HR Metrics and Analytics: So Many Numbers, So Little Time…

To show the importance of what this article covers to an HR professional’s effectiveness – and sanity! –  we want to start with a brief “cautionary” tale. We were asked to help the executive leadership team of the IT department of a Canadian bank determine the data they needed to improve hiring decisions for specific senior IT positions. They had asked an HR analyst with the bank to provide them with data to make better and often urgent decisions. Competition for these mission-critical positions is very acute between financial institutions. A bank needs to move quickly when a need or opportunity arises. And that was the extent of the instruction they gave to the analyst: “Bring us the data!” The analyst worked for two weeks gathering data and then made a presentation that included over thirty slides of dense charts and complex graphics; the analyst had basically downloaded every piece of information on senior IT positions across the bank. Unfortunately, it was of little or no help to the executives who were formulating strategy, managing risks, and making hiring decisions. As the executive who brought us in to help said: “After the 3rd slide my eyes started to glaze over. I had no idea what I was being told or what insights I was supposed to take away from it all. There was no structure and no viable conclusion.”

The evolution of data capture technologies now means that organizations have oceans of data to work with. The problem with this – and it is a “problem”, not merely a “challenge” – is that we need to boil this ocean of data into a drink of water that will help us and our leaders make key HR decisions across a range of issues: hiring, resourcing, training, compensation, performance management, health and safety, inclusion, diversity, employee engagement, and more. HR data analysis is a critical management tool, but only if used in a way that supports, not hinders, informed decision making.

In this article we will share two structured ways to look at organizing your thinking and your data analysis that will make more effective use of your time and lead to more timely and informed decisions. First, we will overview the HR Metrics Cycle which leads in clear steps from defining the opportunity or problem, to decisions and a relevant action plan. Secondly, we will dig more deeply into the Define step of the cycle. Starting any project with clearly defined goals and agreed terminologies and metrics is critical to a project’s relevance and success.

For those of you want to learn more about these models and their applications, we encourage you to join us for Queen’s IRC’s HR Metrics and Analytics program where we cover them in more depth, and where you can actively apply them to both case study material and one of your own “real world” live projects.

Download PDF: HR Metrics and Analytics: So Many Numbers, So Little Time…

Questioning Your Way to Success

 A Practice Guide to Questioning SkillsMany books have been written about negotiation strategy and the different approaches to negotiation, from interest-based to traditional bargaining to win-win to principled, and many more. Much less, however, has been written about the detailed mechanics of successful negotiation and problem solving, about the face-to-face tools and language skills we must master to be more effective negotiators.  In particular, one of the most important skills is the “art of the question” — the ability to ask effective, powerful questions and to combine that ability with strong empathy and listening. These are the skills that deliver better outcomes and win-win solutions.

This is why we wrote BrainFishing: A Practice Guide to Questioning Skills. This new book delivers clear, useful skills in a practical format. It is both a “how to” book for making questioning skills your forte, and an informative guide to understanding the neuroscience behind why the use of questions is far more effective than arguing, telling, or debating. It identifies many different types of questions and when to use them; it highlights the effective use of acknowledging and empathy statements; and it even offers a few “magic words” – words that facilitate effective engagement. It’s also a fun, fast-paced, and at times irreverent look at the skills we can all use to be successful in times of constant change, whether it be at the negotiating table, during a workplace interaction or in a social situation.

In the book, we equate “telling” with “hunting”, which is done by targeting other people by demanding and pushing them to see your point of view. We then equate questioning skills and “asking” with “fishing”, which is done by attracting and engaging the creative, powerful, problem solving parts of our brain.

In this excerpt from BrainFishing, we demonstrate why telling, in most cases, is a failed communication strategy, and why our brains nonetheless get trapped into telling, arguing and debating.  We then offer some ways to start dramatically improving each and every interaction we have with other people.

A Cautionary Tale: 3 Reasons HR Analytics Projects Can Lead to Frustration and Failure

 3 Reasons HR Analytics Projects Can Lead to Frustration and Failure Nothing frustrates me more than to see the expertise, experience and time of HR professionals wasted. And in today’s working environment, I see frustration and failure all too frequently in Analytics projects.

When I say frustration and failure, I refer to the type of Analytics project we have all been involved in. We have pored through oceans of data and done hours of spread sheeting and analysis, and in the end the leaders we have presented our analysis to have put it to one side or seemed confused or unimpressed by our efforts. Somehow we have missed the mark. Or the leader takes one look at our analysis and demands something different – other numbers, more numbers, different charts, flashier graphics – take your pick. And we head off into another round of more effort and increasing frustration.

Why does this happen? Is there too much data? Sometimes. Too much complexity? Possibly. Too little time? Maybe. When these and other analysis challenges arise, it can often lead to the frustration that we have invested time and effort for little or no return. And our managers or leaders are equally frustrated because they are not taking away the insights they need to make informed business decisions.

To make the most efficient use of our time and to increase our chances of success, I’m going to briefly outline three problems that can cause HR analytics projects to stall or go completely off the rails and hopefully point you in directions to ensure that this doesn’t happen to you.

The three reasons for frustration and potential failure that I will explore are:

  1. Poorly defining the problem we are solving and the outcome we want
  2. Not understanding the story the numbers are telling us
  3. Too much data

These problems are all avoidable, if we are aware that they may occur. I will outline the problems and some ways to overcome them below, but this is a very brief article. If you want more insight and practice in these areas of analytics, please join us for the Queen’s IRC HR Metrics & Analytics program. In the program, we provide in-depth strategies, tools and templates, and real world applications to help you to directly address these challenges.

