Organizational Culture

sherrie-suski-cultureWelcome to 2019! It’s hard to know where to begin on your journey toward improving organizational culture if you don’t know where you are currently.  There are a number of different ways to measure culture……… satisfaction surveys, pulse surveys, MBWA, but it is sometimes helpful to have a framework in which to fit your feedback results.  Do you know what your end goal looks like and the steps needed to get from here…. to there?

The journey toward assessing and improving your organizational culture can be roughly broken down into the below five stages.

Functional

Learning and talent are often separate processes. Both are regarded as necessary for HR operations, but they are distinct from how business is done. Most employees do not regard the culture as engaging. Culture is frequently hierarchical. HR may conduct an engagement survey periodically but the inertia behind addressing some of the engagement challenges is low.

Cross- functional

Executive support for learning and talent is more evident but the culture is still principally characterized as a top/down command and control philosophy. The organizational structure is fairly hierarchical, but employees see opportunity for career advancement and mobility. Senior leaders are not purposefully driving efforts to enhance the culture or the level of execution and engagement among employees.

Building

Learning and talent begin to converge based on an awakening of how they can be leveraged to achieve better business outcomes. It is frequently at this stage that the organization becomes focused on quarterly or annual goals.  Employees recognize a shift toward more people-centric strategies as executives support more initiatives that strengthen the culture. Key to success in this phase is the degree of middle management support. Information flow becomes more organic.

Enhancing

An inspired, growth-minded organization is recognized as a true learning culture with a people-first philosophy. The organization is innovating and responds quickly to market changes, often seizing first-mover advantage and outstanding talent. Execution and engagement studies are regularly conducted to measure the tempo of the employee culture and there is wide-spread support for adjusting tactics when signs of engagement begin to drop.  Goals and a goal-based philosophy are adopted across the organization and embedded into the culture.

Optimized

A self-developing ecosystem drives change at individual and organizational levels. Collaboration and transparency in career and development abound. Employee ideas are valued and encouraged regardless of level. The organization is agile and consistently at the front of its field. The people culture is at the heart of the organizational philosophy. As such, multiple measures of employee engagement are used and there may be a dedicated function aligned to the candidate and employee experience. Highly sought after employer.

Not every organization will achieve the optimized state, but it is, nevertheless, a worthy goal.  The closer you can get, the better your organization will be from both an employee and investor perspective!

Wellness Programs

 

Bring up the word Wellness and what immediately jumps to mind is usually ways to improve the physical health of the workforce.  However, true wellness covers a broader spectrum and includes, not only physical, but emotional and financial wellness as well. Especially at this time of year when the urge to overspend is likely, a targeted approach towards financial wellness makes all the sense.  Similar to overeating and alter regretting it, over spending comes with its own regret and last log after the start of the new year and take much longer to rectify than losing a few pounds.  

The most effective Financial Wellness programs, however, are not a one size fits all.  A new study by Prudential Financial, Inc. examined differences in the financial needs and attitudes of various underserved groups in the workplace and the income inequality that affects each set. The 3,000 U.S. respondents included women, African Americans, Latino Americans, Asian Americans, caregivers, and members of the LGBTQ community.

Among key findings in the survey, African Americans across all income levels were more likely than the population at large to prioritize helping others financially, including caring for parents or other family members, paying their children’s college tuition, leaving an inheritance to their heirs, and giving to charity. Women in the survey earned an average annual income of $52,521, compared with $84,006 for men. Half of women said they were the primary breadwinner in their household. Almost 40% of caregivers don’t think they’ll ever be able to retire, compared to just 25% of non-caregivers, and caregivers were more likely to take out a loan or hardship withdrawal from their 401(k) plans.

In a statement, Lata Reddy, Prudential’s senior vice president, Diversity, Inclusion & Impact, said a person’s path to financial wellness is deeply personal. “While there are common experiences that tie us all together, there are also distinct factors that are unique to our individual journeys that impact the ultimate destination,” she said. “These factors need to be clearly understood for true progress to be made.” Reddy recommended that employers listen to the people in each community to understand their needs.

This ties in nicely with the Workforce of One approach that I am so an advocate of.  Programs created for the “average” employee are serving no one, because no one is the “average” employee.  Just like the Target page that pops up with different recommendations depending on who is logging in, we need to design our HR programs to ensure that we are meeting the needs of individuals.

