June 2007


I’ve been playing with Facebook for a little while now, and I’m really impressed with it, but I have a couple of minor niggly gripes.

Political views

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This may make perfect sense if you are in America but it doesn’t work for anywhere else.  

Friends

A more general challenge I find with social media is the glib use of the word friend. Perhaps I’ve been living in Germany too long where the German equivalent is used sparingly, and the terms colleague and acquaintance don’t have the same pejorative sense that they can do in English. There are a number of people I would like to have in my network, but I’m not sure that I would classify them as friends (or they me!). Stephen O’Grady has a thoughtful post- “does this mean we are friends anymore?”

Let’s have a quick poke

The term poke has a second meaning in British and South African slang, namely to have sex. Seeing the term poke Dennis! on my screen is a tad offputting.  So far I have resisted the temptation. 

A geographic diversion

I also find the use of England, Wales and Scotland rather than UK in the country codes rather surprising. It presupposes rather more devolution than is currently the case, but that is a really minor gripe. I’d suggest using the iso3166-1 list, as one avoids any political mishaps

Compared to the example my old school friend Simon  refers to here, this is a very minor geographic hiccup. (hope he doesn’t mind me lifting the post)

More listbox laughs. I’ve talked about interesting listboxes before, but this latest one combines really poor geography and history in a single list. In fact, some of the listings here pre-date DOS, the Internet, and probably DARPA itself. Definitely Fedex. Hell, maybe even the postal service for some of them. See what I mean:

My mate is trying to fill in a web form. Wait, where’s South Africa in the country list? Huh? This is what’s listed instead: wheres_sa.jpg
(To some our geographically-challenged North American friends, South Africa is south of France :)

Here’s more information on ‘whereTranskei is, and what happened to SWA.

But it gets better. Where’s Zimbabwe?
no_zim.jpg

Digging around the list comes up with these hints:
rhod.jpg.
And ladies and gentlemen, step into my time machine: nyas.jpg.

Wtf is Nyasaland you ask. Good question.

Oh, by the way, the site sells iPod covers, great product. But really odd reg. forms.

But seriously, Facebook is very impressive. It is clean, simple, performant, viral and fun. It is also really useful.

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Continuing my HR related theme…

I’m not an investment expert, but I remember from economics at university that portfolio management is not just about maximising potential returns, it is also about doing so at an exceptable level of risk.  Risk management has developed into a highly sophisicated field. Letters of the Greek alphabet appearing in long, complex formulae and all that.

The more you know, the easier it becomes to quantify risk. Investors dont mind risk, as long as they know it is there, because with risk, comes opportunity.

You may be asking what this has to do with HR, well it turns out quite a lot.

I stumbled across (thanks knowledge infusion) this report from the Economist on Risk.

International risk managers surveyed by the Economist Intelligence Unit cite human capital risks as being the most significant threat they face to their global business operations. The findings show that human capital risks, such as skills shortages, succession issues and the loss of key personnel, were seen by respondents as being more significant than threats from reputational risk, information technology risk, political risk and regulatory risk. This represents a change from a year ago, when reputational risk was perceived in our quarterly risk barometer survey as being the biggest threat that respondents faced.

Despite acknowledging the importance of the skills issue, just 32% of the survey respondents say that they manage human capital risks effectively. The only areas where they feel less confident are risks associated with terrorism and climate change.

These findings point to the need for closer integration between the risk function and the human resources function, as well as a clearer understanding of the risks that companies face with their location and human capital strategies.

Read the full  Economist paper on Risk Best Practice.  If you think risk is just some compliance thingy, you may be surprised.

HR executives would be well served by articulating the need to invest in succession planning and combating skills shortages in the language of risk. Sprinkle in a couple Betas into the business case and you will be amazed at its impact.

But taking it a step further.

If I was the HR Director of a listed company, I’d ask for a meeting with the investment analysts that cover my company and ask them what people information they would like to have for their analysis. I’d ask them what models they use to measure intangible assets and how I can help them provide the human capital risk information they need to make safer investment decisions. Actually I’d probably go into the meeting with a series of “here’s one I prepared earlier”. (I’d work with a risk  and ratio expert beforehand..)

Perhaps I’d give him ratios like revenue per sales executive, top 10% sales exec turnover, revenue spread in sales, hipo retention,  I’d show who we were hiring from. I’d talk about the executive and key position pipeline coverage, diversity ratios, employee engagement…  I’d also show benchmarks.

If I was feeling brave, I’d give them a card to the employee dining room and let them ask anything they want.

Perhaps I’m nuts. But then imagine the face of the competitor’s CEO when the analyst asks to talk to the HR director.

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A breath of fresh air wafted into my inbox from Mike, Craig also blogged it.