For now, let’s look at these three common reasons HR Analytics projects fail.

1. Poorly defining the problem we are solving and the outcome we want

The purpose of analyzing data is to help us make decisions to solve problems, capture opportunities or monitor and manage potential risks. In the best scenarios, we use data to run a more effective and successful business or organization.

And while it may be obvious to say, data doesn’t make decisions, people do. We do analysis to help ourselves and our leaders make better, more informed decisions.

Thomas Hobbes, the philosopher, once stated: If we agree definitions, we end most arguments. To this, I will add: if we agree definitions, we get to better outcomes, we get to them faster and we get to them with much less effort and frustration.

Too often requests for analysis are poorly-defined or not defined in collaboration with the person who will be using the analysis to make decisions.  “Why does it take so long to hire? Bring me numbers on recruiting!” “Money’s going to be tight this year end. Analyze the data and tell me how much money we should allot for bonuses this year.”  “I want to know if all that money we spend on training is delivering value. Bring me some numbers.”

We can all bring opinions on these issues, some of it informed, some not, but we will each have different ideas on what defines time-to-fill positions, a “reasonable” bonus structure, and value for money in training initiatives. In order to carry out effective analysis, we need to agree on the definitions of the key elements of a project, report, or dashboard with our sponsor or leader before we launch into gathering data and conducting our analysis.

To create effective analysis, we need to define a number of terms or elements. I’ll note them briefly here:

  • The problem we are solving.
  • The outcome we are looking to achieve.
  • The scope or population we are addressing.
  • The timeframe we want to analyze – both the historical past and predictive future.
  • The terminology we are using.
  • The relevant measures that will tell us the story of what is happening and will help us to make informed decisions.

Analysis in most organizational settings is done by one person or a team of people, in this case HR, to provide insight to another individual or team of individuals. In most cases, this will be your boss or a project team or your executive leadership team.  If you sit down for a brief meeting with the individual or team that needs the analysis – it doesn’t have to be long, an hour or less usually does the job – and agree the relevant definitions, there is a dramatically better chance that the analysis will be done in less time, insights will be more focused and meaningful, and decisions will be more realistically informed and easier to make.

Albert Einstein once said: If you have 20 units of time, spend 19 of them defining the problem. If the problem – and the other terms or elements identified above – are defined together by HR and the business leader who owns issues and the decisions, then the odds dramatically increase of using data in an intelligent, time-efficient way to come to better decisions and more sustainable solutions.

2. Not understanding the story the numbers are telling us

A very wise and senior HR leader that I know explained to a group why he liked the term “Human Resources”. He said that organizations had to use their Resources wisely – money, capital, systems, plant & equipment, patents, etc. – and so they had to know if they were being effective in their decisions and investments. This, he said, is the Resource part of Human Resources, and tends to be what the organization measures and analyzes (particularly the money ($$$!) part). But in HR, he said, it is our job to balance the Resources side of the equations with the Human side of the equation.

The point here is that, as HR professionals, we need to deeply understand both sides of the equation, the Resources ($$$!) part and the Human part, if we are going to be able to provide wise counsel and timely insights.

And this brings us to stories. Any insightful analysis is a combination of Numbers & Stories. If you stand back for a moment and consider any analysis you have been conducting, every number has come from a combination of human decisions and human actions. And every solution to improve those numbers will come from human beings understanding the story that underlies the numbers and making Human and Resource decisions to improve that story.

Numbers are the language of business. To understand the story in the numbers, we need to understand the business, how the business uses its resources and the numbers that measure and score the results. Our recommendations and efforts need to help the business to drive successful, sustainable results. To do this, we first need to recognize that a successful business leader focuses on three key issues: How do I grow revenue? How do I reduce costs or make sound investments? And how do I identify and manage the risks that are inherent in making more money and spending less?

Revenue. Cost. Risk. Any HR practice or issue can be linked to one or more of these business results, these business stories. What is the impact of sales training on raising revenue? How can we reduce risk if we fill empty positions sooner? How will that impact our revenue? What will be the impact of multiple retirements? What are the levers or drivers that will encourage employee engagement and greater productivity? How can we restructure a department or division to take out cost? If we understand the business issues – and define the key terms with our business leaders (see above!) – then we can begin to understand the numbers and how change initiatives and HR practices can help to move those numbers in a positive direction.

Numbers and stories. We need the relevant numbers and we need to understand the story that those numbers are telling us.

3. Too much data

Data is best used for two purposes: to identify opportunities for improvement and to monitor and manage risk. The reason we measure and analyze is to make better decisions or to identify areas of unacceptable risk.

Here is the ever-present danger that exists in today’s working environment. Because of the proliferation of intelligent data-capturing technologies, we are, figuratively speaking, DROWNING in data. And some days it feels like we are literally drowning in it.  To compound the problem, because the sources of data and the amount of data keep expanding, we lose confidence in the numbers we are looking it. (And I can already see other hands waving in the back: What about corrupt data? Incomplete data? What about systems that don’t talk to each other? What about huge gaping historical holes in the data? Or departments that input incomplete data or no data all? These are all very real problems that each organization needs to address, but for right now, for this article, we will only deal with having too much data. One tsunami at a time…)

So, how do we address the challenge of too much data? Remember, not all data is created equal. Data and analytics do not solve our problem – they help lead us to insights so that we can make informed decisions on how best to move forward. I have two recommendations before you start to wade through the oceans of data. Go back to the two points discussed above:

Recommendation #1: Work closely with your business leaders to define the problem they are facing and the outcomes they need.

