Category Archives: Organizations

Automation

Automation used to be a word that was welcomed into business. Back then we were a disconnected, manual world. If you needed to get more things done, or if you were growing, you had to go get more people to help meet the demand. There was a time that I remember seeing competitors driving advertising trucks around the outside of our business campus in an effort to lure our employees away to meet their growing demands.

But times have changed.

It’s fashionable to discuss off-shoring and out-sourcing when companies now reduce their staffs, but the force that is now causing the largest reduction in demand for employees is automation.

It has been easy to look at China, or any other relatively low wage country and discuss the economics associated with moving production and manufacturing to those locations. It is a very easy way to reduce the cost of labor associated with that production. I have discussed it in the past. We all can probably name several companies that we are aware of that have taken advantage of the economic model.

But do you know what is even cheaper than paying people less in low cost countries to manufacture goods that used to be manufactured in relatively higher wage countries? It’s really a simple answer.

Not paying anyone to manufacture your products.

From 2007 to 2013 manufacturing in the US actually grew about 2.2% per year (~17.6% total), however the number of manufacturing jobs fell. Approximately 13% of those job losses came from off-shoring. More than 87% of the job losses came from automation. (http://fortune.com/2016/11/08/china-automation-jobs/)

Now let’s fast forward only a few years. When you hear the word “automation” it can strike fear in the heart of anyone who is currently working. The active word in that last sentence is “currently”. And it is not restricted to just those in production or manufacturing based positions.
As I have also noted in the past, business and organizations continually try to apply those successful approaches used in the reduction of costs associated with production and manufacturing, to other disciplines in the organization. An example of this is where once only manufacturing were outsourced, so now are other disciplines such as finance, accounting and human resources.

So how does this trend affect automation?

The same rules of organizational cost reduction are going to apply. PricewaterhouseCoopers (PwC) has recently released a study that is predicting that up to 38% of all jobs in the US are at risk for being replaced by automation in the next 15 years. These are not just manufacturing sector positions. They also predict the finance, transportation, education, and food services sectors are also going to be significantly affected. (http://money.cnn.com/2017/03/24/technology/robots-jobs-us-workers-uk/index.html)

In case you missed it, that means that automation isn’t just for manufacturing anymore.

Just about any position that has any sort of a repetitive nature to it can and probably will be a candidate for automation. It is predicted that many of the first positions to go will be those focused on the consumer sector. The continued automation of teller based functions will further reduce the number of people in your local bank. Baristas at the local coffee house may also be endangered. How repetitive is it to take an order for a fixed set of options and then write a name on a plastic cup? If there are relatively similar activities being repeated, the function will be looked at for automation.

Look what Amazon has done to the previously brick and mortar based appliance product purchase process. What was once a trip to the store where you dealt with sales associates and waited downstairs for them to bring out your purchase, is now an online search for the best price, the tapping of a few keys and then answering the door when they deliver your purchase, in some instances in as little as one day.

Of course these trends will be somewhat balanced by many consumer’s distaste for dealing with systems instead of people. But even that is changing. Each new generation of consumer has less and less of a tie to the human touch and is more technically savvy than the previous. And even the preceding generations learn the value, simplicity, speed and most importantly the economic benefit to their own personal finances of the new automated model.

Amazon has been successful not only because they have worked to improve the shopping and purchase experiences. They have been successful because they have also reduced the customer’s cost and simplified their search. No more driving around, visiting stores and malls and looking for a sales clerk to answer your questions and wondering if what you want is still in stock.

If you don’t believe that this is the case, the current number of retail stores that have announced they will be closing starting in 2017 now stands at over 4,500. http://clark.com/shopping-retail/major-retailers-closing-2017/.

These are also concepts that will be applied to organizations and business to business commerce.

However, as noted above, I think they will be primarily focused in internal corporate activities, instead of any functions that deal with corporate customers. I have already noted customers distaste for not being able to deal with and have direct human interaction when it comes to their requests for support when they have an issue. I think we could expect an even stronger reaction if corporate customers were asked to interface with a machine for their complex equipment and service needs.

I would also expect even this type of resistance to reduce in the future as each successively tech comfortable generation matriculates up through management to positions with purchase decision responsibility.

The drive for automation within corporations and businesses has started with the internal functions. Just as the automation of spreadsheets reduced the need for the number of accountants in business, so is the drive for on-line processes, tools and tracking systems reducing the need for the number of other types of support staff.

As processes continue to be implemented and refined, and as tools for the tracking of work continue to expand and go on-line, the business environment becomes ripe for automation. Sales opportunities are now tracked from suspect to prospect to bid to contract to implementation in on-line tools. How much data resides in that tool that can be automatically reviewed, with the generation of sales forecasts, booking reports and expected profitability projections made available with just a few key strokes.

Costs are likewise automatically tracked via on-line time charging and the utilization of already automated production and shipping capabilities. How much easier will it then be to generate booking, shipping, revenue and profitability reports.

People in these support and accounting roles who have up to now been providing these periodic reports and functions need to be aware of which way the automated wind is blowing.

So where does that leave us?

First I think everyone is going to need to “up their game”. People are going to have to get reacquainted with the risk-reward scenario. The relatively safer “support” type roles are going to get squeezed almost out of existence. You are going to have to be able to “do” something, not just support the people who actually are doing something.

It is always the “new” or next great thing that is prized in business. People will have to relearn that following the past methods of success will not now provide them with success. They will have to get used to looking forward and trying to predict what will be needed and then trying to move in that direction instead of relying on what was once needed. The creative spark will need to be reignited in all workers as those who wait to be told what they need to do will probably be automated (or off-shored) out of their current roles.

Everyone will truly have to get used to and good at selling. Selling their products, their services, their vision, their ideas, their value, their future. It will probably not be good enough to align with and support someone else who is able to do this.

Everyone will also have to get good at delivering. Customers will want their solutions in ever shorter time frames. Look at how Amazon is driving toward same day – immediate gratification – delivery for their customers. Customers will be defined as those that use your particular service or value. That means that they can be internal to the organization, external to the organization or both.

And value will not be a report. It will have to be more along the lines of an idea, or the fulfillment of an idea.

Automation is coming. The capability to automate will only continue to expand. However, it will be the ability to generate ideas and conceptualize that will be the most difficult to automate (if ever) and will hence increase in value. The person who can think of new ways of doing things will increase in value.

It will also be the person who can actually deliver and implement the products, services and processes of the future who will also be in demand. As I said, it will be those that are able to “do” things as opposed to those that enable others to “do” things that will be in demand in the future.

I guess it has always been that way to some extent, except with automation the gulf between the two will become that much greater.

Off-Shoring

One of the hottest debates going on in business these days is the debate regarding what work, if any, will stay in the supposedly high cost country and what work will be sent to the supposedly low cost country. This is the function that is usually referred to as off-shoring. There are many factors that seem to be taken into account with this decision, but there are also several factors that don’t seem to be included. It appears that the only major factor that companies really consider in the off-shoring decision is the relative wage differential of the existent workforce versus the prospective workforce. Having gone through, worked with and reviewed some of these types of working environments, it has made me wonder if there are other factors that should be reviewed before these decisions get made.

