Author: Patrick Kiger

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Using Worker Focus Groups Carries Risks for Employers

For years, management gurus have touted employee focus groups as the answer to improving cooperation and communication between workers and managers on issues ranging from downsizing to designing compensation policies.


But the thought of employee focus groups makes Bill Altman cringe. As a labor lawyer with Bingham Farms, Michigan-based Vercruysse Murray & Calzone, Altman has spent the past 15 years counseling companies on how to avoid federal labor law violations and trying to extricate the unlucky ones from complaints filed by union organizers.



He warns that focus groups, even when set up by managers with the most noble motives, can easily backfire and expose a company to a litigation nightmare.


“It’s OK to get a bunch of engineers together to discuss the best way to design a truck axle,” Altman says. “But as soon as you get away from the product and into work relationships and employee relations, you’re just asking for trouble.”


What companies often don’t realize, Altman says, is that when they select a representative group of employees and ask them to give recommendations that management may act on, federal regulators may decide that the focus group qualifies as a labor organization—the legal equivalent of a union. And that’s a big no-no. Federal law expressly bars companies from setting up or running such labor organizations to prevent them from subverting employees’ rights to collective bargaining. “If you’re an employer, you’re not allowed to create your own company union,” Altman explains.


Daniel O’Meara, a Berwyn, Pennsylvania-based labor lawyer who is a partner in the law firm Montgomery, McCracken, Walker & Rhoads, agrees that employer-organized focus groups can pose potential labor law problems.


But he says a 2001 National Labor Relations Board decision, in which the board found that Crown Cork & Seal Co. did not violate the law by maintaining employee committees at a Texas plant, can provide employers with a “good faith” defense. It’s critical, however, that there is no intent to undermine a union organizing effort.


O’Meara says companies can keep themselves out of trouble by making sure that focus groups don’t evolve into permanent organizations that can appear to be employee-run unions.


“If it’s an ad hoc, one-time event, you’re safer,” he says. O’Meara also advises that companies suspend focus groups the moment a union organizing effort begins and explain the reason to the workforce.


Companies dig themselves into a deeper hole by naively using focus groups to discuss issues such as work rules and compensation. Altman cites the case of a past client that set up a plant council, originally with the vague purpose of discussing various workplace issues. “It evolved into talking about work rules, wages and benefits,” Altman says. “The group’s members were selected by the employees, and they served in the group for a term of one year. And when management met with them, it would take their recommendations and say either yes or no to them.”


The company ran into problems when union organizers tried and failed to organize a segment of the plant that was represented by the council. “When they lost the election, they went straight to the National Labor Relations Board and complained about the council,” Altman says.


Ultimately, the NLRB decided that the council was an illicit, employer-dominated ersatz union and ordered it disbanded. While the company wasn’t hit with a monetary penalty, it suffered the embarrassment of having to post a notice in all of its facilities informing the workforce that it had violated labor laws. “I haven’t met an employer who would want to have a poster like that in their cafeteria,” Altman says.


“There are ways to do focus groups and not run afoul of the law, but you have to be very cautious,” Altman says.


For example, members of such a group should be randomly selected and should not report back to other workers or present proposals on their behalf. Also, it’s important to rotate frequently the membership to discourage the perception that the members are designated representatives of the workforce.


And employers should avoid doing anything that regulators might see as exerting influence upon such a group. Letting the members meet on company time, providing a meeting space for them or even serving them lunch can get a company into trouble.


The safest bet may be to use a simpler method of getting feedback, Altman says. “If you want to poll the workforce, for example, it’s a lot less risky.”


Workforce Management, January 2011, p. 14 — Subscribe Now!

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Serious Progress in Strategic Workforce Planning

Five years ago, strategic workforce planning—the HR-led effort to ensure that an organization has sufficient talent to achieve future success, seemed like a nascent trend in the business world. Unfortunately, today the paradigm-shifting practice still remains more nascent than trend. But that may soon change, according to a recently published study by The Conference Board, a global business research organization.


Conference Board senior human capital researcher Mary Young, the study’s primary author, says that the severity of the global economic downturn in the late 2000s stalled the growth of strategic workforce planning, also know by its acronym, SWP. Companies were forced to focus on survival at the expense of preparing for the future.


“You couldn’t get business leaders to think long term when they were being forced to lay off workers and their companies were on the line,” Young says. “HR was compelled to be pretty much tactical.”


But as business conditions improve, Young believes that companies will return to developing strategic workforce planning, which she defines as “ensuring that you have the right people at the right time, in the right place, at the right price.”


The report presented case histories of a handful of early adopters who have forged ahead in linking human capital development with strategic goals, and for whom strategic workforce planning has been an effective tool. Their success bodes well for strategic workforce planning’s eventual wider acceptance, according to Young.


“SWP enables companies to make decisions based upon sound data and analytics,” Young says. “It’s all about figuring out where is the best place to make investments, where you are going to get the best return on human capital, where your business is growing and how you’re going to build your resources there. It’s about anticipating future demand and having the supply of critical skills and competencies to meet it.”


In particular, the study looked at four global organizations: 3M, UBS, Sun Microsystems and Saudi Aramco.


