Lutz on Leaders: Why So Nice?

happy leaderRetired automotive executive, former Marine and best-selling author Bob Lutz is also fluent in several languages. And he’s probably pretty outspoken in all of them.

Never known for holding his tongue, the former vice chairman of General Motors took part in a Q & A with the Washington Post earlier this week. And he offered up his usual, unvarnished take on subjects ranging from Mary Barra’s performance as GM’s chief executive so far (“too early to tell,” but “the early signs are outstanding”) to the increasingly guarded stance taken by executives when addressing the public (“nobody is speaking clearly anymore”).

Lutz also spoke at length about what makes for a great leader. While he praised the “quiet, somewhat low-key, persuasive and very effective” style that Barra has displayed at the helm of GM, Lutz seemed to suggest the leadership model prevailing at many organizations in 2014 is, well, a little soft.

When asked to name the best leader he’s ever worked for, Lutz went all the way back to his high school days in Switzerland, calling teacher—and future member of the Swiss National Council—Georges-Andre Chevallaz “an extremely effective individual” who could “convince intellectually, and … had the ability to motivate positively. You never wanted to let him down.”

The corporate community could use a few more like Georges-Andre Chevallaz, according to Lutz.

Today’s leaders “follow a politically correct line and listen to all the 1980s Total Quality Management consultants who say you should always respect everyone, that there’s no such thing as a bad idea,” he told the Post. “Of course we all know that’s hogwash. Good leaders have to be able to criticize constructively. We just have too little of that in American business now. Everybody is way too nice to everybody.”

A dearth of constructive criticism aside, Lutz sees something else lacking in the workplace: Fear.

“I can’t tell you how essential that is: a fear of consequences, of messing up, of letting the team down, of doing something unauthorized,” said Lutz. “That fear has to be there; otherwise the place is out of control. All of the consultants who say you’ve got to take fear away in a corporation don’t know what they’re talking about.”

While he may espouse some old-school ideals when it comes to leadership style, Lutz also warned that too much of the same old, same old can actually damage an organization’s culture; a lesson he says he learned decades ago.

Looking back at his stint as head of product development with Chrysler in the 1970s and ’80s—when the company was integrating an influx of talent from Ford and GM to go along with “the old Chrysler guys”—the culture at Chrysler “was a ragtag bunch of misfits,” he said. “At Chrysler, everybody was from somewhere else. It made for a very interesting environment, because there was no dominant culture. What you rarely heard in meetings was, ‘You can’t do that, because we’ve always done it this way.’

“It was messy,” he continued. “But it was very effective and everybody had a lot of fun. The nice thing about an enduring culture is that you have stability. But stability in a rapidly changing environment can be a very bad thing.”

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Sniffling While You Work

For the first time in five years, the number of employees who said they go to work with the flu has dropped to 60 percent, after four straight years of increases, according to the fifth annual Flu Season Survey from Staples.

The 60-percent figure marks a drop from last year, and yet many employees still feel they can’t take a sick day, according to the office-supply retailer. Indeed, despite 88 percent of managers encouraging sick employees to stay at home, 40 percent of workers feel there is too much going on at work to stay away, and 31 percent show up sick because they think their boss appreciates it.

The Staples survey finds there are a number of factors that have contributed to the drop in employees going to work sick, including:

• Sick employees coming into work are now considered worse for office productivity than a security breach;

• Presenteeism recognized as a bigger problem than absenteeism;

• Employees are taking charge of their own health and wellness; and

• Recent virus outbreaks are affecting behavior.

“While we are encouraged that for the first time in five years the number of sick employees coming into work has dropped, 60 percent is still a significant number,” said Chris Correnti, vice president of Staples Facility Solutions at Staples Advantage, the business-to-business division of Staples.

“Clearly there is still much work to be done. Recent outbreaks such as Enterovirus in the U.S. underscore the importance of fostering a culture of workplace wellness. ”

Meanwhile, last year was one of the worst flu seasons on record, reports outplacement consultancy Challenger, Christmas & Gray, with more than two-thirds of states reporting that the flu outbreak had reached “severe” levels, says CEO John Challenger.

The Centers for Disease Control estimates that, on average, seasonal flu outbreaks cost the nation’s economy $10.4 billion in direct costs of hospitalizations and outpatient visits.  That does not include the indirect costs related to lost productivity and absenteeism.   Online resource, Flu.gov, cites one study estimating that each flu season 111 million workdays are lost to flu-related absenteeism, which amounts to about $7 billion annually in lost productivity.

