HR’s Role in Fostering Innovation

100843802 (1)How do you define innovation?

Chris Hunsberger asked that (rhetorical) question of the 550-plus attendees within minutes of kicking off his keynote talk yesterday morning at the 9th annual HR in Hospitality Conference & Expo at Caesars Palace in Las Vegas.

A quick Google search will bring you nearly 270 million different definitions, explained Hunsberger, the executive vice president of HR and administration at Four Seasons Hotel & Resorts.

So there are a few different ways to define the term. But, in essence, innovation is about “creative problem solving,” he said, “and doing things in new and different ways.”

Indeed, doing things in new ways is a necessity for any organization with hopes of succeeding in 2015, said Hunsberger, who is, by his count, 75 days into his new role, after 34 years in operations at Four Seasons, where he has spent his entire professional career.

To illustrate the importance leading companies (and their HR functions) place on doing things “a little differently,” Hunsberger pointed to organizations such as Zappos and Netflix.

Zappos, of course, has famously offered employees financial incentives to leave the company, in part as a way to separate those who are truly committed to the organization’s success from those who are simply working for a paycheck.

Meanwhile, Netflix is piloting a program that allows employees to set their own holiday schedules.

To further demonstrate his point, Hunsberger also offered a few “short stories of innovation” from within Four Seasons.

In search of innovative ideas from employees, Hunsberger and the leadership team asked senior leaders throughout the organization to arrange and oversee “innovation sessions” focused on identifying opportunities to improve the guest experience, for example.

At one of these sessions, the Boston-based hotel’s team came up with an idea for “15-minute room service.”

“We obviously get a lot of feedback from guests, and many felt room service was too pricey and, at an average of 30 minutes to 40 minutes, took too long. So the Boston team had the idea to develop a 15-minute room-service menu,” said Hunsberger.

Leadership loved the idea so much, he said, that “we rolled this out as a global initiative in about 90 days, and we even had a competition to see [which hotel] could come up with the best menu.”

In addition to drawing raves from Four Seasons guests, the 15-minute room-service initiative “really allowed our team to think about innovating,” he said, “and doing things in a new way.”

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A ‘Window’ into Transforming GM’s Culture

There have been no shortage of books over the years devoted to the glass ceiling, a phenomenon that is still very much evident today in organizations, both big and small. But few, if any, have attempted to explore the issue through the story of one single leader.

cq5dam.web.1280.1280In Road to Power: How GM’s Mary Barra Shattered the Glass Ceiling, a book being released today by Bloomberg Press, Laura Colby, a reporter for Bloomberg News, has found a worthy subject in General Motors’ CEO, Mary Barra. What makes her story of particular interest to those of us in HR is the fact that, for a short but very trying period of time (when GM was in the process of navigating through bankruptcy), Barra led the HR function at GM.

As head of HR, Colby reports in Road to Power, Barra held a significant amount of power in shaping the company’s future management. “Thousands of people were leaving the company. Barra’s job was to maintain morale among the most promising ones—the high achievers—so that they wouldn’t bolt at a time when they could get bigger salaries elsewhere.”

Early in her tenure as HR chief, Colby writes, Barra went on the road, “visiting the company’s locations across the country. She’d hold brown-bag lunches at plants and offices to answer employee questions. She also had a series of more formal meetings with invited representatives from different sections of the company, so-called diagonal slices. With more than a dozen plants closing and thousands of workers laid off, she needed to underline the message that the company wanted those who remained to do their jobs well and to be accountable for the results.”

Colby describes in the book some of the more formidable challenges Barra faced at the time. But as the author reminds us on at least a few occasions, sometimes it’s the small stuff that can be particularly telling about an organization’s culture.

A great example can be found in the chapter titled “The Volt: Shocked into Action” (keep in mind this is an excerpt from an advanced copy of the book). It specifically touches on GM’s dress code …

“One of the most iconic things Barra did to get the message across that times were changing was to relax the company’s dress code. It ran to about 10 pages when she joined HR, including descriptions of proper attire for everyone from assembly line workers to office staff to executives. “It was probably the most interesting change and the biggest learning that I had into a culture,” Barra said at the Fortune women’s forum. She whittled the code down into two words. We said, ‘Dress appropriately.’ That was it.”

Rather than liberating employees, the change left some of them terrified. Barra said she’d have managers e-mailing or calling her and asking for written details of the policy.

“So I’d take them through, and say, ‘What do you do?’ And they’d say, ‘I manage 20 people and a $10 million budget.’ ” And I’d say, ‘I can trust you to manage 20 people and $10 million but I can’t trust you to dress appropriately, to figure that out?’ ”

True, the future of GM hardly hinged on what folks wore—or didn’t wear—to work. But as Colby quotes the subject of the book saying at the Fortune conference, Barra considered the dress-code experience a “window into the change we needed to make.”

