Episode Transcript
Speaker 1 00:00:07 Hello everybody. This week I want to talk about three quick topics. They're all deep, but I'll relatively quickly. The first is a big study that came out from IBM and Chief about the role of women in business. The second is I want to update you on chat, G B T and an even bigger story about to unfold about the role of ai. And the third thing I wanna talk about is this conversation about systemic hr and explain to you what it is and about the research we're doing and enlist your support. So first of all, relative to women on March 1st, IBM in chief announced the results of a, a survey of 2,500 companies in a lot of interviews. And they essentially found three things. First of all, most people who work in the area of diversity and gender quality believed that it would take 30 or 40 years to solve the problem.
Speaker 1 00:00:58 In this survey, they thought it was 10. So people really do believe that the problem of gender equity at work is being addressed. And the results of the survey found that that is true at the very top levels. 12% increase in the number of women on boards. And by the way, I think a lot of that is because of legal regulations. About 10% increase in the number of women at the C-suite, which is pretty high. But for every role below C level role, the number of women declined as a percentage. Senior VP all the way down to individual contributor declined at double digit rates. This is from 2021 to 2023. So for some reason we are hollowing out the leadership pipeline of women. At the same time we're promoting women into the very top roles in business. Now, it makes absolutely no sense to me, and I've talked about it with a lot of people on the team here.
Speaker 1 00:01:53 We've had a number of debates about it actually. And there's a couple things I want to just share with you, and I don't claim I know the answer. The first is that one of the things that the study found is that the way men are evaluated for leadership is very different from the way women are evaluated for leadership. That's not really a surprise, but the research kind of pointed it out. Men are expected to be innovative, analytical, objective, results oriented, honest, ethical, assertive, courageous, and bold. Women in leadership are expected to be strategic, visionary, open, transparent, assertive, courageous, inspirational, optimistic, and empathetic. <laugh>, which are much more supportive leadership characteristics and behaviors than men. So what's been going on for many, many years, long before I started doing this work is that we have been evaluating women and men differently. And that in and of itself is bias because it's an excuse for deciding that a woman is not ready for a role.
Speaker 1 00:02:57 And one of the meetings that I, I had, or discussions I had with some people on our team was a woman in our company who's in a leadership role, who used to work at a consulting firm. And when she had a child, the partners that she worked with said to her, well, since now you're gonna have a child at home. We won't put you on these demanding projects. We'll give you some easier work to do. And she was so insulted and frustrated, she quit. And that is a an example of a belief system where we believe that women are going to respond or act or behave differently than men. And that's absolutely ridiculous. There are just as many hard charging, bold, aggressive, assertive women as there are men, of course, they may not be as well liked in their companies because of the way women are expected to behave.
Speaker 1 00:03:47 But that's all bias. And so all of that bias exists in the system. But there's another big issue of course that affects the leadership pipeline for women. And that is the family issues at home. And I know very well, in my case, my wife was a much more successful executive and much more successful in business than I was for most of my career. And we had two kids. And there were lots and lots of things that had to happen for us to take care of our kids. We both had to take time off. We had O pair's. We both had long commutes, she had longer commute than I did. And she eventually decided to retire to help us with the family. But there was no way to balance that. There was no way. And so in most family situations where women are oftentimes expected to take care of the kids by their husbands, they can't aspire to the same career as men.
Speaker 1 00:04:37 And that was really cheryll Sandberg's point and lean in that if we don't create a support system around women and men too, by the way, neither one can participate in the growth opportunities they have in their careers. So I think this research points out those two things that there's a lot of institutional bias in companies still, even though at the top levels we're trying to do, in some sense, dressing to make it look better. And that a lot of these pipeline issues of women at work also have to do with the support structure we have around us. Which leads me to a second point. If you look at all of the issues that we have in the workforce, hybrid work, diversity, inclusion, retention issues, wellbeing, mental health skills, new careers, people jumping around from job to job, part-time contingent work, all of these changes, by the way, equality is part of that.
Speaker 1 00:05:32 The biggest reason that all these things is happening is longevity. We're living longer, we're working more years, and we have more time. And so we have to think about the work experience as not one where the employees are indentured servants for a given period of their lives. They have long, long lives and they can choose to work for us or not. And they can choose, choose to check out and check back in. And we may have to re-recruit them later if they take time off to have children. And so if there's no scaffolding from the social system to take care of kids at home or to have childcare or early education or support for new mothers or fathers, then they're gonna leave. They're gonna check out of the company and come back later. And that's gonna be the way the world is gonna work. So I was a little bit depressed to see that the percentage of women in these roles all declined at such a staggering rate.