The Decision Process versus the Outcome

Consciously or unconsciously, we all tend to associate good decision-making processes with good outcomes and bad decision-making processes with bad outcomes.  This philosophy allows us to feel in control. All we need to do is to ensure that we hone our decision-making skills and we can nearly guarantee a positive outcome.

Unfortunately, this just isn’t always the case.  When we uncouple the decision from the outcome, we know that we say it’s a bummer or call it unfair when what we consider a good decision process, results in a bad outcome and good luck when a bad decision process results in a good outcome.  

“Don’t be so hard on yourself when things go badly and don’t be so proud of yourself when they go well.” I think this is one of the hardest pieces of advice to follow. Chance, timing and place are important contributors to any outcome.

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Success is what is called a lagging indicator. We can only report on it after it has happened.  Decision Processes, on the other hand, are leading indicators of success. Well-honed Decision Processes establish some degree of repeatability in a world where chance roams freely.  So, spend your time focusing on the quality of your decision processes and not your outcomes.

Diversity and Inclusion in the Workplace

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Diversity is not just the range of human differences, but acknowledging, understanding, accepting, and valuing differences among people including, but not limited to, race, ethnicity, gender, gender identity, sexual orientation, age, social class, physical ability or attributes, religious or ethical values system, national origin, and political beliefs.  Diversity and Inclusion programs are developed in the workplace to ensure that people of all types are included at all levels of the organization and can draw on each other’s strengths and experiences.

The world’s increasing globalization requires more interaction among people from diverse backgrounds. People no longer live and work in an insular environment; they are now part of a worldwide economy competing within a global framework. For this reason, organizations need to become more diversified to remain competitive. Maximizing and capitalizing on workplace diversity is an important issue for management.

Managers need to recognize the ways in which the workplace is changing and evolving. Managing diversity is a significant organizational challenge, so managerial skills must adapt to accommodate a multicultural work environment.

Effective managers are aware that certain skills are necessary for creating a successful, thriving, diverse workforce.

First, managers must understand discrimination and its consequences.

Before we can truly embrace a diverse workforce, managers must understand that discrimination hurts us all, not just the person who is of a different ethnicity, but those who have to witness it.  It creates a divide in the workplace and is counter to the desire to collaborate.

Second, managers must recognize their own cultural biases and prejudices.

Each individual is unique and does not represent or speak for a particular group. When creating a successful diverse workforce, an effective manager should focus on personal awareness. Both managers and employees need to be aware of their personal biases. Therefore, organizations need to develop, implement, and maintain ongoing training because a one-day session of training will not change people’s behaviors.

Finally, managers must be willing to change the organization if necessary.

Organizations need to learn how to manage diversity in the workplace to be successful in the future. When dealing with diversity, managers must promote a safe place for associates to communicate. Social gatherings and business meetings, where every member must listen and have the chance to speak, are good ways to create dialogues. Managers should implement policies such as mentoring programs to provide employees access to information and opportunities. Also, employees should never be denied necessary, constructive, critical feedback for learning about mistakes and successes, due to concerns about a person’s differences.

Managing diversity is about more than equal employment opportunity and affirmative action. Is it about embracing each of our unique differences.

Identifying Lead Measures

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Many organizations go to great lengths to track and report on lag measures.  A Lag Measure measures the ultimate goal you are trying to accomplish, such as an increase in sales or profits, or a decrease in turnover, however, it is always in the past.  While useful, the challenge, and benefit, comes when we spend the time to figure out the lead measures. How do we impact turnover or how to we move the needle on cost per hire?  It is impossible to reliable impact your lag measures without understating all aspects of lead measures.  Lead measure are the measures of the activities most connected to achieving the goal.

Lead measures have two advantages, they are both predictive, meaning they lead to the accomplishment of the Lag Measure or goal, and they are influenceable, meaning you can do something about them. Lead Measures are about narrowing your focus down to the 2 or 3 things that “trigger” success, or your end goal.  If you understand your lead measures, you can more consistently and predictably replicate your success

In the example of employee turnover, a lag measure, what might influence that?  If our goal is to decrease turnover to 10% per year, what leading measures do we need to focus on to achieve that goal?  Some examples could be employee satisfaction, employee engagement, time to respond to an interview request. All of these need to be measured and focus needs to be given to 2-3 that can reliably be shown to have a positive impact on reducing turnover. Choosing only 2-3 will allow you the best chance of success.