“New York alone saw more than 15,000 reported cases in the first month of the season, compared to fewer than 5,000 in the entire previous season.  These outbreaks and the resulting workplace absenteeism can have a significant impact on a company’s bottom line; particularly in smaller companies where illness can spread quickly and incapacitate large portions of a workforce,” Challenger adds.

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Cannabis Business Charges Full Steam Ahead

It came to my attention recently — actually in the writing of a news analysis last month — that there’s a big business growing around 465923899 -- cannabismarijuana, with 23 states now allowing for its medical use and two, Colorado and Washington, allowing for its recreational use.

(For the record, here’s that Sept. 29 news analysis — which actually aired Sept. 30 — examining the issue and what employers can really expect as more laws are passed. It was written just before the Colorado Supreme Court was to hear the case of Coats v. Dish Network and the issue of whether the plaintiff’s positive drug test should have been allowed under the state’s medical-marijuana statute. The court has yet to decide.)

With a keener understanding of this railroad coming down the tracks that is marijuana legalization and the business opportunities on board that train, I took special notice of the Hartford Courant‘s recent coverage of callback selections for a new web series called “The Marijuana Show,” aimed at giving specially selected and very “lucky ganjapreneurs” the chance to become “the next marijuana millionaire,” as the story puts it.

I also happened to notice in the piece that a handful of even-luckier finalists just finished participating in “an intense three-day business boot camp” that ended last Sunday, Oct. 12, prior to the finalists then pitching their marijuana-money-making ideas to investors in hopes of receiving financing, mentorship and attention on the show after the entire process has been filmed. (Here, too, is the Cannabis Business Times’ version of all this.)

So I reached out to co-producers Wendy Robbins, also the show’s director, and Karen Paull, to find out what I could about the boot camp. Their comments did nothing to quell the notion that there’s a most-definite marijuana-business movement afoot.

The camp, says Robbins, included “attorneys, an accountant [and] a branding expert [among others, and focused on] financial help with valuations, regulations, business-plan help, pitching advice and [of course] social media too.” Five out of the 10 finalists were even offered financing and some got mentoring help with their ideas — which ran the gamut from cannabis retail or leisure outlets to supply and distribution centers to growing establishments.

“Most shows have one winner, so we were blown away that half of the contestants got some sort of deal,” Robbins says.

“This is not a scripted show, nothing is predetermined,” adds Paull. “It’s a very organic process.” Indeed.

Looks like airing begins in December.

My story in September also references a Cannabusiness Accelerator job fair held in Seattle Sept. 19, “with the support of the [fast-growing marijuana] industry’s leaders to serve as a locus of networking and informational know-how [for job seekers], as well as a showcase for program partners, all suppliers to the new industry,” according to that company’s release about the event.

But the story does also include employment attorneys’ cautionary comments about the need for employers to not get too worked up. They needn’t, they say, ready themselves for all this marijuana-legalization and cannabis-business momentum to lead to across-the-board pot-induced workplaces (though statistics do show more employees are showing up for work under the influence).

Marijuana, they say, is still against federal law and employers still have every right, and responsibility, to maintain zero-tolerance policies because of that, and for safety and productivity reasons.

As Mark A. de Bernardo, executive director of the Institute for a Drug-Free Workplace and a Reston, Va.-based senior partner at Jackson Lewis, told me for that piece:  “This is not a crisis for employers. Their backs are not up against the wall.”

Not yet anyway, legalization supporters and cannabusiness entrepreneurs would probably say.

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Steele Receives HR Exec of the Year Award

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John M. Steele, right, receives the HR Executive of the Year award from Editor David Shadovitz and Publisher Rebecca McKenna.

John M. Steele, senior vice president of human resources for the Nashville, Tenn.-based Hospital Corporation of America, received HRE‘s 26th annual HR Executive of the Year award at an awards ceremony and banquet held at the Trustee Ballroom at Boston University last night.

In his remarks upon receiving the award, Steele recounted the many lessons he learned from each of the CEOs he’s worked with at HCA, including current CEO Milton Johnson.

“Milton walks in the door and says, ‘Culture beats strategy every day.’ How would you like to be his HR person?” he asked the crowd with a smile.

He described working with Johnson as a dream come true — he’s “someone who supports culture.”

Johnson, he said, supports both development and employee-engagement initiatives, as well as throwing his support into “consolidating HR into one HR organization so we can create capacity and opportunity in the organization.”

Steele went on to recognize the contributions of the different team members who were present at the ceremony. He then closed by quoting from Michael Dell, who summed up how he thinks about his role and career:

“Try not to be the smartest person in the room, and if you are, I suggest you find smarter people or find a different room. In professional circles, it’s called networking. In organizations it’s called team building. In life it’s called family, friends and community. We are all gifts to each other; and my own growth as a leader has shown me again, again and again that the most rewarding experiences come from my relationships.”

