Author: Garry Kranz

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Companies Can Name Their Stars but Struggle to Retain Them

Most companies can identify their top performers and are able to woo stars away from other firms. But keeping them from leaving remains a vexing problem.

Those are key conclusions of an informal survey of 91 human resources professionals by Sibson Consulting, an HR advisory firm based inNew York. The survey was taken in July during Sibson’s participation in a recent conference on awards and recognition.

Eighty-six percent of companies report being able to identify star performers and nearly all companies express concern about losing their best employees. Conversely, just 58 percent are interested in retaining everyone in their workforce, suggesting companies have become more discriminating in their retention efforts.

Yet there is a disconnection between desire and reality: Just 76 percent of organizations surveyed say they are successful at retaining star talent yet stubbornly high unemployment has lulled companies into believing they no longer need to be aggressive in recruiting and retention, says Jim Kochanski, a senior vice president at Sibson.

Star performers are always in high demand, even during an economic downturn, Kochanski says. “There isn’t a general shortage of talent, but there are critical shortages of high performers and those people with scarce skills.”

Those who are deemed to be among a company’s best also present a great risk should they be lured away by competitors.

“High performers are always able to find another job. And replacing one star with another isn’t as easy as it sounds,” Kochanski says.

Sibson’s research on skills-specific talent shortages is backed by other data, including a 2011 report by staffing company Manpower Inc. Despite an abundant labor pool, Manpower says 52 percent ofU.S.employers were struggling to find highly qualified applicants, up from 38 percent in 2010.

Not all companies are as sanguine as those in Sibson’s informal survey. Most organizations use performance levels, assessment scores and feedback from managers and senior leaders to distinguish high, average and low performers, according to a forthcoming study in September by the Corporate Executive Board, an Arlington, Virginia-based advisory firm. Despite those efforts, only 31 percent say they are effectively identifying their best employees.

Even so, companies may be waking up to the increased post-recessionary importance of providing career growth to their best people. “In general, one of the things that keep high performers around is giving them a sense that they have a future with your company,” Kochanski says.

Sibson found that 77 percent of companies are “careful to make sure promotions go more to star talent than to average talent.” Should they learn a star has been offered another job, 84 percent of companies say they would make a counter-offer in an effort to keep the employee.

In an interesting twist, Sibson says 59 percent of respondents agree that their organization provides “extraordinary rewards” to stars. Ironically, nearly the same percentage (60 percent) use extraordinary rewards to entice would-be recruits to join their firm.

Garry Kranz is a Workforce Management contributing editor. Comment below or email editors@workforce.com.

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Game Plan: Coaches Drive Performance at Archer Daniels Midland

Archer Daniels Midland Co. was founded in 1902, but it’s a newcomer to the world of leadership coaching.

Known also as ADM, the Decatur, Illinois-based company has provided agricultural commodities such as grain, oil and cocoa to food-makers for decades. It wasn’t until 2009 that the consumer-packaged-goods giant concocted its own in-house recipe for boosting manager performance.

That was the inaugural year of ADM’s Coaching to Win initiative, an eight-week-long program geared to 6,000 “people managers” around the world. Collectively, they supervise nearly 30,000 employees.

“We expect every one of those managers to become a great coach,” says Jane Pierce, ADM’s vice president of talent and organizational development.

Since the inception of Coaching to Win, about 2,500 managers have taken part in the program, which uses blended learning to teach leaders the importance of continuously coaching employees. The short-range goal is to use coaching to boost the bottom line through cost savings and more efficient operations.

Longer term, it’s hoped that coaching will supplant the annual ritual of performance reviews. “We think the best way to inspire performance, and equip people to be successful, is when leaders coach in the moment throughout the day,” Pierce says.

Among the early returns at ADM: A newly promoted shipping superintendent received coaching from his manager on ways to streamline his facility for greater efficiency. By brainstorming, the two leaders determined it is cheaper to use company trucks to bring inventory into the facility.

“That resulted in significant cost savings, which they were able to quantify. It’s not something they would have looked at otherwise—because we’ve always used outside trucking firms,” Pierce says.

Coaching also helped a manager in ADM’s commercial division, which buys agricultural commodities, to convey the importance of collaboration with its operations division, which converts the commodities into consumer products. One of the recently coached employees even took the lead, facilitating meetings between the two divisions to discuss ways to improve project delivery.

Consequently, the divisions combined to shave an average of three days from project deadlines, Pierce says.

More and more organizations are gravitating to coaching-based performance improvement. Companies whose senior leaders habitually practice coaching have business results that are 21 percent higher than noncoaching organizations, according to a study last year by consulting firm Bersin & Associates. The study from the Oakland, California, firm, High-Impact Performance Management, was based on interviews of 275 human resources and business leaders.

Another factor behind the rise in coaching is generational, says Ellen Kumata, managing director of Boston-based Cambria Consulting Inc. An influx of younger workers is forcing many organizations to abandon the traditional top-down approach to managing people. Gen Yers chafe against traditional hierarchies, but they still tend to want plenty of guidance. “They need managers who can ask provocative questions that help employees discover the best answer,” Kumata says.

Coaching to Win was developed entirely by ADM’s organizational development specialists and is available in multiple languages. It was not launched in response to a glaring skills gap, Pierce says, but to impose discipline around annual performance management.

Managers and employees long had understood the how-to aspect of yearly goal-setting, but too often lacked clear insight on its connection to ADM’s business activities. Senior executives viewed coaching as a way “to move people from doing performance management by rote to appreciating its potential for improving their own success,” Pierce says.

Each group in the program consists of about 45 colleagues, sometimes from the same business unit, but usually consisting of a cross-section of managers from various segments of the company. Individual participants complete a series of e-learning courses and a behavioral self-assessment, in preparation for an introductory conference call with other managers.

Technically, it’s actually five simultaneous conference calls, each one including nine managers. HR professionals within ADM facilitate the calls, making sure each person participates in some way.

During the telephone calls, which last about an hour, managers are asked to discuss their management challenges and lessons learned from the behavioral assessments. Facilitators also help managers identify the first employee they would target for coaching.

“They are expected to coach every one of their direct reports, but we help them pick people with a high probability of success, based on the person’s goals,” ADM’s Pierce says.

