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October 2019

9 Faces of HR Book Update: Is Salesforce Making Progress on Diversity Since Hiring a Chief Equality Officer?

One of the cool things about writing a book that does at least reasonably well is you start to get questions flowing in about the content you included. When I wrote The 9 Faces of HR, I alternated for a good bit of the book between serious chapter and a more pithy, fun "bonus chapter" (but let's face it, I had a lot of fun and took plenty of liberties in the "serious" chapters as well).

I'm going to start sharing my responses to some of the questions I get in my inbox and on LinkedIn. Here's one about my references to Salesforce in one of the bonus chapters of The 9 Faces of HR.

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Hi Kris -

I just finished reading your book and I do believe it will help me raise my awareness of my own profile and my peers. Since 2016, are you aware if Salesforce actually improved in terms of diversity in the aftermaths of naming a "Chief Equality Officer"?

Thanks, Jenny

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(Note - if you don't have my book, there's a bonus chapter on Salesforce naming a "Chief Equality Officer" as a strategy to take credit for what they do well, in an effort to take the focus off of broad diversity reporting in Silicon Valley that always looks horrid).

Hi Jenny -

Thanks for dropping the note and reading my book. The year by year numbers are hard to find - but you can find the Salesforce and Google diversity numbers in the links below for the last reporting period.  See the links below (email subscribers click through for charts/images if you don't see them below) and go about halfway down ("see where we are today" for SF, "workforce representation" for Google) to compare.  Salesforce remains whiter and heavier in male representation than Google, with the increased diversity at Google being all from the Asian/Indian category.  Shows how hard it is to make progress in the talent pools in tech and in the bay area, I think.  Links and graphics below:

For Salesforce:

https://www.salesforce.com/company/equality/#eq-sf-data

SF


Budget Season: Do You Have Any Ideal on Labor Costs By Project/Service?

It's budget season for a lot of us, and in addition to revenue projections, one American pastime is alive and well in the budget process, even in 2020.

Sandbagging!

You know it's true. If you're a leader in the field, you're attempting to load up the expense side of your budget as much as possible, often times because you may have no control F35of the revenue targets that are handed to you.  You NEED that expense side to be as high as possible so you can slash it as needed in an effort to meet your EBITDA or Net Income number, even if you miss the crazy revenue target.

Games people play. Right or wrong, you just can't stop them.

If expense loading is a game in budget season, guess what the favorite parlor game of all is during this time?

Sandbagging the headcount budget!

In most businesses, headcount is the biggest fixed (or is it unfixed) cost. The bigger the headcount budget, the bigger the pile of sand that can be used to make earnings if you miss revenue.

Which begs the following question:

Do You Have Any Ideal on Labor Costs By Project/Service at your Company?

While most of would say yes, that's a yes that we "kind of know" but can't give you "actual math".

I'm reminded of this fact by a conversation I had over the weekend. My son's a freshman in college and a Aerospace Engineering student. He started going down a rabbit hole of what it took to build an American Combat Aircraft.  As you might expect, numbers release are limited, but then he found this gem of an article on the production of America's latest generation fighter jet, the F-35:

The U.S. Government Accountability Office, better known as the GAO, has released a new report on the status of the F-35 program overall. One of the most interesting tidbits in the report was metrics on how many man hours of labor it takes to manufacture each type of F-35 and how those numbers have changed over time.

The chart below shows exactly how many labor hours are poured into constructing each F-35 variant on average. With the A model unsurprisingly being the lowest at 41,541 hours in 2017, the more complex B model taking 57,152 hours, and the carrier-capable C model coming in at 60,121 hours. 

Then, they shared this chart, which shows how production labor costs have dropped over time with the F-35:

F35

Using the standard 2,000 hours in a work year, that shows the highest value version of the F-35(c) actually takes 30 man years - just to deliver the airframe.  And it used to 50+ years!  Using either number, you can safely say it takes the equivalent of a worker's entire career/prime of career to deliver a F-35c.  Crazy.

