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The CEO Needs You. Are You Delivering

Jack Stack, president and CEO of Springfield Remanufacturing Corp. in Springfield, Missouri, remembers the days when human resources—or rather, personnel—constituted a very small line on the general ledger. “It was an unnoticed expense,” he says, something not worthy of a great deal of attention. But with the rapid escalation of costs associated with workers’ compensation, health care, employment litigation, benefits and training, HR has burst onto the frontal lobes of executive consciousness. “Upper management now is beginning to see the need for HR to be more progressive,” Stack says, not only in preventing costs, but in making better use of the increasingly costly human asset.


Stack isn’t alone in this belief. Suddenly, it seems, CEOs in all industries are noticing that corporate performance isn’t just about savvy marketing, sound financial planning, up-to-date technology and efficient operations. Increasingly, executives are realizing success also is based on a solid understanding of the value that warm-blooded humans bring to the bottom line.


Even Chief Executive Magazine suggests that CEOs are starting to view their human resources as an investment. As stated in an article in the July/August 1996 issue: “Some executives are starting to look for ways to tap into that human potential, exploring new methods of managing, motivating and redefining the relationship between employees and the company. They’re working to treat employees not as costs, but as assets that increase in value over time.”


In sum, they’re listening to what visionary HR folks have been preaching for years now. Thanks to an unprecedented convergence of marketplace forces, CEOs now are more ready than ever to hear about the value HR can add to the bottom line.


Sounds like a time for celebration, right? Not so fast. Although CEOs are ready to buy what HR is selling, it’s up to you as HR professionals to close the deal by articulating a vision, speaking in executive bottom-line terms and making the CEO your No. 1 customer.


The time is right.
So what are the competitive pressures that are causing sleepy executives to wake up to HR? Record-low levels of unemployment, for one. The competition for skilled employees has become so fierce that companies are desperately trying to create work environments that can attract top talent and keep it there. “Today’s knowledge workers are highly mobile and they can and will sell their skills to the highest bidder,” explains James Houghton, former chairman and CEO of Corning Inc., in Corning, New York. “Talented people who are highly mobile will choose the friendliest environment possible,” he says. And who’s in charge of the corporate environment? None other than HR.


Global competition also is putting the squeeze on companies and sharpening their HR focus. “With so much competition, the market has become much more value-oriented,” says Bob Collins, CEO of GE Fanuc Automation North America Inc. in Charlottesville, Virginia. “The only way to increase value without increasing price is to find ways to improve employee productivity.” This realization—that productivity is the key to value—comes after years of painful downsizing and cost-cutting in which senior executives simply have run out of things to leverage. The only thing left is people.


Another force executives are starting to contend with is the increasingly demanding consumer population. With very little differentiation in price and quality, consumers are starting to make product choices based on the attributes of the company itself. “Companies have got to realize there’s more to success that just the product they’re making,” says Stan Sorrell, departing president of Calvert Group, a Bethesda, Maryland-based mutual-fund investment company. He believes companies must be socially responsible in all business practices, including how they treat employees. Think about it—all else being equal, who would you rather do business with? A company that values its workers or a company that underpays employees and discriminates against minorities?


Last, but certainly not least, on this list of business pressures is the one Stack mentioned: cost. Yes, HR has become one of the biggest expense items for companies, especially in service industries, and chief executives are frantically searching for ways to get a better return on their investment. This, perhaps more than anything else, is what is putting HR on the radar screen of more CEOs. “On a scale of one to 10, I’d put CEOs’ awareness of HR issues at a solid eight,” explains Mike Deblieux, president of Mike Deblieux Human Resources in Tustin, California. “Five years ago, it would’ve been a four.” Why the sudden increase? “Rising costs,” he says, “especially in the area of lawsuits.”


Roll all these marketplace factors together and you have a business climate that’s ready, indeed desperate, for HR to step to the forefront with solutions.


If you’re still not convinced the balance is tipping in favor of HR, then ask CEOs: What are your most pressing overall business problems today? Chances are, you’ll find even those are HR-related. “Health-care costs and succession planning [are major issues],” says Stack. “Performance and accountability,” says Bob O’Neill, city manager of Hampton, Virginia. In a nutshell, corporate leaders are coming to understand at a very deep level that it’s people, not technology or processes, who create profitable products and services.


But just because CEOs are beginning to understand the importance of HR doesn’t mean they’re taking an active role in pushing HR’s agenda. Nor should they. “They’re looking to HR for clues about how to leverage people better,” says Greg Hackett, president of The Hackett Group, a Hudson, Ohio-based management consulting firm. Why? Because most people who fill the top jobs in companies grew up in the old school of thought about HR. Conditioned to think about personnel as an administrative function, they’re not used to thinking about HR strategically. Even though the market is ready for CEOs to listen, it’s up to HR professionals to grab executives by the collar and make them hear the message of what HR can do.


Sell your financial value.
To capture the CEO’s attention, Donald Van Eynde, professor of management at Trinity University in San Antonio, Texas, says HR leaders have to muster up managerial courage and not be afraid to get in the face of senior executives. “HR is often seen as the entity that stops companies from doing things,” he says. The only way to change that is by understanding and addressing the strategic needs of the organization.


O’Neill agrees. “In some cases, HR folks haven’t done a good job building the relevance of HR programs to the organization, of explaining why they’re important,” he says. “If they don’t do a good job articulating why their programs can help, the fact that they have a good idea is of little significance.”


Ken Carrig, vice president of HR for Houston-based Continental Airlines, adds that HR needs to know the three factors most critical to the success of the business so that it can build programs around them. “High-level managers won’t waste their time with you if you can’t talk about the same goals,” he says.


Perhaps the best way for HR professionals to take advantage of market conditions and push their rising star even higher is to listen to their top customer-the CEOs themselves. What advice do today’s chief executives have for HR managers who are eager to reshape their organizations? Workforce talked to CEOs in companies that have transformed themselves through innovative HR practices to learn what suggestions they have for HR professionals in other companies. Their comments resonated on a single theme: The bottom line.