Coaching to Win participants also download a different coaching assignment every week for five weeks and are expected to put the lesson in practice when coaching their first employee. Follow-up conference calls are scheduled every couple of weeks.

In the third and final component of the coaching, managers meet for the first time face to face for a full day of discussion and exercises that reinforce the importance of daily coaching.

Although coaching is one of 12 attributes against which managers’ performance gets measured, Coaching to Win is voluntary. Instead, the learning is “embedded through envy” by publicizing the achievements of managers who have completed the training.

“When we share with leaders the great results other leaders are having, the next thing they say is: ‘How come they got coaching [through the program] and I didn’t?’ ” Pierce says.

There aren’t many drawbacks to performance-based coaching, says Rick Galbreath, president of HR consulting firm Performance Growth Partners Inc., in Bloomington, Illinois. Companies appreciate managers who show an interest in their growth, and that usually translates to higher employee loyalty, engagement and retention. “Continuous, ongoing performance coaching is critical if you want to be an employer of choice. Your customer’s needs change daily, so the skills of your workforce must keep pace.”

In January, ADM said it would take a pretax charge of up to $75 million by cutting 3 percent of its U.S. workforce, or roughly 1,200 jobs. Also hanging over the company is an investigation by the U.S. Department of Justice, which ADM initiated in 2009, related to transactions of grain and feed exports that potentially violate federal law.

The tough times make training on coaching and feedback all the more vital. It is “even more important during times of transition,” Pierce says.

Garry Kranz is a Workforce Management contributing editor. Comment below or email editors@workforce.com.

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Matchmaker, Matchmaker, Make Me a Mentor Match

Single people use social software to search for the perfect soul mate. If Covance Inc. could find a similar tool, Michael Kauer figured the company would be able to improve employee-mentor matches.

It turned out to be more than a romantic notion for Kauer, the senior manager of organizational development for Princeton, N.J.-based Covance, a drug developer. Covance supplies research and services to help pharmaceutical-makers bring new drugs to market.

In 2010, Kauer’s team spearheaded Covance’s transition to automated mentor-matching, using a software program known as Mentor Scout. The software, licensed from Honolulu-based Nobscot Corp., enables employees and mentors to connect based on mutual professional interests, Kauer says.

Mentor Scout also streamlines many of the processes typically used to connect mentors and those seeking to be mentored. . “It used to take a couple of months before you knew who your mentor was. Now, you can find a mentor within seconds,” Kauer says.

Mentoring remains a hot topic for many organizations, driven by a need to develop future talent, transfer institutional knowledge and reduce costs. For some organizations, an effective mentoring program spells the difference when recruiting topnotch candidates. “People in their mid-20s and early 30s are almost demanding to be mentored,” says Laura DiFlorio, director of sales for Nobscot.

Maybe so, but mentoring often leaves a lot to be desired, says Brian Kropp, a managing director for Corporate Executive Board Co., an advisory firm in Arlington, Va. Of the roughly 1,300 firms his firm works with, Kropp estimates 70 percent have some sort of mentoring program in place. “I would say the vast, vast majority of them are disappointed in the results. There tends to be a lot of hoopla about mentoring, but not a lot of actual value being derived from it.”

Companies are beginning to show interest in technologies that can help streamline the process and provide a science-based approach. One example: the Corporate Executive Board offers mentor-matching software to its members, and it is one of the most popular downloads from the company’s website, Kropp says.

At the same time, social networking websites such as LinkedIn, Facebook and Yammer have taken informal learning to a new level by changing the way people communicate and connect. CEOs are recognizing the trend. “They’re starting to imagine what would happen if their companies could harness social media to get better matches” between mentors and those seeking to be mentored, Kropp says.

Mentor-matching software is not widely embraced by talent-management vendors, probably because they “have not yet learned there is a real desire,” says Beth Carvin, CEO and president of Nobscot.

Exceptions include Insala, based in Dallas, and Redmond, Washington-based Chronus Corp.., both of which have unveiled similar software tools in recent years.

Covance employs about 10,000 people in more than 60 countries. A growing number of the company’s employees want mentors, Kauer says. The company launched in-house mentoring in 2005 with 34 participants, but demand has steadily increased. Nearly 500 employees requested a mentor in 2011, with 300 partnerships eventually approved

Automating the system eliminates hundreds of hours of administrative work for Covance’s human-resources professionals and frees them up to address strategic issues.

Previously, before using the online system, mentors and their protégés were required to complete an eight-hour, in-person orientation. The same information now is given during 90-minute webinars, eliminating the need for costly travel and classrooms. As a result, the company saves about $113,000 a year. “Now that we’ve gone down the path of automation, I can’t imagine ever going back to the old way of doing things,” Kauer says.

Covance employees must meet three main criteria to receive mentoring. They must have worked at Covance for a specified period of time, achieved at least a “meets performance” rating, and have a well-defined objective in mind. Managers also must give their approval before an employee is able to participate.

The program is not used to correct deficiencies or performance issues, Kauer says. “We want folks who have demonstrated a willingness to perform and grow.”

Jonathan Horton found a mentor when adjusting to his new job as Covance’s compliance manager for the Americas. Horton is now managing individuals who not long ago were his peers. “That’s a transition that doesn’t necessarily come easily,” Horton says.

Connecting with the right mentor was instrumental during the various stages of building a new team, such as creating cultural norms for the group and setting performance expectations. Horton’s mentor helped him learn which type of activities would promote participation and bring people together. “Having him walk me through the different phases was very beneficial,” Horton says.

Horton also represents the “pay it forward” attitude among many of Covance’s mentored employees. In addition to being mentored, Horton also has served as a mentor to other employees. “There is a personal satisfaction to seeing my mentees succeed,” he says.

The Mentor Scout software enables mentoring relationships to get established quickly, Horton says.

“The greatest benefit is that the program puts the matching process in the hands of potential mentors and mentees.”

Garry Kranz is a Workforce Management contributing editor. Comment below or email editors@workforce.com.

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Well-Trained Managers Can Curb Attrition

What’s the best way to reduce the cost of turnover?

By training managers on its financial impact and holding them accountable for retention, says James Harris, director of human resources at Bost Inc., a not-for-profit that provides services to developmentally disabled people in western Arkansas.