With those numbers in mind, you don't have labor and headcount problems, you have labor and headcount concerns.

The bigger point here for the budget season?  It's the fact that the smart finance pro in front of you - the one who is going to make the final decision on whether to cut the fat out of your headcount budget - is not only evaluating the sand in your numbers, he or she is asking for the numbers behind the numbers. The smart Finance pro asks questions about your assumptions and wants to know that you're a good steward of the headcount received.

All things being equal, they'll cut someone else's headcount numbers instead of yours - IF you can articulate how responsible you've been with the resources provided and how you're doing more with the same headcount.

Showing improvement in production costs over time like the F-35 program (you can do this even if you're delivering service rather than product) is good backup to have during budget season.

Good luck with the final budget meetings with Finance. May your sand continue to flow.

 


Is What I'm About To Say Going To Blow Up In My Face? A Simple Guide...

I know.

You're a straight shooter. A truth teller. A no-BS kind of guy or gal.

We love that about you. You do you. But based on your position in the middle of the political machine in which you operate, that truth teller vibe can blow up in your face.

Saying what needs to be said is admirable. But so is staying alive in the game and living to fight another day. Stakes vary based on the issue at hand and the power of those involved. 

Here's a few questions that need to answered before you shoot the bastards straight on the issue in question. Enjoy:

Does it need to be said?

Does it need to be said by me?

Does it need to be said by me right now?

If the answer to any of those questions is no, don’t say it.

Additionally, answer this question:

Who is present (or will get word of my truth telling) that has a different position than me and do they have power? Will they react in a negative way and perhaps try to stop the form of direct deposit I've been receiving and enjoying as a result? (either now on in the future, because they have a memory like an elephant)

I could write 10 more questions in this guide about whether to blown them up with your crazy accurate and disruptive thoughts. I'll stop at 4.

Sometimes you gotta pull out the Bazooka and shoot 'em straight and be the sole voice of dissent. Sometimes you gotta fold and live to fight another day.

Knowing what to say is science, based on your subject matter expertise and the fact you're always right.

Knowing whether to say it is art, based on your accurate read of 107 factors, none of them reasonable or rationale.

Good luck players. The game needs you.


What We Can Learn From the Kohl's Response to the Amazon Crack Pipe...

Hi Capitalist Readers - 

I'm up at Fistful of Talent with some notes on what we can learn from the recent decision by retailer Kohl's to become a return center for Amazon. Here's a taste, hit this link to get to whole article at Fistful of Talent:

"In case you missed it, Retail – at least of the normal variety – is on life support.

We’re all to blame. That big sucking sound you hear? It’s the gravitational pull of Amazon, giving you two-day one-day delivery you didn’t even know you needed, but now expect. Amazon has a history of innovating, taking the long view of changing your behavior completely, reinvesting profits in the business to keep you coming back to the crack pipe of unlimited choice and immediacy and yes, paying almost no corporate taxes.

What could go wrong?

But I digress. I’m as guilty as anyone, seeing how I recently ordered two sizes of the same jacket from Amazon because I couldn’t be bothered with a single one not fitting and having to repeat the process. So I ordered two, then got the jacket and decided like an impatient aristocrat of the KG3 variety to send both of them back because I didn’t like it. The humanity!

I was an Amazon Aristocrat until I returned the jackets. You know how I returned them?

I went to ****** ******* Kohl’s."

Get the whole post at Fistful of Talent by clicking here!


The Movie "JOKER" is a Story about You, Me and Our Complete Lack of Empathy...

With all the workplace and school violence in our world over the last decade, I've picked up on a theme from a few deep thinkers - from students and employees alike.  The chilling wisdom goes something like this:

"I go out of my way to talk to Ricky. When he comes to the school with a bag of guns, I want him to look at me and keep walking."