The bottom line in all of these out-sourcing or off-shoring decisions seems to be doing what is perceived as best for the organization’s bottom line. This is also somewhat subjective depending on which of the shores you find yourself. The idea is to save money. All other factors will be dealt with or considered in due course. And one of the best ways to save money is to try and reduce the cost of your labor associated with the function in question. Are there other people in other places in the world that can and will be paid less per person to do the work in question?

On the surface the answer to this question is almost always “yes”.

If the only factor to be considered is the wage rate paid to the resources doing the work, then the decision is always an easy one.

But things are usually never that easy.

The first jobs to experience this sort of movement were the production and manufacturing jobs. Production lines and repetitive functions were sent elsewhere. Business cases were built containing the incremental cost of building a new factory as well as the reduced cost associated with the low-cost labor to staff it. Questions were answered about how long the pay-back was on the needed off-shoring investment and decisions were made. Factories and production lines were built in these low-cost countries. The production of simple and basic products was then moved.

I am not going to continue too far down this line of thinking because we all know where it goes. More and more, and more production functions have been off-shored. These are finite directed positions that perform repetitive processes at a fixed rate, to create large numbers of similar products.

Let’s now fast forward a few decades.

Almost every business function is now subject to the discussions associated with which shore it should be on. One of the biggest issues associated with any proposed move now, is that the work being considered is usually more variable than the production work of the past, and it is more subjective in its execution.

While a production line will move along at a fixed rate enabling all participants in the production line to work at the same rate, the same cannot, and should not be said about knowledge based disciplines. Do all people who write software code, or design hardware do it at the same speed? Are they all equally proficient at their respective disciplines? Are all accountants or financial managers at the same competency level?

On an even more basic level, do all locations have the same financial drives, work culture, language fluency and associated work styles when it comes to delivering the required work products? Remember now we are discussing complex or service oriented work products, not physical products such as consumer electronics or other real goods.

It is no longer just a question of the difference in the hourly wage rates, or salaries of the teams involved. The question now moves into the somewhat murkier areas of work force effectiveness and work force efficiency.

Efficiency and effectiveness refers to how many resources it takes in each relative location to accomplish the desired work, and how long it takes them to do it. Too many times it is assumed that one workforce is as proficient as another. This might have been the case on the fixed speed production line (after appropriate training and time to come up to speed), but is it correct to apply these same principles to non-production line types of work and service products?

This is neither a case for or against the off-shoring and cost reduction push. These are tidal type forces that will continue until some sort of economic equilibrium is reached. This is more a question of identifying, accepting and analyzing the total costs associated with each proposed workforce location decision.

Just because it takes ten highly motivated, well educated, relatively expensive resources in one global location to deliver a satisfactory work product, does not mean that it will take the same number of similarly motivated, similarly educated relatively inexpensive resources in another global location to deliver the same work product in the same amount of time.

Research has shown that it usually takes more people, and more time for the lower waged (and supposedly lower cost) locations to accomplish the same tasks and deliver the same work products. (https://cs.stanford.edu/people/eroberts/cs181/projects/offshoring/failures.html)

What this means is that it is not just the relative cost of each hour of work that must be examined in the off-shoring decision. It is also the relative number of hours of work that are required at each location that must be included in the equation. That means that the relative number of people (spending hours on the work) and the length of time that they spend (how many hours) should also be taken into account.

If it takes five people one month to do the work at a higher cost location, and it takes eight people two months to do the work at lower cost location, the resulting total cost of work delivery may yield a very different work location decision that just the straight hourly wage comparison that has been so popular in the past.

On the other hand, it should be noted that if the relative wage differential is great enough, even these types of labor inefficiencies can be overcome.

I try to focus on real and definable costs. The relative number of hours used and the relative wage rates at each location in question are either known or can be estimated with some relative amount of accuracy. These are usually real numbers that deliver real relative costs. As always there are other factors that can be associated with the off-shoring question. I’ll list a few of them, but as they are less quantifiable in their effect, it will be difficult assign an actual value to them.

Are there incremental but hard to quantify costs associated with the increased complexity of the operations, IT, infrastructure and security associated with an off-shoring. In today’s hacker infested world one would think that adding facilities and resources in other global locations would have an effect on these types of costs. However, it is hard to add them into any comparative costing discussion.

There are considerations that should be observed regarding the relative quality of the work product generated in each location. Are there bugs in the software? Are there differences in the way customer support is provided that affect customer satisfaction? These are difficult issues to quantify, at least prior to having to try and resolve them.

Communications will also become more difficult. What was once a real-time conversation may now become a series of emails, depending on the relative time zones associated with the differing locations, potentially across multiple days. The overall speed at which things are accomplished, or issues resolved can become problematic.

The cost of management should also be expected to increase as well. At least initially, expatriate management will need to be present at the off-shore site to setup the new functions and oversee them. Depending on how things progress, their presence could extend over a significant period.

For those of you not familiar with the expatriate role, these people are expensive. They are normally paid at the “high cost” location salary rate, and their expenses for staying in the low-cost location are usually also covered by the company. They are in effect paid close to twice for the inconvenience of living in one location and working in another.

The final “soft” cost that I will address is the public perception of moving jobs out of their current location and to another, as well as the potential exposure associated with future governmental regulations associated with this activity. Market movements associated with drives to “Buy Local” and legislation designed to increase the expense associated with off-shoring are gaining traction in multiple locations.

It is easy to see why low wage rates in other parts of the world may be attractive. As companies continue to become more virtual in their natures’ Virtual Office can mean an office anywhere on the globe. The initial success and savings generated by moving the simple and repetitive off-shore has given rise to the desire to move more and more complex and unique functions as well. This complexity and uniqueness affects the efficiency and effectiveness of the model.

While the relative wage differential will continue to be an important factor in the off-shoring equation, other factors will continue to increase in importance as the off-shoring drive continues to move up the business complexity curve.

Organizational Chemotherapy

One of the most hackneyed, trite and stale topics to talk about in business is change. Of course that is all the more reason for me to talk about it. We all know we need to change. This is a given. I do not think there is one person out there that could not identify something associated with their occupation, or some aspect of what they do, that needs to be changed. If that is truly the case, I think the greater question associated with change is not what to change, but how and when to change it.

I recently read an article which featured a discussion with Mark Cuban, the owner of the Dallas Mavericks NBA basketball team and erstwhile member of the board on the television show “Shark Tank”. I am neither a particular fan of the Mavericks (I prefer the Dallas Stars hockey team), nor do I watch the Shark Tank, but I was intrigued by the article. Mark Cuban is known for speaking his mind quite often, or at least he appears to speak his mind quite often based on the media coverage he receives, and upon first blush this particular article didn’t seem to be any more important than any of the other myriad of times that he has chosen to speak up.

I guess I speak up quite often too, but since I neither own a professional sports franchise, or appear regularly on TV, there are not nearly as many media articles that cover what I have to say or write. Therefore, I seem to have to write my own.

I guess having a couple billion dollars can influence the media’s opinion of you. Go figure.

