Graeme Martin's HR and People Management Blog

Corporate Reputations and Management Practices

2010-10-24T04:51:00.001+01:00

I'm taking part in a forum on Corporate Reputations and Management Practices as part of an initiative organized by Macquarie University where I'm based for a brief period. As part of my presentation, I'll refer to another recent session in Edinburgh in which I participated on the impact of new human rights developments arising from the Ruggie Report. This report and indeed much of the discussion was relatively new to me but is likely to have major implications for multinational corporations and is already the subject of business school research.
You can find out a little more about it from the following Warwick University website, which has the details of the Edinburgh conference and the 'Edinburgh Declaration'. For those of you interested in corporate responsibility and for those of you managing in multinationals this is essential reading.

http://www.business-humanrights.org/Documents/NHRIsConference2010.

Corporate Reputation by Ronald J. Burke, Graeme Martin and Cary L. Cooper

2010-10-24T04:06:00.002+01:00

We have a new book on Corporate Reputations coming out early next year on corporate reputations, which you may wish to consider for your library.
Contents:
Part I Importance of Corporate Reputation: Corporate reputations: development, maintenance, change and repair, Ronald J. Burke; The meaning and measurement of corporate reputation, Gary Davies; Measuring the impact of corporate reputation on stakeholder behavior, Manfred Schwaiger, Sascha Raithel, Richard Rinkenburger and Matthias Schloderer.
Part II Developing a Corporate Reputation: Reputation and corporate social responsibility: a global view, Philip H. Mirvis; Organizational identity, corporate social performance and corporate reputation: their roles in creating organizational attractiveness, Kristin B. Backhaus.
Part III Managing a Corporate Reputation: Employer branding, the psychological contract and the delicate art of expectation management and keeping promises, Kerry Grigg; managing corporate reputations, strategic human resource management (SHRM) and negative capabilities, Graeme Martin, Paul Gollan and Kerry Grigg; From applause to notoriety: organizational reputation and corporate governance, Charles McMillan; The role of the CEO and leadership branding – credibility not celebrity, Julie Hodges; The role of the news media in corporate reputation management, Craig E. Carroll; The impact of Web 2.0 and Enterprise 2.0 on corporate reputation: benefits, problems and prospects, Martin Reddington and Helen Francis; Re-creating reputation through authentic interaction: using social media to connect with individual stakeholders, C.V. Harquail.
Part IV Reputation Recovery: Corporate governance and corporate reputation: a disaster story, Thomas Clarke; Corporate rebranding, Dale Miller and Bill Merrilees; Repairing damages to reputations: a relational and behavioral perspective, Moonweon Rhee and Robin J. Hadwick;

New Assumptions about Strategic HRM?

2010-10-24T03:47:00.000+01:00

I attended the Strategic Management Society annual Conference in Rome where I went to find out about what strategy academics have to say about HRM as a source of value creation. And I’m pleased that I went if only to confirm what I’ve said in other blogs about the search for new business paradigms. Like many of the other management scholars, strategy academics have fallen out of love with business and with some of their most treasured assumptions about shareholder value. This was evidenced by two new special interest groups that have formed in the Strategic Management Society on human capital and on stakeholder theory.

The opening plenary session given by some of the most prominent strategy academics - Jay Barney, Russ Coff, Ed Freeman and … - raised lots of questions and some answers on the topic of ‘where strategic thinking in business needs to go’. Jay Barney, the man most associated with what has become one of the most discussed ideas among management academics – the resource-based view of strategy (RBV) – outlined some of the assumptions/ predictions it has made with respect to human capital. One of the most important is that firm-specific, as distinct from general (or transferable), human capital is a potentially great source of competitive advantage because it can be valuable, rare and inimitable. This is why firms seek to engage employees to secure their identification and willingness to ‘go the extra mile’. It also explains why firms are much more eager to train employee in the routines, processes, and ways of ‘doing things around here’ and much less eager to give them a more general education, such as an MBA, which they can use for their own advantage and for the advantage of other firms. This last point, however, highlights a problem for the RBV: rational employees recognise that they do not benefit as much as firms from investing in their own firm-specific human because of what is called asymmetric power relations. Basically, this refers to the lack of power and knowledge of individuals in relation to firms. Thus, we are left with a distribution problem: after all costs are paid, who should benefit from residual profits and how should this residual amount be shared?

The traditional answer, which has underpinned strategic management theory and corporate governance since the 1980s, is the normative theory of shareholder value. Employees are paid a wage for their investment in general human capital in the firm and may gain in some of share ownership if they in invest in firm-specific human capital, but the shareholders have sole ownership rights and thus the only legitimate claim on residual profits. Firms in the 1990s did try to limit their investment in firm-specific human capital by retrenching into employment contracts that were largely transactional rather than relational – the so called ‘employability contract’. This, more or less stated that firms were unable or unwilling to guarantee the old style contract based on job security and firm-specific careers, but were willing to help employees develop skills (general human capital) that they could use to make them more employable in the future in return for their temporary demonstration of high commitment. However, such psychological contracts have not proven successful, especially in attracting and engaging knowledge workers and senior managers, who often have high levels of general human capital and are capable of bargaining away much of the residual profits that would normally accrue to shareholders. This is best exemplified by the case of premier league professional footballers and many CEOs and other star employees (who are both unique and capable of adding high value).

Russ Coff suggested the answer lay in developing a different theory of strategic management, one that is based on stakeholder theory rather than shareholder value. This was hardly revolutionary stuff, but was positioned as such by these eminent strategy academics. It was left to Ed Freeman, who has a new book coming out on stakeholder theory, to put the argument for a different view of what might count as useful theorising about strategy and where it may need to go. His time seems to have come, especially given the weakening position of the US in the global economy.

I’m still stunned, however, over how large the gulf is between assumptions made by American scholars and those made by their (particularly continental) European counterparts. However, we should be grateful for small mercies.

A Final Blog from the AOM: New Developments in Strategic Human Resource Management

2010-08-14T11:04:00.003+01:00

I’m about to begin writing a new book exploring the links between HRM and business strategy, a conjunction of ideas which has been at the core of my work for the last few decades. So, I was pleasantly surprised to see that the AOM conference had some core tracks on this subject, the main participants of which have organized an interest group - rather unfortunately in my view - labelled ‘strategic human capital' (are we really interested in human capital or even human resources, or should we be more interested in resourceful humans?). The first conference stream dedicated to research in this field is due to take place at the Strategic Management Society annual conference in Rome in September and fields an impressive array of American scholars, including Dave Lepak, Pat Wright and Russ Coff.

During the AOM conference there were some excellent papers mapping out the field and addressing the question of what it means to be strategic in HRM. Shad Morris used this session as an opportunity to explore how organizations manage their star performers and attempt to expropriate value from them to create firm specific human capital - a very tricky problem because stars often have an inbuilt incentive and the power to expropriate value from the companies with which they deign to work to build their own general human capital. Another paper by Dana Minbaeva from the Copenhagen Business School HR team explored the bridge between the macro-micro divide. This may sound like academic jargon but is an extremely important issue for practitioners to understand. It is not enough to have a set of so called best HR practices in place to ensure desirable individual and group attitudes and behaviour; we also need understand how these practices are implemented, the signals they send out and how these signals are perceived by individuals in particular contexts. This signalling theory approach, of which we have written about in a new book chapter, was demonstrated in another paper entitled ‘ Why are job seekers attracted to socially responsible companies? Testing underlying mechanisms’ by David Jones and colleagues from the University of Vermont. One of the insights generated by this paper is that it is not CSR in itself that attracts potential employees, but the inferences that such people make from the signalling cues of such policies. In this paper, environmental oriented CSR policies did not have as big an impact on the attractiveness of an organizational to potential employees as those policies focusing on being community-oriented i.e. signals from the corporate citizenship elements of the CSR policy were picked up by potential applicants as ‘they treat the local community well, so they must treat employees well’ and 'if they treat there employees well, I will apply to this organization'.

The third and fourth papers, however, provided even better insights into how we can conceive strategic human resource management. A presentation by Lisa Hisae Nishii outlined a process theory of SHRM. The main contribution of process theory lies in explaining how the success of HRM is very much down to the implementation of policies, especially in meeting the valued expectations of employees, i.e. meeting psychological contract expectations. We provided a similar explanation in 2001 in a paper entitled ‘Transforming multinational enterprises: towards a process model of strategic human resource management change’ in the International Journal of Human Resource Management, but it will take someone of the stature of Pat Wright to get this idea into practice. The final and probably best paper was presented by Robert Kaše from Ljubljana. His was an attempt to map out the relationship between HRM and organizational outcomes using a social network perspective. Robert’s ideas would be the most difficult to put into practice because they highlighted the complex and multiple relationships inside and outside of organizations which have to be understood before we can predict with any certainty the impact of HRM policies. However, to get an accurate picture of HRM in organizations, such complex understandings are needed. One of the few examples I have seen of this kind of social network mapping is IBM’s attempt to capture the informal communications patterns which only become evident through tracking online social network communications. Such an activity is only made possible because the company has access to the IP addresses of all users of the company’s social networking software and can trace their communications. The patterns that emerged showed the importance of ‘mavens’ and ‘connectors’ who were critical to knowledge creation and sharing in the organization, so allowing IBM to create organizational structures which built on the bottom-up informal organization structures rather than on the top down formal structures.

If anyone is interested in these papers, which are unlikely to be published for a year or two, the authors may be willing to share their work with you if you email them. Most can be found using a Google search.

However, no matter how many times I attend the AOM conference – I’ve been going for a dozen or so years – I’m always amazed by the differences between business and management and HR on this side of the pond from what goes on in the USA. One example that rammed this point home to me this year was the statement by one of the leaders of the new strategic human capital interest group that I began this post with. He proposed a ‘revolutionary’ idea that US scholars and practitioners took the shareholder value perspective as given, arguing that this assumption needed to be questioned for the field to move on. Quelle surprise! I felt obliged to point out to the largely US audience that shareholder value was not a given outside of the USA, especially in some parts of Europe and Asia, and that we had recently written a 'not so revolutionary' paper on four configurations relating different corporate governance assumptions (shareholder value, stewardship theory, stakeholder theory and context-bound theory) to different sets of ethical and strategic assumptions, and through these to particular strategic HR policies. I also felt obliged that this notion was not even revolutionary among scholars in the USA. In a manner reminiscent of the love affair with Japanese management in the 1980s and 1990s, Peter Cappelli from the Wharton School and his Indian colleagues have just produced a piece of research in the Academy of Management Perspectives extolling the virtues of an Indian approach to management and what US firms can learn from them. The single most important feature they found of corporate governance among Indian companies was the ‘determination to balance the interests of the firm’s diverse stakeholders’. Being a representative of shareholders came only fourth on a list of priorities for business leaders. First was acting as a guardian for the mission driven strategy, which embodied social as well as economic goals, second was as guardians of the firm’s culture, and third was as acting as guide or teacher for employees.

Making Academics More Relevant: Useful Research

2010-08-13T12:04:00.005+01:00

Perhaps the most important session I've attended at the AOM conference featured six of its 'biggest hitters', including past presidents and genuine world class researchers who have made a significant impact on practice and published in top tier journals. Their messages deserved a larger audience and I'm sure they will get it in the near future through their new book, 'Useful Research: Advancing Theory and Practice', edited by Susan Mohrman and Ed Lawler.

The title of the book invoiced its key message and also the impassioned pleas by the presenters for academics to focus on doing more useful research which has an impact on practice (as well as theory) and for the top tier journals to reflect use value to practice in their review processes and acceptance rates. On this last point, some revealing statistics were laid out. For example, in the Academy of Management Journal, probably the top of the top tier, only 16% of articles were based on qualitative case study research - the kind of research closest to practice and most likely to influence practitioners. Apparently, however, this rates as a significant improvement on the 6% that made it a few years ago!

All six presenters grounded their talks in the notion of academic knowledge chain or system, a development of the Mode 1 and Mode 2 distinction of a few years ago. Upstream activities included Pure Research in the traditional disciplines of business and management, e.g. economics, sociology, psychology, philosophy etc., which provide the theory for the Traditional Organizational and Management Research that appear in the so-called top tier journals. Downstream activities include the development of intermediate bridging knowledge, which is really a form of 'knowledge for sale' to practice - very much the province of consultants, professional bodies such as the CIPD, and the writers of textbooks - and Practice-oriented Knowledge Products including talks and keynotes to practitioners, teaching through executive education, blogging, writing in practitioner journals, newspapers, TV and radio, etc. The main message of the presenters was that business schools should require at least some of their (senior) academics to operate in these critical downstream activities as well as the upstream ones. By engaging in 'engaged research' with practitioners - not just on them - academics benefit from grounding their upstream work in relevant problems and can make a significant impact on policy and practice. By doing so they lay claim to be genuine intellectuals in the traditional sense of that term.

All presenters were also highly critical of the current systems in elite university business schools whic rewards only publication in a limited range of highly self-referential top tier journals. As Andy Van de Ven, the doyen of engaged research has demonstrated, these journals have almost zero impact on practice and often little impact on science (some 60% of articles published in top tier management journals are never cited by other academics!).

Yet despite their arguments and positions of influence - not to mention the constant soul searching by the Academy over the last twenty years to make itself more relevant - we seem to be no further forward. The research assessment exercise in this country (the REF) with its near exclusive focus on publishing in top tier journals and the requirements for tenure in the USA have led to a 'trained incapacity' among the academic community which has made the divide even greater over the last twenty years. This divide has resulted in practitioners regarding most of us as 'skilled incompetents' at best and only good for teaching MBA courses and undergraduates (the main finding of some research I conducted with a colleague a few years ago on the views of the Scottish business community of the Scottish business schools).

Will books such as this one and the constant exhortation of senior academics in business schools that featured in this session change the system? I doubt it: what gets measured gets managed, and the new research evaluation framework for the British universities shows no real desire to measure impact, despite its ambitions to be more impactful. Maybe the new (much reduced) funding regime will though?

Just How Important is National Culture in Explaining the Effectiveness and Transfer of HR Practices in Multinationals?

2010-08-08T16:47:00.006+01:00

The second of these two quick posts reflects on some excellent work in the Handbook of Research on Comparative Human Research Management edited by Chris Brewster and Wolfgang Mayerhofer and to be published by Edward Elgar in April 2011. Those HR readers who are involved in managing in multinationals should read this book if you are concerned about the global-local problems. and developing employer brands.

The chapter by Barry Gerhart looks like being a standout in this respect. We've been trained as scholars and practitioners to emphasise national cultural differences as a constraint on transferring practices across cultures, in part because of the influence of work by Hosftede, Trompenaars and others on dimensions of national culture. These ideas have been at the core of teaching on international management courses, as most MBA students would know. Barry has spent a number of years re-examining the evidence produced by Hofstede in particular and reflecting on the messages this work has sent out. He does not deny that national cultural differences exist, but argues (1) that you cannot equate culture with nation states and (2) that it is not national dimensions of culture that are the major constraints in transferring practices but organizational cultures, or industry cultures. According to Gerhart, Hofstede used poor standards of proof and over-interpreted the importance of national cultural variables to the point that they seem to play less and less importance in constraining the ability of corporate HR departments to develop corporate identities and employer brands. Instead he proposed that those firms which buck the shibboleths associated with transferring invidualist HR practices such as performance related pay, performance appraisal, etc, will actually gain a competitive advantage over those firms which follow the received wisdom in this field.

Healthcare HR at the AOM

2010-08-08T16:18:00.003+01:00

One of two quick posts on excellent workshops at the AOM, both of which have important lessons for readers of this blog.

The first is about the influence of context and the disconnections between managers and employees over the effectiveness of HR practices. Jaap Paauwe introduced a session that featured Louise Fitzgerald from Manchester Business School, Corine Boon from Amsterdam University and David Guest from Kings College. Louise's work raised the importance of receptive contexts for change in that most complex of industries. Her research over the past number of years has shown that transferring 'best practice' from the commercial sector to healthcare and even within the the healthcare sector itself is fraught with problems, e.g. lean service delivery and HR best practices. Context matters a great deal, and if ever we needed lessons on this two of the most important dimensions of receptive contexts were (1) the relationships between managers and clinicians and the relationships among clinicians themselves, and (2) the extent of distributed leadership and willingness of clinicians to engage in leadership. However, she also pointed out the impact of senior leadership actions on shaping such contexts, which is a lesson that most recent research has shown. You need both transformational and distributed leadership to make things work.

The second point on the impact of HR practices on change was made by Corine Boon and re-inforced by David Guest's research in healthcare. It is not the fact that HR practices exist but the signals they send and how they are perceived by employees that is important in predicting performance. The correlation between managers reporting that they had such practices in place and the views of employees on their effectiveness was very low (0.25). David Guest argued that there was a general lack of a strategic perspective on HR among his healthcare organizational sample, and a 'huge gap between what was intended and what actually happened' in HR. He further proposed that the adoption of so called best HR practice was linked to low performance, a finding that is not without parallel in the private sector. If everyone is doing the same thing, where is the advantage in that?

So beware of poorly researched case studies reporting only managers' views on the existence of best practices and beware of the airport books promulgating these views. You have to understand the context in which these practices are adopted, how these practices are implemented, they signals they send and how effective they are perceived to be by staff. Simple but powerful lessons.

Engaging Encounters at the AOM on Talent Management and Engagement

2010-08-08T14:11:00.001+01:00

I'm posting from the annual conference of the Academy of Management in Montreal, where I took part in a workshop organized by a close colleagues of mine, Kerry Grigg from Australia, who has recently crossed the academic-practitioner divide. Kerry's intention in this workshop was facilitate a discussion on the problems that many academics have in engaging with practitioners by bringing together four practically-oriented academics and forty plus practitioners, practitioner/academics and academics new to the profession. My thanks go to her for the excellent facilitation and thought that went into this engaging encounter, which provoked some excellent interaction with the audience and allowed me to work (again) with Paul Sparrow from Lancaster and Elaine Farndale from Penn State and Tilberg, and to work with for the first time with John Boudreau from the University of Southern California, whose books have also featured on this blog.

Although this divide has been explored a number of times in the past, we don't seem to be much closer to a resolution. The increasingly dominant publish or perish culture that dominates the lives of academics working in business schools in the USA and UK has had the paradoxical effect of creating disincentives for academics to get too close to practice. For example, it is difficult to get published in top journals using (a) the research methods most valued by practitioners, i.e., single case studies, qualitative research, action research etc., on (b) the topics of the day of most interest to practitioners, talent management and engagement being such two examples.   Practitioners, on their part are usually looking for results that are 'roughly right but fast' and wish to use these results to secure some kind of competitive advantage, either for their organizations or in career terms. At minimum they do not want to be disadvantaged as a result of their links with academics, which can be the case when results are unearthed that show these practitioners, or more likely their senior managers, to be part of the problem rather than the solution.

What came through strongly in terms of advice was the need for younger academics to do a major risk assessment before tying their careers to research that can go dangerously wrong, so preventing them from publishing.   They need to recognise that they are entering into an exchange relationship, in which both parties have to gain for the relationship to flourish. This means that the 'terms of trade' have to be made explicit at the beginning of the relationship, and the lines in the sand clearly delineated.  What happens if the results of the research show that organization or key individuals in a bad light - which is often the case in engagement research? Typically this exchange is best approached in a gradual manner, perhaps through pilot studies that allow both parties to learn about each other and about the benefits of working together.

What has also to be made clear is the distinction between a consulting and a research relationship. At their best, academics can produce consulting advice to organizations on par or better than anything produced by the major consultants  - for example, providing insights into the nature and factors influencing employee engagement, or the alignment between HR and strategic advantage. Consulting (and executive educations) can also lead to follow up projects with major academic spin-offs. Consulting, however, is based on a different kind of relationship, which places academics in a role of service providers and that needs to be recognised by unwary scholarly entrepreneurs. The advice from the panel for less experienced academics was to ensure they and the service commissioners understood the distinction and for both parties to be ready to walk away if the terms of engagement didn't feel or look right.

One of the Book of (Last) Year: Management by the Markets

2010-07-20T10:00:00.001+01:00

I'm doing some work with colleagues on HR and governance and writing another paper on HR and the global financial crisis. Both projects have been influenced by my book of the year (which came out last year - takes me a while to get up to speed) and some academic papers that have shaped its formation. The book is by Gerald Davis and is entitled 'Managed by the Markets: How Finance Re-shaped America' published by Oxford University Press.

As Jeff Pfeffer described it and I agree, this book is an intellectual tour de force account of the American economy by a sociologist who is as comfortable with financial economics as he is with history. To quote, his core argument is that 'financial markets have shaped the transition from an industrial to post-industrial society. For most of the twentieth century, social organization in the United States was shaped by the gravitational pull of the large corporation. It is now oriented around financial markets to a degree that was unfathomable until it was revealed by a global economic crisis' (p. 1). Given the UK's dependence on the financial services sector, the argument applies with almost equal force to this country, though with a few differences.

Davis provides compelling evidence of rise of shareholder value as a mantra for corporate governance and the decline of the traditional corporation. This was associated with increased stock ownership in the early 1980s, mainly resulting from George W Bush's plan to privatise Social Security so ending defined benefit pensions. What emerged was what Davis describes as a portfolio society in which 'free agent' individual investors began to treat themselves, their homes and their colleagues as human and social capital with a view to securing financial returns on their investments. This was evidenced by the huge take up of 401 (k) pension plans and the purchase of investment properties (not just second homes) that individuals felt free to walk away from if their speculations turned sour. It also resulted in the growth of the bond market and the growth of the shadow banking sector, which forced changes in behaviour among the traditional banks, most notably the growth of investment banking. The rest as they say is history.

Davis concludes with some speculations on a 'society of investors', in which everything and everyone is commoditised, a continued decline in the power of corporations and a rise in importance of the financial services industry - broadly defined. These developments will have important implications for employees, with a continued decline in the potential for them to form long term 'resourceful human' attachments to corporate 'feudalists'. Instead they are likely to treat themselves (and be treated) as 'human resources' or 'human capital', which will lead to a further erosion of employee engagement levels, commitment to and identification with individual employers. It will also lead to less mobility, more inequality, educational insecurity (already happening in this country) and the end of the corporate safety net (again already happening). Is this what is driving David Cameron and Vince Cable to reduce the reliance on increasingly dangerous financial services?

There's Something Interesting Going On at the Academy of Management for Practitioners

2010-07-11T10:26:00.001+01:00

It's nearly time for the annual bash at the Academy of Management. For those readers not familiar with this annual event, it is probably the biggest and most important event on the academic management calendar. However, very few practitioners attend, which is a great shame because if you attend the rights sessions it really does deliver some excellent, well researched ideas of great value that you are unlikely to get from going to much more expensive practitioner events. As an example from the last two years, there were ground-breaking sessions on employee engagement and management consulting, which went far beyond the usual fare at SHRM/CIPD events.

One of the reasons guess that practitioners don't go is because of the divide between academics and industry. Many of the sessions at the AOM display this in spades, especially those following the traditional hypothesis testing approach of old and safe ideas (nothing new here), which get wrapped up in statistical proofs and arguments that few people understand. However, when you get good academic work aimed at theory generation or providing solid evidence on management fads, there is nothing so practical (as good theory!).

With this in mind, two practitioners with an academic backrgound are putting on a symposium with some practically minded HR academics (including this one) to help bridge this gap. If you can't attend, please do follow the blog for the event. You can participate from afar and help us in our quest to become more relevant while remaining rigorous.

Senior Leaders, Organizational Performance and Sir Fred

2010-03-24T06:07:00.002Z

When I'm doing presentatations on leadership, I often like to throw in the quotes from Jeff Pfeffer and Robert Sutton's well known book, 'Hard Facts, Dangerous Half Truths and Total Nonsense', which summarises the academic evidence on the (lack of) impact of senior leaders on organizational performance.

'Scholars who conduct and evaluate the best peer-reviewed studies argue over how much leadership matters and when it matters most. But when they set aside their petty differences, most agree that the effects of leadership on performance are modest under most conditions, strong under a few conditions, and absent in others.

'Studies from leaders from large samples of CEOs…, university presidents to managers of colleges and professional sports teams show that organizational performance is determined largely by factors that no individual - including a leader - can control’. Pfeffer & Sutton, 2006 (p. 192).

However, they do make the point that senior leaders that senior leaders can have an enormous negative effect, especially on reputations!

In the august Academy of Management Journal this month, there is an excellent article which explains why Sir Fred Goodwin may have be one of the few leaders to have had a strong effect, positively and negatively on RBS - he went from hero to zero in a few years, like many of his counterparts in the banking crisis. For those interested, the reference is Li, J. & Tang, Y. (2010) CEO hubris and firm risk taking in China: the moderating role of managerial discretion, Academy of Management Journal, 53: 45-68.

Popular views of the impact of leadership are that CEOs have a big effect on firm performance, partly explained by our need to attribute relatively simple causes to complex issues. The underlying theory and data that Pffeffer and Sutton are referring to, however, comes from two different stables of research - popular ecology and neoinstitutionalist theories - both of which argue that CEO and senior leaders can have little effect on firm performance, except under certain conditions, because of overwhelming external forces such as market pressures, etc. The two Chinese authors point to recent attempts to reconcile these views through something called 'Upper Echelon' theory, which highlightlights the role of managerial discretion. In bringing this idea together with the notion of managerial hubris - the exagerated belief that some managers have about the their own judgements against objective standards - they help us understand the dark side of management. For example, they point to research which shows that CEO hubris is associated with paying over the odds for acquisitions, and that cross-border acquisitions are often driven by managerial hubris. Which brings us to Sir Fred Goodwin's impact on RBS's failure.

Li and Tang demonstrate in a Chinese context that CEO hubris is postively related to firm risk-taking, which is facilitated by the market context to support risk, the complexity of the market, room for opportunities to take risk and the degree of market uncertainty. When the context is munificent, when there are opportunities and when information is ambigious, overconfident CEOs can, and do, feel compelled to take greater risks. At the organizational level, there are also key constraints on CEOs, including the age of the firm, its size, its resources and the governance structures of the board. If a CEO has greater control over the board and has resources, s/he is more likely to act on the basis of hubris in making risky decisions. What is evident from the RBS case is that most of these factors were evident, so providing a better good explanation than some of the woolier theories of semi-detached, narcisisstic leadership and its negative effects. What do readers think?

Employee Voice and Engagement

2010-03-06T07:29:00.004Z

A very good colleague of mine, Paul Gollan, from Macquarie University in Sydney has been writing and researching on employee voice for a number of years, assessing whether employee voice has a positive impact on participation and through it, key outcomes for organizations and employees. The usual distinction made in this important stream of literature is 'between direct communication, upward problem-solving, or representative participation. The first two of these are essentially direct and individually focused, often operating through face-to-face interactions between supervisors/first line managers and their staff. Some take the form of informal oral or verbal participation, while others are more formalized in the form of written information or suggestions. The third form centres on the role that employee or trade union representatives play in discussions between managers and the workforce, via mechanisms such as joint consultation, worker directors or collective bargaining in the form of problem solving communications' (Budd, Gollan & Wilkinson, 2010).
Paul and his colleagues have just produced a special issue on this topic for the journal Human Relations, which has some excellent articles in it. He is also running a seminar series this month at the LSE which looks excellent (and, he tells me, is free!), where he will also launch a new book on this important strand of work.
Among the best (for me) papers in the Human Relations collection is one by Kim, McDuffie and Pil, who write about the impact of different kinds of voice and engagement in the automative industry, and their impact on productivity (see the last post). The results of this study are complex but generally support the importance of employee voice as an engagement strategy, so resonating with the findings in the earlier post on Steve Wood's research. Here's a summary of the Kim et al paper by the editors - no need for me to do it.
'Turning from the determinants of individual participation in voice mechanisms to the effects of employee voice and participation, Jaewon Kim, John Paul MacDuffie and Frits Pil (this issue) analyse the effects of team voice and worker representative voice, as well as their interaction, on labour productivity in ‘Employee voice and organizational performance:

'Of particular note, this research centres on teams’ influence on key work-related issues and worker representatives’ influence on collective voice issues rather than simply assessing the presence of teams or unions. Drawing data from automotive assembly plants from around the globe, the findings reveal that when examined solely, neither channel of voice has a significant effect on labour productivity. Rather, the influence of team voice and representative voice on worker efficiency depends on the interaction between these channels of voice. These findings challenge the conventional assumptions of advocates of both direct and indirect voice because neither type of voice on its own consistently predicts better labour productivity. Significantly, even when the two forms of voice are combined, these findings suggest their relationship with labour efficiency is complex because the positive effects of one type of voice are partly offset by them being partial substitutes. Consequently, the two forms of voice can interfere with, or neutralize, each other’s positive effects on productivity. The findings suggest that this occurs more frequently than the mutual reinforcement some might expect. However, consistent with recent European policy-making on employee participation and voice, the combination of both forms of voice does ultimately have a positive impact on performance and productivity. Overall, the findings therefore reinforce the importance of increasing various forms of employee voice for greater positive organizational outcomes'.

