The 4 Most Urgent Business Issues Are People Issues

Leadership. Retention and engagement. Reskilling HR. Talent acquisition and access.

Of all the critical issues faced by business and HR leaders today, those four are the most urgent, according to a recent survey by Deloitte Consulting LLP and Bersin by Deloitte. (You can read more about the survey in the report, “Global Human Capital Trends 2014.”)

1. Leadership

The need for strong leadership is, of course, a perennial challenge. But the report makes it clear—this challenge is accelerating “at all levels, in all geographies, and across all functional areas.” The reasons? The rapid pace at which today’s businesses move and change. Globalization. The speed and magnitude of technological change. The list goes on.

2. Employee Retention and Engagement

These issues have never been so prominent (among business leaders or in the media) as they are today. Unfortunately, as the Deloitte report points out, these issues have no clear owner in most organizations, neither within HR nor within the business at large. This creates a dangerous potential for inertia. “Companies should redefine their engagement strategy to move from keeping people to attracting them and creating a passionate compassionate place to work,” the report states.

3. Reskilling of HR

For many of us in HR, this is the issue that hits closest to home. After all, we’ve been working attentively for the past decade or so on transitioning from a largely administrative function to a more strategic one. And the Deloitte report acknowledges this to some degree: “… the HR and talent functions are in the midst of a transformation.” But then it goes on to say: “HR is not making the grade as companies move away from HR as people administration to a focus on people performance. An essential part of this change is the upskilling, reorganization, and transformation of HR and its relationship with business leaders and issues.”

Clearly our internal transformation isn’t complete. We must continue to strengthen our role as a strategic partner to senior and functional leaders. We can do this, in part, by advancing our methods of gathering, analyzing and sharing actionable people data. And we can improve our recruiting and hiring practices so they foster a better quality of candidates and new hires. And we can further develop our abilities to drive passion, engagement and innovation among our workers.

4. Talent Acquisition and Access

As a growing number of analysts have advised, many of our companies will not face a shortage of workers in the next several years. What we will face is a shortage of the right workers—people possess the skills, mindsets, behaviors and goals that truly are in line with our organizations’ needs. Our success depends upon our ability to find these people efficiently. “Tools such as LinkedIn, Facebook, Twitter, and others are changing recruiting into a strategic function focused on marketing, branding, and new tools and technologies,” the Deloitte report declares. Of course, using the tools to find the right talent is just the beginning. Then we need to develop them and retain them for the long term. And these challenges bring us right back to the three urgent issues covered above.

It’s no coincidence that people issues are our four most urgent business issues—or that these issues are so deeply intertwined. After all, our businesses are built upon our people.

Unless we do a better job of recruiting, managing and developing them for the long term, our sense of urgency will quickly turn to desperation.

The Price We Pay for Bad Managers

“Currently, 30% of the U.S. workforce is engaged in their work … (while) the vast majority (70%) are not …” -- Gallup’s State of the American Workplace report

This statistic sent a shockwave through the business community when it was first published. But the Gallup report actually begins with another and equally important insight that deserves our attention. Gallup’s Chairman and CEO, Jim Clifton, opens the report by telling America’s business leaders: “The single biggest decision you make in your job—bigger than all of the rest—is who you name manager. When you name the wrong person manager, nothing fixes that

bad decision. Not compensation, not benefits—nothing.”

Clifton estimates that bad managers are costing the U.S. an estimated $450 billion to $550 billion annually through the active disengagement they create.

Why are there so many bad managers, and why are they doing so much damage? A 2013 article in U.S. News and World Report offered seven noteworthy reasons. Here are the top three:

1.     Managers were promoted into management roles because they were good at something else. As the article points out, “Management is often just the next rung on the ladder, but the skills needed to succeed at management are very different from the ones that got them this far.”

2.     They get little or no training in how to manage well. New managers often receive precious little guidance on “how to take on their crucial new role and are left to just figure it out as they go along.”

3.     Managing well is hard. It requires an understanding of challenging concepts such as “how to set goals that are the right mix of realistic and ambitious; how to give feedback that's clear, specific and actionable; how to stay involved without being overly hands-on; (and) how to hold people to high standards without being a tyrant,” among others.