And for those of us reading about it some years later, it serves as a valuable reminder that many of the policies and practices we put in place as HR leaders, even the ones that don’t fall into the category of make-or-break—along with the behaviors we demonstrate—send powerful signals about our organization’s culture and priorities.

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Considering the Stigma of Affirmative Action

Two recent studies out of the University of Michigan raise some troubling questions about just how far we’ve come as a diverse 468250323 -- diversity hiringnation, with equal access to all in life, school and work.

The most recent, published on the Phys.Org site just this past Monday, contains the unsettling finding that, although a credential from an elite university results in more employer responses for all applicants, black candidates from these prestigious universities do only as well in getting the job as white candidates from less-selective universities.

When our editorial team discussed this study at its Tuesday news meeting, “unsettling” wasn’t the word most used. “Sad” was the term of choice.

“These racial differences,” says the study’s author, S. Michael Gaddis, “suggest that a bachelor’s degree, even one from an elite institution, cannot fully counteract the importance of race in the labor market. Thus, both discrimination and differences in human capital contribute to racial economic inequality.”

One can’t help but wonder if some of those hiring managers and recruiters studied by Gaddis weren’t jaded by assumptions that such a collegiate star — at least on paper — was the recipient of favorable treatment and maybe easier hurdles to jump, thanks to affirmative action.

Which brings me to the other, earlier U-M research that essentially confirms — by carefully examining — the stereotypes many do, indeed, have about co-workers who advance through affirmative action and diversity initiatives.

Researchers David Mayer of the U-M’s Ross School of Business, Lisa Leslie of New York University’s Stern School of Business and David Kravitz of George Mason University’s School of Business examined research showing affirmative-action recipients being viewed as less competent and competing for company resources. Based on that, they say, they’re seen as less likeable by their colleagues, which can lead to negative assessments of their performance.

“People have all kinds of assumptions about what affirmative action means,” says Mayer. “A lot of people assume it’s about hiring people less qualified [than leading candidates] because they are a member of a protected group … .”

In Leslie’s words:

“Diversity initiatives are effective, but also produce unintended consequences that can limit the career success of the very groups of employees they are intended to benefit. Implementing an affirmative-action plan without taking steps to avoid unintended consequence is unlikely to be an effective solution.”

So what should employers do with all this? Researchers from the earlier study say none of the drawbacks mean companies should get rid of affirmative-action programs. Instead, they say, such programs should be implemented more effectively and positive outcomes, such as having high-level minority role models in business organizations, should be studied.

But how do we alter those silent, destructive mind-sets that very well could be impacting resume assessments where ethnicities are known? Those mind-sets that whisper “easier ride”?

Hard to say.

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Is One and Done Finally Done?

The annual performance review — a joyous occasion for all involved (sarcasm) — is on its way out. That’s according to Bersin by Deloitte, which has summarized the findings of its recent study on performance management software (which evaluated 120 performance-management features from 46 software providers) in a new “WhatWorks Brief.”

Organizations are increasingly viewing performance management not as an annual assessment but as a series of ongoing activities that include goal-setting and revising, managing and coaching, development planning, and rewarding and recognizing, according to the study. However, HR will need to evaluate new performance-management software carefully, as not all will offer the same level of support for these activities, the study’s authors warn.

Continuous coaching, in particular, is becoming a bigger priority for many companies — yet only a subset of software applications support coaching management and tracking today, according to Bersin.

“There are many factors contributing to this focus on continuous coaching,” says Stacia Sherman Garr, Bersin’s vice president of talent and HR research. “Work is becoming more dynamic and fast-paced. We see the rise of a large, young generation of employees, along with a skills gap in both developed and emerging markets.”

Coaching, she says, is becoming a bigger part of the “employment value proposition,” where employees want individual feedback and to feel valued for their unique contributions.

 

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CEOs Pay the Price for Scandal

CEO payWhether it’s a companywide pattern of unseemly actions or one rogue employee’s dirty deeds, corporate misconduct happens.

And, when it does, the chief executive has to answer for it.

Theoretically, anyway. But how do you hold CEOs accountable for ethical breaches—and deter future lapses—that occur on their watch?

One way is to hit them in the wallet, in the form of reduced salaries or forfeited bonuses, for example.

Earlier this week, the Wall Street Journal suggested that more boards are taking that route, in a piece highlighting a few prominent examples of CEOs who have recently seen their compensation cut in the wake of scandal (subscription required).