Solid Evidence that HRM and Engagement can Work

2010-03-06T06:21:00.005Z

As HR academics and practitioners we are consistently looking for good evidence that HRM actually works - that the adoption of high performance work practices pays off in terms of ley measures of performance, such as productivity, quality, customer service, etc. We need such evidence to build our respective cases, and there has been quite a bit of it around for the last twenty years beginning the Mark Huselid's large-scale statistical studies in the 1990s. Often, however, the academics have have failed to look at this issue over long periods of time, so demonstrating consistent and long terms effects of the use of high performance work practices and related engagement strategies, which, if done well, would represent something of a gold standard of proof that investment in HRM actually works.

This morning I and quite a few of my HRM academic colleagues were sent the results of a paper that goes some way to delivering such proof, though they are more modest and, like good academics, highlight their study's shortcomings. The work comes out of the Institute of Work Psychology stable at Sheffield University, run by Stephen Wood. Here's his summary of the paper and its contribution in the email he sent out.

'My colleague, Lilian de Menezes, and I examined the integrated use in British manufacturing of a set of lean management practices in which employee empowerment was a major component over 22 years. We found in all 22 years that those firms that used the integrated lean approach (my emphasis) has higher levels of productivity (measured by value-added). In addition, we found that the pioneers of the high lean approach continued to outperform even those that subsequently adopted it. These later adopters gained the performance advantages associated with the integrated approach, but their productivity growth was not sufficient to catch up with those which had adopted it earlier. This shows that the employee engagement, so central to lean production, achieves its aim of continuous improvement.

The practices included in the study are: empowerment, intensive training and development, team work, TQM, Just-in-time, integrated computer-based technology, and supply-chain partnering

The study was financed by the ESRC and will appear in: L. de Menezes, S. Wood and G. Gelade, ‘A longitudinal study of the latent class clusters of modern management practices and their
association with organizational performance in British manufacturing’, Journal of Operations Management'.

Lilian, Steve and Gerry acknowledge the limitations of their study, suggesting that gold standard proof would need to consider not only productivity data but also evidence on quality and lead times in manufacturing. Nevertheless, this study represents an important step forward and substantial argument for integrating engagement strategies - team working and empowerment - with lean techniques. Given the widespread adoption of the latter in healthcare in the UK, maybe its time to puut in place a similar study to test the impact of these large scale and somewhat controversial initiatives.

Back in the Frame and Following up on Engagement

2010-02-18T05:09:00.006Z

I’ve had a (partly enforced) break over the holiday period (and beyond), due to some many writing deadlines, being overseas and being laid low for a few weeks (first time for me), so I'm likely to be a little ring rusty in the blogging sense. Anyway I would like to follow on with the post from November regarding engagement. In that post I was critical of the Macleod report’s discussion on the subject because it lacked the necessary rigour to make engagement a useful practitioner tool that would stand real scrutiny. Susan Hetrick and I first raised this issue of engagement in our 2006 book on corporate reputations and HR, suggesting it was little more than consultancy re-packaging of old ideas designed to refresh their HR product portfolio. Since then, I’ve come around to the idea of engagement, in part because it is so big in practice. So I’ve been working on developing a model of how leadership and high performance HR work systems influence different components of engagement to produce critical business and public sector outcomes. This model will be published in a forthcoming chapter on employer branding (with Saskia Dyke from Switzerland) and another in an article on leadership branding (with Julie Hodges from Durham). Susan and I will also be using it as the basis for a forthcoming financial services presentation.
Co-incidentally, two prominent HR academic colleagues of mine, Elaine Farndale from Tilburg and Paul Sparrow from Lancaster have been working on engagement, both of whom have made major contributions to the literature on the topic and have influenced my thinking significantly.
I’ve mentioned Paul’s work before and his Centre for Performance-led HR at Lancaster University. Along with Shashi Balain, he produced a really insightful contribution to the notion of engagement in a white paper. As part of that contribution, Paul and his colleagues have also made a series of short videos summarising their work. These are really worth looking at.
However, to my mind Elaine’s work on engagement with colleagues from Tilberg, represents a major breakthrough in bringing some rigour and evidence to the topic and anyone seriously interested in engagement should contact Elaine to get a hold of this paper by Bejier, Farndale and Van Veldhoven . For me , the most important contribution has been to define two different foci of engagement – work engagement, which I’ve already written about on this blog, and organizational engagement, which is what most consultants typically refer to as employee engagement. It also makes a key distinction between state engagement (attitudes and emotions which people hold to work and their organization) and behavioural engagement (actions that employees report taking to display engagement with their work and the organization). For example, many professionals are engaged in their work but not the organization, often to the point of over-engagement or burnout. Conversely, managers can become over-engaged (or over-identified) with the organization, which can lead to a form of collective blindness, intolerance of others who are not ‘organization men’ and a failure to privilege professional and moral values in decision-making. This is a topic that Elaine, Japp Paauwe and I hope to be discussing at a forthcoming symposium on HR’s contribution to corporate governance at the Academy of Management in August – the ‘darkside of engagement’ – something most of us can recognise but which has rarely featured in the practitioner literature..
Currently, we’re working on expanding the range of engagement foci – what people at work engage with – to show how they are distinct but related. For example, in healthcare and financial services, it is clear that people are engaged or can become disengaged with the industry, which is very important in explaining recruitment and retention. It is also clear that people can be more or less engaged with each other in the performance of their work, which is related to team-working and distributed leadership, both critical drivers of effective performance.

Much Shorter Reflections on the CIPD Annual Conference and Engagement

2009-11-20T13:38:00.007Z

Picking up on the previous blog, a key theme of conference was employee engagement, which ran through a number of sessions I attended. Perhaps the most important was the presentation of the MacLeod Report by no less than David MacLeod himself and Nita Clarke. I've previously expressed a mild form of disappointment with this work during an earlier blog on Saturday 18th July, to which I want to return in the spirit of critical friendship. David McLeod encouraged this during his presentation, so I'll try to oblige.

To focus on the positive, firstly, these two advocates have turned into evangelists for their work and cause, and this can only be to the benefit of the British economy and for HR professionals seeking ways in which they can add strategic value. Secondly, they have also enlisted and marshalled an impressive set of fellow travellers and evidence to support their cause. Thirdly, they have produced a highly readable and informative report, which they outlined with vigour and dedication during their presentation.

However, they still have not yet nailed down the concept for my liking, nor shown how this consultancy-generated idea is an advance on what academics have been talking about for years. Indeed, listening to the presentation, a harsh reading might question - what's new! If you have any sense of history in the field, you could justifiably argue that the same message and mode of enquiry has re-surfaced at least five times in since the 1920s and 1930s, beginning with the reporting of some dubious human relations experiments by the arch-evangelist, gifted self-publicist and, some would claim, charlatan, Elton Mayo (I've written about this in the Managing People book) and most recently popularised by Peters and Waterman in the early 1980s when they began the culture-excellence movement with some sketchy research on so-called excellent companies. As many readers will know, half of these excellent companies experienced a significant fall from grace five years after they did their initial research. You can guess where I'm going with using only 'excellent' case study companies as the basis for providing long term predictions - not very clever, and a trap the McLeod report is in danger of falling into.

That said, just like In Search of Excellence, we should be careful of throwing out the baby with the bathwater, as some academics did and are likely to do with the MacLeod report. Instead, we should be building on its positives and its capturing of the zeitgeist. What David MacLeod needs to do, contrary to his dismissal of fifty-plus definitions as a way of avoiding the problem, is to begin to get some definitional clarity on the concept. For it is only by doing so that we will be able to measure engagement's impact and understand its drivers. Paul Sparrow's group at Lancaster are beginning to do just that; so are we in some forthcoming papers, where we have begun to disentangle the conflation of engagement into four related but distinct sets of ideas about what workers can engage with (and, just as important, measure them with valid and reliable scales with known drivers and outcomes) .

In the corporate reputations book I examined a number of consulting approaches to the concept and found them to be inconsistent in what people were supposed to be engaged with and just plain wrong in confusing correlations with prediction - are engaged workers likely to create high performance organisations, or are high performance organisations likely to create the conditions for engaged workers?. These are not just academic niceties but have important practical implications. Unfortunately, David MacLeod's presentation gave the impression of falling into into both traps.

To conclude, we are now at the stage that engagement is too important a concept for academics to dismiss as yet another consultancy-generated fad. It has a lot going for it and needs to be treated a little more rigourously; otherwise the MacLeod Report will loose a lot of its relevance - just like its predecessors!

Reflections on the CIPD Annual Conference and The Future of HR

2009-11-19T08:30:00.008Z

I've just spend an enjoyable and highly informative two days attending the CIPD annual conference in Manchester as one of their guests. The invitation to spend time with the senior team of the CIPD was, in part, a result of my involvement as a judge on the technology and HR awards. So, first of all, I've want to congratulate the team at Intercontinental Hotels for their leadership learning portal and two extremely able guys at Beds and Bars - both of whom read this blog - who have created something new and practical in the field of e-HR and Web 2.0 with very limited resources and good use of iPhones.

My involvement, along with some good academic colleagues, was also to provide academic input and feedback into the CIPD's future initiatives and suggest ways in which the academy and HR professionals can get the best from each other. Again, this was a very welcome and excellent initiative on behalf of the CIPD. So with this last point in mind, I suggest that one of our most important jobs is to act as 'critical friends', though there are additional roles for us in helping contribute to 'thought leadership' (I'm not keen on that term), as advocates of rigour as well as relevance in producing actionable knowledge about HR , and in helping ask the right questions for the CIPDs future research and knowledge agenda. On this last point, for the most part we're typically dealing with 'wicked' problems for which there is no real solution, programme or end point; instead we are only able to resolve inevitable tensions, especially at the strategic level (see earlier post on leadership and negative capabilities) by distributing ownership to those people who have either a better grip on the issues or who have to live with the consequences.

So with the critical friend role in mind, I would like to offer some comments on two very important initiatives launched by the CIPD and one that they actively support. The first was the launch of the HR Profession Roadmap, which is one of the most important exercises in competence mapping and building HR capability ever undertaken - at least as far as I'm aware - (download here). The launch breakfast meeting was poorly attended because of heavy rain in Manchester but deserves greater publicity (which I'm sure it will get) because of its potential impact on shaping thinking and practice in HR and building current and future capabilities of the profession. My advice is that any organisation seeking to build HR capacity, and there can't be many not seeking to do so, would be well advised to take advantage of the thinking, frameworks and evidence produced by this project team. I'm working with a number of organisations on capacity building in HR projects and I know I'll be using these standards to help build strategic leadership capacity among senior HR people. Which is where I want to begin my critical friendship!

In a piece of work we completed recently on developing a model of strategic leadership for HR directors in NHS Scotland, we cautioned senior HR directors on the limitations of 'atomistic lists of competences. To paraphrase Henry Mintzberg, even when joined up in a circle (or triangle or other geometric shape)', competence models do not provide testable models of relationships among the complex range of factors that produce effective strategic leadership in HR. This is an important cautionary note for practitioners because it is really only by devising causal models (or, dare I say it, theories) of effective leadership that you can truly evaluate the impact of competences, knowledge, attitudes, EQ/ IQ etc) on performance. These causal models should show how,why and what people bring to a job, the styles of leadership they choose, the attitudes and behaviours they demonstrate, etc., result in effective performance (itself a contestable issue). In addition, practitioners also need to understand the complex range of so-called moderating factors which influence this line of sight. By moderating factors I mean how market or stakeholder context, business models of how to create value, values and leadership aspirations, HR architectures, and the capacity of the HR team to create and leverage networks for innovation, combine to influence the process of strategic leadership in HR.

Sarah Miles, Organizational Effectiveness and Development Director, and her team at the CIPD have done an excellent job in bringing us so far with the new mapping exercise but were ready to admit they don't have all of the answers. If they are able to build on what they have achieved so far by devising better causal models and setting out the full range of contextual factors organisations need to take into account when implementing them, they will do the profession an even greater favour - a direction we're certainly travelling in.

The second major initiative, discussed by Jackie Orme and Lee Sears at the conference and on a recent CIPD podcast, was the results of the Next Generation HR Study. Again this initiative is extremely important because it aims to build a picture of future strategic leadership in HR based on research into what leading firms in the UK are thinking and doing. You can read about it in People Management in the November 19th edition or download reports/listen to discussions from the above links, but basically the project has highlighted three trajectories along which organisations are moving - creating greater organisational agility for sustainable performance, (re)building a culture of authenticity and trust, and demonstrating a balanced approach to risk management.

Again, I'm really pleased to see this work because it is important for the profession to understand its role in resolving the tensions created by shaping the innovation or 'agility' agenda while focusing on the legitimacy agenda. We've been researching and writing about these agendas and tensions for some time now, and these have been the subject of a number of posts, our book on corporate reputations and HR, a forthcoming one with Ron Burke and Cary Cooper on corporate reputations, some academic papers, and a new chapter on HR's role in contributing to better staff, innovation and financial governance. Our approach has been to discuss them in terms of the wealth creation role of corporate governance (innovation by doing different things and doing things differently) while managing the wealth protection role of governance (developing corporate reputations for being excellent and trustworthy employers, providing effective and ethical leadership and governance, and exercising corporate social responsibility).

In other words, both the CIPD and our agendas seem to converge on issues that strategic HR leaders need to address, which is both comforting for us and, if they ever needed it, a degree of validation for the CIPD Next Generation project. Furthermore, I suspect our agendas are likely to become even more important because HR has not only to find ways of adding strategic value but also contributing longer term reputational value to the nowadays somewhat tarnished business sector and its senior leadership teams (at least in the eyes of many). It also has to find ways of contributing to public value in an under-threat public sector, which is having to deal with decreases in public spending because parts of the financial sector have been unable to manage the tensions between the wealth creation and wealth protection roles of governance.

I'm going to leave the third sets of comments on the engagement agenda and the McLeod report to a separate post. This one is getting far too long!

Putting People Back into HR Strategy

2009-11-14T06:43:00.005Z

My apologies for the time I've had off from posting. I'vebeen very busy participating in some events which have provided me with excellent examples of how to 'put people back into strategy', the subject of some recent posts

I've recently written a paper with Paul Gollan and Kerry Grigg on HR strategy, suggesting that a strategy-as-action approach has much to teach us as practitioners and academics about strategic management in general and developing workable HR strategies in particular (see the strategy-in-action website). Over the last couple of weeks I've taken part in two health service-related events which have demonstrated the benefits of a strategy-in-action perspective, although participants didn't use this label as such.

The first was a large event run by the leadership team of Dumfries and Galloway Health Board, facilitated by an ex-postgraduate student of mine, Sharon Millar, and colleagues from the CIPD, Drs John McGurk and Jill Millar. This event was one of a series they have run aimed at developing workable strategies for building dynamic capabilities in the health board as it moves closer towards partnership working. What was impressive about this process was the volume, intensity and numbers of people involved in the leadership and strategy-making process. In other words, the emphasis at this event and the others which preceded it was very much on strategising and human resource development as much as strategic content.

The second was an event I participated in yesterday, run by the Allied Health Professions of Scotland to develop an integrated professional and educational strategy for a group of key workers in the NHS in Scotland. Drawing on a methodology to creating a consensus around the principles and content of such a strategy, it was fascinating to watch how they used inputs from internal and external speakers to develop a progressively more refined series of consensus statements. The process was driven by discussions during previous events where questions about what mattered to staff were posed by about 180 participants at all levels from all Allied Health Professions in all healthboards in Scotland. These questions were then turned over to 'experts' to write research-based papers on the issues raised by participants (of which I was one). During the actual consensus event at Murrayfield Conference Centre in Edinburgh, experts fed back their findings, which were fully discussed by the conference participants and their views were summarised in the form of a progressive series of consensus statements by a panel who acted as facilitators rather than directors of the process. Though the process may not be without its flaws, as a methodology of developing strategy for a group of rather disparate set of professional groupings - around which there was a strong need for consensus - it was a real lesson in how to put people back into strategy and in how to use the strategic journey to develop workable strategies that have much more chance of buy-in.

There are important lessons from these events not only for organisations in healthcare, which are dominated by the need to gain the consent of influential professions to survive, but also for the private sector. For example, I'm currently being asked to think about how a large multinational organisation gain insight into values that stakeholders can understand, agree on and draw on to shape their future direction and current actions. I think there are lessons from these two projects that help address this question.

Explaining Dissatisfaction with Senior Leaders

2009-10-10T06:32:00.005+01:00

I'm faced with a little problem on a major research project we are conducting, and that is how to understand why staff in a public sector environment find their senior leadership teams to be disconnected, more interested in politics and government targets and not particularly focused on clients. It's also the subject of a 'provocative' commentary I'm writing about on the need for a leadership 2.0 for Skills for Health in the UK.

As you can imagine, senior leadership teams see the problem quite differently from so called followers. They see themselves as caught up in having to resolve, often conflicting demands from a variety of stakeholders, including the increasing need to meet public value objectives, and having to make tough decisions about resource allocation, which inevitably clash with the single-minded aims of powerful professional groups such as physicians and other clinical grades.

I’ve tackled this issue before in an earlier blog on a report Keith Grint and I did on the 'wicked problems' of leadership in the public sector for the Scottish Government. In that report, the issue of distributed leadership (DL) as an important new(ish) theory was raised as a possible panacea, and such is the head of steam behind it in organizations such as the NHS and other public sector bodies in the UK and elsewhere, it needs to be treated seriously, whatever it might mean. Peter Gronn, an ex-colleague at Glasgow University, has written extensively about this issue, and he often provides the starting point for a stimulating conversation. And he certainly did that at an excellent symposium at the British Academy of Management in September on this issue, which attempted to get under the skin of DL through four insightful presentations that have caused me to re-visit my recent thinking on the subject.

Jackie Ford from Bradford University pointed out that DL has come to the rescue of our unrealistic implicit theories of hero managers in the public sector, point out from her research what most public sector senior managers often feel, i.e. frustration and inordinate levels of stress because they have so little autonomy as a result of agendas being set for the over which they have no control. Leaders, as it were, become arenas for competing narratives and expectations, which they often seek to deflect by laying off responsibility to the centre, or, increasingly look to the language and promises of distributed leadership to others throughout the organization to help them resolve.

This was pretty much the message of Jon Gosling and Richard Bolden from Exeter following their recent research into leadership in Higher education. They found that distributed leadership existed in the sense that certain responsibilities and decision-making authority were delegated but only within bounds, and that power remained at the top, often linked to control over key resources. They argued that there were four dominant discourses of leadership and DL – as an alternative to management and administration (re-labelling), as a bridge between previous collegial styles and new theories of executive behaviour, as a reality (or appearance of reality) towards encouraging responsible followership, and as a rhetorical device to draw attention to some problems and solutions but mask others.

Annie Pye, also from Exeter saw ownership as an important missing link, reflecting Barbara Kellerman’s call for responsible followership as a way of thinking about distributed leadership, often operationalised in simple ways such as going the extra mile to help others or offer suggestions on how to improve things. However, in the private sector at least, this was less likely to be the case (unless you worked for a John Lewis organization that shared responsibility, ownership and rewards among all staff) because of the increasing gap between upper and lower eschalons.

The session was opened by a good colleague of mine, Paul Iles, from Leeds Metrapolitan University. His contribution was to set out some useful two-by-two matrices for comparing and contrasting the various features of leadership. Two of the most useful were to see leadership in terms of being a planned or emergent phenomenon and essentially an individual or collective phenmenon, with celebrity leadership and tradition leader development typically planned and individualistic while DL was typically emergent and collective. One of the best examples of this perspective of DL is work by David Buchanan and colleagues on the UK healthcare system, demonstrating that, under certain circumstances, 'no-one in charge' can lead to highly positive outcomes critical areas such as cancer care. However, another matrix has provided me with a perspective to criticise much of this work - that is to see leadership and the assumptions underpinning it either in rational-objectivist- unitary terms or in political/ pluralist terms. The first assumes that organizations among other things are essentially characterised by common cause and common spirit, amenable to rational solutions such as leadership and sophisticated HR. The second is more traditional in industrial relations teaching, seeing organizations made up of legitimate but competing interests, which frequently come into conflict, and are usually only resolved through compromise and negotiation to allow everyone gets something of their aims.

I've recently used this last perspective to provoke an arguably more realisitic discussion on the potential of leadership in healthcare to incorporate doctors into management, a popular solution in the UK NHS but one fraught with difficulty. This is because many hold a pluralist perspective and seek to remain a 'loyal' but necessary opposition to ensure that patient care is not submerged in the welter of politically-inspired changes and financially-driven targets. More of this in a later post. The main point, however, is that much of leadership's popularity is rooted in optimistic but innappropriate assumptions about organizations. Criticisms of this arguably misplaced faith in unitarism used to be the recieved wisdom thirty years ago in a more pluralist Britain before Thatcher, when opposition to power was sees in a more positive light, and when social engineering through culture management, HR and the 'cult of the customer' to discipline employees was less prevalent. Are we about to return to these pluralist assumptions with calls for a new leadership 2.0? I don't think so, but the zeitgeist is changing. The 'romance with leaders' is definitely on the wain - even in football, the subject of a forthcoming post.

Evaluating the Impact of HR by Evaluating the Signals they Send

2009-09-17T07:08:00.007+01:00

There has been an enormous amount of academic and consulting research on the impact of so-called high performance work systems (HPWS) on organizational performance, which has generated great interest in complementary ‘bundles’ of usually high commitment HR practices, including comprehensive recruitment and selection procedures, incentive compensation, performance management, extensive employee involvement, training and career development . Much of this work has linked the mere existence of such practices, particularly when integrated with an organizations business strategy of business model, to positive organizational outcomes. This work has been used by by academics and maybe should be used by practitioners to evidence the credibility and impact of the HR function through the substantial benefits resulting from high commitment HR.

However, as anyone who has been the recipient of the mismatch between the ‘people are our most important asset’ and the actual implementation of such practices will tell you, it is not the existence of such practices that are important but the consistency and vigour with which they are implemented, whether or not employees actually expect and value what they deliver and whether their experience of these bundles of practices is a coherent, beneficial and fair one. This was the subject of a symposium we took part in at the British Academy of Management’s HR in Healthcare track, the papers in which were all characterised by a simple but powerful idea, initially put forward by Greg Bamber from Monash. He drew on thinking from a chapter in a forthcoming handbook from Sage on human resource management which suggested that what is important about high performance work systems is not their existence but the signals they send to employees and whether these signals are interpreted by staff as strong - intense and consistent - or weak. This is based on so-called signalling theory: strategies, policies and practices are really signals and it is employee perceptions and behaviours resulting from these signals that really predicts organizational outcomes.

Our paper on the employer branding in the Scottish healthcare system could certainly be interpreted in this light. Like much of the other research in healthcare, re-interpreted into the language of signalling theory, we found that staff in healthcare often exhibit low levels of identification and/or engagement with their employers, despite the existence of well intentioned HPWS. This is due, in part at least, to the weak and mixed messages they receive from senior leadership teams, which sometimes see themselves as the 'meat in the sandwich' between at least two forces. The first are government initiatives and targets (often developed to satisfy the needs for politicians and the media to tell and sell simple stories to the general public and the media that shapes their interests). The second is the professional power of certain clinical groups to block their reforms. These mixed and weak messages were core themes of Greg’s paper on the key role of ward managers in fostering high performance and, indeed, as pointed out by Stephen Procter, the chair of the symposium, one of the themes of our own paper.

Perhaps the most demonstration of the impact of signals and HPWS was made by Jody Hoffer Gittell from the US, who has written extensively in the field of relational coordination for academics and practitioners (see her website for a full explanation of her ideas). Jody's paper was, for me at least, one of the most impressive of the conference because of its rigour and relevance to practitioners. She and her colleagues put together a very well constructed study that demonstrated a strong and positive relationship between staff reports of their experiences of HPWS in healthcare and positive organizational outcomes, which included, among other measures, variations in patient experiences and actual results of a particular kind of surgical operation in different hospitals. The line of sight was not a direct one but mediated by staff perceptions and experience of other team members' levels of collaboration and relational coordination. Her findings suggested that a small increase in the experience and reporting of relational coordination among healthcare teams led to proportionately very large increase in patient outcomes. The importance of relational coordination, one key measure of social capital, however, was less apparent among physicians, who tended to be less impressed by the idea or were reported to be less involved by others in relational coordination. This could be put down to structural problems, ie. they operated across a number of hospitals and were less integrated into hospital-based teams. Or perhaps maybe because of their lack of professional training in such issues? One of the implications of the study is that by having physicians more integrated into the care teams in hospitals, so sending signals about the importance of relational coordination, such a change would pay off markedly in key patient outcomes.

These ideas have important practical consequences for HR and assessing the impact of HR. Not only should we concerned with the design of HR strategies and architectures but also the signals they send, how they are interpreted and what intervening factors influence the messages received. Our argument is that there are two key ones, which don’t require a great deal of rocket science to understand. The first lies in the skill, will and, importantly, the opportunity (removing blockages and introducing enabling structures) of line managers to implement HPWS. The second is for senior leaders to signal and follow through on the messages of HPWS and, increasingly, on higher values in more ethical, innovative and caring forms of leadership 2.0 (see earlier post on management 2.0).

Employee Impact on Corporate Reputations and Web 2.0

2009-09-11T05:05:00.005+01:00

I spent a very pleasant day on Wednesday with the HR team of Standard Life, one of Europe's major insurance and asset management companies as part of their 'Big Conversation' on the future of HR in the organization. It's great to see companies like this engaging in a serious way with outsiders who can bring something to their conversation to help them reflect on what they do and, hopefully, do things differently. The aim of the day was to help them enhance their own reputations and that of the company, and this was certainly what my co-presenter, Bill McEwen from the Gallup Organization, did.

One of the benefits that good consultants can bring to the table is often large data sets, which Bill certainly had at his fingertips. His theme was the relationship between employee brand advocacy and a range of customer satisfaction/ enagagement scores, which he demonstrated through close correlations. It was also interesting to see his data on the low levels of brand advocacy among government and financial services employees. However, perhaps the most powerful messages he put across were contained in two little stories. One was of the multiplicative effects of employee advocacy and engagement, e.g. great hotel buildings with disengaged employees equal zero customer satisfaction, according to Ritz Carlton's CEO. The other was the story of Dave Carroll, which appeared in Forbes magazine. To quote Bill:

'Dave Carroll was sitting in a window seat on a United plane at O'Hare airport in Chicago when he looked out and saw baggage handlers hurling guitar cases (Dave and his colleagues' guitars) through the air. He pointed it out to flight attendants; they responded with indifference. When he arrived in Nebraska, he found that his instrument had been smashed. After months of complaining to the airline and getting no response, he wrote and performed a song, "United Breaks Guitars," and posted it on YouTube. It was viewed more than 3 million times in its first 10 days'.

Bill's point was that it was the United flight attendant indifference and the indifference of the follow up staff that has caused probably United a great deal in terms of loss of reputation - a great deal more than the investment in effort to promote better customer service among flight attendants and/ or the $3-400 it would have cost United to replace the broken guitars and prevented the posting.

Talent Management, Football Teams and Metaphors

2009-08-24T10:52:00.004+01:00

Following up on the last blog on investment in human capital and social capital, and the example of football teams, I was taken with a little article in this week's edition of the Economist (August 22nd, 2009, p. 32) on the economics of Real Madrid's strategy for re-gaining their competitive position in world football by recruiting a new clutch of gallaticos - a metaphor for what many companies have done in the past and, apparently, one that finds support in the Harvard Business School study by Jose Luis Nueno of the soccer industry in emerging markets such as the USA, Japan and China.

For those people less engaged by football (soccer) than I am, Real Madrid have spent many millions this summer in re-applying a strategy first tried nearly ten years ago by their then president, Florentino Perez. He has has just been re-employed to help the club regain their former pre-eminent status in Spanish and world soccer from their arch-rivals Barcelona, who, interestingly, have followed much more of a 'grow your own', social capital approach to world domination of soccer.

The Real Madrid strategy is not just based on the ability of the new gallaticos to turn their considerable individual talents into results but to generate merchandising revenue in the way David Beckham did during the first wave of this strategy. It is also based on the ability of Perez to convince banks in Spain to supply sufficient credit to a club operating in one of the worst hit countries in Europe in terms of GDP growth and decline. Finally, much lower levels of income tax on players coming to Spain than in other European countries helps explain that the real costs to Real Madrid in paying wages is lower.

The point of the article is to contrast 'cheque book power' with Barcelona's largely 'home grown' strategy as a route to success. Metaphors, however, such as make or buy strategies are partial - they hide as much as they reveal. What the article fails to mention in Barcelona's strategy of building social capital not only through its attempts to create 'bonds' among the team by its development strategy but by its building of 'bridges' in the community it serves and the wider world through its ethical approach to promotion. So, like all, rather lazy, single factor theories of strategic success, of which sports team metaphors are among the most popular, are likely to be found wanting. Perhaps the secret lies in complementarity among different forms of capital investment. It certainly lies in developing better mid-range theories of success in industries like soccer; otherwise we will end up repeating this make or buy argument in football, which has a long history going back a century or so but has generated little light in what makes for sustainable success.