“It’s a question of return,” says Calvert’s Sorrell. “Go to the CEO and discuss, from a financial perspective, the impact of your programs, be it cutting turnover, reducing training costs or increasing productivity.”


Sorrell has firsthand experience with cost-saving HR programs because Calvert is widely known for its employee-friendly programs, including flextime, parental leave, free 15-minute massages, a meditation room and a program that reimburses employees for the cost of roller blades, bicycles or running shoes used to get to and from work. Since the company implemented these and other similar programs, turnover has been slashed from the industry average of 25 percent a year to less than 12 percent, saving greatly on the costs of recruitment, training and low productivity.


Evelyne Steward, senior vice president of HR at the Calvert Group, who helped initiate—and sell—many of those programs, adds this advice: “Make the CEO your most important client. Learn what issues top managers are struggling with and develop creative programs to help them.” Then, demonstrate how those programs aren’t costs, but investments that will have a measurable return.


Mike Servais, president of Acute Care Division of King of Prussia, Pennsylvania-based Universal Health Services Inc., also suggests HR executives learn and demonstrate an understanding of the business, especially the goals and needs of senior managers. “In many companies, HR people see the function as a separate entity—and not part of finding business solutions,” he says. “The only way to change that is if people in the field become more bottom-line oriented.”


At his company, which is the third-largest investor-owned health-care company in the United States, HR recently led a cultural change effort that has successfully focused the attention of its 14,000 employees on customer service. How? With a thorough understanding of the corporate goal of service excellence, HR was able to align the recruitment, hiring, compensation, discipline, training, reward and recognition processes so all employees were focused on this goal. The result has been an across-the-board improvement in customer satisfaction, lower turnover, higher employee satisfaction, increased business volume and excellent profits, he adds.


Charles Kovaleski, president and CEO of Attorneys’ Title Insurance Fund Inc. in Orlando, Florida, recently underwent a similar cultural change effort. His employee-services department-as HR is known—thoroughly revamped the application, interviewing, orientation and training process so that the company’s 800 employees understand the corporate goal of customer service from their first days on the job. The employee-services department was so successful in re-focusing employee efforts that the manager of the division recently was promoted to senior vice president and now is reporting directly to Kovaleski.


What advice does Kovaleski have for other HR managers based on his new-found appreciation for HR? “HR managers need to understand they have a lot of internal customers to satisfy,” he says. “They have to orient toward becoming strategic contributors, not inhibitors, to each of those customers.” They can do that by getting out of the office and learning about those needs, he says.


When asked what kind of advice he would share with today’s HR managers, Springfield Remanufacturing’s Stack continued to beat the financial drum. “Too many HR managers can’t read their own financial statements,” says Stack. “I recently spoke to 1,100 training professionals and asked how many of them could read a balance sheet. Not six hands went up. You can’t help provide financial security for the organization unless you know how to read the report card.”


Stack should know. His management team espouses open-book management, and the HR department provides ongoing financial education for all employees. What has the business impact been? The company’s stock value has leapfrogged from 10 cents a share 15 years ago to $33 today. Not only that, but in 15 years of business, the company has never had to borrow beyond its original credit line.


What to expect from the CEO.
In companies at which HR professionals have been successful in selling their services to the CEO, HR is finding its bosses are more than willing to support HR’s new role as strategic partner. But the way CEOs demonstrate that support varies a great deal depending on the size of the company, the industry it’s in, the competitive pressures it faces and the personal management style of the chief executive.


Tharon Greene, director of HR for the city of Hampton, Virginia, says her boss shows “incredible support for the workforce and HR.” But ask City Manager O’Neill what his support looks like on a daily basis and he’ll tell you: “I’m not sure I do support HR daily. My role is more to create an imperative for change.”


Indeed, being the visionary and champion for change is the most typical role for chief executives in this new HR-driven culture. Carrig says Continental’s CEO Gordon Bethune’s role in the company’s recent workforce turnaround was to set the goals and regularly communicate with employees.


“He understands that people issues are as important as any other business issue, including operations and finance,” Carrig says. Bethune has reinforced this several ways: by placing HR on the management team alongside the CFO, by devoting just as much time to HR issues as he does capital issues and by helping other senior managers realize how important HR is to the company’s new way of doing business.


This last activity—keeping other senior managers focused on people issues—may be one of the most vital ways CEOs can support HR. Shoshona Zuboff, a professor at the Harvard Business School, says that if corporations have any hope of developing the skills and behaviors needed to manage the new workplace, the focus has to shift from changing employees to changing managers. In other words, CEOs can and should be instrumental in redefining the purposes and priorities of the managerial hierarchy and get rid of managers who don’t support the need for new people—driven practices.


When Attorneys’ Title Insurance was ready to embark on its cultural change effort in the late 1980s, there was some reluctance and cynicism on the part of senior managers, Kovaleski says, because they didn’t want to hand over more decision-making authority to employees. “They told me, as the new CEO, ‘This isn’t how you do things.’ Those managers aren’t here anymore.”


At the very least, HR executives should expect their CEOs to provide the tools and resources to initiate cultural change efforts, especially if HR demonstrates how those efforts will release the energy, creativity and enthusiasm that now lie dormant in many organizations.


But HR has to sell itself before it can expect the CEO to come through with any form of support, be it verbal, financial or managerial. Although some CEOs inherently understand the value people bring to the bottom line—and how to harness that value—these executives are the exception rather than the rule. If HR professionals have any hope of comfortably assuming their role as strategic partners, they must take advantage of the forces that have raised CEOs’ awareness of HR issues and then sell their bottom-line solutions.


The time is right. CEOs are ready for a change. Employees are most certainly ready for a change. And HR, as the function that touches every single employee, is ideally suited to take on the challenge of reshaping America’s organizations to release the productivity of those employees. Armed with managerial courage and a boatload of bottom-line facts, HR professionals should easily be able to sell their organizations on the idea that people are the key to making a profit.


