Lack of Top Talent Linked to Failure to Innovate

Friday, March 30, 2012

If there was ever a time when innovation was and is crucial to the success of organizations, it is during the worst economic times in the last half century. Certainly the times they are improving without question. However, Europe is continuing to struggle with debit, Asia’s economies are beginning to soften, and the US is still facing what may be considered long-term structural unemployment. What are needed are governmental and business leaders who are capable of innovative thought and vision. In other words, organizations must focus on acquiring new talent and they must retain the top talent they have or they will not be able to innovate to success.

Like so many other traits, is innovation learned or is it somehow engrained into leaders and top performers. Can innovation be spread across the cloud in some distributive process or is the purview of some vaulted few? What is innovation and will organizations know it when they see it? Are top performers universally innovative? Can everyone, anyone be innovative? From where does innovation come?

According to Steve Tobak writing for CBS Money Watch, innovation is about seeing things differently than how others might see them. He cites a number of household names as examples of innovation in how technology and services are delivered. So if one man sees a pile of trash, another would see recyclable resources. If one organization sees production waste, their competitor may see a new product. Take the smart phone, it was not always smart, but somewhere along the product development line someone decided that a phone had to be more than a phone. Someone saw something that was not just a phone but a browser, game console, recorder, camera, personal assistant, … etc.

A web search brings phrases up such as “seeing” things differently, “listening”, and “connecting” to create innovation. Creativity and innovation are linked in a dance where neither one leads nor follows. Innovation is married to change, while change may not bring innovation, innovation certainly brings about change. Innovation is both tied to the current state of the environment as well as standing on the shoulders others. Over 150 years of communications technology development began with the electric telegraph and Morse code in 1840. By the way, Morse code is a binary system of “dots” and “dashes” which dates back to 1828 and Harrison Dyar. That same binary system in the form of “0s” and “1s” is the backbone of today’s communications and computing technology.

Apple, Nokia, and Research in Motion did not invent the smart phone, but they did take fundamental communications and computing technology and “innovate” how it was used by the consumer.

Amazon was not the first price discounter, however it successfully innovated how consumers search for and purchase books and other products. Mark Zuckerberg did not invite social networking, he made it feasible, user friendly, and economically viable. Henry Ford did not build the first practical automobile, however he innovated how it was built and marketed.

Jim Stikeleather, Dell’s Chief Innovation Officer speaks to three points of innovation:

1. “Rapid Prototyping”
2. “See the total picture”
3. See “great ideas … no one has recognized”

Stikeleather concludes that “social media and crowdsourcing” are tools of innovation.

Retirement Prospects Post Great Recession

Friday, March 23, 2012

Lowered 401(k) accounts balances, declining home values, lay-offs, reduced earnings, increased debt levels, all devastated the confidence of many near-retirement age workers following the 2008-2009 financial crash. The natural reaction for many workers is to remain in the labor force and attempt to recoup losses, pay down debt and somehow make-up for their diminished financial status. Postponing retirement age does have the potential value of an increased monthly social security benefit amount. Remaining in the work force does provide an opportunity to re-build 401(k) accounts and pay down debt. Unfortunately, time is both the friend and enemy of those attempting to plan and save for retirement.

The Employee Benefit Research Institute reports that in spite of financial and employment prospects improving, many workers still have a low level of confidence in their ability to retire.  A recent CareerBuilder study found that 22% of workers believe that they will never be able to retire, another 22% are planning to postpone retirement by 5-6 years, and 18% think it will be 7 or more years before they can leave the workforce.  A 2011 Towers Watson Retirement Attitudes Survey, pointed to an increase in the desire by older workers for more security in their retirement health care and savings plans. Over 50% of the employees surveyed reported they would trade take-home pay for more security in their retirement benefits. One positive note from the survey is that workers appear to be more engaged in the retirement planning and are paying closer attention to their retirement needs.  The Mercer “What's Working” survey, which was conducted from Q4 2010 to Q2 2011 found that for US and Canadian employees, an adequate retirement plan ranked as second in value, after base pay. Even outside North America, retirement plans are in the top 5-7 value positions for workers.  A June 21, 2011 report on National Public Radio hosted by Neal Conan related that many older workers want to retire but are financial able to do so. The result is that many younger workers are unable to move up as older workers have postponed retirement. This result also has a dampening affect on entry level jobs as current workers have few opportunities to advance.