The study found that strategic workforce planning uncovered significant differences among business units and locations in terms of demographics, skill levels and labor costs. That, in turn, enabled the companies to get a more accurate picture of how well equipped they were to achieve strategic goals at the ground level and to make changes to meet their future human capital needs.


3M, for example, utilized strategic workforce planning to facilitate its business strategy of shifting from being primarily a domestic business into one with a global focus that sold 70 percent of its products outside the U.S.


3M’s early efforts at strategic workforce planning in 2006 foundered, mostly because they were not connected well enough to the company’s larger strategic planning and goals. But in 2007, after 3M chief executive George W. Buckley mandated companywide productivity gains, countries and business units found that they had no choice but to grow their headcount-to-revenue ratios, either by cutting workforces or increasing sales. That put more pressure on them to implement strategic workforce planning so they could analyze and project the economic return on their talent, according to the report.


Eventually, 3M became so effective at the process that it could not only track how its spending on human capital influenced revenue, but it also developed the ability to compare its metrics with competitors. More important, 3M was able to figure out how to gear its human capital efforts to take advantage of market opportunities, the report found. 3M’s strategic workforce planning team consulted with recruiters to learn about local talent supplies in various countries, and charted how future needs matched with supply.


3M’s effort was able to project “the demand for any workforce category, in any business, in any part of the world,” Brian Ronningen, 3M’s manager of human capital management, told The Conference Board.


Another successful practitioner of strategic workforce planning was UBS, which used the process to ensure that its expanding Chinese operation in the late 2000s had an adequate supply of talent to succeed.


After UBS began tracking human capital data, it made some painful discoveries about its staffing strategies. It found, for example, that its Chinese operation filled 56 percent of its positions by hiring developed talent, and that such acquisitions accounted for 75 percent of its sourcing costs. Additionally, the workforce had an unsustainable attrition rate of 20 percent.


Based upon such data, UBS planners came up with recommendations for how to better develop and retain talent in China, including an incubation program for middle managers, a graduate training program for new hires and improved career mobility across business units, so that employees could seek opportunities and gain experience within the organization.


In contrast, Saudi Aramco, a government-owned oil company based in Saudi Arabia, was motivated to develop strategic workforce planning for a different reason: About 40 percent of its aging workforce will be eligible for retirement in five years, and Saudi Aramco must have capable replacements in the pipeline.


The company employs 400 planners to analyze and model Saudi Aramco’s workforce needs for the next decade and beyond, based on both productivity targets and historical data, such as the typical time needed to train workers for various jobs. That modeling helps Saudi Aramco make decisions about the timing and capacity of new training facilities and project what its future company housing needs will be. Additionally, because the plan’s long-range projections show a slim supply of immediately ready Saudi job candidates, Saudi Aramco has developed a system of hiring the kingdom’s top high school graduates, sponsoring their college educations and further developing them through job experiences and training.


At Sun Microsystems, the strategic workforce planning effort made extensive use of data mining, aggregating information about international markets from a wide range of external sources—from World Bank and European Union statistics to articles in business publications—and integrating it with internal data on workforce trends, compensation, local labor regulations, revenue forecasts, and product and marketing information. That information is combined with observations gathered by HR professionals in the field. The aggregated data is analyzed and translated into scorecards, such as a graphic comparing the IT workforce supply and other factors in several Chinese cities, that assist Sun executives in making decisions.


The development of such sophisticated analytical tools will help drive the strategic workforce planning trend, according to Young. “Data mining, and the ability to combine data across different locations and make sense of it, is transforming business, and SWP is a perfect example of that,” she says. “Just as automation turned inventory and procurement into supply chain management, these tools are going to revolutionize human resources.”


The Conference Board researchers found that for strategic workforce planning to be effective, business leaders must learn to think of it as a source of business intelligence, rather than just as operational HR data.


For example, executives need to start integrating strategic workforce planning and other types of planning, such as risk management, supply chain and customer relationship management, to shape a unified, coherent strategy, Young says.


“I suspect that over time, we’re going to see companies merging their workforce data with lots of other analytics,” she says. “We’re already beginning to hear them describe it in the same way. They’re starting to think about optimizing the workforce, the way that they try to optimize the supply chain: How do you put your people to the highest and most productive use?”


Workforce Management Online, July 2010 — Register Now!

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Special Report on Training and Development The Leadership Formula

General Electric, one of the most iconic names in American business, has managed to become not only the 12th biggest company in the 2009 Fortune Global 500, but also one of the most resilient and agile. Even in the depths of the global downturn in 2009, the company earned $30 billion while simultaneously positioning itself to grow in emerging markets such as Latin America and going after opportunities in “ecoimagination” technologies such as smart grids, offshore wind installations and cutting-edge batteries. At a time when much of corporate America was too scared about survival to contemplate the future, GE not only kept its focus on innovation, but also increased its spending on research and development by 7 percent. 