Spend time thinking about where your focus lies.  Does it lie on a lag measure that is out of your control or on a lead measure(s) that you can actually control?  Lead measures track the critical activities that drive, or lead to the lag measure.  They predict success of the lag measure and are influenced directly by the team. A common example of a lag measure is weight loss. Which activities or lead measures will lead to weight loss? Diet and exercise! Proper diet and exercise predict the success of weight-loss and they are activities that we can directly influence. Simple enough but be careful. Even the smartest people fall into the trap of fixating on a lag measure that they can’t directly influence. This is because lags are easier to measure and they represent the result we ultimately want

In summary, Lag measures give you the score, but Lead measure tell you how to win!

Should we hit the Easy Button?

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It’s a question worth pondering.  Is easy indeed always better? The fast, intuitive response might be a resounding “YES”, but given more thought would you change your mind?  While easy gets the job done, does it leave us with the same level and sense of satisfaction of overcoming a challenge, something that was hard, something that, because it didn’t kill us, made is stronger?  Do we need to feel a sense of accomplishment at overcoming something that was not easy, in order to grow as human beings?

In the words of Margaret Thatcher “Look at a day when you are supremely satisfied at the end. It’s not a day when you lounge around doing nothing; it’s a day you’ve had everything to do and you’ve done it.”  And, I might add, exceedingly well in spite of it being exceedingly hard.

Perhaps that is because the level of accomplishment that leads to success and promotes self-esteem requires that you do estimable things.  Taking the easy way out does not result in these feelings and does nothing to further predict your ability to undertake great endeavors in the future.  This is part of the reason that colleges would rather see a student who takes Calculus and gets a “C” than a student who takes Pottery and gets an “A”. It is because undertaking something that is hard is a better predictor of success than simply achieving something easy.  

A look at accomplished individuals who regularly win awards and medals shows that they are driven by the effort rather than the result. It is the striving rather than the reward that is long-lived.  The striving, the risk taking, the hard won spoils of war are what build self-esteem, not the awards and trophies that are handed out to both teams, win or lose. 

Self-esteem feels good because it calls on the emotion of pride. Pride in turn arises from one’s sense of confidence and capability. Esteem and related emotions instill a sense of success and the confidence that you can accomplish whatever you set out to do.

So, are we cheating ourselves when we take the easy way out?  When we cut corners just to get to the result faster? Are we telling our selves that the result is all that matters?  I think “yes”. I think striving to do our absolute best against formidable odds, even if we take a few missteps along the way, is better than taking the easy way out.  It yields accomplishment rather than simply achievement, it builds self-confidence, and it forms a habit that is a predictor of success for the rest of your life

Some of the Best Things are Free

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That statement is never more accurate than when talking about employee satisfaction.  Employers often create employee surveys to discover ways to boost employee satisfaction and retain employees.  They think of programs with hefty price tags including, incentive pay, additional benefits, and perquisites. When reviewing results of such surveys, many employers are concerned they won’t be able to respond to employee needs/asks that surface. However, they may be missing existing internal satisfiers that are already in place but are not being utilized. In some cases, attention to current programs and opportunities can reap great rewards and be real opportunities for employee satisfaction.

Career growth and even professional relationships are often motivators of satisfaction and engagement. One of the reasons employees leave a company is career growth opportunities.  Career growth does not have to be the typical upwardly mobile, vertical track, but can be horizontal growth as well.  Many employees would relish the opportunity to become more involved in a different part the business.  A reason employee stay is the relationships made in the workplace. One survey showed 25 percent of departing employees revealed that they would have stayed in their position with the company if they had a more respectful and connected relationship with their direct manager.  Employees are human beings who want to feel that others care about them and that includes their direct supervisor.