While this may seem like a lose-lose game, but consider that organizations are now is a position to use this time to transfer knowledge and skills from long-term older workers to their up and coming younger cohorts. Yes, many older workers may elect to postpone retirement for 5-10 years, however, they will eventual retire. Many of these same workers have been trained and operated technically sophisticated machine tools, this would be an opportunity to implement apprentice programs designed to train younger workers. The ironic issue is that faced with naggingly high unemployment, many organizations continue to struggle to fill vacant positions with skilled workers, as reported by a survey by the ManpowerGroup.

FMLA: Potential for Abuse

Friday, March 16, 2012

If your role in a business requires that you oversee others either in a direct supervisory or administrative capacity; you should have an understanding that many employees are eligible for protected time off under The Family and Medical Leave Act of 1993 (FMLA). FMLA was designed to provide eligible workers with up to 26 weeks of unpaid time off to care for themselves or eligible family members who had a “serious health condition”. The law was later expanded to cover certain situations dealing with certain active and reserve military activities. So when is an illness serious?

In general, a serious health condition includes any situation which prevents the employee from working, attending school, or performing other routine activities and includes continuing treatments for chronic conditions such as chemotherapy or similar treatment regimens for themselves or eligible family members. Is it possible that a common everyday cold, flu, headache, or malady can meet the FMLA’s definition of serious health condition? Yes, it is possible. A cold or the flu can be a precursor to a severe respiratory condition. An ongoing headache may be an indication of an undiagnosed neurologic disease. Even an extreme sunburn could require several days of hospitalization and follow-on treatment.

Confronted with any potential FMLA situation, the FMLA Medical Certification Form is the basis for the employee to “certify” their medical situation is serious. Section III of the form is the employee’s personal physician’s attestment as to the employee’s medical condition and its estimated duration. SHRM, the Society for Human Resource Management also recommends a number of ways that employers can manage FMLA and remain within the law.

Training for supervisory and managerial employees is essential to FMLA compliance, as well as training for internal staffs that are required to administer human resource and payroll functions. As with most regulatory compliance, non-compliance can be expensive, time consuming and result in unnecessary employee relations issues. Key to FMLA compliance is annual and on-going training not only to refresh existing staff but for newly hired and promoted supervisors and managers. 

Tantamount to training supervisors and managers and administrative staffs; is employee training and communications to cover both FMLAS notice requirement as well as organizational absence management policies and procedures.  Many potential FMLA abuse situations can be avoided if both supervisors and managers and employees understand their roles and responsibilities when it comes to the company’s leave policies.

Retaliation Claim: Double Jeopardy

Friday, March 09, 2012

Virtually all Federal and state whistleblower and employment related laws have an anti-retaliation clause which prohibits taking adverse action against an employee who is otherwise engaged in some protected activity. The scenario works like this; the employee files a claim of discrimination or reports some illegal action of their employer. Within days of filing the claim or reporting the incident, the employer demotes, transfers, re-schedules, changes job duties, hours of work or terminates the employee for “cause”. The aggrieved employee now adds a claim of retaliation to their original charge. Even if the original charge against the employer is dismissed, the claim of retaliation may have merit and result in significant financial loss to the employer.

Consider Kevin Kasten who filed a retaliation claim against his former employer claiming that he had been fired for “oral complaints” about the inappropriate location of time clocks under FLSA. The Supreme Court concluded that a "complaint is 'filed' when 'a reasonable, objective person would have understood the employee' to have 'put the employer on notice”. The case was sent back to the lower courts for further processing consistent with Supreme Court’s definition of when a ‘complaint is filed’. Even if Kasten’s firing was for a valid reason, the employer’s actions may still constitute retaliation, which is going to be expensive to settle.