While the giant manufacturer has plenty of successful wares, in a 2009 Harvard Business Review interview, GE chairman and chief executive Jeffrey R. Immelt gave much of the credit for GE’s success to one thing that the company is particularly good at producing: highly capable, forward-thinking leaders who can execute his growth and innovation strategy. In addition to using 360-degree reviews, bottom-line data and other tools to assess how well its leadership candidates are progressing, GE has its Leadership, Innovation and Growth management development program (LIG for short). The Harvard Business Review article, which is posted on GE’s website, described one such LIG session in which scores of senior managers spent days analyzing case histories of GE projects in an attempt to discern the impediments to innovation and growth in their departments and find ways to overcome them.


Immelt explained: “When somebody asks me, ‘At your level of the company, what does a leader do?’ I always say, ‘Drive change and develop other leaders.’ LIG gave me a chance to do both at the same time.”


(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


To be sure, there are numerous factors that combine to create high-performance corporate cultures like GE’s, according to the Institute for Corporate Productivity, a business think tank of which GE is a member. The institute, which goes by the acronym i4cp, has spent several decades trying to figure out what sets high performers apart from the pack. Its researchers have identified five key attributes, or “domains,” that distinguish companies: strategy, leadership, talent, culture and market. But i4cp has found that while doing well in all of these areas is critical, the domain that seems to most greatly influence the others and promote overall excellence is leadership.


“We’ve been surveying companies about critical issues since 1986, and leadership is something that they’re always concerned about,” says Jay Jamrog, i4cp’s senior vice president for research. “Not only do they see it as important, but they’ve always worried that they’re not doing a very good job at it.” The recently published 2010 i4cp Major Issues Survey of more than 600 companies in various industries, for example, found that 75 percent of them were concerned to a high or very high extent about leadership development, but only 24 percent thought they were effective in developing leaders.


Jamrog says that the trauma of the recent economic downturn has intensified that concern. 


“The recession was a real wake-up call on leadership for companies,” he says. “They’re looking at the changed environment and asking themselves whether they’re training leaders with the right competencies. And because they had to stop hiring for a long time, they’re concerned about having enough talent in the pipeline. They’re thinking, ‘How can we put leadership development in the microwave and produce the leaders we need faster?’ ”


But while the importance of good leaders is apparent to most companies, many aren’t clear on how to produce them. To that end, companies have spent princely sums to seek wisdom from management gurus and experimented with a wide range of philosophies. They’ve even turned for guidance to political, historical and religious figures such as Colin Powell, Attila the Hun and Jesus. At i4cp, however, researchers have taken a more systematic, data-driven approach to discerning what makes for an effective leader, and how to develop one. By surveying management at successful, average and underperforming companies in a variety of industries and crunching the numbers, they’ve been able to develop a data-driven template for what constitutes good leadership and how to develop it. 


How important is leadership? 
Traditionally, high-profile corporate leaders—from Chrysler’s Lee Iacocca to Apple’s Steve Jobs—often have been celebrated in the media as the keys to companies’ successes. But business researchers have struggled for decades to determine the extent to which leadership actually contributes to corporate performance. A study of 48 Fortune 500 companies published in the Academy of Management Journal in 2001, for example, found that top executives’ charisma—that is, their ability to influence and persuade employees to follow strategy—had only a small effect on profitability, though that effect rose when business conditions were more uncertain. 


(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


At i4cp, researchers also have attempted to correlate leadership with bottom-line performance, but from a different angle: by surveying hundreds of companies and zeroing in on both the actual and perceived differences between high, midrange and low performers. “We’re asking people not just what they’re doing, but what they think they should be doing,” Jamrog explains.


The 2009 i4cp Leadership Competencies Pulse Survey, for example, found significant differences between how high-performing and low-performing companies develop and evaluate their leaders. High performers are nearly 40 percent more likely to have a process that enables them to identify development gaps in their next generation of leaders. They are more likely to use tools and training to develop leadership competencies, and to gather data to gauge the programs’ effectiveness afterward. They also are more likely to measure leadership success through a variety of performance indicators—ranging from the obvious, such as profits and revenues, to deeper metrics such as customer satisfaction and time needed to make critical hires.


The survey also found that low performers had more difficulty overcoming barriers to leadership development. The most glaring gaps: Low performers were 50 percent more likely to complain that their companies didn’t have a supportive culture for leadership development, and by a similar margin were more likely to struggle with identifying which staffers they should try to develop as leaders.


Leadership components
When i4cp researchers asked companies to rate the importance of 56 leadership competencies and then compared them with the companies’ rankings on both leadership and market performance, their finding was startling. Only two competencies—being an effective role model for organizational values and hiring talent—had a significant correlation to both types of performance. Statistically, both turn out to be roughly equal in importance.


“The example you set, in terms of values, has as much impact as who you hire,” Jamrog explains.


“What we’re seeing with leadership is that it’s more important than anything else to have the right attitudinal and behavior fit with the organization,” Jamrog says. “It’s all about walking the walk, being a coach, a teacher and a mentor. Leaders who do those things are the ones who get employees to do what’s needed to help make the organization successful.”


Jamrog says that most companies understand the importance of such charismatic leadership, at least in theory. But when it comes to valuing it day in and day out, many have different priorities. He explains: “Companies will tell me, ‘Jay, I know that building relationships is important. But how do I measure that stuff and reward it?’ It’s easier to measure the effectiveness of a leader on how many widgets he gets out the door each week. And we tend to model the behavior that’s rewarded.” 