For instance:

  • The board of directors at GlaxoSmithKline cited the settlement of bribery charges in China (and the company’s sinking profits) when it slashed CEO Andrew Witty’s pay nearly in half.
  • Rolls-Royce Holdings chief executive John Rishton saw his salary cut last year amidst a series of bribery and corruption scandals that continue to plague the company.
  • Faced with sliding profits and a spate of compliance issues, soon-to-be former Standard Chartered CEO Peter Sands recently announced he would forego a bonus reportedly in the neighborhood of $6 million.

Richard Leblanc, an associate professor of governance, law and ethics at York University, told the Journal that affecting executives’ pay incentives is “the best way to control management” in terms of preventing bad behavior and unsavory business practices.

In the same piece, Leblanc says boards are taking an increasingly unforgiving stance on such transgressions, withholding CEO pay and vesting of equity as part of a broader trend of “risk-adjusted” compensation.

In some cases, chief executives may be forced to fall on their swords even if untoward behavior took place before he or she took over the top spot.

In fact, CEOs should be prepared to do just that, according to Alan Johnson, managing director of compensation consulting firm Johnson Associates.

“It may not be your fault,” Johnson told the Journal. But “the lesson for executives is to expect it.”

Johnson urges CEOs to “get out ahead of the board” and actually volunteer to have their pay cut or to waive a bonus in such a situation.

“It’s probably going to happen anyway,” he said, “so why go through the pain of [the board] having to agonize over it?”

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Obama’s New TechHire Initiative

President Obama has announced the Department of Labor’s  TechHire initiative as part a new campaign to work with communities to get more Americans rapidly trained for well-paying technology jobs.

According to the White House, TechHire is “a multi-sector initiative and call to action to empower Americans with the skills they need, through universities and community colleges” but also nontraditional approaches such as “coding boot camps,” and high-quality online courses that can rapidly train workers for a well-paying job, often in just a few months.

According to the White House memo:

Employers across the United States are in critical need of talent with these skills. Many of these roles do not require a four-year computer science degree. To give Americans the opportunity they deserve, and the skills they need to be competitive in a global economy, we are highlighting TechHire partnerships.

The initiative includes:

  • A $100 million H-1B grant competition by the Department of Labor to support innovative approaches to training and successfully employing low-skill individuals with barriers to training and employment including those with child care responsibilities, people with disabilities, disconnected youth, and limited English proficient workers, among others. This grant competition will support the scaling up of evidence-based strategies such as accelerated learning, work-based learning, and Registered Apprenticeships.
  • Expanded regional employer hiring and paid internships for IT jobs (e.g., coding, web development, project management, cybersecurity) sourced from accelerated training programs based on demonstrated competencies instead of only selecting candidate using standard HR ‘markers’;
  • Expand slots, upgrade quality, and diversify participants in accelerated training pipeline – expand local programs like coding boot camps, the best of which have 90 percent job placement rates – to enable more Americans to master the skills required to fill technology jobs and create a strong pipeline of technology talent that local employers demand and will hire that can be ready in months not years; and
  • Support from locally intermediaries – municipal leadership, workforce development programs and other local resources – that help connect people to jobs based on their skills and job readiness and help employers engage local talent trained in both alternative and traditional programs.

To kick off TechHire, 21 regions, with more than 120,000 open technology jobs and more than 300 employer partners in need of this workforce, are announcing plans to work together to new ways to recruit and place applicants based on their actual skills and to create more fast track tech training opportunities.

Examples of TechHire Community commitments include:

  • St. Louis, MO. A network of over 150 employers in St. Louis’ rapidly expanding innovation ecosystem will build on a successful Mastercard pilot to partner with local non-profit Launchcode, to build the skills of women and underrepresented minorities for tech jobs, and will also place 250 apprentices in jobs in 2015 at employers like Monsanto, CitiBank, Enterprise Rent-a-Car, and Anheuser Busch.
  • New York City, NY. With employers including Microsoft, Verizon, Goldman Sachs, Google, and Facebook, the Tech Talent Pipeline is announcing new commitments to prepare college students in the City University of New York (CUNY) system for and connect them to paid internship opportunities at local tech companies. NYC will also expand successful models like the NYC Web Development Fellowship serving 18-26 year olds without a college degree in partnership with the Flatiron School.
  • State of Delaware. The new Delaware TechHire initiative is committing to training entry-level developers in a new accelerated coding bootcamp and Java and .Net accelerated community college programs giving financial institutions and healthcare employers, throughout the state, access to a new cohort of skilled software talent in a matter of months. Capital One, Bank of America, Christiana Care and others are committing to placing people trained in these programs this year.
  • Louisville, KY. Louisville has convened over 20 IT employers as part of the Code Louisville initiative to train and place new software developers, including Glowtouch, Appriss, Humana, ZirMed, and Indatus. Louisville will build on this work in support of the TechHire Initiative: the city will recruit a high-quality coding bootcamp to Louisville and establish a new partnership between Code Louisville and local degree granting institutions to further standardize employer recognition of software development skillsets.

