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February 2009

Management Gone Wrong - Al Davis, an Employee Warning Letter and an Overhead Projector...

This post is brought to you by the good people at the Employment Branding Institute (EBI).  "EBI - we make you look good, even if you're hideous"...

Today's rant is about employment branding and the NFL's Oakland Raiders.  With the exception of theAl_davisfull last 6-7 years, the Raiders have been one of the most storied franchises in professional sports.  In 1963, Al Davis was brought to the team as head coach and general manager. Davis immediately turned the Raiders into winners, and from 1963 until 2002 the team had only seven losing seasons. He also initiated the use of team slogans such as "Pride and Poise," "Commitment to Excellence," and "Just Win, Baby"—all of which are registered trademarks.  Let's face it, all those taglines are money in the branding space.

So, Al Davis got "it" for a long, long time.  Players across the league, especially veterans, wanted to play for Davis and Oakland because of the mystique of the brand and the freedom they were given to let their "freak flag fly". 

In 2002, Oakland lost Super Bowl XXXVII in a lopsided affair, 48–21. Following the loss, the Raiders won a league-worst 19 games during the five full seasons from 2003-2007 (seven fewer wins than the 26 posted by the next worst team, the Detroit Lions). In January 2007, the team named 31-year-old Lane Kiffin as its fourth head coach since 2002. Kiffin was fired September 30, 2008, after the team started the 2008 season with a 1-3 record. 

So, the franchise goes from "Just Win Baby" to having 5 Head Coaches in six years.  Does that sound like brand stability?  A place where you would want to work?

Here's where it gets freaky, and I'm not making this up.  Al Davis is still the managing partner, is approaching 80 years old, and calls all the shots.  When he fired his last coach (Kiffin), in the press conference that followed, Al proceeded to not only bring up a "final warning" letter he had sent Kiffin, but actually read it word-for-word to the press.

But that's not all.  Being the tech savvy types they are, Al had one of his flunkies throw it up on an OVERHEAD PROJECTOR while he was reading it (I believe they called those "transparencies" back in the day).  That's right, your final warning on an overhead projector at a press conference.

Money buys a lot of things, but who in their right mind would take a gig with the Raiders right now?  Even if they got their management shop together, how are they going to get the talent they need to turn that thing around.

They threw the dude's FINAL WARNING up in a PRESS CONFERENCE on an OVERHEAD PROJECTOR.  If I'm a candidate (player/coach/front office person), that tells me they don't respect their people, they're cool with public humiliation on their terms, and they're running around the earth like T-Rex when it comes to adopting technology.

Email subscribers, click through for the employment branding session.  Go to about 7:00 on the first video for Al starting to read the letter and warming up the overhead projector.

Remember - This post is brought to you by the good people at the Employment Branding Institute (EBI).  "EBI - we make you look good, even if you're hideous"... (I have no idea how EBI could repair Al at this point - I'd start with buying his staff a laptop...)

Discretionary Labor/Effort - Why Your Company Needs to Think Like a Yahoo Community...

Let's roll out a couple of organizational realities today to get into the topic at hand:

1. You've got employees.

2. The employees come to work each day.Online communities

3. The employees give you minimal effort without you asking.  That's what you get in exchange for salary, benefits, etc.

4. You can get more than minimal effort for your money in several ways. You can scare your employees through punitive measures (although the returns are short-lived), you can become best in class in measuring results and performance management, etc.

5. It's hard to get more than minimal effort.  Damn hard.

6. The easiest path to get more than minimal effort is to hire people who traditionally give more than the minimum.

7. There's only so many of those to go around.

8. For everyone else (those that migrate to giving the minimum), you've got to come up with a culture and strategy that engages employees to give more than the minimum (I'll call this DISCRETIONARY EFFORT), often with no financial rewards.

In short, you need to think like an online community.  You know the type of community - one like Yahoo Answers that engages readers to provide increasing amounts of time and labor with no direct path to increased rewards.  All because they LIKE AND ARE ENGAGED BY THE CONTENT/TOPICS and get a non-financial high from contributing.