"I always talk to Nick. He's going to get fired and there's a 50/50 chance he's coming back to take some people out. If that happens, I think he'll let me go."

Crazy, but real. The probability players among us are treating individuals they think are prone to violence differently, planning for a day we all hope will never come to our Arthur fleckneighborhood.

They see someone struggling, and perhaps left behind or given up on by most. They aren't giving real engagement/friendship, but instead performing some type of risk management by acknowledging them by saying hello, sharing a laugh or pretending to be interested.

Is that empathy for those on the outside looking in?  No. But it's a start that might actually result in a conversation or two that leads to real empathy.

These quotes are the first thing I thought of as I watched JOKER starring Joaquin Phoenix last weekend. It's clear that the character played by Phoenix (Arthur Fleck) suffers from mental health issues. The origin story of the Joker, future nemesis of Batman, tracks Fleck through hardship after hardship in the early 1980s.  It's a hard watch as he struggles with mental illness, his treatment by others and ultimately turns to the dark side.

The villain doesn't come out until the movie is almost over.

Let that sink in for a second. A movie - even one as committed to telling a deep story like Joker - can only show you 15-16 meaningful interactions, which generally lead to a good place or a bad place.

In real life, that's more like five thousand negative interactions that a struggling individual has before he turns to violence, goes in cave of depression/addiction or take his own life.

I'm pretty good at holding doors open for people. Like most of you, I kind of suck when it comes to people who don't fit in. I don't do enough to make people who are struggling feel better about themselves.

When you see someone on the outside looking in, empathy and connection is really the only answer. We can have the usual conversations after negative events about drugs, guns, etc. - or we could slow down, reduce our anxiety and try and connect long before those things occur.

I recommend Joker as a movie, but not because the story is a great tale of how a super villain came to be.

The story is about you and me, and the lost opportunities that are everywhere around us.  

We gotta do better.


Here's What Job Security/Being Untouchable/Arrogance as a Leader Looks Like...

If you've lucky, you've felt it at some point in your career. The swagger and incredible self-confidence that allows you to throw caution to the wind, confident you have the ability to provide for yourself and your family. 

"If you don't like they way I do it, find someone else to do the job."

To be sure, we've all thought that. But how many of us have actually said it? That's rare air for any working professional, and it usually means one of four things:

1--You're incredibly confident in your ability to find another job. In fact, you may already be on the market and have turned down a few offers Dantonio recently.

2--You at the tail end of your career and you've stored up enough acorns for a long winter (i.e., retirement).  You're daring someone to take you out.

3--You're an incredible ****, full of arrogance, disagreeable with all and really a negative force within your organization.

4--You're tired. You have to work, but you're at the end of your rope. You won't quit, so you're daring someone to make you go find another job.

I'm reminded of some leaders feeling untouchable by this report from last weekend's college football slate. Michigan State was at Wisconsin and just got drilled.  Here's how the post-game presser with Mike Dantonio went via ESPN:

"The Michigan State head coach drew even more attention to his inept offense in the aftermath of a 38-0 loss at Wisconsin, if that was even possible.

In his postgame news conference, Dantonio was asked if his offseason staff changes — he shuffled his offensive staffers’ responsibilities but did not fire any existing coaches or bring in anyone new — might have been a mistake.

“I think that’s sort of a dumb-a** question,” Dantonio replied."

That's taking "it you don't like it, find someone else" to a whole new level.

Let's put in context what 38-0 feels like in the corporate world.

--38-0 is being the incumbent provider in a renewal process and not making it to the final four and presenting live.

--38-0 is opening up a new call center and not taking a single call your first day - but you're not sure where the calls went instead - nobody got the calls.

--38-0 is agreeing to ship the new software release and when your CEO hits the site to test it, it crashes his Microsoft Surface.

Now imagine you're the manager in the call center scenario. Someone from corporate fixed the problem routing calls that your team couldn't fix. You go a meeting on the second day to revisit what happened.  Someone from corporate asks you, "Do you think you have the right people on your team moving forward?"