It’s an old idea that took on new life for Harris while getting certified as a retention specialist at the Retention Institute, part of consulting firm Finnegan MacKenzie in Longwood, Florida. Harris says that the online program, spread over one year, couched retention as a strategic issue, not a tactical one.

It convinced him that Bost’s 33 department managers needed to be involved in solving chronic turnover by engaging workers and coaching for performance. It also emphasized the cost-benefit analysis of keeping people, particularly high performers. “I realized we were focusing on lowering the turnover rate, but we weren’t attaching an actual dollar cost to it,” something that managers are now doing routinely, Harris says.

Retention is a growing concern despite high unemployment in the U.S. More than 1 million workers voluntarily left jobs in October, the highest number in more than a decade, according to the U.S. Bureau of Labor Statistics.

Getting managers to assume the burden of retention may be easier said than done. Even though it sounds logical to do so, organizations typically don’t evaluate turnover as they do equipment and other capital costs, says Richard Galbreath, president of HR consulting firm Performance Growth Partners Inc., in Bloomington, Illinois.

Many managers would lose their cool if an employee’s negligence ruined an expensive tool, Galbreath says. “But when an employee leaves, there is often very little concern, except to refill the position as soon as possible,” Galbreath says.

Moreover, managers typically aren’t aware of turnover’s impact on the organization or given the tools to fix the problem. “Many, many supervisors don’t even think turnover is their responsibility,” Galbreath says.

It’s an attitude Harris set out to change at Bost, which operates a diverse range of facilities that includes preschools, apartment complexes, intermediate-care facilities and home-health services.

With so much to do, managers took a ho-hum approach when Harris first announced the turnover-reduction initiative. “At first they thought it was a ‘flavor of the month’ thing that would disappear.”

Managers quickly learned to take it seriously, though. Harris requested all 33 department heads to estimate how much money they were spending each month to recruit, hire and train replacements. The figures for each department were tallied and came to $966,000. The combined figure provided a baseline to slash turnover across the organization by at least 10 percent.

Having departments calculate their turnover forced them to take ownership of the issue, Harris says. “All we wanted was a benchmark to work from, but it had to be their number, not mine.”

Harris then applied peer pressure during monthly manager meetings. He began handing out a report that shows monthly turnover costs within each department. “Supervisors didn’t like the idea that their names appeared showing actual turnover costs for their departments,” Harris says.

The methodical approach resulted in an epiphany: One-third of the departments accounted for virtually all organizational turnover. Post-mortem meetings were convened in which department managers with good retention could share tips and techniques with peers who were struggling.

Manager training also was provided through Bost’s internal School of Leadership. The training includes workshops and role-playing exercises for resolving workplace conflicts, active listening and coaching for performance. In addition, managers have accountability goals for boosting retention as part of their annual reviews.

Bost’s annual turnover has plummeted to 21 percent from 35 percent. In comparison, turnover among workers in the developmental-disabilities field averages about 50 percent a year, according to the U.S. Department of Health and Human Services.

Still, Harris says Bost’s retention strategy is a work in progress. “As I told them, ‘We are not out to fire any supervisors. The object is to spark discussions about performance and offer help if you’re having turnover issues.’ “

Garry Kranz is a Workforce Management contributing editor. To comment, email editors@workforce.com.

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Organizations Need Coaching on How to Coach: Report

The success of performance coaching hinges on the support of top brass, enabling organizations to generate superior business and employee results, a new study shows.

Business results were 21 percent higher among organizations whose senior leaders “very frequently” make an effort to coach others, according to High-Impact Performance Management: Maximizing Performance Coaching, produced by Oakland, California-based advisory firm Bersin & Associates.

Additionally, organizations that reported “excellent” cultural support for coaching had 13 percent stronger business results and 39 percent stronger employee results, including engagement, productivity and customer service, the report notes.

The report is based on responses from nearly 200 U.S. companies. It marks the second phase of Bersin’s study on performance coaching. An earlier Bersin report in August revealed that 70 percent of organizations have jettisoned traditional performance reviews in favor of coaching, but also noted that most managers don’t know how to effectively coach.

“Coaching is the No. 1 performance-management challenge that organizations face, yet most don’t understand its value. They aren’t sure which emotional levers they need to pull to change people’s behaviors,” says Stacia Sherman Garr, a Bersin analyst and the report’s author.

Senior leaders need to engage in coaching to make sure it becomes culturally accepted and a point of accountability, the report concludes. Getting executives to participate is itself a challenge, though. On average, only 11 percent of senior leaders are considered “true believers” that coaching leads to improved performance.

To reverse the perception, leaders who believe in coaching should evangelize others through action, particularly by piloting performance-based coaching programs, according to the report.

Aside from executive support, helping managers understand the impact and acquire coaching skills also is crucial, according to the study. For instance, organizations that effectively prepare managers to coach are 130 percent more likely to realize stronger business results vs. those that don’t prepare managers and 33 percent better at engaging employees than ineffective organizations, Garr says.

Finally, human resources should be involved by creating an environment “that supports, teaches and measures coaching,” the study says.

Two years ago, Archer Daniels Midland Co., a global agricultural products company, launched a Coaching to Win program designed to better equip its 6,000 managers around the globe. The objective is to formalize coaching as an expectation for all managers, says Jane Pierce, the Decatur, Illinois-based company’s vice president, talent and organizational development.

“We believe good performance management really is about coaching for performance. The performance management review process is important, but it looks backward. Coaching gets people to look forward,” Pierce says.

Participants identified three traits to help managers improve their coaching abilities: active listening, reinforcing the desired behaviors, and asking open-ended questions, Garr says.

Generally, though, leaders still struggle when expected to coach, says E. Michael Norman, a Los Angeles-based senior consultant with Sibson Consulting, headquartered in New York. “Leaders are lining up and acknowledging the need. Now it’s a matter of making it a priority as part of the performance management model.”

Garry Kranz is a Workforce Management contributing editor. To comment, email editors@workforce.com.

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Newell Rubbermaid Aspires to Grow Leaders

Laurel Hurd represents the face of leadership development at Newell Rubbermaid Inc. She also represents the Atlanta-based company’s effort to keep more of its talent in house, adopt a new corporate strategy and combat an industrywide trend of failing executives.