Recommendation #2: Understand the story of what the numbers are telling you so that with the business leaders you can choose the relevant data to measure and analyze.

In the end, all three problems are connected. If we haven’t defined our problem and our desired outcome, then we don’t know what story the data is or might be telling us. Without having the clear, agreed definitions and understanding the story, we can’t determine what data is relevant and what isn’t and we quickly become overwhelmed by the amount of data available.

I encourage you on any project, but particularly where analysis is required, to work closely with your business leaders. Together with them define your terms, understand the story, determine the relevant data and from your analysis find the insight and benefits to help them make sound business decisions. And in the end, I can only hope that you can profitably use these ideas to avoid frustration and failure!!

 

About the Author

Jim HarrisonJim Harrison is an international consultant and facilitator focused on strategy, sales and talent management for mid-sized to large organizations, including government, public service and healthcare organizations. He started his career in financial services, working as a money trader for RBC/Dominion Securities.  He has over 30 years’ experience in consulting, training, and executive coaching. He works with clients in North & South America, Europe, Australia, and Asia, and regularly facilitates strategy and training sessions for such well-known companies as IBM, Accenture, PwC, KPMG, Deloitte, Fuji, AGFA, TD Bank, AT&T, Deutsche Bank, and HSBC. Jim received his B.Sc. degree in Finance from Florida State University and a Master’s Degree in English from the University of California, Irvine.

Jim teaches on the Queen’s IRC HR Metrics and Analytics and Linking HR Strategy to Business Strategy programs.

 

5 Questions to Help You “Sell” the Value of HR

5 Questions to Help You Sell the Value of HRIn the current business environment, it can be very frustrating some days to be an HR professional. In many ways it is like we are living the first line of Charles Dickens’ A Tale of Two Cities: It was the best of times, it was the worst of times…

Never have there been more HR programs and initiatives that can have a direct impact on business results – and never has it been harder to get the attention, investment and commitment of business leaders to make substantive – and at times even minor – changes in order to use the full value of our HR expertise.

In many companies, while HR has been granted a “place” at the table – or earned that place – they have not yet been granted or earned an equivalent and impactful “voice” at that table.

Businesses are in a constant state of change; yet, HR often waits in line for attention and investment behind technology, and technology, and technology, and then marketing (driven more and more by technology) and finance (often driven by technology in the endless appetite for more data). I think you get the point – and if you are an HR professional you not only get the point, you are probably living it. There is an endless, jostling line-up at the money trough for change initiatives – and there is a limited amount of money, resources, “brain-space”, time or attention to handle them all.

There are three reasons why it is easier to sell a technology – or marketing or finance – investment than an HR investment:

  1. The business value of a change in technology can be easier to calculate and justify. The business case is usually more predictable and anchored in more accepted investment metrics.
  1. There is often a “business imperative” that is easier to identify and argue – “Our value proposition is falling behind our competitors because we can’t offer (fill in your own technology-driven blank) – or “Our cost base is too high compared to our industry peer group because we are not utilizing the most up-to-date technology” or “Our data security is not strong. Our customer data is at risk!”  Loudly supporting these imperatives in the popular press are studies like the recent Citibank research that claims that 57% of all existing jobs will be lost to technology in the next twenty years.[1] This is in addition to the jobs that have already been lost!!
  1. Finally, changes driven by HR are usually changes that involve – gulp!! – people! Shocking! But people – managers and staff alike – are a lot harder to manage or change than machines, or marketing campaigns or financial data sets. On top of which it is often harder to draw a direct line between a dollar investment in HR initiatives and a specific, time-bound rate of return.

The great irony, of course, that is never lost on HR professionals is that it is only by developing a well-recruited, qualified, motivated, engaged, well-managed, and competitively compensated work force that any change can be effectively evaluated and executed.

So that’s where most of us live – in a competitive, noisy, money-driven environment. What can we do?  We can teach ourselves how to sell our ideas. To sharpen our pencils and our presentation skills. To build relationships and accept small, steady, measureable victories – to accept the reality that in this day and age having good ideas and a willingness to work hard are not enough. We have to shape and sell and implement those ideas so that they can be seen to have a measureable impact on business results.

To help HR professionals “muscle up” in the realm of selling and relationship management, we have created a checklist of 5 Questions that you need to answer as you work to be heard and have impact. They are essential questions to test yourself against at the start of every project. As you read through this for the first time, we suggest that you identify a critical HR initiative that you are responsible for getting your senior management team (or your boss) to support. As you work through the 5 Questions keep a pad of paper to one side. Answer each question as clearly and honestly as you can for that initiative. In other words, let’s start by candidly admitting where we stand.

 


[1] Dyer, G. (2017, January 18). Davos: The Rich Are Worried | Gwynne Dyer. Retrieved April 06, 2017, from http://gwynnedyer.com/2017/davos-the-rich-are-worried/.

 

The Relevant HR Professional: Five Strategies to Better Engage with Senior Business Leaders

 Five Strategies to Better Engage with Senior Business LeadersI’m always stunned when I hear a senior business leader say that their head of HR isn’t one of their key advisors; that the head of HR is often not at the senior executive table when major strategic or market initiatives are being discussed.

And yet, in most organizations, human resources are both the largest expense line in the profit and loss statement and the most mission-critical resource: it is only with good people that ANYTHING of business value gets done. For this reason alone, there should be a senior HR professional at the table for every strategic discussion.

So how can it be that in so many companies, the senior HR professionals get relegated to the kids’ table when the main meal is being prepared and served? Why are HR issues too frequently an afterthought? The reason for this comes from both sides; business line executives often feel HR professionals spend too much time on process and analysis and not enough on understanding and creating strategic impact; and HR professionals historically have not been trained or encouraged to find the necessary business skills to identify that impact and talk about it in language that excites and engages business leaders.