As Bob Collins, CEO of GE Fanuc, emphasizes: “This isn’t a matter of choice anymore, but a matter of how quickly you can make this change and get the changes implemented.”


Workforce, June 1997, Vol. 76, No. 6, pp. 62-68.


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Guarding the People Factor Behind Prison Walls

Human resources professionals are challenged enough with their duties. Imagine adding to the mix the daily worry about whether you’ll walk away from your job alive. HR professionals at the California Department of Corrections not only must do their job well, but live with the possibility that mayhem can occur at any moment.


James E. Libonati, assistant deputy director in the Office of Personnel Management for the California Department of Corrections, has turned a two-month temporary job into a 12-year career at this state agency devoted to public safety and public service. Below, he describes a unique situation in which 75 percent of the 550 HR staff work inside the prisons.


What is your range of responsibilities?
I’m responsible for a great portion of the HR management program in the Office of Personnel Management. It entails hiring, which includes testing for all of our entry-level, nonpeace-officer classifications. Then, there’s the testing for promotions of everybody in the department. In addition, I have responsibility for the classification and pay program for the department and its disciplinary processes.


How is human resources set up in the state agency?
We’re somewhat splintered. In the state of California, there’s a central department called the Department of Personnel Administration. It handles the more generic activities for state employees. For example, it’s responsible for benefits administration for all state departments. State agencies like ours, therefore, don’t need to worry about negotiating contracts with health providers.


Now, within the California Department of Corrections’ Office of Personnel Management, the human resources function is structured in a way that reflects the rapid growth we’ve experienced within the last 15 years. We have a special branch called Selection and Standards, whose sole function is the recruitment, selection and hiring of all entry-level peace officers. This classification refers to all prison-custody personnel, parole agents and special law-enforcement staff. Approximately two-thirds of our 42,000 employees are peace officers who must go through our academy, the Richard A. McGee Correctional Training Center in Sacramento.


How did you land your current job at the agency?
That’s an interesting story. In the early 1980s, I worked as the personnel officer for the California Department of Water Resources. There was a vacancy in the Department of Corrections for the personnel officer job. It was a two-month, temporary position. I thought, “Why not?” For me, it was quite a promotion. Then this two-month appointment turned into 12 years plus.


How has the job changed over those years?
One of the biggest changes—not because of me, personally—was centralizing the hiring process. Some years ago, most of the responsibility for hiring and firing rested at the institution level. In the mid-’80s, California had 12 penal institutions. Each institution had its own unique way of handling things. Standards were slightly different; procedures were different. There was no one way of handling things. Then the agency centralized all of the entry-level peace-officer hirings into one place. That created a more efficient pipeline.


How do you look at growth?
Growth is a challenge. I’ve never worked in an organization as big as this. In 1985, we had 12 prisons. Today, we have 32. Back in 1985, we had 14,000 employees. Now, we have 42,000. Our new prison program was legislatively mandated, obviously. It was the will of the people as expressed to their elected representatives. They wanted more prisons to lock up more people who do bad things to society. I don’t have a problem with that. That’s what prisons are for. I support the department’s mission of public safety and public service.


Which jobs are the most dangerous —and why?
When you work in a prison, you assume some risk to yourself once you get inside the perimeter. This is one thing that’s different from any other agency. You don’t have the same type of security issues in more typical work settings. The danger factor here is going to be more prevalent among the custody staff inside. But there are also possible assaults on other staff, too—the medical personnel and culinary staff—even HR. You can’t predict what’s going to happen. Working in a prison is inherently dangerous at all levels.


As an HR manager, I’ve visited every single prison. I don’t feel threatened by going inside the prison walls. You get used to it. Once you go inside, however, you take responsibility for your own safety. You have to be constantly vigilant about what’s going on around you.


How do you go about recruiting for some of the tougher jobs?
We actually have no problem recruiting the correctional officers who comprise the majority of our peace-officer staff. Their turnover rate is approximately 7 percent, which is very good. The State offers good salaries and benefits structures. Recruitment isn’t an issue for those classifications. But we have difficulty hiring medical staff for some locations. And that’s not just doctors, but psychiatrists, psychologists and psychiatric social workers. It’s quite a responsibility for the department to assume [comprehensive] medical care for all of our inmates. And it’s even more difficult to recruit for some of our more remote or rural areas, such as Crescent City, located near the Oregon border. So [the only leverage we have] is the salary to attract the right person. The State has some flexibility, but not a tremendous amount.


Are inmates who work managed under HR?
No. We don’t consider inmate workers as employees. They’re considered a separate group—not state employees. They typically work to reduce their sentences. Many of them provide public service by cleaning parks, fighting fires or making prison products. Inmates who work typically report to their first-line supervisors who are non-inmates.


How many HR professionals actually work at the prisons?
Our department is pretty decentralized. Approximately 75 percent of our 550-member HR staff is working inside the prisons.


Does that make it hard to recruit qualified HR candidates?
A little difficult. We have to compete with the salaries of our custody personnel. We’ve even seen some of our HR staff take the entry-level custody-personnel exam because of the better salary.


Does HR staff receive special training to work in a prison?
The department provides an orientation for all new employees, which includes information about the department’s mission, how to work in a prison setting and what HR staff can and can’t do in this setting. For example, employees can’t become involved in a relationship with an inmate—however innocent. You can’t hold an inmate’s money or have any business affair with an inmate.


What are the main HR issues facing the department today?
We’ve been growing so quickly over the years that we’ve needed to hire and train new people. But there doesn’t seem to be enough time to prepare those who will become the new supervisors.


Because we have a diverse inmate population and workforce, communication skills need to be addressed in any kind of supervisory training component. So we’re spending more time examining ways to improve the personal treatment of our staff and improve our supervisors’ communication skills.


