People–Can’t Profit With Them, Can’t Profit Without Them

So, in the same week that Tesla says that lack of people is a problem in their business (too many robots!), Starbucks comes to the conclusion that people are biased and are hurting its business, everyone gets training. So, which one is right?

Let’s start with Tesla. Their statement is not as much about how wonderful people are as it is that they haven’t quite (yet) gotten the engineering down for their new cars to be built completely by robots. So, it is not exactly an “Up with people” moment as a “Well, we guess we have to put up with them for a bit longer” one.

The Starbucks situation is a bit stickier. On one hand, they clearly felt as if they had to do something after a horrible incident involving African-American customers to maintain their brand image. But, I think they are setting themselves up for failure. Implicit bias training is well meaning, but correcting a lifetime of assumptions about people in a ½ day seminar is a pretty tall order. What will they do next time a racially tinged incident occurs? Do a full day of training? Validate a test that predicts levels of implicit bias?

Where I think the training will have the most impact is on their new hires. It sets a cultural norm of what is and is not OK. Yes, this will require management support and some way of recognizing employees for being decent human beings. But, in reading the comments on their social media pages after the announcement that may not matter as a lot of people were pretty bent out of shape of having to go one whole afternoon without their Starbucks. Ah, the downsides of selling a legal, but addicting, product.

Service sector organizations will always face the challenge of directing the activities of people in a way that is consistent with their values. Manufacturers are always challenged with introducing technology (which improves efficiency), but also understanding its limits (for now). We are not quite at a point where people can be engineered out of business. So, we still need to lead them in productive ways.

Can Tech, Workers, and Burgers Co-Exist?

One purpose of technology is to make labor more efficient. This was not news to the inventor of the first wheel or the latest and fastest micro-chip. Western society has been pretty comfortable with this because it really makes things go faster and has eliminated some very physically demanding jobs. Of course, tech also creates higher paying jobs (though not as many) than the ones that get replaced. But, where do customers draw the line?

This article describes the effect that tech is having on McDonalds. Note that this is the only description of the issue I’ve seen online, so I’m a bit skeptical of the premise that this is the reason people are quitting work at McDonalds at higher rates than before, especially considering the low unemployment rate. There are those who think that this kind of automation is being driven (or at least accelerated) by local minimum wage increases. However, automation has always been designed to reduce labor, so that’s not a big surprise.

Yet, Walmart is appearing to be having the opposite experience with tech in its stores. I think the big difference is that the impact of the technology there is to allow employees to focus on what they already do well rather than leading to a change in necessary skill sets.

New tech always has growing pains and I am sure that fast-food chains will get this figured out pretty quickly. The bigger questions to me are:

1) Whether they will understand that they have changed the cognitive complexity of the jobs, and therefore need to change their hiring practices.

2) If service is really part of the equation for fast food customers.

When you change tech in any job, you need to change organizational behavior to adapt. Part of this equation is training, but the other half is ensuring that your selection systems are still valid. This change has led to an increase in behaviors such as quickly shifting between ways people can order while maintaining attention to detail. This requires a somewhat different skill set than handling one order at a time using one process. The tech won’t work as well if you do not have the people who can run it correctly.

As for the second question, the U.S. economy is filled with examples of service employees going away. Whether it was the transition away from pumping your own gas to checking out your own groceries, we are pretty good at serving ourselves. This leads me to believe that the increasingly automated fast food restaurant will be here more quickly than you think.

But we Trained Them!

Workplace controversies that make headlines are a bonanza for corporate trainers. Even in states like California that have mandatory sexual harassment training (companies with 50 or more employees are required to provide all supervisors two hours of sexual harassment prevention training within six months of hire or promotion, and every two years thereafter), you can bet that the #MeToo movement has led to an explosion in programs for managers devoted to the topic.

While providing basic information about sexual harassment is a good thing, it is more of a “check the box” activity than a creator of change. The underpinnings of what made it allowable and tolerated run deeper than what can be addressed in a two-hour mandatory training session or firing a couple of executives for egregious behavior. So, how can a company create an environment where incidents of sexual harassment are reduced?

