As an organization evolves the relative importance
of these roles will shift. For example the Innovator is crucial in the
early stages of an organization's life cycle, the General is important
in more mature stages, and the Visionary is important at all stages.
Indeed it is unlikely that any one individual will be equally effective
in all areas. However, an effective leadership team will include a
broad range of these skills and harness them to the needs of the
organization at each point in time. This is an area where effective
coaching can develop dormant skills. Let us examine each role in more
depth.
Guide. Whole Foods Market Inc. has taken a
concept of providing nourishing, healthy food and built a successful and
growing business. This was done while respecting the value of the
workforce. Whole Foods Market is one of the Fortune Top 100 best
companies to work for in the United States. Whole Foods Market has an
internal policy that the compensation of any officer in the organization
is limited to fourteen times the average full-time salary of all team
members (employees); amounts in excess can be deferred. No mega-salary
for the CEO here, simply a level of compensation linked to others in the
organization. This is a powerful values statement that shows the regard
the leadership of this organization feels for its employees. It is an
example of the organization's leaders providing strong guidance about
the kind of organization they are creating and the behaviors they
encourage within the organization. Business bestseller lists have been
replete with stories of CEOs who have enhanced their own egos and lined
their own pocketbooks. Whole Foods Market is a telling testament to the
principles of servant leadership. Their leaders act as guides not only
for their own organization but also for all of us.
Mentor. I remember beginning my first
position responsible for a new business area. This was in a competitive
industry sector where the fledgling business was significantly smaller
than our competition. On my first day in the new position my boss sat
me down in front of his desk and pointed to a small rock on the corner
of the desk. On that rock was an inscription along the lines of: “The
customer is always right.” There were many occasions over the next three
years, as the business grew and flourished, when we grappled with the
challenges of meeting customer needs. While there were many customer
compliments, there were other times when customers were frustrated or
angry and they weren't reticent. I never forgot the words on that
stone. Due to the skills and commitment of others the business
flourished, and it did so while respecting customers and employees. My
boss had provided a simple and important example of being a mentor to a
rookie. It was an invaluable lesson. Imagine the power that could be
harnessed in an environment where mentoring is as natural as breathing,
for mentoring is born in us and somehow our organizational structures
can cause it to be lost or hidden.
Coach. Closely aligned with the role of
mentor is that of coach. The distinction is in the frequency and focus
of the relationship. While a mentor is focused on being a resource as
needed, a coach is an active supporter who is consulted regularly. As
coaches, leaders are there to encourage, exhort and help employees set
goals that cause them to reach new levels of performance. I recall an
incident from my teenage years. I had been volunteered as a member of a
swimming team for an intramural event in the English equivalent of an
American high school. Swimming was not my forte; in fact I was hopeless
at it but had to participate. The event took place on a Saturday night
in a pool with quite a few cheering (and jeering) spectators. It came
to my event. Four of us were competing. It involved four laps of the
pool and predictably by the end I was in last place, a full half-length
behind the third-placed participant. I finally arrived at the finish
point, too exhausted to even pull myself out of the pool. I was
expecting a searing criticism, for that was common in that school. Then
something unusual happened. The team coach, an older boy, helped pull
me out of the water. He looked at me and said: “Well done, we really
appreciate your efforts. Thank you.” I was too shocked by these few
words of kindness to say anything, but they have remained with me for
more than thirty-five years. I have forgotten the many small slights
and put-downs, those acts that diminish rather than elevate. But I have
not forgotten the brave words of that coach.
A coaching relationship can involve elements of
counseling, performance development and business consulting, with the
mix shifting according to the needs of the moment. Coaching flourishes
in an environment that supports individual development and decision
making. For example, the apocryphal statements in the Nordstrom
employee handbook: Rule No. 1: Use your best judgment in all situations.
There will be no additional rules (Michael Tushman). These statements
encourage the expression of individual initiative. Implicit in the role
of the coach is concern for the development of the individual, occurring
in the context of organizational needs. So the coach is a source of
wisdom and insight, a listener and most of all a developer of human
potential. The oil that helps the gears connect smoothly. It is a role
that can be adopted at any level in an organization and it is an
ennobling experience for both coach and the person being coached.
Conductor. The conductor of an orchestra
might seem like an unlikely analogy for the organizational leader.