With more than half a million unfilled jobs in information technology across all sectors of the economy, the initiative could be poised to help employers fill their high-tech talent gaps.

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Layoffs or No Layoffs, Employees Come First

Whatever side of the layoff story you find yourself on — now or in the 187065451 -- layoffsfuture, conducting them or avoiding them at all costs — don’t ever lose sight of your employees’ experiences.

That seems to be the collective message of two articles I came across recently, written on the same day, no less. One, from the Harvard Business Review site, written by the chief executive officer of Scripps Health, Chris Van Gorder, trumpets that company’s no-layoffs policy.

The other, from the Society for Human Resource Management site (registration required), details Target Canada’s recent “unprecedented” move to offer a $70 million severance package to the some 17,600 employees who are slated to be laid off by mid-year 2015 as the company exits the Canadian retail market.

A more recent HREOnline news analysis by Senior Editor Andrew R. McIlvaine, “Cushioning the Blow,” highlights the merits of giving severance to everyone. In that story, Sanjay Sathe, founder and CEO of San Jose, Calif.-based outplacement consultancy RiseSmart, is quoted saying that, “if the No. 1 goal of severance is to take care of employees, then the practice should be to offer it to all employees.”

Without a doubt, taking care of employees is at the heart of both the Target and Scripps Health examples mentioned above.

As Brian Cornell — CEO and chairman of Target’s U.S. parent company, Target Corp. — says in a statement:

“We do not take lightly the impact that our decision to discontinue operations in Canada will have on Target Canada’s team members who have worked tirelessly to make improvements to the guest experience. That is why we took the unique step of establishing the employee trust.”

More specifically, that’s why his company has set up a trust fund for employees to receive 16 weeks of pay, an amount that will be kept separate from Target’s restructuring process. Lisa Stam, a partner at Koldorf Stam in Toronto, calls the severance amount “unprecedented.”

Anil Verma, director of the Centre for Industrial Relations and a professor of human resource management at the University of Toronto’s Rotman School of Management, tells SHRM it’s “unusual” for a company to protect its employees with a trust fund. In his words:

“[Laid-off employees] will also accrue certain benefits, such as medical and life insurance. This act demonstrates that Target is a good employer.”

In defending his decision to establish a no-layoff policy, which “isn’t the norm in my [nonprofit] industry,” Van Gorder shares his belief that “a no-layoffs philosophy is good for employees’ physical and psychological health.” As he puts it:

“I’ve seen what it’s like to carry out mass layoffs — I had to do that in the 1990s at a hospital that was in bad financial shape. I vowed never to let myself get into that position again. Instead, nonprofits need to match institutional discipline with authentic good will toward employees, developing effective employee-assistance and wellness programs and eliminating anxiety about job security.

“Who knows? If enough nonprofits master this balancing act, then maybe we can teach the for-profit world something for a change. … In today’s economy, organizations are supposed to treat employees almost as free agents, with low expectations of loyalty on either side. … But paternalism works — even in the 21st century, and even in an industry undergoing disruption.”

Just some food for thought, I thought.

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Being a Disruptive Force in Healthcare

As snow began to fall on the nation’s capital yesterday morning, attendees at the National Business Group on Health’s Business Health Agenda 2015 conference were inside the J.W. Marriott (Washington) intently listening to NBGH President and CEO Brian Marcotte lay out the challenges and opportunities that lie ahead for healthcare in 2015—and beyond.

452031437During his talk, Marcotte touched on the “disruption” occurring in healthcare today and praised employers for the role they’re playing in “driving innovation.” He described those employers that are leading the way with such innovations as “disrupters.”

“Disruption” is certainly as good a word as any to describe what’s taking place in healthcare today.

No surprise that Marcotte — who was vice president of compensation and benefits at Honeywell for roughly 12 years before replacing Helen Darling as NBGH president and CEO last May — pointed to the Affordable Care Act as healthcare’s biggest disruptive force.

Six years ago, Marcotte said, “[w]hen the CEO would ask the question, ‘Why don’t we just get out of healthcare?’ the answer was simple [because] there was no place for people to go to purchase affordable, high-quality healthcare. Well, the answer is not as simple today.”