Need an example?  How about ThisNext out of Santa Monica and how it corrals the sweat equity of volunteers.  More on getting free labor from the engaged user at BusinessWeek:

"It's dawn at a Los Angeles apartment overlooking the Hollywood Hills. Laura Sweet, an advertising creative director in her early 40s, begins to surf the Net. She searches intently, unearthing such bizarre treasures for sale as necklaces for trees and tattoo-covered pigs. As usual, she posts them on ThisNext, a social network where people exchange shopping leads. Why does she spend so many hours each week working for free? "It's sort of a cool feeling that you're influencing people," she says.

A half-hour's drive to the west, a serial entrepreneur named Gordon Gould strolls into the Santa Monica offices of ThisNext. Gould has managed to entice an army of volunteers, including Sweet, to labor on his site without pay. Traffic on ThisNext is soaring, with unique visits nearly tripling in a year, to 3.5 million monthly. Revenue comes from advertisers, who pay to display their wares amid so many shoppers. What's in it for the volunteer workers? "They can build their brands," Gould says. "In their niches, they can become mini-Oprahs."

Here's how it works: Entrepreneurs like Gould build meeting places that provide visitors with tools to express themselves, mingle with friends and strangers, and establish their personal "brands." The result, when all goes well, is an outpouring of creativity. These bottom-up efforts have produced not only ThisNext but also YouTube (GOOG) and even American Idol.

The challenge for managers all across the economy is to harness as much of this free labor and brainpower as possible to their own enterprises. From universities to the computer labs of Internet giants, researchers are working to decode motivations and perfect the art of enlisting volunteers. Prabhakar Raghavan, chief of Yahoo! Research, estimates that 4% to 6% of Yahoo's (YHOO) users are drawn to contribute their energies for free, whether it's reviewing films or handling questions at Yahoo! Answers. If his team could devise incentives to draw in an additional 5%, it would enhance Yahoo's pages, bringing more traffic and advertisers to the site. Incentives might range from contests to thank-you notes."

Now think about your company, specifically our exempt/salaried ranks.  They've got a choice if you aren't really focused on what they are doing.  They can do the socially acceptable norm (40 hours) and go home.  Or, you can figure out what makes them tick, maybe give them tools to work remotely so they can find work/life balance, and watch the hour count go up as they become more engaged in their role and the mission of the company.

It's the holy grail of engagement, and it's part hiring for motivation, and part motivating and engaging once they're in the door.  I suspect much like the woman featured in the BW clip above, the secret sauce to this type of engagement is part praise, part visible scoreboard, and part future career promise for the individual moving forward if they put in the time.

Kind of like why I blog each day, right?  Think about it and figure out what you can do to create that type of "discretionary effort" in your employees.  Remember, they don't have to give you the last ten hours of a 55 hour workweek - the key is to make the value proposition better than Xbox or TV... without money...

Han Solo or Millennium Falcon? Reader Feedback Results...

OK, I asked for your feedback on whether to keep the Capitalist a solo affair or expand it to a multi-Han_Solo_and_Chewbacca_1 contributor blog and the feedback's pretty clear.  The customer generally doesn't want the cook toying around with a recipe they believe works.  So the soup?  It stays as is...

Between comments, emails and twitter DM's, the final count was 87 for keeping it Han Solo, 15 for expanding into multi-contributor territory.

Thanks for everyone who provided feedback, and I thought it was worth a post to show you the total results.

Still digging the multi-voice vibe at Fistful of Talent, so if you haven't checked that out, please do soon.  As for the "pure HR" multi-contributor blog project, maybe another venue at some point in the future.  I'll keep you posted if that develops.

For now, I'll keep it real at the HRC...

The Dangerous PR of Best Buy Layoffs...

Before I get started, allow me to give you the following disclaimer.  I love going to Best Buy at the retail level, and from what I've read, it's got a lot of good stuff going on at the corporate offices as well - results-based work environment, etc.  Good stuff, and do I love gadgets.  Wish I had a blog covering gadgets.