We have to earn our way to the table. Yes, it is critical for our own careers, but more importantly it is imperative for the business.  Outlined here are five strategies that any HR professional can employ to make themselves so relevant to the business and so engaged in its success that senior executives will demand that they are invited to join the senior executive team.

1. Understand your customer’s customer

To connect our value to what is most important to our customers – the senior executive team in our organization – we need to deeply understand our customer’s customer. What is happening in their market? What pressures are they under to differentiate themselves from the competition in their customer’s eyes?  What kind of skills will they need to achieve that differentiation? Dave Ulrich, in his excellent book HR From the Outside In: Six Competencies for the Future of Human Resources, talks about the need for HR professionals to reverse the way they view the world, to go outside and understand the motivations of customers, regulators, industry groups and competitors. (As a note, Ulrich’s book HR From the Outside In: Six Competencies for the Future of Human Resources forms the heart of the Queen’s IRC Advanced HR program.)

By going outside the business and looking back in from the customer’s point-of-view, we can directly connect to the challenges our business line executives are facing in forming and executing a winning strategy. With this knowledge we can then shape and focus the value we deliver to help our customers differentiate their offerings and capture and retain their customers. By doing this we earn the right to engage in the strategic discussions that take place at the senior table.

2. Learn how to “sell” your value

The challenge for any executive in today’s business environment – this applies to CIO’s, marketing directors, compliance and risk officers, product heads and CFO’s in addition to HR professionals – is that there are more good projects to consider for investment than there are budget dollars to fund them. To be relevant, we need to be able to show how any initiative we propose will directly improve the business. We need to “sell” our ideas, and to sell them we must connect them directly to one or more of three key business drivers.

  1. How can this investment help to grow revenue?
  2. How can this investment reduce or help to better manage our costs?
  3. How can this investment help to better manage our risks?

Revenue. Cost. Risk. To be relevant, to be invited to the senior table, we need to ensure that any idea we propose connects directly to one or more of these areas. To do this, we need to understand how money is generated, how it is spent and what risks are involved in creating a profitable, competitive company.

3. Answer First

In discussing or presenting an initiative, start by showing the answer. Get to the point – immediately! And then backfill information as it is needed or requested. There is a story that when Jamie Dimon, current CEO of JPMorgan Chase, went to Bank One to be their new CEO, the weekly management meetings went on for hours and hours (8 hours was the number I heard when the story was relayed to me). Mr. Dimon is a driver, confident in his own knowledge and comfortable making decisions; these meetings drove him crazy.

So he implemented a rule that was called “Answer First”. Any executive making a presentation had to summarize his or her presentation on one cover page, including the relevant numbers. If the one page story was enough, the executive team made their decision and moved on. If they needed more information, the presenting executive was asked to present more. The meetings went from 8 hours to 2 hours. The point is that senior executives can process information very quickly – they “get” it – without needing extensive details. Remember, they aren’t buying a 40 page PowerPoint deck or 100 pages of detailed research – they are buying a compelling business argument backed by realistic financials. Make the concise argument. Back up your argument with relevant research and realistic financial numbers. Do the research and analysis and have your backup material ready, but don’t turn the telling of the story into a painful, mind numbing experience.

4. How do we get from here to money?

In most HR change initiatives, we are asking senior executives to invest in a change that will bring strategic benefit to their business. To earn this investment, we must be able to show the key decision makers how the organization or department will get from here to the point in time when their investment reaps the predicted returns. How do we get from here to money? This is an act of imagination – and it is an act we can’t assume our executives will make or will make well enough to see the full benefits and green light our project. We have to show them – succinctly – how the change will take place, when the investment will be required, when they can expect a return on that investment and how the risks of implementation will be managed.

5. Change the Conversation

To look at HR value through a business lens requires a mindset shift. To achieve this shift we need to change the way we think and talk about our work – we need to change the conversation. And the first conversation we need to change is the one in our heads. We need to think about what we do in terms of ultimate value to the business and – wherever realistically possible – translate that value into hard dollar financial terms.  This conversation must be the start of our approach to any problem or project: What is the business problem? What financial measure or risk mitigation practice am I working to improve? How can I plan and implement this change that gets us from here to money with the greatest speed and the least risk?

Secondly, we need to change the conversation with our teams. When we are discussing, researching, defining and preparing our arguments we need to challenge each other to define the business impact and to express it – Answer First! –  in succinct business terms and financial numbers.

And finally, we need to change the conversation with our senior executives. Even if we don’t have strong numbers, we need to be willing to talk about the numbers, about business impact, about their stakeholders, about how their strategy can be strengthened and the implementation times shortened. We need to change the conversation – in our head, with our team, and with our customers.

Companies and organizations of all sizes and shapes need senior HR professionals at the senior executive table. With the coming shifts in demographics and the endlessly accelerating need for better technical and business acumen and skills, there is a chair waiting at that table to be filled. Take the challenge – make yourself relevant and engaging; execute these strategies to show the full impact that you and HR can have on your business.

About the Author

Jim Harrison, Queen's IRC FacilitatorJim Harrison is an international consultant focused on strategy, sales and talent management for mid-sized to large organizations.  He started his career in financial services, working as a money trader for RBC/Dominion Securities.  He has over 27 years’ experience in consulting, training, and executive coaching. Jim is a facilitator on the Queen’s IRC Linking HR Strategy to Business Strategy program.  He also works with clients in North & South America, Europe, Australia, and Asia, and regularly facilitates strategy and training sessions for such well-known companies as IBM, Accenture, PwC, KPMG, Fuji, AGFA, the Toronto Dominion Bank, Deutsche Bank, and HSBC. He received his B.Sc. degree in Finance from Florida State University and a Master’s Degree in English from the University of California, Irvine.