After all an orchestra is tightly scripted, following a predetermined
path. However, there are many similarities. The role requires the
execution of complex skills that include deep functional knowledge of
the creative process needed to bring music to life. The conductor must
couple this functional knowledge with the ability to bring consensus to
a group of creative and independent individuals. The conductor must
know how to follow the script or plan he or she has been given, and how
to create unique expressions from this script. The conductor has a
discriminating audience that expects technical virtuosity and delivery
that meet predetermined commitments. The conductor is a public figure
who is an active proponent of the works of the orchestra, and who must
create in such a way that the orchestra generates income to support
itself. All of these aspects have parallels in the organizational world
and the world of the workforce. Workforce conducting is just as
creative and complex, with outcomes that can enhance organizations and
communities just as the music from the orchestra enriches. An example
from the corporate world is that of Microsoft and Bill Gates, where the
introduction of succeeding generations of software is a series of
carefully orchestrated scripts that reach millions.
Artist. Closely related to the Conductor is
the Artist. The Artist is steeped in the creative process, using a
given medium to generate a new vision and, in so doing, offer insights
and perspectives on beauty that were previously hidden. The work of the
Artist is bounded only by his or her imagination and proficiency. It
comes to life in the response evoked in those receiving the gift of the
Artist's creation. Likewise leadership in an organization creates a
work of art from the medium of the workforce, with much beauty in the
complexity and dynamics this represents. A business example that, both
in a physical and in a metaphorical sense, demonstrates this is Apple
Computer. Even the design of its products transcends a purely
functional physical form, to delight customers with innovation in style.
Functional performance has also reflected constant striving for new,
creative approaches that expand the boundaries of prior experience and
require the development of novel software and hardware. Here we see the
convergence of business form and function in an artistic expression that
generates an emotional response both from customers and from employees.
Such artistic expression is an important part of the early creative
stages of a new organization, and an established organization that views
innovation and flare as core business processes.
Visionary. A visionary stance, that
transcends the daily strife and toil, is essential for leadership to
engage and energize the workforce. An example is Southwest Airlines.
Southwest repeatedly takes a distinctive and different position. This
is evident in its operational activities, where an emphasis on
efficiency and providing basics well results in rapid aircraft
turnaround, low fares and lively flights. However, this approach
extends beyond the operational to the organization's relationship with
employees. In the aftermath of the September 11, 2001 terrorist
incidents in New York, when the airline industry was reeling, many
airlines were making deep cuts in the employee ranks. Not Southwest;
here the emphasis was on strengthening the relationship with employees,
ensuring continuity of employment, recognizing the possibility of
penalizing short-term earnings, knowing the benefit of engendering
longer-term employee commitment. Many would cite the visionary stance
taken by Southwest's management in their business and operational
practices. And they do represent impressive accomplishments. However,
I suggest that the stance taken with their workforce is equally
visionary, requiring organizational courage and commitment.
Entrepreneur. It might seem that the
hallways of a large oil company are an unlikely place to find an example
of entrepreneurial leadership. However, this example demonstrates that
entrepreneurial leadership is by no means limited to the high-tech
arena. Most of us come into contact with polyester daily. It could be
through the fibers in clothing or in furnishings; it could be soft-drink
bottles. Polyester is part of daily life, helping clothe people,
insulate houses, and package food and supplies. In the mid-1950s
polyester was made from a raw material that was produced by a complex,
multi-step chemical process. At that time, enterprising scientists
working for an organization known as the Scientific Design Company
discovered a new, simpler and more cost-effective process to make a
different raw material and significantly lower the cost of making
polyester. At that same time, Amoco Corporation was in the process of
founding a chemical company, and was able to produce from its refineries
a chemical that could form the starting point for the new synthesis
route to polyester.
By serendipity a chemist from Amoco met a scientist
from the Scientific Design Company at a social event and together they
understood the potential for the new Scientific Design discovery.
Amoco's leaders, upon learning of this opportunity, immediately
recognized its commercial value and purchased the rights to the
technology. At this point there were still many technical hurdles to be
overcome, related to the intricacies of full-scale, commercial
production and securing needed purity. Nevertheless, Amoco's leadership
made the investment in the technology purchase, followed by major
investments in research, and in commercial facilities. At each stage
there was significant technical risk of failure. Today this is a
multibillion-dollar business for the organization (it is now part of
British Petroleum by acquisition). The organization is now the world
leader in the production of the key intermediate for making polyester.