1) Recruit, hire, and promote qualified women. Sociologists tell us that the roots of harassment are power differences. Having women and men participate in an organization with equal footing will likely reduce harassment incidents. Oh, and while you are at it, equal pay based on skill and experience goes a long way.

2) Reward at least some of the means, not just the ends. Cultures that have a win at all costs mentality are prime breeding grounds for harassment. If an organization only focuses on results, top producers can rationalize and get away with more bad behavior. Consider rewarding important process indicators (voluntary turnover, complaints to HR, engagement survey results, etc.) as part of evaluating manager’s performance.

3) Apply corporate sexual harassment policies quickly and as intended. This is where training has benefit. If manager know the policy and implement it correctly, it tells employees that it is as important as other policies and procedures.

Sexual harassment in the workplace did not happen, nor will it disappear, overnight. Our challenge is to create cultures that strongly discourage it. And that takes more than a two hour training band-aid.

Does Kindergarten Really Have a Culture of Success?

You may be familiar with the marshmallow challenge. It is an intriguing and engaging team building exercise that demonstrates the importance of failure in group interactions.

It is all fun and everyone gets a laugh regarding how, according to an accompanying Ted Talk I show, kindergartners do better at it than those who went to business school. By the way, I’d like to see that replicated because it makes a great story but I doubt that it is really true. But the most important lesson for leaders from it is not that failure eventually grows success. Rather, it is the call to action to create a culture where taking the risk should be rewarded and not only when the risk leads to immediate success.

What leaders should learn from the challenge is that it takes place in an environment that encourages risk taking. There is no one to say, “Let me tell you how we’ve done this before” or “If this doesn’t work out well we are in big trouble.” From this culture, most teams are able to accomplish something that at first seems unlikely in about 18 minutes. This should lead to a candid conversation about the barriers that exist to useful failure and what actions can be taken to change those aspects of the culture.

The nature of kindergarten is to reward process more than results. Incentives in business cannot be quite follow that model and lead to success. However, we can use learning to find the unnecessary hurdles creativity and problem solving.

Flexibility, Bench Strength, and Leadership

An attribute associated with leadership is determination. The idea that once a goal has been established and a plan laid out, effective leadership involves sticking to it and absorbing the inevitable bumps that come along the way. This may involve coaching or training, but requires confidence in the team.

But, what if things get really bad? Should the leader have faith in the plan and work harder on execution? Or, does effectiveness require that things get “blown up” and change on the fly?

There was an interesting example of this in the college football national championship game earlier this week. The University of Alabama (Bama) was playing the University of Georgia (UGA). Bama’s coach had won 5 national championships (6 was the most) going into the matchup, so he knows something about winning big games. While renowned for his success, he is also thought of as being a bit humorless and someone who has extraordinary attention to detail, the latter being a trait shared with other successful coaches, regardless of the sport. This is a person who meticulously plans practices and expects nearly flawless execution.

So, in the championship game, UGA took a large lead into halftime. Bama’s coach was faced with a choice: Conclude that his team was executing poorly and stick with the plan (with some adjustments) or decide that the plan was not working and implement a different one. The coach chose the second option, including replacing many of his star performers, and they won the game in dramatic fashion. What can we learn from this?

1) A plan is not destiny. If leaders view them as the ONLY path, then they will be blind to other opportunities to succeed.

2) Changing approaches requires bench strength (which is literally true in this case). When Bama changed their game plan they also replaced some key players. This was only possible because they had a reservoir of talent with a variety of skills. If they had recruited (the college athletics equivalent of employee selection) players with the same skills, they would only be able to execute one type of plan. Since they had more variety, it gave the coach more flexibility. Think about that when someone says, “We need to hire more people like so-and-so.

3) Effective leaders establish criteria for success and failure. We often here about measuring when we have achieved goals. Less frequently talked about is when it is time to rethink our approach. While perhaps not explicit before the game, Bama’s coach knew when it was time to change to Plan B and made the decision.

Do effective leaders need determination? Of course they do. No plan is ever going to be executed perfectly and without adjustments. But, they also need the humility to know when their plans are failing and the talent available to them to change directions.

