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Tag: HR

3 characteristics of recession-lovers

Published December 8, 2008 by Jo Jordan

I need your help

This is a serious post and I would love some of the heavy hitters out there like Jon Ingham, Scott MacArthur,  Bay Jordan and Jon Husband to critique it. Others please join in!

I am a work psychologist. That means I am as much concerned about work as I am about psychology. I do a lot of background reading about management, organizations, new work like nanotechnology, etc.

McKinsey’s advice on management & organization in a recession

McKinsey have just circulated an old report 2002 report on risk and resilience in recessions.

They argue that firms that come out of a recession in the upper quartile, differ significantly from other firms.  The winning group, lets call them “recession-lovers”, either hung on to their upper quartile position, or came up from below.

The McKinsey report has a few sentences I find ambiguous. They are also talking about firms that make the UQ. They aren’t talking about firms who climb from LQ to Median say, so we should be careful not to over-extrapolate.

3 winning characteristics in a recession

I have found THREE characteristics of the ‘recession lovers’.

1.  ‘Recession-lovers’ surge ahead because they were always clearly focused on what they are doing. Prior to the recession, recession-lovers are involved in less acquisition activity than their rivals. Recession-lovers maintain their acquisition activity during a recession, while others drop acquisition activity to the steady level of the recession-lovers.

Can we conclude that firms who are less successful during a recession were involved in shakier business prior to the recession?

2.  Recession-lovers make 33% more sales per employee than their rivals. During the recession, they maintain this ratio by spending MORE money on sales and general costs. To do this, they absorb lower margins (TESCO’s just announced this I think).

Can we conclude that more successful firms move to protect and maintain their central markets?

Can we conclude that less successful firms are willing to jeopardize their market position by taking quicker profits?

3.  Recession-lovers spend more money on R&D and double this expenditure during the recession.

Can we conclude that rivals had thought that their markets and products were stable and by cutting back further believe that markets will be essentially unchanged after the recession?

3 thought-provoking questions for HR Managers to ask

If I have summarized this report correctly, then there are hard questions HR Managers should be asking as they consider redundancies, cutbacks, etc.

1.  When we hired staff, we assured them of their importance, and the value and importance of the products and services they would deliver.  What has changed?

2.  Now the market is tougher, surely we should give staff  more, not fewer,  resources to do their work and to sell our products and services.   If we don’t allocate more resources, than why?    Was our previous allocation of resources thoughtless, or,  is the market is worth protecting, in which case .  .  .  What are the ethical and legal implications of what we are saying?

3.  If we are making less provision for R&D, then are we saying that the demand for our products and services will be stable into the future?  Is so, why not write long-term contracts for staff on those lines?

What’s your take?

I would like to phrase these questions as constructively as possible and I don’t want to overreach.

How can we improve our understanding of a business so that in the future we can ask the right questions earlier?

Where do young HR managers in UK develop and test their understanding, BTW?  Which are universities and firms known for turning out HR Managers with solid business sense?

UPDATE: For an HR Managers perspective on the Recession, I have written a summary on a new post.

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$$$ with collaboration

Published December 6, 2008 by Jo Jordan

Global supply chains

McKinsey have just circulated an article on supply chain management.  I read it hoping to find information on local modularization, i.e., breaking up the supply chain in the way done by Boeing.

Rules-of-thumb for organizational structure

The article was about linear, but global supply chains.  In HRM, we have very few rules-of-thumb to guide us about what is possible.  Here are three that I gleaned from the article.

The demand for labor within a firm varies huge

1.  Demand for mobile phones is often inaccurate by 400%.  Evidently, if we have no idea whether we need to make 1 of something or 5 of something, we will have heaps of productive capacity idle much of the time.  We are also going to have people hanging about, or we have to hire people at short notice with consequent loss of skill, team cohesiveness, and performance.

Companies who ‘play well’ with their supplier reduces their order times and save money on ‘capital employed’

2.  A company who shared market information increased their suppliers’ confidence in the company’s predictions [industry unstated] and decreased inventory by 45% and order-shipment cycle time by 70%.    Do we deduce that this reduction in capital-employed and stock-outs and the improved the cash-flow of the business with a positive knock-on effect into other areas like HRM?