Three other members of the HR community were added to the  HR Honor Roll (see photo below): Terry Geraghty, senior vice president and chief human resource officer at Manhattan Associates; Kathleen Wilson-Thompson, senior  vice president and chief human resources office at Walgreen Co.; and William A. Blase Jr., senior executive vice president of human resources at AT&T.

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From left, Terry Geraghty, John Steele, Kathleen Wilson-Thompson and Bryan Gonterman, accepting on behalf of William A. Blase Jr.

The HR Executive of the Year and Honor Roll awards are presented each year to individuals in the HR profession who have distinguished themselves through extraordinary vision, strategy, direction and leadership in their organizations. A prestigious panel of judges, including previous award winners, HR thought leaders and HRE‘s editor, selects the winners from a field of worthy candidates.

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Non-Competes for Sandwich-Makers?

Fast-food chain Jimmy John’s Sandwich Shops bills itself as a place that makes good sandwiches “freaky fast.” Perhaps the formula behind “freaky fast” is so vital and unique that it’s worthy of being shielded behind the walls of Fort Knox, Ky.? That seems to be the gist behind an interesting issue revealed via a class-action lawsuit filed against Jimmy John’s and its franchisees: They apparently require employees to sign a non-compete agreement stipulating that, should they leave (or be fired from) Jimmy John’s employ, they will not seek employment for at least two years with any other establishment that derives at least 10 percent of its revenue from selling sandwiches that’s within a three-mile radius of any Jimmy John’s location.

The lawsuit in question is Brunner v. Jimmy John’s Enterprises Inc., and the details were first reported by the Huffington Post. The plaintiffs accuse the sandwich-chain’s franchisees and its corporate parent of violations under the Fair Labor Standards Act. In the lawsuit, the plaintiffs assert that the non-compete clause “effectively restricts an employee ‘from working in an area that is over 6,000 miles large, at innumerable types of business … in any capacity for a period of two years in 44 states and the District of Columbia,” according to the Workplace Prof blog, which analyzes the details of the non-compete clause.

Is a non-compete clause for fast-food workers enforceable? Unlikely, according to two attorneys interviewed by Politico. Rochelle Spandorf, a business-franchise attorney, said non-competes for low-level workers are quite rare and “very hard to enforce in court.” “I don’t think it’s a smart policy for any employer to apply a non-compete to lower-level employees who are taking directions from supervisors and who are not given independent access to really classified information,” she said.

However, Jimmy John’s and its franchisees — and indeed, many other organizations that require large numbers of their employees to sign these agreements — may have an ulterior motive that’s linked to the traditionally high turnover rates in their field, said Eric Fink, a professor at Elon University Law School.

“It’s not uncommon for employees to extend non-competes that are far broader than the law allows,” he told Politico. “Employees may be scared by this.”

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Egg Freezing: Unique Benefit or Bad Idea?

pregnant womanThe Apples and Facebooks of the world are known for their original and generous employee perks and benefits. But these companies find themselves in the news this week for offering a new benefit that goes well beyond the usual on-site dry cleaning services and free haircuts.

Earlier this year, Facebook began covering up to $20,000 for female employees to freeze and store their reproductive eggs, so they can put off pregnancy as they establish themselves during their prime career-building years. Apple has announced it will start doing the same in January 2015.

Cryopreservation and egg storage could be seen as the latest advance from the tech firms that continue to blaze the trail for employee benefits that help attract and retain the best and brightest.

“Egg freezing is one in a long line of innovative HR practices intended to be attractive to educated people with many employment options, seeking a focus on flexibility in the difficult balance between work and life,” according to James Hayton, professor of human resource management at the Warwick Business School in Coventry, England.

“The cost appears to be moderate, although not trivial, at about 20 percent of average salary at these firms,” says Hayton. “The benefits, in terms of attracting and retaining employees, can be expected to significantly outweigh the costs. The positive PR will pay for itself by signaling these employers’ values with respect to women’s control over this important life choice to prospective female employees.”

All that said, the practice isn’t without its detractors.

Healthcare law and bioethics expert Seema Mohapatra, for example, wrote in August that egg freezing “seems to put a Band-Aid on the problem of how difficult it is for women to have a career and raise a family concurrently.”

This week, one woman, speaking on the condition of anonymity, told the New York Times that delaying fertility for female employees is “certainly in the employer’s interest … from a business perspective. But in my experience, it’s more personal: Are you married or not married, and if you’re not and you’re over 35, it’s a health thing.”