(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


A recently published i4cp paper, based on multiple studies over the years, identified the top five elements of leadership in terms of correlation with market performance. The top element was the ability to clearly communicate the organization’s goals. This quality not only scored a top-ranking correlation to performance, but it also was the item on which high performers had the highest average score and, perhaps most significantly, had the biggest gap between them and lower performers. Other key elements included being an excellent decision maker, empowering employees, making sure that programs support the desired culture and continually adopting innovative approaches to increase employee effectiveness. 


What leaders need to learn
Even successful companies have doubts about the effectiveness of their leadership-building efforts. The institute has found that only 50 percent think their officer-level leaders surpass most of their industry. About 45 percent of them think that their organizations emphasize continuing development of current leaders’ skills, and about 30 percent think that they’re strong at developing future leadership talent. Even so, they’re twice as confident of their leadership development as low-performing companies. 


When asked what elements help them to develop leaders, high-performing companies tend to rate commitment from executive row, a positive corporate culture and a basic leadership development strategy as more important than the actual processes used to develop leaders. 


Almost half saw CEO support as an important factor, while roughly 40 percent viewed the top executive’s personal involvement in development, a transparent and high-trust culture and a leadership development strategy as important.


By comparison, only 28 percent put their faith in processes for identifying employees with leadership potential and 23 percent valued developmental assignments—a popular technique for seasoning leadership candidates. Just 15 percent thought fast-track development programs were critical.


When it comes to educating leaders in specific business competencies, there are significant gaps between what high-performing companies and low performers do, according to i4cp’s data. The most glaring differential: 66 percent of high-performing companies say that they emphasize teaching leaders about operations, while only 44 percent of low performers make that a priority. 


Another big gap is in understanding the bottom line, which is emphasized by 65 percent of high performers, compared with 47 percent of low performers. Perhaps the most basic knowledge set of all—knowing the company’s business—is another area that distinguishes high and low performers. Eighty-two percent of top-performing companies believe that they emphasize this in training, while only 62 percent of low performers make sure that leaders understand what the company actually produces and markets. 


Training for high performance
One surprising i4cp finding is that leadership courses from training outsourcers—both the off-the-shelf and custom-designed ones—have little correlation to companies’ market performance. Instead, according to Jamrog, research shows that the leadership-cultivating tools with the most bottom-line impact are performance management and development plans, mentoring and internal coaching. 


“I know that’s going to make vendors cringe,” he says with a laugh. “The problem is that it doesn’t take much thought for companies to just buy an off-the-shelf course. It takes more time and energy to train leaders in a more hands-on way, though it doesn’t necessarily cost more money.”


Oddly, only 5 to 7 percent of all companies use what i4cp has determined to be the most effective training methods—role-playing simulations and business case studies. 


“With case studies, the key seems to be to have leaders look at issues in their own company,” Jamrog says. “It’s all internal, as opposed to the way you might do it at Harvard. A lot of times, they’ll work on an actual business problem at the company and try to learn from solving it. They may end up writing up the exercise and actually producing something as they do it.”


Jamrog says that simulations and role-playing are more costly and time-consuming to stage, but that research shows they are even more effective. “You can use technology to create a simulation where you have to make a decision, and then see how it plays out,” Jamrog explains. “Or it can be more of a staged scenario where you play parts like actors and improvise. The key thing is that you learn how to handle different situations and get a sense of what behaviors you need and how to make decisions.”


How leaders translate what they learn into behavior is crucial. According to Jamrog, effective executives combine transactional and charismatic leadership techniques—using gestures of appreciation, for example, to reward employees for good performance and to model.


“I know one CEO who walks around with dollar bills in his pocket,” Jamrog explains. “When someone does something positive, he gives the person a dollar bill in front of everyone. Another CEO sends anonymous bouquets that will suddenly show up one someone’s desk when they accomplish something. It takes time and energy and focus to build these things into the culture, so that it begins to reward the right kind of behaviors.”  


Workforce Management, May 2010, p. 25-26, 28-31 — Subscribe Now!

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Leadership Development for All

San Diego-based wireless telecommunications technology maker Qualcomm is a template for high-performing companies. The 16,000-employee organization has managed to earn the No. 7 spot on Fast Company magazine’s 2010 list of the most innovative American companies, while simultaneously scoring ninth place on Fortune’s list of the top 100 best places to work. And according to Tamar Elkeles, Qualcomm’s vice president for learning and development, the company’s unusual approach to leadership training is a major reason for the company’s success.


Unlike many companies, Qualcomm doesn’t try to separate out a few high-potential individuals and put them in a special fast-track development path designed to groom them for executive positions. Instead, Elkeles says, the company spreads its leadership development efforts throughout the entire workforce, from line-level technical managers to directors and senior executives. The idea is to help as many people as possible to develop leadership skills.


“We don’t tag people,” Elkeles explains. “Leaders develop at different paces, and blossom at different stages of their careers—and different stages in the company’s development. We believe that if we treat everyone as eligible for leadership training, the best leaders are going to emerge when they’re ready and when you need them.