Companies who share sales data with suppliers benefit from fewer stock-outs

3.  A retailer who provided a supplier with direct access to their data and ceded the management of their supply chain improved the availability of availability in store by 70%, and overall supply chain inventory by 20%.  Improvements of this size are likely to decrease lost sales and the price of the product itself  and increase competitiveness.

Lateral communications across organizational boundaries

It is stunning that improvements of this magnitude come about from improving the lateral communication structures across the organizations boundaries.

I wondered earlier today whether there any examples of HRM across a whole supply chain.   It would be an interesting project.

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CEO and Me

Published December 5, 2008 by Jo Jordan

What do HR Managers do?

What do HR Managers do?  Who do IT Managers do?  What do any staff managers and trusted subordinates contribute to the leadership of an organization?

What does the boss do and what should subordinates and staff managers do?

While I have been in the UK, I have been struck by the confusion and discomfort that local HR practitioners feel over their role in the management team.

Learn from Henry Kissinger about advising the boss

People who do feel under appreciated, or who are looking for better ways to describe their role, may enjoy this piece by Henry Kissinger, where he describes the relationships between the members of the ‘security team’ at the White House – the President, the Secretary of State, the Secretary for Defense and the National Security Adviser.

The contribution of the National Security Adviser seems to mirror my understanding of the HR function.

  • “to ensure that no policy fails for reasons that could have been foreseen but were not and that no opportunity is missed for lack of foresight.”
  • “takes care that the president is given all relevant options and that the execution of policy [by various departments] reflects the spirit of the original decision.”
  • “insisting — if necessary — on additional or more complete options or on more precision in execution”

UPDATE: For an HR Managers perspective on the Recession, I have written a summary on a new post.

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Essential HR in the recession

Published December 3, 2008 by Jo Jordan

The Recession: How big is the problem?

Six years ago, before I left Zimbabwe, I did some work for the UNDP in Harare. Their Representative, whom you might think of as the UN Ambassador, was, as you might expect calm, multilingual, knowledgeable, worldly, and very experienced. He said something to me that was memorable, as I am sure he intended it to be.  He said:

Right now you are in a tunnel, and you cannot see the light at the end. But you will pass through the tunnel and see light at the end again one day.

As it happened, I left Zimbabwe, as have three to four million others, and I have found myself in the ‘West’ in the middle of the financial crisis, experiencing deja vu.

Where are we in our understanding?

The stage theory of bereavement is often criticized, but is nonetheless useful for thinking in an organized way, about catastrophic events.  We aren’t in a deep dark tunnel, as we were in Zimbabwe, and as Zimbabwe still is.  We are in the very early phase of denial.  After this will come anger, then bargaining and at the every last, accommodation.

At the moment, we are still trying to fix things, to make them stay the same. We lop off a few workers here, and cut back on some expenditure there.   And in the process, in all likelihood, we make the recession worse!  We retreat into what we know, or into the laager as they say in South Africa, and cut off all possible creative and generative engagement with the unknown.

But if we don’t take immediate action to retrench and downsize, will we survive?  Won’t we just be overrun, and go out of business?

What is the alternative?

Situations like these are exactly what positive psychology and positive organizational scholarship address. Our dread of the tunnel does not make the tunnel go away. And sadly, our dread of the tunnel leads us to do things that feel so right, yet could be so deadly. For example, is it a good idea to conserve the batteries on our torch?  It is?  When we don’t know how long the tunnel is going to be?  Maybe we need a fresher look at what it happening.

The principle of positive human sciences, whether we are looking at psychology generally, or ‘organizational scholarship’, is to identify the processes that have led to our strengths.   As we have no idea what the future holds, we don’t want to squander those strengths, and more importantly, we don’t want to destroy the processes that generated those strengths, and that will sustain and regenerate them.  It is not just the strength we look for, in other words, it is the process that generated the strength that we seek.

Capital we have seen is as volatile as pure alcohol – it evaporates in a flash.  It is part of the business package.  We need it.  But it is not dependable.

The distinct role and contribution of HRM

Our job in HRM during the recession, is to focus our attention on our human strengths, and on the value of our relationships with each other.  It is tough to do this when people are in a panic.  They want relief from the terror of the tunnel.  And they want relief now.