We also want to improve the quality of our supervisory staff by increasing the time it takes to get to the next pay level.


If there’s a prison disturbance, how does it impact HR?
We have minor problems almost every day, such as inmates fighting with each other. When we face a larger disturbance, our line custody staff are the ones responsible for quelling them. Our prison staff calms down the inmates, breaks up the combatants or helps the injured parties. Other than handling workers’ compensation claims, human resources doesn’t play much of a role. Ours is a service role—after the fact.


What’s the most common misperception the public has of the California Department of Corrections?
Many people think [criminals] should be put in prison with the key thrown away. But the Department of Corrections doesn’t have that kind of discretion. The prison’s role is to track the sentences of all inmates. When it’s time to release an inmate, he or she is released—regardless of how we feel personally.


How have you changed your perception of prisons in the last 12 years?
I have a greater understanding and respect for the prison environment—especially for those who are responsible for the day-to-day operations, such as the warden. This is one of the most difficult jobs in the world. Not only is a warden responsible for thousands of inmates, but thousands of employees, physical plant issues and local community concerns.


What was the most frightening experience you’ve ever had?
I was down at one of Southern California’s institutions leading a tour of officials from another governmental jurisdiction. We went into the receiving and release area, where new inmates come when they initially arrive at the prison. Well, we got locked up in a room with two different busloads of inmates—many of whom got into a fistfight. Everything worked out in the end.


Seriously though, a prison is a prison —it’s not a country club. It’s not a very nice place to be.


Workforce, June 1997, Vol. 76, No. 6, pp. 115-119.


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Multi-part Special The Trainer’s Role

The typical trainer’s job used to be fairly straightforward. His or her main responsibility was to impart standard work-related material to each new crop of employees. Sessions were held in classes for fixed periods of time and used many of the same teaching methods commonly used in high school or college classrooms. At the end of each session, the new recruits were tested and then sent on to their jobs. Some were called back for follow-up training. The trainer’s job, in other words, was fairly routine.


But not anymore. Trainers can no longer count on teaching the same subjects or using the same methods year in, year out. Change is now the rule. The following series of articles in this special report will address six of the key issues facing today’s trainers:


Competencies:
Trainers today need to know more than ever before. Even when they assign some work to vendors, they still need to know how to make sure those vendors are performing as expected.


Corporate universities:
Many companies are bringing training programs in house and offering them through corporate universities. What are the benefits to structuring training this way?


Technology: Technology offers trainers new tools for company training programs. But it’s important that trainers know how to effectively integrate yesterday’s training methodologies with today’s technological marvels.


Outsourcing:
Outsourcing can be a cost-effective way to address training requirements as needed. But will outsourcing be used more or less than before? And will it be used in a different way?


More accountability for performance:
Trainers are being held to higher standards. This means they need to find the most accurate methods for measuring their results.


Budgets:
Budgets are tighter than ever before. And, of course, trainers are expected to do more with fewer resources. Is it actually possible to improve training results on a smaller budget?


Workforce interviewed more than a dozen training professionals in an effort to answer these questions and more.


Workforce, June 1997, Vol. 76, No. 7, p. 94.


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Training Budgets How Much Are Companies Investing

Almost everyone agrees that training budgets are tighter than ever before. That’s not to say that lots of money isn’t being spent, or even that increases aren’t evident in some cases. According to a June 1996 article in Across the Board, a magazine published by the New York City-based Conference Board, American business invested an estimated $30 billion in training in 1996. Late last year, Omnitech Consulting Group, based in Chicago, predicted a sharp increase in corporate spending for multimedia training budgets in 1997. Nevertheless, managers everywhere want to get much more mileage out of their training dollars than ever before.


June Maul, district manager of development and multimedia development for Basking Ridge, New Jersey-based AT&T, says, “As in most other organizations, our training budget is declining. As more corporations are looking to reduce costs, they’re also trying to make sure people get only the training they need.” AT&T’s School of Business and Technology, which Maul oversees, deals in part with its budget constraints by charging its employee-students for the courses they take. Rates, according to Maul, tend to be between 10 percent and 20 percent lower than alternative institutions might charge.


Northern Power’s corporate university system is helping save the company money, according to Mark Fritsch, director of the Minneapolis-based company’s Quality Academy. “We’re probably doing 20 percent more training with 30 percent less resources,” he claims. “Consolidating different training groups in areas that had some redundancy is one way. Also, by measuring the processes of our training, such as looking at what goes into needs analysis, helps us get better at delivering high-quality training in a short period of time, for a very low cost.”


Lynn Slavenski, vice president of education and organizational development for Atlanta-based Equifax, acknowledges that her company also is concerned about cost control, as evidenced by its cost-efficient use of grad-school interns. But she also stresses that budget takes a back seat to needs. “If we need it,” she points out, “we do it. Lots of organizations are realizing that learning is their competitive edge-more than ever before. As long as training departments concentrate on strategies and organizational needs, and work closely with senior officers to make sure they’re on target, then they can usually get funding.”


Not every organization is downsizing its training budget, however. Some are even coming back from sharp cutbacks, and reinvesting heavily in new training. “We believe we may have underinvested in training the past few years,” says Steve Wood, Spartanburg, South Carolina-based Flagstar’s senior vice president of HR. “One thing capital should be used for is more training. In the hospitality industry, what our guests tell us about the quality of service is just as important as the quality of the food we serve.”


Workforce, June 1997, Vol. 76, No. 7, p. 98.


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Technology Delivers Training in New Ways

A recent survey conducted by the OmniTech Consulting Group based in Chicago indicates that among Fortune 1000 companies, 16 percent of all training is delivered through multimedia-based methods, and this figure is expected to double within two years.


“Over the last 10 years, [use of] electronically distributed training has climbed 20 percent,” reports Rich Silton, president of Silton-Bookman Systems, of Cupertino, California, a record-keeping software producer for trainers at Fortune 1000 companies. “Some estimates indicate that before the year 2005, instructor-led training may drop to 50 percent, while electronic training will increase.”