Inviting Introverts to Lead

Whenever I teach about leadership the participants and I talk about the value of charisma. Not surprisingly, most of those in the workshop feel that the most effective leaders are these larger-than-life figures. That is, until we start talking about ones that are not (and often one of them is the CEO of their company). So, what gives?

This article delves into the issue. Note that the author sometimes confuses behavior (which can be changed) with personality (which is VERY stable, despite her claim and her link that is not associated with any research). The real issue is what can introverts do to be effective leaders?

For many, what it comes down to is the expectations of the situation. If I think any task is going to be painful, of course I am going to avoid it. This is how introverts feel about an assignment that involves a lot of group interaction.

This study looked at potential barriers to introverts being effective leaders. What they found was that negative thinking about assuming the role inhibited performance (as measured by emergent leadership). However, and this is important, positive thinking did not lead to more emergent leadership. So, in working with high potential introverts, this data (and it is only one study) suggests that removing undesirable thoughts about the role (e.g., your fears are not accurate, you will not be a failure, etc.) will lead to more leadership behaviors than selling the role (e.g., you will be fabulous, there is no doubt that you will be successful, etc.).

This is important because it shows that those who lack the extroversion trait associated with charisma may still be effective leaders. This increases your pool of leadership potential in your company. It also provides a road map for encouraging introverts, who are otherwise qualified, to take on leadership assignments in way that allows them to be successful.

From a selection perspective, understanding this nuance would be valuable to determining who you choose to be leaders. Rather than assessing introversion/extroversion, you can look at a person’s attitudes towards leading groups as potentially a more valued predictor.

How Committed Are You to Developing a Skilled Workforce?

The economy is in a unique position right now. Unemployment is at the lowest rate this century as is the net migration rate. This leaves employers of a skilled workforce in the position of a smaller pool of candidates in general and likely one that contains fewer people with the talents they are looking for.

When more the jobs in the country were in the industrial sector (and there was a higher participation in private sector unions), management and labor worked out apprentice programs. This allowed lower skill workers to obtain the knowledge and skills for jobs over time. It also required the companies to really think about how they wanted the work done and train people accordingly.

The knowledge and service economy (along with companies’ willingness to expand/contact their head counts and greater employee mobility) has ground the apprentice approach to a near halt. People are more willing to skip from job to job to gain skills and employers are less leery of candidates who have multiple firms on their resumes. This gives hiring companies less control of the skills of the people they are hiring. I was considering these ideas when I read this article about Kaiser Permanente breaking ground its own medical school.

Kaiser’s jump into medical education can be taken in several ways, but the one that interests me the most is that a very large player in a big industry (health care) has gone to another big industry (medical schools) and said, “You all are behind the times in providing us workers and we think we can do it better.” It would be like a software company offering degrees in computer science (I think I just gave Amazon an idea!). This is potentially a disruption of a 300 year old model of providing workers.

The investment Kaiser is making is large, but they obviously see the benefit is even bigger in the quality of their doctor labor pool. I would think that if this foray is successful that they would open schools for other professions where they hire a lot of people (e.g., nursing).

The question for other business sectors is this: If your pool of available skilled talent is getting smaller, what are you doing to do to ensure you have access to it in the future? Are you going to poach from competitors or are you planning on creating your own talent pipeline?

I get that the investment in training is high and has its risks (I don’t want to spend a lot of money investing in people just to see them leave). However, it provides you the opportunity to develop the right skills and create the culture you want. It seems like money well spent.

Eliminating Subtle Age Bias

Since age bias is something that could affect nearly all HR professionals, I am surprised that it does not get more attention. But, with the average age of employees in the U.S. going up (see here) and companies likely to recruit more older workers due to the unemployment rate being near recent lows, we are likely to see more attention paid to it, particularly in the technology field.

As with most bias, it can be introduced in a subtle way. For example, the term “digital native” describes those born roughly after 1990 that have had current technology (internet, smart phones, etc) pretty much their whole lives. A quick Indeed.com search shows many jobs where “digital native” is part of the description. Put another way, those older than 35ish should think twice before applying. Similarly, there is a whole literature (this article is an example) on how gender loaded terms in job postings affect who will respond to them.