But I'm a HR/Talent guy.  Which brings me to the topic of this post - the recent Best Buy layoffs.  BestBestBuyShanghai Buy is a retailer, and it stands to reason that in a recession, Best Buy's probably going to have layoffs at the corporate level.  It's the way it works.  It sucks for anyone, but if Circuit City is ceasing to exist in this economic climate, it's stands to reason that Best Buy's corporate office is going to slim down.

I'm not inside at Best Buy.  But I think the PR surrounding the recent layoffs underscores a dangerous game, one that could reduce transparency and trust over time.  What am I talking about?  The data point provided to media outlets that while Best Buy is laying off 250 people, they're likely to land 210 new positions likely to be opened up soon.

If you've ever been through administering the communication of layoffs, one of the things that always comes up is the impacted employees eligibility for open positions.  Are they eligible to move to open positions?  Sure.  Do they have the necessary skills to be effective? Always dicey, especially for corporate specialists.  Throw in possible relocation to get to the open job, and the total odds go down significantly of one of the impacted employees landing in a new position.

So, when you craft that media kit related to the layoffs, you have to be careful citing open positions as a likely, or even possible, destination for impacted employees. 

Here are two examples of how media outlets treating the "eligible for open positions" data point.

First, from the specialist book Home Media Magazine:

"There are 40 corporate employees at Best Buy Co.’s Minneapolis headquarters who probably wish they could turn back the hands of time.

They were among the first layoffs initiated Feb. 19 by the No. 1 consumer electronics retailer at the corporate level following last month’s staff reductions in which 500 employees — prompted by expanded severance and healthcare benefits — left the company voluntarily.

Best Buy employed 3,460 people at the corporate level following the layoffs, including the relocation of 210 personnel to new positions throughout the company, according to spokesperson Sue Busch Nehring.

Best Buy has not announced any job cuts at the store level.

Now for the more "iffy" type of communication via MSNBC:

"Best Buy announced today that 250 jobs at the company's Richfield-based corporate headquarters are being eliminated.

That news is tempered somewhat by news that those employees will be among those considered for 210 new positions Best Buy will be opening soon. Together, they add up to a net loss of 40 jobs."

See the difference? I bolded the text in the Home Media piece because it underscores the reality that most of the positions referenced would require relocation from the home office, which also means most of the spots will be somewhere in retail operations.  That means that few of the impacted employees (depending on the departments) will end up in the upcoming open spots.  

Just keeping it real.  My take is that the media packet oversold the likelihood of employees landing in the 210 upcoming spots, thus Home Media's spin that only 40 employees would be impacted.  MSNBC, on the other hand, has been around the block and didn't bite.

Final take?  Don't oversell the likelihood of that type of placement happening, because the employees impacted (as well as those watching) know better. 

HR Carnival and FOT's Talent Management Blog Rankings - Two Great Tastes That Belong Together...

I’m the host of the next HR Carnival, and in the endless quest for themes to freshen this thing up, I think I’ve got a good one – we’re deeming the March 4th HR Carnival MARCH MADNESS, a hat tip to the coming college basketball craziness that will consume America for most of the month.

Here’s how it’s going to work – you submit your post for inclusion into the carnival as normal, and we’llBracket use your post and your blog to announce a MARCH MADNESS bracket with all submissions that will serve as the HR Carnival for March 4. At the same time, we’re gong to reach out to any blogs that have received votes in the past Talent Management Blog Rankings over at Fistful of Talent and encourage them to submit a posting for the carnival. Our goal is to have up to 65 blogs represented (that’s the number of teams that make the NCAA college basketball tournament).

But it doesn’t stop by merely announcing the MARCH MADNESS field for the HR Carnival of March 4. After we let you know who’s included in the MARCH MADNESS HR Carnival through the expected post on March 4, we’ll use the bracket we create for that day to run our next installment of the Talent Management Blog Rankings over at Fistful of Talent. Instead of asking our staff at FOT to vote on the blogs, we’ll do a web poll and ask the participants and readers to vote on the head to head match ups. We’ll start with the round of 64, and then move to the rounds of 32, 16, 8, 4 and then of course, the final match up. Winners move on, survive and advance. 6 rounds in all, 2 days to vote on all the matchups in each round (12 total business days in the tournament).