 

References

Ulrich, D., Younger, J., Brockbank, W. & Ulrich, M. (2012). HR from the Outside In: Six Competencies for the Future of Human Resources. New York: McGraw-Hill

Linking HR Strategy with Business Strategy: Optimizing the Impact of HR practices on Business Results

We have moved into an era where traditional support services – HR, Finance, IT, Administration, Legal etc. – are under increasing daily pressure to produce a more direct impact on business results. The business rationale for this pressure is easy to understand. Organizations – both public and private – are being pushed by customers, boards of directors, analysts, and investors to do more with the resources they have or – in many cases – do more with less. Deliver more services. Deliver them faster and with more value in more locations. Customize the experience. Gather, analyze and integrate data in a multitude of ways to enhance controls and cross-selling. Provide 24/7 access. Allow flexible work hours. Provide life-long learning and work-life balance. Move everything online – and make it accessible everywhere, with full privacy and security.

You get the picture. And we well imagine that if you are reading this article you are – in many ways – living that picture.

To be taken seriously as HR professionals, we need to be relevant to our audience. To be relevant to the organizational leaders and C-Suite executives we serve, we need to understand and adopt the goals and objectives of the organization and make them our goals and objectives. To do this requires that we directly link our HR strategies to the strategies – and ultimately the success – of the business we are serving.

A strategy is an articulated plan that enables an organization to make optimum use of its people, resources and investments in order to achieve its goals and objectives. In this article we offer a small taste of what it means for HR practitioners to connect their HR strategies to those of the business leaders they serve. These ideas, mindsets, and skills are explored and expanded upon in a hands-on, interactive programs offered by Queen’s IRC called Linking HR Strategy with Business Strategy.

Where do you start if you are an HR practitioner who wants a relevant and impactful relationship with the leaders of your business or organization? We offer the following actions you can take to start to build those relationships and begin the journey.

1. Understand the goals and objectives of the business – and make them your own

To be relevant we must understand what our business colleagues are working to achieve and the strategies they are employing to achieve them. Read their documented strategies, mark them up, ask clarifying and challenging questions, and discuss the objectives and strategies with your HR team. Most business leaders love to talk about their businesses. Where possible, set up a monthly meeting to go through the strategy and the needs of the business unit. If you are embedded within the unit, analyze their plans and results, attend all the meetings and invite team members to coffee or lunch to soak yourself in what they are trying to accomplish and how you can help.

One challenge you may face is that your organization may not have a written strategy. If that is the case, then use the business ideas below to piece together those areas of strategic focus that will help you to create a deliver a relevant HR strategy. Every organization operates to some strategy, whether they state it or not. Sometimes our job as HR professionals requires that we figure out what that strategy is before we are able to serve it.

2. See your HR practices through a business lens.

Lens #1: The first lens focuses on key business drivers. As you work to understand and digest the goals and strategies of the business, remember that business goals can usually be directly connected to one of three primary objectives: revenue growth, cost control, or risk management.

By starting with these primary objectives, you can then trace back the HR practice you are recommending through the value chain to show how it directly impacts that objective. Let’s use the example of recruitment and how it might impact a growing sales force. The primary objective of a talented sales force is revenue growth. Our experience shows that a structured recruiting process that combines the candidate’s previous sales results with scenario testing and experienced-based interviewing, when conducted in partnership between HR and the sales leader, dramatically improves the sales success of new recruits and helps to drive faster revenue growth. In discussing HR practices, work to tie your story or recommendation back to one – or more – of the three primary objectives – revenue, cost or risk.

Lens #2: The second lens for HR professionals to look through is how a customer’s needs and how they make decisions are impacted by the business’s value proposition. To attract and keep customers, successful businesses create a value proposition designed to satisfy their targeted customers, deliver outstanding value, build loyalty and differentiate the business from its competitors. It is your job as an HR professional to enhance that value proposition with relevant and focused HR practices. For example, in a sales or service organization, compensation plans and training and development programs need to be tailored to specifically build the motivation, skills, knowledge and confidence of the front sales and service staff. In this way, the investment in HR practices can help those staff members execute the value proposition in a way that creates a unique and positive customer experience.

The leading HR expert Dave Ulrich says this is one of the fundamental mindsets that drives the impact of HR practices in specific organizations; that HR professionals must learn to look at the business from “the outside in”; that we must start with the point-of view of our customer’s customer and how those customers make decisions if we want to have a meaningful dialogue with our customers, the leaders of the business.

3. Make the connection: Link HR strategy and practices to business results

Once you understand the goals, objectives and strategy you can work to directly link everything you do to the success of the business. You build your strategy and execute your practices to serve the overall goals of the organization. This is true in commercial, union and public sector organizations. There are sound strategic reasons why the top organizations in the world execute a suite of progressive HR practices, including performance management systems, learning plans, organizational design, change management programs, and employee feedback and engagement initiatives. When they are well designed and professionally delivered, these programs enhance the overall value proposition of the organization and provide a key piston in the engine that drives success.

4. Talk their language: Numbers are the language of business

One of the biggest complaints we hear from business leaders about their HR support teams is that HR practices are rarely discussed in the same financial or numerical manner that other business decisions are discussed. If you want to be relevant with business leaders and C-suite executives, you have to speak their language and their language is numbers: numbers are the language of business.