Now, I get that you are advertising for tech jobs you are looking for employees who are completely comfortable in a digital environment and communicating with others who are. But, those are behaviors that can be assessed for with valid pre-employment tests without having to make assumptions about a person’s age.

And that is really the point about implicit bias—we make assumptions about groups without understanding people as individuals. We face a challenge in employee selection of creating processes that treat everyone fairly, but at the same time learn about them as individuals. It is a challenging needle to thread, but one that our businesses depend on us to do well. Using a combination of unbiased language and valid pre-employment tools can help us get there.

Or, if you would rather beat them than join them, you can open an art gallery that only focuses on artists ages 60 and older.

Accountability, Fear, and Changing a Culture

Uber finds itself in the news for lots of reasons, not all of them good.  The most recent story concerns the firing of 20 employees for a variety of bad behaviors to show that they were being held accountable for their actions.  I am not so concerned with whether this was a good move as much as if it will lead to change.

Certainly, the publicness of the firings meant that they were done as a message to Uber employees and the investment community.  It says, “Yes, we hear you about our culture and we are doing something about it.”  What it doesn’t say is, “You have been rewarding our CEO who does the same things, but we are not so sure what to do about that.”

Firing a bunch of people does not improve a company’s culture, even if it was the right decision.  Rather, it instills fear.  And while it may convey a message of what will not be tolerated, the action does not reinforce any positive behaviors that senior management would like to see.  It is almost like sentencing people to hang by the neck until they cheer up.

Uber has grown their business by the asking for forgiveness rather than permission.  That type of a model, by definition, rewards people for bending the rules to the extreme.  Their challenge is how to continue with a culture based on disrupting the status quo but respects the people who support it.  That will require threading a pretty small needle.

Changing a culture requires time and consistency.  Management needs to look at every aspect of its people processes (recruiting, hiring, onboarding, training, compensation, performance management, and succession planning) and ask, “Have we put in the right incentives and are we modeling the correct behaviors for a sustainable culture?”  Cultures do not happen overnight and they do not change after a few heads roll.

Higher Minimum Wages and Success in the Hospitality Industry

The state of California and several of its cities have been on the forefront of raising the minimum wage.  The arguments for (people cannot live on the current minimum wage) and against (it will cost jobs because business will need to lay people off) it are familiar.  But now there is some data that makes a very interesting link between quality and the impact of raising wages.

This study looks at the impact of raises in the minimum wage and restaurant employment in the San Francisco Bay Area.  Don’t be fooled by the academic nature of the paper—the authors do a good job of explaining things in English before digging into the math (though you can get another explanation here with an eye towards the political).  The main takeaway from the article is that well run restaurants (in this case, defined by high Yelp ratings) are not impacted by minimum wage hikes.  Crappy restaurants (based on quality, not menu price) saw their already higher closure rate go up with the increases.  So, what does this mean for HR?

  • Well run businesses can absorb higher wages when their competitors cannot. This may mean higher prices (in some instances people will pay for quality) or that these businesses can survive on lower profit margins.  HR can contribute to this through good hiring (brining in people who can deliver high levels of customer service) and training (developing a learning culture) practices.
  • Use data to improve quality. The study shows that online feedback (in this case, Yelp reviews) is strongly correlated with business success.  This customer input should be used to improve service and quality.
  • If we presume that the vast majority of the workers at the restaurants are at minimum wage (as the paper does), this research tells us that paying more is not an indicator of quality or success. If restaurant A is getting a rating of 5 and restaurant B is getting a rating of 3, it is not due to wage differentials.  Rather, it is likely based on the quality of the product and the level of service.  HR may not have much impact on the former, but it certainly does on the latter.

What the paper really tells is that that business can succeed without necessarily being the one that pays the highest wages.  When wages are held constant, hiring the best people from the available labor pool may lead to higher service delivery.  This, in addition to a good product, can keep a business successful, even if wages are forced to go up.

Thanks for coming by!

Please provide this information so we can stay in touch.

CLOSE