Make sense?  No?  Winner takes all.  There's no tomorrow.  It's do or die.  <insert tired sports cliche here>

Since we’re being market-based on this one, we’ll allow the FOTers to include their blogs as well. You can engage your audience and have them vote as well.

Who’s ready? Send me a link to a recent blog post you're proud of by February 27 to [email protected]

Want a Great Workplace? Start with the John/Toilet...

Robert Scoble has a great piece up at Fast Company providing advice to Microsoft as it prepares to create a retail presence to compete with the Apple store.  In the article, he compares the Apple experience with the more "mass-market" experience you get when you go to Best Buy. 

Like anyone with an inner geek, I love Best Buy, so it's hard for me to be critical.  But part of his adviceBathroomo attendent to Microsoft caught my eye as it relates to building a workplace that could routinely compete in the "best places to work" category:

"Microsoft has to build an integral and magical experience. When you go to Disneyland everything fits together and attention was paid to every element of a guest's experience. Same thing here. If I were Microsoft's designers I'd start with the bathrooms. Why? That's one place that Apple hasn't spent much time (they often are dirty, don't use any technology, and don't match the rest of the store in the experience). Make the bathroom experience magical, then work backward out into the store. Make every experience something you can't do at any other store."

Think about that for a second.  Where do your employees spend a lot of time other than their office/cube?  What experience, if negative, has the potential to make employees do the gag reflex and throw up in their mouth a little bit?

That's right - your bathrooms...

I hadn't thought of it before reading Scoble's article, but I'm going to venture a guess that by spending 2 to 3x what others do on the bathroom and by paying to keep it clean during the day, you can deliver a differentiating factor that your employees would notice if they ever interviewed for another job.

I'm dead serious - done right, this might be one of the most inexpensive ways you could deliver value that others can't or won't.  I choose convenience stores, on road trips, based on what I know about the cleanliness of their johns, so why wouldn't that have an impact on where I want to work?

And make sure I have access to paper towels instead of the industro-blower....

Pay Transparency - The CEO Parable...

Quick note today about pay transparency.  For those of you new to the game, the call for pay transparency is hot, and a while back I encouraged everyone who would listen not to drink the entire pitcher of Kool-Aid regarding pay transparency.  My main point in that Workforce article.  While it's trendy and seems progressive to call for full transparency in pay rates and pay practices in organizations, the folks who are calling for it don't have to live with the employee fallout. 

In my experience, employees generally don't want their co-workers to have exact or directionalMo money information regarding what they are making.  See more regarding the fact that while most employees would love to know what you are earning, they don't want to reciprocate by allowing you to have access to the same information here. If you practice HR, you know what follows these survey results if you opened the transparency door wide open - tons of ER issues you can't solve.

So, that's pretty much where I'm at.  The new observation I'd like to share from the world of pay transparency involves the parable of CEO pay, and I was reminded of it in a post this week by Paul Hebert (a rewards, incentives and influence guy) over at FOT.  Here's what Paul had to say about the law of unintended consequences regarding pay transparency in the CEO ranks:

"Talk about unintended consequences.  One of the reasons cited for the huge salaries and pay packages available to top executives is in fact greater transparency caused by the disclosure requirements in Sarbanes -Oxely.  Congress enacted the Sarbanes-Oxley Act of 2002 in response to a spate of highly publicized business failures and corporate improprieties.  The issue they said was a lack of oversight and transparency.  I don't want another Enron and can see why more transparency was needed but, some of the requirements of SOX may be what is driving CEO pay issues.  Specifically, once I can see what others get paid - that's what I want.  The highest salary now becomes the minimum salary and I want more than the minimum." 