Adds Steve Wood, senior vice president of human resources and corporate affairs for Flagstar Inc., a Spartanburg, South Carolina holding company of six major restaurant chains: “More companies will invest in technology as a training vehicle because they can get better quality training, more consistent delivery and lower training costs. It’s also the preferred delivery vehicle for recipients.”


Consider the benefits of incorporating technology.
Using technology as a tool for instruction delivery allows trainers to train more people,” Syracuse Language Systems’ director of corporate markets, Pete Simmonds, suggests. “In traditional classrooms, there may be one instructor for 20 people. But with the Internet, the student audience potentially can be expanded so that the cost per employee goes down.”


Simmonds says that to meet the rising demand for language training, his Syracuse, New York-based company created a series of self-study multimedia software programs that incorporate the Internet as a tool for interactivity. “Although self-study programs tend to be inexpensive and easy for people to do, the lack of structure makes it difficult for employees to maintain the self-discipline to complete the program,” Simmonds points out. “One-on-one tutors tend to be more effective. But these programs aren’t only more expensive, but also more difficult to schedule…. We combined the best features of self-instruction with teacher interaction through a combination of multimedia software and the Internet.”


Some companies have devised unique in-house technological solutions. One noteworthy example is Silicon Graphics, a Mountain View, California-based producer of workstation servers, supercomputers and software. “We’re doing as much distributed learning as possible and putting it on our intranet in a flexible, accessible way,” says Drew Banks, manager of Technical Education and Distributed Learning for Silicon Graphics. Banks explains, “I want to make training as painless as possible, so when you click on something on the Web, you don’t know whether you’re being trained, just getting information or being entertained.”


Another key benefit of technology is the ability to conduct training over long distances.


Technology is boosting the use of distance learning.
Distance learning is growing in demand. Companies find it too costly to maintain a full-time training staff to teach every necessary course. If you’re looking for flexibility and the least amount of time lost from work, then distance learning is the most effective solution.


Many training professionals agree that distance learning is the best way for students to take courses while remaining on the job. Courses may be offered by mail (shipment of books and CD-ROMS) or via the Internet. Videoconferencing is another method.


Jean Barbazette, president of Seal Beach, California-based Training Clinic, is an advocate for videoconferencing. “It sounds expensive,” she suggests. “But if you want to train people over several days, it’s an easy way to do it…. You don’t need to own a satellite; you can go to Kinko’s and rent a room for a nominal fee.” Some companies, like Arlington, Virginia-based Gannett Publishing, are now using company-owned satellite hookups to broadcast training sessions.


“A lot of our clients can’t send employees out to train,” says Betty Howell, director of Learning Dimensions, a Birmingham, Alabama-based distance-learning firm that provides independent-study programs. “The cost of training is very high, whether it’s conducted in house, or through seminars. Also you can’t be as in-depth in a one-day seminar as you can be in an independent-study program.”


Employees complete work outside of classroom settings and enjoy the assistance of subject experts via phone or e-mail. “They can take an hour a day to do coursework at their desks. The benefit is the immediate application of what they learn to their jobs,” says Howell. Also, since people learn at different rates, or may be slowed down by work or life pressures, there’s an advantage to flexible scheduling.


Although Howell respects technology’s potential, she doesn’t see it replacing more conventional teaching. “I’m excited about its possibilities,” she says, “and it makes learning accessible for people at distant sites. But I think a combination of methods is best.”


Warning: Technology is constantly in transition.
John Faier, principal of OmniTech, suspects that many trainers are diving into technological solutions before they’re fully developed. “Are they ready to take advantage of technology in a way that maximizes its potential? Or are they merely substituting new media for proven methods? It concerns me when organizations use the Web to distribute self-paced workbook study programs. People read 30 percent to 40 percent slower online. The Web is great at some things. But do trainers understand what they are?”


Trainers, according to Faier, still have much to do. “Our study indicates that 60 percent of learning professionals who aren’t involved in the development of multimedia [training methods] today won’t be able to make the transition to future multimedia development goals.” So trainers should be thinking about how they’re going to cultivate these skills.


Rich Wellins, senior vice president for Development Dimensions International in Bridgeville, Pennsylvania, concludes, “Technology is in transition. That creates huge problems. Eight years ago, [employees] studied workbooks or went to class. Now there’s no standard. Different companies want different solutions.” It’s the responsibility of trainers to find the best ones for their organizations-which they certainly can’t do without being up-to-date themselves.


Workforce, June 1997, Vol. 76, No. 7, pp. 98-100.


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Inspiration Where Do You Find It

Where do we go for inspiration? How do we inspire others? From a human resources viewpoint, there are times when we see situations we wish we could change—and things we wish would just go away. Sometimes, when I’m in desperate need of inspiration, I wish I could just wave a magic wand and find the world, my company, my work and my responsibilities all neatly and easily put together in a simple, peaceful way. Couldn’t I just be on a holiday, snuggled away in the mountains or lounging by the ocean?


When we’re actually by the ocean, the mountains, a gorgeous valley or meadow, we’ve allowed ourselves to get away. When we’re in nature, we take time to relax and to breathe. As we view the landscape, we’re still. Sometimes, we’re even awe-struck. We find ourselves seeing beauty, power, majesty and sweetness in the scenery. We may not even realize that we can see and feel these qualities. When we soak up the beauty, we begin to restore ourselves and to find a new perspective to our lives. In short, we become inspired.


Restore yourself.
But how do we retain these qualities? How do we bring them back into the workplace? Obviously, we can’t take a holiday every few weeks. How do we get away while we’re on our jobs? The key is to remember that it is possible to restore oneself. Here’s what I was told during an informal survey of 20 peers and colleagues. I asked the following questions: What do you do to stay inspired at work? How do you get yourself back on track when you’re just going through the paces?


