Situation: A company started small with everyone wearing many hats including the person in charge of HR. They wish to create a more formal HR structure with professional advice, but don’t yet want to hire a full-time HR professional. How do you create HR using outside resources?
Advice from the CEOs:
One company outsources their full HR function. Services include:
Putting records in order and maintaining them.
Developing different hiring packages for different levels of employees.
Keeping the company and employees updated on compliance regulations.
Coordinating on-boarding and training.
There are several national HR and personnel outsourcing companies that can help. Examples include Paychex and ADT. There are also a large number of local providers. Network with your business peers or check out your local Chamber of Commerce to learn who these providers are.
What about training?
Outsourced HR professionals can organize training for formal certifications and some aspects of job skills training.
Training in company culture should be done by company leadership. Outsourced HR can organize schedules for this. The key point is that company leadership is the face of the company and the foundation of company culture. This can’t be effectively outsourced.
In some cases, training can be done via video. Outsourced HR can help to plan and coordinate creation of the videos, and can then schedule video training for new employees.
Have your in-house person join an HR roundtable to embellish their own training.
Situation: A CEO recently attended a workshop on awareness of employees’ emotions. The message was that to effectively lead, the leader must be aware of both their own and their team’s emotions, and effectively address these in all communications. How have others acknowledged employee emotions? Can you effectively manage your team’s emotions?
Advice from the CEOs:
All companies have both cultures and ways in which employees and managers interact. These are either intentional or accidental.
It is important to develop a competency model for any company – skills and behaviors that reinforce company culture and guide both hiring decisions and personnel evaluations. Behaviors should be defined by competencies, including both technical and soft competencies.
Once a company competency model is established, position descriptions will be variations of the company competency model.
A competency model will help you to script candidate interviews. This works whether you use a panel or individual interview format. Questions should address past behavior in specific situations that the individual has experienced. Provide each interviewer with a set of questions that will help the interviewer understand how the candidate expresses soft competencies. Post-interview, get together and discuss how each candidate’s responses compare with the company model.
Supplement your interview results with a psychometric test which scores and effectively measure the key soft competencies expressed in your culture. Pair the psychometric test with cognitive testing to assess a candidate’s technical competency.
Use similar questions for employee evaluations or coaching situations. The difference will be that in the case of current employees, you will want to have the employee refer to situations and behaviors experienced at work or working with customers or company partners.
Special thanks to Maynard Brusman of Working Resources for leading this discussion.
A company is revising sales forecasts for 2016 and seeks the advice of others. A combination of low energy prices and shaky financial markets sparked by the Chinese decline has left many questioning whether they should revise their plans to account for an economic contraction. How is the economy impacting your sales plan?
Advice from the CEOs:
Niche Software Company – we are coming off of a good year. Our industry has seen low impact so far. Going forward we are cautiously optimistic. A couple of clients have delayed projects but didn’t cancel.
Services Company – hiring has been frozen. Adjustments to staff count have already been made. Clients are asking us to contact them again early in the second quarter. Opportunities exist in the health care area.
Hardware Company – we are running scared. We have cut business and personnel expenses to assure survival. A large customer just announced new plant construction earlier this week – this may help to turn things around. We are assuming this will be mean a longer term rather than a short-term opportunity.
Niche Software Company – cutting personal/business expenses. Long term things look favorable, but we have to survive the short term. Attendance at a large trade show this month was a little above last year but we don’t know whether this will yield a significant increase in sales.
Trades – Projects with big bank backing are on hold. We see large scale bidding wars for projects. Where there used to be 3-5 bids there are now 15 or more. Looking for consolidation of competition – especially union–based shops.
Situation: A company is in the skilled trades. When there is an injury at work, Workers Compensation does not cover the employee if they were using drugs or alcohol at the time of the injury. Should you conduct random drug tests at work? How do you make employees aware of company policy on random drug tests?
Advice from the CEOs:
Laws governing Workers Compensation vary by state. Be sure to get the latest update on regulations from your State.
The best policy is preventative. Always test for drugs and alcohol prior to hiring. Let potential employees know that this testing is a requirement of employment, and that a positive test disqualifies the candidate. A candidate has the option to disqualify him or herself rather than be tested.
