Local Problems with Global Significance?

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

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

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

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?

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

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

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.