Which Counts More for Performance: Human or Social Capital?

2009-08-18T06:06:00.006+01:00

We've been doing quite a bit of work recently (one of my PhD students, Stacey Bushfield and I) on the drivers of innovation in public sector organizations. These drivers are often described in tripartite terms - human capital (broadly individual competences), social capital (bridging and bonding capital, and trust) and organizational capital (the non-human capital left in the organization when people walk out of the door at night). And this is the basis of the model we are testing in the NHS in Scotland, which, like many industries, invests enormous sums of money on talent management.

So, it is with interest I read about the recent investments in football stars in the English Premier League and the attempts by one of Barclays subsidiaries to pay almost obscene amounts of money to recruit staff from US competitors. It seems that some organizations and industries' strategic recipes are based heavily on human capital and hiring in stars. And, where they go, others seem to follow.

However, this strategy for banks and football teams and the unreflective imitation by others seems to fly in the face of good research as Jeff Pfeffer has recently reminded us in citing a series of articles by Boris Groysberg from Harvard on the problems of hiring stars. He did so in his book with Robert Sutton on Dangerous Nonsense, but here's a recent summary of his arguments if you haven't read it. Worth reading and reflecting on because they demonstrate the importance of social capital and its interaction with human capital, which most most of us know about but some forget in committing the fundamental attributional error - attributing too much cause to individuals and not enough to the context. So why don't firms and football teams get it?

I recently watched my local football team in the Scottish Premier League draw with and beat two English Premier league clubs (actually one was recently demoted, which tells you something). My club cost less than £500,000 to assemble in total, which was less than the cost of the cheapest player on the demoted side and about a hundreth of the cost of assembling both Premier League sides. Cheap shot or a cheap lesson here for talent management?

Living the Brand at Abercrombie & Fitch

2009-08-13T22:40:00.007+01:00

On what has turned out to be a very long journey back from Chicago to Scotland, I found myself killing time in a New Jersey mall after an unplanned ovenight stop at Newark Airport. I chanced to go into Abercrombie and Fitch's store, by far the most popular in the whole mall as far as I could tell. For those less familiar with fashion retailing, A&F is a top casual luxury American brand popular with young college students, so I'm not really sure what I was doing in there. Just a few hours later, I was amused and interested to read in the airport lounge at Newark a BBC news a story about A&F in London, which has just been found wanting in its application of its employer brand. A young, highly qualified woman, Riam Dean, had been 'forced to work in the stockroom after wearing a cardigan to cover her prosthetic arm'. The industrial tribunal which heard her case 'is satisfied the reason for the claimant's dismissal was her breach of the 'look policy' in wearing a cardigan. Throughout the hearing A & F's London flagship store management claimed they had an inclusive diverity policy.

A couple of points emerge from this case. The first is just how important decisions taken by a local management team can impact on a brand. This item was number three in the national UK news, and may result, like the charges levelled against the Gap and Nike a number of years ago, in costing this company very dearly in terms of reputational capital. The second, slightly more subtle point, is that it illustrates the problems local managers have in interpreting the different strategic logics discussed in previous posts. I can well imagine an agonised discussion/debate taking place either in the head of the manager who took the decision to put the girl in the stockroom, or maybe between a group of managers/ supervisors in the store over the logic of distinctiveness (most fashion brands feel the need to have their staff 'live the brand' in terms of their appearance) and the logic of legitimacy.

At 3.00 am this morning my colleagues who were also stuck in the airport with me (Continental Airlines certainly did not live up to its brand claim for satisfied customers) were debating the merits of sustainable management and corporate social responsibility. Our sleepy conclusions were that new standards of legitimacy will probably win in the end in spite of the edicts of Milton Friedmann on the unitary role of business, forcing firms to become more ethical in their approach to doing business. Not easy to square, but firms like A & F had better eat some humble pie to recover their reputation in the UK at least for being a 'cool brand'.

New Perspectives on Engagement

2009-08-11T18:36:00.003+01:00

Another wonderfully illuminating session from the AOM conference, which most consultants and HR managers interested in engagement would have found very beneficial. To my mind this session represented all that is good in academic research and made up for what I've not found in any of the consulting work on the topic. It dispelled commonly held myths about the 'engagement industry', helped define what engagement was, provided robust and logical models of the how and why of engagement, and provided some great evidence from extremely tight studies of 'how to get engagement and keep people engaged'.

Here's a precis of their blurb (I've only changed the tense, changed a few pieces of academic jargon and added in a few parenthetical comments).

'Because of claims from both research and practice that engaged employees result in competitive advantages for today’s organizations, researchers have focused a great deal of their attention on identifying drivers of engagement that could suggest levers for managerial control. The symposium presented four papers that expanded our understanding of key antecedents which help employees become and remain engaged in the workplace. The first paper, by Sabine Sonnentag et al., from Germany was a longitudinal examination of how job demands combine with off-the-job psychological detachment to predict employee engagement. Results suggested that periods of psychological detachment (mentally “switching off”) during non-work hours reduced or eliminated the negative relationship between job demands and engagement.

The second paper, by Eean Crawford et al., from the University of Florida was a meta-analysis (a survey of surveys) that clarified ambiguities concerning the relationship of job demands with engagement in the job demands-resources model (this is definitely one that practitioners should get to grips with). Meta-analytic estimates revealed that job resources (autonomy, control etc) had consistently positive relationships with engagement, while job demands appraised as hindrances have negative relationships with engagement and, job demands appraised as challenges have positive relationships with engagement.

The third paper, was by Jill Waymire Paine from Columbia (was an absolute gem). It examined multi-level data from five organizations predicting employee engagement in organizational change initiatives. Arguments for change and followers’ regulatory focus (whether they were risk taking optimists, or risk averse pessimists) were most predictive of employee engagement in change initiatives. This paper had really important implications of how leaders management change and keep people engaged while doing so, rather than inducing resistance or cynicism.

The fourth paper, by Ronald Bledow et al., from the University of Geissen, examined daily fluctuations!!! in employee engagement and found that positive workplace events interact with social and personal resources to predict daily levels of employee engagement'. Again, this work brings into question the stability over time of a concept such as engagement.

Link these papers to the one by Balain and Sparrow reviewed in an earlier blog and you begin to get a far better understanding of what engagement is than anything that I've come across so far. I'm certainly going to use them in my research and consulting, and others may want to do the same.

More on Talent Management from the Academy

2009-08-11T00:16:00.008+01:00

I'm doing a new chapter with a practitioner colleague of mine for a book on Global Talent Management edited by Hugh Scullion and Dave Collings, so it was with great interest I attended probably the best session for me so far. This was chaired by Paul Sparrow and summarised by Chris Brewster, with some top class presentations in between, all of which will feature in a special issue of the Journal of World Business later this year.

I'm not going to try to summarise the papers as some can be found on various websites, including the opening literature review by Randall Schuler from Rutgers and Ibraiz Tarique. Of the four papers presented two were of most interest for me. The first was by Hugh Scullion, Paul Sparrow and Elaine Farndale on the the role of Corporate HR departments in global talent management. They argued that what they did and how effective they were depended to a great extent on the degree of corporate control or decentralisation of the organization, or in our terms, how the organization addressed the integration-responsiveness logics, which maps onto my earlier posts on this topic on Negative Capabilities. In trying to develop a framework for helping academics and practitioners think more systematically about global talent management, I think they have come up with something of real interest which is both empirically based and shows important connections among the four roles that corporate HR departments play or should play. These four roles are:

1. Champions of Process - systems monitors, or in our terms guardians of corporate integration
2. Guardians of Culture - in our terms, ensuring integration and legitimacy through spreading the message of corporate values
3. Managers of Internal Receptivity - preparing the organization and its business units to facilitate and accept mobility among leaders, and
4. Managers of Networks of Leaders and Corporate Intelligence

They argued employer branding was the binding tie between 1 and 2, with which I readily agree. We've discussed this in earlier posts as employer branding following a logic of similarity and legitimacy through help build and disseminate shared values. However, there are a couple of problems with the framework, one of which was picked up by Paul Evans, who pointed out the corporate HQ perspective they had on global talent management, a view evidenced by the frequent mention that decentralised multinationals experienced the greatest problems in implementing global talent management. This, of course, depends on where you are standing, because the interests of business units are sometimes in conflict with the interests of the corporation as a whole. And, as Paul Evans rightly mentioned, Web 2.0 technology is facilitating a much greater bottom up approach to talent management, which is not in the gift of corporate HQ to control. I would also add that our discussion of employer branding needing to reflect authenticity and privileging the local (see earlier post) also implies a perspective that global talent management is not something that corporate HR departments should necessarily control in the way they often do - in other words, decentralisation of some decisions on talent is not always a problem, rather the reverse.

So, Paul, Hugh and Elaine, if you read this blog(I know we discussed that following the questions you may have to rethink your model a little) you may want to take into account some of these points in revisting your model. But even if you didn't it is certainly a help for HR practitioners in multinationals in giving them a useful framework to think about their jobs in relation to talent management.

A second paper from some Finnish and Swedish colleagues presented by Kristina Makela which was also very interesting examined the question of who made it into the talent pool and why. Apart from the obvious reasons connected with performance appraisal, which was a rear view mirror, 'on-line' search', they found three explanations, which were more forward looking, 'off-line' reasons - cultural and institutional distance (the less that this was between corporate HQ and individuals, the more likely they were selected), 'homophilly' (the more like the existing talent pool, the more likely to be chosen) and network centrality (were they key nodes in the organizational networks). Some worrying findings here!

Picking up on Negative Capabilities and Talent Management

2009-08-08T23:04:00.003+01:00

I know as academics we're not supposed to look for confirmatory evidence to support our views, but it's rather difficult not to feel pleased when some ideas you have just written about seem to be supported by what is going on in the big bad world of talent management.

I've just attended another session at the Academy of Management on 'Developing Top Executive Talent; How Employers Do it' featuring three presentations by the heads of HR/ Talent management of three American multinationals - GE, Boeing and Sara Lee. Common themes of these presentations were:

The linking of executive development to key strategic capabilities and the distinctiveness logic, which was also expressed in the exclusive approach to talent management focusing on the top 20% of performers
But the need to connect and assess executive development to the expression of core, corporate values. Indeed corporateness and corporate values were core themes in all three presentations but never fully explained as to why. GEs performance-values matrix seemed to sum up the way these organizations attempt to reconcile these two dimensions, with leaders measured not only on how the perform but also on the extent to which they express core values. Indeed, they seemed to be pretty ruthless about 'removing' (their word) high performers who didn't live up to the values ('would you want these people in GE' was the question?), whereas they were willing to give second chances to low performers who expressed the core values.

When questioned on this, all three suggested that the strategies weren't forever and that they frequently amended the values to reflect changing environments. In other words, strategic direction was more learning than planning, though the planning word did feature in their presentations - implying even these giants of the corporate world 'muddled through', to some extent at least.

Two further noticeable features were:

1. the desire and reality of all three to focus on developing rather than hiring talent, especially in the engineering divisions of GE and in Boeing. Leadership development in the core businesses was based on taking talented engineers and subjecting them to intensive and extensive development opportunities - in other words seeing leadership and management as an extension of 'craft' and not as something which was separate from and above the core business of engineering and manufacturing quality products, and

2. that sustainability, the core theme of the AOM conference, was not even mentioned in the three presentations. Is this a case of the Academy leading practice, or failing to be in touch with the reality of business?

Finally, the Boeing case highlighted a potential problem in the development-oriented approach to talent management. Everything they seemed to do was aimed at creating strong internal cultures and strategic capabilities based on promotion and development from within. Yet much of the research suggests that innovation often requires the injection of fresh blood and ideas from outside. The Boeing VP for talent management didn't seem to recognise the irony of this philosophy with her need to visit GE at Crotonville and Harvard to develop herself to develop others!

Blogging for Management Academics and Practitioners

2009-08-08T14:00:00.006+01:00

I participated in an excellent professional development workshop at the Academy of Management's Annual Conference yesterday on 'Blogging for Management Scholars' run by CV Harquail of Authentic Organizations and colleagues. This day long workshop focused on the reasons to blog, how to read blogs, how to participate and, for beginners and experienced users alike, how construct a blog using Wordpress, probably the best platform for this social medium. Though it was aimed at academics, I would say that it applied equally well to reflective management practitioners and consultants who are interested in blogging.
A blog has been created - InsightstoAction- which contains all of the information to get started and a really useful list of academic blogs created by management and organizational scholars, some of whom I met yesterday for the first time. There were some particularly useful sessions, tips and illuminating discussions on not only 'how to' blog but, just as important, why to blog and how to engage with your intended audience. I learned that my blog posts were among the longest, which is rarely a recipe for any form of communications, let alone one that is noted for brevity. In part these long blogs are written for my benefit, so there was a lesson for me in being a little more focused on who I'm writing for. So no more 2500 word posts.
One session that helped me think more reflectively about my own blog was a free writing exercise intended to help author construct the 'About Me' page, one of the most important features on all blogs since it helps convince readers that you are worth listening to and engaging with. This exercise was based on writing to a series of prompts and ran along the following lines:

If your blog were a room, what kind of room would it be? A lecture room, seminar room, kitchen, etc' - describe the room, the furniture, the layout, decor etc.
In that room, what do you want to talk about or discuss and why do you want to talk about it?
What role do you see yourself mainly playing in that room? Director/ expert, conceiver of new ideas, translator of ideas, coach, collaborator? Which words describe your role? And which are most appropriate for what you are trying to do with your blog?

So many thanks to CV Harquail, Jordi Comas and colleagues for an excellent session and I can thoroughly recommend InsightsToActions to anyone interested in management blogs and blogging

New Futures for Employer Branding

2009-08-01T07:04:00.009+01:00

I'm doing a number of presentations on employer branding at academic and practitioner conferences over the next month or so, beginning with a symposium with colleagues on 'Current Controversies in Recruitment and Selection' at the Academy of Management (AOM) in Chicago this coming Friday. At that session I'm going to outline what employer branding is about, how the recession has changed the focus of HR and people management, and thus the need for employer branding, and how employer branding can contribute to a bigger agenda of strategic and business model change (incidentally, I'm also going to participate in a session at the AOM run by C.V Harquail, the creator of Authentic Organizations on blogging for management academics, which I'm really looking forward to).

Three inputs into that session are relevant. The first is our consulting work with some excellent colleagues at Holcim, Getinge and the NHS in Scotland, from whom I've learned so much. This has reinforced my conviction that you never really understand business and management phenomena until you have been involved in changing them, which is one of the compelling reasons for academics becoming involved in clinical work and action research. The second and third are the most recent CIPD statement on Employer Branding: Maintaining momentum in a recession' which Rebecca Clake wrote and to which I contributed to during some roundtable discussions with senior practitioners, and a paper I've just finished with Paul Gollan and Kerry Grigg from Australia, entitled 'A Future for Employer Branding? Dealing with Negative Capabilities in Strategic Human Resource Management', which my colleagues are going to present at a conference in Sydney later this month. Not surprisingly, some of the messages in these two publications coincide'. The CIPD paper makes a case for employer branding becoming a business imperative. At one of the advisory group sessions from which the CIPD report was produced I argued for the need to link employer branding to big ticket items such as leadership and innovation, which has been taken up in the report and is one the themes in our new paper on the future of employer branding in tying it to strategic and business model change.

In this paper, we have tried to deal with the problems that complex organizations, especially but not only, multinationals face in dealing with the integration-responsiveness problem, part of which turns on how to deal with how to be global and local at the same time. In doing so, we've set out a new framework for thinking about what strategic human resource management might mean, highlighting two contradictory logics that drive strategy making in organizations in opposite directions. The first is to be distinctive, which takes them down the route of identifying business unit level strategic capabilities that make organizations truly unique, and the A positions and players that are critical to these strategic capabilities. In turn, this leads these organizations away from one-size fits all HR strategies and best practice and global employer brands towards more of a focus on exclusive talent management policies and segmentation of the workforce and specific employer value propositions/ branding messages for these groups, especially the A players (see earlier blog on linking employer branding to strategic HRM)

The other logic drives organizations to be legitimate in the eyes of others and society at large. This logic sees strategic decisions as influenced by a need or drive to be similar to others. Sometimes decisions are driven by the need for legitimacy, sometimes they are driven by an historically shaped 'industry recipe' for success that managers use as a model against which to judge their decision-making in uncertain conditions. The result is that there are strong pressures to imitate others’ strategies and values, supported by intensive networking among managers (and HR specialists), recruitment of business leaders from a relatively small cadre or talent pool that lead to bandwagon effects, coercive comparisons in the form of benchmarking best practice against other firms, and national legal standards or codes of conduct in accounting, governance and CSR drive companies to achieve legitimacy by becoming similar. This logic ensures that firms develop a strong corporate value system, often for investor s’ consumption, and to control potentially rogue subsidiaries that might damage hard won corporate reputations and brand equity through opportunistic but ultimately self-defeating behaviour for the corporation as a whole.

The SHRM implications of this drive towards corporateness are of firms becoming similar in their branding, thus seeking to become employers of choice with a global employer brand and ‘best practice’ high performance HR architectures (high performance work systems +the Ulrich model). The audience for many of these best practice messages are largely external – to sell a message to investors, governments, customers and potential employees that they are engaging with a well run, legitimate company that is as least as good as others. It also helps existing employees identify and engage even more with the organization because identity and engagement are formed by what these employees think significant outsiders feel about their organization - their so-called construed image.

The obvious point to make on the legitimacy logic is to ask the question that Michael Porter might ask: where is the differentiation in doing things the same as everyone else?

Three further sets of tensions of negative capabilities result from these contradictory logics:

1. The tension between corporate and local identities. Global companies seek to exercise control over identities because of the need to have business units and their workforce ‘on message’ with the corporate logic, global cost leadership and corporate stakeholder management. However, philosophers and management scholars have argued identity is essentially a local phenomenon and has to resonate or be authentic with employees and other local stakeholders because both are a product of local cultures. So localisation of identity requires organizations to be in tune with local employees and other stakeholders and to encourage constant expressions of employee voice and speaking truth to power, an argument recently receiving UK government backing from the MacLeod Report on engagement.

2. The tensions between exclusive and inclusive HR strategies. The exclusive approach to talent management that focuses on the few at the expense of the many has its critics for ethical, economic and rational reasons. Especially in European economies, including Britain, that have a heritage of integration among firms and employees and different values from the USA as a recent Economist poll on Anglos-Saxon attitudes has so vividly illustrated, the liberal market philosophy on which this exclusive talent management approach is based is a difficult pill to swallow for many organizations, managers and employees outside of the US.

Even within the USA, however, there is strong evidence that the exclusive version of talent management hasn’t worked well and, given the unpredictability of economic environments, can’t work well. Groysberg and his colleagues have produced a number of series of articles showing the negative side of the ‘star’ system which the exclusive version of talent management has helped fuel. And, has Anthony Hesketh has argued, the metaphor or a talent pipeline with the implication that talent management can be planned might be more realistically replaced by a metaphor of the talent sieve, with leaks appearing at many junctures because of the failure of organizations to manage careers through the pipeline and because of declining levels of loyalty among talented employees who have got the message delivered by acquisitive organizations that job change is the fastest route to salary increases.

3. Tensions between human and social capital and innovation. Arising from the previous discussion, HR initiatives and other management techniques and functions are increasingly being judged against how they impact the innovation agenda in these organizations. Research has shown that the 'collective IQ' of an organization, the latter of which is the basis for innovation, depends at least as much and probably more on social capital investment than individual human capital investment, which is what talent management and employer branding have traditionally focused on. So as well as investing time and effort in recruiting talented individuals, the role of human capital investment, organizations also need to focus on social capital by strengthening internal bonds among employees and by creating strong organizational identities (addressing the ‘who are we’ question as well as the ‘who am I’ question).

Implications of the Future of Employer Branding. So what are the implications for the futures of employer branding and how can it be used to resolve these dilemmas of SHRM and identity management? We suggest there are three changes in direction needed: a focus on authenticity, privileging the local, and a focus on social capital.

Focus on authenticity. It needs to rid itself of its image of being something that is designed by HR, marketing or corporate communications departments for others, especially among buisness unit managers and employees of large corporates, towards being locally responsive and authentic. Authenticity has become an important concept in recent management literature in fields such as leadership and marketing and needs to be at the heart of employer branding for it to help resolve the dual logics of SHRM.

In our Sydney paper, we have written about an HR strategy-as-practice approach that attempts to reconcile the tensions between the two logics of distinctiveness and similarity/ legitimacy. This requires that we understand who all parties to the strategy-making process are (a much wider group of people in organizations than senior managers and officially designated strategists), how they act and what resources they draw on they participate in helping create and implement strategies and, by extension, business models. Thus effective employer branding should begin by learning about the authentic voice of different groups of employees and managers at all levels and locations inside and outside of the organization. On this point, we have made the case in our CIPD report for new, free-form, open access Web 2.0 tools such as blogging, on-line discussion forums and social networking to enable authentic employee voice. We regard these new tools as more effective, or at least complementary, media for enabling employee voice than traditional organizational surveys.

Privileging the Local. Our argument for greater authenticity in employer branding compels us to focus on the local and on the logic of difference. This is not only because identity is an essentially local phenomenon, but, as we have noted, so are strategic capabilities, transformative business models and the HR architecture that supports them. In practical terms, this means privileging the local at the expense of the global in terms of creating authentically meaningful employer branding and employee value propositions. The outcomes may look no different from those that might result from a traditional top down exercise infused by the logic of similarity, especially since the process may be loosely framed in terms of broad aspirations of values or a corporate identity that organizations would like to be known for. However, an HR strategy-as-practice approach suggests the outcome is less important than the means by which it is arrived at.

As we have argued elsewhere, however, ‘the weight of evidence…suggests that the top-down, corporate global message continues to be the dominant one, which often represents considerable previous investment in ideas and programs, and, hence, an inbuilt reluctance to change course or experiment’. And, as we have noted in this paper, top down employer branding reflects the compelling logic of similarity, the benefits of integration and strong institutional and rational pressures to remain top down, including the desire to build global customer facing brands, pressures to meet international governance standards, investor demands, global performance standards and HR business processes. As the similarity logic requires, it is not only local responsiveness and authenticity which needs to be taken into account; there also needs to be a balance between the needs for and benefits of integration . A key element of HR architectures is employee engagement, which rests on defining the kinds of beliefs, values, attitudes and actions that employees are expected to hold and display, both at local and corporate level. This is part of the corporate function of employer branding, to ensure that it moves lockstep with business model and strategic change, not in parallel to it.

So, in privileging the local we are not arguing for a neglect of corporate or global values and branding, but rather that they should be ‘equivocal’ to allow employees at local level considerable latitude in creating local expressions of these values, authentic identities and meaningful strategies for themselves, and in doing so benefit the corporation as a whole.

A focus on social capital. Finally, we stake a claim for employer branding’s potential contribution to building bonds, bridges and trust, the key elements of social capital, and not just focusing on the creation of human capital. Social capital as a complementary asset and enabler of human capital and as a precursor of intellectual capital and innovation has become amongst the ‘biggest games in town’. And innovative business model change and product-market innovation needs a clear explanatory framework of how HR integrates with such changes, which provides an essential justification for employer branding role in learning about and communicating a strategic discourse that binds individual, team and organizational identities – the glue that holds organizations together - during periods of change.

Since social capital is also dependent on building bridges among employees and business partners, employer branding can help innovation, business model and strategic change by extending its traditional focus from those employed on a ‘contract of service’, the traditional employment contract, to those ‘contracted for services’, often pejoratively described as the contingent workforce. Employer branding can also contribute directly to the innovation agenda by encouraging authentic voice in organizations as I've argued above.

To conclude this rather long blog, if you find any of these arguments appealing or contentious, please - all comments on our views are welcome. Andif readers of this blog are keen on seeing the full paper, please contact myself, Paul or Kerry.

HR, Learning and Performance

2009-07-20T16:10:00.008+01:00

Not sure how I've managed to miss this, but there's an excellent report in the Harvard Business School's Working Knowledge Series by Amy Edmondson, someone whose work is always worth listening to and I've often cited her publications in the past. In this Q and A session, she decribes her research journey into organizational learning and learning organizations over a fifteen year period following an earlier career as an OD practitioner. One of the key messages she has taken from it is the tension between the need for organizations to learn in order to survive in the long run and the short term problems learning creates for performance because such learning frequently involves making errors and, more importantly, acknowledging in public the errors you have made. This tension is a difficult one for managers to handle in most arenas so the tendency is to go for the short term performance gains at the expense of learning because of the typical basis on which their performance is managed and rewarded. Nowhere is this more evident than in the frequently reported and experienced clashes between short term target achievement in the NHS and long term organizational success. Edmonson's work is particularly appropriate in this context because her early research was set in a clinical context.

Edmonson describes the challenge for managers as two-fold:

'One is to become team leaders who promote open discussion, trial and error and the pursuit of new possibilities in the groups they directly influence. The other is to work hard to build organizations to produce extraordinary teamwork and learning behaviours'.

These challenges are part of the message of the papers and reports I've been discussing on engagement in the last few blogs. It is also a message we are delivering in a new paper we're (myself, Paul Gollan and Kerry Grigg) writing on how employer branding can and should contribute to the innovation agenda. Talent management, employer branding and engagement have traditionally been aimed at building human capital in organizations, focusing on the beliefs, values, attitudes, competences and behaviours of individuals. However, as much of the research on innovation has shown, it is the creation of social capital (building bridges, bonds and trust in teams and organizations) that is the necessary condition for organizational learning and innovation. Edmondson's work over the last decade and a half begins to show how this can be achieved.

Even Newer (but Mildly Disappointing) Perspectives on Engagement

2009-07-18T20:46:00.005+01:00

Having just reviewed an excellent academic paper on engagement in the previous blog, I was interested to see what would be the outcome of the UK government sponsored McLeod Review of employee engagement. This review is the outcome of almost a year long study by two Government appointed practitioners who have taken evidence from a range of senior executives, some academics and leaders of professional organizations with an interest in the topic. The outcome is a 150 page report on what engagement means, why it matters, barriers to an engaged workforce, how engagement might be made to work and a series of recommendations for making it work in all sectors of the economy.

While there is much to commend this report, and I'm sure it will get lots of press coverage, I have to say I'm mildly disappointed with the outcome. For the novice manager (and chief executive who still 'doesn't get it' -I can't believe it), it will serve as a useful introduction to the topic and provide some pointers on how to get it, but for the experienced HR professional it tells us little that is new. Nor, paradoxically, is it likely to have much impact on practice. By going for breadth (i.e.trying to engage as many mainly practitioner views on the subject as possible together with lots of randomly selected case illustrations), it lacks the kind of depth needed to really move the issue forward (i.e the insights that a good critical analysis and theoretically sound treatment that the topic deserves, e.g. the Balain and Sparrow white paper). It also exhibits a number of the failings the previous blog identified as characteristic of the engagement 'industry' - conceptually unclear, lacking in hard, predictive evidence, no clear logic of the antecedents and consequences of engagement, etc.

So, though this report certainly deserves to be read, did we really need a year long study of this kind to tell us what most managers have known for a long time (listen to the video introduction by David McLeod)? Maybe I expected too much for our money?