“For us, flexibility and being able to adapt to the market is really crucial. It doesn’t make any sense to spend a lot of resources grooming someone for a specific position when we don’t even know if we’re going to be in that business in the future. We want to be in the position that if a business opportunity suddenly emerges in India and we need a person to run it, we can look at the entire talent pool and decide who is best suited for that job.”


Qualcomm’s leadership training starts with an introductory program in basic management skills, which aims, among other things, to train project managers with technical expertise how to supervise people as well. More experienced managers go into the company’s Leadership Skills program, which focuses more on studying specific business issues at the company and developing solutions for them. Even at the top, executives and directors continue to receive training, through the Executive Leadership Essentials program. “We think that you have to keep developing new skills and upgrading existing ones, no matter how high you’ve risen in the company,” Elkeles says.


Qualcomm typically uses a blended learning approach for leadership training. After a week of studying Qualcomm case histories—“we’re not big on hypothetical scenarios and simulations,” Elkeles says—or taking online training on management techniques, trainees often go back into their workplaces and try to apply what they’ve learned. Then they reconvene to evaluate their success and reinforce key points. Trainees also are encouraged to work with their classmates between sessions and help one another to improve their grasp of the material.


“The Qualcomm culture is built around cooperation, so we want people to be working together, rather than competing,” Elkeles says.


In an era when metrics tend to rule, Qualcomm uses only a few basic benchmarks to measure the effectiveness of its leadership training: the organization’s financial performance, employee satisfaction rates, and retention and promotion statistics. “It’s not all that complicated,” Elkeles says. “If you’ve got good leaders, for example, you tend to be able to retain workers, but if you’ve got poor leaders, you usually don’t. We’ve got a less than 5 percent rate of employees leaving the company, compared to the industry rate of 10 to 15 percent. So we must be doing something right.”


Workforce Management, May 2010, p. 28 — Subscribe Now!

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HR Information InsecuritySteal Our Data, Please

As a consultant, Accretive Solutions’ Mike Saylor has what might appear to be an unseemly, if not outright criminal, expertise. He’s a self-taught expert at slipping past security perimeters and checkpoints at business facilities and stealing sensitive data.


But it’s all good, because it’s the corporate victims themselves who enlist Saylor and Accretive, a New York-based firm that helps companies to identify and fix holes in their information defenses. Often, Saylor says, the vulnerability that he discovers and exploits isn’t a porous firewall or inadequate vetting procedures, but something even more insidious: basic human nature.


In one recent assignment, for example, Saylor was given the address of a Detroit debt collection agency, and instructions to obtain an assortment of personal credit reports stacked in a printer tray somewhere in the building. Saylor’s preliminary surveillance revealed that the business had elaborate defenses against intruders, including an entrance checkpoint where a receptionist screened visitors and verified they had appointments and interior ones that could be opened only with security badges.


So Saylor chose to exploit what he says usually is the weak link in corporate security: the human factor. He walked into the lobby playing the part of a typical preoccupied executive, talking on a cell phone, with a bunch of paperwork in one hand and a Big Gulp in the other.


“I got past the receptionist without even talking to her, and people just opened the doors for me, because they didn’t want to be rude,” Saylor recalls. “I made it past two secured areas, found the printer, and made it out of the building with 39 confidential credit histories. It took 12 minutes.”


Before becoming Accretive’s national security services director, Saylor worked as a personal bodyguard, a college computer science professor, and as chief security officer for a telecommunications firm, where he says he frequently worked with the FBI and other federal agencies on cybercrime investigations.


Saylor is adept at “pretext calling,” in which he utilizes bits of information gleaned from corporate Web sites and LinkedIn and Facebook profiles to trick employees into giving up restricted data or revealing procedures for obtaining it.


While corporate leaders may be most worried about Eastern European or Chinese hackers stealing their secrets via the Internet, Saylor says that they seldom realize how easy it is for an unauthorized person to walk off with a laptop full of sensitive data, or a stack of confidential papers. And given the current economic turmoil, the thief is increasingly likely to be someone on the inside.


“Employees who got laid off or who didn’t get a raise, malicious executives who didn’t get bonuses—all of these people know company processes and how to take advantage of them,” Saylor warns.


That’s why Saylor preaches to companies the importance of teaching all levels of the workforce what he calls “security awareness”—that is, not only to follow the procedures in the corporate rule book, but to continually, proactively be on the lookout for attempts to steal information, whether it’s by an outsider or a co-worker.


“If you see an unfamiliar person walking around, be sure to ask them who they are and whether they need any help,” Saylor says. “And know that that the IT department will never send you an e-mail asking for your password, or ask for it over the phone. If you get a request like that, alarms should go off.”


Workforce Management, February 2010, p. 3 — Subscribe Now!

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Tough Times Bring Clients to Disneys Training Business

Like many other prominent companies that have traditionally been seen as models of effective management, Walt Disney Co. has been hit hard by the economic downturn. With nervous consumers cutting back on their discretionary spending, the entertainment empire has been beset by declining DVD sales for its classic animated films, and attendance at its world-renowned theme parks has dipped.