Nowadays, he explained, there are several options, including staying the course, private exchanges and public exchanges. As things stand today, he said, “staying the course” continues to be the most efficient way to deliver to employees affordable healthcare. As he explained it,  “[w]e haven’t seen good and consistent data” to suggest otherwise.

At the end of the day, Marcotte added, it all comes down to value and whether or not private exchanges can deliver greater value than today’s self-insured model.

During a session later in the morning, Julie Stone, North America health and group benefits leader for Towers Watson, shared, for the first time, the results of her company’s just-completed 2015 Emerging Trends in Health Care Survey. Among the findings: While 17 percent of 444 employer respondents believe private exchanges provide a viable alternative for employer-sponsored coverage for active full-time employees in 2016, confidence in the approach builds to 37 percent by 2018.

In addition, the Towers Watson study found companies that have done extensive analyses of private exchanges are twice as likely to consider them a viable option in 2016 (29 percent versus 14 percent).

Despite this somewhat promising data, Marcotte said, employers aren’t going to embrace private exchanges until they see more data suggesting it’s the right move to make.

Early on in his remarks, Marcotte emphasized the need for more data, recalling an episode at Honeywell when CEO David Cote put him on the spot at a meeting to back up a statement he made with meaningful data.

CEOs make their decisions based on data, Marcotte said. But with the exception of cost, he continued, the data needed to make the right healthcare decisions aren’t available yet.

In his talk, Marcotte also touched on other disrupters, such as the industry consolidation that’s going on in healthcare. “When will we begin to see the synergies from the consolidation?” he asked.

Another disrupter: emerging delivery models, such as accountable-care organizations. Despite an “explosion” in the number of these organizations, he said, the jury is still out as to “what to make of it.”

“Employers,” he said, “need to know what they’re buying.”

In other words, he said, they need to understand the “value” they’re getting.

As he put it, if you’re going to go to your CEO and say, “We’re going to change the plan design and encourage people to go to ACOs,” that CEO is going to respond, “Why? What’s the value proposition?”

So be ready for that question. And, I would think, be ready with the required data to back your proposal up, because you know you’re going to need it.

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Where’s the Best City to Live?

SFMercer has just released its latest annual Quality of Living rankings of the world’s cities based on their quality of life. As in prior lists, European cities — with their quaint downtowns and superb public transportation — dominate the top of this year’s rankings, joined by cities in Australia and New Zealand.

Coming in at No. 1 is Vienna, followed by Zurich, Auckland (N.Z.) and Munich. The highest-ranked city in North American is Vancouver, coming in at No. 5 and the region’s only city to make the top 10. San Francisco is the highest-ranked U.S. city, at No. 27, followed by Boston (34), Honolulu (36) and Chicago (43). New York City and Seattle are tied at 44.  Montevideo (Uruguay) is the highest-ranked South American city at 78, while Singapore (25) takes that honor for the Asia-Pacific region. Dubai, at 74, is the highest-ranked city for the Middle East-Africa.

And where’s the worst city to live, based on Mercer’s rankings? That would be Baghdad, coming in at 230. Joining the Iraqi capital in the bottom five are Port-au-Prince, Khartoum (Sudan), N’Djamena (Chad) and Bangui (Central African Republic).

Mercer conducts its annual rankings as a way to help multinational companies and other employers compensate their employees fairly when sending them on international assignments with respect to factors such as hardship premiums, etc.  The cities are ranked based on factors including political and social environment, crime rates, economic environment, medical and health considerations, public services and transportation, schools, recreation and housing.

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John and the Thick Glass Ceiling

According to a new piece on the New York TimesTheUpshot section, fewer large companies are run by women than by men named John.

If that seems like an unlikely thing to consider, that nugget of information was dug up from what the Times calls its Glass Ceiling Index, explained thusly:

Among chief executives of S.&P. 1500 firms, for each woman, there are four men named John, Robert, William or James. We’re calling this ratio the Glass Ceiling Index, and an index value above one means that Jims, Bobs, Jacks and Bills — combined — outnumber the total number of women, including every women’s name, from Abby to Zara. Thus we score chief executive officers of large firms as having an index score of 4.0.

The GCI is inspired by a recent Ernst & Young report, which computed analogous numbers for board directors, according to the piece. That report yielded an index score of 1.03 for directors, meaning that for every one woman, there were 1.03 Jameses, Roberts, Johns and Williams — combined — serving on the boards of S.&P. 1500 companies.

While the methodology behind the figures is certainly interesting and unique, the NYT piece notes that it also points to the sad truth “that in many important decision-making areas of American life, women remain vastly outnumbered.”

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