The use of medical marijuana with a doctor’s prescription does not preclude a candidate or employee from failing a drug test. State laws regarding medical marijuana are evolving, so monitor state regulations.
In your employee policy, specify that you can test for drug use at any time, at your discretion. Additionally, state that you have the option to perform a drug test in case of an injury. If there is an injury on the job, have the treating physician perform a drug test on the injured employee.
Assure that you are consistent in treatment of employees and in how you apply your policy.
There should always be a reason for a drug test – tie it to employee safety.
As you institute a new policy, let all employees know about the policy. Prominently post the policy at your place of work, and remind employees about the policy at appropriate company or employee meetings.
Situation: A company pays employees based on skill level. Raises are given as an employee learns additional skills. In some cases, when they give an employee a raise, productivity drops. The company has tried other approaches including bonus systems and profit sharing but did not find these effective. How do you effectively motivate hourly employees?
Advice from the CEOs:
Before trying a new motivation scheme, find out what matters to your employees. It may not be either bonuses or profit sharing.
Develop and send out a questionnaire listing different factors – revenue sharing, bonuses, creativity, doing quality work – ask what matters to you? Get their feedback.
People work for respect – many studies have shown that as long as the payment offered is fair, salary is secondary.
Hire an advocate for your employees – a part-time HR person. An important role for this individual will be to determine what motivates employees, what they want from their jobs, and how improvements in both processes and the working environment can boost productivity.
What is the real issue: employee motivation, employee productivity or cost reduction?
If material waste is more expensive that labor – create metrics and rewards to reduce waste.
At companies that use the Toyota Production System employees receive points for process improvements. At the end of the year they receive a cash payout based on the points earned during the year.
Employees are rewarded publicly. The incentives are cash, recognition and respect. These companies find that recognition and respect trumps cash.
Depending upon your cost structure, it may be more productive to focus on scrap reduction. Bring in someone with experience who can find the sources of scrap. The effort will pay for itself rapidly.
During the hiring process, require educational attainment as evidence of the individual’s commitment.
Look for skills experience – machinist, etc. Match skills and experience to your needs. This will lead to faster learning curves and will help to reduce waste.
Situation: A company has goals and objectives in place for the whole company. The challenge is that they need to focus top managers on effective processes and not just on their team’s objectives. In particular they want to increase focus on cross-functional processes. How do you focus managers on process?
Advice from the CEOs:
Start by identifying all critical processes. Once this is done, build an in-house system to track these.
Make contingency decisions dependent upon sticking with the processes.
Consistent follow-through is essential – talk through the blocks as they arise.
Don’t become a slave to your own system. Stay flexible and allow appropriate non-prescriptive behavior/solutions where it makes sense. This helps to feed creativity in the organization.
Be an advocate/cheerleader for the new culture. Employees need ongoing encouragement as they shift focus to the new regime.
Build an underlying culture to support your processes. This takes time and persistence.
If you are growing, as you hire new people, select new employees who fit the new culture. This helps to create lead models for the rest of the group.
By definition, growth means increasing infrastructure, which in turn means more restrictions and rules. Keep it fun. For example, create a wine penalty for missing deadlines.
If you’re late on your deliverable you have to contribute a good bottle of wine, with your name and the month that you were late on a tag attached to the bottle.
Contributed bottles of wine are shared at the company Christmas or holiday party.
Situation: A company’s CEO wants to segue from rainmaker-project manager to leader, with others taking the lead on projects. He has tried raising prices on his time, but clients are willing to pay the higher price so this hasn’t worked. How does the CEO set boundaries so that he is not involved in day-to-day project management?
Advice from the CEOs:
The most important question is: where’s the real battle – is it in the client’s or your own head? Is this really a client problem, or are you unwilling to let go? You need to answer this question before alternate strategies will work.
Look for the right project managers. You will change your hiring when the goal is for you to not be deeply involved.
Hire people who are better than you.
Gradually phase existing relationships to others.
In early work with a new client, set expectations so that your involvement is at the appropriate level and your team handles the heavy lifting.
Instead of attending meetings in person, use electronics – video conferencing. This saves the travel time for the meeting.
Don’t respond to client emails too quickly when you are copied – let others respond.
As one company grew, they invented new roles with high profiles but little work. These roles were figureheads for project leadership.