But one segment of Disney’s business actually is booming as a result of economic worries. The Disney Institute, which offers other companies business leadership and customer service training based upon time-honored Disney precepts, is seeing a surge in demand for its services.


While Disney isn’t releasing specific figures, Disney Institute spokesman Terry Brinkoetter says corporate clients—which include hospitals, accounting firms and aircraft manufacturers—are signing up in greater numbers than ever for the institute’s various offerings. The curriculum includes three-day courses at Disney resorts where students get to observe Disney’s customer service techniques firsthand, and on-site training sessions in which Disney trainers work to customize Disney business approaches to fit other businesses’ specific needs and problems. The institute also offers a popular traveling series of $400-a-session Keys to Excellence conferences, which it has recently expanded to other countries.


“I think we’re probably going to be the brightest spot in the company this year,” Brinkoetter boasts. “We’re actually setting higher targets for business than in the past, and we’re still seeing enormous jumps.”


Though companies are under increasing pressure to cut expenses, training experts say that forced austerity may be driving organizations to spend what few dollars they can spare for training on one of the world’s most illustrious brand names. Disney, which has been in the training business since 1986, can draw upon its own fabled history for material. Institute instructors, for example, share the tale of how company founder Walt Disney bought dinner for his animators to boost their morale during the 1937 creation of Snow White and the Seven Dwarfs, at a time when the company was so short on resources that Disney and director David Hand worked with only a single light bulb lit to save electricity.


“Disney is an outstanding company,” explains Doug Lynch, vice dean of the University of Pennsylvania’s graduate school of education, who studies corporate leadership training. “These days, there are so few companies that big who have been around as long as they have. But what’s interesting about them is that they have that whole Imagineer, creative side of things, and they’re also perceived as very good at customer service and operational excellence. And they seem to be able to attract really good people and get them to be loyal, without having to pay through the nose. So it’s natural for me to say, ‘I want to be able to do that, too. Can they teach me how to do it?’”


Bruce Jones, the institute’s programming director, says corporate clients turn to Disney for help because they see customer service and efficient execution as ways to differentiate themselves from the pack in a brutally competitive economy.


Health care providers are major part of the institute’s clientele. “The point we make to them is that behaviorally, people don’t always understand the medical procedures and the technology, but they understand how family members are made to feel,” Jones says. “That’s something we know how to do. We try to make everyone feel like a VIP, and we can show them how to do it.”


For example: In the wake of a scandal involving shoddy conditions and patient neglect in 2007, Walter Reed Army Hospital paid Disney $800,000 to retrain 2,000 of its employees on-site in Maryland, according to a Washington Post report. Another institution, the University of Arkansas for Medical Services, spent $178,000 to bring Disney trainers to Little Rock for 17 training sessions last year, and the University of Iowa’s medical center paid two Disney trainers $3,000 for a one-day crash course in customer service, according to coverage in local papers.


Cheri Greenfield, director of strategic consultancy at Humana, the health insurance provider based in Louisville, Kentucky, says working with the institute’s detail-oriented trainers enabled Humana to develop a special program to deal with consumers who are referred to out-of-network specialists by their primary physicians. “Sometimes, the person goes to the appointment, and that’s the first time they realize that Dr. Joe is a nonparticipating provider,” Greenfield explains. “What we learned from Disney, though, is though it may not be our fault, it’s our problem. Now, as soon as we’re notified of the referral, within 24 hours we reach out to the consumer, educate them on the situation, and offer to guide them, if they desire, to a participating provider.” Greenfield says surveys show that 84 percent of its customers want to switch to a participating provider if given the opportunity.


Based upon Disney’s guidance, another client, Arkansas Children’s Hospital, adopted a “central casting” approach to hiring, with an HR staffer embedded in each department to learn its particular needs and then do the initial screening of résumés and interviewing. “That way, the manager doesn’t have to spend time doing all that stuff, which takes away from his or her regular job,” explains Scott Gordon, the hospital’s vice president and COO. “It has worked very well.”


Possibly inspired by Disney’s success, other corporate brand names, such as Motorola and Raytheon, also have ventured into training and consulting. “More companies are offering education externally; they’re not just doing it for money,” says New York-based training consultant Jeanne Meister, writer of the New Learning Playbook blog. “They’re also doing it to add to their brand.”


Perhaps Disney’s closest competitor is Washington-area-based Ritz-Carlton and its Leadership Center, which utilizes the company’s own hotels as classrooms for courses with titles such as “Legendary Service,” in addition to doing on-site consultations.


Like Disney, these days Ritz-Carlton is finding plenty of eager corporate students. “What’s happening is that companies are in dire straits,” says Diana Oreck, Ritz-Carlton’s vice-president of global learning. “They’re realizing that they need that service touch as a differentiator, and that they better get on it. We have everyone from automotive companies to health care to financial firms coming to us.”