There are manufacturing plants at many locations around the world based
on this technology. The entrepreneurial leadership of those pioneers
led to the foundation of a company, and ripples from it benefit many of
us in our daily lives today. The entrepreneurial role of the leader is
vital to the continued reinvention of organizations as environments and
opportunities change.
Innovator. Closely related to the role of
Entrepreneur is the role of Innovator. The Innovator works at the edge
of the envelope, exploring new boundaries and new approaches. One
company has made an art of innovation. That company is 3M, where the
abilities to spot new opportunities and to harness technology to realize
those opportunities are core to the company's values. In relation to
the workforce this means encouraging innovation in individual businesses
by keeping small units, dividing operations as needed to maintain focus.
3M views the innovative effectiveness of small tightly knit teams as
outweighing the diseconomies of innovation that can arise with large
scale.
An example of the Innovator role in the development
and application of technology is the commercialization of xerography.
The ubiquitous copy machine began as a brainchild of Chester Carlson,
who recognized how to harness the natural forces of static electricity
into a practical application. The leaders in the field of conventional
photography rejected the idea as impractical. That rejection led to
the formation of a new company, the Haloid Company, which later became
the Xerox Corporation and founded a multibillion-dollar industry. As the
wheel turns full circle, leaders of the Xerox Corporation now struggle
to maintain the innovative spark that characterized its foundation. The
role of Innovator is vital to sustaining the life spark and growth of
organizations.
General. These innovative, entrepreneurial
roles require structure and process to be effective. This is the role
of the General. Here the focus is on organizational efficiency, on
establishing those processes and systems that allow the different parts
of the organization to function effectively together. An example of
this is General Electric, a behemoth in organizational terms that has
continued to grow and prosper. It operates under strong central
guidelines, requiring individual units to be first- or second-ranked
competitors in their sectors. Strict financial controls and
sophisticated planning and control methodologies guide performance.
Change Agent. In a stable world the General
can reign supreme seeking ever-greater efficiencies. However, the world
is one of surprises. They can take the form of technology advances that
can rapidly make an existing product obsolete, such as compact discs
replacing tapes. They can take the form of major social change, such as
the entry of women into the workforce from the 1950s through the 1980s
in the United States. Changes can take the form of shifts in the
economy such as the changes in GDP growth rates, or shifts in political
perspective such as the U.S. government's changed position in the
Microsoft antitrust case. In this shifting environment the role of
leaders as organizational change agents is critical. An example from
the world of chemicals is DuPont, where different leaders have
successfully re-directed the organization’s focus many times throughout
a more than 200 year history.
Connector. I came across an interesting
example recently of an organization that ran a number of call centers.
In call centers, employee attrition is typically high, to the point
that it is easy to assume such attrition is inevitable. In this
organization high attrition was indeed the norm. However, one of the
call centers had a different profile with attrition at a much lower
level. Leadership wondered why this was so and talked to the supervisor
of this one call center. On being asked about what she did, her
response was that she tried to find something about each new employee on
a personal level she could connect with. With one person it might be
their children, with another a favorite hobby. It didn't matter, just
that she could connect with that employee on a personal level. Then she
made a point of talking with that person regularly and asking about
their personal area of interest. This single investment of her time and
interest led to a dramatic reduction in attrition. This behavior was
almost certainly coupled with other equally supportive practices. It
demonstrates the important role of connecting for organizational
leaders.
It might seem that fulfilling these roles well is
an overwhelming challenge. Indeed it is a lot to ask of any one
individual. However, it is a practical objective for a leadership team
and for distributed leadership in an organization, for example in the HR
function. A first step is to define the key leadership roles needed to
support each segment of the workforce. This can begin by clarifying the
characteristics of different segments of the workforce (described in
“Affiliation in the Workplace”). Based on such an analysis, the most
critical leadership roles can be identified and prioritized. The
capabilities of leadership teams can then be harnessed to address these
roles. This involves understanding the strengths and aspirations of
each person on the leadership teams, and then providing each person with
development support for the roles that are a natural fit. This support
may take the form of coaching, it may take the form of educational
experiences or it may take the form of on-the-job experiences.