Clearly, with losses of $450 billion to $550 billion a year, we need to choose our managers with greater care. Managing others is demanding and it requires a whole host of people and business skills that must be deftly exercised. If we’re going to give our managers every chance to succeed, they need better training and more coaching in the art of leading others.

Employers spent an estimated $62+ billion on training in the U.S. alone last year. But I’d be willing to bet that a relatively small portion of that went into training our managers to be better managers. It’s time we started making and taking that investment seriously.

Are You Ready To Create the Organization of Your Dreams?

It’s not beyond your reach!

Not according to the authors of a 2013 Harvard Business Review report, “Creating the Best Workplace on Earth.” They affirm that you can indeed create your dream organization—i.e., one that operates to its fullest potential and gets people to deliver their best work day in and day

out—if you nurture six key attributes:

1.     Let people be themselves.

2.     Unleash the flow of information.

3.     Magnify people’s strengths.

4.     Stand for more than shareholder value.

5.     Show how the daily work makes sense.

6.     Have rules people can believe in.

The authors identified these attributes by talking with and surveying hundreds of executives across the world over the course of three years. They admit that few organizations possess all six attributes … that there are costs and complexities associated with implementing them … and that creating a dream organization is definitely “aspirational.”

Even so, these attributes are found to varying degrees within the most productive and successful companies on the planet. So they represent a useful blueprint for those of us striving to transform our organizations into dream organizations. By choosing a few of these attributes and doing what we can to nurture them within our own companies, our employee engagement and commitment levels could soar.

And, as the authors of the HBR report point out, focusing on employee engagement and commitment can pay powerful dividends:

“Research from the Hay Group finds that highly engaged employees are, on average, 50% more likely to exceed expectations than the least-engaged workers. And companies with highly engaged people outperform firms with the most disengaged folks—by 54% in employee retention, by 89% in customer satisfaction, and by fourfold in revenue growth. Recent research by our London Business School colleague Dan Cable shows that employees who feel welcome to express their authentic selves at work exhibit higher levels of organizational commitment, individual performance, and propensity to help others.”

Creating “the organization of your dreams” or “the best workplace on Earth” might sound like pipedreams to some but the potential rewards are very real. And that makes these dreams worth reaching for.

Negative Feedback Can Be a Positive Experience

A couple of weeks ago, we published a post examining the myth that everyone hates performance reviews. It referenced a study that looked into how people respond to receiving negative feedback in a performance review.  The upshot: not a lot of folks enjoy negative feedback. Big surprise, eh?

But the fact remains … negative feedback is an inevitable and invaluable part of performance reviews. After all, managers need to let their direct reports know where and when they’re missing the mark. But there are constructive ways of delivering negative feedback.

Here are a few things to keep in mind when it comes time to provide negative feedback to your employees:

·      “The purpose of a fair 360 review is to maximize performance and not punish the employee in any way.” That quote is from an interesting article on the HR Daily Advisor’s website, and even though it’s about 360 degree reviews the point is valid for all performance reviews. The article goes on to remind us that one of the main goals of performance reviews is to boost productivity. That won’t happen if a manager uses reviews to punish, threaten or browbeat employees—even those whose performance is missing the mark.

·      The ultimate goal of performance reviews is to inspire success, not highlight failure. Performance reviews are one of the tools we use to get our people to perform at their best and hit the targets we set for them. In addition to showing them specifically where they’re living up to or exceeding expectations, we also need to show them where they’re falling short. But we need to do so constructively—by offering useful insights, guidance, understanding and patience. We want (and need) our people to succeed. Replacing them is costly and time-consuming. So it’s in our own best interest to inspire and coach them to want to do better, especially during performance reviews that contain negative feedback.

·      Don’t just dwell on the past. Performance reviews offer the perfect opportunity to inspire your people by talking about their future. Think of the signal you send to people when you provide them with fair and necessary negative feedback but then move onto discussing their future (the kinds of roles and work they want to take on in the next three to five years, the kinds of learning and development resources they’re interested in, etc.). You’re showing them that there is still a place for them within the company, despite temporary performance hiccups, if they raise the bar.

It all comes down to this: performance reviews are only as effective as we allow them to be. If we do a poor job of delivering negative feedback—or positive feedback, for that matter—the review won’t do our people or our organizations much good.

If we learn to inspire success and ignite the desire to do better in our people, then the performance review can be a truly transformational experience.