Mark Cuban, while appearing on CNN’s “New Day,” morning infotainment, talk show and celebrity-fest referred to President Donald Trump as “political chemotherapy” for the system. He then went on to explain the genesis of the term was from one of his “smart friends” who said:

“Mark, I’ve voted for politicians my entire life. Do you know what the definition of insanity is? Doing the same thing over and over and expecting different results. So I voted for Donald Trump. Is he poisonous in a lot of respects? Yeah, this is out chemotherapy. We hope he’s going to change the political system. And if that’s the way you’re evaluating Donald Trump, he’s doing a phenomenal job.” (http://www.cnn.com/2017/04/21/politics/mark-cuban-donald-trump/)

I am in no way or form going to get into any discussions regarding politics or the relative values, or lack of values of any politician. I am merely interested in the term “political chemotherapy”.

Using this example, I would extend Cuban’s example to the professional environment in that when an organization or business continues to do the same thing and apply the same process over and over again, and does not seem capable of doing anything else, but continues on hoping for a different result, it would seem that it would also become time for what I would call organizational chemotherapy.

And indeed, we often see that this as the case when it is finally recognized that there is a need for a change of direction within the organizational system. This change usually comes in the form of a new business or business unit leader, usually from outside of the stricken organization, who is brought in. Since they are not beholden to, or vested in the existing processes or structures, it is their role and responsibility to be the change agent, much like chemotherapy, that changes the way the existing business system is operating.

I do not seek to minimize or reduce the hardship that people must go through when they are forced to endure chemotherapy. Everyone I have spoken to who has gone through it, and everything I have read about it indicates that it is as an unpleasant process to endure as can be imagined. Having to ingest a proscribed list of toxic and poisonous chemicals into one’s system on a regular basis for the purpose of eradicating items that if left unchecked will destroy the system, cannot be thought of in any sort of lighter terms.

I am however interested in the analogy that was drawn by Mark Cuban’s friend to the political process, and the similar analogy that can be drawn to the business process and organization.

It seems in both the political system, as well as in the business system, it sometimes takes the injection, or introduction of something that can best be described as a known toxin into the system to get the system to change. This usually occurs when it is recognized that if left unchecked the system can become, or may have already become somewhat compromised, and are unable to correct themselves. The inertia of the organizational and business process in these cases, once compromised are almost impossible to correct from inside the system.

Almost all business systems are risk averse. It doesn’t matter what the organization says. It doesn’t matter if the organization claims a culture that rewards risk. Almost all business processes are created to reduce risk. And one of the greatest perceived risks to business is change.

Change in business requires the system to do something it hasn’t done before. It can be small or it can be large. Regardless, it will be resisted. Over time the resistance to change will become ingrained into the system. The resistance to change can almost become a process unto itself. This point is usually achieved when the stakeholders in the status quo structures and processes have neither the authority or inclination to “buck the system”.

The perception in the organization evolves that the return for the risk of challenging the system is lower than the potential penalty for the continued less that optimal performance under the current methodologies.

This is the point in time for the organization, when it will probably take nothing less than business chemotherapy to force the system to change. There will probably be both good and bad effects associated with it. A stable if underperforming system will become at least temporarily unstable. There will be uncertainty and risk for the members of the organization as they must change what they do and adapt to the changes being imposed, or face exiting the system as part of the corrective solution.

One of the side effects of organizational chemotherapy is that like its sourcing namesake, it doesn’t specifically correct the system. It is actually designed to remove something that is detrimental to the system. While similar, they are in fact two distinctly different actions. It hopefully allows the treated system to return to its normal, more healthy performance level.

I think we have all seen high profile instances of organizational chemotherapy. I have actually lived through one, where a CEO was brought in specifically to change and remove a “good old boy” culture that was hampering the growth and evolution of the organization. It seemed he was successful beyond even the board of director’s expectations in that he seemed to alienate everyone including the board that hired him, and he genuinely seemed to enjoy those aspects of his role.

The issue was that once the culture had changed, there was not a new beneficial system and process available to put in place to replace the old one. The CEO knew how to remove what was unwanted, but did not know how to replace it with what was desired. The company began to falter and performance began to fail. The board then had to step in again and replace the chemotherapy agent with a new CEO who rapidly built back up a new culture based on merit and performance. The company then took off.

The progression was one of starting with an organizational system where performance was secondary to “who you knew” or were politically aligned with; to one where it was essentially toxic to be associated with the old system and regime, but again where performance was secondary; to one where performance and merit were moved to the forefront.

It took approximately three years from when the chemotherapy CEO was installed to when he was replaced. And this represented three distinct organizational systems and processes. It was also interesting that as the solution to the first cultural problem, he only knew how to remove the problem. He did not have the capability to implement the desired final solution for the organization. He focused on his strength which was to remove the undesirable aspects of the original organization. It took someone else with a different skill set to rebuild the new system.

Organizations have a tendency to want to drift into comfortable, known and reduced risk structures and processes. It takes careful stewardship and an eye on the future by the organizational leader to continue to drive a balance between acceptable risk, challenge and new directions, and the continued implementation of risk reducing processes and decisions.

Regardless of how hard an organization tries, it continues to be exceedingly difficult to violate or even change the Risk-Return economic equation. As an organization constrains itself with the drive to reduce risk, it also by necessity also reduces its related opportunity for gaining an acceptable return. Invariably the solution to this issue is for the organization to try and implement even more of the constraining systems and processes to address the new issues, which in turn creates even more organizational drag.

At some point it becomes apparent that a chemotherapy type solution will be required to change the self-defeating process constraints. As shown in the above example, organizational chemotherapy may solve the current problem, but it needs to be closely monitored, because correcting the current set of problems is in many instances not the same as creating the desired final solution and system.

Where are the Future Leaders Going to Come From?

It used to be that leaders in business emerged from the organization and moved to the forefront by having a better idea. Or having a compelling vision. Or solving a significant problem. Or dealing with a difficult situation. Or a combination of several of these traits. They moved to the front and led by changing things for the better. But that does not seem to be the case anymore. In these days of process driven organizations, it appears that leaders are selected according to their ability to follow or implement the existing process. It appears that the leaders of the future are not being recognized as the one who can do things the best or most innovative way, but rather the ones that are the best at doing things the current way.

In the past most leaders did not always follow a preset process. Sometimes it’s hard to follow a process when you are out front leading. Leaders would have a flash of insight, or belief in a new idea and risk doing something that was outside the then status quo to achieve it. They would recognize that whatever was currently being done was not going to generate a new result or get the organization to new ground. They were looking for a solution and didn’t mind defining a new way to get there. If they deemed it necessary, they would take a new path.

It was then up to those that would follow them, to try to emulate that success. Followers would then try to create a process to follow that would enable them to hopefully achieve the same result. They would follow in the leader’s footsteps, and hopefully codify each step so that everyone else would be able to understand and follow. They would try to minimize any of the potential risks that the leader had taken in order to succeed.

As the new process evolved, each step was assigned to a specific individual or team to complete. No one ended up owning the entire process, or even the final result. They owned steps. There would be hand-offs at each step. In time the process would become an ingrained smooth running feature of the organization.