The mere act of asking these questions inspired some of the respondents. They remembered they didn’t have to work with unnecessary stress. Many were inspired by remembering a past success or achievement they had accomplished—one that brought satisfaction to their lives. Others mentioned being inspired by the talent of fellow workers with whom they interact on a regular basis. Several also said the nature of their jobs served as an inspiration. And even though the stress intensified at times, they were renewed if they took the time to sit back and reflect for a moment. One person told me that his inspiration usually came from visualizing what he could create or accomplish either at work or outside of it.


Janet Colson, senior vice president of administrative services at La Jolla, California-based ScrippsHealth, and acting COO of ScrippsHealth System, recalls her most inspiring day: “The most inspiring workday I’ve ever experienced was the time I was working in the White House. It was the day former President Ronald Reagan was shot. I was inspired by the efficiency of the government and the military—and by the White House staff. It was touching to see how the public accepted Reagan as a person, not just as a political figure. In our sadness over the event, we were buoyed by Reagan’s sense of humor, the gracious dignity by which the press secretary, Jim Brady, fought his way back to life. You know, people always talk about the White House and the Oval Office as the greatest places of power in the country. While it is that, on that day, I also saw its humanity, compassion and strength. I’m inspired to this day by remembering that time.”


Colson also visualizes the future: “I’m inspired by reinventing myself, my position, my company. We’re undergoing radical change, and I’m involved with moving us forward. I’m always thinking about how things can be better, what we can become. Now, that’s thrilling.”


Look within.
Others spoke of inspiration from an internal point of view. Some responded that inspiration comes from getting in touch with their passion. One should ask: Why am I here? How can I make a difference?


Indeed, being inspired truly is an inside job. For within us is the ability to stop or to slow down ourselves when we’re frazzled—and to open up to a different mindset than that of the hustle and bustle, stressful environments in which we all work and live. It’s what’s inside us that allows for inspiration.


Colson touched on her willingness to allow herself to take time out for reflection and to mull over different situations. Some of her best thinking, she says, occurs when she walks her dog. The exercise allows the opportunity for her mind to consider how to handle a difficult situation, to figure out solutions to problems—and still to enjoy the outdoors. She also tries to take one lunch break a week outside the office. Sometimes she sits at the beach, watching the waves. “It’s such a restorative time. I’m much more inspired when I return,” Colson says.


So let us remember that inspiration is possible at any time. We can give it to ourselves, and we can give it to others. Let’s take the time to allow ourselves to be inspired. Let’s give ourselves the gift of filling up ourselves with awe, wonder, peace and patience so we’re centered. When we’re inspired, we become motivated. When we’re motivated, we achieve greater results.


Workforce, June 1997, Vol. 76, No. 7, pp. 139-140.


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Ethics Spot the Red Flags in Your Organization

All your compliance programs are in place, the sexual-harassment policy is posted, and you’re pretty sure every department understands its legal and financial responsibilities. But the stories in the daily newspaper about companies that have fallen into ethical dilemmas remind you that bad things do happen, even to good companies. Sears, Texaco, Avis and CNA Life Insurance have dominated the headlines with allegations of illegal collection practices, race discrimination and sexual harassment. Such examples make you wonder about the ethical health of your own company.


We suggest there’s one more bit of analysis that’s necessary. Close the door, hold your calls, clear your head and think hard about where you, your training programs and your organization fall in the realm of ethical behavior. How prepared are you and your colleagues to deal with an ethical crisis? A business without ethics is a business at-risk. Legal compliance is the lowest common denominator. The one element that prevents major mishaps is producing results continuously in an ethical manner.


To visualize the structure of an ethical environment, imagine a pyramid divided into four parts:


  1. Base: Ethical Awareness
  2. Middle: Ethical Reasoning
  3. Top: Ethical Action
  4. Peak: Ethical Leadership

The broad, base level is Ethical Awareness.
HR professionals should ask themselves questions such as: Do employees recognize ethical problems when they occur? Some employees concentrate on their duties so intently that they miss an obvious ethical situation when it happens. People need to be wearing their ethical glasses to see moral dilemmas in their midst.


In hindsight, of course, a lack of ethics is recognizable. But the slide on the slippery slope to immorality is often well-hidden. Recall the days when Honda Accords were the hottest cars in the land. Customers were lining up to buy them at more than full price and dealers were scrambling to find inventory. Yet, by all accounts, the salaries Torrance, California-based Honda paid its zone managers were mediocre, and the company went as far as taking away their company cars as a penny-pinching exercise.


Is it any wonder that seven of 10 regional managers and 12 Honda sales executives were convicted in a kickback scheme for pocketing $15 million in cash and valuables given by grateful dealers? As one Honda senior exec said on his way to jail, “My sense of right and wrong went right out the window the first year of my career as an automobile dealer.” With that lack of moral vision, he probably still doesn’t understand what he did wrong. It was just the way business was done.


One way to test employees’ awareness is to plan a discussion about a hypothetical situation and pose the question, “Is there an ethical issue here?” If the discussion includes responses like, “What’s the problem? We don’t get hurt,” “The important thing is delivering results,” and “Everyone does it,” these are red flags indicating the company might need a course in “Ethics Awareness 101.”


The next level of the ethics pyramid is Ethical Reasoning.
 When employees recognize an ethical problem, will they be equipped to think through it? Part of the process of building an ethical infrastructure is to provide everyone with the proper tools: a common language and method of sorting through the courses of action open to them when an ethical problem occurs.


Every individual on the corporate ladder has a shared responsibility to be a moral leader.


Dow Corning certainly had the right programs in place when its silicone breast-implant controversy surfaced, including an ethics committee and a long-standing code of values. But arguably, those inside the Midland, Michigan-based company who might have suggested alternative courses of action throughout the lengthy litigation and public relations nightmare were drowned out by the voices of the company’s lawyers, who saw the crisis as a legal, not an ethical, matter. As long as the issue was framed as defending a product that the company executives believed wasn’t harmful, other decisions were precluded. A brainstorming exercise in ethical reasoning might have produced ideas that ultimately would have helped Dow Corning avoid more than 400,000 claims of injury and inevitable bankruptcy.