You don't miss a beat.  “I think that’s sort of a dumb-a** question,” you reply.

That's next level Job Security/Feeling Untouchable/Arrogance as a Leader.

"Next Question"

May you reach the level of success in your career when you can play offense and be belligerent rather than answer questions/concerns after failure.


Amp Up Your Employment Brand Like Domino's...Or Maybe Not...

When it comes to attracting candidates to your employment brand, purpose matters.

Candidates are increasingly seeking a sense of purpose in their work, so it makes sense to embed purpose in your values through connection to Corporate Social Responsibility (CSR) themes.  Companies like Unilever have gone all in on this approach and even mandated executives assign a purpose to every product in the company's portfolio. An examination of how Uber's company values changed after a period of turmoil show a transition from focusing on winning to working with others, serving community and valuing differences. Intent of your messaging matters.

BUT.... and there is a but....It's dangerous to reach when it comes to the purpose you assign to your business. If you're simply a nice business/company with a good product, don't suggest that you're trying to save the world.

I was reminded of this danger when Domino's used footage of employees as they marketed their Delivery Insurance/guarantee, which says that if your order isn't right, they'll make it right quickly and free of charge.

That's good business, but not a 8.3 on the Richter Scale of CSR and corporate purpose. Watch the following video (email subscribers click through if you don't see the player below) and we'll break it down afterwords:

Amp up your employment brand like Domino's... or maybe not.

“we're going to be expediting this order, people”

If I close my eyes on that audio, it feels like I'm in an emergency room and someone's life is at risk.

Then I remember, "no, Jenny just called to complain and she didn't get the cheesed stuffed crust".

Flash forward from the pizza oven room to drivers running up steps to help get Jenny's calorie count up. What really happens when that complaint comes in? I'd imagine it involves talking about who screwed it up. But someone's Netflix night is in peril, so let's expedite the order and send the fastest sprinter in the room, but let's make sure we obey all relevant traffic laws.

Somebody's going to blow out an ACL if we're not careful.

You get the vibe. Mission and purpose for your company is important. But don't chase world-defining purpose when showing your employees if it doesn't exist. But showing pride and the love of the craft for the people who make the product?  That never goes out of style.

Don't chase world defining purpose with your employment brand if it doesn't exist.  Just be you.


LEADERSHIP SIGNALS WEEK: Tilman Fertitta On Business Over Politics...

Capitalist Note: It's "Leadership Signals Week" here at the HR Capitalist, where I talk about things I've seen leaders communicate over the last couple of weeks that speak volumes about what they want their followers to think.

Communication matters if you're a leader. It's the most visible sign of what you believe, and it drives the intensity and beliefs of those that choose to follow you. Don't be fooled into thinking all communication is part of a formal plan. Some leadership signals are purposeful, others just happen organically. (see earlier leadership signals covered from Steph Curry and Elizabeth Warren)

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Do you know who Tilman Fertitta is? I didn't until he bought an NBA franchise. Here's his bio from Wikipedia:

Tilman Fertitta (born June 25, 1957) is an American businessman and television personality. He is the chairman, CEO, Tilmanand sole owner of Landry's, Inc., one of the largest restaurant corporations in the U.S. He also owns the National Basketball Association (NBA)'s Houston Rockets.

In 2018, his net worth was estimated at $4.5 billion, placing him at No. 153 on the Forbes 400 list of the wealthiest Americans; Forbes calls him the "World's Richest Restaurateur".

Fertitta is chairman of the board of regents of the University of Houston System. Fertitta became the star of Billion Dollar Buyer on CNBC. On September 5, 2017, Fertitta reached an agreement to buy the Houston Rockets for $2.2 billion.