Employees want to learn and experience healthy professional relationships. Management must connect with workers both professionally and personally, and, depending on the work atmosphere and nature of the company, create a fun work environment.  Initiating conversations about things outside of work is one way managers can show an interest in their employees’ lives. Other things managers can do to build employee satisfaction are:

  • Allow employees to use and demonstrate their strengths. Everyone wants to be valued and make a difference. Know where to place each employee for the greatest results. Ask what an employee wants to do in the company and look for opportunities to create the experience.
  • Ensure employees understand the goals of the business and how the work they are doing impacts those goals.  Make sure they understand how they fit into the big picture. Individuals on a team create winning scenarios when everyone knows their role and the rules of the game.
  • Enhance communication. Really listen to your employees. Ask what is and is not working and take action to explore where the company can and cannot implement idea changers. Have managers meet with employees on a regular basis and report on performance, engagement, and employee feedback.
  • Consider stay interviews to understand engagement and exit interviews to understand turnover better. Especially for your HiPo’s, conducting regular stay interviews pays off with better engagement and less risk of them turning elsewhere.
  • Create a learning environment. Foster internal opportunities to learn from one another and expand upon existing skills. Implement programs like “a Day in the Life” where you employees get up to eight (8) hours a year to shadow someone in a job that they would like to know more about.  While this may cause a hiccup on that particular day, future projects led by a well-rounded work teams will create greater quality, be more productive and come up with winning solutions faster.

Don’t fall into the trap of thinking that it costs thousands of dollars to ensure that your employees rank high in satisfaction.  Sometimes all it takes is a little bit of thought and a lot of care.  

Pulse Surveys

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Pulse Surveys can be called many different name, employee satisfaction surveys, employee engagement surveys, employee experience surveys, etc.  One of the reasons I like PULSE, is because they are truly designed to measure the pulse of the employees and of the organization, as a whole, at a given point in time.  Not all employees who take them are satisfied or necessarily dissatisfied, nor are they engaged or disengaged.  However, all employees have an opinion, and when give a chance to air it, usually do not disappoint.

Pulse surveys take on three primary forms- Annual Surveys, which may measure a broad level of employee satisfaction, Weekly check ins that might tackle a topic or two and Reaction Surveys, which measure the employees reactions to a certain initiative.

 

Annual Employee Surveys

Annual Employee Surveys are common amongst employers pursuing an Employer of Choice philosophy.  They provide management with the knowledge and tools to build positive employee relations and a corresponding positive work environment. Employee attitudes, burnout tendencies, engagement, loyalty and workplace environment are key indicators for employee retention, satisfaction, and productivity.

Effective businesses focus on creating and reinforcing employee satisfaction to get the most out of their human capital. Properly constructed employee satisfaction surveys provide the insights that are foundational to creating and reinforcing productive work environments. These surveys can address topics such as compensation, workload, perceptions of management, flexibility of schedules, teamwork, appropriate resources, etc.

 

Weekly Check-ins

Weekly Check-ins provide management insight into a particular topic or issue that is important in the near term.  Frequently organization will adopt Guiding Principles or Corporate Values and choose to focus their efforts around one of these initiatives per quarter.  Guiding Principles are principles that guide an organization throughout its life in all circumstances, irrespective of changes in its goals, strategies, type of work, or the top management.  These can be quick questions, maybe just one or two, that give an organization directional guidance on that particular topic.  These can also be useful for a department when you don’t necessarily want to check in with the organization in its entirety.

 

Reaction Surveys

Reactions surveys are just that.  They test the reaction of employees to a specific initiative.  You may have rolled out copious communications on a a particular initiative and yes, when it goes live, you hear a rumbling through the grape vine that not everyone is happy, there are misunderstandings.  Reaction surveys give everyone an anonymous voice.  Both Survey Monkey and CustomInsight offer employers a free vehicle to use to create these surveys and analyze the data collected.

In all cases, once you have collected and analyzed the data, give the feedback and have a plan of action to present an implement.  Collecting data and not acting on it is worse than not collecting the data in the first place. Use this as an opportunity to show your employees that you really do care and you will be rewarded with their honest thoughts and opinions going forward, helping you, as an employer, to create a truly great place to work.

What do most start-ups have in common?

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There are as many types of start ups as there are investors to invest in them but most have a few things in common.  Knowing what these are, in advance, will help you to stay one step ahead of your investors, your market and your competition.

 

VC’s are an impatient bunch

Venture Capitalists, commonly referred to as VC’s,  are those that invest dollars in multiple start up business enterprises with the hopes of hitting it big in 1 out of 10, in my experience, although different VC’s may tell you otherwise. Various VC’s play in different niches established by the stage of the business.  For instance, idea generation, proto-type product, mature product, revenue, growth and profitability.  However, they share at least one thing in common which is impatience.  Impatience to get a product to market, to show profitability, to attract later stage investors at higher valuations and to make a very profitable exit.  