New Perspectives on Engagement

2009-07-14T18:42:00.004+01:00

Last week I had a very productive time doing some work with a large multinational company based in Zurich which is doing some really interesting work on employer branding and HR strategy – hello Saskia, Paulo and team. Like all organizations operating in a multinational context, they are struggling with the integration-responsiveness problem discussed in the last blog, which, in part, turns on the need to have employees identify and ‘engage’ with the organization globally and locally. Engagement has become one of the hot topics among HR practitioners, driven mostly by the management consulting industry’s desire to re-invent, re-package and re-fresh tired old ideas that have been around for many years in the academic community such as satisfaction, commitment, organizational citizenship and identity, and psychological contracting, and link them statistically to appealing notions such as share price increases, financial performance and a range of other outcomes.
In a chapter of a book we wrote on corporate reputations and HR in 2006, we criticised this arguably naive and perhaps even cynical attempt by consulting firms to re-invent the wheel and to do so in a with a lack of rigour that hardly justified the huge amounts of money being spent on this new ‘industry’. We examined a number of such approaches and found little or no agreement on what the meant by engagement, a significant problem in its own right; nor was the evidence particularly compelling since it was based on a lack of identifiable and sound logic connecting the precursors of engagement to engagement itself and onwards to the outcomes claimed for it. Our argument in the form of a question in that chapter was: why not use some of the more rigorous work on psychological contracting, citizenship etc., that has been around for a number of years and build in some of the newer ideas of the engagement industry to improve their utility? In part, we were basing our arguments on a book produced by Paul Sparrow and Cary Cooper in 2003, so it is with great interest we read a new working paper by Paul and one of his colleagues, Shashi Balain to be found on the website of Lancaster University’s Centre for Performance-led HR.
In this paper they begin with a section on why engagement is becoming so important to practitioners, arguing that it has served three functions: as an internal marketing process to sell complex change to the workforce; as a means of linking employee motivations and committed behaviour to process improvement; and as a predictor of service and organizational performance, usually in the form of a variation on the well known ‘service-profit’ chain. Like our own chapter, they proceed to evaluate the consultancy attempts to develop ‘theories’ of engagement, claiming that the research designs used do not allow them to infer that their own versions of engagement cause performance improvements, that there is little construct validity in what they choose to define and measure as engagement, and that they all use different items to measure what they describe as engagement. Though some promising work in proving useful statistical relationships has been produced by some of the consulting firms, it lacks strong logical basis and argument as why their versions of engagement should be linked to individual and organizational outcomes, and is thus unlikely to be helpful to HR practitioner seeking to manage the process.
Balain and Sparrow suggest an extremely useful way forward to make the concept more useful. They argue that HR directors in specific companies need to reverse engineer the type of performance that an organization is trying to create, in much the same way as the book previously reviewed by Becker et al does. What is it that we are asking employees to engage with at an individual level and organizational level? In answering these questions they produce a model of antecedents of engagements (job characteristics, perceived organizational support, leadership, reward and recognitions, procedural fairness and trust), which leads to strong performance bonds (individual and organizational identification, internalisation of company values, psychological ownership, etc), leading to conditions of engagement (i.e. job engagement and organizational engagement) , which result in important individual and group level outcomes (e.g. motivation, discretionary effort, commitment, improved group and organizational morale, organizational citizenship, etc). One of the key points of this model is that it makes use of well-known and validated scales. Another is that it is necessarily more complicated than most of the overly-simplified consulting models.
A further, extremely important point they make is that there is no single organizational performance recipe. The potential contribution that employee engagement makes in different organizations is likely to differ, so why should engagement have the same performance impact across different service models? To reinforce this point, they identify four different service models from the marketing literature - personal v non personal service, encounter v relationships, collaborative v single service relationship and B2B and B2C interactions – all of which are likely to make different demands on what and who employees need to be engaged with . Their claim is that HR directors have a ‘fantastic opportunity’ to really get under the skin of engagement in their own organizations by developing more complex understandings and models of engagement that apply to their specific circumstances. Two key questions they need to address is: what are they asking their employees to engage with, and what beliefs, attitudes, intentions and behaviours do we require of them to engage. To make the construct more useful to practitioners, HRDs need to identify the performance belief – ‘a shared belief of a team that it has the required ability, resources, goal clarity and leadership attributes to achieve the desired performance outcomes’ (p 38). The performance belief is the cause, while being engaged to perform is the effect. Answering these questions allows HRDs to manage engagement more effectively, but this requires them to measure different things from the standard attitude or engagement survey, which Balain and Sparrow begin to describe. Here they need to do a little more work. Overall, however, the general arguments in the paper are excellent and take us a lot further in understanding engagement than anything else I’ve read so far. There is still a need to do some tight editing and crisping up of the arguments to make them more accessible to most practitioners, but this paper is certainly the best place to begin for serious work in this burgeoning field.

In visiting this excellent site you will find other papers of interest and also a survey on HR in tough times that Paul would like you to help him out with.

Linking Employer Branding to Strategic HRM and Customer-based Reputation

2009-06-13T10:08:00.009+01:00

I'm working on a couple of projects just now, which require me to focus on some of the problems involved in employer branding in multinational environments. I've also just finished an enjoyable exercise acting as a judge on Personnel Today's employer branding awards, which has caused me to reflect on the criteria for assessing and measuring the impact of employer brands. With both of these projects in mind, there are a couple of good sources of material that may be worth looking at if you are working in this field as a reflective practitioner ( I've got a few people in mind when writing this blog) or academic. One source I've written myself with Susan Hetrick ( I'm saying this is good but I'm not really the best judge of that); another is in the recent edition of the British Journal of Management. These works are written mainly for academics in the field but are accessible and useful for those who want to get beyond the usual homilies or lack ofevidence-based practice that characterised much of the employer branding literature.

Our piece is entitled 'Employer branding and corporate reputations in an international context' (pages 293-320) and can be found in the new 'bible' edited by Paul Sparrow on 'Handbook of International Human Management: Integrating People, Processes and Context' published by John Wiley and Sons, Chichester, UK, 2009. This chapter sets out a model of employer branding in an international context and illustrates some of the problems of negative capabilities associated with 'thinking global and acting local' using a case from the financial services sector. In the case we argue the need for authenticity in employer branding to favour the local rather than the current fashion for global. More of this in later blogs, because this issue gets to the heart of strategic HRM and employer branding in international contexts, the subject of a forthcoming paper by myself, Paul Gollan and Kerry Grigg.

The second extremely useful source is an excellent if somewhat parsimonious attempt to provide a theory of customer-based reputations (C-bR), written to explain the basis on which customers attribute positive reputations to companies and what such reputations lead to in terms of important outcomes. The paper by Walsh, Mitchell, Jackson and Beatty in the British Journal of Management current edition and the core argument is that customer satisfaction and customer trust in the organizations drive positive (and negative) customer-based reputation attributions. In turn, C-bR causes customers to be more loyal (CL) and to produce high levels of customer advocacy through word-of-mouth (WM). The authors show highly significant links among these variables, especially among C-bR and its consequences for CL and WM.

I'm sure I can learn from this parsimony in two ways, largely because my own attempts to explain the causes and consequences of employer branding are so complicated and cannot easily be tested. The first way is to ask the question: what are the workforce and HR antecedents or drivers of customer satisfaction and customer trust? This is likely to lead us into a refinement of the logic of the 'three compellings' from the Sears service-profit chain, a favourite example of many who wish to demonstrate links between satisfied employees, satisfied customers and profits. So, you might expect that employee satisfaction, employee commitment and employee engagement might by related in some way, together with the authenticity of the employer brand, to drive trust in organizations and their leaders (see CV Harquail's application of authenticity to personal branding for an idea of where I'm going).

The other use of this model is to translate the variables into employer branding language. So, you might expect that high levels of employee satisfaction, commitment and engagement, and high levels of trust on the part of employees in the organization and its leaders may drive Employee-based reputation (Eb-R). In turn high Eb-R is likely to result in key outcomes such as employee loyalty/ intention to remain and to word-of-mouth advocacy of the organization, the latter of which is so important to our current project for the NHS.

Although this line of reasoning has been pursued by Gary Davies and Rosa Chun from Manchester Business School in a number of recent articles, the ideas from the Walsh et al paper do suggest how their work could be developed.

When I've worked through some of these ideas a little more, I'll put these up for consideration in a further blog.

Dealing with 'Negative Capabilities' in Strategic HR: Social Capital and Corporate Branding versus Human Capital and Segmentation

2009-06-13T07:20:00.010+01:00

The notion of negative capabilities, often attributed to the poet John Keats, refers to the ability to work with issues that can't be resolved and the need to keep an open mind. W. Scott Fitzgerald, a famous American writer, dubbed this a sign of intelligence - being able to hold two or more inconsistent ideas in your head simultaneously and still work with them. Such an intelligence is one that HR practitioners need to develop in spades, especially when dealing with the paradoxes and tensions manifested in the 'think global, act local' mantra of many organizations - and not just multinational ones. Unfortunately, most organizations treat this as a problem to be solved rather than resolved by drawing on packaged solutions, which usually create further and potentially worse problems down the line.

Two such examples of these HR paradoxes are the corporate (global) employer brand versus segmented employer brand issue and the decision-making over whether to put your money behind social capital (teams and organizations) versus human capital (talent and stars), which has been at the heart of the talent management controversy for the last decade or so. For the purposes of this blog I've conflated them because they naturally link together. As I mentioned in the last post, I've been working with a group of excellent HR managers from a Swedish-based multinational, all of whom come from different countries and different business units within the one corporate entity. Our job has been to raise our game, individually and collectively, by learning to think more strategically and more corporately, which turns out to be another negative capability. To that end I've been helping them learn and in doing so learning myself about what strategic HR might mean in their context. So I drew on a number of new books and research from the US that offer excellent insights into this question. These books offer sound, evidence-based practical advice of the kind that most consulting manuals don't. However, they still need to be treated with a certain caution in complex situations because of the potential problems created by an unreflective application of heavy doses of human capital and segmentation. The one that seems to summarise this more than any other is the new blockbuster by Brian Becker, Mark Huselid and Richard Beatty on the Differentiated Workforce, which encapsulates a number of messages from solid, research-based work by these authors themselves and others. The others are Boudreau and Ramstad's 'Beyond HR: The New Science of Human Capital', Cascio and Boudreau's book on Investing in People: the Financial Impact of Human Resource Initiatives(reviewed in the last blog), and the work on HR architectures by my good friend, now returned to Rutgers to work with Mark Huselid, David Lepak.

Being US in origin, these books are strong on prescriptions, especially the new Becker et al book. One such prescription is that HR begins with understanding the strategy and environment - the strategy map - of the organization, and not its people, which is where most HR specialists are likely to begin - a 'trained incapacity' often used to beat HR over the head with. Incidentally, this is a view that the high priest of strategy, Michael Porter, would endorse but not so resource-based strategy theorists who argue for a more inside-out approach to these issues. A second prescription is the need for sound logics and the need measure. All of these works are especially strong in making a case for causal measurement rather than best practice, benchmarking and scorecards. This, they argue is single most important activity that HR can do to prove its credibility with senior managers - being able to identify and predict the strategic outcomes of HR initiatives. A third and probably the tie that binds these books and research more than any other is the need for greater segmentation of the workforce, which is to use the power law (80/20 rule) to focus on those 'A roles and players', 'pivotal positions', or 'core' segments of workforce that add most value, exhibit most performance variation (the range of performance variation between the best and worst performers in very high), and which are relatively unique. The Differentiated Workforce is particularly strong on these messages, the logic (though not the intent) of which leads us further and further away from any notion of global, including corporate strategies, corporate employer brands and global value propositions, global employer of choice approaches etc. Indeed, the authors repeat their 2005 message in the 'Workforce Scorecard' that adopting employer of choice approaches are a recipe for mediocracy - an argument and rail against 'best practice' that I mostly agree with. In essence the logic, and in one case the title of these works, is to attribute strategic performance and capabilities to human capital in the form of individual roles, people, pivotal points etc, and workforce segmentation.

However, in working though these ideas with the HR group in Sweden, we constantly came up against problems with this logic, one of which is that human capital and segmentation divide organizations. The line pursued by Boris Groysberg from Harvard with increasing sophistication over the last five years on why the focus on stars can be bad for business is testament to this excess focus on human capital. A second problem is that human capital and segmentation is rooted in a US centric view of equity that does not always translate into the more equality-conscious continental European mindset. A third, related problem is the over-attribution of performance to human capital rather than social capital, which can be defined in terms of the bonds between people, the internal and external networks or bridges they build, and the extent of trust needed in organizations, especially networked organizations, to survive and prosper. As excellent research in the field of innovation by Subramaniam and Youndt has shown, it it social capital more than human capital that accounts for transformative innovation; at the very least these have to be seen as complementarity forms of capital assets.

Some of these features of social capital were beautifully illustrated during a factory tour we had in the plant where the group and I were working. The fact that manufacturing was been conducted at all in this very Swedish plant was bucking the trend towards off-shoring to Eastern Europe or Asia, although it was high-end batch production rather than mass production. One of the reasons why the design, development and manufacturing of a family of products was so successful (and successful it is) seemed to be down to the focus on design, development and manufacturing based on social capital (i.e. involving customers, designers, shop floor workers in the interative design and development process, flexible manufacturing based on autonomous work groups, extensive job rotation and group training so that everyone could do everyone else's job, investment in work life balance and flexitime to engage the workforce, etc etc). In other words, it was the system and social capital that seemed to be important rather than any notion of A players, pivotal positions, valuable and unique segments.

All of which brings me back to the broader issues raised in the title of this blog. The logic of these books, excellent though they are, is of human capital and segmentation. And it is a compelling logic. However, it doesn't sit easily with the equally compelling logics of investment in social capital and the need for a reflective and reflexive corporateness (corporate strategy, branding, identity, value system) that considers and is influenced by what goes on at local levels. One way of working with these negative capabilities is to treat them as complementary, not competing, assets. What that might mean in practice is to do what most organizations don't do, which is to begin with and even privilege the local rather than the global to ensure ideas - brands, strategies, values, etc., ring true among employees and managers at business unit levels - in other words to privilege authenticity. Arguably from the perspective of organizations, whether or not we have high levels of human capital is not really so important to organizations; what is important, especially for innovative organizations. is how human capital and identity feeds forward into group learning and team-building and then into organizational learning and organizational identification. In other words, by building on what is locally authentic and on evidence of good local practice (maybe even created by A players who aren't 'assholes'? - see the book by Robert Sutton) we learn to develop social capital, organizational IQ, corporate strategies, and authentic corporate and employer brands.

Evaluating Investments in HR

2009-05-31T06:44:00.007+01:00

For many HR practitioners being able to provide a logical business case and proper evaluation that links HR investment to key financial outcomes would represent a huge step forward for their credibility. Yet, it is a fact that we typically spend large sums of money implementing leadership development programmes, talent management, employer branding etc, and almost nothing on assessing their strategic impact. In part, this is because we believe that it is impossible to measure intangibles - what's meaningful isn't measurable and what's measurable isn't usually meaningful. So we justify our actions on the basis of acts of faith or attempt to persuade senior managers with arguments along the best practice, 'everyone is doing it', so 'we don't want to be left behind' lines (often following attendance at some networking event). Unreflective copying and jumping on the bandwagon, alongside legal requirements (themselves often based on 'best practice'), are the main drivers and justification for spending vast sums of money on 'soft' initiatives. This is why institutional theorists argue most organizations and their HR architectures end up looking the same, and, as the more perceptive strategists point out, where is the competitive advantage (or even best practice) in that?

So it is with some relief (not total) that I've picked up two recent American books. One, the Differentitated Workforce' by Becker, Huselid and Beatty, I will leave for a later post because it is more mainstream and I'm currently testing some of their ideas with a group of great HR managers from Getinge as we speak. The other is Wayne Cascio and John Boudreau's 'Investing in People: Financial Impact of Human Resource Initiatives'. This book is probably the best I've read in the field, in part because it deals with measures in a sophisticated way, in part because it not so much a book about measures but about understanding the logics that link strategic decisions to human capital initiatives and their outcomes. John Boudreau is a 'name' on the HR circuit following his book in 2007 on 'Beyond HR', while Wayne Cascio I know from my time working at the University of Colorado where he teaches and researches. Wayne wrote one of the first books on measuring HR and this works represents the culmination of a long career in introducing rationalism into the HR profession.

For me, the highlights of their book are three-fold. The first is the LAMP framework, which states that you can only use HR metrics as a force for strategic change if you have the right logic (that link your measures to competitive advantage, pivotal points through causal modelling, etc), the right measures (timely, reliable and available data) the right analytics (good questions and analysis of data) and the right processes (good knowledge management in the organization and a culture that supports learning, not just assessment, from measurement).

The second is the use of yield curves to examine the types of jobs (and people) where firms should invest their money for the greatest return. Boudreau tackled this in his earlier book and the book by Becker et al also make great play of this very important point that it is the range of performance variation in jobs (the difference between best performance and poor performance) that helps determine this yield. The most quoted example is Disney: where do you put your money for greatest return ie satisfied customers, Mickey Mouse or the street sweepers who are key customer relations people? The answer is for a small extra investment in selecting and developing street sweepers you get an enormous yield in satisfied customers because their performance varies so much; investing more in the characters playing Mickey Mouse etc is unlikely to yield such returns because the performance variation in these characters has been effectively drilled out so that one Mickey Mouse is no different to another. You can apply this analogy in healthcare, education and many other jobs - well worth thinking about.

The third key element is the focus on causal modelling and logic. This is fast becoming de rigeur among sophisticated HR functions and forms part of a project we are conducting for the Scottish Governement and ESRC. The core argument is that organizations need to develop the right logic linking their HR practices to business unit or strategic peformance. Sounds logical but it is not what most organizations do, judging by the use made of engagement models and engagement data in the firms I observe. So if you are involved in assessing employee engagement, just reading the chapter on the logics of engagement (derived from sound evidence-based academic research) will be worth your time and money alone.

Two words of warning. This is not an easy read for the more mathematically challenged, but don't be put off because the arguments are the most important element in the book (and you can always employ a statistician). Second, it begins to sound a little like best practice by railing against best practice, just like the Becker et al book I'll discuss next. I'm always worried by the idea there is only one way or the highway approaches to HR, which this is close to becoming. There are some important assumptions and simplifications in this book that just don't stand close scrutiny. For all that, this is one of the HR books of the year for me, and I will use it extensively in teaching and consulting.

Why Leaders Change Things, Often with No Impact

2009-05-20T19:15:00.005+01:00

The leadership seminar we did for the ESRC and Scottish Government yesterday provided me with an excellent explanation for why leaders’ desire to change things often results in no significant progress (but plenty of change fatigue and rewards for leaders). I’m grateful to Keith Grint for pointing me in the direction of this interesting piece of research over a cup of tea prior to the seminar.

(By the way, if you want access to what we talked about, here’s the publication we produced for the seminar with the help of Chris Blunkell, the ESRC and Scottish Government. It will be posted shortly).

Back to the story - a group of Israeli researchers shed new light on these issues, drawing from the art of goalkeeping in soccer [Bar-Eli, Michael, Azar, Ofer H., Ritov, Ilana, Keidar-Levin, Yael and Schein, Galit (2006): "Action bias among elite soccer goalkeepers: The case of penalty kicks," in: Journal of Economic Psychology].

Here’s how one blogger, Elli Malki, from the financial services industry described the research because the analogy has been used before (and she summarises the article well saving me from doing it).

‘ The researchers examined a very unique situation in soccer games—penalty kicks. From a behavioral point of view, penalty kicks have several unique characteristics:
ln most cases, the penalty kick ends with a goal being scored, thus having a significant effect on the result of the game.
An experienced goalkeeper has faced many penalty kicks and thus is expected to know how to react to them.
From the moment of the kick, it takes 0.2-0.3 seconds until the ball reaches the goal. Thus, the goalkeeper cannot know in advance what will be the direction of the kick and must choose the direction of his jump based on his past experience.
As a result of these characteristics, a penalty kick is a type of a "natural experiment" in which it is possible to examine the choices made by the goalkeepers under uncertainty. Since soccer players' compensation is dependent on the performance of their team, the result of the goalkeeper's choice will not only affect the result of the particular game, but also the long-term prospects for himself and for his team.
The researchers examined 286 documented penalty kicks from games of top soccer teams. For each one of the penalty kicks, a group of three qualified referees was asked to determine: (1) the direction of the kick; (2) the direction of goalkeeper's jump.

The results are presented in Table 1 and Table 2 in the original paper.

To summarise, Table one showed that the directions of the kicks were almost uniformly distributed. About 1/3 of the kicks were aimed to each one of the directions (left, right or center of the goal). On the other hand, the decisions of the goalkeepers were biased toward jumping to either the left or the right side of the goal. Only in just over 6% of the penalty kicks did the goalkeeper choose to stay in the center of the goal.

Were the decisions of the goalkeepers rational? To answer this question, the researchers examined the success rate of the goalkeepers to stop the penalty kicks. Altogether, goalkeepers succeeded in stopping 42 penalty kicks—14.7% of all the kicks that were examined. The overall success rate of stopping penalty kicks is very low and most kicks result in a goal being scored. The results showed that there is no connection between the success rate in stopping the kick and the direction of the kick. The success rate is very similar regardless of the direction of the kick.
On the other hand, an analysis of the 42 successes showed that the success rate of staying in the center (e.g., doing nothing) was more than double than the success rate of jumping to either direction.

Thus it seems that the decision made by the goalkeepers in 94% of the cases—to jump either to the right or the left—was not rational, since it decreased their chances of stopping the penalty kick.

Why does it happen? The researchers provide the following explanation:

An identical negative outcome (a goal being scored) is perceived to be worse when it follows inaction rather than action. The intuition is that if the goalkeeper jumps and a goal is scored, he might feel "I did my best to stop the ball, by jumping, as almost everyone does; I was simply unlucky that the ball headed to another direction (or could not be stopped for another reason)." On the other hand, if the goalkeeper stays in the center and a goal is scored, it looks as if he did not do anything to stop the ball (remaining at his original location, the center)—while the norm is to do something—to jump. Because the negative feeling of the goalkeeper following a goal being scored (which happens in most penalty kicks) is amplified when staying in the center, the goalkeeper prefers to jump to one of the sides, even though this is not optimal.

And this explantion was confirmed by subsequent interviews with top professional goalkeepers

The researchers call this behavioural phenomenon an "action bias." (Elli Malki, http://www.indexuniverse.com/sections/research/4801-what-can-investors-learn-from-goalkeepers.html?start=1&Itemid=7)

Elli’s concern was the relationship between and action-bias and investment decisions. However, the authors of the article also point out implications for management, the most obvious one being why leaders change things (even when doing nothing would be the right course of action). When an action-bias is couple with significant rewards for changing things, as is often the case under modern day performance management, appraisal and pay systems, this action-bias is likely to be magnified substantially – ‘ leaders change things, they do not maintain’ goes the clarion call and is given further credence by the often made distinction between management (who do maintain) and leaders. Yet, often this action bias, motivated and sustained by the rewards system, leads to little else other than the creation of further problems, which, yes, you’ve guessed it, requires a further action bias. The result is, as Keith Grint pointed out, 25 years of constant structural change in the NHS has resulted in no change. We’re pretty much where we were at the beginning.

Bruce Ahlstrand made a similar point in a book many years ago revisiting productivity bargaining at the Esso Fawley Plant, made famous by Alan Flanders book in the 1960s (for the old industrial relations scholars). Twenty-five years of productivity bargaining from 1960 onwards implemented by frequent changes in HR leadership resulted in Esso Fawley remaining bottom of the productivity league table, exactly where it began in the early 19060s. He attributed this to a performance appraisal system that rewarded change, a failure to monitor the results of the changes but people being promoted on the basis of introducing change. New appointees were stuck with the same problem (because the unions learned new tricks to re-invent them) so naturally they came up with the same solution, albeit in a different guise. So, there's definitely something in the old saying, "the more things change, the more they remain the same'.

Bad Science

2009-05-16T21:13:00.006+01:00

A good colleague of mine, Robert MacIntosh, has just created a blog for PhD students in management. He's developing it as a resource site for them and has included a number of books that might help those people learn about what consitutes good research. I'm going to suggest he recommends Bad Science by Ben Goldacre, a wonderfully funny and well written book with serious messages on what comprises knowledge in the field of healthcare, nutrition and much of the nonsense that gets acres of press coverage by all branches of the media.

Goldacre, a medical doctor, writer and columnist in the Guardian, has brought together ideas from his website to do a demolition job on popular treatments such as Homeopathy, Brain Gym, much of Nutritional 'Science', Pills that solve social problems such as Omega - 3, etc., and people who promote them, including Gillian McKeith and Professor Sir Robert Winston. He does so from the perspective of a trained experimental scientist, used to applying the rigours of controls, placebos, probablity sampling, etc to the evaluation of research. For the most part, these are not the kinds of rigours that some PhD students in management are used to, nor are they necessarily sympathetic to the positivist assumptions underlying this form of knowledge production - at least in the UK. However, it's probably best that they learn about them, if only to defend their methodologies and methods against those examiners with a scientific disposition - and I've come across a no more amusing nor sharply intelligent way of doing so than by dipping into this book.

Reading it has helped me understand where my class of surgeons, physicians and dentists are coming from when they looked at us with some astonishment when introducing them to the 'rigours' of action research in clinical leadership. It's a world away from their world, though as the author frequently mentions, what is often the most interesting aspects of the findings are the complex social issues that often have the greatest impact on treatments.

The book has also taking me down another path to explore the metaphor of 'leadership as placebo'. This is not a new idea: it was first 'discovered' nearly a century ago during the Hawthorne studies when productivity progressively increased during the so-called experimental stages even when benefits given to the girls in the Relay Assembly Test Room were removed (at least that's the myth). Mayo, the father of Organizational Behaviour at Harvard, explained these findings in terms of the bad science of the Hawthorne effect, sympathetic leadership and the development of 'appropriate norms' rather than the treatment (increased lighting, rest breaks, etc) - itself an explanation that was based on bad science. Nevertheless, placebos in the form of sugary coated pills (read leadership) can produce some extraordinary effects because people want to believe in their efficacy, as Goldacre points out in a stunning set of findings by Braithwaite and Cooper in 1981 on research into headaches. 835 women were given either aspirin or placebo pills, packed in either bland boxes or flashy, brand name packaging. They found that aspirin did have a positive effect on treating headaches, but more than that they found the packaging enhanced both the effects of the aspirin and placebo pills.

Just like some nutritional and pharmacological treatments, the evidence on leader impact on performance isn't strong, yet the belief in leaders is high, especially when they come well packaged and branded. Goldacre argues his medical case in the context of the highly dubious claims that fish-oil pills improve childrens intelligence, which are accorded no support by good science. Yet belief in these pills is widespread and the main reason for this state of affairs lies not just with the hucksters and snake oil salesman but with the media in the form of the news values of journalists and how stories are pushed. What is also evident is the invention by pill salesmen and some unethical pharmaceutical companies of new diseases because they cannot find new treatments for the diseases we already have. A parallel exists in the business field, because power lies in the ability of leaders, according to the leader-centric explanations of business performance, not because the facts support this explanation but because of the media's need for celebrity and their search for heros (and more recently villains). And because some leaders become almost deified by the business and popular media, they are encouraged to search for new problems (or diseases) to solve, often in contexts for which they have no previous nor relevant experiences. Such is the case with the system of pantouflage in France, whereby public sector leaders can easily transfer to positions in the private sector because of who they are, not what they know. It also occurs in the reverse direction in Anglo-Saxon countries such as the USA and UK. Leadership as craft it seems is not important, where leaders learn to lead with followers; instead it is the art of leaders and their charisma that dominates popular imagination and the expectations of many followers.

It is just such an unhealthy view that has led to the problems we currently face in many of our companies. Am I onto something here with this metaphor, and can our PhD students learn more from reading serious 'airport books' like this one on medical research than some of the material we pass off as knowledge about management?

Avoiding the Mistakes of the Past: Downsizing and Corporate Reputations

2009-05-16T09:20:00.006+01:00

I've been asked to address an audience of executives on Tuesday in Glasgow on dealing with the recession and people management, so I've turned to the lessons of history and, increasingly on these occasions to CV Harquail's blog, Authentic Organizations, for some lessons from the present and excellent insights into all thing organizational. On her blog there is an excellent threaded discussion on the layoff/alternative to layoffs debate and references to an old (1999) but recently updated study of Downsizing the company without downsizing morale,which has recently appeared in the Sloan Management Review by Aneil Mishra, Karen Mishra and Gretchen Spreitzer. I won't repeat their findings because you can get easy access to them by clicking on the above discussion ( (hello to the CEED group in Glasgow in anticipation you'll read this blog and apologies to those fortunate enough not to be present to hear my second-hand account of this line of argument).

I'll also be drawing on another recent study that appeared in the recent edition of the august Academy of Management Journal (not the kind of thing that many practitioners would read; nor, it seems, do many academics, but this article has caused some interest since it was reviewed in last week's Economist). In the article, by Geoffrey Love and Mathew Kraatz on '...how and why downsizing affected corporate reputations' (AMJ, 2009, Vol 52, No. 2, 314-335 for those interested), the authors draw on three sources of literature to explain why an audience attributes positive and negative reputations and why these attributions may change over time.

The first is the corporate character explanation that explains why people value organizational personality traits such as trustworthiness and reliability (my colleague Gary Davies has written extensively about this). These traits essentially explain how and why firms can create differentiation and novel EVPs. The second explanation begins from a different place in that it explains why firms tend to become similar (for the initiated, institutional isomorphism). Audiences tend to value actions that show conformity to cultural norms - of society, industries, professions etc. The third is more basic, at least in its simplest version, and is rooted in exchange theory - people assign reputations based on the answer to the question: what does it do for me in relation to my material and emotional needs (and, as we argue, valued expectations of psychological contracts)?

One of the novel aspects of their study is that is was carried out on financial analysts' assignment of reputations and those of peer firm executives to a sample of Fortune 500 companies that had downsized over the period 1985-94. The conclusions were complex but to summarise:

Downsizing resulted in a signifcant negative effect on reputational change, even among financial analysts,

But only early on in the study time frame, because planned downsizing fitted well with the analysts' and executives' perceptions of legitimate actions, especially if it led to valued results for them.