This would be good, until such time as something changed. It could be anything, a customer preference, a competitor’s strategy or product, the market or economic environment, but the ripple effect within the process would be significant. Because now the process must change, and based on its codification, structure, and stakeholders, it is now being asked to change itself.

Under a process driven structure, only the current leader can have the end to end insight to change the process. Since each specific piece of the process is usually owned by a specific individual or group, any other type of change would require all the pieces of the process to come together to implement any change. And since the process was originally created to remove variation and risk from the organization, there will usually be a fair amount of self-induced risk avoiding resistance to change. Something that was put in place to reduce unwanted change must now somehow become a catalyst for its own change, and must continue to do so into the future.

Performance now is based on how well each individual or group performs their individual step in the process. This might not be the most conducive environment to developing leadership.

I think this might be what Henry Ford had in mind when he created the first automotive production line that was capable of producing Model T’s in any color…as long as it was black.

He was a leader in this area. It was great as long as he could dictate what the market wanted or would get. When others caught on and started to provide customers with options and variety, he too had to change and follow.

The point here is that those that were part of the production line process were not asked to get together and change the process. There was an acknowledged leader and owner, and he made the call. Now he got to do that because he owned the company and it was his name on the car, but I think you get my point.

Leaders see a big picture and have final responsibility. Today’s process driven organizational structures drive dis-aggregated pictures and responsibility for only specific steps in the acknowledged process that is supposed to generate the final result.

In essence, today’s organizations are not asking leaders, or future leaders to be focused on the overall car that is metaphorically being produced, but rather just the few pieces, screws and bolts that they are responsible for in the production process. They are responsible only to perform their specific work product.

It is possible that this organizational structure has also given rise to the requirement for a Quality group. There have been too many instances everyone was performing their assigned task in the process, and yet a low-quality car was being produced. Defects and recalls soon became almost the norm for the process.

A great deal has already been written about the millennial generation. Some of it even by me. There is no doubt that they have already joined the workforce in large numbers. It has been well documented that they are the products of the current social and political environments. Their effects in these realms are already being felt to significant levels.

While there is obviously variation across individuals within any group, “Mainstream media has drawn a picture of Millennials as lazy, narcissistic and entitled selfie-lovers.” (http://luckyattitude.co.uk/millennial-characteristics/# ). And while this may be interesting from a media point of view, there are a few other characteristics of millennials that this article provides which could open a few eyes and possibly answer a few leadership questions.

Millennials are also categorized here as “Impatient, Entrepreneurial, and technologically the most savvy generation to come along”. They are viewed as the children of the entrepreneurial generation and to date have been credited with creating twice as many new businesses worldwide as the baby boomers did.

So, what does that mean for the future of business leadership?

For me it means that businesses are going to have to walk a fine line, as well as possibly have to draw a new line when it comes to process and business leadership. The new generation may in fact feel entitled, but they are also well educated and impatient. If they cannot lead, or at least quickly change the process that has evolved there is a very good chance that they will leave and look for other opportunities, possibly their own start-up where they can utilize their own ideas.

Process oriented business structures have evolved to reduce business risks and variation. In doing this they also slow down the response time and ability of an organization to change and react to new conditions and markets. As the business organization continues to evolve, these somewhat change resistant process environments will be populated by more and more impatient millennials that will feel entitled to change things for the better as they see fit, and will be increasingly more frustrated with the systems built in resistance.

This change resistant, process oriented organizational structure, when coupled with impatience, risk receptivity and the willingness to go their own way for fulfillment of the millennials could in fact be the perfect storm for future leadership within business organizations. It is usually the best and the brightest that get frustrated first.

They want to believe in and be involved in a merit based system, not a seniority based one. They will want to change and move as opposed to evolve. They will not be as patient as previous generations because of their feeling of entitlement. In short they will be up against a business system that currently represents just about everything that they don’t want.

Both will have to change. Millennials will have to experience first hand how organizations work and change. As Randy Pausch said in The Last Lecture: “Experience is what you get when you didn’t get what you wanted.” Just because they will feel entitled does mean the will be entitled. This could be an unpleasant lesson.

Organizations will have to change in that as the millennials become an ever greater proportion of their work-forces, they will have to take steps to retain their frustrated best and brightest. If they don’t they risk having to compete with those organizations that have solved the millennial-organizational conundrum, or even the millennial-led entrepreneurial start-up. Competition for the best resources will drive them this way.

Either way, it does not seem that the organizational structures and processes that have so successfully moved business forward to this point, will be sufficient to continue to move business forward from this point. It will be interesting to see not only where, but how the next generation of leaders comes about.

Darwin and China

I think it is safe to say that we are all experiencing some sort climate change. I am not just saying that because it is one hundred and four degrees here in Texas. It is mid-August in Texas. It is always one hundred and four degrees in Texas in mid-August. Remember Climate is what you expect. Weather is what you get.

What is interesting about this year in Texas is that we had almost four feet of rain in the first five months of the year, and now it hasn’t rained since then. That is a little odd. We have had something of a drought for the last few years where all of the water resources were way below normal. Most municipalities had instituted water conservation rules because of it. Needless to say, there were a lot of dirty cars because we could not wash them and a lot of brown lawns because we could not water them.

We then had a short period of a few months where it rained a lot and filled all the reservoirs to literally over flowing. Everything got green and lush. Most importantly, the golf course fairways were lush and the greens were soft. Life was good. And now we are back to no rain, a drought, but with full lakes. And on top of that it’s August and really hot, again. Go figure.

There are many that would like to point to man as the cause of this perceived global climate change (global warming). I am not entirely convinced of this causality since the geologic record across hundreds of thousands and millions of years indicates that we have had multiple periods of global glaciations (ice ages) followed by significant periods global warming in the past. I’m pretty sure that man didn’t cause these as he (we) weren’t around for most of them. It is possible that man is potentially affecting or exacerbating this cycle with carbon emissions and the like but with a data sample of only a few hundred years (against a historical record of millions of years), as I have said, I am not sure I am entirely convinced.

Be that as it may, this entire introduction regarding environmental change brings up the topics of how do you recognize environmental change, and how do you cope with that type of change. As always there seems to be some significant parallels between what is going on (and has gone on) in the environment and what businesses are facing on almost a daily basis.

Darwin in his “Origin of Species” postulated that organisms either adapt to their environments, or they go extinct. This is pretty interesting stuff when you remember that he figured this out by looking at some little birds in what are now Galapagos Islands. This is now a basic tenet that we all seem to agree on.

It is those that adapt to their changing surroundings that survive.

About ten to eleven thousand years ago North America experienced a period of rapid warming associated with the end of the last glacial period. During this time lions, cheetahs, mastodons, and various types of bears that were present in North America went extinct. It is interesting to think that there were lions, cheetahs and mastodons as little as a few thousand years ago in North America, and that they are now extinct. That is a veritable “blink” of an eye in climate or geologic time.

It is believed that several of these species were unable to adapt quickly enough to the changing environment associated with the post glacial period warming and began to die off. It is then thought that other species in that particular food chain (predators and such) also began do die off as they could not quickly enough adapt to utilizing other prey. The net result is that they are gone, and we only know about them here because of the bone and fossil record.