Disney is hoping to stay ahead of the curve by offering “Leading Through Turbulent Times.” The new program draws upon Disney’s history—including Walt Disney’s experiences leading his studio through the Great Depression of the 1930s, and Disney’s struggle to operate its Florida resort complex after major hurricanes—to give clients insights on how to survive the current downturn. Disney was planning to roll out the product with a late-March webinar, which is intended to appeal to companies who are feeling too financially strapped to send staffers to Orlando, Florida.

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Measure Spawns Cottage Industry

While businesses tend to fear the Employee Free Choice Act as potentially ruinous, the prospective legislation also promises to provide an economic stimulus—for lawyers, that is.


    Even as it awaits introduction and passage by the incoming Democratic-controlled Congress, law firms across the country already are marketing an ever-increasing array of services—ranging from breakfast lectures and webinars to full-scale instructional courses on DVD—to corporate legal and human resources departments desperate for advice on how to cope with what some believe will be the most sweeping change in labor law since the passage of the Fair Labor Standards Act in 1938.


    At the forefront is nationwide labor-law firm Jackson Lewis, which has been both sounding the alarm about the act’s possible negative effects and offering advice to companies on how to deal with them. This fall, one of the firm’s trademark products, its 1½-day seminar on the latest developments in labor law, focused on the Employee Free Choice Act, says San Francisco-based partner Michael Lotito. But that was just the start. The firm also recently put on a free web­inar that Lotito says has been heard by more than 3,000 corporate users, and its 40 regional offices are in the process of offering in-person seminars. “At some of the offices, the demand has been so overwhelming that we’ve had to schedule more than one program,” he says.


    On the Web, the law firm markets the “EFCA Defense Kit,” a six-DVD course on the nuances of the Employee Free Choice Act, intended to thwart union organizers who might seek to take advantage of the new law. The online ad for the course promises that it will enable “ongoing communication that will help your company stay union-free for years to come—all through great communication tools and positive employee relations.”


    The cost of law firms’ Employee Free Choice Act offerings varies. It costs $219 for an audio recording of “Unions: Why the Employee Free Choice Act Could Change Your Workplace Forever; Get Up to Speed Before It’s Too Late,” a 90-minute presentation by Maria Anastas, a partner in the San Francisco office of Davis Wright Tremaine. Ogletree Deakins offered a daylong Employee Free Choice Act seminar at Washington’s Mayflower Hotel in December for $495 a person.


    At the high end, Jackson Lewis charges $4,995 for the six-DVD course, though the firm also gives away some Employee Free Choice Act-related content, such as the webinar recordings and a recent white paper on the subject.


    “The market’s huge, in terms of doing seminar work,” says Peter Bennett, whose Portland, Maine-based Bennett Law Firm charges $1,000 for a half-day Employee Free Choice Act presentation to corporate groups. “It’s probably the most significant issue that I’ve seen in 25 years of practicing law. The good news for us is that this is what we specialize in.”


    But the revenue from the Employee Free Choice Act seminars and archives of webcasts pales in comparison to the six-figure fees law firms eventually may earn from representing companies in the arbitration proceedings that the act would dictate, Lotito says.


Workforce Management, January 19, 2009, p. 22 — Subscribe Now!

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Linn State Technical College iOptimas Award-I Winner for Vision

A s the U.S. tries to reduce its dependence on carbon-based fuels to combat global warming, the 20 percent of the nation’s electricity that is provided by nuclear power plants has become all the more important. There’s even serious talk, for the first time in decades, of building a new generation of nuclear plants.

But that nuclear renaissance is imperiled by an impending shortage of talent with the technical skills and training to operate plants safely and effectively. A recent study by the Nuclear Energy Institute found that more than half of the industry’s workers are older than 47, and that as many as 27 percent will be eligible for retirement over the next five years.


In the face of that potential crisis, Linn State Technical College in Linn, Missouri, has seized the initiative. With the assistance of federal grants and donations of equipment and expertise from the nuclear industry, the two-year school has developed a nuclear technology program that trains students in specialties such as radiation protection, instrumentation and control, reactor operations and quality control. Since Linn State began the program in 2004 with 10 students, enrollment has grown steadily, and this year 71 students are enrolled.


Department chairman Bruce Meffert is quick to share the credit with outside players who played important roles in the growth of Linn State’s program. It was Chris Graham, a consulting health physicist at AmerenUE’s Callaway Nuclear Plant near Columbia, Missouri, who actually conceived the idea of a two-year program for nuclear technicians when he became concerned about the potential talent shortfall.


William H. Miller, a professor at the Nuclear Science and Engineering Institute at the University of Missouri in Columbia, helped provide funding for Linn State from a $4.8 million Department of Energy grant that the university had obtained to improve nuclear infrastructure and education. Additionally, companies in the nuclear industry contributed hundreds of thousands of dollars’ worth of equipment and technical expertise.


“The support from the industry has been particularly important,” Meffert says. “Whether it’s donations or academic help, the industry usually makes sure that I get what I need.”


But Meffert’s and Linn State’s genius has been leveraging that help to achieve ever more ambitious goals. Originally, the program only offered a certification in radiation protection, but this year Meffert added three specialties to the program. Industry demand—and the allure of $50,000-a-year starting salaries for graduates—is so great that by next year, Meffert envisions scaling up the program to accommodate as many as 350 students.


