivity or low revenue per group or turnover or or quality or whatever it may be. So you need to work in a senior leadership team to focus your attention on the big problems that matter to the company today. By the way, building a skills taxonomy is not a problem. That is a project that we decided to do because we think it's important. Does the company think it's important? Is there a reason we're doing it? Is there a problem we're trying to solve? Even that big issue, this whole hairball of becoming a skills-based organization is irrelevant if it isn't focused on one or two or three big significant problems that the company's trying to address. And as I talked about in the podcast I did a week or two ago, companies can't do a hundred things. Great companies are good at a few things.
Speaker 1 00:14:41 And if you're not working on the problem areas that the CEO and the senior leadership know are existential problems, you could be distracting people. Now, I'm not saying that HR isn't complicated and there's many, many things you have to do. What we're learning about in the systemic HR research is that you gotta do that too. You gotta keep the lights on those 1980s. IT guys gotta keep the mainframes running. They gotta do the backups, they have to have an uninterruptable power supply. There's a bunch of stuff they had in those old data processing departments that nobody knew about and nobody cared about because they kept the company running. And we have a lot of that too. And that work needs to be put into a group that's important, it takes care of it, but let's shield the rest of the employees from that work and just reflect on the fact that that's not what we're gonna get promoted for.
Speaker 1 00:15:34 Doing that is the core basic kind of zero based budgeting part of our job that we have to do when we come to the problem of solving the issue or dressing the solutions, that's where we have to be systemic in our design. If I think about the big reset meetings we've been having, we just finished a group of these and we had one on attraction and retention. We had one on org design. We had one on diversity inclusion, equity belonging, including pay equity by the way, which is a huge topic. We had one on skills and careers and employee growth, and we had another one on the function and structure and technologies of hr. Every single one of them came to the same conclusion. This is partly a management problem, <laugh>, it's partly a culture problem. It's partly a problem of recruitment, selection and assessment.
Speaker 1 00:16:22 It's partly a problem of rewards and pay and value proposition to employees. And it's partly a problem of infrastructure and productivity and ease of use and data and, and that is true in every single problem we get engaged in. And so as you ask yourself questions like what can we do to make the performance management process better, by the way, some new research on that is coming out this week. 65% of employees think the performance management process is a complete waste of time. And that group thinks that HR should not be trusted. So not only are we sometimes delivering stuff they don't wanna do or they don't see value in, but then they're blaming us for it and for wasting their time. And that's another reason <laugh>, to take this so seriously. A couple more things just to reflect on this issue. Ultimately, the redefinition of HR as a problem solving organization does land on the lap of the C H R O.
Speaker 1 00:17:23 And I know most of you would like nothing better than to be the most valued problem solvers in your company. I know that's the way you're wired, but your C H R O has to also believe that he or she has to position the HR function as a consulting problem solving, ready, reliable, trusted partner with every major business business initiative in the company. And that means that the top of the HR function has to really get to know what the business is all about. One of the things I find is that the most systemic problem-oriented HR groups are oftentimes led by CHROs who didn't come from hr. Now, I'm not recommending that every single company, but it turns out when you rotate a finance professional into HR or someone who came from one of the business leadership roles, which by the way is probably a better fit than a lawyer or a finance person, they come in, they look around at all the stuff we're doing, they don't understand it, and they suddenly try to reframe it around the issues that they know are important.
Speaker 1 00:18:30 And usually they don't understand how complicated and how much sort of science there is in hr, but they push us in this direction. And so the next time you're part of a team that's designing a program for this data or the other thing, or you're selecting a new system or you're in a big group doing a redesign, some part of the company or some part of some program, take an hour and tell everybody, we're gonna take a step backwards and let's remind ourselves what is the problem we're trying to solve? What is the business outcome that will be impacted by that problem? How are we going to measure the success? By the way, you're not gonna measure the success by adoption. Adoption is not a measure of success. You're gonna measure it through a business return. You're gonna measure it through the utility of the program that you created, or maybe even the financial ROI measured in terms of the business improvement, not necessarily the ROI on the HR investment alone.
Speaker 1 00:19:29 I guess one more point on this issue, the real underlying issue behind this redefinition of HR is the skills of hr. And as we've learned in our academy and as we've addressed in our academy, we have done a really good job of training ourselves to be domain specialists. We have recruiters, we have learning and development people, we have people who do compensation. We have d e I experts, we have data analysts, we have tech people, we have employee experience people. By the way, employee experience is kind of a a multifaceted area. We have a leadership development person, an IO psychologist. Each one of these people is deeply trained on the vertical part of the T in their career, but they don't necessarily know or haven't spent a lot of time on the horizontal part of the T, the related disciplines of HR that matter. And that's kind of like a carpenter knowing how to use a drill, but not knowing how to use a saw.
Speaker 1 00:20:28 If you're a carpenter, your ultimate job is to build stuff, not to hammer nails or saw wood. I mean, you do have to know how to do that. You have to know how to do a lot of things, but those are the trades of your craft. Your craft is really to solve people related problems. And the the more you do that, the more you realize that you as an individual have to have cross domain skills. So I would encourage you to think about that and bring programs like our academy to you as an individual and to your company because that will ultimately be the best way to become more systemic in your solutions, to make this transition out of the old service delivery model into the true area. We wanna be individuals and partners with our company to address some of the biggest issues we have. So it was a really wonderful trip to New York. For those of you that I met with, I wanna thank you for your time and the generosity of your efforts of coming to talk to us about the things we were meeting about. And I wanna encourage you to just remember this issue of taking a step back, bending an extra hour on the design or implementation project that you're currently engaged in, making sure you really know at the sea level what is the problem we're trying to solve. Thank
Speaker 0 00:21:52 You.