The third level is perhaps the most difficult: Ethical Action.
The ability to recognize and understand an ethical problem is essential, but unless managers provide the mechanism for solving the problem, the company is still in a fix. This is a management problem that’s solved by creating the structures and approach to allow employees to convert decisions into reality.


If employees feel the corporate culture doesn’t encourage full disclosure or allow individuals to freely debate and resolve ethically sensitive issues, all attempts at integrating ethics into the organization will be viewed as the sham it probably is. Here are some red flags that signal a company’s ethical action level is deficient:


  • Are high-potential employees leaving the company?
  • Are exit interviews notable for their lack of information or candor?
  • To what degree do employees at all levels feel they have a stake in owning the company?
  • With what degree of respect do company executives consider ideas that pose ethical issues and resolutions when implementing those ideas will result in a loss of revenue?

When Vienna, Virginia-based America Online launched its new surf-all-you-want pricing plan and then to its surprise discovered that its eight million customers clogged the system, the company certainly hit a crisis. Some dismissed it as a technology issue, which could be solved given time and resources. Others saw it as a business-strategy issue; AOL didn’t think through the obvious ramifications of its single-price plan. Lawyers saw the crisis as an opportunity to sue; AOL didn’t deliver what it had promised. Marketing gurus saw the disaster as a comedy, watching AOL continue to pitch for new customers even as its existing ones rang up busy signals.


It would be interesting to know if anyone inside Chairman Steve Case’s inner circle framed the issue for what it really was: an ethical question. AOL developed a huge following based on a good product, ease of service and trust. Millions ran their businesses and communicated to their customers through their AOL addresses. Millions more invested in AOL stock. Case lured more customers in the door with free software. Then in less time than it takes to surf the Net, AOL’s commitment to customers crashed, betraying their trust.


Case and AOL didn’t exactly rush to provide refunds, postpone the pricing plan or solve the service issues until pushed. To outsiders, it appears that AOL’s interests were paramount and that its customers—stuck with their AOL addresses and accustomed to its Internet access—could wait.


The peak of the ethics pyramid is Ethical Leadership.
The individual or organization reaching this top level is a moral compass for others’ actions. In the best companies, every individual on the corporate ladder—from the mailroom clerk to the CEO—has a shared responsibility to be a moral leader. HR can recognize ethical leadership in an individual if he or she’s among the people who come to mind when a tough question arises and co-workers ask, “What would you do?” Ethical leadership isn’t reserved only for those at the top, rather it’s a quality held by individuals and organizations with the moral courage and diligence to talk and walk ethical values. This is what is meant by having individual and institutional integrity.


At its recent board of directors meeting, Michigan Physicians Mutual Liability Company located in East Lansing, Michigan pushed the envelope of ethical leadership by devoting precious board time to a free-wheeling discussion of what it means to act as an ethical director. The directors tackled ethical issues confronting boards today in the presence of company executives and invited guests. Board members weren’t shy about proclaiming their commitment to ethics at all levels, examining their own practices and thought processes, and disagreeing among themselves. It was a stunning example of ethical leadership at the very level where the ethical buck stops: the board of directors.


Hundreds of companies have developed and put into practice ethics programs which exemplify the ethics pyramid. We invite you to join in this movement. Start by developing a foundation of ethical awareness and work your way up to the top, cultivating ethical leaders throughout your workforce. Strengthen the ethical environment of your organization.


Workforce, June 1997, Vol. 76, No. 6, pp. 135-136.


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Outsourcing Training Helps Companies Keep Up

The tremendous structural changes taking place in most companies are stirring up greater demand for outsourcing training than ever before. First, there are shrinking budgets. Next are shrinking in-house staffs, largely due to downsizing. And then there’s the mind-boggling proliferation of specialized new knowledge that needs to be imparted to employees on a frequent basis. No small group of in-house trainers is likely to master so much knowledge. Outsourcing, therefore, isn’t only on the rise-it may well be the wave of the future.


“Because training costs are fairly high,” remarks Mark Fritsch, director of Northern States Power Co.’s Quality Academy based in Minneapolis, “companies that are only doing 3,000-hours worth of business-skills training can’t afford to hire anyone in-house. So they need to outsource it. There needs to be some critical mass of training before you can afford to get your own in-house people.”


Fritsch indicates that local educational institutions are playing a growing role in providing such services. “We’re seeing great interest in outsourcing partnerships with a lot of the existing technical schools and community colleges that are able to reduce costs and improve effectiveness.”


Companies turn to outsourcing as a way to cut costs.
Cost pressures caused Atlanta-based Equifax to develop a creative new approach to outsourcing-one which not only pares internal training costs, but also controls the cost of outsourcing. “Three years ago, we cut our training staff to a few people, developed our own courses and hired contract trainers to teach them,” recalls Lynn Slavenski, vice president of education and organizational development at Equifax.


These free-lance consultants often are displaced professionals or graduate school students who want to break into consulting. “This is different than hiring consultants whom you pay perhaps $2,000 a day because they use materials they’ve developed. Since our contract trainers use our materials, we’re able to pay them much less. We don’t do that with higher-level training, however. Sometimes we need high-priced consultants and need to pay for the expertise they bring.”


Slavenski’s approach also saves Equifax the cost of outside materials which she feels tend to be expensive and aren’t always customized to the company’s needs. “Because we create our own materials or contract to create them,” she explains, “I don’t use a lot of packaged programs. I don’t like paying $200 or $300 a package. For a high-level class I might. But it’s too much for basic classes. I’d rather spend that on other things, like self-study.”