“We had to think hard about the expansion—do we really want to do this?” Meffert says. “But the industry needs this, and the jobs are out there for the students when they graduate.” As Meffert explains, the expanded program provides students with the chance to have the sort of lifetime job security that is increasingly vanishing from the U.S. economy.


“These utility company jobs can’t be shipped overseas,” he says. “They have to generate the power here. And you can stay in the same job for 30 years if you want. There’s really no opportunity like it.”


In recognition of Linn State’s prescience in meeting a critical industry need and creating lucrative opportunities for its students, the school wins the 2008Optimas Award for Vision.
 



The nuclear technology program began in 2004 with just 10 students. but enrollment is now up to 71, with further expansion planned. It has two full-time instructors and an annual budget of $180,000 that has been augmented by hundreds of thousands of dollars of equipment and technical expertise contributed by nuclear utilities.


Linn State Technical College offers training in civil, computer, industrial and transportation technology and is one of the only a handful of U.S. educational institutions that train students to work in nuclear power plants. The nuclear program offers specialization in radiation protection, instrumentation, reactor operations and quality control.



Workforce Management, October 20, 2008, p. 28 —Subscribe Now!

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Establishing a Culture of Compliance

Creating training and documentation systems is a crucial part of staying within the legal requirements regarding lunch breaks. But experts say it’s equally important to convince people throughout the organization that compliance is an important part of achieving the corporate mission, rather than a hindrance to it.


“A lot of managers have heard over and over again that productivity is paramount,” says Chris Bauer, a Nashville, Tennessee-based psychologist and consultant who focuses on the impact of ethics upon organizations. “You can train them about wage and hour rules, but if they still think deep down that the bottom line supersedes everything else, your impact is going to be limited.”


He adds: “I talk to a lot of managers and executives who see wage and hour mandates as annoying suggestions, rather than something that must be followed. It’s not entirely unlike the way that people talk about EEOC mandates. There’s generally a lack of respect for these laws.”


“You can train [managers] about wage and hour rules, but if they still think … that the bottoms line superseded everything else, your impact is going to be limited.”
—Chris Bauer, psychologist and consultant

Rather than relying strictly on the human resources department or online training programs, Bauer recommends enlisting trusted leaders throughout the organization both to disseminate technical information about compliance and to sell others on its importance. “If there’s a lack of trust in the messenger, the implementation will suffer,” he explains.


Bauer says it’s also crucial to augment training sessions with face-to-face follow-up. “There are some very good online courses,” he says. “But I know of too many places where there’s an answer key to the online test that circulates around. You really need to have someone on the ground, talking with managers and employees and asking some blunt questions about their understanding of what they do regarding wage and hour requirements—and just as important, why they do it.


“You need to get frontline managers and workers to believe that we all have some power to change things, at whatever level we’re at. That’s how you accomplish change.”


Workforce Management, September 8, 2008, p. 44 — Subscribe Now!

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Lawsuit Side Effect A Bad Reputation

The seven-, eight- and even nine-figure jury awards and settlements paid out by employers in lunch-break-related wage and hour lawsuits are only one part of the cost, experts warn.


They say highly publicized allegations of employee mistreatment can tarnish a company’s reputation with consumers, damage its employment brand and diminish the company’s value in the eyes of investors.


“The reputational risk is real,” says Tim Smith, senior vice president of Walden Asset Management, a Boston-based firm that specializes in sustainable, socially responsible investments. “A company that doesn’t deal with the public directly isn’t as vulnerable, but for a consumer-
oriented outfit like a big retailer, these sorts of charges can be troubling.”


Some of the consumer-brand damage may be self-inflicted; experts say that employees unhappy over what they perceive as unfair treatment are less likely to provide good customer service. “That ill feeling becomes part of your image,” says labor law attorney Reuben Guttman, who is representing meatpacking plant workers in a wage and hour suit against Tyson Foods.


“In the old way of thinking, employees were viewed as an expense. … But today, sustainable investors are seeing that as shortsighted and problematic.”
—Tim Smith, senior vice president, Walden Asset Management

Wage and hour lawsuits can cripple talent acquisition as well, says recruiting and HR consultant Peter Weddle, publisher of the Weddle’s guides to employment-related Web sites.


“Some think your employment brand is a jingle or a slogan or a formal branding statement, but what’s equally important is what people say about an organization and what it’s like to work there,” he says. “It’s absolutely guaranteed that one of these situations will degrade the employment brand, because it says something negative to potential hires about the leadership values and priorities of an organization.”


Increasingly, investors are tuned in to such disputes and what they reveal about corporate governance, Smith says.


“More and more, they look at ESG [ethics, sustainability and governance] issues as part of fiduciary responsibility,” he explains. “In the old way of thinking, employees were viewed as an expense, something you try to get as much work out of for as little money as possible. Companies might have assumed that investors wanted them to squeeze workers. But today, sustainable investors are seeing that as shortsighted and problematic.


“They want companies that see the workforce as a resource, as an asset on the balance sheet rather than a cost.”


Workforce Management, September 8, 2008, p. 46 — Subscribe Now!