Calming the panic is our first duty.   When the Chief Executive, to the high school student on-work-attachment, are calm, they bring their technical knowledge to bear, and find innovative solutions that last week, we didn’t know were possible. They turn the tunnel from an object of dread, and real danger, into a place of opportunity and growth.

We also need to remember that some people don’t show their panic.  So we have to judge their mood by their activity.  Are they suggesting solutions, or is their very lack of complaint, suggestive of loss of efficacy?  Calming different personalities, from the voluble executive to the quiet person who falls into passive-aggression, calls on our unique technical training.

Our chances

Will we always succeed?  No of course not.  In business, winning is not a given.  But, if we do not believe that our people are capable of working constructively and together, on the challenges we face, then we can be sure of one thing.  We will communicate our doubt.  And our doubt contributes to a downward spiral of self-efficacy and collective efficacy.  We become part of the problem.

Our ethical responsibility, when we don’t believe in our company and more importantly, its people, is to resign, and make way for someone who can work with them, to find the sweet spot where they will surge ahead.

Sadly, when we take short term actions to ‘feel safe’, we may experience the satisfaction of immediate relief.  We might feel less exposed, temporarily, until our customers and suppliers are in trouble, as has happened in the financial sector.  It is a case of making haste and less speed.

To quote @Pistachio of yesterday.

The world seems to run on courage.  When mine falters, things get so stuck and difficult.  When it flows, things start to flow also.


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Recommended reading:  David Whyte, British-born corporate poet now living in Seattle has a marvellous CD, Mid-Life and the Great Unknown, available through Amazon.

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The way ahead at John Lewis, a British department store where the staff are shareholders in the business.

UPDATE: For an HR Managers perspective on the Recession, I have written a summary on a new post.



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BHAG for Britain!

Published November 28, 2008 by Jo Jordan

Do you still dream?

What is your BHAG for the UK? What is the Big Hairy Audacious Goal for your industry?

What is the one thing that could take your industry from stagnation to contributing to the 2.5 million new jobs or the equivalent that we need here in the UK?

Big Hairy Audacious Goal

Last night, my heart soared when Roland Harwood welcomed the ‘Network of Networks’ at Amplified08 with this BHAG:

to be the most networked nation in the world.

Getting down and dirty

Toby Moores, founder of Sleepy Dog and Visiting Professor at De Montfort University brought this goal alive.archive-since-nz-0571

Leicester, cotton city of the English Midlands has been transformed from 5% design:95% manufacturing . . . to . . . 50% design:50% import/export.

Networking via Creative Coffee Club and other social media configurations, using technologies like blogs, Twitter and Facebook, provides designers with the hyper-competitive domestic environment, or space, that an industry needs to be competitive in the international world.

Breaking the British reserve?

One of the epiphany moments in my life was visiting Roman ruins at Coimbra in Portugal and imagining running water several centuries before Christ. Superimposed on the ruins I was looking at were mental images of the dams that Italians have built all around the world. Civil engineers, then; civil engineers now.

Leicester is also taking their core competencies and the best of their past into the future.

Something tells me the British may be very good at networking. Something verbal, something witty, . . . .?

A highly networked country also offers advantage that is not here now. Youngsters can find mentoring more easily. New ideas transfuse in that mysterious way they do between two people who have never met yet share a common acquaintance.

As a goal, to be the most networked country in the world, is sufficiently concrete for us to monitor it. It is sufficiently open for us all to agree. It is sufficiently enjoyable for us all to get started.

It is inclusive. It is generative.

Some of the new 2.5 million jobs will be directly in the networking industry.  Most will be because our knowledge workers are finding it easy to access to information, make decisions, and provide services that are valued throughout the world.

Good input NESTA.  Thankyou.  And thanks to @DT, @sleepdog, @loudmouthman and @joannejacobs who did much of the organizing.

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P.S.  2.5 million jobs are Obama’s target for America.  About 30m people work in the UK and 3-4 people may be unemployed before the economic downturn is done.  What is our target?

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10 steps for making beautiful Moo cards efficiently

Published November 26, 2008 by Jo Jordan

Do you use Moo cards?