In the same Times article, Mohapatra expressed concern that women who “do not fit that profile” could feel pressure to use the benefit.

“What I worry about is it’s not going to be just used by that population, but [it’s] going to be used by the population in their 20s and early 30s saying, ‘If I want to be seen as a serious employee and make it to vice president, I can’t take maternity leave,’” said Mohapatra, a law professor at the Barry University School of Law in Orlando, Fla.

Critics may also note that, “while perks such as these are very impressive and innovative, broader pay equity might be an even stronger signal of the importance of women in the workplace,” says Hayton.

Additionally, companies offering this benefit could draw the ire of religious groups with serious reservations over “the tricky domain of bioethics and reproductive choices,” he continues, adding that other observers may be “squeamish about the degree of paternalism when employers show concern for their employees’ reproductive choices.”

While we’re certain to see these and other strong reactions in the days to come, Hayton, for one, is confident that employers providing egg freezing options for female employees will prove to be a good thing.

“Ultimately … these policies are innovative and forward-thinking, and likely to benefit the employers [that are] creative enough, and bold enough, to offer them.”

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Transforming the Future of Work

As expected, Ray Wang gave attendees at HR Tech’s closing session, “Transforming the Future of Work,” a lot to think about last Friday.

In his usual highly energetic way, Wang, founder and principal analyst of Constellation Research, explored how technology is altering work as we know it—and what HR and IT leaders need to do to prepare for the new business models that are emerging.

145926450Early on in his remarks, he touched on the parts mobile, social, the cloud and Big Data are playing—and are going to play—in shaping the digital landscape of tomorrow.

“Mobile is not about the device,” Wang told the packed room. “When you mobile-enable something, it means you can do it in motion … ” in 30 seconds or less.

Social, meanwhile, is not about the networks, but about creating brand-new verbs such as  “share, like and publish,” and about engaging people.

The cloud? It’s an option that allows you to say, “ ‘Hey, I don’t need to worry about technology [and] can spend more time improving the process and improving the experience.” And Big Data isn’t about information, but about the insights that can be generated and about making better decisions.

At the end of the day, Wang said, the goal is for businesses to take all of this data and create new experiences and outcomes. Today, he said, companies are in the “outcomes business” and building relationships, not selling products and services.

In turn, Wang said, this is inevitably going to impact the kinds of people they are hiring, the skill sets they need and the ways they are structured.

In the digital world, what’s the best way to hire away your competitor’s talent? he asked. “Monitor LinkedIn,” he said. “If you see 48 changes at the same company, you know something’s going down. The signals are all there.”

Wang told attendees that companies are going to need to continually look to the data to generate meaningful insights and thereby make better bias-free decisions.

In line with that, he predicted that more companies are going to be appointing chief digital officers who are dedicated to thinking about and operationalizing the organization’s digital strategy—and he suggested that all leaders are going to need to be digitally enabled.

Going forward, Wang said, HR and IT are going to have to work more closely together.

“If you’re on the HR side,” he said, “you want it simple, no manuals. You also want the ability to have it scalable [so you don’t] need to call IT to make a change. You want it sexy”—so people will want to use it.

In contrast, he said, IT wants it safe. “You don’t want to take the system out. You want to make sure that the system is not going to be insecure, [since] you don’t want to be on the front page of the Wall Street Journal. And you want to make sure it’s a sustainable platform … .”

Change, he said, isn’t going to happen in a silo.

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Screening in a Peer-to-Peer World

Does background screening have a role to play in shaping the future of peer-to-peer marketplaces?  HireRight certainly thinks so.

At this week’s HR Tech, the Irvine, Calif., company announced a new practice that aims to address the needs of “sharing” businesses.

Lyft_Pink_MustacheIn recent years, peer-to-peer marketplaces have been gaining traction, with big bets being made on enterprises like Uber, Lyft and Airbnb. But in order for these organizations to thrive, HireRight CEO John Fennelly believes participants are going to want to know that those they’re entering into a business relationship with are trustworthy.

Through its technology platform, HireRight is looking to provide those individuals with some level of comfort.

In some cases, HireRight’s press release says, a marketplace might mandate screening to help ensure consumer safety and mitigate risk, such as for drivers belong to a ride-sharing service. In other cases, it might offer screening as an option so providers can differentiate themselves, such as for clerical or personal-assistant services.

In the world of background screening, Fennelly says, self-verification is pretty much nonexistent today. But if it begins to catch on in the peer-to-peer world, he says, the approach could eventually transition into more traditional workplace settings.