And that, my friends, is what I mean when I cite the fact that those who call for unlimited pay transparency won't be around to help with the fallout. Conceptually, I get pay transparency, but the fact that most employees would look at the range, where their peers are in the range and automatically want more duckets speaks volumes. 

I can handle the conversations and defend the differentiation employees would see.  Most managers can't, and that's the issue.  For the transparency folks, I absolutely agree with their core argument - we should pay fairly regardless of gender, race, etc.  With that said, there's a lot of contrast regarding what people are paid that makes total sense.  The problem is that most people in your org won't be able to defend it.

No company has strong enough managers to withstand the pressure and stand tall on how they value talent, so guess what happens?  You start valuing talent the same because of the pressure, and then a vocal average employee ends up making as much as your star.

Does that sound like the best way to maximize performance?  

Can "Bonus Banks" Balance the Long-Term View with Short-Term Incentive Plans?

Hang around any business long enough, and eventually you'll run into circumstances where managers sacrifice the long-term view for short-term gain, usually the result of pressure felt from their boss, the board and/or shareholders in the company.  Here are two great examples:

--Subscriber-based businesses like Cell Phones - you're pinched on subscriber counts in Bank vaulta competitive environment, so you make the short-term decision to move your disconnect threshold for customers who don't pay you timely from 30 to 60 days.  In the short term, your subscriber numbers look great, but over time you train your customers that they don't have to pay you timely, and your bad debt goes through the roof.

--Any business where revenue is mined or expense avoided to improve the next quarterly report - We've all been around this one in our careers.  Is it good for the business long term to avoid R&D costs now?  Probably not, but we're doing it anyway...

So, there are levers to pull and decisions to make.  However, the bonuses that are traditionally paid out in a quarterly or annual fashion to managers in many companies are under more scrutiny than ever, based on what's occurred lately economically.  Enter the concept of the Bonus Bank, which defers managers receiving all of an annual bonus until time proves their management to be prudent.

More on Bonus Banks from BusinessWeek:

"Some companies, aware of the direction the regulatory winds are blowing in Washington and other capitals, are making preemptive moves to overhaul the schemes they use to reward top brass. One concept that's gaining traction is that of the "bonus bank." UBS (UBS) launched a bonus bank late last year after the Swiss government tossed the institution a $60 billion lifeline. Investors are pushing for E*Trade Financial (ETFC), Charles Schwab (SCHW), and JPMorgan Chase (JPM) to adopt similar plans.

Here's how the bonus bank works at UBS: One-third of a top manager's annual bonus will be paid out and the rest will be deposited into an account. The money can be drawn down over three years, provided the bank meets or exceeds predetermined operating targets and other benchmarks. If not, the manager stands to lose some or all of the funds in the account. The beauty of the idea, in the eyes of compensation specialists, is that it discourages employees from goosing results one year at the expense of the next. "For a bank, this is an opportunity to move to a system that's far more defensible," says University of Chicago's Booth School of Business Professor Raghuram G. Rajan.

While straightforward in principle, the bonus bank can be difficult to make work in practice. Briggs & Stratton (BGG) in Milwaukee, which has more than $2 billion in annual sales of engines for equipment such as lawn mowers, set up a bonus bank in the early 1990s. It worked pretty well, too, until 2005, when a spell of dry weather drove down demand for the company's products. So even as Briggs & Stratton outperformed rivals, it wasn't hitting return-on-capital targets, a key metric under its plan. By 2008, bonus accounts had moved into negative territory, meaning executives would have to relinquish a portion of their future payouts. The bonus plan had become a "disincentive" for managers to stick around, says CEO John S. Shiely. So the board decided to cap bonus bank losses, and put a temporary, supplemental bonus plan in place. Says William F. Achtmeyer, a member of Briggs & Stratton's compensation committee and CEO of strategy consultant Parthenon Group: "It's a model that is theoretically outstanding, but from an implementation perspective has its limits, too."

I'm a fan.  Of course, there is lots to figure out in addition to what's mentioned above, such as the treatment of employees who exit the company before past year's bonuses have "vested".