Thus, the conclusions the authors draw, is that it seems that violating commitments to employees and the community is more permissable when there is a 'clear and present danger', but that reputational assignment changes over time

A similar argument is made by previous study in the Sloan article in that the layoff/alternative to layoff decisions may be less important to employees than being active participators in the decisions - see the outcomes of the process as fair (procedural justice) and feel empowered to address the additional problems created by the solutions. However, these positive outcomes are contingent on them trusting management to draw on higher values and long term interests rather than use recession as an exercise in opportunistic cost-cutting or to get rid of people they see as poor performers (often those who speak truth to power but who may be seen as destructive actives in the language of the Sloan diagram?).

These are US studies, and I've made the point on CVs blog that the Employment Protection legislation introduced in the UK many years ago when I had to deal with layoffs for real, more or less instiutionalised the notion of firms seeking to avoid layoffs asa first port of call and widespread consultation over alternatives to redundancy with staff. Nowadays, there is certainly current evidence of firms embodying spirit not just the letter of this legislation in the UK, which is contained in a recent CIPD survey on talent management and in article in People Management. But is this the norm, or do firms still privilege analysts' attributions of reputations in the long run, regardless of the clear and present danger?

Critical Perspectives on Leadership: A Little Night Reading

2009-05-10T19:15:00.009+01:00

I've just spent extremely stimulating three days facilitating a group of HR practitioners from the Swedish-based multinational, Getinge, in Lund. They came from Sweden, Poland, the UK, the USA, Germany and France to learn about the problems of leadership and the difficulties of establishing common values in a complex organization. In a week's time, I'm tasked with a related set of problems, this time examining the relevance of leadership theory to public sector policy makers in Scotland. With these projects in mind and having written a text which deals with the topic a few years ago, I recently picked up a fascinating little book by Brad Jackson and Ken Parry, entitled ' A Very Short, Fairly Interesting and Reasonably Cheap Book about Studying Leadership', published by Sage ( a companion to an earlier text of the same ilk by Chris Grey on organizational studies). Written as an introduction for students, the authors hope that academics like me who skirt around the subject will learn something from it. I certainly did, and I would thoroughly recommend it to any of my students, the HR group at Getinge and the public policy group I'm about to meet.

The book is a gem and to boot is well written and short, although it is much more than the kind of an annotated bibliography that you might find in similar sized textbooks on the subject. Along with Keith Grint's 2005 book on the limits and possibilities of leadership, the authors provide an up-to-date critical review of much of the extant leadership literature and way of integrating different strands of leadership thinking in a very helpful and practical way.

After an introduction on why leadership matters, a not uncontested debate given the evidence on the lack of positive impact of leaders on organizational performance, the authors make the now conventional distinction between research on leader-centred persectives and research on follower-centred perspectives. They outline and discuss the research findings on transformational leadership, charismatic leadership, gender and leadership, and the personality of effective leaders. These are followed by a critical evaluation of these approaches, especially narcissistic leadership and the dark side of charisma - both very topical. The balanced treatment of these leader-centred approaches are followed by an excellent summary and evaluation of the perhaps unnacceptably labelled 'follower centred' theories, made popular by Barbara Kellermans new book on why followers matter. These include theories on how leaders are socially constructed by followers, the romance of leadership which fulfils important needs for many people, psycholanalytical theories that emphasise how we learn to be leaders and followers from early childhood, and social identity theory, which proposes that leaders will be acceptable to the extent they fulfil prototypical expectations of leadership of a particular group. Taken together these theories have great power in explaining why senior public sector leaders are often seen as ineffective, weak, politically driven, etc, in large part because they aren't able to meet the expectations of employees for the kind of leadership that is portrayed in the business press as the private sector ideal.

The next chapter s especially relevant for firms engaged in devising leadership frameworks in international organizations since it deals with cross-cultural leadership. Especially relevant here is the brief but fair evaluation of the GLOBE studies, probably the most extensive research to-date into cross-cultural leadership research. This is followed by a chapter on critical leadership, including newer theories on co-leadership, distributed leadership and team leadership, which have become very popular in the new public sector environment, and among organizations seeking to flatten out hierarchy.

In producing a chapter on research into leadership with a higher purpose, the authors have provided some insights into the now popular calls for leadership 2.0 (see earlier posts), post-transformational/ post charismatic leadership, leadership as art and drama, and leadership as sense-making and the exercise of wisdom. The Half Moon Bay discussions led by Hamel and Birkinshaw reflect many of these ideas and are likely to provide much of the agenda for the reform of leadership/ new directions of leadership debates.

Finally, not content with discussing research only, the authors have an excellent chapter on leadership development, and the strengths and weaknesses of various methods of leader development and leader/ follower development. They also provide some links to resources to help practitioners do further work in this field.

All in all, this is likely to be one of the most profitable three-to-four hour periods that leadership development specialists could spend in understanding the limitations of leaders and the importance of linking leadership to followership. Hopefully it will encourage them to read some of the other authors mentioned in this blog and in the extensive bibliography they provide.

Leadership 2.0 and the CIPD HRD conference.

2009-04-24T16:13:00.009+01:00

Two blogs in one day (and a third on the way).

Because of my interest in leadership development and forthcoming seminar with the ESRC and Scottish Government on the topic, I attended two sessions at the CIPD conference, both of which were good in some ways but worrying in others. To begin with the positive, they were both beautifully presented and contained lots of interesting material based on evidence and experience - no problems here. The first was on the global competences needed for tomorrow’s leaders and the second was on positive psychology and its applications (not necessarily leadership but could be). Both issues are highly topical, especially positive psychology in current circumstances of recession.

My worries, however, stem from passing of yesterday’s ideas as the future, and outlining ideas that are strong on face value and commonsense but weak on theory and in spelling out the limited assumtions on which they are based. As John Maynard Keynes pointed out, all practice and commonsense are based on theories-in-use; all are also rooted in fundamental but partial assumptions about how the world works and how it should be. These assumptions need to be made explicit when placed in the public domain for them to be truly useful because a way of seeing is also a way of not seeing.

I'm not being an academic purist here, just re-stating the precept that there is nothing so practical as good theory. For example, the attempt to glean a set of global leadership competencies has a long history and has been done many times before. For example the GLOBE programme has spent a lot of time researching these ideas, so why do we need another attempt that may no reference to this work nor states how it will improve on this excellent work? Perhaps more importantly, why are we still looking to leadership comptences rooted in the past? For, as we have pointed out before on this blog, it is those same leaders and leadership competencies that have shaped the current crisis of governance and performance associated with the recession and major corporate failures. I've just finished reading Paul Krugman's excellent account of how yesterdays leaders, many recently hailed as messiahs in their day, have been responsible for our current problems ( see 'The Return of Depression Economic and the Crisis of 2008'). So do we want to repeat the mistakes of the past, or should we be engaging in reflective learning of the lessons of the past to design a leadership 2.0?

Secondly, I couldn’t understand why I was sceptical of positive psychology until one of the seminar leaders gave the game away by stating that most of the evidence was based on the powerless (not her term but mine). As the presenters were taking about the attributes of positive psychology, I couldn’t help thinking that they fitted perfectly well with Fred Goodwin and his can do approach to leadership. So one person’s positive psychology and confidence to act may be another’s narcissism and lack of wisdom in not knowing their limitations or those of their ideas. The point I guess I am making is that arguments such as those made by positive psychology are context-bound; they may not apply and may even be positively dangerous in the hands of the powerful, especially if they don’t embrace the kind of self doubt that is necessary for the exercise of wisdom.

The presenters responded by claiming my understanding of positive psychology is limited; that it is not to be equated with positive thinking. May so! I may be guilty of creating staw men (or women), but they also might want to reflect on the merits of 'one size fits all' theory that applies equally to self-styled masters of the universe and the kinds of people for whom the assumptions underlying positive psychology might hold.

To return to the positive, I think that what we need more of at these events are evidence-based insights into leadership combined with rigorous examinations of the future. The latter could be done using scenario forecasting sessions as the basis for reflection along the lines of the Hamel and Birkinshaw exercise in previous posts. Readers may want to suggest other ways of delving into the future without repeating the mistakes of the past.

Web 2.0 and HRD: Reflections on the CIPDs Annual Event in London

2009-04-24T06:01:00.003+01:00

Not having been to the CIPDs annual HRD event, I was pleased to get the opportunity to launch our report on Web 2.0 and HRM during a session on Wednesday this week and to do some further stress testing on our arguments in that report (I'm also doing this summary for a great European HR class I taught in Nijmegen yesterday, which I under-serviced in spending too long on other issues - say Hi).

For those of you who’ve not heard these arguments before, they are as follows. Technology in the form of information and communications technologies have an enormous potential to change the way in which HR works and to change the business model of HR by allowing it to make a fundamental contribution to the innovation agenda of organizations, regardless of sector (though innovation is more likely to be important in the knowledge-intensive and creative industries). Previously, our work focused on e-HR and how it could create operational efficiencies; however, we have been flagging for some time how a newish read-write, bottom up Web 2.0 could help HR create strategic value in three, interconnected ways (and, more importantly for some, avoid being left behind).

The first of these is by facilitating the use of Web 2.0/Enterprise 2.0 to allow employees make online connections with others, inside and outside the organization, to collaborate, create knowledge and learning and share it. In doing so it helps enhance the absorptive capacity of organizations for new knowledge, create organizational learning and learning organizations, and enhances the ability of people to connect with one another across time zones and traditional organizational boundaries in networked organizations (the subject of a new excellent report for the CIPD by Mick Marchington and his colleagues at Manchester University).

The second way is by enabling more effective forms of engagement and employee voice. Because Web 2.0 is a democratic architecture for participation, it enables employees of all levels and types, so long as they have access to the web, the chance to engage in decisions that affect them and to exercise the voice in the ways in which they are managed. In short, it has tremendous potential to enhance staff governance by reaching the parts that other techniques (e.g staff surveys) can’t reach in ways that are more meaningful to staff and owned by them. And by enhancing staff governance, you enhance the governance of innovation and risk (the wealth creation and wealth protection functions of organizations), which, in turn, feeds through into corporate governance.

These two features of Web 2.0 are also thought to be necessary to connect to the natural ways of learning, playing and working of so-called Gen Y. So organizations can learn and engage with the new generation of employees using social media which are relevant and natural to this demographic group. However, we prefer to think in terms of the V(irtual)-Gen, because it is not only young people who use these social media (as good research has shown). The V-Gen even embrace people like myself who have to use these media to collaborate across time zones etc, but are best characterised by two pastiches of modern day working, Meet Charlie and Meet Jessica, referred to on this site before.

So, given these arguments, I was really pleased that we had two updated cases from our report that showed how these organizations had moved on since we first visited them and how they illustrated these three arguments beautifully. Ruth Ward, who looks after knowledge management in Allen and Overy, a major UK legal firm, demonstrated how a firm can enhance its knowledge creation, sharing and dissemination through the use of an integrated portal that gave employees access to a range of Web 2.0 social media, including wikis, blogs, feed readers, etc. One of her key points was that if a staid, risk averse occupation like lawyers find these media attractive, then anyone will. I’m sure that this was said tongue in cheek to illustrate the point that it is not only Gen Y that use these media, but the comment led to an important discussion about the blockages to change and how to overcome these.

Graham White, HR Director of Westminster Council, who has worked with us before then gave a beautiful illustration and illustrated presentation on how the Council’s engagement with its employees through online staff discussion forums has been transformed in important ways. Although there were some teething problems in getting staff to use the forums, they have turned out to be one of the principal ways of helping staff to exercise their voice on matters ranging from ‘who stole my milk’ (which generated lots of replies) to the understanding of the need for downsizing. On this latter issue, Graham had tracked through an online survey the extent to which employees understood the reasoning behind certain critical decisions connected with public sector finance, which, according to his data, has increased markedly over the space of the year as a result of the online discussion forums.

Both cases have something in common, however, in that the users of these media were not Gen Y but people of all ages who either needed to or were minded to use online forms of communication. To my mind, these examples spell out some of the dangers in talking in terms of demographic or age related terms. Yes, it may be a technology that younger people as early adopters wish to claim some degree of psychological ownership over , but network effects will eventually mean that the more these technologies are used by people of all ages, the more they will be used and have to be used. So the lesson here is that HR practitioners may want to get ahead of the curve to shape its use and to take advantage of the benefits it will inevitably bring.
The event showed there were lots of practitioners unaware of what is going on – less than six months ago, but still the majority in the audience were not leading the charge (maybe that was why they were there?). More research and effort needed?

Local Problems with Global Significance?

2009-03-31T19:41:00.012+01:00

Last Friday I had the privilege of helping facilitate a debate on the current problems and what to do about them with a group of highly insightful HR directors from some of Scotland's largest organizations. This debate was part of the CIPDs Roundtable discussions on 'Shaping the Future' and a summary of our deliberations will appear in People Management. However, in the light of recent posts I want to flag a couple of issues.

The first was that the group tended to see things in 'glass half full terms', describing the current crisis to bring about major changes in culture and the way in which managers and leaders manage. The second was the problems of reputation spillover from the banking crisis, both for bankers and for confidence among Scottish companies and employees following the problems of two of its major banks - RBS and HBOS - and new problems such as the demise of its largest building society, the Dunfermline.

During the debate, colleagues cited evidence of ordinary banking employees (in organizations relatively unaffected by the crisis) seeking support because of the vitriol being heaped on the Scottish banking sector. Much has been made in recent press commentary from the quality Scottish newspapers about this issue and needs little elaboration. However, much of the discussion focused on the impact of these failures on the reputation of Scottish companies generally and its managers. This represents a fast fall from Grace, paradoxically generated by the previous success of companies like RBS and HBOS, and its reputation over the last two hundred years for generating real innovation, e.g. the steam engine, television, telephone and even the principles of capitalism itself through the work of Adam Smith, a professor at Glasgow University. One of the potential consequences of this fall is a reversion to Scots managers 'knowing their place' and 'not getting above themselves', a problems discussed in an influential book by Carole Craig on the Scots' Crisis of Confidence.

To continue with this theme of management leadership, it is the subject of an Economic and Social Research Council/ Scottish Government event I'm taking part in on May 19th in Edinburgh. This event aims to bring policy makers, practitioners and academics together to debate the impact of new theories of leadership on the Scottish Public Sector. Two academics, Keith Grint from Warwick and myself, will provide some provacations to that debate in the form of an ESRC publication. Keith has written an excellent book on 'The Art of Leadership' and, among others, a recent paper on 'Wicked Problems and Clumsy Solutions; the Role of Leadership'. A key theme of his is a distinction between management and leadership rooted in n the context and nature of problems to be solved. Management, he argues, is about solving known problems, while leadership is about resolving new questions and issues - de ja vu versus vu jade (excuse the lack of accents)- for which there are no simple answers, only ambiguity, tensions and complexity. One implication of this is the innappropriateness of a model of leadership of all knowing forceful individuals being able to take decisions on their own or in a small cabal. This is the model of 'celebrity' or charismatic leadership in which many of us have placed so much faith in recent years, attributing them with almost mythical abilities and rewarding them on that basis (see last post). Keith's works brings together a long list of Greek philosphers and recent management academics including Aristotle, Kotter, Weick and Robert Chia, who have all discussed the importance of complexification rather than simplification in leadership and the need to draw on wisdom and reflective experience rather than schooled learning. Which brings me to my contribution to that debate, or at least one of them, because it is something close to my heart and a key message of my Managing People in Changing Contexts book.

A theme of mine will be that we have an increasing mistrust of senior leadership, not only in the private sector, as evidenced by the recent anticapitalist demonstrations and bad press, but also in the public sector in Scotland and elsewhere. We have some local evidence of this from recent research we have carried out in the NHS. Part of the explantion of this lies in our overloaded expectations of leadership and our culturally-generated implicit theories of leaders - we have come to expect them to have visions, be great communicators, motivate and inspire us, etc. And when they don't, we get very dissappointed and tell them so through surveys and focus groups. Another part of the explanation lies in the demands placed on leadership, which, in a public sector setting, are to meet strictly defined targets. Target setting, according to Grint, is a management problem and one that leaders in the public sector find it both easier and politically sensible to address. However, they do so at a cost, not only in failing to fulfil the expectations of their 'followers' but also at the expense of sound strategic and innovative thinking about creating public value. This requires greater involvement of those that can/ wish to contribute to innovation in public management, the creation of environments where risk taking can be exercised without individuals being nailed to the mask when they make mistakes, and the application and exercise of wisdom. This has been described as 'the achievement of ignorance' (Weick) - being able to admit you just don't know - but being confident enough while being ready to admit they you really don't know. It also means involving others who may know more - not rocket science but difficult to live with if you believe in management 1.0.

Other research we've undertaken shows that leaders in Scotland are less likely to seek solutions from business schools to their problems because leadership is not something that can be learned in schools. They are probably right in this assessment, which presents real challenges for the local business schools in being relevant and in making a contribution to the Scottish economy. A report shortly to appear from the Royal Society of Edinburgh on the Scottish business schools emphasises this point.

So, I'm going to go down the line of the need for a leadership/management 2.0 (see previous posts) articulated by Hamel and Birksinshaw in the Harvard Business Review recently to rescue the reputation of leadership (and management), and, beating my drum once again, the need to focus on innovation, a more realistic and modest 'branding' of leadership, its contribution/ relationship with governance and social responsibility.

More later when we've written the ESRC/Scottish Government pamphlet.

Preventing Managers from Doing Dumb Things and the Consequences for Others

2009-03-26T05:39:00.007Z

Following on from the previous posting and from recent events in the news, a timely book has just been published 'Think Again', by and American-Anglo collaboration, Finkelstein, Whitehead and Campbell. Reviewed in the Economist, it is a book about why managers make poor decisions. Coming from a long line of research and writing in this field I wonder what it has to add to previous, scholarly work on the limitations of rational decision-making in the 1970s by March & Simon, and Janis's ideas on 'groupthink' and its derivatives. These ideas were subsequently made more accessible and given a given new twists through the insights of Gareth Morgan on the dark sides of strong cultures and 'psychic prisons', Richard Pascale and 'nothing fails like success' and Pfeffer and Sutton on 'why smart people do dumb things'.

Maybe wanting to appear smart, I'm tempted to ask why smart readers should continue to read the same narrative, albeit using different examples. Perhaps this is something to do with willing consumers looking for 'new' ideas (and silver bullets) and willing producers looking to recycle 'old' ideas (and make quick income), which are good theories of management fads and fashions. However, in a less cynical vein, I'm sure this book will certainly serve a useful purpose in bringing to the fore some modern examples of why trends and history don't contain their own justification, pyschologically-biased 'prejudgement', close friendships with colleagues, self-interest in seeking rewards and power, and so on.

Such a list of reasons, especially when combined with the earlier, more scholarly, works help explain the current financial crises from a micro perpective (for a more macro perspective, have a look at the recent video from MIT featuring two excellent financial economists outdoing each other in pessimism). Knowing a little from the inside about the RBS crisis in my own country and reflecting on the current vilification of its former CEO, Sir Fred Goodwin, who's house has just been vandalised by self-styled 'anti-capitalists', I'm sure we would be able to apply some of these lines of analysis to the failure of one of the world's largest banks, the loss of reputation of its former boss, and the reputation spillover to its former managers, employees and Scottish firms (see earlier posts and 'Security Stepped Up for Senior RBS Staff'). And, surprise, surprise, I note that they do in the excellent little video introduction to the book on the Amazon website and the near full text of the book posted online. I'm also sure we can learn from some of the safeguards proposed by Finkelstein, et al, in testing theories and business models to destruction through the equivalent of courtroom advocacy and defence, the promotion of devils advocates and naysayers (where have I heard this before, Tom Peters?), and checks on the power and narcissism of celebrity CEOs, the subject of the last post.

My point is that the rather indigestable question we really should be asking is: despite managers knowing all about the problems of their less-than-rational behaviour and the above solutions (most will have read some of the books), why do smart people continue to do dumb things (the will and skill problem) and why do we continue to let them do dumb things (the opportunity and regulatory problem)?

I will raise this question tomorrow at the meeting of HR directors in Scotland because it has implications for HR and because it has major implications for the reputations of those people who have been caught up in the collapse of major banks, a small number of which are culpable for not speaking up to power but a large majority who had no access to power. The public feelings over banks and 'bankers', made worse by media interest in bad news, may blight the employment prospects of many ordinary people for some years to come (see CV Harquail's post a few weeks ago on reputation spillover on Authentic Organizations). That is an empirical point we should be taking up. However, we should also be taken up the questions of will, skill and opportunity referred to in the previous paragraph. Do managers actually know about the problems and consequences of irrational decision-making? Are they aware of the trained incapacity problems that socialisation into firms' strong cultures are likely to result in, and are they aware of the benefits of widening minds through a critical management education versus the challenges created by narrowing them through much in-company management training?

And do we need more effective regulation of managers that impose on them certain obligations, not only principles of good corporate governance (the current solution) but also a requirement to actually learn in the true sense of that term from the lessons of the past. By which I mean not just knowing about but knowing how (to learn). In other words, do managers need to become more professional in the widest sense of that term, which is an old but still relevant debate? Easier said than done I suspect. I had better read the book and maybe think again.

Corporate Reputations, Executive Pay and Shaping the Future of HR

2009-03-22T06:46:00.010Z

This coming Friday I'm co-hosting an event in Glasgow for a group of senior HR professionals in Scotland with the CIPD as part of their flagship 'Shaping the Future' programme. At that event, we are going to debate a series of questions on the current economic and financial services crisis, which are particularly relevant in Scotland given its large financial services sector. Two of these questions relate to how the present situation came about and what HR professionals can do about it.

On that issue, a series of events have taken place in the town near where I live that illustrates some of the problems of this crisis for the Scottish economy. The events relate to the decision taken by Ohio-based multinational NCR, one of the world's leaders in the design, development and production of ATMs, to cease manufacturing in Dundee and relocate to Hungary and China. This closure is particularly close to my heart since NCR Dundee was something of a personal laboratory for me for a period of ten years. The Dundee plant had developed and manufactured NCRs first ATMs in the early 1980s. It then became one of Britain's great development and manufacturing success stories, winning the best factory in Britain award twice, the Queens Award for Exporting and one of the very few British companies to feature on a Harvard Business School video as an excellently-led company. These achievements were gained on its way to becoming the world leader in its field for some twenty plus years, in and bringing great pride and much needed quality jobs to Dundee. I wrote a number of articles, book chapters and cases about the NCR Dundee story explaining why, three of which were the role of serendipity in strategic decision-making, committed and engaged leadership that had the Dundee plant's interests at heart, and HR practices way ahead of their time but largely based on the 'old deal' of high commitment in return for job security and career development.

The final closure of the manufacturing function of ATMs in Dundee (some design and development is still located there, but for how long?) is a good example of some of the causes of this present economic and financial crisis, which is, in part at least, a failure of leadership and corporate governance, and perhaps a failure of senior HR leaders to engage in this debate. I say this because at the same time as manufacturing was being closed down in Dundee, the site that had given NCR much of its revenue and had helped it survive as a global concern since the early 1980s, its CEO in the USA, Bill Nuti, was awarded a $5.6 million bonus. The local newspaper in Dundee, reflecting on this local tradegy, calculated that Nuti's bonus was enough to pay the manufacturing workforce a salary for a year of £22,000, maybe enough time to see the company through the present crisis until demand rose again in the financial services industry. While the local paper's reasoning may be misplaced, it does raise issues that lies at the heart of HR's ability to secure high commitment and high performance working, which is the aim of the CIPDs Shaping the Future initiaitive - senior leadership and their pay.

I've just finished researching and writing a book chapter with a colleague on corporate governance and HR, so I have a number of figures at my fingertips that show how socially unhealthy senior executive salaries have become in relation to the normal worker in the USA, the UK and in other countries. Some might say this socially-generated 'disease'is a product of a system of shareholder value which gave CEOs enormous power, unchecked by weak boards (and weak HR), to arrogate to themselves a huge share of company profits, is now being called into question. Witness the punitive tax on bonuses at AIG introduced by the US government and the public outcry over Sir Fred Goodwin's pension and rewards at RBS in the UK.

The question is: why did this take so long to emerge as a potentially socially dislocating disease in damaging trust relations between employees and their employers? Even the chief protagonist of shareholder value, Jack Welch the former leader of GE who was apparently instrumental in promoting the idea in a speech he made in the early 1990s to the Business Rountable, has just recanted, claiming shareholder value as a principle of governance was a 'dumb idea' (see the great debate on the FT blog between Henry Mintzberg and Colin Mayer). And as academics with an interest in such matters, we have known the statistics for some time on the rapidly growing disparity between CEO pay and typical employees in the US, which grew from 42 times the average US worker in 1980 to 400 times in a twenty year period 1980-2000. This pattern of growth was less marked in most European countries but the pattern was evident neverthless, particularly in the UK, Switzerland, France and Germany. Moreover, most of this growth in disparity came about because of equity-based options, though salary and bonuses have accounted for a significant portion of total CEO (and other senior executive) remuneration. The rub is that most of these rewards are not linked directly to CEO performance directly, which is diffcult to measure but what evidence we have is not particularly supportive of their claims to adding value. And in many cases these bonuses have been awarded despite relatively poor long term performance and declining corporate reputations, as we are now beginning to see.

So why has HR as a profession been relatively silent on one of the worst demonstrations of leadership power over the last twenty years? I raise this because there is evidence to suggest that this among other things has has caused a widespread lack of trust by employees in senior managers and declining levels of employee commitment over the same period? What lessons are there from the NCR case and in the problem of executive pay for shaping the future of HR? This is important, not because HR could have prevented NCR closing down its Dundee manufacturing, which has been the story of much of manufacturing industry in developed countries, but because it is difficult to generate high commitment, high performance working in a context where the share of returns to ordinary employees has not grown much over the last 20 years and in countries like the USA has probably declined. My recent comments about the need for HR to promote higher values has to be seen in this light; technical solutions to engaging employees are unlikely to work unless basic issues of fairness are addressed, perhaps starting with some reforms in corporate governance that limit the powers of CEOs to dominate boards in the way in which many have do so in the recent past.

Employer Branding: Back in the News Again

2009-03-12T09:45:00.008Z

I'm sure there's a strong element of selective perception on my part, but I think that employer branding is back in the news again. This product of three related forces - the talent wars, willing producers in the form of marketing consultants who sought to extend their reach and expertise internally and willing consumers in the form of a receptive HR and communications audience seeking a new twist on and language of 1980s culture management - has been hitting the HR press and conference circuit with some force. At one level this may surprise sceptics and protagonists alike, especially those that saw employer branding as synonomous with recruitment and the 'buy' solution to HR strategy. Getting talent in the door and fresh blood to stimulate new ideas was (and still is in some cases) the defining order of the previous decade and a half. However, as I've been suggesting on this site, the 'make' solution to HR problems - motivating, developing and retaining good people - has usually been the most cost effective and sustainable strategy for many organizations (though not all and not in all circumstances!), which I'm glad to say has now become the focus of employer branding.

My comments are made in the light of an excellent article in this week's People Management on 'Employer branding still makes its mark', a recent CIPD panel discussion, a surprisingly well attended Employer Branding Summit on March 10th run by Symposium Events, and insights into the content of future events on employer branding (including, plug, one of our own with the IES in Glasgow on April 16th). All of these have stressed and will stress the importance of employer branding.

To borrow from the CIPDs Rebecca Clake's comment in the recent PM article, 'Budgets are under pressure, and its now that HR needs to demonstrate that it is true to its principles...you will need to work hard to look after the people who are leaving and the ones that remain to retain a good impression of how good an employer you are' (People Management, 12th March, 2009, p.13). I'm going to leverage these excellent sentiments by suggesting it is not only HR that needs to demonstrate its principles but the boards of organizations and senior leadership that have bought into the employer of choice message, because it is they that will carry the can for raising expectations and failing to fulfil them (NHS trusts and boards may wish to take note because of their desire to promote themselves as employers of choice). This also works in reverse: some organizations' boards have over-promised on expectations and over-fulfilled them, usually through high bonuses and and increased pay. This privileging of extrinsic rewards, as research by Deci and others suggested quite a few years ago, may have led to people who previously believed in the value of intrinsic benefits as a source of motivation to now focus much more on pay, bonuses and other extrinsic benefits than in the past. These changes apply to industries as different as financial services and healthcare. In short organisations' performance and reward management policies may have taught people only to well about the values of material benefits, and to criticise people now for being greedy is to criticise them for being good students of perhaps misguided organisational policies.

I also suggest that working hard to look after people internally has always been and will continue to be a key focus of employer branding, in part because it is the signalling cues given out by informal recruiters and existing employees that act as the most important influence on prospective candidates (and yes organizations are still recruiting, up to 40% of them according to a recent survey by Taleo). It is also because through the web use of existing and ex-employees - social networking, blogging, reputation management ratings and media sharing sites, etc - many people will come to understand 'what it is like to work here'.