Fertitta is an opinionated guy and not one to shy away from the limelight. On September 17, 2019, Fertitta released a book, Shut Up and Listen! Hard Business Truths That Will Help You Succeed, in which he details his journey to success and offers advice to other entrepeneurs on their business ventures. Each chapter contains "Tilmanism's" which focus on 6 important rules for any entrepreneur to follow.

Wow. That's a lot to take in. Go ahead and soak on that last paragraph. I'll wait.

You kind of get the picture right? Fertitta a person that would never shy away from sending leadership signals, and a recent one that he sent is all over the news. 

Last week, one of Fertitta's execs at the Houston Rockets, general manager Daryl Morey, issued a tweet that supported the 2019 Hong Kong protests which drew criticism from Fertitta who said that while Morey was the best general manager in the NBA, the Rockets were not a political organization.

Morey since has deleted the tweet. Here was Fetitta's response, a tweet that happened in lighting fashion after Morey tweeted his support of the protests in Hong Kong (email subscribers click through if you don't see the tweet below):

Fertitta's leadership signal here is that no single employee gets to provide political direction for the organization (except maybe Fertitta, I'm guessing).  I've written in the recent past about employee activism, what it means and how to handle. Check out that post in the link, because you've got some things to figure out as a leader.

There's also an element of "please shut up and do the job we pay you for - only" in Fertitta's tweet.

The Daryl Morey tweet has since blown up into global news, as the Chinese government and state-run agencies that cover the NBA have reacted in a very negative way, causing an important market to be at risk, not only for the Rockets, but for the entire NBA.

Should human rights violations and what we think about the communist system in China trump the need to do business with the Chinese? That's a post for another day, and I'm probably the wrong guy to analyze that.

What I can tell you is that Fertitta was on this quickly, understood the risk and sent a leadership signal ASAP. Whether you and I agree with that signal in these circumstances is up to is, but one thing is for sure:

You need to think as a leader (at any level) how you're going to handle situations where employees attempt to dominate conversations on political and social issues.

Right or left, capitalist or communist, it doesn't really matter. You need to be prepared as a leader for this, because employee activism in our social age is only going to continue to rise.

Good luck!


How To Know If Your Defined-Benefit Pension Plan Is In Trouble...

I'm not an expert on pension plan funding. But if you're relying on a pension in retirement, you might want to take a look at what % of obligations are funded currently in your pension plan.

Why would I say that? Because while I'm no expert, I can tell you when your pension plan is in trouble. Here's how you know: Ge1

You know your pension plan is in trouble when your company announces they're freezing pension benefits, IN THE MIDDLE OF THE BIGGEST ECONOMIC EXPANSION IN HISTORY.

More specifics from the Wall Street Journal:

"General Electric Co. GE +0.06% said it was freezing its pension plan for about 20,000 U.S. workers and offering pension buyouts to 100,000 former employees, as the conglomerate joins the ranks of U.S. companies phasing out a guaranteed retirement.

GE’s traditional pension and post-employment benefits programs, which were underfunded by $27 billion as of the end of 2018, are one of the company’s biggest liabilities. The company said the latest changes could reduce its pension deficit by as much as $8 billion.

GE is still responsible for lifetime payments to more than 600,000 retirees, workers and beneficiaries. The latest changes won’t affect retirees or others already receiving pension payments.

The company’s pension plan is the second largest by projected obligations, only behind International Business Machines Corp.’s,according to consulting firm Milliman Inc., which compiles data on the 100 U.S. public companies with the largest pension plans.

GE had funded 76% of its projected pension obligations at the end of 2018, according to Milliman, compared with 91% funded at IBM. The median funding level was 89% for the group.

Man. While freezing pension plans has become a common technique to reduce risks and shrink corporate balance sheets, when you're doing it in the middle of the biggest expansion in history, you kind of know you're screwed. 

Let's do story time and look at another classic buy high, sell low type of investment fund for the common good.