Speaker 1 00:06:29 But maybe it's a combination of bias and the lack of social support we have in society now. A lot of companies are, are doing a lot of good things to take care of that. In fact, in the healthcare industry, what we found is because so many nurses are women, healthcare providers provide all sorts of daycare and leave and family benefits to their nursing population, their clinical population because they have to to get them to even be able to work and they give them more flexible hours and all that. But maybe this data is one more connection point on this issue that people want more flexibility in their lives. They want meaning and purpose at work. And if they want to grow, they're gonna, they're gonna push to grow, but we need to make it possible for them to grow in a flexible way. By the way, there are companies that are very good at taking care of women.
Speaker 1 00:07:17 I had a really good call with one of my favorite companies this week, Cummins Engine, which is one, by the way, one of the best run companies I've ever met. I've met most of the management team there. And the CEO is a woman. It's an engineering company. They make engines. It's all about diesel engines and hydrogen engines and gasoline powered engines. And they have a lot of women executives that have very senior roles there, that have good technical backgrounds and management backgrounds and marketing backgrounds. So it doesn't matter what industry you're in, you can do good by women if you make it a priority. So I suggest you read the article and just think about it. I don't have the answers, but there's a lot of issues that are raised by that finding. Okay, second topic to update you on is all of the noise about ai.
Speaker 1 00:08:05 And I think the clamor from the New York Times about Sydney and the Bing chatbot has quieted down. My personal perspective is that all of this hair on fire worries about AI taking you over the world is misplaced. AI is a wonderful, marvelous invention. It's gonna do incredible things and you're gonna see more pretty quick here, and it's gonna be unpredictable like every other piece of technology. But the users and the buyers and the sellers of these tools are going to have to keep them safe. None of these companies want you using a system that threatens you or hurts you or steals your data or causes problems. I do think Elon Musk is a, is an exception. He perhaps doesn't understand that self-driving cars can kill people and human beings are not, not Guinea pigs for his experimentation, but in most cases, I certainly know in the case of Microsoft and Google, they don't want anybody getting to get hurt by this stuff.
Speaker 1 00:09:03 And the engineers making it don't want people to get hurt. And so more and more energy is going into safety. That's not to say it isn't kind of creepy and weird when it becomes more human, but just accept the fact that you've been talking to your phone, you've been talking to Alexa, you've been talking to Siri for a while, and it doesn't seem to bother you anymore. So we'll get used to this too. So what's happening? Well, in the only a short number of weeks that open AI's technology's been out there, they opened up the api. What that means is that any software developer in any company, any vendor, any IT department can license the API and create chatbot tools, load data into it and use it for new applications. There's going to be an announcement next week from a company, I won't mention who it is, that's going to show you the power of this in many, many business applications.
Speaker 1 00:09:54 And I think you're gonna see more and more and more that ha happen faster and faster and faster. Some of it is gonna be marketing noise, but some of it's gonna be amazing. I have seen open AI technology applied to training with automatic quiz generation. I've seen it applied to teaching with automatic teaching assistance. I mentioned last week the opportunity to use it for process management, q and a databases, onboarding, play experience. I think companies like ServiceNow have to be getting just a tiny bit nervous that a lot of the traditional process management tools that they've built could easily be displaced by a chatbot. If the chat bot was intelligent enough and it was instrumented to touch the processes in Workday or Oracle or SAP or ADP or whatever systems you have, you could talk to your computer and you wouldn't have to dig around and look for things online.
Speaker 1 00:10:50 I think you're gonna see some of that when this new announcement comes out and the pace of innovation is accelerating. And the reason for that is largely because OpenAI has made this available to so many people. And I think a lot of the software engineers graduating from high school, college, graduate school are learning about large language models in their academic underpinnings. And so they're not intimidated at all about using these huge databases and these multi-billion node mathematical systems and optimizing them further. So I think we're gonna see just amazingly powerful, positive productivity enhancing solutions here. I am not at all worried about the creepiness of it or the danger of it, and I could be completely off base, but the world is not gonna be taken over by some ai. So stay tuned for that and we are gonna stay up on it as much as we can.
Speaker 1 00:11:46 And when the announcement comes out next week from this one particular company, I'll tell you more about it. Okay. Third thing I want to talk about is the big article that I wrote about systemic hr. And I did mention this in the last podcast. So the storyline kind of goes like this. The economy has slowed down. We have high inflation. There's a shortage of labor. The shortage of labor is likely to get worse because the birth rate is low. There's a shortage of skills in all sorts of new areas, and there's lots of industry disruption going on. In fact, 40% of CEOs told pwc that they believe that their company and the business model they are in now will not exist in 10 years. That's not very long. So what that means is that most companies, small, medium and large, are going through transformation, a slowing economy and a lack or shortage or difficulty of hiring people.