Even more important, however, organizations have had to work hard (or should have done so) over the past two decades to re-establish the trust that employees once had in those that delivered on old-style, relational psychological contracts in return for a willingness to go the extra mile. Much of the solid evidence on commitment to work (though not some of the consulting based engagement surveys?) shows a long term decline: as people are getting materially richer (or were), they are getting less satisfied with work, perhaps having learned the lessons of 'employability' and the 'cash-nexus' only too well.

The CIPDs panel discussion was particuarly illuminating because it brought together leading practitioners, consultants in the field and the odd academic to debate employer branding's future. The key lessons from that debate was that it does have a future, mainly as suggested, in engaging staff and presenting positive images of organizations for the future. It also has a future in helping drive the innovation agenda through building collaboration and enhancing employee voice (my kite to fly). Where that future lies is in creating a delicate and dynamic balance (the graphics equaliser metaphor was invoked brilliantly to explain this) between corporate employer branding and segmented value propositions, and in producing evidence that it works. More on this debate will come from the CIPD themselves.

On this last issue of evidence, one of the best presentations at the Employer Branding Summit was Graham Dietz and Tom Redman's academic contribution which demonstrated an association between external employer brands and some key HR outcomes (Graham, if you read this send me the paper and I will summarise on the blog). Studies like these are much needed, though they need to go beyond cross sectional work into predictive measurement. I was also impressed by the insights of Daniel Kirk from Lambie Nairn on the future of reputation rating on the web and the potential impact on employer brands, and a case study of Diesel by Tim Pointer, which had important lessons for the creative industry and fashion retailing sector. Three others which were presented by communications specialists, Phil Weare, Ian Humphries and Jill Tombs, interestingly head of HR and governance, all focused on the need to create internal awareness of the employer brand and align it with the corporate brand.

Of all the cases presented, however, it was the journey currently being undertaken by the BBC to create and employer brand - solid, well research and creative, this presentation by Madeleine Abdoh and David Roberts has lessons for all. Which brings me neatly to our forthcoming event on April 16th in Glasgow, where David will be speaking. So, if you get the chance, come along to this event in the Hilton Hotel, and look out for the CIPDs next event on employer branding on May 10th.

Web 2.0 and HR: Groundswell or Hype?

2009-03-03T04:59:00.006Z

We are really pleased to see our research report for the Chartered Institute and Personnel Development (CIPD) out today. In that report we posit a rosy future for Web 2.0 and Enterprise 2.0 in changing HR's business model - for three main reasons. The first is to connect with the (overhyped) generation Y, or as we prefer, the V-generation, which is a more sophisticated and useful demographic category. The second is the potential (and problems) these social media hold for leveraging genuine employee voice (over more traditional top down surveys, etc). The third is the potential for increased innovation, collaboration, knowledge sharing and networking, which is probably the number one argument in our judgement. The report sets these out in some detail, provides ten short case illustrations (longer versions are available on the CIPD website) and outlines four future scenarios for organisations.

So in this fast moving world, we were very interested in an excellent article in the Economist on the potential for social networking to impact the kind of networking that is necessary to build social capital (see Primates on Facebook, Economist, Feb 28th-March 6th, pps 88-89). This article cites two views on the investment in grooming that is necessary to develop social networks. One is based on established research by Dunbar that argues the power of the brain limits the size of effective size of social networks that anyone can usefully develop to around 150 (the Dunbar number). More recent work by Marsden at Harvard found that even if people can develop wide networks, they only have significant discussions with a handful of these people, and this handful is on a downward trend according to subsequent research. So the Economist commissioned Facebook's resident sociologist to do some work on online networks. He found that the average number of 'friends' was around 120 with a side variation (women have more than men), but the number of active online friends was about seven. Online social networking doesn't seem to increase the core network but the more casual contacts.

The conclusion the Economist artilce draws from this is plus ca change, that what social networking sites have done is to allow us to 'broadcast' or advertise ourselves more. I'm more inclined to take a different perspective, but one that needs researched. And this is based on the paradox noted by earlier work on the relationship between social networks and innovation. To simplify the argument, \Mark Granovetter some years ago argued that closely networked people tended to think alike - like attracts like - which is not a good recipe for new ideas and knowledge creation in organisations. So what was necessary was more casual networks to introduce diversity and new ideas into organisations for innovation. Is this what online social networking helps us do? Or is there an innovation paradox at work - loose networks may be good for knowledge creation, but tight networks may be necessary for knowledge dissemination? If so, how can organisations resolve this dilemma?

Management 2.0, talent and employer branding

2009-02-23T07:07:00.005Z

Following up on a post on Authentic organizations by CV Harquail a few weeks ago, I've just come across an excellent article in Management Today (January 2009, pps 50-54) by Simon Caulkin. This short piece has got me thinking about a presentation I'm going to do next week on employer branding. In some previous work, I've been suggesting that the talent management agenda, which was at the heart of firms' desires to brand themselves, is still an important driver, though in a changed form - less concerned with celebrity and individualism and more concerned with building social capital and trust. Caulkin's summary of some work by Julian Birkinshaw and Gary Hamel at the LBS Management Lab and Hamel's recent book on the Future of Management puts some flesh on my arguments and will help re-orient them a little.

To summarise the article, the recent crash has been 'an astounding market failure' (Birkinshaw) and a result of management 1.0 with its focus on incentives, self interest, neglect of risk management and trust relations, all tied to the dominant shareholder value model of the 1980s onwards and the corporate financial models developed and taught in business schools which privileged financial engineering over general management (e.g. Efficient Markets and capital asset pricing). Organizations have been treated as markets for the last thirty years rather than as fulfilling important social functions in society, a business philosophy associated with buying and selling of companies at the drop of a hat, the rise of wealthy individuals and private equity as an dominant ownership model (see Peston's book on Who Runs Britain and some of the later essays in Michael Lewis's collection on 'Panic: the Story of Modern Financial Insanity'), outsourcing, downsizing and, importantly, attributing success to talented individuals, paying them exhorbitant salaries to keep them happy and granting them enormous tax breaks. Nowhere has this been more evident than in financial services, which is why Britains Chancellor of the Exchequer Alistair Darling is seeking to tackle this 'culture' problem as he defines it as a necessary prelude to getting the economy working again. Caulkin cites the growth of M & A activity and the recent but enormous impact of the financial services sector on the British economy, which accounts for around 35% of economic activity now as opposed to 10% thirty years ago, so squeezing out the so-called real economy. Until very recently, it was a case of tails wagging dogs, with managers having to respond to the demands of deal makers, powerful individuals and hedge funds.

Citing Sumantra Ghosal's 2006 article that business schools have been teaching too much self interest and not enough ethics, Hamel and Birkshaw have moved to 're-orient management from compliance to creativity, from flogging efficiencies out of existing resources to generating new ones', from zero sum management to positive sum games. In short, the call is for management 2.0 to focus on innovation and stakeholders rather than costs and shareholders (for a better insight, you might want to read Rakesh Khurana's brilliant book on the transformation of American business schools).

What management 2.0 looks like is detailed in an HBR article (cited in an earlier post) resulting from a conference held at Half Moon Bay, California, in May 2008. This brought together some of the leading managers, thinkers etc in the field. The consensus was that companies needed to articulate a purpose beyond making money (higher values), to ensure distributed leadership and strategy-making (rather than the traditional top-down model), fostering community and citizenship and building trust - none of which are new but speak to the legitimacy dimension of the corporate reputations agenda I've been banging on about for the last so many years.

So what do companies that currently embrace management 2.0 have in common. First, an emphasis on higher values rather than seeing managers as merely hired hands to serve market purposes. Second, to avoid the formulaic thinking imposed by business schools and mimetic, unreflective behaviour of firms; doing things differently and doing different things are the order of the day - the innovation agenda. Third, governance based on internal values and risk assessment needs to be internalised (which is the UK Chancellor's message, the message of prudent banking put out by prime minister Gordon Brown, and the message of our recent chapter on HR's potential contribution to governance). Fourth, the restoration of trust among key stakeholders, a return to the old style pluralistic conception of managers holding ring of competing claims made on the business? Fifth, a preference for old style instrinsic rewards rather than the appeal to greed of recent years (Deci's warning over the perils of extrinsic rewards, and Maslow and Hertzberg revisited? - the longer I'm in this game, the more I see old wine in new bottles and the consequences of yesterday's solutions causing tomorrows problems).

And what does this mean for employer branding, corporate reputations and HR? As we have argued in some recent work and presentations, the talent management agenda is still an important driver but the focus should be as much on social capital and social legitimacy as human capital. I'm also more convinced than ever that employer branding and talent management has to address the innovation agenda and the creation of intellectual capital in organizations. It also has to address the need for surfacing employee voice and challenge to ensure that powerful interests do not dominate in ways that stifle innovation and lead to excess, which is a tall order for those brought up under a management 1.0 regime. So how do we create EVPs and employer brands that achieve these laudible but sometimes competing aims to simulataneously integrate and differentiate?

Recession-proofing Employer Branding

2009-02-12T05:36:00.009Z

What future for employer branding seems to be all the rage just now in the current recessionary context. The CIPD are developing a conference on this topic in May, which I've been invited to speak at (thanks Anita and Rebecca and hello from down under). As luck would have it, I was doing a presentation yesterday with two colleagues in Sydney - Paul Gollan and Kerry Grigg - for a mixed audience of practitioners and academics, where we outlined some thoughts on this issue plus a future for employer branding that we're currently working on. I'm not the best judge, but I think it went down reasonably well, so the drift of the presentation may be worth sharing with some of the readers of this blog.

The core of my argument and of a new paper we're writing is that employer branding is recession-proof in the sense that it was never only or mainly about talent wars/ talent shortages caused by bouyant economies, though recruiting talented people was and will remain an important driver. Part of the presentation yesterday was that the four drivers of employer branding and its impact on corporate reputations are still relevant in todays recessionary economic circumstances - the need for talent in knowledge economies and knowledge intensive organizations, the long terms demographic problems faced by most economies, the long term decline in employee identification with employers and decreasing levels of trust, and the rise of idiosyncratic careers built around individuals rather than organizations. What has probably changed over the past decade is that employee expectations of good employers have been slowly ratcheted up by organizations engaging in practices such as employer branding/employer of choice schemes from which they will find it difficult to disentangle. Yes, organizations may not be recruiting so much, particularly in financial services, construction, retailing and manufacturing, but the impact of how they cut costs by laying people off and how they continue to create positive internal images for existing employees (particularly those currently being blamed for the mess we're in) will continue to have a major impact on their corporate reputations.

By corporate reputations, I'm referring to some really big ticket issues - corporate branding, corporate governance and corporate social responsibility - which require deft handling to manage the inevitable tensions between the needs of organizations to be simultaneously different through corporate branding and legitimate ( or the same) through the exercise of good governance and social responsibility. In many respects, these are, or should be, the key drivers of strategy and the endgame of good people management. Having just finished reading Robert Peston's excellent book on 'Who Runs Britain', which is an insightful guide to the complex financial engineering 'rocket science and crude incentivization that has been at the heart of the current problems, I'm more convinced than ever of the need for HR and employer branding to address these issues.

However, there is another agenda that places techniques like employer branding centre stage and that is the innovation agenda. We've been writing quite a bit about this recently, but to cut a long story short, good evidence suggests that innovation relies less on investment in human capital (talented individuals) and more on social capital (creating bonding and bridges or social networks) and organizational capital (what's left when people walk out the door at night, e.g. structures, systems, processes and technology etc). If advocates of employer branding and the HR function wants to make an impact, addressing the innovation agenda (wealth creation) in knowledge economies by ensuring that such innovation is socially responsible and well governed (ie. risk managed) is the place to be. Our argument is that employer branding has much to offer in this direction - by helping create the necessary diversity of talent, social capital and social networks needed for innovation. But such branding will only do so if it is authentic and is rid of much of the brandwashing and marketing/communications spin with which it has become associated. And this is where Web 2.0 comes in - these tools have enormous potential for surfacing authentic and challenging employee voices in organizations as well as facilitating collaboration and networking beyond conventional organizations boundaries, both of which are drivers of organizational learning and innovation.

Not everyone agreed with these arguments, so it may be worth a discussion either on this blog or at the events such as the ones that the CIPD and ourselves are running with the IES.

The Changing Context of Employer Branding

2009-01-24T07:57:00.009Z

This post is prompted by a number of initiatives we're involved in that deal directly or indirectly with the changing context of employer branding (EB) and HR (see next paragraph). It is also prompted by direct communication from a colleague who has just posted an item on 'reverse employer branding' on http://authenticorganizations.com/. This post is definitely worth reading because it points out that the reputation of 'toxic' firms can spillover to their employees, so making them less employable in the future because of their association with the unethical/inept practices of their leaders. This must certainly be a worry to those employees/managers in some of the major UK/US financial institutions that have had to be rescued or allowed to collapse over the last few months.

To return to the initiatives we're lucky enough to be part of (and do a bit of advertising for the Centre), the Chartered Institute of Personnel and Development has just promoted two important initiatives in this field. The first is their 'Shaping the Future' programme, the Scottish edition of which we are launching with them in Glasgow on March 27th with a working lunch for an invited group of HR directors to consider the future of HR in the current economic conditions. The second is an advisory board established by Rebecca Clake of the CIPD to examine the role of EB research in the current recessionary context. In addition to these initiatives, we're also running a one day seminar we're running with the Institute of Employment Studies in Glasgow on EB in changing contexts on April, 16th.

So what does all of this activity add up to? Well, all will have to re-visit EB with a critical hat on because it was largely a product of the talent management agenda and employee shortages of a few years ago. For some people, EB and recruitment were almost synonomous. Therefore, what is the future for EB when talent management takes a downturn?

A few months ago I posted some thoughts on that issue following a series of seminars in Australia, to which I still adhere no matter how deep the recession bites. However, I'm working with two sets of colleagues in Australia and Canada on different projects that may have something more to say about this question. The Australian project, with colleagues from Macquarie (Paul Gollan) and Monash (Kerry Grigg) and supported by ADCORP and other organizations, is examining the impact of EB not only on the talent management/human capital agenda, but also on the creation of social capital (creating strong organizational identities and creating strong bridges/networks among people) and organizational capital (e.g. Web 2.0 - our CIPD report on this comes out in a few weeks). Surprisingly, some excellent research has shown that both of these forms of capital have more of an impact on innovation than human capital/talent. The Canadian/British project is a new book I'm editing with Ron Burke and Cary Cooper on Corporate Repuations for Gower. A key focus of this book is on managing reputation risk, which leads me back to the opening comments on reputation spillover and reverse employer branding. The more I think about this issue, the more important I think it is to investigate. So thanks to CV, the author of Authentic Organizations, for raising this issue. Any comments, experiences, examples would be greatly appreciated to help inform our events and research.

HRs Role in Governance

2009-01-20T06:06:00.006Z

Been very busy with writing deadlines, so no posts recently. We've just finished writing a chapter for a book edited by Suzanne Young on Corporate Governance, a particularly important issue just now, especially given Gordon Brown's recent criticism of governance in the British financial services sector. We've argued in the past that HR has a key role to play in governance and sometimes a negative one. I'm thinking here of a paper written by Bert Spector in 2002 claiming the HR was the unindicted co-conspiritor in Enron because of its advocacy of a certain brand of McKinsey-style talent management.

Our focus in the chapter, probably quite apposite given the UK Government's 'nationalisation' of some of the UK banks to inject more responsible management (see John Kay's insightful comments on Newsnight last night), is to look at this issue in the public sector, particularly healthcare. To help us think about this issue, we've adapted some excellent work by Jaap Paauwe on four faces of governance and its relationship to risk. Our adaptation, which we have illustrated with material from current research into the Scottish healthcare system, shows how governance of the HR function itself - how it is organized and led - play directly into the 'three pillars of governance' in healthcare. Firstly, it does so by shaping staff governance (or climate governance) - the ways in which staff are encouraged to participate and exercise voice in their organizations. Secondly, staff governance has an obvious and important impact on clinical governance - the balancing of innovation in heathcare with risks to patient safety etc. Innovation is key to creating public value in any 'enterprising' public service, but there are often real risks to innovation that must be governed effectively (the banks have suffered from this because senior managers didn't seem to know what was going on in their innovations in the wholesale banking market for which they were responsible). Finally, clinical and staff governance directly impacts on the third pillar of financial governance, which in turn refracts back on these two other pillars. How NHS boards (with many lay members) are selected, developed and performance managed will have an enormous influence on the management of innovation in healthcare. In turn, the costs and demands by professional for greater innovation will impact on financial prudence among these authorities.

Our key message is that HR at a strategic level has to understand these causal links, and has to manage its own house to make an impact on these three pillars of governance in healthcare and in other industries. All three rely on effective people management, but aren't always seen as part of HRs role. HR should 'step up to the plate' to help make their organizations legitimate as well as different, which are the two central objectives of reputation management. As an aside, a good starting point for understanding the governance problems of the financial services industry would be to read Niall Ferguson's excellent book, 'The Ascent of Money', which was my Xmas reading and why I haven't had time to post

Why Organizations Succeed and Fail: A Corporate Reputations Perspective

2008-12-19T05:49:00.011Z

For those of us interested in why organizations succeed and fail from a reputation management perspective, one of the books of the year is 'Taking Brand Initiative: How Companies can Align Strategy, Culture and Identity through Corporate Branding'. This book is especially timely because it helps explain important elements of the current crisis of financial services, and also helps us explain some of the problems being experienced in healthcare. The book's authors are two of the best academics in the field - Mary Jo Hatch and Majken Schultz. They have produced a practitioner-oriented work that should be read by all HR, corporate communication, marketing and strategy professionals. The book is based on an ongoing research programme and ideas that first saw the light of day in an article in the Harvard Business Review in 2001, material which we used in our corporate reputations, branding and managing people book. It is also based on an edited book written mainly for academics on organizational identity.

Using this lens and a theory of organizational identity, they restate their well-known idea that organizations should constantly work towards aligning their vision (for being different and legitimate), their image (or reputations among key stakeholders) and culture (how employees and managers think, feel and act) for corporate branding to work and for organizations to be sustainable in the long run. They cite many examples from their own research and the work of others to demonstrate the validity and usefulness of their model, as well as draw on a considerable body of sound theory that should give some comfort and to practitioners and academics alike. Though they don't use financial services companies as examples, their analysis, especially of organizational narcissism, should be required reading for banks worldwide, a line we took in a case in our corporate reputations and HR book questioning the future fitness of the financial services industry in 2006.

Some of the key messages of this book are as follows. First, the 'most successful corporate brands simultaneously communicate belonging and differentiation...' (p. 21), a simple but powerful message that applies to private and public sector organizations, including our current work on the health service which is faced with major difficulties in attracting talent in the longer term, in enaging its current employees and in having a lack of image among employees for being a patient-centred service. They argue that organizations which are able to manage the tensions between integration and differentiation, one of the key paradoxes in business, do so by conducting continuous identity conversations with employees, customers and other stakeholders to create strong organizational identities. These conversations attempt to reconcile the fundamental and ongoing questions of 'who are we' as an organization with 'what is their image of us'. The attendant identity dynamics often result in two different but related dysfunctional states - hyper adaptation and narcissism. The first of these is where organizations are over-reactive to what customers and the media (and sometimes employees) think of them, so they continuously search for 'coolness' and 'cutting edge' instead of having regard for their unique heritage and core competences. The second is where organizations fail to check their internal beliefs against what stakeholders, including employees, think. This is often associated with narcissistic, charismatic leadership, protected from reality by group think, which attributes past success to their own insightful decision-making rather than the often favourable contexts in which such decisions are made - the so-called fundamental attributional error. The limitations of charismatic leadership and problems of narcissism, the subject of a brilliant book by Rakesh Khurana, was behind Enron and other corporate governance distasters, and in also being used to explain the failure of many of our financial services firms in the UK and USA.

A second lesson concerns the valuation of brands (and by implication employer brands). They make an important point in highlighting the limitations of brand valuation models, which, among other problems, ignore the emotional and symbolic effects of brands. As recent research has shown, these are the two most important factors in making employer brands attractive to outsiders and engaging for insiders. To gain real insights into (employer) brand value they argue that brand equity and consumer research models are more appropriate because the uncover and account for symbolism and meanings through ethnographic research into how people (employees) interact with brands and qualitative research into the meaning that brands hold for them. Which is what we have been doing in the health sector in Scotland as a complement to large-scale quantitative research.

A third lesson that is especially important for HR is the nature of the endgame. Long terms effective and sustainable corporate branding is what most organizations are striving to achieve to remain successful. This requires organizations to go beyond (1) first wave branding, which is based on a marketing mindset and is dominated by marketing/communications departments, and (2) second wave corporate mindsets, which attempts to bringing together multifunctional teams of mainly internal stakeholders, but typically ends up being fragmented by incompatible models and mindsets. Instead they posit a third wave notion of enterprise branding, which is an interfunctional and and integrated way of bringing together internal and external stakeholders in the extended entreprise in constant cycles of identity conversations. They also flag the importance of Web 2.0 tools in conducting such conversations, a key message of our recent CIPD research in the field. This imagery of dynamic enterprise-wide conversation cycles is a particulary powerful one because it extends the notion of the corporation and gets us away from the typical brand 'programmatis', which is premised on the artifical notions of beginnings and ends of change. For HR, it also reminds us that employer brands are not the endgame but are merely an input into a continuous conversation of how organizations can remain successful.

The book is not without its shortcomings. In tantalising us with the notion of enterprise branding, I don't think they go far enough in fleshing out what this may look like - maybe they want us to write what we want into this open space? They also seem to misinterpret employer branding to mean recruitment, when it is usually taken to apply to both the attraction of new employees and engagement (read identity management) of existing employees. However, these are minor points and should not detract from an important book which should be read by for all practitioners, particularly chief executives and HR directors, interested in this field.

The Dangers of Branding Leaders (and Roy Keane)

2008-12-07T08:11:00.002Z

Julie Hodges and myself are in the middle of writing an article on leadership branding, so I was intrigued by a recent post on the Australian HR online magazine (5th December, 2008, HR Daily), which appeared with the headline ‘Strong CEO brand improves candidate attraction and retention’
Citing a study by Minolta in Australia, ' Richard Branson (Virgin), Bill Gates (Microsoft) and Steve Jobs (Apple) are the business leaders Australian workers are most inspired by. Westpac CEO Gail Kelly was the only Australian CEO to make the top five list. Workers were also asked to identify which of the world's biggest companies they would most like to work for. Google topped the list, followed by Microsoft, Virgin, IBM and Apple. Locally based banks Macquarie ANZ, Westpac, followed by BHP Billiton, a mining company, ranked sixth, eighth, ninth and tenth respectively.

This headlining of leaders is further testament to the notion of ‘celebrity firms’ being tied up with celebrity leaders. Violina Rindova, and her colleagues in a 2006 article in the Academy of Management Review entitled ‘Celebrity Firms: The Social Construction of Market Popularity’ argued that a celebrity firm is developed from the media’s search for organizations that symbolize important changes in society by taking bold or unusual actions and which attempt to create distinctive identities. These firms are natural targets for ‘dramatized realities’ created by the business press. Google is one such firm that has become one of the most widely discussed success stories in the business press; also Apple whose products define the industry standard.

Most of the business press coverage focuses on the founders. For example, Google is often reported by referring to Larry Page and Sergey Brin. An Economist article of January 2006 portrays Page as the ‘visionary geek-in-chief', pronouncing at software conferences on the range of new products that will help Google achieve its ambition to ‘organize all the world’s information’. The storyline portrays the firm’s celebrity through Page’s missionary fanaticism, claiming that visitors to Google feel they are in the company of religious zealots rather than ordinary employees. Much the same story could have been written for Apple in the 1980s and, to a lesser extent, for Virgin over the last decade or so.

Though employees and the business press may feel the need to put leaders on a pedestal because of their requirements to find simple solutions to the complex problems of explaining why firms (and football teams!) are successful, are there dangers in doing so, and in having a corporate brand so closely linked to celebrity leaders?

My answer is yes. Much of the academic evidence points out that senior leaders don’t have a major impact on organizational performance. For example, Jeff Pfeffer and Robert Sutton claim that the hard evidence shows the impact of leadership on performance are modest under most conditions, strong under a few conditions, and absent in others. ‘Studies from leaders from large samples of CEOs…, university presidents to managers of colleges and professional sports teams show that organizational performance is determined largely by factors that no individual - including a leader - can control’ (‘Hard Facts, Dangerous Half-Truths and Total Nonsense’ p.192) Like a number of writers in this field, they also point to the dark side of leadership – narcissism, ruthlessness, group think and risky decision-making by people believing themselves to be all powerful. So, is it better to have leadership brands that are less reliant on powerful individuals and more on distributed leadership throughout the organization, i.e. build organization systems and brands where the actions of powerful and skilled individuals matter least. And should leaders act more wisely by knowing when to get out of the way so others can make contributions?

My own football team, Sunderland, provides a dramatic recent example of the problems of celebrity and wise leadership. Roy Keane, its talismanic manager, was over-loaded expectations by success-starved supporters seeking ‘instant pudding’ and a sports press always on the lookout for celebrity stories. Keane acted wisely by resigning when there were no calls for him to do so. He rightly expressed his self-doubt that no sane person could live up to such expectations (and implicit leadership theory –see earlier post) and resigned in as low key a manner as he could. Good for him and a lesson to other leaders (and firms seeking to brand themselves on the basis of individual leaders).

Employer Branding in China

2008-11-26T00:48:00.003Z

On the last leg of a marathon, which has finished in Beijing. I'm the guest of a joint venture between our centre in Glasgow and a newly established, practitioner oriented research centre in Bejing. The Cente for Employer Branding and Reputation Management is a collaboration between Peking University (the number one university in China), Zhaopin.com (one of the largest recruitment consultants in China) and CCTV, which produces the 'Best Employer in China' awards. Such a coming together of big brands in China is testament to the emerging interest in this concept (somewhat similar to Australia in last blog), as was the three hundred or so HR executives, graduate students and staff who turned up to a conference on the subject where I gave the keynote speech and received a visting professorship from Peking University.

The Chinese project is being led to my long time colleague, ex-PhD student and co-author, Dr Hong Zhang, who is currently editing a book on employer branding in China, due out late next year. My impressions from meeting with colleagues are that employer branding and reputation management are concepts that will take root in this most complex of societies. There are two reasons underlying this prediction. The first is the concern with image and identity, which, according to colleagues, is a major issue with employers in China. Consulting report after consulting report lists image and reputation as major pre-occupations of Chinese CEOs. Part of this interest seems to be a result of a lack of confidence among Chinese companies, and part is due to the second reason - the talent management agenda.

Talent management - attracting, retaining, motivating and engaging people - still remains a major issue in the big cities in China, despite the downturn in economic growth (accurate statistics on this issue are not easy to come by). A recent McKinsey report on talent management in China seems to support this impression, which is also the belief of my new colleagues in the Centre. I'm based in an hotel located in a science and technology centre next to the two big universities in Beijing, which has every big technology company in the world resident on its huge science parks. These companies require talented people and the Chinese universities cannot put them out fast enough; nor can they deliver the right levels of quality to turn this country into the knowledge-based economy in aspires to. As a consequence, Chinese companies are beginning to operate in global labour markets for talent, and its shows. Compared to my first visit fifteen years ago, the number of non-Chinese working over here has grown enormously, so much so that they have begun to locate themselves in the equivalent of 'gated communities'.

This new venture has plenty of interesting questions to ask of employer branding and talent management, and I look forward to helping them.

A Great Week with Australian HR Professionals

2008-11-21T08:27:00.010Z

I've just spent a spectacularly enjoyable and informative week with more than 250 HR professionals in Australia in Melbourne, Brisbane and Sydney as a guest of ADCORP, one of Australia's largest marketing and communications firms. ADCORP specialises in employer branding, and during the course of interaction with their consultants and clients, it soon became apparent that they do some very good practitioner-oriented research and creative work in this field. As part of their programme to support their clients and to learn more about what academics have to say about these issues, they asked me to lead a number of sessions on employer branding and on other HR-related issues I'm currently researching, e.g. strategic leadership, Web 2.0 etc.

From these sessions, a number of items re-occurred. These are worth summarising for the people who attended because they and others may have better answers to the questions than I do.

The first is something we wrote about in 2003, when we produced the CIPD's first research report on employer branding: 'What's in a Name'? There is no doubt that, in some knowledge-based, professionally dominated, industries - healthcare, professional services, consulting engineering and education, what's in a name really matters. This was confirmed by a number of discussions, during which branding was seen to connote spin and anti-professionalism among key managers and professionals. On this issue, my argument has been for some time that the notion of reputation management is more likely to appeal to internal stakeholders in certain companies/ industries and probably more accurately reflect what the process is about - underscoring legitimacy in external and internal labour markets for good governance and leadership, ethical practices and CSR, as well as creating difference in these markets through branding.

