Strategic Human Capital Insights

It may be underestimated, but it is certainly strategic!

This question predictably comes up when I speak with company management, often because the Employee Handbook is seen as moderately useful but not on the top of management’s priority list. 

Why’s that? Because often the Employee Handbook:

• Isn’t current
• Doesn’t cover the full range of issues
• Isn’t specific enough to be meaningful
• Isn’t given to new employees
• Isn’t used by management

However, one thing is for certain, when something goes wrong in an organization, the following happens:

• From the manager’s perspective: Managers look to the Employee Handbook for guidance and protection from liability.
  
  
• From the employee's perspective: Employees look to the Employee Handbook for guidance, protection from liability or loopholes created by omission or ambiguity.

Both employee and manager loyalty has always been considered a good thing. So what’s changed? When does being loyal long-term, at all costs, go from a virtue to a liability?

The concept of "change" has changed everything. When companies grew at normal rates, and change was incremental and predictable, manager and employee loyalty could keep pace with each other and with the direction of the organization. Now, however, when organizations are growing fast and adapting to new technology, new processes and methods, increased customer demands, and additional new employees, the predictable static environment that many employees are comfortable with, have morphed into chaotic, change-driven, unpredictable frontiers where the old rules and controls have evaporated. Increasing, the latter describes today’s work reality. 

Here are some important questions to consider when thinking about manager loyalty:

• What does it mean for the employee who is attached to the old rules and controls and is having real issues adapting to the new work reality? 

• What does it mean for new employees who don’t know the old rules and controls and don’t really need to work under those constraints since that work environment has shifted?

• What does it mean for the manager who must manage these two conflicting and competing employee needs?

Have you ever thought, heard or said the following?

• Organization charts aren’t worth the paper they’re printed on?
• Here is the organization chart, but, let me tell you how it really works!
• Why do we need organization charts anyway – they only reinforce bureaucracy which is counterproductive?
• We can’t figure out how to put together an organization chart that makes any sense

Why Should We Even Bother?
Why do organizations spend so much time putting organization charts together and why do they rarely display how the organization really works?  Because we desperately need to rationalize how the organization works, recognize how work gets done and define how accountability is managed.  Without a visual depiction or starting point, we are disorganized around chaos where people are busy (but busy doing what and for whom?) and where accountability is elusive because no one really knows who is responsible.  This, in fact, describes a state of disorganized chaos which is hardly an efficient and effective way to run a business and is frustrating for everyone involved, both managers and employees.

Today, we are right in the vortex of a VUCA world. We are living in a perfect storm where the tensions and demands of our changing external environment on many levels are creating real pressures on our internal ecosystem and the people working in our organization. Old structures and roles have expired and are "past their sell-by-date." To truly embrace the new VUCA work reality, it’s time to rethink all the old organizational structures and roles. It’s easy to see when our food has expired, but are we quite as rigorous when evaluating if our structures and roles have expired as well? Are we clinging to the old, hoping they will somehow be relevant for the present and future work demands? Let's examine the 4 critical skills that are required to excel in the new VUCA (volatility, uncertainty, complexity, and ambiguity) world.

1. Business Acumen: Understanding the Business of the Business 
   
   Your employees need to fully understand your business as it performs in the marketplace. If they do not, you cannot expect them to stay relevant and deliver forward-focused, value-added services and productivity.

In the late 90’s the term VUCA was first used by the military.  VUCA certainly sounds like a strange acronym.  VUCA is defined as dealing with: 

V – Volatility: Anticipating and reacting to the nature and speed of change

U – Uncertainty: Maintaining effectiveness despite constant surprises and lack of predictability

C – Complexity: Navigating through complexity, chaos, and confusion

A – Ambiguity: Acting decisively without having clear direction & uncertainty 

VUCA is now used to describe today’s current world of work.  We are now right in the middle of this new working environment.  How different is this from the preceding work environment? It is very different. In my last blog, I compared the old, conventional work paradigm with the VUCA emerging work paradigm of:

We are sitting at the crossroads of two different worlds of work.  We all know this intellectually. Everyone talks about it. Then why is it taking us so long to change things?  Our present organizations are often disconnected and misaligned.  This disconnect between the new reality and blind adherence to old operating structures is creating an organization operating chasm that can and will have serious strategic implications. 


Past Organizations 

The old work paradigms of the past focus on:

• BAU – Business as usual
• Maintaining the routine
• Sustainability
• Planned growth
• Global expansion – unlimited green fields
• The emergence of the age of the Knowledge Worker
• Legacy organizational structures and practices rooted in the past 

The Business Impact of Transformation Initiatives

The research tells us that 90% of change / transformation initiatives fail.  Failure can be very simply measured relative to the following 3 criteria.  Was the initiative:

         On Time?
         On Budget?
         With Quality?

So while transformation initiatives may get done, unless they meet these three criteria, we must question their success.  A bigger organizational question must be considered.  What is the strategic business impact of transformation failure or delay for organizational business sustainability?

In this continuously changing world, would you rehire your current leadership team?

If the world of work is changing, we can’t ignore how the role of the leader fits into this change and is evolving itself.  The leadership of yesterday and today may not have the necessary knowledge and skill sets to drive the business into the future.  It doesn’t mean leadership can’t.  It does mean that they will most likely need to be developed to use a new set of core competencies.  The role of the leader is CRITICAL to the organization and its success. This role requires a person who is both outwardly focused and inwardly responsive. Some required key competencies for the future are:

• Vision
• Risk Assessment
• Creativity and Innovation
• Critical Thinking and Problem Solving
• Communication
  
  

Here are some questions to consider as you evaluate your current leaders to see if they are "upskilled" to meet tomorrow’s business challenges.

This question has been considered in organizational development theory and practice for decades.  There are as many opinions as there are people.  Some say yes.  Others say no. To begin to answer this question, three key concepts must be uniquely defined by every organization. 

Since every organization is different, the definition of the concepts can vary.  However the following three concepts must be clearly defined:

1. Definition of Leadership - The Benchmark 

How does the organization define the role of the leader?  What are the benchmark competencies required for the role, as it ideally relates to and aligns with the business strategy?  How are those competency requirements prioritized?  How are people evaluated against the organizational benchmark?