It should be interesting to see if this indeed turns out to be the case.

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Recruiting Beyond Traditional Social Networks

An interesting little recruiting story came out of a late-afternoon session at the HR Technology® Conference in Las Vegas Thursday. 178915467--social mediaSlugged “How Red Hat Approaches Hiring Beyond Traditional Social Networks,” the session featured Brad Warga, senior vice president of customer and employee success for Gild Inc., a San Francisco-based technology-talent search firm, and Don Farr, director of global-talent acquisition for Red Hat, a global open-source provider.

“We found [traditional candidate sources such as] LinkedIn just weren’t providing the recruiting results we needed,” Farr told conference attendees. Long story short, he knew Warga, but not much about Gild, so decided to try him out with an assignment: Find him 200 top technology developers in a city abroad where Red Hat does business. Warga turned it around in record time “and more than half of the developers on his list were already employees of Red Hat,” said Farr.

Pretty convincing. So Farr decided to use Gild’s sourcing and reporting tool, based on far-more specific tech-developer social-media data — including code information and technical questions and answers, indicating levels of focus and expertise — to complement the recruiting system he already had in place.

Not only has it enriched Red Hat’s recruiting, with vastly improved and far enhanced returns on the right kinds of candidates for the growing company, it’s even provided some surprises.

Key among them was proof it needed to enhance its employee-referral service as well. Using Gild’s tools and services, Red Hat was able to determine that 70 percent of its developers who came in outside the referral program were actually connected in some way to current employees through social media.

“In other words,” said Farr, “we could have hired them ourselves if we had just sourced them through more social [streams]. The connections were out there.”

Long story short, Farr convinced his CEO to invest more in employee referrals and the savings are already being realized.

“We now have an employee-referral portal tracked through our applicant-tracking system,” Farr said. “We’ve effectively built a process where referrals aren’t going into a black box anymore.”

Lesson learned here? “Take advantage of the opportunity to embrace social media in multiple ways,” particularly when you’re looking for something as specific and hard to find as tech developers, he said.

“This is really the story of the old guard and the new guard,” Farr added. “You have to adapt or die.”

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HR Tech: Out With the Outmoded!

“If talent is the most important part of every business, then why do we manage it so badly?”

This question, posed near the beginning of Jason Averbook’s presentation at HR Tech 2014, titled “What the End of the ‘Job’ Means for the Future of Work and Talent Management,” was one of the major themes of his talk. Averbook, chief innovation officer at technology consulting firm Appirio and author of the new book HR: From Now to Next, repeatedly made the point that as the nature of work undergoes drastic change, the talent-management practices still used by a majority of companies today also need to be transformed, or perhaps jettisoned altogether.

“Many of the talent processes still in use today come from a time when our economy was manufacturing-based,” he said. “So today, most of our talent practices are broken down old pieces of crap — we manage people like they were machines, with annual performance reviews, timekeeping, performance ratings.”

Talent is the most important part of any business and, unlike machinery, can’t be easily replaced, said Averbook. So why, he asked, do HR departments continue to subject this precious resource to outmoded processes that no one — not even HR itself — believes actually work?

“How many of you here believe that your performance-management process actually helps improve performance?” he challenged the audience.  When only one person raised his hand, Averbook asked “So why, then, do you continue to use it?”

“For compliance,” one person replied. “Because HR makes us,” said another.

These outmoded processes include how most organizations go about measuring employee engagement, said Averbook,

“If engagement is so important, how come you’re only measuring it once or twice a year?” he said. “Do you look at your Facebook page just once a year, to see if anyone ‘liked’ your stuff? Engagement should be something you look at every day.”

Twitter can be an excellent way to determine employee engagement because it can reflect current engagement levels, rather than what they were six months ago, said Averbook. HR is a business function, not a support function, he said, and as such, its technology for supporting talent should incorporate the following five principles:

  1. It should be real time
  2. It should be looking now and forward, not backward
  3. It should be based on killing silos within the organization
  4. Its processes should be for the good of the business, not HR
  5. It should be easy.

As the nature of work and jobs continues to change, with many organizations moving toward an independent-contractor model, talent processes can no longer be cyclical and the technology supporting them can’t be user-unfriendly, said Averbook.

“You’ve heard of business-to-business — well, now we live in a business-to-employee world, and if a process isn’t simple, employes won’t do it,” he said.

And if your technology vendors can’t provide tools that are simple and intuitive and that meet your specific needs, then build your own, said Averbook.

“If your vendor can’t come through, then build an app yourself,” he said. “It’s not hard. My 10-year-old builds apps.”

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