When we look at what is going on in the various markets, not only in the Americas, but globally, we see similar adaptation and extinction events occurring. Businesses and organizations must be quick to recognize shifts and changes in their environments and be agile and flexible enough to be able to adapt to them.

This adaption – extinction pressure requires businesses and organizations to continually perform a balancing act between their desire to codify and stabilize the activities and functions that allowed them to succeed yesterday into a repeatable format, and the ability to be flexible and change these activities and functions in order to meet the new demands of the environment (and the competition) of tomorrow.

There is an old joke that if you are a member of the group that is being chased by a bear, that you don’t have to be faster than the bear. You just have to be faster than the slowest member of the group.

This idea works for a while, until the bear has caught all the other members of the group that are slower than you. Now you had better be faster than the bear, or able to figure something else out. Just running, like you always do is no longer good enough. If you don’t change, you are probably in line for the next personal extinction event.

All this leads to the rather simple position: Changing environments require businesses and organizations to change.

We have all heard the platitudes that organizations have with respect to change and their ability to change. They have to plan on change. They have to react to change. The only constant is change (a particular favorite of mine). This is all well and good. They may or may not do these things. It appears certain that if businesses cannot accept and come to grips with the idea that the way they are doing things today will not be good enough “to outrun the bear” tomorrow they may not get to see the next “tomorrow”.

Climate change may involve the possible change of tenths of a degree across tens or hundreds of years. It is not constant or consistent, as demonstrated by the fact that average temperatures have actually declined slightly in the last few years. It seems the past changes were small and slow, but it was enough to send multiple species into extinction, rather rapidly when looking at things from a climate and evolution time frame point of view.

Such is not the case in business.

Over the last few days the Chinese government has “officially” devalued its currency, twice. In global warming terms this is the equivalent of announcing tomorrow the world will officially be five degrees warmer and good luck to all you seals, walruses and polar bears. This move in China fundamentally alters a business’s ability to move products from other countries into the world’s second largest market by making them significantly more expensive, and at the same time makes products manufactured in China far more competitive in other global markets by making them significantly less expensive.

A business that finds itself on the wrong side of this type of import-export governmental cost equation manipulation has a very short time to change its model for doing business. Maintaining that a company is flexible and that it prides itself on its ability to change isn’t any good here. When there is a recognition that the environment has changed, there needs to be the accompanying recognition that in reality the bear is now running faster.

The only thing that counts in a situation like this, or just about any other situation where a business is confronted by a reality that is in conflict with its current operating model is, does the leadership recognize the new environmental reality, and do they have what it takes to get to the new required business reality? Discussions, meetings and attention to process improvement do not “change” the need for a new approach to doing business when you find yourself in a change or extinction situation.

Sometimes the changes in the business environment occur like they just did in China. They are blatant, easily recognized and either drives a business response, or extinction. However sometimes they are more similar to the changes associated with global warming in that they have occurred slowly, and somewhat erratically and inconsistently over time. There will be those (like me for instance) that recognize and agree that an environmental change is occurring but differ on the attribution of its cause, and there will be those who deny that any change has actually occurred.

It is very clear though that in either case there comes a business morning where you wake up to an unseasonably hot day, and smell bear breath over your shoulder. What you change and how you change will then decide which side of the adaptation – extinction equation you are on.

I think Darwin would be agree.

The Executive Suite

It’s hard to say what will get me started on a topic. It may be something I see or notice. It might be some offhand comment that I hear. Something clicks and off I go. I recently visited a customer friend of mine and went through the usual security screening before entering the building. I presented a photo ID, filled out the form on who I was seeing, passed through the Magnetic Resonance Imaging device similar to what we now go through at the airport, provided a blood sample for disease testing and had the inside of my mouth swabbed for DNA testing. I was then issued a day pass security badge and allowed to enter the building. I then took the 14 minute elevator ride to the top floor where I got off and waited. Yes, waited for someone else, with an entirely different and more special access badge to come and let me into the Executive Suite of offices to see my friend.

I guess it is time for me to address one of the last bastions of corporate elitism in business, the executive suite. Sometimes called the “ivory tower”, sometimes called “mahogany row”, the executive suit has been a source of wonder for me, for years.

The executive suite is that part of the organization’s building or campus that for whatever reason is off limits to everyone, including the mere mortals that work there. It is the part of the building where the access door is locked, and even in the age of high security magnetic badge access for entry into the building, those that are not chosen cannot enter the executive suite. I understand the concept of security for the staff and the building, but exactly who are the executives in mahogany row protecting themselves from with this incremental access denial point, inside a building which is populated by their own employees? If you are going to be allowed in the building, surely you should be cleared to access all floors and regions of that building, right?

I have mentioned many times that I am old school when it comes to business. That does not mean that I particularly ascribe to the way things were done. It just means that I am aware of the way things were. The executive suite to me is a part of the way things were. It has even entered our lexicon of corporate terms in that “getting a key to the executive washroom” is the sign of an executive’s success. I don’t know why executives would need a special bathroom, but then I don’t understand why they are locking the access to their offices from their own employees and staffs. It is also probably a vestige of the hierarchical business world that has run its course and worn out its usefulness. In the age of political correctness, egalitarianism and immediate access, having senior management working behind an extra set of locked doors seems to me to be both an anachronism and the wrong message to send to the rest of the corporate team.

I have worked in and visited several locations where the executive suite was a cherished and protected aspect of the corporate culture. You longed to feel the extra padding and more plush carpet under your feet. You got to appreciate the upgraded office art and inspirational images that adorned the walls. To be called in there was to walk on hallowed ground. After being in an executive suite, walking around on the industrial strength, geometrically patterned, low wear, indoor – outdoor carpet that the rest of the building walks on just won’t do.

Most of the time the executive area is cloistered away from the prying eyes of the uninitiated, behind a solid wooden door. Occasionally, and perhaps a little perniciously, there is sometimes a glass door as the access point to mahogany row. That way the general business population can walk by, and see how the executives live, much like the children that walk by the window of a candy store only to gaze upon that which they cannot have. I could also assume that the reason for a glass door would be so that the casual observer could per chance walk by and gaze upon an executive in the midst of his work day and marvel at his or her work ethic.

However it has been my experience that executives upon entering the pearly gates of the executive suite immediately go into their offices and close the door so that they have yet another barrier separating them from the masses. With the door closed and being fully sequestered from the herd it is hard to guess what they are doing.

The locked door to the executive suite seems to be a vestige of a bygone era. I once had the opportunity to work in an environment where the only access to the executive suite was by a very small, cramped elevator. The various stairwells were locked from the inside to keep people from gaining entry to the hallowed ground (or in this case floor).

I finally worked up the gumption to ask the residents why the limited access and the small elevator. I was told that the facility was actually built in the 1950’s, and back then there was a genuine concern that if the labor resources on the manufacturing floor became so disenchanted with the management team that they decided to charge them, they wanted the elevator to be so small as to limit the number of them that could access the executive area at one time. This is a true story.