My state has a Prepaid Affordable College Tuition program, created by the Legislature in 1989 and managed by the state treasurer. It almost collapsed during the last recession. Imagine the Dow at 14,000 in early 2007. Well, that investment group was struggling to meet the member requirements in 2007, and the Dow went to 7,000 during the recession, at which time they exited securities and went to a cash position. Buy high, sell low.  Great work, team! That decision combined with sharp tuition increases (healthcare costs as a comparison in a pension, anyone?) caused the fund to go insolvent and require a state bailout.

The point? If you're freezing pensions at the Apex of the market and the biggest expansion is history, sh#t's going to get real in even a moderate recession of any length.


Leadership Signals Week: Steph Curry Says "Bye" to an Unlikable Peer...

Capitalist Note: It's "Leadership Signals Week" here at the HR Capitalist, where I talk about things I've seen leaders communicate over the last couple of weeks that speak volumes about what they want their followers to think.

Communication matters if you're a leader. It's the most visible sign of what you believe, and it drives the intensity and beliefs of those that choose to follow you. Don't be fooled into thinking all communication is part of a formal plan. Some leadership signals are purposeful, others just happen organically.

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Next up on Leadership Signals Week - Pro Basketball (NBA) star Steph Curry (Golden State Warriors).

This isn't a sports post. It's a post about the signals that leaders send when important team members Curry (unpopular to some or all in your company) decide to leave the company.

The history of the Golden State Warriors has a dramatic arc over the last 5 years. Led by the always likable and role-model worthy Curry, the Warriors won the 2015 NBA Championship, then reached the finals in 2016 - but lost to the Lebron James-led Cleveland Cavaliers. Along the way, Steph Curry was the NBA season MVP in 2015 and 2016.

Great success to be sure. But after the 2016 Finals loss, Golden State did the unthinkable, picking up another top five player in free agency - Kevin Durant. The roster addition of Durant resulted in two more titles in 2017 and 2018, before injuries resulted in a loss in the finals last summer (2019).

But along the way there was drama. Durant was known to be moody, petulant and hard to please. While the addition of top talent in Durant made the healthy version of the Warriors all but unbeatable, the work product wasn't the same as in 2015 and 2016.  Less sharing, less collaboration and less fun.  The business version? We're stronger than we've ever been as a company, but man, the old days were the glory days - and that executive sure is grumpy as hell.

Flash forward to late last summer, and Durant chose to leave the Warriors in free agency. This combined with other injuries and competitive pressures means the Warriors aren't the team they used to be.

But leadership signals are still important - so in the Warriors first preseason game (and first game without the moody Durant) in a new arena, Steph Curry sent the following message (email subscribers click through if you don't see the video below or click this link to get the video on Twitter):

The message? "The person that brought everyone down isn't here anymore. I'm in charge and work is about to become a lot more fun for you."

Curry's quote after the game: “That was choreographed since, like, yesterday. I was just going to shoot it. Christen Chase Center the right way. Obviously it went airball, but obviously I thought it was fitting to take a wild shot like that and get everybody excited.”

What Curry doesn't say is that there's zero chance he takes that shot if Durant is still a part of the team. Curry had a long history of trying to keep Durant engaged by deferring to him and making sure he felt like a leader the team needed. It wasn't enough - Durant was moody and difficult as a teammate.

Things that could happen in your company when a leader with low approval levels decides (or is asked) to leave:

--The old leader didn't like any music at any company function. First all-hands meeting, the leaders that take over blast Van Halen from the speakers.

--The old leader had a parking spot upfront. The leaders that take over turn that into an "employee of the week" parking spot.

--The old leader didn't like to participate in recognition activities. The leaders that take over do a recognition event within the first week. With music.

You get the vibe. When grumpy, unlikable leaders leave, a celebration of sorts might be in order.  

Steph Curry sent a leadership signal with his first shot that win or lose, this season was going to be fun. Buckle up! Ding-Dong, the grumpy witch is dead took another job on the East Coast!