In 2008, the consumer products giant selected Hurd, then a vice president of sales, and 11 other top managers for an exclusive leadership training program, known as Aspire. Limited to 12 participants at a time, the initiative consists of four weeks of group learning spread out over one year, including classroom instruction, required readings, structured exercises and on-the-job projects.



Up-and-coming leaders also are paired up with individual coaches within Newell to reinforce what they learn and help apply it on the job. The most meaningful part may be the frank feedback of other participants when the group meets every three months. Being forced to share her planned marketing or branding strategies—and have the rest of the group pass judgment—wasn’t easy for Hurd, 41, a 10-year company veteran who is now general manager of Newell’s baby and parenting essentials division in North America. But the constructive criticism was worth it, she says. “The team piece was incredibly powerful in that we were holding each other accountable,” she says. “It also built real trust and collaboration.”


Hurd exemplifies the type of leader Newell wants to develop on a fast track: young, upwardly mobile senior managers eager to think globally. The Aspire program targets vice presidents and functional heads that have potential to “run one of our 13 global business units within the next three to five years,” says Brian Hults, Newell’s vice president of organization and people development.


Aspire is the culmination of a “transformation effort” started in 2006 by then-CEO Mark Ketchum, who retired in June. Up to that point, Newell had been a holding company for dozens of brand-name consumer products, “very lean at the center” but lacking a global training function, Hults says.


Ketchum shifted the emphasis more toward innovation. “To do that, our leaders needed a different set of skills,” Hults says.


In addition to being skilled at point-of-sale promotions, product placement and marketing, senior executives now are required to interpret the results of consumer surveys and focus groups. “Our focus has really changed to understand unmet consumer demand in a systematic and scientific way—and then to utilize that knowledge to help bring new products to market” at higher prices, thus creating greater margins, Hults says.


Lagging leadership

Newell markets its products in three broad market sectors: home and family; office products; and tools, hardware and commercial products. The company markets nearly 40 brand-name products, including Rubbermaid plastic storage containers, Sharpie pens, Calphalon cookware, and Graco baby gear. Newell generated $5.76 billion in revenue in 2010, up slightly from $5.6 billion year over year, according to its annual report.


Major demographic shifts also fuel Newell’s drive to develop younger leaders. The Aspire program is Newell’s answer to a problem plaguing many large companies: the loss of vast institutional knowledge as baby boomer-era executives approach retirement. The invitation-only training is aimed at the 250 vice presidents and functional heads at Newell. It was created “because the greatest need was at the top of our organization,” Hults says.


Aspire also amounts to Newell’s attempt to buck an alarming trend of failing leaders in the business world. Whether they are hired from outside their organizations or promoted internally, some executives struggle with the transition to senior management, according to a joint study by the Institute of Executive Development in Palo Alto, California, and consulting firm Alexcel Group, near Oakland, California. Thirty percent of senior executives hired from outside a company fail to make the grade within two years, and end up leaving sooner than expected, according to the study.


The situation improves only slightly (23 percent) among executives who are promoted internally, according to the Executive Transitions Market Study Report 2010. The annual study culled responses from 320 executives and talent professionals in 12 countries and 21 industries.


The findings echo other industry studies on executive turnover. Companies invest huge sums of money to recruit, hire and groom people for senior roles. In spite of that, there is a 50 percent chance a new executive will quit or be fired within the first three years, and 40 percent fail within 18 months, according to a 2008 study by Aon Consulting, part of Chicago-based Aon Corp.


One possible reason for the high level of new boss busts is an overemphasis on logical prowess at the expense of domain expertise. Top business schools and many leading companies “believed they could churn out excellent managers who could be parachuted into virtually any organization and transform it through superior reasoning,” author Matthew Syed wrote in his 2010 book about the science of success, Bounce. “This approach was seriously misguided.”


Newell seems to have taken the message to heart. Hults says cookie-cutter leadership programs won’t suffice as Newell pushes aggressively into foreign markets. Rather than producing leaders who are top-down decision-makers, Aspire teaches them to learn the value of “working through others.”


“As an executive, it’s impossible to do all the work [of leadership] yourself anymore. You need to empower your employees by coaching them and enabling them to do the work—and then supporting their development,” Hults says.


Strengthening the bench

Aspire’s learning content is broken into four modules: creating followership, leading global change, coaching employees and developing “next generation” leaders.


Aspire participants also spend one week gaining firsthand knowledge of the differences between North American and overseas markets. Paris has been the destination the past two years. In addition to structured learning exercises on understanding cultural differences, the most significant learning takes place on in-store visits. Senior leaders observe and sometimes interact with shoppers, trying to get a handle on their preferences and desired product features.


Observing Parisian shoppers helped Hurd better understand their preferences. In the U.S., for example, shoppers place a high premium on utilitarian strollers that collapse easily into the trunk of a car. Parents in Paris, conversely, tend to be more pedestrian-oriented, and want the stroller to also have a more stylish look. “What they care about from a product standpoint is different,” Hurd says.


Giving managers international exposure is crucial to Newell’s plan to boost operating margins, especially in Europe. The company last year began revamping its European business operations, seeking to boost margins at least 10 percent, according to its 2010 annual report.


If retention is an indication, Aspire appears to be paying off for the company and its participants. Of the four classes thus far, 80 percent of the participants have been retained— not outstanding, but far better than a few years ago, Hults says. Nearly three-quarters of them have been promoted.


In 2010, roughly 90 percent of vice presidencies were filled from within, compared to an internal fill rate between 30 percent and 40 percent in the years prior to the program. Last year, Hurd parlayed her participation into a promotion as general manager for the baby and family essentials division. Along with bolstering her confidence, she says it taught her how to coach employees who demonstrate leadership potential.


If Hurd is an indication, the Aspire program should help other promising leaders realize their career goals at Newell. “The fact that the company was going to spend that much time and energy to help develop me as a leader was inspiring,” she says.


Workforce Management Online, July 2011 — Register Now!

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Software to Follow Rules and Boost Results

To human resources professionals, regulatory compliance is akin to having a crazy uncle locked in the basement. It’s an obvious issue, but discussing it can be uncomfortable. In an era of stepped-up government enforcement, though, companies have no choice but to tackle compliance head-on. And they are tapping software tools to help them stay on the right side of the law as well as boost the bottom line.