 

I kept expecting him to suggest wearing sunscreen.

 

An SAP partner from the Netherlands produced a compelling 3 minute pitch.

To the folks at perfectforpeople. I say brilliant. I say Dank u wel.

 

There is something oddly cluetrainy about this. 

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Cote from Redmonk is fast becoming the Parky of enterprise software. Here he is talking with Ed and Dan from Colgate-Palmolive about the SAP imagineering fellowship.

[podtech content=http://media1.podtech.net/media/2007/06/PID_011732/Podtech_sap_colgate_imagineering.flv&postURL=http://www.podtech.net/home/3443/brining-the-coolness-to-enterprise-software-sap-colgate-palmolive-imagineering &totalTime=550000&breadcrumb=2f72f4a2685143a1866bb79d750a592e]

Coolness.

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Last week I kicked off a discussion on the Deloitte-Economist study. I received several comments back from the folks I tagged- thanks.

The Evil HR lady nailed it.

For HR to add value we need to speak the language and be able to state our case. We often get in scuffles with finance because training, development and benefits all cost money. When we give in because the CFO says, “that’s too expensive” we have cooked our own goose. Before we propose we need to have the figures that will show how it will save money in the long run–lower turnover, higher productivity, etc. If we can’t show that, we have no business making the proposal in the first place.

We need to not sit by quietly while the “big boys” make the decisions and then carry them out. Are we conducting layoffs? Why? Before we sign on the dotted line we better be showing that his layoff will truly help the company financially. What is the cost of turnover? How come we don’t know this off the top of our heads? (Or at least how to calculate it?) Are we increasing the employee portion of medical expenses? What will be the result of this in terms of turnover? We better be able to build models.
What are models? Crud people, hire yourself some statisticians.

Spot on. 

Jim from Gartner also picked up on the need for more rigorous analytics, referring to Peter Howes. Peter is the best guy on HR analytics I’ve ever met. (I’m planning to be at the IHROM conference in london in December). 

It was also a discussion point at the Chief HR Officer roundtable that we ran in Heidelberg last week, but I’ll post more about that in the next couple of days.

I was also in Amsterdam last week at the IHRIM conference. The night before it was good to see Karen from Jeitosa (it has been too long). I met Luk from Cisco, Tim from Equaterra , caught up with Gary from Cadbury-Schweppes and met another member of the South Africa HR mafia, John from Tetrapak.   

At the conference, we also heard a UK based academic, Anthony Hesketh, present a very well researched model linking people investment to organisational performance. Anthony is an economist, but despite that handicap, he was a very entertaining speaker. For good measure he even discussed Aristotle. Amongst other things, Anthony is arguing for  greater theoretical rigour in HR research. (see this paper) At a practical level, he is crunching some serious numbers on the performance of companies and their people investment and I look forward to reading the research in detail when it is published. He has some insights into outsourcing and BPO, and I especially like the collaboration with industry he and his colleagues at the Centre for Performance-led HR are driving.

If marketing can build a business case for sticking a logo on a formula One car, then it is high time that HR got over their analytical aversions and start to use work like that of Hesketh, Cascio, Reilly, Fitz-Enz and Howes to argue coherently for effective HR investment.

I quoted this last year, but I’ll use it again.

Though your balance-sheet’s a model of what balance-sheet should be,
Typed and ruled with great precision in a type that all can see;
Though the grouping of the assets is commendable and clear,
And the details which are given more than usually appear;
Though investments have been valued at the sale price of the day,
And the auditor’s certificate shows everything O.K.;
One asset is omitted – and its worth I want to know,
The asset is the value of the men people who run the show.

Bowman, Archibald 1938. “Reporting on the Corporate Investment”
Journal of Accountancy, May 1938 p. 399.

The challenge to both HR and Finance remains unsolved.  But I think us HR types can make a start by getting stuck into the world of analytics. This book is a great start.

On a related topic, we will be exploring shared services and BPO in detail at the next HR best practice meeting in Edinburgh. Driving cost out of, and efficiency into HR processes is no longer an option. Perhaps I can talk Anthony into coming along. Peter Reilly from the IES will be there too, as will about 30 HR types.

 

 

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For the last  month or so, Craig and I have been doing the occasional podcast over on starship enterprisey radio. This week we discuss ABAP with Thomas Jung. Have a listen, Thomas knows his stuff.

Craig and I are experimenting with how best to use this medium- we’d like to cover a mix of business and technical topics in a laid back, conversational way. Considering it is your ipod we are polluting, please let us know what you’d like to hear about. Or better still, join us on the show.

Next up we are vaguely thinking about a roundtable podcast on all the cool SAP Adobe goings on.  Any volunteers? Form an orderly queue, please.