I then noted that the 1950’s were more than half a century ago and that it might be time to change the facility’s configuration. I was looked at as though I was from another planet. I actually seem to get that look a lot. Still it was interesting to me how this segmentation of the executives from in this case the waged manufacturing staff had far outlived its usefulness (if it was really ever useful at all), but that there was no desire to change it, even fifty plus years later. In fact there seemed to be subtle and tacit resistance to any mention of changing it.

I think this is in part due to the idea that so many people passed by the outside of that special door on their way up that when they actually get to have an office on the secured side of it, they want to continue perpetuating the segregation. It seems to be that if they went through the wondering of what was going on in there and the pining to be a part of it, then everybody else will have to go through the same wondering.

I have tried to think of other organizations that have retained this same idea of general access for the standard population, but segregation of a specific group away from the rest. It took a while, but I actually came up with a couple of institutions that initially started out with this organizational configuration and have maintained it, quite successfully for literally hundreds of years.

These institutions are prisons and zoos. It seems to me that the only potential difference is that the executive suite door locks are on the inside and the prisons and zoos have the door locks on the outside. This would logically lead to the question: Did the Executive Suite get it wrong when the put the lock to the door on the inside?

The answer to that question seems to fully depend on which side of the door to the executive suit that you are currently working.

Office Art

There is a very good chance that I am perhaps overly aware of the business environments that I have been in. This could be because of all of the changes that I have seen in those environments over the years. I can remember when everybody wore a suit and tie to go to work and people could smoke in the office. It really wasn’t that long ago when you think about it. Now with virtual offices and telecommuting we are all casually attired whether we are in the office or not, and very few admit to smoking whether they actually do or not, and certainly not in the house or office as the case may be.

It could also be that I am so office environmentally aware because of the many things that have not changed over time. Just about every cube still looks like every other cube. The carpet and wall color schemes all continue to remain boringly and uninspiringly neutral. It is from this bland sea of constant cubic uniformity that we are trying to create and innovate new approaches and solutions to our customer’s needs.

There is however one bastion of stolid stability in the office environment that stands out above all others. It is so pervasive and consistent so as to be present in just about every office environment that I have ever worked in or visited. It is so constant so as to go almost unnoticed by the denizens of the business office environment. Almost. It seems to me that the one thing that never changes, regardless of restructuring, reorganizing or remodeling is our office art.

That is correct. The objects and images that adorn the walls of the standard office building seem to be a constant that never changes.

The items on the walls of an office would appear at first to fall into one of three general artistic categories: Technical, Inspirational, and Artistic art. Invariably there is a mixture of all three genres in any office environment, and depending on the group involved in that location there is usually an emphasis placed on one specific type.

Technical office art usually consists of multi-colored charts and posters that purport to provide some sort of definition or direction in accordance with the various processes associated with the business. There is usually a flow diagram of some sort associated with them, and they also usually contain at least three or four geometrically diverse shapes as a way of distinguishing the various different functions represented in the flow chart.

The more complex, the more colors, the more shapes and the more connective flow lines the better. Remember this is technical office art. It is supposed to be colorful, complex, obtuse and inaccessible. You will usually find this type of art in the building sections normally populated by engineers, and the research and development staff. The truth be told, most of them don’t understand the diagrams and flows either, but it does contribute to the general feeling that you are in a technical area populated by smart people.

Inspirational office art usually consists of sweeping vistas, soaring birds or athletes, either individually or in teams, either training for or competing in high stakes arenas such as the Olympics. In general we are all inspired by pictures of mountains, or eagles or groups of people rowing boats. When we see these things I assume we all want to go climb the mountain, soar like the eagle or row the boat to the point of exhaustion. Who wouldn’t?

However, that alone is not enough for the image to be considered inspirational office art. It must also be accompanied by some sort of an inspirational phrase or message. When I see these pictures with their inspirational catchphrases, I can’t help but think of the statue shown in the opening credits of the movie “Animal House”. As the camera pans down the length of the statue of the founder of Faber College, it rests on the inscription at the bottom. The inscription reads:

“Knowledge is good”

That movie inspired me to do many things, most of which I will not go into here.

Inspirational art is normally found in and around the Human Resources and Training departments of a company. I don’t know why these groups require that much incremental inspiration, but they do seem to need it.

The final category of office art is the category that can nominally be considered art. That is the artistic category. This category consists of anything that can be hung on the walls of an office that is neither technical nor inspirational in nature. The preponderance of artistic pictures that are hung an office wall normally consist of some sort of pastel oriented soothing landscape or similar type of image. It is definitely not art that is intended to evoke any sort of response, with the possible exception of a yawn.

There are however notable exceptions to this generalization. I was once in an office building where there was a framed US flag that hung on the wall. This in itself was not too interesting except for the fact that the flag had only forty eight stars, not the customary fifty that I had grown used to seeing on the average flag pole outside. I could not tell if it was in fact a decorative antique or artistic relic, or if it had just been put up on the wall prior to Alaska joining the union in 1959 and no one had thought to take it down since.

This point brings me to the downside of all this office art. It never changes. Buildings are erected. Businesses move in and they are finished out with whatever art du jour is popular or applicable at that time, and that art is never changed. The building, the offices, the cubes may be rearranged or reconfigured, but the artwork remains intact and in place. For years.

I am sure that some number of millennia in the future when the future archeologists are excavating our office buildings, much like we have done in the ancient pyramids, they will discover all these images on the office walls (much like the hieroglyphics on the pyramids) and wonder how people with such boring tastes could have built such buildings.

I believe that there was some sort of financial analysis conducted which proved out the hypothesis that it would in fact be cheaper to move, relocate or rotate the locations of the resident people in the building than it would be to periodically replace and upgrade the office art. This could in fact be the underlying reason that on average people in offices are asked to change their locations approximately once every year.

On the surface this movement of people not art, may sound like an ingenious solution the issue of people becoming jaded with respect to their professional surroundings, but no one thought about the long term issues associated with this scheme. With all this office relocation that has been going on for years on end, we now have HR and Training people trying to contemplate pastel landscapes and outdated flags, Engineers and developers being assaulted by simple pictures with inspirational phrases and the rest of us losing productivity as we try to understand the complexities associated with the engineering flowcharts and diagrams that once directed the development processes of our companies.

Pardon the pun, but this cannot be considered a pretty picture.

As an example, currently outside my office is a Software Improvement Process Diagram. It is on that heavy gage high density white presentation board. On the surface this isn’t so bad, other than the fact that the plan is dated 2004. It is only ten years old. Now it may be a fabulous process and there is even the finite possibility that it still may be applicable. The problem is that it is not applicable to me. I am here now, and I need my abstract pastel landscapes, or even a trite inspirational eagle or two if I am to get my work done.

On the inside of my office is a multi-dimensional, multi-figured, multi-colored flow chart and guide to problem solving. When you put the four three dimensional figures that represent the various stages of the problem solving process together, to me they
resemble a psychedelic lava lamp that has been laid on its side

The four phases of the problem solving process all quite conveniently start with the same letter “D”. They are “Define”, “Discover”, “Develop”, “Demonstrate”…..

Reading further into the detail….Wait a minute. This thing is actually starting to make some sense. I guess I should have looked at it in more detail sooner.

Nevermind.