I have some typical corporate cards, but in truth, I am not sure what I am trying to convey.  That I am a relic of the Emily Bronte era?  But are Moo cards, half the size of a business card, with pictures on one side and minimal contact info on the reverse, too frivolous?

Whatever’s the right choice, Moo cards require quite a lot of conscious decision making.  Which pictures should I use?  What do they say about our products and services?  And what should I say about myself in exactly 6 lines?

Moo cards also require a modicum of administrative efficiency.  I need to load up photos, or find some on Flickr, edit them using an online service like Picnik, and then place them on the Moo interface, pay Moo online and wait – for about 10 days for them to arrive through my letterbox.

Starting from scratch, it took me about 3 days (!) to make a set of 10 cards which will be printed 10 times each.  The magic of Moo is that the customization is done at no extra cost.   I could do 100 unique cards, if I wished, or 100 of a single card.  Anyway, three days is way too much time, so I paid attention to what I was doing and this is the routine that I will use in future.

Routine for designing Moo cards

  1. I’ve set up a directory called Business Cards, and a subdirectory for each month: November, December, etc.  In free moments while I am hanging on to a call centre, for example, I will search Flickr for pictures and download them into the upcoming month’s directory.  I also did one more thing: I went into the Tools of my browser and set it to ask me where to download (or it dumps everything on me desktop/screen).
  2. I explore rather than search Flickr.  Under explore I go to Creative Commons and search pictures that are listed as “By and Share-alike”.  This means the owner is happy for me both to use them and to change them, provided I indicate who took them and provided I allow anyone else the same right to use the picture I come up with.
  3. I am continuously thinking of tags that might represent my business.  Being a psychologist, so far I have searched for words like “horizon”, “dream”, “steps”.   When I find a promising picture, I download it carefully saving it with filename like “Name of the Picture by Photographer via Flickr”.  Normally the picture will save as a .jpg file.
  4. In the future, when I have some free time, I will go into the online editor, Piknic. It’s free and there is nothing to download.  Here is where I hope to save a lot of time that I spent last time around.
    • Use Edit to resize the picture so the width is 330.  The length doesn’t matter so long as it is 900 or so or less.  An alternative is to resize the picture to something bigger and crop to the right width.
    • Go to Create and add frames.  I’ve found the trick is to set the inner and outer frames to full and change the colour to suit the picture.  I’ve also found it simplest to make both frames the same colour.  At a picture width of 330 and both frames on full, the final picture printed by Moo will have no frame along the long sides and a thick frame at both top and bottom where I can add text.
    • Use Text to add a heading at one end or the other. So far I’ve mostly used a variation of the picture’s name, such as “horizons”.  Then I vary the font and colour to suit the picture.  I also found, after much trial and error that the title must fit within the picture width. As a guide, the circle placeholders must be within the picuture, not overlapping its ends.
    • Use Text to add the copyright information “Picture name By author via Flickr” and use Shapes to find the BY and Share-a-like pictures.  These shapes look like a man and a broken c (not full c) respectively.  Occasionally, I put the copyright information on the picture itself.  Whatever looks good.
    • Save the picture with a new file name.  I extend the original filename with the word “pikniked”.
  6. When I need to order some more cards, I will go go to Moo and select mini-cards.  Using upload, I can pick out the images I have already edited and saved onto my harddrive, position them, and preview them.  In the past,  I have done this even if I am not going to proceed with an order, just to make sure I have edited the picture correctly.  As in this run,  if I want say 20 of one card and 10 for 8 others,  then I just upload the first image twice!  Lastly, I whip out my credit card and pay online.   The going price as of the end of November 2008 is 9.99 pounds and 3.68 postage.  Print out the confirmation and wait 10 days!

I am looking forward to the cards I have made especially for Christmas.  Two geese, looking quite fat and prosperous are waddling through the snow.  That’s my metaphor for the recession!  A fun, happy and prosperous 2009!

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5 years’ time: where will we be?

Published November 24, 2008 by Jo Jordan

Skate to where the puck will be

“She’ll be alright”. “Manyana, manyana”. We may not wear this attitude on our sleeves but we English are notorious short-term thinkers.  Not for us, saving for a rainy day or a stitch in time.