Would you put your bonus in such a plan?  Really? You're such a good citizen...

Reader Feedback Requested - Should I Make the HR Capitalist the Pure HR Version of FOT?

Hi Gang - I need your feedback on the the future of the HR Capitalist.  Here are your choices:

--OPTION #1 - Everything stays the same.  I write a lot, sometimes it's good, sometimes it sucks, but you get the good old college try every day.  Lots of pop culture and sports connections embedded.  It's who I am, so why try to fight it?  I have nothing but energy, so I'm not going anywhere.

--OPTION #2 - I move the HR Capitalist to the multi-contributor format I use over at Fistful of Talent.  If I go this direction, I'd go out and find the sharpest 12 HR pros I could find in America and mix their voices with mine.  I still contribute to the Capitalist 3-4 times a week, but in addition to me you get other snarky voices delivering "first-run", exclusive content to the Capitalist 4-5 times a week. 

So those are the options - what say ye?  The motivation behind the possible change is the good times I'm having with the crew over at Fistful of Talent (FOT).  FOT's been up and running since April 2008, and I love the team we have.  Some of the best professionals I've met, and a classy yet snarky, talented group to boot.  The kind of people I like to hang out with.

So selfishly, I'd love to be a part of another team like that, because I get a lot of energy from being around cool people, and I think the possibility exists to do it all over again with nothing but upscale, pure HR pros. 

But I don't want to kill the goose. What do you think?  Do you want Han Solo, VP of HR, or the whole crew from the Millennium Falcon? 

Hit me in the comments or privately with an email ([email protected]) to tell me what you think.  Your opinion matters to me...

Automatic Stimulus - Will 2 Million New Visas Save the Economy?

Lots of talk about the various economic stimulus bills over the past couple of weeks.  Can we stimulate the economy? What about the debt we're taking on?  More questions than answers, I'm afraid.

Also, I'm a little disappointed there hasn't been more talk about the talent side of the equation.  When theStatue_of_liberty1 economy is bad, the protectionism DNA of America usually emerges.  The fact that we're hopelessly attached to the global economy is one of many reasons why bills like the EFCA are such a bad idea.  Another way the protectionist DNA shows itself is through the call to further restrict worker visas into the states. I get that unemployment is high and Americans need jobs, I'm just always concerned when we try and close the gates to LEGAL immigration.

That view is one reason I'm a fan of Tom Friedman, who generally attempts to embrace the global community concept in an America-centric way.   Here's a gem from his most recent column, which claims that in order to stimulate the economy, we ought to grant additional visas to 2 Million Indians, Chinese and Koreans.

"Leave it to a brainy Indian to come up with the cheapest and surest way to stimulate our economy: Immigration".

"All you need to do is grant visas to 2 million Indians, Chinese and Koreans", said Shekhar Gupta, editor of the The Indian Express newspaper.  "We will buy up all the subprime homes. WE will work 18 hours a day to pay for them. We will immediately improve your savings rate - no Indian bank today has more than 2 percent nonperforming loans, because not paying your mortgage is considered shameful here.  And we will start new companies to create our own jobs and jobs for more Americans.

While his tongue was slightly in cheek, Gupta and many other Indian business people I spoke to this week were trying to make a point that sometimes non-Americans can make best: "Dear America, please remember how you got to be the wealthiest country in history.  It wasn't through protectionism, or state-owned banks or fearing free trade.  No, the formula was very simple: Build this really flexible, really open economy, tolerate creative destruction to dead capital is quickly redeployed to better ideas and companies, pout into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat".

It's easy to go protectionist when times are tough.  Still, when the chips are down economically, what better way to improve the talent DNA of America than by asking 2 million stars from some of the hardest working, most entrepreneurial cultures in the world to join the team?

It's a contrarian view and one that wouldn't be popular.  But, it's also crazy enough to work and more importantly, founded in the economics of talent.

Give me your huddled masses sharp, entrepreneurial stars who long for more than your country can provide...