By implementing software-as-a-service tools to manage its human resources processes, for example, the National Aquarium in Baltimore is trying to do more than simply comply with federal wage-and-hour regulations. The 550-employee organization thus far has also saved about $60,000 in overtime expenses since 2009 by implementing UltiPro, a human capital management suite from Weston, Florida-based Ultimate Software Group Inc.


That may not seem like much money to larger organizations, but to the not-for-profit National Aquarium, which already is facing tighter operating margins and dwindling contributions, $60,000 is a nice chunk of change, says HR executive Candace Osunsade.


The Web-based software platform replaces an antiquated process for timekeeping that placed the National Aquarium in jeopardy of violating the federal Fair Labor Standard Act, or FLSA. Until 2009, employees were responsible for manually recording their own hours worked on outmoded carbon time sheets. Managers then would tally up the data on the time sheets and forward it to the organization’s payroll outsourcer.


Although that ensured that employees were paid fairly and on time, the approach was too casual to rigorously track compliance with federal wage laws in the event of an audit, Osunsade says. The practice stemmed from the “mom and pop culture” that still prevails at the National Aquarium, in which people take ownership of projects and “do what needs to be done.”


Since implementing the UltiPro platform, the Aquarium has moved many HR processes online, thus eliminating paperwork in line with its mission of environmental stewardship. Automation also provides a record of compliance should federal regulators come knocking. Equally important is the system’s ability to produce analytical reports on how to efficiently allocate staff when launching new exhibits. That formed the crux of Osunsade’s pitch to persuade the aquarium’s executive team to invest in the new technologies.


“The first thing I talked about was the benefit of leveraging data in our systems for predictive decision-making. As a byproduct of doing that, we also are able to close significant compliance gaps,” Osunsade says.


The National Aquarium joins a growing list of organizations whose HR teams are concerned about tougher regulatory enforcement and the threat of lawsuits, according to experts. Topping the list of worries are disputes over wages and hours, often revolving around the proper classification of workers. Ensuring correct worker classification by employers has been a priority of the Obama administration.


Complying with federal guidelines on pay for hourly employees sounds simple, but can be quite complex, says Reid Bowman, the Baltimore-based general counsel with ELT Inc., a San Francisco company that provides online legal and compliance training to corporations.


Bowman says frontline managers generally have a poor conception of their company’s pay practices. As a result, managers make “deals” with employees on how and when work gets done, possibly offering them extra time off in exchange for working late or even answering work email during off-hours. “The problem with that arrangement is it may violate the law,” Bowman says.


Wage-and-hour disputes constitute the single-biggest compliance worry for HR executives, Bowman says. Of the 4,152 employment-related class-action lawsuits filed in 2010, wage-and-hour disputes accounted for 91 percent (3,785). “This is the 800-pound gorilla in the room. Finally, organizations are starting to pay attention and put together strategies to make sure this issue doesn’t darken their door.”


ELT enables organization to use its internal learning management system, or LMS, for mandatory compliance training. ELT has seen demand for its LMS-based compliance training pick up in recent years as more and more companies awaken to the risks of noncompliance, especially amid a heightened regulatory environment at the federal, state and local levels, Bowman says.


Other technologies are emerging to help companies dot their I’s and cross their T’s. According to a report by Aberdeen Group, a Boston research and consulting firm, more and more organizations are beginning to implement software for automating workforce schedules. Of the 200 organizations surveyed for the report, titled Workforce Scheduling 2011, nearly 25 percent cite adherence to collective-bargaining agreements and federal regulations as key drivers for using the technology.


In addition to complying with wage regulations, contractors doing work for federal, state and local governments face a different set of regulatory hurdles, especially pertaining to workforce diversity. The Office of Federal Contract Compliance Programs, part of the Labor Department, last year intensified its scrutiny of contractors. It initiated more on-site investigations and hired more than 200 compliance officers “to conduct more comprehensive compliance evaluations and increase enforcement efforts” regarding affirmative action-based hiring of women, “underutilized minorities,” and the disabled, as well as pay equity, according to the agency’s 2012 budget request.


State agencies across the country are following the Fed’s lead, imposing new requirements on contracting businesses. The aggressive regulation has contractors on the alert. “The industry as a whole is seeing closer, more stringent oversight,” says Jason Zins, the HR director for Minneapolis-based Shafer Contracting Co., a heavy-construction firm.


Zins’ company is an early adopter of a new Web-enabled recruiting application, Diversity Outreach, aimed at construction, mechanical and engineering firms. The software is part of a broader candidate acquisition and management system provided by Des Moines, Iowa-based BirdDog and is designed to help contractors meet Equal Employment Opportunity and Affirmative Action mandates.


Like the National Aquarium, Shafer Contracting is trying to wring business value from compliance. The BirdDog application helps Shafer cast a wider net for diversity candidates. “We’re getting more qualified candidates than we have in the past,” Zins says.


Workforce Management Online, July 2011 — Register Now!

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Special Report on Leadership Development: Corporate Leaders Train in Fire Drills and Funny Skills

Corporate leaders are accustomed to putting out organizational brush fires. Now, they can become firefighters for a day and extinguish the real thing, too.



To sharpen their leadership skills, managers from about two dozen companies in New York and New Jersey joined with some of their employees to play firefighter one afternoon last May. The four-person teams traded in their white collars for gas masks and “turnout gear”—traditional firefighter garb. Under the supervision of New York City firefighters, the teams rushed into burning buildings, rescued passengers from simulated subway accidents or performed other high-pressure emergency drills.

The unusual training took place at the New York City Fire Academy. Learning how to properly hook up a fire hose, gauge the correct water pressure and extinguish flames—all while being timed—took leadership from abstract concepts to the practical realm, says S. Scott Parel, one of the participants who is a private equity lawyer and partner at Weil, Gotshal & Manges in New York.

“I honestly didn’t expect that it would foster team building beyond mere camaraderie, but it did a lot more than that,” says Parel, whose crew received the FDNY’s teamwork award for its performance. “Our team was put to the test as to who was supposed to do what.”



The team combined people from Parel’s practice group and the firm’s bankruptcy practice. Although the four lawyers were acquainted as colleagues, the intense experience “proved especially challenging since we had not worked together on a project before,” Parel says.