Is it healthy though, to plan ahead? Isn’t planning ahead exactly the opposite of what is recommended by positive psychologists: be mindful and attentive to what is going on around us?

The difficulty with living in the present seems to me that we can be living in the past. Just as the ice hockey player skates to where the puck will be, we have to interpret the present in terms of the energy and dynamism that it represents. One of the beautiful phrases asked by positive organizational scholars emerging in the business schools in the US is: what is trying to emerge here?

What will the UK look like in 5 years’ time?

In some respects, I am sure the UK will not have changed muchin 5 years’ time. An endearing quality of the UK is that it piles layer over layer. A scratch below the surface is always interesting.

Demographic change

There will also be some trends that will stretch out linearly. For the most part, those people who already here will still be here. 5 year olds will be 10. 40 year olds will be 45. 75 year olds will be 80. Some people will be off exploring the world, but we will mostly be here. Even in Zimbabwe, most people are still there!

Structural changes

But some things will change qualitatively, fundamentally, or definitively.

I have just read a prediction that IN FIVE YEARS, Africa will overtake China as the supplier of low cost labor.

On line virtual laboratory

Being linked to universities, another prediction that caught my eye is that new ideas will no longer come out of US business schools. Nor will they come out of Chinese or Indian business schools. They will come out of ‘on line virtual laboratories’. There are obvious implications for universities who carry on treating the value chain as the long 7 year process of thinking up ideas, testing them, and publishing them.

Journalism collapsing

Similar changes are being predicted in journalism. Jeff Jarvis predicts changes even deeper than those predicted for academia. Editors will no longer drive news policy. They will encourage the creation of better news.

So what is my time line?

From time-to-time, I play with Curriculum Illusione in which you input what you think will happen between now and the year you die (chosen by yourself). It is interesting how hard it is, particularly when you have to back up your ideas with photos.

So where are we exactly?

Or maybe, the question for today is what do we need to know?

Is it sufficient to get up and go to work and just hope for the best?

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HR doubles your money?

Published November 19, 2008 by Jo Jordan

Supermarket in São Paulo

Image via Wikipedia

State of Retail 2008

On Monday, The Times published a summary of OC&C’s report State of Retail 2008.  As a typical Gen Xer, I love numbers and numbers abound in this article.

Rates of return are slim

They report the EBIT (earnings before interest and taxation) as a profit margin. None of the figures surprised me.  They are quite constant with figures achieved in other countries.  After all, the nature of an industry does define what we do and how we do it.

Grocery stores achieve 2.5-3.5%.  Books & stationery, Electricals and Music, video & gaming achieve similar margins.

Opticians, pharmacies and health & beauty achieve twice that rate at 7%, and clothing, footwear and accessories achieve slightly better at 9%.

What this tells us about work is this:  if we own a business, even a successful one, we have to sell a lot of stuff to make 1 pound profit!  The local convenience store or bookshop must sell 40 pounds to leave 1 pound profit in the hands of the owner.   The local clothes shop must sell about 12 pounds to keep 1 pound in the pocket of the owner.

Some do so much better than others

The article also gave a good comparison of the margins achieved by the top two retailers and the rest.  In almost every case, the top two retailers achieved TWICE the margins of the field.

What the report didn’t tell us were the “HR Costs/Revenue” ratios: how much of the sales dollar do large companies like TESCOs spend on HR?

It is clearly obvious that industries like consultancy where 20-35% of each sales dollar is paid in salaries, more money is spent on training, etc.  When the return on 1 pound on HR is 3 pounds in sales, we pay more attention to HR than when we spend 1 pound on salaries to make 30 pounds such as might happen in a supermarket.  Simply, in a supermarket other factors have a bigger impact on sales.

But when the margins are DOUBLE in one firm than another, then the question arises, WHY?

  • Does the firm have an advantage of size?
  • Does the firm operate in a more lucrative niche?
  • Are the management somehow superior to management in the other firm?
  • Are the management practices better?
  • And how does HR contribute to a better HR costs/Revenue ratio?  (Profit=Sales-Costs-HR Costs)

I do wish OC&C had give us the HR figures too!

UPDATE: For an HR Managers perspective on the Recession, I have written a summary on a new post.

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Leadership parables

Published November 15, 2008 by Jo Jordan

Weekend special.  Leadership from the top or from the bottom?