 

 

Jason has a thoughtful post about Facebook, and the whole discussion of Facebook as a platform deserves serious attention. Jeff’s and Marc Andreessen’s posts are well worth a read, and my feedreader is full of Facebook prophecies. 

But in this post I don’t want to explore the platform implications of Facebook, significant though they maybe. I’ll just quote from a friend request I received this morning from an old university friend.

“this thing is much more fun than LinkedIn, dammit!”

 

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There is a message in this for us enterprisey software types. Fun is a user requirement.

 

 

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I’ve been thinking a bit about GRC lately, especially Governance and how it relates to corporate social responsiblity efforts. James Farrar has helped me a lot to understand the realities of CSR –  the dynamics of investors, society, corporate behaviour, standards, governments and NGOs. I’m learning lots, but I have much more to figure out.

Amit discusses sustainability, reporting on a McKinsey conference that he recently attended.

Another director of the Firm announced that McKinsey was currently serving 20 of the Fortune 100 around establishing or building out their corporate sustainability program.

This makes a lot of sense. The investor and broader society are demanding that companies take a more proactive approach towards issues such as global warming. Witness, for instance the recent announcement by Google, Intel and others on climate and technology –  the climate savers smart computing initiative or Steve Job’s long eulogy to the green apple.  (update: for more on green and technology see Chris Lochead on ZDNET)

A quick read of perspectives on responsible sourcing blog points to significant investment from companies such as Nike in CSR and CSR reporting.

Nike has been working on business integration in a big way. “Corporate responsibility is no longer a staff function at Nike. It’s a design function, a sourcing function, a consumer experience function, part of how we operate.”

Investors such  F&C, with over 102 Billion pounds under management, are demanding strong transparency in the extractive industries. This stuff is not just window dressing, I quote from the EITI (extractive industries transparency intitiative documentation.)

As institutional investors representing US$8.3 trillion we actively support the development of international mechanisms to address payments transparency, and encourage other investors to join us in this statement.

Some Investor fund heads such as Karina Litvack take a strong stance on ethical and goverance issues, see here on Walmart. So, investors are demanding clearer, more transparent and better information on sustainability measures. A couple of paragraphs in the annual report and some nice pictures won’t cut it. Research is thorough.  NGOs are quick to pounce on inconstitences. HBSC for instance, were embarassed   by Global Witness. 

Yet it is easy to apply the charge of window dressing or even hypocrisy at some CSR reporting efforts. The modern corporation is hardly the paragon of virtue, so some scepticism is in order.

This brings me to the issue of materiality.

A meaningful definition of ‘materiality’ must effectively identify information that, if omitted or misstated, would significantly misrepresent the organisation to its stakeholders, and thereby influence their conclusions, decisions and actions. (Zadek and Merme 2003)

If Corporate Social Responsibility reporting itself is to be sustainable, then surely it needs to become a lot more reliable, transparent and comparable from company to company and across industry. It will require greater standardisation if it is trully to impact behaviour. Will standards such as ISAE3000 and AA1000 will help drive stronger rigour into CSR reporting?

AA1000 Assurance Standard is a generally applicable standard for assessing, attesting to, and strengthening
the credibility and quality of an organisation’s sustainability reporting, and its underlying processes,
systems and competencies. It provides guidance on key elements of the assurance process.
(www.accountability.org.uk)

 I’ll transplant something that Jonathan wrote when discussing management dashboards,  I think it is equally relevant here.

Dashboards need a certification process for all of the data they contain: goals, initiatives, financial and non-financial metrics. With certification and auditing comes trust. With trust, comes use. With increased use, more impact.

In other words, Reporting is only useful if it impacts behaviour. Words are easy.

I don’t want auditors crawling all over sustainability, but I do want to know that the stuff in the annual report and elsewhere is relevant and material. I want to know who is serious and who is bs’ing me. I worry about greenwash.

I want to hear more about the GE’s of this world, who are driving real innovation around sustainability and developing new business models.

GE reported $12 billion in revenues from ecomagination products and services in 2006, on course to the goal of $20 billion in sales in 2010.

GE GHG emissions in 2006 from operations have been reduced by about 4 percent from the 2004 baseline. GHG and energy intensity have been reduced by 21 percent and 22 percent respectively compared to 2004. GE is committed to reduce its GHG emissions 1 percent by 2012, reduce the intensity of its GHG emissions 30% by 2008, and improve energy efficiency 30 percent by the end of 2012.

I want to see sustainablity innovations clearly documented, so that as an investor and as a citizen I can make informed choice. If AA1000 helps bring this about, then I’m all for it.

I also want to know when the GE’s of the world aren’t doing what their messaging tells me it is. (tip james) 

I’ve just ordered this book and this one too. Mark Crofton’s old School are doing  interesting research on sustainability.