Regardless, it means recognizing the importance of developing
individuals who can effectively execute the needed leadership roles. It
also means developing a description of expert execution in each role and
a means for supporting progress against such an ideal. By taking such
steps exceptional leadership can emerge to create inspiring, successful
organizations for the benefit of all.
(Much of this article is excerpted from Affiliation
in the Workplace: Value Creation in the New Organization, Ron Elsdon,
Praeger, 2003. Should you wish to know more about EOR’s comprehensive
leadership development capabilities please feel free to contact us at
renewal@elsdon.com, 925 838 2362)
Workforce Performance and Resourcing
Our traditional financial measures, such as return
on investment or return on assets focus on tangible, physical assets.
In “Affiliation in the Workplace” we began to explore how, in an
increasingly information and service based economy, we can link
organizational performance to the workforce. Recent examples of similar
approaches are in the latest SHRM Human Capital Benchmarking Study
(2005). The following table shows some selected key items from the SHRM
study. For each of five measured items we show the lowest, median and
the highest sector values. The number of organizations providing data
varied from 400 to 700 according to the specific data set, covering many
for-profit, public sector and not-for profit areas, across the U.S.
The first item shows revenue per full time employee
varying from $60,767 for the non-profit service sector to $404,444 for
the utilities sector, with a median of $145,455. While the data is not
provided, the higher values are likely associated with greater use of
tangible assets.
This revenue translates to the second item, pre-tax
net income per full time employee, which ranges from 0 for educational
services to $68,182 for the insurance sector with a median value of
$12,450. Based on pre-tax net income and revenue the median margin
(pre-tax net income/revenue) is 8.6%.
We see the significance of investing in people in
the third item, which shows salaries ranging from 17% of operating
expenses for utilities to 53% for high tech with a median of 40%.
Given this profile it is not surprising that the
high tech sector invests the most in HR per full time employee as shown
in the fourth item. The sector investing the least in HR (Educational
Services) also shows the lowest pre-tax net income per full time
employee.
The importance of investing in support of the
workforce is also underlined by the fifth item, % of full time positions
filled by internal or external hires. Healthcare, which continues to
grow rapidly with our aging population, filled 24% of all positions
during 2004. One in every four positions was newly filled during the
year. Let’s look at the overall profile for healthcare in the following
table:
Revenue per full time employee at $92,000 for
healthcare was significantly below the median of all sectors of $145,455
reflecting its service foundation. Earnings are also well below the
median, in part due to the non-profit nature of many entities in this
sector and the challenges of operating effectively in this service
focused environment. One of the challenges present in the sector is the
relatively low level of workforce support investment, with HR expense
per full time employee at only 79% of the median even though the number
of positions filled is the highest of any sector, at 150% of the
median. Leaders in healthcare organizations, as in other sectors, can
examine steps to strengthen workforce support and, as a result, reap the
rewards of enhanced performance.
Support for this is further evident when we examine
the relationship between earnings per employee and HR spending per
employee. In “Affiliation in the Workplace” we developed a model that
showed the rationale for an optimum level of HR spending per employee.
The actual value of the optimum depends on the specific characteristics
in a given organization. For the organization studied in the book the
optimum was about $5400 per employee based only on the influence of
attrition rates and using operating income per employee as a proxy for
value creation per employee. The following figure shows how pre-tax net
income per employee varies with HR spending for the SHRM sample.
Here we see pre-tax net income per employee
increasing as additional investments are made in HR. While, based on
this limited data, we cannot say with certainly that HR spending over
this range does increase earnings per employee; there is good indication
of a positive relationship. Twenty-seven percent of the variation of
the data in the figure above is explained by the variation in HR
spending per employee. Based on the earlier modeling work it is likely
that the HR investments in the SHRM data are significantly below the
optimum, confirmed by the line in the figure above continuing to rise
with increasing HR expense per employee. This underlines the importance
of examining workforce support investments not as a cost to be
minimized, but as a strategic resource to be optimized.
Quote
“Research is to see what everybody else has seen,
and to think what nobody else has thought.”
Albert Szent-Gyorgyi (Peter’s Quotations).