Project emails were set up so that all client emails went to the team, as well as the CEO, but the team would then respond to client questions.
Situation: As a company has grown to multiple sites around the world they have lost some of the culture that originally bound the company together. Many new hires are hired locally by regional managers and don’t have a strong bond to headquarters or the broader company culture. How do you build a unified culture in a company with many geographically diverse sites?
Advice from the CEOs:
Company culture starts with a common set of values. These values should drive everything, from hiring, through on-boarding and training, to performance measurement and evaluations. In a strong company, these values should be reinforced regularly and expressed in the day-to-day behavior and decisions of the company.
Look at how you hire new personnel. Is alignment with company values part of the selection process?
Next, look at your on-boarding and training process. Company values and culture should be thoroughly expressed and reinforced in the training process.
There is no substitute to face-to-face meetings to build shared company values and culture. At least once or twice a year you should host national meetings that bring the regions together. At these meetings company values should be reinforced, there should be business content, and there should also be recreational bonding component to help employees get to know one-another.
Consider an annual reward or recognition trip or special event, and include spouses at company expense. This creates a completely different level of bonding, and spouse involvement communicates a company commitment to the families of the employees.
If you have a large number of locations, you should also have a human resources department. Among the important responsibilities of the HR department will be developing uniform selection criteria, uniform training which includes emphasis on company culture and values, and assistance in planning national or multi-regional meetings.
Situation: A company needs to hire several upper level managers to support growth objectives In the past they have selected candidates based on referrals from existing employees or management’s “gut feel” of candidates. The results have been inconsistent. What have you done to identify good job candidates?
Advice from the CEOs:
The answer depends upon the success of your hiring in the past, both for areas where you are comfortable with the skill sets and those areas you are less comfortable. For example, you may be good at identifying candidates for technical positions, but not for sales and marketing.
One CEO’s “gut feel” hires have been consistently wrong. The solution has been to have recruiters screen and evaluate candidates. Once candidates are prequalified, only the best are presented to the CEO for final selection.
Another CEO uses a two-step process:
A recruiter selects and ranks their final two or three candidates.
Then the CEO gets a second opinion from another recruiter on the recommended choices of the first recruiter.
If both recruiters agree on the best candidate, the CEO meets the person and offers a job provided that they are compatible. If the recruiters disagree, the CEO probes the differences between the evaluations and decides whether to meet with one of the candidates.
Another CEO involves staff and uses a ranking system to evaluate candidates in areas of competence and fit. This produces composite scores that assist them in identifying the best candidate.
Key Words: Hiring, Manager, Selection, Referral, Gut Feel, Process, Skills, Head Hunter, Recruiter, Ranking
Situation: A company has established market leadership in an emerging market. When you innovate in a niche, focusing on early adopters, eventually you run out of early adopters. The challenge is broadening the appeal to a larger mainstream customer base. How do you cross the chasm from early adopter to mainstream?
The challenge is both messaging and cultural.
In messaging, you must support the new norm. This means convincing the customer that if they are not with you, they’re being left behind. You need to demonstrate that your established, proven solution is the new norm.
The cultural challenge is maintaining a culture of innovation and attracting the right talent while becoming a mainstream company. An attraction to new talent is that you are cutting edge – changing the world. This aura is critical to a start-up. You must maintain this innovative culture as you become the market leader.
How do you overcome these challenges?
Finding people who’ve been there and done that increases the odds in your favor. We hired a marketer who had helped take SuccessFactors through the same transition.
Hire for excitement, energy and enthusiasm. Quickly remove new hires that turn out not to fit.
Maintain a freedom to fail atmosphere. You need people who will take risks, but who will also step back and quickly change direction when the risk isn’t productive.
Decision-making speed is a great advantage of small companies.
Create an organization that celebrates innovation.
We have “Hack Days” when employees are free to work on projects of their choice. A new product that brings business audience targeting to social media came from a Hack Day project.
Keep everyone informed. We have company-wide daily stand-ups. Individual updates are quick – 30-45 seconds. This fosters open communication and awareness, and surfaces issues before they become problems.
Weekly, we send out full disclosure emails including key financial metrics, successes and failures.
Monthly we have executive-only stand-ups. These are longer, but updates are quick and focus on progress to goals, as well as next month’s goals.