Numbers come in two forms when looking at business decisions. The first and most obvious one is dollars and cents, the financial impact. Value is measured and decisions are driven by the financial impact that an investment or program can have on a business. We will acknowledge that for many HR practices it is hard to calculate a specific dollar benefit, but we have to at least show estimates and potential impact. Most executives are not draconian about needing a business case for all HR initiatives. They understand that the building of a strong, knowledgeable, informed staff is a key strategic need for success. But our willingness to at least estimate or wrestle with the financial impact of a program shows them that we understand what they wrestle with in making investment decisions; it places us on their side of the table in looking at the best use of the organization’s limited financial resources.

The other numbers you must be familiar with are activity and satisfaction surveys, and operational and change measurements. If your firm runs a balanced scorecard that identifies customer satisfaction, financial results, operational processes and change or learning initiatives, then take the time to study in depth how these numbers (or scores) are derived, how they link to the value proposition, and how the executives who run the business units are shaping their strategies to achieve top scores and thus strengthen the long term sustainability of the business. HR practices can directly influence the majority of the scores that make up a balanced scorecard. But to have an “informed” discussion about how the business units can best take advantage of those practices, you have to understand these numbers and how to impact them.

5. Who do you show up as?

Finally, ask yourself: “Who do I show up as?” for conversations with my organizations leaders. Do you show up as a well-informed business professional who is deeply immersed in their strategy and value proposition? Do you show up as someone who understands how your customers make decisions, and who is willing to have in-depth discussions about the measures of their success? Do you show up as a professional who can help them implement change in a way that maximizes effectiveness and minimizes risk?

For HR professionals, the challenge is to show up with compelling arguments to business leaders that show the positive impact of HR practices and programs on the results of the business or organization. But in order to make those compelling arguments and have a positive impact as HR professionals, we need to directly link our HR strategies and practices to the strategies of the business.

To be invited to the table, our programs need to have impact. To be invited back, we need to establish ourselves as trusted partners who understand the issues, can speak the language and can deliver practices and programs that have a direct and sustained impact on everyone’s success. It is an exciting challenge for all HR professionals, to be a key player in the work to grow and sustain a business, union or public sector organization. And the time has arrived when we all have to rise up to meet that challenge.

 

About the Authors

Paul Juniper, Director, Queen's IRC
Paul Juniper
Paul Juniper

Paul Juniper became the sixth Director of the Queen’s Industrial Relations Centre (IRC) in 2006. Paul is a leading and respected figure in Canada’s HR community, with over 30 years of experience in human resources and association leadership.

Paul is particularly sought for his views on the future of the human resources profession. He speaks regularly at national and international conferences on trends in human resources, and the ways in which individuals and their organizations can continue to raise the bar on HR. Paul developed and designed the IRC’s Advanced HR programming to meet the increasingly complex professional development needs of HR practitioners. His research focuses on the state of the HR profession both in Canada and around the globe.

Paul is currently a member of the Advisory Board for the Banff Centre for Leadership. He is also a member of the Board of Directors for the Global Organization Design Society. Throughout his distinguished career, Paul has served as Vice-President of Human Resources for national and international companies, and also managed a Toronto-based consultancy, focusing on strategic planning and recruitment. Paul was an interim CEO of the Human Resources Professionals Association of Ontario (now known as HRPA), President of its Board, and was instrumental in the adoption of a degree requirement for certification in human resources. He is a former member of the Board of Directors of the Canadian Council of HR Associations, and sat on its Independent Board of Examiners for many years. In addition, he has taught in both college and university environments, including the Strategic HR Planning course for York University in Toronto.

Jim Harrison, Queen's IRC Facilitator
Jim Harrison
Jim Harrison

Jim Harrison is an international consultant focused on relationship management, senior level strategy, and business development skills for large organizations. He has a background in financial services and professional writing, and has more than 18 years experience in consulting, training, and development. He teaches in North America, Europe, the U.K., Australia, and Asia, and has facilitated training programs for Manulife, Clarica, Deutsche Bank, HSBC, and Bank of Nova Scotia. He designed and delivered a sales and negotiating program for Group Insurance Representatives that supported significant increases in business for a major group life insurance supplier.

In recent years, Jim has focused predominantly on helping senior sales executives understand, plan for, and build trusted advisor relationships with senior business executives. There are specific requirements of building relationships in the “C-Suite” and Jim has chosen to refine his knowledge in helping others to succeed in this realm.

Through his continuing work with Accenture, Agfa, Deutsche Bank, and IBM, Jim has developed the expertise and focused tools to help account teams land large dollar contracts and to build meaningful long-term relationships. Jim has also helped structure and deliver strategic partnering workshops with long-term clients.

Jim received his B.Sc. in Finance from Florida State University and Masters Degree in English from University of California, Irvine. In addition, Jim has won the Canadian Junior Golf Championship and the Ontario Amateur Golf Championship.

Building Trust in Business Partnerships

Building Business PartnershipsIf you ask anyone to name the most important elements of any long-term, satisfying relationship, trust is usually near the top of any list. This is certainly true for personal relationships, but it is also true for business relationships.

The ability to quickly establish and build trust is becoming even more important in today’s business environment, where partnerships and strategic alliances are common practice. Companies and organizations are strategically focusing more and more on their core competencies and high value activities. They are looking to partners – both external and internal – to contribute added value through complementary services, products, and expertise. Adding value from partners allows companies, business units, and specific departments to innovate and to differentiate themselves from their competitors. And the foundation of these successful partnerships is trust. In this article, we outline a method through which trust can be formed quickly and proactively, and sustained over time.