Good pic for a lecture on leadership and organizational design.

obama1.jpg

obama2.jpg

Customized shoes by Van.

For those mulling over HR and the recession

Have we organized the work in the organization so every person on the edge can use their skills, and the situations that arise in their patch, to advance our cause?

The genius of the Obama campaign machinery is that they provided the resources to do a good job (communication channels, how-to-do manuals, moment-to-moment goals e.g. make 100 000 calls) and let people get on with it!

Let’s tell the stories of what works well and do more of it?

What are the great HR stories where we have helped managers focus the management system to (a) reduce management cost and (b) increase initiative and productivity?

And did we manage to pass on the gains to the workforce?

Mmmm, lets publish the success stories of  HR and the recession.  The press will do a fine job for the downside.

See you on the brightside?

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5 tips from the recession guru!

Published November 14, 2008 by Jo Jordan

Self-appointed recession guru

Do I dare call myself a recession guru?  Why not?  I spent most of life working in a regional centre given to trouble and strife!  If we weren’t rapidly readjusting to major political turmoil, we were adjusting to the effects of drought on agriculture which was our primary economy.  In a good year, the economy expanded 3%.  When the rains didn’t come, we went back 3%.

  • We got very good at scenario planning and not over-reacting.  We were brought up on the phrase: anyone can make money when the markets are going up.  A business person plans for the up and the down.
  • We stopped blaming people.  If weather is the problem, then plan for it!
  • We learned about the economy.  As an HR consultant, my business wasn’t hit in the year the economy went down.  It would feel the pain 2-3 cycles later.  Simply, psychologists don’t work with farmers very  much.  We work with people who supply the farmers and people who supply the suppliers.  It takes a little time for the effects to work through the levels.
  • We learned what the numbers meant.  For the record, a downturn of 7% will have accountants hyperventilating.  Quite often their firms are technically bankrupt and they should cease trading – but if every one is in the same boat, you breath fast and trade through!  Equally I can tell you with confidence that you can survive 100% inflation quite well. At 300% expect people to get seriously ill.  Relax.  We aren’t there yet!
  • And above all we learned to focus.  We learned to sack customers who didn’t pay on time!  It is disconcerting to shrink your revenue, grow your profit and play more golf.  But that is how it works!

Time management

BNET published a good article today on time management.  The centre piece of the article is the busy, busy person who is racing around being busy being busy.

Since I have come to live in the UK, I have been stunned by poor time management.  I am amazed by someone who delegates his time management to a subordinate (usually blokes delegating to gals?).   Beyond a junior levels of management, our tasks aren’t serial, they are interrelated.

Let me give you an example:  I email you asking to discuss something.  You email back to say yes and speak to your secretary.  I write to her (usually).  She consults you (or doesn’t).  She writes back with some questions about time.  I write back.  She confirms.

7 emails to do something you had the power to do in your first reply.  When I confirmed, that would be 3 emails.

The pre-email rule is that any piece of paper should come across your desk once and once only.  You should have been sufficiently clear about your priorities to make a decision whether or not the meeting with me was important to you and how our meeting would move your major project forward.

All else is dross.

HR and the recession

As HR practitioners, we have a major role in a recession:

  • Make sure we are calm ourselves.  Get the HR team taking exercise, working reasonable hours and secure about their own prospects.
  • Back up the people like accountants who are on the front line.  Spend time with them to make sure they are taking exercise, working reasonable hours and calm about their own prospects!
  • Get the conversations about the economy and the company humming.  Make sure managers understand the economy and talk to staff (I’ve heard of Royal Bank of Scotland managers unable to discuss credit derivatives with their staff – don’t be like that please!).  Resource the conversation and support it with social media.
  • Make sure people understand what factors the business must focus on to succeed and keep them focused!

Above all of course, we should be focused.

“Know your Number 1 priority. If you achieved nothing else in the next 12 months, what single achievement would most contribute to the success of your organisation?”

Can we answer this question ourselves?  How many people in the organization could state the No 1 priority for

  • the organization
  • their unit
  • their boss
  • themselves
  • each of their colleagues
  • their subordinates

Remember, any one can do business in good times.  It is the bad times that test our credentials.

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