Facilities and Information Technologies

In the past I have looked at several different disciplines within the business organization. Sales, Marketing, Finance, Research and Development and even Human Resources all have their roles and responsibilities in the organization. There are a couple of key support organizations that should also be examined; Facilities and Information Technologies (IT), and unless you want to have an office in an abandoned warehouse and communicate via semaphore (that’s the waving of flags to pass messages between ships) or smoke signals, you need to be aware of and know how to work with them.

The facilities group is a reasonably simple group to identify and locate in the business environment. Simply find the second nicest offices in the building. Chances are these will be the facilities group.

Why the second nicest? Very simple. Facilities is normally wise enough to understand that the senior corporate executives will expect to have the nicest offices in the building. They will want the biggest offices on the highest floor with the best views out the windows. If someone else has them, the executives will want them. This will cause unrest and unhappiness. It is best just to give executives what they want. Everybody knows this, including the Facilities group.

And who will be the ones to give the executives the offices that they want? Correct, it will be Facilities. They are the group that is in charge of all the buildings and all the stuff that goes in all the buildings. Once they have decided who gets the very best offices – the executives – they then get to decide who gets the second best offices. The only people who can over-rule Facilities decisions regarding who gets what office are the executives, and since chances are that the executives are all content and placated in their offices Facilities pretty much at this point has carte blanche to decide who gets what.

With this kind of power with respect to office allocation it is only logical that they should place themselves only slightly below the corporate executives in the office pecking order.

Also expect Facilities to place their offices as far away from the corporate executives as is possible. They usually do this in order to minimize the opportunity or even the chance that a corporate executive may actually wander over to their area just to make sure that they do in fact have the second best offices in the building and not the actual best offices in the building. This will mean if the executives are on the top floor, facilities will be in the basement. If the executives are on the east end of the building, facilities will be on the west, and so on.

Why is all this important you may ask? Remember on average you will be asked to move your office location every one to two years. Also remember to take advice like this with a grain of salt as it is also estimated that 76.43% percent of all statistics are made up on the spot. I however have found this to be a reasonably accurate estimate on the number of times I have moved my office in my career.

With that in mind, it may be a good idea to identify who the Facilities representatives are within your organization and to foster a relationship with them. This relationship will be good for you in that it may help you and your team when it comes time for you to move, and it can be good for Facilities as they want to build relationships with both the current and future leaders of the organization.

The next group to be aware of is the Information Technologies team. No one is ever really sure where their offices are. Their offices are normally in a part of the building that is cordoned off from the rest of the mere mortals in the organization, usually behind a security door or special access badge reader of some sort. This is usually claimed to be done in the name of making sure the communications infrastructure of the organization is kept safe from terrorists and other employees of the business, but one can never really be sure.

I have walked by these doors on several occasions and thought I have heard the sound laughter and music, but as these doors also appear to be somewhat sound proofed I was never quite sure so I have written it off to an over active imagination.

The Information Technology team members are also easily recognizable by the number, quality, complexity and sophistication of the electronic gadgets that they have in their possession. The Information Technology team members are usually the people with the coolest mobile phones, with the latest time saving applications on them, and the ability to have you stricken from every corporate directory with but a single call or key stroke. Now that is power.

For those of you that are wondering, IT are the people that are responsible for your phone and computer networks. If you want to have a quiet day in the office just go and insult the IT leader in your area. It will be surprising how seldom your phone will ring, or dial tone will be present when you go to make a call.

If you want to reduce the number of emails that you have to deal with, just send an email to management which is critical of the IT team’s performance. You will also find that when your email is not working and you call the toll free hotline for immediate technical support that they will direct you to the website where they will ask you to send them an email detailing the issues that you are having with your email.

There is currently a détente between most Facilities groups and most IT teams in that Facilities is responsible for enabling IT to have office space behind closed and locked doors where goodness knows what goes on, and IT is responsible for making it impossible for all but the very most senior executives to ever establish real time contact in the form of a phone call with anyone from the Facilities group. If this relationship were found in nature it would be called social symbiosis.

The reason that I bring IT into the discussion about the Facilities group is that every time you move your office you also have to reestablish all of your network connections so that you can get email on your computer and that your phone will ring when someone calls you at your new office. If you move every one to two years on average, that can turn out to be a significant amount of time spent with the Facilities and Information Technologies groups.

Without exception I have found the professionals associated with the Facilities and IT groups to be some of the most helpful individuals in any company I have been in, I have also found that it does not hurt to bring them “tribute” in the form of a written thank you for the effort that they have invariably expended on my behalf to make the vast majority of my office moves while not enjoyable, at least that much more tolerable.

International Organizations


Not everybody gets to work for a foreign based multinational company. Many in the US may actually go through their entire business career without having every worked for one. I have had the opportunity to actually work for three different foreign based multinationals. I think it has provided a perspective on both the similarities and the differences associated with international and domestic business processes and practices. With the continued globalization of business and organizations, that may be a healthy concept for all leaders to be familiar with. While things are obviously done differently in North America, we need to understand the perspective that it is the North American business environment that is different from the rest of the world, not the rest of the world that is different from North America.



I will attempt to generalize at least some of the differences I have encountered between the foreign based and US domestic based organizations that I have had experience with. This is always a dangerous thing to do. Generalizations are opinions that are applied to greater sample sets, based on limited sample sets. Having worked for three foreign based nationals means I have some experience with three specific instances of foreign based multi-nationals. It doesn’t mean I should generalize across all of them, but that sort of perceived limitation has never stopped me from rendering an opinion or article before.




Mark Twain is a favorite author of mine. I have quoted him in the past, and will probably do so again in the future. I am envious of his way of expressing things, and while I may not be able to write a good line, I know a good line when I steal it. Twain said:




         “All generalizations are false, including this one.”




Undaunted by that fact, I will move forward with my comments regarding foreign based multinational organizations, and how and why leaders in North America need to understand them.




There is always the push-pull, love-hate, cats-dogs sort of relationship between the corporate offices and the field offices. In domestic based organizations one of the most feared phrases to ever be heard in the field is:




         “I am from headquarters, and I’m here to help.”




I think we have all either experienced or participated in the horror stories that have ensued after hearing this phrase. It can make your blood run cold.




It’s even worse when you think you may have just heard the phrase but you cannot be sure because your brain is still trying to unscramble and translate what you think you may have heard because it was stated in such a heavy foreign accent as to make it almost unrecognizable. Be afraid. Be very afraid.




Also remember that this is a person who is trying to communicate in English, which may be something other than their native language. That means that they have a working knowledge of at least two languages.  It sometimes open to interpretation whether some people who were born, live and work in the US have a full working knowledge of the native tongue.




With domestic organizations there is at least a consistency of culture, value set and approach that can be a basis for working together. In North America we know how fellow North Americans usually tend to think, or not think as the case may be. European and Asian cultures and value sets, believe it or not, are different from North American ones. I have not had the opportunity to work for an African or Australian based multinational, but I suspect there will be differences to a lesser or greater extent there as well.




What I have found is that despite North America being one of the largest markets for just about every type of product in the world, it is also the unique market in the world. What I mean by that is that I believe there are reasonable and rational similarities between the European and Asian markets in the way they conduct their business and the way they treat their employees. It is North America that is different.