The second notion that seemed to strike a chord was the need for HR to be the guardians of 'authenticity' in employer branding. Employer brands which aren't rooted in what really matters to employees and potential employees are unlikely to be effective. Indeed, these top-down 'designed' brands are more capable of creating cynicism through perceived attempts at 'brandwashing' and dissappointment among employees through overpromising and underdelivering. One of the lessons is that HR needs to drive employer branding to prevent it being dominated by corporate communcations and marketing, functions which often struggle with the notion of bottom-up design or co-creation.

This issue raised an important discussion around segmentation: should and can organizations tailor EVPs to segments, and on what basis should we construct segments? Among the many interesting discussions we had on this topic were ones related to how far you go with segmentation and how do you relate segments to high performance, and to what extent do you privilege the 'global' over the 'local'. A number of organizations have begun to segment their employer branding on the basis of lifestyles, but do EVPs that appeal to lifestyles produce significant benefits for organizations? Also some organizations are wrestling with the problem that idenity and employer branding are essentially local phenomena, yet organizations seek to impose and privilege the corporate brand over the local brand (perhaps reflecting the dominance of marketing and comms). Is this the right way around for employer brands in frequently culturally diverse businesses? Or should we go for the equivalent of endorsed branding strategy, which is sometimes used in customer-facing corporate branding? Again, context is all important; there is no 'one best way'.

A third issue was the role of leadership and its impact on branding. It was clear from discussions that the idea of leadership branding was seen as an integral part of employer branding. Either because leaders have an important influence on the reality of employer branding through their actions in 'walking the talk' or other wise, or because we expect them to, the reality is that leaders (and recruiters) really matter in how people externally and internally experience employer branding. So, should employer branding always incorporate leadership branding?

A fourth issue was measurement. Very little is done in this direction, though for nearly all participants measurement is an absolutely critical issue in making a business case and in evaluating effectiveness. So, we had a lot of discussion around the notion of how to measure employer brand equity through psychological contracting, surfacing images, brand awareness, and some of the more conventional recruitment and retention metrics. For employer branding to really take-off (and for HR credibility), measurement has to be a lot more effective than has hitherto been the case, even allowing for the fact that what is measurable isn't always meaningful and the value of intangible assets.

A fifth issue was the importance and use of the term, Gen Y, which is more widely discussed in Australia than it seems to be in the UK (where the demographic problem is more about managing an ageing workforce). As we have pointed out in recent publications and will do in our forthcoming report for the CIPD on Web 2.0, Gen Y is a crude term than may do more damage that good. The problem seems to be associated with the 'fallacy of misplaced concreteness', in which shorthand labelling (of often diverse groups) begins to have real consequences; the more we think of the younger age groups as Gen Y, the more we treat them uniformally as Gen Y, despite the wide variation of lifestyle and behavioural differences within this group. So, do we need to be a bit more sophisticated in our research?

Employer Branding in a Recession

2008-11-14T19:37:00.005Z

I'm increasingly being asked to comment on the need for employer branding in the current economic circumstances? Just how relevant is it when the context for the 'war for talent' has changed? So here's my take on this.

Prediction in an increasingly unknowable world is fraught with problems, as books like the Black Swan point out. I'm not trying to play the recession down because for many people and industries, it is - and will become - very severe. However, there are a few longer term trends which seem to suggest that employer branding may become even more relevant than before.

The first point to note is that employer branding is not just, or even mainly, about attracting new talent but is also about engaging, motivating and retaining existing talent. And these processes are subject to the same kinds of dynamic expectations among employees that I noted in the last post. Most of the good evidence on engagement suggests that organizations in general are not getting any better at this, despite the enormous investment in ever more sophisticated HR techniques. In part, I suspect that this is because these self-same HR techniques and the promotion of so-called best practices are leading to a ratcheting-up of expectations by employees of what constitutes a good employer. The more exployers are drawn into branding, the more the ideal standards they promote influence minimum standards of legitimacy in this field. This ratcheting-up influence is likely to become even more exaggerated as evidence on the ideal standards among prominent firms in the 'employer of choice' game become seen as the norm as a consequence of heavy promotion in the business media. So the criteria for what may have been seen as an employer of choice a number of years ago becomes the the necessary table stakes, even in a recessionary context.

Second, demographics worldwide point to ageing populations, decreasing numbers of young people entering the labour force and changing expectations among those young people that do. These three demogrpahic trends may well be shaped by recessionary economics but suggest talent wars will not diminish in the medium to long term, so organisations that ignore them will only succeed in storing up problems for themselves by neglecting their external and internal images as employers.

Third, in every recession I have experienced over the last thirty or so years, there has always been a shortage of talented people in certain occupations, and the knowledge-intensive nature of industry and competition in developed (and, increasingly, developing) economies will just add to that problem. As intangible assets become an ever more important strategic driver for organizations, so -called talent wars are unlikely to diminish (which is evidenced by current reluctance among financial services to give up their much maligned bonus practices, one of the probable causes of their current problems - see a case we wrote in 2005 on 'The Financial Services Industry: Unfit for the Future' in our Corporate Reputations Book).

So, I'm not saying that the recession will have little impact - of course it will. However, organizations that have invested in employer branding should continue to do so, and those that haven't may need to think hard about how they compete in labour markets that are affected directly and indirectly by demographics, knowledge-intensity and ratcheting expectations.

Corporate reputations, images and identity: how theory can help practitioners

2008-11-14T19:16:00.002Z

I’m just about to begin a two-week stint running some courses and doing presentations on HR’s contribution to branding and reputation management in Australia and China. As always, I’m on the lookout for interesting material from academics to help me provide some insights into these important topics; hanging around airports and spending time on long plane journeys gives you plenty of time to do just that. So I brought with me the new edition of the Corporate Reputation Review (Volume 11, number3 for those interested). This special edition brings together leading people in the field of organizational identity to write about their emerging frameworks and data. In this increasingly arcane field, this special edition produces some gems. Though the papers are difficult to decipher, even for academics versed in the language of social identity and social actor theory, they yield some blindingly obvious-in-retrospect insights that cause me to re-think some of my ideas on employer branding, some research and consulting work we are doing in the field of employees’ images of healthcare organizations, and the nature of the HR.

The first is an examination of the well-worn distinction in the literature on reputation management between organizations’ needs to be simultaneously different and legitimate in terms of their organizational identities, the characteristics of which are their central, enduring and distinctive attributes (CEDs). Brayden King and Dave Whetten (the latter always a great bet for new insights) suggest that this ‘paradox of identity’ can be thought of in a rather different way than has hitherto been the case. Traditionally, this tension has been seen in terms of organizations attempting to solve seemingly incompatible needs for being different (i.e. branded) from competitors in product and labour markets but also being similar (social legitimate) to their comparators (e.g. being socially responsible, adhering to legal and governance standards, etc).
King and Whetten’s insight – rather obvious when you think about it - is that these needs are linked by the notion of ‘accountability standards’, which define norms of both appropriate behaviour (legitimacy) and esteemed performance (reputation).

Thus, when an organization seeks to become or remain a member of a business/ industry category, say a healthcare provider, it has to meet the minimum expectations of external and internal ‘audiences’ for patient care and the delivery of public value – the necessary, legitimacy-based conditions for membership. However, to become an esteemed member, it has to meet the ideal or aspirational standards of that group of businesses/ industry (reputation). The two, of course, are linked in the form of a continuum from minimum standards to ideal standards. And, because they are linked, changes in one have an impact on the other and vice versa. So, for example, as our expectations of the minimum standards of an employer change in relation to what might be expected, say, of an ‘employer of choice’, this leads to a ratcheting-up of our expectations of the ideal standards of an employer of choice - in other words, employer branding becomes a moving target. Similarly, as organizations compete harder to become employers of choice, such competition leads to a ratcheting-up of minimum standards. The probable results of this last dynamic is that the previously held ideal of an employer of choice becomes the the minimum table stakes, because audiences focus on, and increasingly use as their benchmarks, these prominent players in their industry and exclude reference to others.

Applying this line of thinking to the legitimacy and reputation of the HR function itself, you might be better able to understand how excellence in HR is no longer just associated with meeting the standards associated with cost control and service delivery to internal stakeholders, its two traditional and necessary functions (see Martin, Reddington and Alexander, 2008). Nor, we argue, is it good enough for HR to meet the aspirations of being ‘strategic’ (i.e. to contribute to corporate needs for innovation, customer satisfaction, productivity through high performance work systems, etc) , which has now become the prototypical expectation for HR excellence. Instead, HR needs to focus on the long term reputation and legitimacy of the organization itself by contributing to corporate branding, corporate governance and risk management, corporate social responsibility and ethics, and the creation of intellectual capital. These are all intangible assets, which, according to the well-known economist John Kay (2005), are the reason ‘why some nations are rich and others remain poor’.

The downside of this process, however, is that the market and competition over organizational and even professional identities leads to ever more risky behaviour, in much the same way that competition in financial services has seen firms develop riskier products and riskier HR strategies (talent management and bonuses). What will HR need to do next to help organizations become an employer of choice, and to become a function that rates high in the credibility stakes with CEOs?

The second article is by Kristin Price (who tragically died recently) and Dennis Gioia, both of whom featured in a recent blog. This time, their specific contribution is to raise the question: how can organisations improve their images in the marketplace for images – that is, among customers, employees, the media, prospective employees, shareholders, governments and the like? Building on their previous work on the notion of organizations having multiple, intended and unintended images, they propose the notion of the self monitoring organization. This concept is borrowed from the literature on individual differences. So just as high self monitoring individuals have to be vigilant about the multiple images of themselves (their own self concept, professional images, family members’ images etc), so high self monitoring organisations use a range of strategies and individuals to further the organization’s interests in reconciling self image with others’ images (the press, employees, prospective employees, shareholders, etc). Most of these are well known – brand ambassadors or even bloggers who are high in self-monitoring and become the eyes and ears of the organization, newcomers not yet socialised into the system, boundary spanning functions such as marketing, communications and, yes, and outward looking HR function, social networking and leadership liaison functions, which interact with outsiders, etc.

Two critical points emerge from this paper. The first is to expect multiple images in organisations and leadership difficulties in understanding them, especially if they aren’t high self monitoring as a group. The second is the problem of managing organizations with purposively different intended images, for example, a merger between two quite different companies even in the same industry. Both of these problems can be solved, to a degree at least, if organizations become high in self monitoring. As an afterthought, it in self-monitoring that Web 2.0 can make an enormous impact in helping act as the eyes and ears of the organization – another connection between technology and branding.

HR and the Governance Agenda

2008-11-04T19:11:00.006Z

As part of our corporate reputations and HR agenda, I've been working on a chapter with a close colleague for a new book edited by Suzanne Young on governance. The chapter will focus on the links between HR and the governance agenda, but will do so from a public sector perspective, where governance issues are equally important.

Part of the reason for the book chapter stems from the current economic crisis, which, in part at least, is a crisis of governance. A few years ago, we wrote a case study on the financial services industry, which was sub-titled 'An industry fit for the future?' In that case we questioned the role of incentives in creating an industry driven by new business and new products rather than by servicing existing customers. Well, the forecast implied by the question in the title was along the right lines, with incentives, greed and lack of governance playing a role in most explanations of what has happened. So the challenge has to be raised, to paraphrase Bert Spector's classic paper on Enron, was HR the 'unindicted co-conspirator' in the demise of financial services?

To return to the public services, our work with some senior HR directors in the NHS in Scotland has led me to think about the links between how HR governs itself, and how that plays into the so called 'three pillars of governance' in healthcare - staff governance, clinical governance and financial governance. It has also led me to think about just how central an issue this is since governance seems to be about balancing innovation and risk in all three pillars and in the HR function itself. How HR organizes itself and is incentivised to be simultaneously creative and risk-conscious can have an enormous impact on how well employees experience their organisations as employers of choice, embracing principles of fair treatment, a say in decision-making, development, a good working environment and supportive leadership (staff governance). In turn, this has obvious consequences for clinical governance, which is concerned with balancing innovations in healthcare with patient safety, especially in so far as staff are fully trained and committed to caring/ prevention goals.

However, where HR at senior levels can really make their mark is at the corporate (read financial) governance level, providing advice and help in the selection, development, performance management and incentivisation of boards. As we have seen in the financial services sector, the culture of an industry and the organisations that represent it are shaped by leadership actions and the values they espouse. Consequently, HR and people management has a key role in to play in promoting their organisations as representatives of 'higher values' rather than just 'hired hands'. So, resurrecting the arguments of Karen Legge, my position is that HR needs to think less about being strategic partners (pace Ulrich) and more about more about becoming managers of reputations - for being simultaneously different (the branding agenda) and legitimate (the governance, ethics and CSR agenda). Any thoughts?

Branding and Reputations: the Needs for Equivocality, Flexibility and Adaptability

2008-10-25T09:06:00.002+01:00

It’s been my week for working on reputation management and employer branding. Along with colleagues in the Centre, I’ve just finished off a couple of draft reports on employer branding and reputation management for two of the largest health boards in Scotland, given a presentation on the topic to the senior executive team of another health board, and about to give a presentation on corporate reputations to a specialist conference on the subject in Rome in a few hours. So it was extremely helpful to have received a mail from a good colleague of mine, Kerry Griggs, from Charles Sturt University in Australia, who is working with me in this field. Kerry pointed me in the direction of an insightful academic piece in the Journal of Management Inquiry by Kirstin Price, Dennis Gioia and Kevin Corley from the USA entitled ‘Reconciling Scattered Images’, which has helped me make sense of the scattered images we have unearthed in our own health service research and revise some of our model building on employer branding, coming out in two books early next year by Ron Burke and Cary Cooper and by Paul Sparrow.

Price et al discuss organizational images from three perspectives. These are projected organizational images (self presentation), refracted images (how outsiders read specific aspects of an organizational image) and intercepted images (how particular employees and leaders interpret images, often based on the way insiders think outsiders see them). So far, nothing much new here, aside from new terms. However, it is what they make of these, often competing, images that help me make sense of organizations such as the NHS. They argue that these images are ‘best seen as ‘virtual commodities modified and exchanged’ in a marketplace for ideas about an organisation. Thus people hold multiple images of organisations, often at odds with the official one that organisations such as the NHS would like to dominate the marketplace for ideas about health providers. As an example, our research (on, in their terms, projected, refracted and intercepted images) has unearthed four competing and complementary images among health service employees in rank order of the 'volume' (a measure of frequency and intensity with which they were expressed during group interviews): as organisations dominated by financial governance, power and politics; as professional bureaucracies structured along strong clinical identities, as employers of choice; and as a patient-centred, caring organisations. Interestingly, while the first two images dominated, the last two were not widely held or consistently expressed during our interviews.

Price et al's key insight is that organisations such as the NHS need to be flexible and adaptable in identity management to cope with the dynamic environments in which they operate. In this way they become sustainable in the long run – the dynamic capabilities argument. Organisational image architects (and academics) need to think in terms of ‘image equivocality’ to mitigate the scattered images problem. Roughly translated this means they need to build in flexibility (relevant to time and context), consistency (non-contradictory images) and inclusivity (relevant and authentic to most employees and users). How organisations such as specific health care providers achieve this is dependent on their ability to create images that maintain employees’ appreciation of its needs for adaptability (say in moving care towards the community and away from hospitals, and in meeting ever stringent financial resourcing) while not producing cynicism and mistrust through projected duplicitous images (e.g. those emphasising patient care that health service workers sometimes find difficulty in buying into, given their perceptions of senior management's main concerns). Such projections have an awful tendency to come back to haunt them.

Political science tells us this is best achieved by creating images that constituents can write what they want into them, while still remaining consistent with their overall mission and values. Which is why we are advocating public value as a equivocal image for health services providers. This notion, part of another of our research programmes on healthcare discussed on this blog, seems to fulfil the criteria of flexibility, consistency and inclusivity because it is ‘what the public values’, an idea broad enough to be flexible,consistent and inclusive but also a compelling one. What the public values may change over time with ratcheted expectations of healthcare providers; it may also change over time to incorporate an economic as well as caring mission. However, it remains a consistent goal for many healthcare employees seeking to gain meaning from their work while being fairly rewarded and provided for, and being allowed to hone and utilise their professional skills. For example, new public sector financial stringencies will lead to investment problems for all healthcare providers in the UK, while demographic trends point to major problems in recruiting clinical and non-clinical staff from traditional labour markets. A public value image allows healthcare to reflect these environmental changes by being at the heart of economic development as well as a caring society - providing good knowledge-intensive jobs in regions that need them and in providing employment for disadvantaged groups who are often those most in need to healthcare as a consequence of their marginalisation (see the results between unemployment and health). These economic goals are easily reconcilable with a healthcare and prevention mission, and place Scotland’s healthcare providers at the heart of economic growth.

Is this a projected image that we can all write into it what we want to, while remaining consistent with the traditional values of the NHS?

New Insights into Web 2.0 and HR

2008-10-08T10:09:00.002+01:00

I've been under the 'cosh' recently finishing off our CIPD report on Web 2.0 and HRM. I have to thank some bloggers who have helped provide insight and new material for the report and have done so in the written version. However, I would also like to acknowledge them online in case they don't read the document when it comes out in late November. They are James Hayton, James Richards, John Castledine, Jon Ingham and Thomas Otter.

To single out a few new recent pieces of research worth reading, James Hayton recently pointed me to a report by Pew Research on networked workers - excellent! Thomas also pointed to the advice given by IBM as a model for a code of conduct on Web 2.0. Finally, Julian Birkinshaw and Sarah Pass have just produced an interesting piece of work for the CIPD on Innovations in the Workplace: How are oragnisations responding to Generation Y and Web 2.0? This seems to be one of the few pieces of hard data on the lack of knowledge about Web 2 by HR professionals (and other managers in the UK) , which is also a finding of our work. This doesn't prevent HR professionals from being interested in the subject, however; indeed, we have found the situation to be the opposite.

As evidenced by research from Pew, Gartner, Forrester and McKinsey, there is strong justification for HR to be thinking in terms of and planning for a generation gap, which is one of the conclusions of the Birkinshaw and Pass study. However, this gap may be more of sociographic, V-generation one than Gen Y demographic one (see the other surveys referred to above). Birkinshaw and Pass also report evidence that HR sees potential in Web 2.0 and the need to address that potential, but just haven't done much about it. Maybe they have more on their plates just now with the problems of the financial services industry and the economy?

Leaving aside the hype, we side with those that believe HR need to address this issue strategically, or else they maybe left at the starting line?

Strategies for Web 2.0 and HR

2008-09-21T06:59:00.013+01:00

We are in the middle of writing our report for the CIPD on Web 2 and HR, which, as well as helping HR specialists understand what is going on in this space, has to help them develop policies and strategies to take advantage of these new social media. With this aim in mind, I've been reading a veritable rash of articles,books, blogs and the like aimed at advising companies on Web 2 and their dealings with customers. Two of the best of these are by Charlotte Li and Josh Bernoff(2008) Groundswell: winning in a world transformed by social technologies, Bostong: Harvard Business School Press and Amy Schuen (2008) Web 2.0: a strategy guide, CA:OReilly Media.

I'll say a little more in a later post about the second, but having just finished reading the first one I'm happy with my practitioner hat on to recommend it to HR colleagues or students seeking to implement or talk about implementing Web 2 into organizations.

The basic thesis of Groundswell is simple enough, though perhaps written in an over-evangelisitic tone befitting of US consultants from the American technology and media sector. It is simply this: that the democrastising features of the social web is enabling the ever growing numbers of people who use such technologies to 'get the things they need from each other instead of from companies' (p. x), which is a phenomenon that organizations can observe but can't control. Like most such publications, they invoke a form of social contagion, resulting in a widespread groundswell through emotional, behavioural and ideational processes. Brands and employer brands, are increasingly in the hands of customers and employees, and those 'on the street' who have the potential to influence these people. Correspondingly they are increasingly out of the control of companies, conventional marketing departments, public relations, communications and HR departments.

So far, nothing much new here, apart from some dramatic illustrations of these phenomonon. But in later chapters they begin to sketch out some 'hardish' data on these developments, a form of analysis they call 'social technolographics' that helps segment potential customers (and employees). Thus, they usefully distinguish creators (of content), critics (of others content), collectors (of content), joiners (who follow fashion), spectators (who consume content) and inactives (which formed 41% of Americans and 53% of Europeans in 2007). Like all forms of segmentation, the power of such analysis allows organizations to target their product offerings more effectively, using one of more of five strategies for addressing the external customer problem with Web 2. These strategies easily translate into strategies for HR to deal with internal customer 'problems', including engagement, employer branding, knowledge sharing and knowledge creation, based on a four stage analysis of people (what are employees ready for), objectives (what are your people management goals in introducing Web 2), strategy (how do you want your relationship with employees to change) and technology (what applications should you build).
The five strategies they identify are:

Listening to understand employees through digital research
Talking to employees by spreading digital messages
Energizing by building on the enthusiasm of key employees and using the power of word of mouth to spread the message/medium
Supporting employees by setting up tools to help them support each other, and
Embracing employees into the design of new product and HR process design and implementation

Each of these strategies is discussed in turn using case illustrations to show how organizations are using social media rather than simply relying on conventional market research techniques of surveying and focus groups and communications techniques. For example, listening is illustrated by continuously tapping into the different ways in which customers use social media to voice their opinions (volume as well as quantity), including customer blogs, rating reviews, social bookmarking and tagging, and discussion forums on community websites. Talking, by contrast is illustrated through the use of posting viral videos, enaging in social networking sites and user-generated content sites, joining the blogosphere to write manager blogs and creating online communities to listen as well as shout.

While the authors have a chapter on relating to employees, it is easy to apply the five strategies to HR and people management. Moreover, as the authors predict in their final chapter, 'groundswell' technologies are 'exploding' since they are cheap and easy to create and improve. They also draw on powerful social networking effects for their adoption, the key message of Amy Schuen's book, which I'll review in a later post.

Reflections on the CIPD Harrogate Conference

2008-09-18T09:07:00.006+01:00

A few further thoughts on the CIPD Annual Conference at Harrogate. Of all the sessions I attended, perhaps the two most useful for me were on the CIPD's 'Shaping the Future' programme and Jack Phillips workshop on Measuring HR and Determining Return on Investment.

The CIPD's Shaping the Future agenda, which you can find details of on their website, is an ambitious set of a dozen or so action research projects intended to help members learn more about the links between people management and high performance. As they stress, this is a research programme and a development programme, based on the premise that you only ever learn about something by trying to change it. For us, this is an excellent fit with our work as we run a number of action-research based masters programmes and are about to begin a major knowledge networking and action research programme of our own with senior HR professionals.

The second session on measuring HR directly played into our project for the the Scottish Government/ESRC on measuring human capital and its links with public value. Jack Phillips work has been influential in this field for some years but this is the first time I have come across him face-to-face. Personally engaging in a low key kind of way, he was the consumate HR professional, both in his presentation and in being 'content rich'. For anyone considering a project on measuring human capital, I strongly recommend an examination of his well-research and rigorous methodology - beginning with a look at his ROI website and attending one of his seminars.

CIPD Annual Conference and Web 2.0

2008-09-17T06:58:00.011+01:00

I chaired a highly enjoyable interactive session at the CIPD Annual Conference at Harrogate yesterday, during which we took the chance to gain feedback from around fifty-five members about the relevance of this topic for their jobs and organizations. This cannot be described as a representative sample in any statistical sense, but provided us with an indication of the high level of interest in Web 2, but relatively low levels of understanding of its potential. This contrast was even more marked at a presentation we did at Olympia in June for the CIPDs software and recruitment event, where well over a hundred people packed into a space that could only seat sixty or so.

The session comprised of three purposefully short but highly informative presentations by three industry speakers on different aspects of Web 2 and its application to HR. These were followed by questions and break out groups to discuss key some of the key issues raised by the presentations and by our research for the CIPD. Andrew Unsworth, Head of E-Government at Edinburgh City Council, began with some evidence on the Virtual Generation and how it is and would affect models of organizational learning in his organization. This generational driver is one of the most important in getting HR to think seriously about how to incorporate these social media into their communications and ways of working, a point taken up in the following presentation by Tom McCabe, Head of Human Capital in IBM's North East Europe Consulting Division. IBM is a highly sophisticated user of the complete family of Web 2 media and a serious experimenter, which was demonstrated by a short video of how they are using Second Life as an induction and conference tool. He also explained how they used wikis, blogs and their in-house version of LinkedIn to create and share knowledge in the organization. For me, however, one of the most interesting applications was the Jam, where thousand of IBMers collaborate online to generate ideas for the company and to share their views. This demonstrated the power of Web 2.0 to reach parts that surveys can't reach, in ways they can't reach, which shows how employee voice can be surfaced and acted upon. Finally, Andy Hyatt, who leads Web 2.0 for Hodes, a recruitment and HR consulting firm, drilled deeper into the potential of social media for recruitment and selection. He provided a number of examples of how organizations are using interactive online media to connect with potential recruits, including passive candidates, which were topics of immediate interest to many of the audience.

Following questions of clarification, we posed five questions to the audience, which they discussed in groups. In true Web 2 spirit, they were also given the opportunity to discuss any other questions they thought to be more relevant. Our questions were of the type: what are the implications for knowledge sharing and collaboration, surfacing employee voice, etc in your organization. Also, what are the implications/ dangers for loss of control over the corporate message and/ or brand. We gained two strong impressions from participating in the groups and listening to the feedback from them. The first was that our questions weren't particularly relevant to them at this stage in their understanding; most participants were at a level of finding out about the basics of these new technologies. The second was that many were still pre-occupied with the dangers of open/democratic communications, and with the damaging impact on brands.

As Martyn Sloman from the CIPD suggested, these impressions were similar to those he gained during the early years of e-learning. Most HR professionals have not been in the vanguard of adopting new technologies in businesses, which was evidenced by the lack of interest in technological issues on their website - technology and HR ranked 400 and something on the list of important issues for them, some distance below many of the traditional 'tea and toilet' issues.

However, given the interest shown by the numbers of people that have turned up at these events on these new social media, we remain encouraged that the HR function is beginning to 'get it', an impression supported by many of the comments from participants in the room

A Final Thought from BAM: Two to Track on Leadership

2008-09-12T18:28:00.009+01:00

The developmental papers at the British Academy of Management are always interesting because of the short presentations and long discussions, a format used in many conference nowadays.

I attended a few sessions on leadership to learn something for our research projects and was delighted to come across two pieces of work in progress that deserve a wider audience - which I'm sure they will get when they're more complete. One was on the popular topic of Authentic Leadership (based on Goffee and Jones's work) by Jane Turner from Northumbria. She has only recently moved into academia from practice, which was reflected in the practitioner-oriented nature of her excellent presentation. Authentic leadership focuses on being true to others and true to yourself, and she described work she was doing with a group of senior leaders to try to get them to get to grips with this concept and turn it on themsevles. The mode of action research and her results were of great interest to the audience, though there were some unresolved questions over what to do about the insightful reflections she had generated among her group of leaders. The notion of authenticity links both our work on strategic HR leadership and our work on employer branding; I'm certainly going to read more on this and look forward to seeing Jane's work in the future.

Gareth Edwards from the Leadership Foundation presented an excellent joint paper with Birgit Schyne from Portsmouth Business School on emotions and implicit leadership theory. This notion is a highly attractive one to me because it helps explain why leadership is becoming such an important topic. In a recent post on the NHS, I raised the issue of 'does leadership matter'? The objective evidence suggests it is not all that important to performance in many contexts but has become something of an industry. However, many of us in attitude surveys and in our everyday discussions about work raise the issue of leadership as an important one, because we hold implicit theories of what leaders should do and how they should behave, based on our individual and cultural belief sets. In other words, leadership can be thought of more as a phenomena created by followers to help them make sense of organizational life and performance, and because we need to attribute cause and blame to complex organizational problems (attribution). The paper raised two questions: how do emotional reactions to the same leader vary among followers and to what extent are these reactions shaped by the implicit leadership theories. Gareth and Birgit produced a very useful framework for explaining how follower characteristics and implicit leadership theories will cause employees to see the same leader differently and to generate different emotions reactions to him/her, which they hope to test in a laboratory setting. Again, I look forward to reading more because it helps us make sense of some results we are unearthing in out branding project for the NHS in Scotland. Leadership really seems to matter to employees perhaps because they expect it to make a signicant difference in this world of celebrity, which places incredible pressure on senior managers who are often unable to fulfil these expectations. This may be because of the difficult constraints they operate under (especially in political organizations such as the NHS) and simply because different people expect different things of the same leader. A no-win situation for mangers? Which might explain why leaders recruit in their own image and engage in emotion shaping culture management/employer branding/leadership branding programmes?