Upcoming Elsdon Organizational Renewal (EOR) Events and Recent
Mentions
Upcoming Events
·
“Using Measurement to Guide
Employee Development and Training” Strategic Metrics and HR Measurement
Conference, NCHRA, Sir Francis Drake Hotel, San Francisco
o
August 31, 2005
o
NCHRA Meetings & Events : Event Registration
·
“Networking and Connecting”
presentation for U.C. Berkeley, Haas School of Business Alumni, Haas
School, Berkeley
o
September 20, 2005
Recent Mentions
·
Reviews of “Affiliation in the
Workplace: Value Creation in the New Organization.”
o
Harvard
Business School
·
HBS Working Knowledge: Organizations
o
Global Diversity Institute
·
Global Diversity Institute - The Journal of Diversity Praxis
o
Journal of Asian Economics
·
ScienceDirect - Journal of Asian Economics : Ron Elsdon, Affiliation in
the Workplace: Value Creation in the New Organization, Praeger
Publishers, Westport, CT (2003) 280 pp. (hardcover), ISBN 1-56720-436-8,
$49.95.
·
The Alliance of Chief Executives
o
Alliance of CEOs - Ron Elsdon
·
“Reaching for Our Deep Gladness”
o
Article in May, 2005 NCDA Career Convergence Magazine
·
NCDA Career Convergence Magazine
·
Review of MBTI Step II workshop
o
CCDA News, April 2005
·
California Career Development Association - Articles
·
Recent mention in article on
cost of turnover
o
East
Bay Business Times,
April 2005
·
Turnover costs exceed employers' estimates - 2005-04-25
·
“Worklife Survival: Finding a
Fit”
o
Article for HR West, February 2005 (Northern California Human Resource
Association)
·
http://www.nchra.org/StaticContent/Download/EXT0205007.pdf
·
Recent interview in the
education field “Affiliation as a Unifying Principle in Education”
o
Career Pro News
·
Affiliation and Education
·
Review of ICDC Global Issues
Forum
o
CCDA, January 2005
·
California Career Development Association - Articles
About EOR: Our Value Contribution
We enhance your workforce,
leadership and organization by:
·
Using proprietary approaches to
understand workforce and leadership challenges
·
Creating tailored action plans
and solutions to strengthen workforce and leadership practices
·
Building individual capabilities
and contributions
We enable you to focus on
external results and building value, confident that your organization
and leadership are operating at peak effectiveness.
Our Mission
To support your organization by
enhancing performance, productivity and effectiveness through
revitalized workforce relationships and leadership practices.
Our Approach and Values
We tailor our engagements to the needs of each organization with a
process designed to surface critical issues, identify root causes, build
effective solutions, monitor progress and implement.
With a scope that ranges from system and organizational interventions to
work with individuals, our focus is on the heart of the relationship
among the individual, the organization and the community. We believe
that organizational and community prosperity are built on enabling each
person to fulfill his or her potential.
Our Services
We work with individuals and
groups in your organization to drive performance and development for
both the short and long term. As a result people will choose to work in
your organization and will prosper there.
We bring solutions when you need
to:
·
Reverse declining revenues and
performance
·
Revitalize your workforce
·
Stem the loss of key talent
·
Redirect your organization to
new areas
·
Stop losing customers or market
share
·
Penetrate new markets
·
Combat aggressive competitors
·
Handle major change
·
Break down communication
barriers
·
Energize your leadership team
·
Successfully build on an
acquisition or merger
Our proprietary services
include:
·
State-of-the-art tools to take
the pulse of your organization and then move to action
o
Web enabled systems
o
Experts to gather and analyze information, moving your organization to
action
·
Individual leadership coaching
to give you world class leadership capabilities
o
Leaders who know themselves and their aspirations, build their
capabilities and become catalysts developing others
·
Workshops to build interpersonal
skills in your organization so that:
o
Communication is timely, concise, accurate and personal
o
People listen to each other
o
Negotiations are quick and effective
o
Differences create rather than destroy value
o
Teams move forward, get results and quickly commercialize new products
and services
o
People understand and link their motivations to your organizational
needs
o
Your teams understand what it takes to create a committed, energized
workforce
o
People use their time well
·
Systems that make it easy to
drive performance and build capabilities by:
o
Linking objectives throughout the organization
o
Strengthening key competencies
o
Making sure you have the bench strength where and when you need it
o
Giving people tools to take charge of their own careers and development
and have a major long term influence on your organization
·
Proprietary simulation and
modeling techniques that let you explore how to maximize the value of
your workforce
o
Move from guessing what might happen to looking in depth at the
financial impact of different approaches