Fail fast is a fact worth remembering.  You are less likely to burn investor bridges with $1M in when you determine that your idea or product has little chance of success than after you have $10-20M in.

Don’t underestimate the marketing spin

No matter how good your product is, whether it be software, SaaS, or shoes, it needs to be marketed effectively.  What will you brand around and how will you differentiate in the marketplace should be the first questions you ask yourself and your team.  Keep your head in the sky and think about the ways you want people to “feel” when they hear about your product.  Stay away from long lists of functionality.  People buy, for the most part, on emotional reactions.  

Shelter your employees

Start ups are volatile and not everyone needs to know every brutal truth.  There will be times when you are putting payroll on the execs credit cards, but you don’t necessarily need to share that with everyone in the company.  Trust me, I have been one of those execs floating 1,000’s of dollars for a couple of weeks before funding closed.  Some who join your start up will be true entrepreneurial types and for those the uncertainty will not matter.  Others, however, will be employees looking for stability, with families to support.  You don’t want to shrink your candidate pool any further than is necessary.  Portray a positive, stable and growth oriented environment.  

Act bigger than you are

Allocate a few dollars into presenting a professional image.  Maybe that is the receptionist in the lobby who doubles as the AP specialist.  Maybe that’s a phone system where you can look like you have lines for a variety of different functions.  To some extent, it follows the old adage of “Fake it till you make it.”  If you have 20 employees and someone asks the response is still truthful if you say “we are still under 100” but send a very different signal to a potential customer.

Start ups are, by their very nature, challenging in many respects.  Knowing a few of the most common pitfalls can help to guarantee yours is that 1 in 10 that everyone is looking for to hit it big!

Acquisition Considerations for Human Resources

pexels-photo (6)You have just been told that your Company will be acquiring another Company.  Although your first question could be “How will this impact me?”, your first question should be, “Is this an asset sale or a stock sale?”  There are many implications for Human Resources in any type of an acquisition, but some will depend on which type of acquisition it will be.  You and your team are likely to catch the first wave of questions and work that will follow. 

 

Stock Sale

Let’s talk first about the definition of a stock sale versus an asset sale.    A stock sale is when your Company is acquiring all assets and liabilities of another company.  In a Stock Purchase, all of the outstanding shares of stock of the business are transferred from the seller to the buyer. The buyer in effect steps into the shoes of the seller, and the operation of the business continues in an uninterrupted manner. Unless specifically agreed to, the seller has no continuing interest in, or obligation with respect to, the assets, liabilities or operations of the business.

Asset Sale

On the other hand, in an Asset Sale, the seller retains ownership of the shares of stock of the business. The buyer must either create a new entity or use another existing entity for the transaction. Only assets and liabilities which are specifically identified in the purchase agreement are transferred to the buyer. All of the other assets and liabilities remain with the existing business and thereby the seller.

 

Organizational Structure

In both cases you need to begin to build out your organizational structure of the combined entities as soon as possible.  This will act as your guidelines for interviewing and assessing employees for future roles. The employees who will be, as well as your existing employees, will be anxious to know about any changes in the organization, their positions, location of their work and/or the reporting structure. You also need to have your people, particularly the top-level of the new organization, in place quickly. Frequent and early communication from leadership will reduce anxiety on both sides. 

Policies and Procedures

In both situations you will need to figure out what the company being acquired has in place for their policies and procedures and how they align with those that you have in place.  Frequently there can be a meeting of the minds where you can take the best of both worlds and adopt new P&P’s.  Not only does this give you an advantage but is a nice show of collaboration to the employees being acquired. Especially, understanding the differences in both leave policies and having a transition plan before the close date is critical to reducing employee disruption and managing expectations.

Benefits

In most cases, when it is an asset sale, you will be able to choose which liabilities to exclude from the sale, such as the 401(k) plan provided by the seller.  In a stock sale, you will be required to assume all the benefit plans, at least for a period of time, and may not exclude any up front.  

Other benefit considerations, which we will explore in more detail next time, include how to handle FSA’s, LOA’s, 401(k) account balances and outstanding loans, bonuses and medical deductibles and out of pocket maximums.

Acquisitions bring a lot of uncertainty but also a lot of excitement around the possibility of building a bigger and better entity…….. almost overnight!