Two to Read for HR Specialists in Airlines and Healthcare

2008-09-12T10:25:00.004+01:00

I enjoyed my first visit to the British Academy on Management (BAM) since 2001 (see previous post). Two papers in the HR stream particularly caught my attention. The first was a presentation by Greg Bamber, who is now at Monash, on a new book written with American and European colleagues (including colleagues from Glasgow - Judy Pate and Phil Beaumont) entitled 'Up in the Air: how airlines can improve performance by engaging their employees', Cornell University Press (januray 2009). The second was a paper presented by Paula Hyde and Claire Harris on 'Expectations and Performance in Healthcare', which is based on the study they, and others from Manchester Business School, undertook for the Department of Health and the CIPD on HR in the NHS in England.

The material on the airlines was very well researched and well argued, with some useful frameworks for understanding the relationships between commitment strategies and unionisation. The authors have done an interesting job in mapping out the changes in HR strategies over time of the low cost and legacy airlines, showing that being low cost and good at HR isn't incompatible. For example, South West Airlines has a positive relationship with unions, employees high commitment strategies and was the most profitable airline in the industry last year. Greg quoted a senior airline official from one of the pilots associations, which went along the lines of 'Why is it that other airlines don't get it'? It is clear that some don't and have developed other consistent strategies of low cost and low commitment HR/anti-union stance, which also have been successful. The problem children seem to be those airlines that, to borrow from Michael Porter's phrase, are 'stuck in the middle', neither making one decision or another. While this is an appealing analogy, it only takes us so far. Reminiscent of criticisms of Porter's boxology, life isn't quite so simple and if everyone followed the same strategy, where's the competitive advantage in that?

The HR in the NHS study is the culmination of three years 'hard labour' for a multi-author research project for the CIPD and Department of Health. For any HR manager in healthcare, this research is an essential read. Claire and Paula's paper provided some excellent data on HR strategies, psychological contracting and HR outcomes. They have also developed a very useful model bringing these issues together, which is both rigorous and relevant (the theme of the conference) to academics and practioners in healthcare. However, they may want to think about how the issue of public value might be incorporated into their model (see earlier post from work we are doing on human capital and public value) and on the notion of valued expectations in psychological contracting, which I discussed in our book on corporate reputations, branding and HR.

This is definitely one to read for my colleagues and students working in the NHS in Scotland.

See Hyde, P., Boaden, R., Marchington, M.P., Claire Harris, Paul Sparrow, Sarah Pass, Carroll, M. & Penny Cortvriend (2008) 'The process of engagement and alignment: Improving health through human resource management', Department of Health, Chartered Institute of Personnel and Development.

Blogging's Contribution to HR

2008-09-12T09:42:00.006+01:00

James Hayton’s recent post on his Threee blog referring to the apparent stalling of social networking and James Richards work on blogging has got me thinking more and more about the contribution of this type of social media to people management and HR. So when the second of these two excellent HR bloggers brought our attention to a new book on the topic by Jill Walker Rettberg, an American academic teaching at the University of Bergen, I had to dash off to Amazon and buy it. En route to the British Academy of Management (BAM) annual conference in Harrogate, where I met some new friends from Australia (hello Naomi, Sandra and Elisabeth) and some old friends (hello Stuart and Anne Claire) who were interested in this topic, I read this short but excellent publication. In a field where it is difficult to find good writing that is both rigorous for scholars and relevant to practitioners - the theme of the BAM conference - this book is certainly one that will repay readers seeking to understand some of the serious conversations on Web 2 and get practical advice on how to blog. Not many attempt and clear the double hurdle of rigour and relevance but she does so admirably.

James Hayton rightly questioned the perhaps modish nature of social networking with his reference to a survey published in Mashable (see earlier blog) showing the dissatisfaction and lack of penetration among 18-65 year olds worldwide, while James Richards has focused on the extent and potential of blogging for employee voice in his work on organizational misbehaviour. Both of these academics raise important questions which has caused us to revise our thinking for the CIPD research Web 2. Jill Walker Rettenberg’s book addresses these issues head on. On social networking, she quotes a statistic that shows its potential among the ‘V-gen’. Facebook was originally developed for US college students and has now achieved over 90% penetration, a fact that was supported by the recent work on social networking at the AOM conference, which I reported on in an earlier blog. So while social networking may show signs of running out of steam among older generations, it seems to have become the norm among young, educated people, a fact not lost on some organizations and universities looking to recruit them.

Like James Richards, however, blogging is Rettberg’s preferred social medium and it is on the application and potential of this phenomenon that she scores heavily because her book works at different levels; it is also beautifully written. For anyone wanting to either begin to blog or improve their blogging potential, this book is a godsend (I’ll certainly use many of her ideas on how to make a blog more interesting and widely read); for any serious scholar interested in new digital media or any HR manager wishing to understand the potential of blogging in their own organization, it is a genuine ‘ eye-opener’. Unlike me, she has not come to this topic late, having researched and blogged in the field for most of this decade, so she shows a real mastery of her topic.

In a book of only 160 pages she explores fully the potential and problems of blogging. On the plus side, she outlines bloggers potential to democratise society (and the workplace) by creating a ‘modern public sphere’. To quote one famous press critic, ‘the power of the press is huge if you own one’; blogging now allows everyone to own a press. On the downside, she invokes the worries of both Plato and Jurgen Habermas, a modern social philosopher, to explain the dangers involved in having too many writers and readers because such a groundswell can result in a ‘ lacks authority and, ultimately, a lack of control’ (p48). Both of these perspectives on blogging are evident in our case research and in other research on Web 2 and HR. Some organisations, such as Microsoft, Google, IBM and UK government departments, see the potential for unearthing authentic employee voice through blogging and actively do all they can to encourage employees to blog; they also learn to with the consequences of the occasional and usually in the process rant. We recently made this point to the CIPD’s policy and research committee, which seemed to take this on board for their ‘Shaping the Future’ programme. However, most organisations want to control employee blogging or even ban it altogether (such as the UK armed forces but, interestingly, not their US equivalents). These organisations see significant threats to their authority to be sole authors of the official corporate story and brand identity, so that they attempt to control blogging through a range of mechanisms, ranging from banning employee blogs outright to bringing them behind the firewalls, having policies on what and what can’t be said if you want to keep your jobs, by having the communications departments monitor and respond to employee blogs or by creating corporate blogs or their own.

Walker Rettberg makes the point in her conclusions that the future of blogging lies not only in a form of direct participation by facilitating often unheard voices, providing a basis for participation in issues that truly matter to people, and in the power of a read-write web to collaborate and learn together, but also in an important form of indirect or implicit participation that is grounded in social networking theory. This kind of theorising, probably best known for the work of Mark Granovetter, points to the importance of ‘weak ties’. When we set up strong ties with colleagues, according to Granovetter, we are less likely to learn from them because we share with them common perspectives and common knowledge (we are likely to know and understand what they know and understand). By establishing lots of weak ties, however, we tap into perspectives and knowledge we are much less likely to know about. Thus social networking, outside of our Facebook friends or immediate contacts, is the best way of increasing our absorptive capacity for new knowledge, the sine qua non for innovation. Blogging, more than social networking sites, helps us do this by establishing more weak ties. At a deeper level, it allows organizations such as Google, Flickr and You Tube to harness our collective intelligence by mapping our IP addresses and use them to make recommendations on what might be of interest to us in the same way that Amazon does with books. It is not to difficult to imagine a situation in which the new attitude survey is replaced by software that maps our IP addresses and offers us tailored employee value propositions or knowledge. Indeed some of that future is with us already, with companies such as IBM mapping the social networks of their internal bloggers/networkers to create organizational structures around naturally occurring communities of practice rather than top down imposed structures that do not reflect hoe people interact.

See Jill Walker Rettberg (2008) Blogging, Polity Press, Cambridge:UK

The Future of Social Networking and Blogging

2008-09-07T17:37:00.006+01:00

We're putting together an article for People Management on Web 2.0 and HR as part of our project for the CIPD. Just in case anyone missed them, there were two very interesting posts in links to other blogs on this site last week. One of these focused on the mixed picture on social networking by James Hayton's Threee blog. He referred to an article in Mashable on September 3rd, referring to a report from Synovate, which showed that 58% of 18-65 year olds world-wide had no clue about social networking. To quote from the article:

'The survey of more than 13,000 people in 17 developed nations also asked if users were losing interest in social networks. According to the report, 36% said “yes,” with interest fading fastest in Japan, Slovakia, and Canada, with 45% of US users supposedly losing their appetite for social networking'

However, the article also points out that this survey leaves out teenagers who are the biggest users, and that provides optimism for providers in this space. Moreover, even in countries where internet penetration is high, such as the US and UK, less than 30% of internet users use social networking, which is evidence either of potential markets or lack of interest.

James raises an important question in his post: Does this suggest a lack of future for social networking? A discussion among academics at the recent Academy of Management event thought not, and we agree. However, social networking is only one aspect of Web 2, and for HR, we believe other social media have greater potential impact, including blogs, which is where the next post by James Richards in useful. Aside from his site and his own research, he has pointed to a new book on blogging which has just come out. It's called simply 'Blogging'. Written by Jill Walker Rettberg from the University of Bergen, it looks like an interesting piece of research into this field. She also has a good blog. I'm off to read it and report back.

Human Capital Measurement and Performance

2008-08-30T06:05:00.009+01:00

I've mentioned that we are doing some work, sponsored by the Scottish Government and the ESRC, on measuring the impact of human capital investment in the public services. One of the most useful pieces of research that we'll draw on is the Institute of Employment Studies (IES) report 'Human Capital Measurement: Approaches, issues and case studies', Report 454. This report, written by Dilys Robinson, Hulya Hooker and Mary Mercer, has only just been published in July 2008.

The report stemmed from a series of workshops with IES network members, some of whom were relatively advanced in linking their human capital measures to performance, including the Royal Bank of Scotland (RBS), Standard Chartered Bank, Civil Aviation Authority (CAA), Centrica, the Royal Navy, the MoD, two local authorities (East Sussex and Haringey Councils) and Medway NHS Foundation Trust.

It comprises a well-written review of some of the academic literature on human capital and a summary of the good consulting work in this field. However, the report's real strengths lie in the short case illustrations of how the above organizations have developed and used human capital measures and in the approach they used to producing their findings, which was very much in the action research mode.

Some of the key findings were as follows:

Few of the participating organizations used the term 'human capital', which was poorly understood, sometimes meaningless and sometimes offensive to managers.

Although there was some consensus over basic measures, there was no 'one-size-fits-all' approach or framework. Context mattered: while each organization felt they could learn from others, their was little possibility of developing a standard set of measures. This was most obvious in the differences between the private and public sectors, with the latter having to concern themselves with more intangible measures and more diverse stakeholders.

A 'workable' approach emerged during the course of the research workshops, fitting the needs of a majority of participants. This was the CAA's approach of asking a series a searching questions on what they wanted to know (e.g. are we retaining key employees?) and attaching a series of measures to each question, forming a four stage hierarchy - basic underpinning employee data, operational measures (e.g recruitment costs, training days), outcome measures (employee turnover) and 'strategic' measures, where the links were made between, say, absence and engagement. On this last series of measures, much more work was needed. We would suggest that this was particulalry true of the public sector, where intangible issues such as public value come into play.

In the cases, there is quite of bit of evidence of correlational work, though much less in the field of predictive measurement, which is our goal for the Scottish Government research. The most notable exception is RBS's well publicised and researched integrated human capital system.

In summary, this report is well worth the £18 investment for any practitioner or researcher. It is another example of good research/knowledge into practice from the IES, an organizations with which we are beginning to do a little bit of work . This starts with a 1-day conference on employer branding in Glasgow on November 4th, but more of this in a future post!

Leadership: What is it and Does it Matter in Healthcare?

2008-08-22T14:08:00.002+01:00

I'm doing a presentation on leadership next week for the senior management team of NHS Greater Glasgow and Clyde, the largest health authority in the Scotland employing upwards of 40,000 people. This has caused me to think seriously about what I can usefully say - without being academically bland - to experienced people operating at a senior level on matters that can have extremely serious outcomes.

Like most management academics in these situations, I've chosen to do something which challenges the shibboleths of the 'leadership industry' from an evidence-based perspective and points to some useful things that leaders and leadership can achieve, again drawing on evidence rather than managerial cant. Some of this evidence is drawn from the provocatively titled and beautifully written books by Jeff Pfeffer and Robert Sutton on 'Hard Facts, Dangerous Half-Truths and Total Nonsense', Phil Rosenzweig on 'Eight Delusions that Deceive Managers', and Rakesh Khurana on 'The Irrational Question for the Charismatic CEO', with a of little Henry Mintzerg's 'Managers not MBAs' thrown in for good measure.

Other evidence, however, is taken from recent articles in journals or reports that most managers wouldn't pick up on. These include new material by Helen Dickinson and Chris Ham (2008) Engaging Doctors in Leadership', which can be found on the NHS Institute for Innovation and Improvement website at the bottom of this page; research into the importance of social capital; research into public value creation, including Mark Moore and Jean Hartley's (2008) paper 'Innovation in Governance' Public Management Review, 10, 1, 3-20; and two articles in the current issue of the British Journal of Management on something call 'top echelon theory', which deals with the impact of top management teams on performance (Patzelt, H., Zu Knyphausen-Aufseff, D. and Nikol, P., 2008, Top management teams, business models and performance of bio-technology ventures: an upper echelon perspective, British Journal of Management, 19, 3, 205-221; Naranjo-Gil, D., Hartmann, F. and Mass, V. S. (2008) Top management hetrogenity, strategic change and operational performance, British Journal of Management, 19,3, 222-234).

It's a real shame that these latter two articles weren't written with managers in mind because they have important practical things to say about what effective senior management teams in the healthcare sector need to take into account and need to become. However, I'm drawing readers, especially my postgraduate healthcare students, attention to these articles and to the other references because they are certainly worth reading, though some are more easily understood than others.

My storyline is as follows:

that leaders matter a little less than the leadership industry would have you believe, especially in organizations that remain professional bureaucracies, dominated by doctors,
that investment in followership and microsystems of distributed leadership in healthcare is key to effective performance, but they need to be connected to:
diversely-constituted top management teams that both fit and shape innovative 'business models' or organizational architectures. These TMTs can be a positive force for strategic change in healthcare in ways that charismatic individuals can't. However, the composition of these teams matter a great deal because it determines their absoptive capacity to take in and exploit new knowledge. The diversity of these teams also matters because different people bring different things to the table and, equally importantly, diversity is also likely to reduce professional tribalism and motivate increasingly dissenchanted and/or sceptical clinicians to become more involved in the running of their organizations.

There may be little that's novel in this message, but I hope the evidence-base just about makes it credible.

Web 2.0, HR and the Long Tail

2008-08-15T13:37:00.000+01:00

I've just come back from the Academy of Management (AOM) annual conference in Disney's 'smile factory' at Anaheim convinced of a couple of contradictory thoughts about that conference and Web 2.0. Now being something of a regular (this was my seventh stint in the last nine years) at what is the world's premier academic management event, I'm more convinced than ever that practitioners, consultants and non-attending academics in HR would benefit greatly from coming along. There is no doubt that the standard of papers and presentation of evidence-based HR (and any other topic on management) is higher than at any other academic or practitioner event I've attended; yet, there is a certain anti-intellectual bias, not in the sense of there being a lack of strong academic rigour but because there is too much focus on academic/scientific specialisation at the expense of big or innovative ideas and engagement of practitioners.

Nevertheless, if you can past the formulaic hypotheses testing, numerous discussions of regression and structural equation modelling, etc., by young academics looking to hit the top tier journals, most of whom have had few connections with practitioners, you can pick up many real chunks of insights that other conferences just won't give you.

One such paper dealt with the role of social network sites in hiring. Written by two not so young American academics, Donald Kluemper from Louisanna State University and Peter Rosen from Evansville University, this work was both rigorous and relevant. They argued that the use of social networking websites, like Facebook, has become extremely popular, particularly with
high school and college students in the US (interestingly more than half of the academics in the room had facebook sites). As a consequence, employers have begun to use the personal information available on social networking websites not only for recruitment, which we all know about, but also to make hiring decisions. Using ratings from 274 Facebook websites of students, this study assessed the validity of using Facebook to predict self-rated and other-rated
personality. Their data showed that Facebook ratings of Big-5 personality traits were correlated with each of the self-ratings of the Big-5 personality factors often used to predict performance at work: correlations ranged from .23 for neuroticism to .45 for extroversion, which in selection studies would be seen high. In a follow-up study of 54 employees, Facebook ratings were also shown to predict supervisor rated job performance and to show additional validity beyond self-rated personality in predicting supervisor ratings of job performance. In summary, Facebook entries can do a reasonable job of predicting the important personality characterisitics employers seek from potential employees without having to bring them in for assessment.

This study led to an interesting discussion of why this should be so, what employers can use Facebook and other sites for beyong recruitment and what happens when people wise up to the potential uses by employers of social networking, e.g. faking, impression management through competing over friends, etc. It also raised the issue of whether or not people will be left behind if they don't have a social networking site as recruiters week passive rather than active candidates.

So, here we have a paper that provided evidence on an important social phenomenon in a useful way, but will probably be read by only a few interested academics because practitioners don't tend to read academic journals (for good reason). So it was left to a guru to give me further food for thought and to provide some genuinely intellectual argument that will be read. On the journey back I picked up the new addition of Chris Anderson's recent reworking of 'The Longer, Long Tail' with a new chapter on marketing. Although we have used his ideas from the earlier book in our discussion paper for the CIPD, re-reading this book and the new material, showed the power of genuine insight and engagement with practitioners to present innovative issues in a rigorous fashion. His discussion of how the the the long tail of employees in Microsoft changed the way in which that company does business, despite the worries of lawyers and the brand police, showed the power of letting employee blogging rip. As he argues, ...Microsoft is a less monolithic company run by two titans, and more a collection of thousands of people pretty much like us. Whatever, Microsoft product you use..., there is an engineer or product manager carrying on a conversation in public about it.' (p 241). He also makes the point that Microsoft's customer and employer brand is now controlled by employee bloggers, and, what is more, they are relatively happy about this.

There is no doubt in my mind that social media will be more and more used by employees to give voice to their thoughts about their employers in ways that shed much more light on what matters to them than than through conventional attitude surveys. Some firms are beginning to recognise this, for example, IBM, which is one of our CIPD case study companies; perhaps others should begin to think about how the surface employee voice more innovatively.

If you want to participate in our CIPD study on Web 2.0, please go to CIPD website and look up the discussion under 'Helping People Learn'; if you are not a member, you can repond to this entry by going into the discussion listed on the side-bar.

Because there was so much at this conference of interest to readers of this blog, I'll take up a few more of the HR themes, such as the impact of HR and innovation and performance in forthcoming entries. I'll also examine the growing practitioner and academic interest on employer branding and corporate reputations, which was the subject of my paper.

Employer Branding and Reputation Management in China and Glasgow's Supporting Role

2008-08-03T23:07:00.001+01:00

In this week's Economist there are a number of stories highlighting the importance of branding and reputation management in China, some of it centred on the Olympics and some on the increasing need for Chinese companies to develop strategies based on branded goods and services that can be sold to the West. The available evidence also points to the need for many of the top Chinese companies to be able to compete more effectively in labour markets to attract and retain talented people to support branding strategies. So it comes as no surprise to see the establishment of a similar centre to our own being established in China, and we are pleased to announce that we have signed a memorandum of understanding to set up a co-branded Peking-Glasgow International Research Centre for Employer Brand and Reputation Management. This is to be based at Peking University, with Dr Hong Zhang (from Glasgow) and Professor Wang Hansheng from Peking University as co-directors. The relationship is to be strengthened by forming a partnership with the Zhaopin company, a leading Chinese recruitment consulting firm, and CCTV's China Best Employer Programme.

The aim of this new centre is to undertake research into employer branding and reputation management, and to examine the relationship between HR and branding. I will be helping launch the Centre with a presentation at Peking University in November of this year, and will be helping to put together an international conference on employer branding at Peking University in 2009.

We would be pleased to hear from anyone who may have something to contribute to this conference, so please take the time to email us with your ideas.

Web 2.0: McKinsey Global Survey Results

2008-07-31T20:59:00.000+01:00

The latest review by McKinsey, which can be downloaded from their website after registering, shows that Web 2.0 is becoming more popular with organizations in their now annual survey of nearly 2000 companies. Web services, blogs, RSS feeds and wikis are the most popular tools, with the main internal uses being to manage knowledge, foster collaboration, enhance the company culture and training. However, there is a wide variety of levels of satisfaction with Web 2.0 technologies, along with marked regional variations. Asia Pacific respondent were most satisfied with Web 2.0 with Latin American companies least satisfied. The main barriers to take up were that companies didn't understand the financial benefits, didn't have a supportive culture or sufficient incentives to experiment with Web 2.0. Its main HR impact seems to be that it has changed the way companies hire and retain people, though one has to question the way in which they addressed these issues. Interestingly, nearly half of respondents suggested that Web 2.0 had not changed the company nor the way it was organized. As one commentator suggested on our CIPD discussion space on Web 2.0 and HR, these findings are in line with our own preliminary thoughts in the field and with the CIPDs research on Web 2.0 and recruitment.

These surveys give an indication of what is happening, but respondents can only respond to the quality of questions asked. I'm not so sure these questions are as well constructed as they could be in the McKinsey survey. Any thoughts?

Employer Branding Link with Adcorp, Australia

2008-07-29T14:36:00.000+01:00

Employer branding has largely been an American and European phenomenon, often associated with the needs for organizations to compete in the market for talent and to engage more fully the talent they have at their disposal. However, in our opinion this topic it is not well enough researched for practitioners; most of the current writing and case work is a little light on evaluation/ analysis and heavy on simple messages, 'silver bullets' or bullet points. Professional HR bodies such as the CIPD have been active in helping investigate this phenonenon more deeply, further evidenced by a recent call for research into the impact of mergers and acquisitions on employer branding.

There is even less written about this subject in an Asian context, however; though we have contributed to an Indian book on the subject and have recently signed a memorandum of agreement to set up a joint venture in China on employer branding and reputation management with a leading university, recruitment consultancy and TV channel (more on this development in a forthcoming blog).

So, given the Asian connections, and Australia's ambitions in this region, we are pleased to announce that we are working with Adcorp, a leading Australian employment communications agency, to run a series of one-day master classes, breakfast meetings and luncheons in Melbourne, Brisbane and Sydney between November 17th-21st of this year. These master classes will focus on strategic HR and its links with employer branding, corporate reputation management and leadership branding, and will draw on our recent case study research and our most recent publications in these fields.

Anyone interested in attending these events should contact Tim Grogan from Adcorp timgrogan@adcorp.com.au, who is leading this initiative.

Leadership and HR

2008-07-29T14:16:00.000+01:00

Leadership and HR are rapidly becoming more intertwined, as our research into leadership branding is beginning to indicate. Human resource development has a key role to play in developing leaders in organizations, so HR professionals need to understand leadership theory, its promises and problems. At the same time, leadership of the HR function has become increasingly more important, yet needs to be better explained than the current vogue for HR competence frameworks are able to do. Currently we have a project on strategic leadership in HR that has produced a new framework for HR leaders, which we've written about in a recent conference paper and will be publishing in the near future. If you want a copy of the paper, just mail me on g.martin@mgt.gla.ac.uk.

Two very useful insights into the fields of leadership and HR leadership, which we will incorporate into our thinking, are discussed in a new special edition of the Leadership Journal (Vol 4, no. 3), edited by a colleague of mine, Dennis Tourish, and a brief, but timely, perspective on HR leadership by Pat Wright from Cornell in the current issue of Human Resource Executive Online. Both of these sources are well worth accessing.

HR, Social Networking and Blogging

2008-07-25T06:00:00.000+01:00

Alongside the CIPD's website, one of the most useful site for HR practitioners to visit from an evidence-based practice perspective is the new social networking site for the HRM journal run by Theresa Welbourn. This site already has some interesting discussions going on but has greater potential to link practitioners to academic work than any other medium I'm currently aware of. This potential will be realised the more it is subscribed to and used by practitioners and academics, so please join.

The site already has a number of useful interest groups, including ones on networking, e-HR, HR in healthcare, teaching HR, HR in China, all subject areas of interest to my colleagues and I. In addition, there are a number of HR forums on issues such as ethics in HR, innovations in HR. You might also want to check out her leadership pulse site for some excellent tools and papers for practitioners and academics. This is related to http://www.energizeengage.com/, which explains/ debates the regular pulse surveys

Leadership Branding

2008-07-18T18:50:00.001+01:00

Julie Hodges from Durham University and I are exploring the use of Ulrich and Smallwood's introduction of the term, 'leadership branding' into HR. For those not familiar with the notion, it focuses on how an organization wants to position its leadership and governance idenity with customers, investors, media and, importantly, employees. Julie has been exploring the use of leadership branding in a piece of action research with a major multinational and we are in the process of writing this work up for publication (suitably anonymised).

We are interested in hearing from anyone who has experience of leadership branding, either as having been involved in the design and implementation phase or as an employee? What was your experience? Or, it this just another brand extension too far?

Employer Branding

2008-07-18T14:00:00.000+01:00

Judy Pate, Sheena Bell and Steve Ansell (all from Glasgow University Business School) and I are conducting a major exercise for NHS Scotland on employer branding and reputation management. This involves an examination of internal and external perceptions by different groups staff and potential employees of four NHS Boards in Scotland, which cover more than half of the population. We are using a mixture of group interviews and questionnaires to establish the extent of identification of people with the current employer brand(s) with a view to recommending changes in the design of the brand(s) and the HR and people management drivers of the brand. We hope to report on this project later on this year. However, anyone interested in these issues might want to look at a new survey and research report, entitled 'What matters to staff in the NHS' by Ipsos/Mori for the Department of Health, published in June 2008.

This work builds on recent ideas that colleagues and I have published for the CIPD and a book of our own (see side-bar) and in chapters in two forthcoming books on HR by Paul Sparrow on international HR and by Cary Cooper and Ron Burke on High Performance Organizations due out later this year.

In February, we presented at a conference on 'Employer Branding and Employee Voice' run by the London School of Economics and the CIPD. At that conference, a panel made up of employers were largely sceptical of the notion of branding as it applies to HR practice. We were quite surprised but would enjoy hearing from practitioners one way or another. We are particularly interested in any work that has been done to evaluate the effectiveness of employer branding on either improved recruitment or on improvements in employee identification or engagement with organizations.

Measuring Human Capital

2008-07-18T06:26:00.000+01:00

Stacey Bushfield and I are investigating ways of measuring the impact of human capital investment in public services as part of a project funded by the Scottish Government and ESRC. Currently we are at the stage of producing a literature review on the topic but are still searching for new material and insights into this problem. Has anyone come across or developed interesting ideas that you are willing to share with us? In return, we would be happy to send you our review.

The work done so far is a systematic review of most of what has been written on human capital and its relationships with social capital, organizational capital and innovation. This is linked to a discussion of public value and client outcomes from public services, an important topic in public sector management.

The next stage of the exercise is to investigate how public services currently measure their investments in human capital. Judging from our preliminary work, there is little evidence of predictive measures of the kind, 'to what extent does investment in, say, leadership development, pay-off in key outcomes measures' and the timing of any returns. If anyone has come across any examples of predictive measures of this kind, we would be pleased to hear about them and exchange ideas.

Web 2.0 and HR

2008-07-17T21:44:00.000+01:00

Martin Reddington, Mary Beth Kneafsey and I have recently produced a Research Insight document for the CIPD on Web 2.0 and HR as part of their 'Shaping the Future' agenda. This can be found at the CIPD's website, which we encourage members of the CIPD to visit and participate in the online discussion . Other people who are not members of the CIPD can contribute by joining our discussion forum/ resource space, which is also listed on the side bar. We are looking for feedback on the issues we raise in the document. These focus on the potential advantages (and some of the problems) of social media in helping organizations become more effective in recruiting, engaging staff, allowing greater individualisation of psychological contracts and encouraging collaboration to increase the organization's collective IQ.

The questions we would like readers to share their thoughts with us are:

Are these social media - for example, blogs, wikis, social networking sites, image sharing sites, virtual worlds, etc., - like to be 'disruptive innovations' for people management, and thus likely to help create sustainable high performance organizations? Or are they part of the technology hype?
Does the HR function need to be where the net or virtual generation communicate to reach them? Or is the net generation too general a term so as to be misleading?
Can these technologies be used to enhance employee voice/engagement and the extended IQ or the organizations, or are their better ways of achieving these ends?
To what extent is the HR community up to speed with these innovations, and do they need to be?
To what extent does Web 2.0/social networking represent a threat to HR's desire to control?

Please take some time out to record your thoughts on these questions, either on the CIPD website or this blog. On this topic, you might also want to visit James Richards blog, 'Work-related blogs and news', for an expert, evidence-based insight into one of the most important social media technologies. John Castledine's blog has an excellent introduction to Enterprise 2.0, while Jon Ingham's Human Capital Management and Ross Dawson's 'Living Networks' are also highly informative on Web and Enterprise 2.0