Dousing actual fires may seem extreme, but the program exemplifies the trend toward making leadership training more creative and engaging. The FDNY launched its Firefighter for a Day Team Challenge last year to share “best practices” on decision-making and problem-solving, says Greg Pfeifer, a development associate with the FDNY who oversees the program. The training has “the feel of executive education,” with companies paying $2,500 to enroll each four-person team. The FDNY suggests organizations form teams that have one senior official and several nonmanagerial employees.

“Firefighting is very complex and interdependent, and that has obvious applications to the business world,” Pfeifer says. “Since our training puts people into crisis situations, hopefully they will be better prepared to handle any crisis that arises in the workplace.” The Fire Department plans to reprise the challenge with a new crop of companies at its second annual leadership training program on May 13. Among the expected participants are some employees in the New York City office of Syska Hennessy Group Inc., an engineering, design and consulting firm whose projects usually involve large numbers of professionals from different disciplines.

The sprawling nature of projects sometimes makes it difficult to communicate the customer’s needs to all parties, says James Callahan, a Syska electrical engineer. “We have to do a better job of talking to one another and coordinating tasks among the different parties on project teams. We expect that working with the firefighters will help us make decisions more quickly, and learn how to delegate.”



Whether such kinesthetic training is more effective than classroom instruction remains subject to debate. Yet more companies clearly are embracing programs that enable leaders to learn by doing, especially in group settings.

To meet that demand, some of the top business schools are livening up their executive education programs. Companies now want executive education to embed “experiential” learning with traditional coursework, says Stephen Burnett, the associate dean of executive education at Northwestern University’s Kellogg Graduate School of Management in Evanston, Illinois.

Burnett says companies realize “there are limits to what people learn in the classroom or even on the Web. For skills such as communication, coaching and enabling team performance, people have to be given an opportunity to immediately apply them.” Spending on leadership programs began dropping in 2008 but appears to be stabilizing, according to research firm Bersin & Associates in Oakland, California. In 2010, organizations devoted 22 percent of their training budgets to leadership, down just slightly from 2009.

Leadership may not seem like a laughing matter, but some companies are seeking comic effect in their training. Many turn to Chicago-based Second City Communications, the corporate consulting division of renowned comedy troupe Second City, whose alumni include Dan Aykroyd, Stephen Colbert, Tina Fey, Bill Murray and Mike Myers.



Second City Communications began using satire and theatrical comedy for corporate training about 10 years ago, and its business has been ticking steadily upward, according to Tom Yorton, CEO. The consulting division provides comedy-infused workshops for nearly 400 corporate clients, about half of which are Fortune 500 companies. The reason for the growth is simple, Yorton says. “There is a cost of being boring” when learners don’t retain what they hear.

Improvisational comedy serves as a metaphor for how leaders must adapt to the rapid pace of change in business. One minute, a corporate manager might be yukking it up over a joke during a Second City workshop. The next minute, that executive might be roped on stage to perform with the cast and become part of the joke. “When people learn by doing, it tends to have greater impact and staying power,” Yorton says. “Likewise, when we present something in a comedic way, it cuts through the clutter and helps people pay attention.”

Most half-day workshops cost about $5,000, while full-day sessions run about $7,500, Yorton says. Second City also produces custom programs starting at about $10,000. One of Second City’s clients is Los Angeles-based Farmers Insurance Group of Cos. Humorous videos provide a fresh way to teach the leaders at Farmers how to be more transparent and how to create an environment that encourages feedback, Yorton says. “A lot of our work focuses on communication skills, being nimble and adaptive.”

Timothy West, an associate professor in the accountancy department at Northern Illinois University in DeKalb, asked Second City to provide improvisational techniques for leadership to his class of certified public accountants, whose profession gets stereotyped as “boring, predictable and inflexible.” The workshops force accountants into new roles of communication and on-the-spot collaboration.

At the end of the workshop, accountants create skits in the form of an infomercial, which West says helps them “deliver concepts in ways they would have never considered just a few hours earlier.”

Chord progression
Music, which can also involve improvisation, is being incorporated into some leadership training programs. Minneapolis-based Jazz Impact, for example, has delivered jazz-infused leadership workshops for such blue-chip clients as Credit Suisse Group, IBM Corp., Microsoft Corp., the Mayo Clinic and Vodafone Group.

Classical music has been used to illustrate the leader-as-conductor model, but jazz provides different lessons. Michael Gold, the head of Jazz Impact and a former real estate executive, says jazz enables leaders to understand the ensemble nature of work. In a typical workshop, the group starts with a few bars of music, which do not have a scripted ending. Each performer then takes a turn in the spotlight, improvising a solo, while the other band members provide accompaniment. With the solo complete, the musician blends into the background to support the next member’s Louis Armstrong moment.

Although the musicians shine during their solos, it is the interplay and mutual support that create a sense of harmony and completion, Gold says. “There’s a tremendous parallel between a jazz ensemble and the demands placed on businesses, particularly leadership.” One of Gold’s venues is the Kellogg School at Northwestern. Jazz Impact performs in leadership courses taught by Michelle Buck, a clinical professor of management and organization, as part of Kellogg’s Advanced Executive Program for people on track to become senior managers. Tuition for the four-week program is $41,000.

In the weeks leading up to Buck’s final class, participants pursue coursework on various facets of management, including strategy, accounting and marketing. The final class, however, is intended as a surprise. Students are often taken aback when they enter the classroom and see a jazz ensemble tuning up, Buck says.

After listening to some jazz, students can question the performers. But perhaps most important, students also are asked to grab simple percussion instruments and contribute to the musical tableau. The class is designed to push leaders beyond their comfort zone. The pace of business is faster, and the pressure to innovate is increasing, Buck says. Leaders don’t have a lot of ramp-up time, “yet they’re being told: ‘Here’s the template: Go create a new product in a new market.’ ”

Buck also spices up some of her classes with the Argentine tango. The two dancers illustrate the interdependence between leaders and the people they lead, Buck says. “The cliche that ‘It takes two to tango’ is true for a reason: A leader can’t lead alone. The follower has to follow in a way that helps the leader lead.”