Outsourcing also solves another perennial problem for trainers-the waxing and waning demand for training. Rarely is training provided to the same extent at all times throughout the year. When at times a great deal of training may be offered, little or none will be provided at other times. Hiring a full-time staff capable of meeting the organization’s training needs during peak seasons, therefore, also means paying those same trainers when little or no training is planned. Outsourcing, on the other hand, provides companies with the flexibility to use and pay trainers only as needed.


While corporate downsizing has been one of the primary causes of the growth of outsourcing, not everyone is confident the downsizing trend is permanent. President Richard Silton, of Silton-Bookman Systems, in Cupertino, California, a record-keeping software producer for trainers, believes the trend may turn around. “The downsizing movement hasn’t played itself out yet,” he insists. “I think it will go the other way when people begin to realize they’ve lost critical resources that can’t be acquired through outsourcing.”


If Silton is right, then the implication is clear-HR departments need to make sure they don’t restructure their training programs to the point at which they may find it difficult to reverse them, if necessary. It could be that the pendulum is still seeking equilibrium.


Assuming that a great deal of training will continue to be outsourced-and for the foreseeable future, that’s likely for many organizations-what does that mean for in-house trainers? Most likely, they’re experiencing a change of focus. Vendors need supervision and input. In-house trainers also will need to coordinate their efforts with those undertaken by vendors. And finally, in-house trainers need to learn enough about their vendors so they’ll be able to make intelligent selections.


Workforce, June 1997, Vol. 76, No. 7, pp. 98-100.


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CEOs Talk to Their Peers

In companies in which leading-edge HR practices have shown a measurable financial impact, the CEOs understand the value the function brings to the bottom line. What advice about human resources do these executives have for other CEOs? Read on.


“CEOs need to have a pretty good set of listening skills. Employees will tell you what the HR agenda should be.”
Bob O’Neill, City Manager
City of Hampton, Va.


“Stop looking at HR in the traditional manner É as the soft side of an organization. Instead, make it a part of the financial organization of the company. There should be no difference between the CFO and the HR executive. We’re all working toward the same objective.”
Jack Stack, CEO
Springfield Remanufacturing Corp.
Springfield, Mo.


“To survive, CEOs must begin to focus on people as resources in the organization.”
Mike Servais, President
Acute Care Division of Universal
Health Services Inc.
King of Prussia, Penn.


“I have a belief that human nature is extremely elastic with respect to its ability to do work. The amount of elasticity depends on the individual’s commitment to the business. When people believe in what they’re doing, see it as worthwhile, and see value from it, they’ll put their heart and soul into the work.”
Bob Collins, CEO
GE Fanuc Automation,
Charlottesville, Va.


“My impression is that human resources often gets pigeon-holed and isn’t consulted by other departments. For HR managers to help everyone in an organization, they need to understand the big picture. That’s why HR needs to be elevated to the senior management team and report directly to the CEO.”
Charles Kovaleski, President and CEO
Attorneys’ Title Insurance Fund Inc.
Orlando, Fla.


Workforce, June 1997, Vol. 76, No. 6, p. 66.

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Corporate Universities Are Catching On

Corporate universities are far from new. But they’re becoming more commonplace than ever before. And they’re evolving to meet changing demands. Lynn Slavenski, who heads up the Atlanta-based Equifax university, defines the concept. “Corporate universities aren’t a place, but a concept for organized learning that’s designed to perpetuate the organization.”


Equifax started its corporate university seven years ago. “Our curriculum is geared to employees on all levels and offers professional management development, self-study programs, and an in-house MBA program offered in cooperation with a local university,” Slavenski explains.


Northern States Power Co., headquartered in Minneapolis, set up its corporate academy just a few years ago. “We wanted to consolidate and leverage the value that corporate universities can bring to organizations,” says Mark Fritsch, director of the company’s Quality Academy. The academy provides training in leadership, team-building, time and project management, technical skills and more. “We have no separate building. We’re a virtual university, meaning we maintain training facilities wherever it makes sense.”


Fritsch says his academy has made a quality breakthrough by cross-training employees. “Some corporate universities don’t align corporate and technical business training,” he says. “But we might train line people to install transformers and to deal with customers. We know those interpersonal skills can enhance the technical skills.”


Basking Ridge, New Jersey-based AT&T requires employees to pay for some classes. On the flip side, June Maul, AT&T’s district manager of development and multimedia development, explains that her students sometimes receive credit toward college degrees. “The University of Phoenix and St. John’s in New York City allow credits for some of our courses, if students take additional courses from them.”


Corporate training programs widen their reach.
While in-house personnel continue to be the trainer’s main focus, some trainers also are being asked to serve such other constituent groups as vendors, customers or even community residents.


“We provide training to other companies, customers and suppliers,” says Fritsch. “If instructors aren’t busy, we can open up classes for external needs. Because of our university approach, it may be cheaper for them to go with us than somewhere else.”


Abbott Laboratories, a pharmaceutical, medical equipment and nutritional products company based in Abbott Park, Illinois, recently began to offer basic skills training to nonemployees. “We went to the local community college and asked [its administrative staff] to review the skills our workforce needs,” says Keith Mitchell, manager of testing and assessment for Abbott. “They developed a training curriculum for such basic skills as reading, math, problem-solving, communication, interviewing, test-taking, mechanical comprehension and documentation.” The company offers free sessions to employment applicants who fail to pass the initial entrance exams three times a year, each over a period of 12 weeks. Local college interns are sometimes used as trainers.


Mitchell started this program to help applicants who don’t pass his employee entrance exams the first time, but who, through remediation, might be given a second chance. “We don’t want to screen out people through testing,” he says, “but to help them improve their skills so they might later qualify for employment. What we get out of the program is an increasing pool of qualified candidates to fill future jobs.”


So you think corporate training is a big job now? When your in-house university opens its doors, you may find your role expanding beyond your company’s walls.


Workforce, June 1997, Vol. 76, No. 7, p. 96.