External and Internal Partnerships

So, first, what do we mean by “partnerships.” They are everywhere – in your organization and ours – even though we don’t sometimes think of them as such. The obvious partnering initiatives include public joint ventures between two companies, mergers and acquisitions, construction projects involving multiple owners, architects, contractors, suppliers and trades, and distribution models that allow greater product and service reach through a broader set of distributors or resellers. These are partnerships with highly visible external partners. But there are other, less visible, external partnerships as well. These include relationships with suppliers, with legal or auditing counsel, with training companies or with IT experts. In the most successful organizations, these traditional buyer-supplier relationships are being run not as price-driven, pain-filled, win-lose procurement exercises, but rather as trust-based, win-win partnering relationships. This focus on partnership and trust is driven by the increasing need for speed, innovation, shared knowledge and investment on behalf of both parties, necessities in today’s market place if organizations are going to survive and flourish.

The same paradigm applies to “internal” partnerships as well. Closer and more flexible relationships are demanded by business units or government agencies in their relationships with all internal departments – with HR for faster, more relevant recruiting practices; with Finance for better predictive analysis and timely decision making data, and with IT for faster, value-added technologies, streamlined security, and implementation practices. Internal departments need to support each other to add value and to respond to the urgency placed on them by demanding consumers and a faster, dynamic marketplace. This is true in business; it is true in government; it is true in any organization that needs to do more with less to compete and survive.

Defining Trust

Participants in workshops and seminars we run universally agree: a foundation of trust makes both external and internal partnerships stronger and increases the chance of success. So we ask them: How important is trust? Very important. How long does it take to build trust? A long time. How long does it take to break trust? A single moment. The answers are uniform and – in a positive way – predictable. Then we ask: What is the definition of trust? You would think this would be an easy question to answer, given the importance of trust. But here the answers vary: honesty, integrity, doing what you say, starting what you finish, being trustworthy, being someone I can count on – all good answers, and all certainly capturing an element of trust, but still not nailing it down to a clear, working definition that points to a sustainable course of action. Then we ask: What do you do if you need to build trust quickly and sustain it over a long period of time? The answers tail off to silence. So two key questions: What is trust? How do we quickly establish trust? Yet, no clear answers. However, everyone agrees that when a partnership is formed, it must be formed in a way that establishes trust as rapidly as possible.

A Working Definition of Trust

So what is trust? We have developed a working definition that can be applied anywhere:

“Trust is the level of positive expectation we have of another person, when in a situation of risk.”

Risk is the key element that drives almost everything related to trust. All relationships possess some degree of risk. This is true in our personal lives; if anything, it is even more acute in our business relationships, particularly in circumstances where we are critically dependent on partners – both external and interna – in order to succeed. The relationship between risk and trust is symbiotic; if risk is high, it challenges or diminishes my sense of trust with you. If I already trust you, I am willing to work faster and take greater risks.

To add even more complexity, in business partnerships we need trust to exist between individuals, as well as between entire departments or organizations. Often, we need it to be established very fast and sustained through numerous interactions and constant change. How do we achieve speed and sustainability? To understand how to do this, we need to break down trust into two distinct elements.

Two Kinds of Trust

When we commonly think of trust, we are thinking of the interpersonal relationship between two individuals. We call this personal trust. This is our willingness to trust an individual with whom we are working. It is the trust we think of that builds over time. For example, I assess your honesty, your integrity; I watch as you promise something and then you deliver (or not), and I gauge your intentions, your willingness to go the extra mile to help me or the team. From these experiences, my willingness to trust you either grows or erodes. This trust is critical to the strength of our relationship and how willing I am to take on more – or less – risk in concert with you as an individual.

The problem with personal trust is that, while we desperately need it, we can’t build it proactively. We can’t make it happen just because we want it. It evolves situationally and slowly; but to be frank, in most current business environments, we don’t have the time to allow that to happen at a leisurely pace.

There is a second form of trust that we can focus on in the early stages of a relationship, one that we can move on proactively and quickly, and from which we can build a foundation of sustainable trust. This second form of trust we call procedural trust. It is where both parties initially place their trust in an agreed structure or a clear procedure that they execute together. It is the ability to create transparent, consistent, and verifiable steps – with clear checks and balances – that allow us to create the long-term, sustainable foundation upon which organizational trust and, eventually, personal trust can be built.

Procedural trust has evolved from the practice of procedural justice, in which defendants were given a defined process to have their story and facts clearly heard before a judgment would be passed. This concept has now been built into a broad range of societal structures, human resources practices, and project management disciplines. Procedural trust is grounded in the concept that if we have a clearly defined process in which we initially place our trust – we trust the process, not the individual – then trust can be quickly established. From procedural trust – the trust in the process – personal trust can be established and the process can be extended to build upon that initial trust and sustain it into the future. The key benefit to establishing procedural trust is that it can, unlike personal trust, be done proactively, with a plan developed by and agreed on by both parties.

Building Trust in Partnering Relationships

When establishing, or in some cases repairing, business partnerships between internal or external partners, there is a clear process that can be agreed on at the start of the relationship that will align the objectives of the partnership, identify challenges and risks, and establish the ongoing processes that will build and sustain long-term trust.