Experiential-based leadership development programs have long been popular at the Wharton School of the University of Pennsylvania. This year marks the 10th anniversary of Wharton’s Leadership Ventures, in which 20 to 30 people participate in two learning expeditions lasting up to 14 days, says Jeff Klein, director of Wharton’s Graduate Leadership Program.

One program takes participants to Normandy’s Omaha Beach, where Allied troops invaded France on D-Day, during World War II. The students stand on the beach as Wharton instructors conjure up images of the turmoil of the deadly battle, and provide lessons on leading under difficult conditions.

Another excursion proves to be a bit more grueling, with executives trekking across the Mount Everest region of Nepal. The students learn survival skills such as overland navigation, proper hydration and nutrition, Klein says. “When the team succeeds in understanding the environment, performing as a team and acquiring new skills, it also gains confidence and the ability to apply the same concepts in organizations. And they have a vivid and memorable experience to draw upon in the future.”

Not all experiential learning at business schools is quite so demanding. One of the newer offerings at the University of Virginia’s Darden School of Business in Charlottesville, which is titled Leading Teams for Growth and Change, combines classroom work with competitive rowing on the nearby Rivanna Reservoir. For a fee of $6,900, enrollees receive practical classroom instruction on leadership, followed by a day of competitive rowing.

Darden partners with Dan Lyons, a former Olympian who rowed on seven U.S. national teams and now runs Team Concepts Inc., an experiential training firm near Philadelphia. David Newkirk, CEO for executive education at Darden, believes rowing helps teach leaders trust and teamwork. Each eight-person team is taught to sweep and scull by listening intently and following the directions of the coxswain. Because the teammates face away from one another, they learn to trust each other and to collaborate. “The physical experience of rowing makes leadership lessons come alive in a powerful way,” Newkirk says. “Plus, it shows how useful a great coach is in providing the coaching and feedback” needed to pull together.

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Deloitte Gets Physical with $300 Million Learning Center

Consulting giant Deloitte is putting serious cash behind its stated priority of training and development. Many companies have hoarded money in an uneven economy, but the New York-based firm is dipping into its profits to build Deloitte University, a $300 million “learning and leadership development” campus near Dallas.

Slated for completion this summer, Deloitte University will feature 35 classrooms, each outfitted with technology for interactive learning. The 712,000-square-foot complex also will be self-contained, including 800 hotel rooms on site to house visiting Deloitte employees who attend training. The company plans to hire a hospitality management vendor to operate the hotel.

Deloitte University’s primary purpose will be to help consultants buttress their technical proficiency with leadership, collaboration and team-building skills, says Bill Pelster, a Deloitte managing principal for talent development, who is based in Seattle. More than 45,000 consulting professionals make up Deloitte and its U.S. subsidiaries. Worldwide, the company has nearly 170,000 employees.

Deloitte consultants specialize in highly technical fields, such as tax accounting, auditing and risk management, corporate financial advice and regulatory/legislative matters. They also have expertise in selected business sectors.

It is unusual for consulting firms to adopt the corporate-university concept, says Sue Todd, president of the Mechanicsburg, Pennsylvania-based Corporate University Xchange, a research and advisory firm. In fact, Todd says most consultancies still cling to older models in which consultants specialize strictly in one strategic area.

However, the need for continuous learning by technical professionals is greater than ever and likely to remain so given the rapid pace of the changing business climate.

“Consulting firms are slowly finding the models they’ve used to define jobs need to be significantly expanded. Either they get more value from their consultants, or they risk losing whole hunks of business to competitors,” says Todd, whose organization is not directly involved with Deloitte University.

Still, it is unusual for companies in the current economy—even large concerns like Deloitte, which posted global revenue of $26.6 billion in 2010, up 1.8 percent—to sink vast sums of money in a physical learning campus. But Deloitte has been transforming the learning curricula across its varied lines of business, including switching last year from a regional to a national model for talent management. Construction of the leadership center dovetails with that effort, officials say.

As the most visible outgrowth of the strategy, Deloitte University will sprawl across 107 acres in Westlake, Texas. When operations begin—probably in October—it will deliver 1 million hours of training per year, or roughly one-third of all Deloitte’s U.S. training.

All told, more than 420 learning programs are scheduled during the first year of operation.

“It embodies our commitment to developing professionals in a much more dynamic way” than traditional learning formats, Pelster says.

Deloitte University plans to jettison traditional learning methods. Lecture-based learning is out. Instead, interactive training activities will force employees to anticipate hypothetical problems and devise solutions as a group. Computer-simulated business scenarios, case studies and role-playing will be the norm.

The participatory format should help consultants see things from a client’s point of view—an important attribute when addressing business issues fraught with ambiguity and complexity, Pelster says.

Some of Deloitte’s U.S. partners, managers, and executives will serve as instructors at the Dallas campus, facilitating small groups of cross-disciplinary teams and providing feedback. For roughly every five participants, one Deloitte leader will be on hand as a sounding board.

“It’s basically a leadership laboratory that gives us the opportunity to see how teams react, and then provide immediate feedback on their decisions. It’s important that our leaders be in the classrooms to teach and mentor the next generation of Deloitte professionals,” Pelster says.

Deloitte decided to invest money in a learning campus largely because it will provide flexibility in how learning is delivered, Pelster says. Video and other interactive technologies are being installed to connect classroom learners with colleagues in Deloitte offices, including another learning center in India. Classrooms also can be reconfigured to accommodate different types of learning events, Pelster says.

It’s not a true corporate university, however, in which employees can choose to enroll in professional courses. Rather, participants will be invited to attend by business units or sponsors of specific learning programs.

Deloitte’s sizable investment also comes amid growing optimism by senior executives, 70 percent of whom expected to spend more on all types of capital projects during the first quarter, according to a February survey by the Corporate Executive Board in Arlington, Virginia. That’s up from 52 percent in the fourth quarter of 2010.

Deloitte isn’t alone in pouring money into a building dedicated to employee development. This year, Planned Cos. is celebrating the second anniversary of its 2,000-square-foot interactive educational facility. The company, which provides building management and maintenance services at commercial and residential properties, built the $200,000 center next to its headquarters in Parsippany, New Jersey.