A claim of retaliation may even be filed by a third party. The Supreme Court revised a lower court’s ruling that the terminated fiancée of an employee could not file a claim of retaliation. The Court concluded that retaliation is not restricted to “conditions of employment”, noticeably; retaliation may include action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination”. Thus retaliation may occur even when the injured person is a third party such as a relative, fiancée or a co-worker.

If found in such a situation, an organization should consider long and hard before taking any action that might be remotely perceived as retaliation. Something as seemingly harmless as changing an employee’s work hours could impact regular or overtime earnings. Retaliation may be, maybe not. Nevertheless, the perception of retaliation could persist and it could provide the employee with the grounds to file an additional charge of retaliation. Now the employer has two charges to contend with, not just one.

And while the employer and others are engaged in defending their action(s), who is running the organization? Even if the employer prevails, other workers are watching and may be embolden to take action at some time in the future. Even if the employer prevails in court on the original claim, they may still face significant damages on the charge of retaliation. The EEOC’s own manual states that,”Compensatory and punitive damages for retaliation claims … are not subject to statutory caps. Punitive damages often are appropriate in retaliation claims under any of the statutes enforced by the EEOC.”

In a May 2011 case involving “sexual harassment by a supervisor”, a jury awarded $350,000 in damages, $242,000 in back pay, and $10 million in punitive damages. A heavy price to pay for an organization that fails to manage to its own policies of “prohibit[ing] any kind of sexual harassment or retaliation against an employee who files a complaint.”

Missing Leadership: A Question of Talent Management

Friday, March 02, 2012 Question

In a February 7, 2012 press release, Right Management’s ManpowerGroup reported that 31% of the senior manager in 600 U.S. public and private firms who responded to their 2012 talent survey stated that a “lack of high-potential leaders” within their organizations was a significant challenge.

Michael Haid, Senior Vice President of Talent Management for Right Management points to years of “organizational contraction and less internal investment.” Furthermore, Haid credits “lean times” and a “tough competitive environment” as challenges to an organization’s ability to “recruit, retain or develop future leaders.”

Faced the deepest and longest recession since the Great Depression of the 1930’s, it is no doubt that many organizations saw investment in “potential” future organizational leadership as something that could be put on hold until better times. Unfortunately, betters times are often conditioned on having a strong supply chain of not only raw materials, but also talent. That talent needs to be a mix of technical and leadership to take advantage of emerging opportunities as times do get better.

Rarely does leadership automatically emerge from some combination of education, training, and past experience. Just as a great product has to be conceived, designed, engineered, refined, manufactured, and marketed; potential great leaders have to be sought out, developed, groomed, mentored, and yes, rewarded. Since great leaders are often highly marketable, organizations have a difficult time retaining them even in the deepest recessions. What is required is a highly visible means of identifying potential leaders and shaping them along the organization’s path to their appropriate role.

The need and timing for a replacement leader may occur for numerous reasons, some of which are under the control of the organization, others are not. Most organizations cannot afford to miss even one beat in its efforts to compete. The lack of a leader in a key role can be the difference between failure, just getting by, and success. Therefore, it is critical to have a mechanism in place to quickly move a new leader into their role fully ready to take on the challenges facing them. Failure to do so, not only places customers and clients at risk, but support staff is also at risk of seeking opportunities elsewhere.

Even after that new leader is in their position, leadership development must continue to be used to evaluate and refine the leader’s ongoing performance. “The only thing constant in life is change”, and this apples more so to the business world. Organizational leaders face change every day in competitors, processes, methods, regulations, costs, prices, and the list goes on. Thus, to be effective, leaders must be constantly prepared to meet the challenge du jour. To ensure that leaders have the tools to meet that next crucial challenge, their toolbox has to be upgraded and expanded. This may require a combination of internal as well as external leadership development which includes professional coaching and executive education.

A final question seems to be, where have all the pre-recession leaders gone? They are all still here. Many have chosen to start businesses of their own, either solely or in concert with other like minded leaders. Other have selected encore careers or simply selected alternative life paths.