A good example could be seen in the various approaches to contractual relationships. In Asia and Europe it seems that a contractual relationship is the beginning or starting point for an ongoing business relationship. Once the contract is in place both buyer and seller seem to understand that some changes will occur and will work together to adapt and modify the arrangement in a mutually satisfactory manner. In North America it seems that a contractual relationship is the end point or culmination of a business relationship. Once the contract is signed it seems to be the arbiter of all potential differences of opinion that can arise, and it is hoped that every possible contingency has been covered.




It has been my experience that in North America customers want to see working products before they buy them. This means that all potential vendors must create a competitive product and the buyer will select the one that they feel best meets their needs at the most favorable price. Admittedly this is not the method for all purchases, but since I have already discussed generalizations and the pitfalls associated with that, I will continue to go with it. Even the US Air Force wants to see a working model of the next generation aircraft from each of its potential suppliers before it decides which one it will buy. I always wondered how it could be next generation if there was already one built.




It has also been my experience to witness in Asia and Europe that customers seem to be much more willing to contract to buy a product based on a specification, with no actual working models. In Europe, several countries got together to pool resources and jointly design and build their next generation Joint Strike Fighter with nothing but a set of desired specifications to work from. They didn’t require that a working prototype be built as was required in the US. Again this is based on a small experience set, but it runs so contrary to what for the most part is accepted practice in North America I had to bring it up.



Despite these and many other business, organizational and cultural differences that can and will provide the grist for future articles, I strongly suggest and recommend that leaders spend some time in a foreign based organization. It will provide an entirely new perspective on how organizational structures, communications and cultures affect the business. In today’s increasingly global business environment, understanding business environments outside of what is considered the North American norm, and hence comfort zone, will help leaders deal with the complex problems associated with multinational business opportunities. It will enable them to understand and deal with the increasing number of non-domestic competitors that have entered or are now entering the domestic market.



 It may also help better prepare them for how to better understand, and deal with someone the next time they walk up and say:




“Ah yem fwoam haid-kwahtaihz, awn ah yem eah tew hehp yew.”

Human Resources


Human Resources – the name of the organization that can strike fear in the heart of the business leader, individual contributor and job seeker alike. People only go talk to HR when they have a problem. People only get called by HR when they are in trouble. It is HR who identifies the talented individuals that would be beneficial employees through their talent acquisition responsibilities and it is HR who administers the lay-offs and exits those employees who are deemed to no longer be sufficiently beneficial to the company. It is quite possible that HR is the single most misunderstood organization in the company.  Now why would you suppose that would be? Their name should say it all – Human Resources. They are supposed to be a resource for us humans right? Not so fast.



On August 10, 1949 the Department of Defense came into being for the United States Government. Okay, so what, you might ask. Prior to that date the military enterprise for the United States was referred to as the Department of War. It was decided shortly after World War II that the government would try to avoid the word “war” pecause of its perceived negative connotation by the population, hence the change of the name to defense.



Personally I think this is some pretty spiffy marketing on behalf of the government. This group did not make “defense” on other countries or peoples. They made “war” on them. They continued to perform the same functions after the name change that they performed before it. Despite having defense in the name, there did not appear to be a lot of defending going on.



Which brings me back to Human Resources. Like the Department of Defense, and contrary to their name, Human Resources is not entirely about the humans that make up the organization. That would be only half the equation or less when it comes to describing their role. If you look at the roles that HR plays in the organization you would think that their name would more appropriately be Corporate Resources, or CR. Despite what people may think, or what their name might indicate, HR is there to look after the best interests of the corporation.



That doesn’t mean that HR cannot or will not help people. They will, as long as it does not conflict with the interests of the corporation. If it is in the best interest of the company HR will absolutely be the individual employee’s advocate. For example, if someone has been discriminated against, HR will help them. Why is that? Some would argue that it is their moral responsibility. That may be partially true, but that is not the total reason. The full reason is that if the corporation does not adequately respond to complaints and charges by its employees regarding improper conduct either by the company or other individual employees in the company, the corporation will actually be in deeper trouble from a legal standpoint than if they did respond and took action.



Rules have been put in place regarding how a corporation may conduct itself. This can include rules regarding both corporate and employee conduct, legal and safety responsibilities, fairness in hiring and firing practices, and a host of other topics regarding how employees may interact with each other while working at the company, as well as how they and the company as an entity may interact. It is HR’s primary responsibility to properly enforce these rules. If it is shown that HR did not fully or properly enforce these rules, the corporation can be at greater risk than if they were enforced. This puts HR in something of a precarious position. They must be an advocate for the employee with the issue, but they must continue to look out for the best interest of the company. If there ever is a question of which interest set is the most important, I would suggest you examine who is compensating HR to make sure of to whom their allegiance is.



As another example I’ll look at that most unpleasant of business activities, the lay-off. If the business leadership has done their job appropriately well, most lay-offs will be avoided. When the leadership has failed and a lay-off is called for in order to reduce the size of the company, who gets involved? Human resources. They will administer the lay-off on behalf of the corporation to make sure that it is handled as humanely and correctly as possible. They will make sure that no specific employee demographic associated with age or gender or race, or anything else has been discriminated against during this lay-off. Are they doing this for the benefit of the employees? To some extent yes. Are they doing it for the benefit of the corporation so that the company does not find itself the defendant in an improper dismissal law suit? Absolutely.



Even with all that in mind, that does not mean that HR will not help the individual. I have found HR to in general be populated with good people who do genuinely want to do a good job for both the people they work with as well as the company they work for. As I noted above they are charged with finding the most talented individuals to become employees of the company through their talent acquisition responsibilities. If you have an issue or a question they will want to listen and help you not only because they have to, but because they want to as well. In many instances HR finds itself trying to be the conscience of the corporate management in trying to translate quantitative corporate performance metrics and actions into qualitative human terms that can be accepted and implemented by the employees.



Understand that it takes a special sort of person to be responsible for listening to and responding to each individual’s issues and complaints in an organization. In today’s litigious world, it is almost to the point where if an individual feels they have been discriminated against, then they have. It is a time where it may be improper to repeat a joke that you have heard on the public airwaves of the radio in the office, as someone could potentially find it offensive in some way and complain about the environment that it has created. Remember, accepted societal norms for social behavior may not be acceptable to each individual in the office, and it is HR’s responsibility to sort them out.



Human resources takes both its corporate responsibilities as well as its employee advocacy seriously. Despite the fact that HR is paid by the corporation, and is responsible for looking after the corporation’s best interests, they will still do all they can for the individual employees. Just remember that they are doing it both because they want to for the employee and because they have to, for the company.



As Juliet told Romeo, “What’s in a name?” When it comes to the Department of War and the Department of Defense there is probably not a whole lot of difference with the possible exception of some good public relations work. It is a good idea to remember the same public relations spin may be at work when looking at the Human Resource department in your organization, and understanding their Corporate responsibilities. They are the acknowledged company advocate of the individual employee and they usually do take that responsibility very seriously, but they are there primarily to protect the company from both itself and the improper behaviors of its employees as well.