Speaker 1 00:12:40 And the people they have are more than willing to move around, leave, go to another company, work part-time, take a break, whatever, because of the state of the economy, because of the state of the job market, because of the state of the pandemic. So here we are in the HR department, and we're supposed to be the architects of all of this change. And I have met with the CHROs of four or five very large consumer packaged goods companies in the last week. Cause we have a whole bunch of them as clients. And we've talked about all of these issues and they're suffering from all of these issues as we all are. And they wanna rebuild their supply chain and strengthen their supply chain. And they're buying new companies to get into new product areas. And of course they wanna do more consumer marketing and digital marketing and so forth.
Speaker 1 00:13:23 So they've got skills requirements on both sides, on the supply chain side and on the marketing side. So how do we deal with that in hr? Well, the problem is all of the research we've done, including the first chapter of my book, is about building an integrated organization that operates across boundaries. In other words, as we like to say, rather than focusing on the organization structure, focus on how we operate, it's how we operate. That's more important than how we are organized. In other words, if I'm working on product or solution A and I happen to be an expert on some piece of that and somebody else in the company is working on product or solution B and they don't know how to do something that I know how to do, why wouldn't I help them? It's silly for the company to go out and hire somebody else to do that when the skills are inside and I can easily spend some time helping this other person.
Speaker 1 00:14:17 That small example, by the way, is what Edgar Shine talked about as the most important part of a high performance culture is people helping each other is a problem we have in hr. And here's the problem we have in hr, and I just talked to a bank about this early this week last. This particular bank has about 50 or 60, 55, 60,000 employees are very large global consumer and commercial bank. And they hired last year, almost 15,000 people. And I went to the management team, we were talking about this and I said, wow, that's a lot of lot of people. Why did you hire so many people? Did you build a new credit card operation? Did you go into new country? What was the motive for this? And they said, well, you know, to be honest, we did open up a new credit card business, but we had massive turnover in the service and sales organization of that business, more than a hundred percent turnover.
Speaker 1 00:15:12 And so we did a lot of hiring to deal with that turnover. And I said, well, why did you have so much turnover? And they said, well, we put the call centers in the wrong place. We hadn't scoped the roles well enough to understand the real skills we needed. We were behind on the training, et cetera, et cetera, et cetera. We didn't pay people correctly, et cetera. I'm listening to this. I'm thinking HR should have gotten in the middle of this and prevented it. Rather than take the orders for new hires by somebody in the business who said, we need 500 people in call centers here to do customer service and 500 and a thousand people over here. We should have said, okay, I understand your requirements. Let's take a step back. Let's look at the characteristics, the skills, the roles, the job design of these operations.
Speaker 1 00:16:01 Let's look at the locations in cities and countries of the world where we're most likely to be able to attract those people based on our pay structure and our brand. Then let's sit down and put together a plan and not hire too many people because we want to get the right people and do it in an iterative fashion. Now, the talent acquisition team probably wouldn't have been able to do that alone, but theoretically, if the HR team got together and worked as a multi-functional team on that problem, they probably could have perhaps prevented this high turnover situation from happening. But the skills are all separated. They're isolated. We've got the DEI skills over in the DEI group. We've got the pay skills and the comp group. We've got the skills, skills in the L and D group. We've got the recruiting skills in the TA group.
Speaker 1 00:16:46 We've got the retention skills in the employee experience group. And unless all those guys work together on this to put together an integrated hiring plan and strategy, they probably just filled the headcount. And it turned out that's what they did. They actually outsourced a lot of this and probably lost a lot of money and time as a result. By the way, I think this is a little bit of the problem that happened at Goldman Sachs with the consumer banking business that they're now sort of getting out of. I don't think they spent enough time holistically looking at the skills and capabilities they needed to build the platforms and services in consumer banking that are very, very different than they have in investment banking. Now, I'm not blaming anybody for this, but we are not helping when HR is split up into all these COEs and can't operate systemically.
Speaker 1 00:17:31 So what I would love you to do is read the long article I wrote this week on systemic hr. It's on the website. And think about it. We are going through a large research project to study this right now in partnership, by the way, with LinkedIn. And we're interviewing companies, we're putting together use cases, we're doing surveys, and we're gonna help you write the book on how to be more systemic. And the good thing about it, for those of you that are HR people, is your role, your career, your job is gonna get better and better and better. You're gonna become a more full stack professional in hr. You're gonna become more of a consultant and less of an administrator. You're going to add more value in your company. You're going to learn all sorts of things about business that you didn't necessarily think about before.
Speaker 1 00:18:17 And if we can pull this off in most HR departments, we're gonna reinvent this profession. And that's what this is about. So I wanted to spend a couple minutes on that. Okay, I think that's enough for today. Next week and the week after, we are launching the long awaited research on pay equity. That is going to blow your mind. You're gonna learn some things about compensation and pay that I don't think you've thought about before. It's a more important topic than you might realize. And I'm not saying we've solved it, but I think we understand it. And we'll give you a good roadmap and some good guidelines on what to do about it. Have a great weekend and we'll talk next week.