The process to establish trust between business partners follows four clear steps:

  1. Alignment of Objectives and Interests
    In this critical first step, the objectives of the relationship and partnership are agreed between the senior leadership of the two parties.
  2. Identification of Issues and Challenges
    Once the objectives are aligned, the two parties identify all of the challenges, issues, and risks that they think or imagine will arise within the relationship. These issues are prioritized, assigned owners by the parties, and solved accordingly. The key here is that everyone’s issues are heard and addressed, in the calm of an adult discussion between senior leaders, not in the heat of a deadline on a loading dock or construction site between employees without sufficient information, resources, or decision making authority.
  3. Issue Resolution and Decision Making
    Ground rules, or working principles on how the group will interact, are then agreed upon, including how decisions or problems will be escalated. By defining and agreeing on a clear process for escalating and resolving difficult issues, trust grows in the partnership’s ability to work effectively together. This allows the partnering process to sustain trust and build a strong, long-term relationship.
  4. Regular Review of the Relationship
    As a final step in the partnering process, the parties establish a regular schedule to come back together to review the relationship, to recalibrate objectives and resources, to publically celebrate successes, and to ensure that trust is continually and consciously strengthened and sustained.

The partnering process is frequently used at the start of a new relationship – an outsourcing agreement, a merger, a construction project, or a joint venture product development. It can also be used to repair relationships that have gone off the rails. In these cases, while we can’t change history, we can start to write a new history from today, a chance to clean the slate and build a future of strong and sustainable trust.

In all businesses and public organizations, we are being asked to do more with less, to move faster to create and deliver value, and to work with a broader, more complex range of challenges, opportunities, issues, and partners. Organizations and individuals that are skilled at quickly and proactively building and sustaining trust will be a competitive step ahead of the market in meeting these challenges.

 

About the Authors

Jim Harrison, Queen's IRC FacilitatorJim Harrison is an international consultant focused on relationship management, senior level strategy, and business development skills for large organizations. He has a background in financial services and professional writing, and has more than 18 years experience in consulting, training, and development. He teaches in North America, Europe, the U.K., Australia, and Asia, and has facilitated training programs for Manulife, Clarica, Deutsche Bank, HSBC, and Bank of Nova Scotia. He designed and delivered a sales and negotiating program for Group Insurance Representatives that supported significant increases in business for a major group life insurance supplier.

In recent years, Jim has focused predominantly on helping senior sales executives understand, plan for, and build trusted advisor relationships with senior business executives. There are specific requirements of building relationships in the “C-Suite” and Jim has chosen to refine his knowledge in helping others to succeed in this realm.

Through his continuing work with Accenture, Agfa, Deutsche Bank, and IBM, Jim has developed the expertise and focused tools to help account teams land large dollar contracts and to build meaningful long-term relationships. Jim has also helped structure and deliver strategic partnering workshops with long-term clients.

Jim received his B.Sc. in Finance from Florida State University and Masters Degree in English from University of California, Irvine. In addition, Jim has won the Canadian Junior Golf Championship and the Ontario Amateur Golf Championship.

Gary T. FurlongGary Furlong has extensive experience in mediation, mediation training, alternative dispute resolution, organizational facilitation, negotiation, and conflict resolution. Gary is past president of the ADR Institute of Ontario, is a Chartered Mediator (C. Med.) and holds his Master of Laws (ADR) from Osgoode Hall Law School. Gary is the author of The Conflict Resolution Toolbox, (John Wiley and Sons, 2005), and the co-author of The Construction Dispute Resolution Handbook, (Butterworths, 2004). Gary was awarded the McGowan Award of Excellence in ADR in 2005.

As a mediator, Gary has worked in the areas of commercial, personal injury, estates, construction, shareholder, insurance, wrongful dismissal, real estate, and workplace conflicts, and specializes in intervening in difficult organizational and workplace disputes. Gary was regularly called in to the court-annexed ADR Centre in Toronto for the first three years, and is now appointed a roster mediator, Ontario Mandatory Mediation Program, Toronto. Gary has mediated personal injury, insurance and long-term disability claims ranging from $30,000 to over $1 million dollars. Estates files include multi-party claims ranging in size from $200,000 to well over a million dollars. Contract and tort claim files have ranged from $10,000 to $2 million dollars. Gary was a regular mediator and fact-finder with the Education Relations Commission, and was also appointed a provincial facilitator and mediator with the Education Improvement Commission, assisting with the financial reorganization and amalgamation of school boards in Ontario. Gary has also been on the Law Society of Upper Canada’s complaint mediation panel, and the Teachers College of Ontario mediation panel. Gary has conducted fact-finding and investigations for the past 6 years.

Gary has delivered ADR and conflict management training for judges from across the country through the National Judicial Institute, and for hundreds of lawyers through the Law Society of Upper Canada and law firms such as Gowlings, and Sims, Clement, Eastwood. In addition, Gary has trained RCMP officers, firefighters, and hundreds of front-line managers and employees for companies like Purolator Courier and Transport Canada, over 1000 by-law enforcement officers with most of the cities in the GTA, as well as numerous departments of the federal government, provincial government, and many municipalities. Gary has worked with the Queen’s University Industrial Relations Department conducting research into employment models of dispute resolution in Canadian companies, and teaches Negotiation Skills at the Queen’s University Industrial Relations Centre (IRC). Gary also spent 6 years as an organizational development consultant to both large and small corporations in Canada and the U.K.

Gary is a partnering facilitator to the construction industry, and has pioneered the use of partnering in unique organizational settings. Gary has mediated a number of construction matters, both construction design and contract issues, along with construction lien disputes. Gary has facilitated conflict systems design projects for numerous clients, including the Royal Bank of Canada. Gary is a principal with Agree Dispute Resolution, and is a graduate of Stanford University in California. He is distinguished fellow, International Academy of Mediators (IAM) and an Ontario Bar Association ADR Section past member – executive.

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