It features 14 workstations, each providing simulated exercises on a specific area of building management. A front-desk module, for example, enables employees to watch a live feed from a luxury condominium in Jersey City. “It lets them visualize what it means to man a front desk in a professional manner,” says Robert Francis, president and CEO of the company his family has owned for four decades.

Planned Cos. uses the facility as a retention tool for existing customers, as a sales tool to persuade new prospects, as well as a way to improve employees’ skills and help them plan their careers, Francis says.

The learning center also helps Planned Cos. hold onto its employees—a key goal in an industry with volatile turnover. “The higher our retention rate, the more it helps our bottom-line productivity,” says Francis, whose company’s efforts at career development earned it the 2010 Optimas Award for Vision from Workforce Management.

Even with the rise of e-learning and virtual technologies, Deloitte placed a high value on having its own leadership campus. The decision to build Deloitte University came after extensive internal research, including surveys across its multigenerational workforce. Pelster was surprised to find that throughout the company, including millennial employees, support for a physical learning facility was strong.

“It’s one place we’ll all go at key milestones in our careers, and it’s one place we’ll all have in common,” Pelster says.

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Coaching Takes Center Stage

Defense contractor Northrop Grumman Corp. uses internal coaches for succession planning across multiple lines of business; group coaching for technology workers helps Genentech Inc. boost employee engagement and retention; and focused, individual coaching enabled a vice president at Philips Healthcare to provoke a daunting culture change that touched more than 6,000 employees.


Industry observers say professional coaching has gathered steam, and is being used to tackle a range of strategic business issues. Its application is changing, though. Rather than trying to “fix” underachievers, organizations are pairing high performers with coaches to accelerate their development—and get the best return on investment.


Ellen Kumata, managing director of Boston-based Cambria Consulting Inc., says organizations increasingly are targeting employees with potential to create great value over the long term as leaders. “Coaching has kind of grown up in the last five or six years. It’s an expensive solution, so companies are putting the money into people who have the longest runway to success.”


Coaching can serve a variety of purposes for companies. In an era when employees are seeking greater employment security, it can serve as a retention tool by demonstrating an organization’s commitment to career development. Coaching also helps make up for decades of “shortsighted” human resources practices when organizations failed to capture the knowledge of veteran employees, says Carl Nielson, a management consultant in Dallas. “Now they see a lot of people rising into leadership roles before they are ready. That’s where coaching comes in.”


Organizations using professional coaching for business reasons recouped an average of seven times their initial investment, according to a 2009 report by the Lexington, Kentucky-based International Coach Federation, or ICF. That report was produced for ICF by professional services firm PricewaterhouseCoopers and Canadian consulting firm Association Resource Centre Inc.


Los Angeles-based Northrop Grumman Corp. is sold on the value of coaching. The global conglomerate, with 2010 revenue topping $35 billion, has a program to train and certify employees in coaching skills. Since its inception in 2004, the initiative has produced nearly 40 internal coaches from its managerial ranks, company officials say.


By developing its own coaches, Northrop Grumman has a clearer picture of leadership gaps across the company and is better able to plan for succession, says Barb Goretsky, the corporate director of learning and leadership development.“We’re creating a culture in which coaching is used to develop our leaders. We don’t use coaching for remedial activities” for poor performers.


Northrop Grumman’s voluntary yearlong coaching program is “on par with that of large coaching providers,” says Anita Stadler, manager of the Internal Coach Development Program, which certifies the candidates as coaches. Applicants need a solid grasp of their industry, and “we look for people who already display innate people skills.”


Upon certification, internal coaches commit to a two-year coaching stint, working with two to four high-potential co-workers, Stadler says.


At roughly the same time Northrop Grumman began to groom potential leaders, San Francisco-based Genentech faced more immediate concerns. The biotech pioneer launched its Personal Excellence Program, or PEP, about five years ago, after an internal survey showed its information technology department ranked last in employee satisfaction.


PEP provides a cost-efficient blend of group and individual coaching for the firm’s 700-person IT organization, says Pam Weiss, an independent coach who works with Genentech’s program. “I really didn’t know if the one-on-one impact of coaching would translate to a group setting. But the benefits have been exponential.”


According to a Genentech-commissioned study in 2009 by the Advantage Performance Group, a Larkspur, California-based consulting firm, PEP helped to boost employee satisfaction between 10 percent and 20 percent. It also led to a 50 percent improvement in employee communication and collaboration. In addition, PEP’s business impact was more than double that of other leadership programs, generating roughly $2 for every dollar invested, according to the study.


IT employees approved for Genentech’s voluntary program receive coaching in several different formats. First, a larger “community of learning” takes part in a series of workshops.


The larger group subsequently is broken into smaller facilitated groups. Lastly, each individual participant receives three one-on-one coaching sessions. “It provides the best of both worlds: People learn collectively as a community, but also have the opportunity to get individual reinforcement and support,” Weiss says.


In fact, coaching may help boost employee engagement. Companies are eager to hasten leaders “who drive performance by the work environments they create. Building relationships is at the heart of coaching,” says Janet Harvey, president-elect of the ICF and an independent coach.


Coaching helped Lisa Barnett spearhead culture change at Philips Healthcare. Barnett, a vice president of sales for the western zone with the Seattle-based company, was surprised when top brass tapped her to lead an effort to bolster core company values. “I said: ‘I’m just a sales chick. Why do you want me to take this on?’ ” The company, which has more than 6,000 employees, sells medical imaging systems to hospitals and health care providers.


The project’s intention was to “make our core values to show up more consistently and overtly in employee behaviors,” a market differentiator, Barnett says. Those behaviors, she says, include stronger employee accountability and a rekindled passion for patient care.


The initiative was intended to influence not only sales reps, but also support teams, business development professionals and others who deal directly with customers, Barnett says.


Barnett hooked up with Harvey for one-on-one meetings, practical exercises and other activities. Coaching provided a new slant on her role as a leader, leading to above-average performance by her direct reports as well as improved employee engagement and better business results for her sales team, which includes reps from Minnesota to Hawaii.


For example, the West zone exceeded sales expectations, while each individual region in the zone achieved its sales goals—a rare occurrence, says Barnett, and one she attributes to coaching.


Although the culture-change effort is a work in progress, Barnett says “the change in our people who deal with customers has been deep and profound.”
 


Workforce Management Online, February 2011 — Register Now!