Global capitalism is at a crossroads. During the last two decades of the 20th century, free trade produced mixed results at best. Wealthy and developed countries have grown richer, while the vast majority of nations and people in the world have been bypassed or damaged by this process. Furthermore, the underlying natural systems that support human economies – forests, fisheries, soils, ecosystems and climate – have continuously declined. Anti-globalization demonstrations have made it apparent that if corporate expansion is seen as coming at the expense of the poor and the environment, it will encounter vigorous resistance.

For global business, therefore, it has become increasingly clear that the historical separation between competitive strategy and social contribution must be eliminated. Rather than treating social and environmental issues as expensive luxuries, companies are increasingly fusing social mission with competitive strategy. Indeed, a form of “new capitalism” is emerging where environmental and social performance is embedded in the competitive strategy of the firm.

Sustainable global enterprise represents a new private-sector approach to achieving the goals of sustainable development – by creating profitable enterprises that simultaneously raise the quality of life for the world’s four billion poor and conserve the ecological integrity of the planet.

Lots to think about. Sustainability is not just about reporting. It isn’t just about Green either.

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Business Leaders Don’t See HR as Key to People Strategies 

While 60 percent of senior business executives consider people issues to be a significant factor in corporate strategy, relatively few of them look to their human resources teams for help on those issues, according to a study released Tuesday, May 29, by consulting firm Deloitte Touche Tohmatsu and The Economist Intelligence Unit.

The study found that 52 percent of companies don’t have a chief human resources officer or equivalent executive assigned to such people issues as developing a high-performance culture or meeting talent needs.

Deloitte and The Economist surveyed executives from 468 companies on several continents, including 104 HR leaders and 155 senior business executives.

Only 23 percent of corporate leaders see their HR departments as currently playing a crucial role in coming up with corporate strategy and having a significant impact on operating results. And although business experts increasingly recognize people as a key intangible portion of a company’s market value, 63 percent of executives rarely or never consult their HR team on mergers and acquisitions. Even when it comes to regulatory compliance, a traditional HR domain, 26 percent rarely or never check in with HR.

From Workforce magazine.

It is not the first time I’ve read this sort of study, but it concerns me a lot.  Yes, the sample isn’t huge, but the numbers are similar to stuff I’ve read before. It doesn’t seem to be getting any better. A couple of years ago there was a big huff about the “why we hate HR article”, but has much changed?  Should HR care?  At the end of last year I had the opportunity to listen to Dave Ulrich, a leading HR academic. Strong, inspiring stuff, but the Deloittes survey points to a more depressing reality.

I’ll be a little forward here and tag several HR-HCM related bloggers out there and see if we can’t get a series of posts going on this. I’m asking  Donald. Jim, Max, Laurie, Jason, SystematicHR,  Michael, Alice, Systematic, Karen, Michael, Debra, Gautam, Tom and the evilhrlady to get the ball rolling, but feel free to add more to the list. 

Fancy a podcast anyone?

 

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The little town where we live, Ladenburg, is Carl Benz’s home town. He started the business in Mannheim, but it was here he built a factory and home in 1904, and he lived in the town most of his life. If you are ever in the area, pop in and see the local museum. One of his first cars is there, and a fabulous collection, including a silver arrow and a new Formula One car. (the town is beautiful too)

First Garage in the World

Photo from WrldVoyagr The first Garage. In Ladenburg you will also find the first purpose built car garage. It was in Ladenburg that the German tradition of washing your car every Saturday began.

Benz Auto Museum, Ladenburg, 9

Thanks to miraculix1951, his photostream of Ladenburg is excellent.

Stuttgart was the home turf of Daimler, but not of Benz. The companies merged in 1926, but as the head office is now in Stuttgart, the Ladenburg-Mannheim side of the story tends to get the  short straw.

It is time to correct this travesity of industrial history once and for all.

With the disposal of Chrysler, it is time to add the name Benz back to Daimler.

My German readers may wish to read this article in the Mannheimer Morgen. It is great to see the SAP HR Director, Claus Heinrich supporting this. He is also chairman of the Rhein-Neckar Metropole.

“Für mich ist das keine Frage: Benz gehört dazu”, erklärte Heinrich: “Er ist Teil der Innovationsgeschichte unserer Region, auf die wir stolz sind und die auch nach Außen immer wieder dokumentiert werden muss”, unterstrich der Vorsitzende.

Vague translation: For me it is not a question. Benz belongs, it is a part of the innovation history of our region, of which we are proud. This history should be consistently communicated..

So, dear readers, I would like you to click here and tell the chaps in Stuttgart. NO DAIMLER WITHOUT BENZ. There have been 13,000 petitioners so far, but lets use the power of the blogsphere to really make them sit up and notice.  

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