Dan Erwin

A Paradigm Shift in Human Resource Management

I’ve been dreaming about the issues David Ulrich and colleagues’ new book, HR from the Outside In, deals with since the 1990s. Until this book came out, the ruling gods of Human Resources were recruiting, training, benefits and supporting the business. The obvious consequences were that HR managers and execs had no seat at the table, didn’t understand the firm’s business and acted passively around line managers and execs. The more serious consequences were that HR failed to center on the goals of the business and contribute significantly to business performance.

HR from the Outside In offers a radically different orientation to Human Resources, reframing the whole game and resolving issues I’ve faced in both small and large companies all over the nation. Ulrich argues that “aligned, innovative, and integrated HR practices make a dramatic difference in individual and organizational performance.” That’s a mouthful, and you’ll need to work through the book to fully understand the importance of what he’s saying. What’s unique about the book is its emphasis upon a new HR mindset that starts with the external context in which the business operates and the goals of that business--not internal disciplines and technologies. To achieve these objectives, the authors focus upon personal effectiveness and the relevant knowledge for both HR professionals and departments to improve business success. 

In a book such as this, where a major shift in a discipline is proposed, the authors need to provide a rationale for their thinking. And so their first chapter is largely devoted to this changing external context which justifies their shift in the discipline. The writers think of their rationale as “trends,” enumerating six ever-changing issues which drive their research and conclusions: society, technology, economics, politics, environment and demographics. In the following chapters, they show how different companies around the world emphasize HR and deal successfully with local and national issues relating to their “trends.”

Their goal is straightforward, as the authors lay out plainly in three statements: determine what HR pros should be and do to be seen as personally effective, what pros should be know and do to improve business success, and what they should focus upon to improve business performance.

As a result and in order to achieve this objective, the authors lay out six (extensive) competencies for the future of human resources. They include such domains as credible activist, capability builder, change champion and tech proponent. The most important focus, the foundational objective of the book,  is the chapter about the strategic positioner: HR professionals who facilitate business strategy through their objectives and practices. Although the authors provide ways for getting at business strategy and applying it to HR, the most useful and unique means for getting at strategy issues is found in the chapter on building capabilities. There, the authors detail an approach that takes the strategic emphasis seriously, and walks the reader through a six step process for aligning HR practices:

• Business: where will we do a strategic HR linkage?
• Environment: What are the business trends?
• Strategy: What are the strategic drivers for the business?
• HR investment: What are hr priorities?
• Action plans: Who will do what, when, where and how?
• Measures or metrics: How will we measure progress?

In our tumultuous times, HR has a significant contribution to make to the success of businesses, a perspective not readily understood or even shared by many outside the field. Indeed, HR from the Outside In offers a highly transformative process, fit for today’s business world. Thus, this book deserves to be on the shelf of every practitioner and put into daily practice.

Dave Ulrich, et al, HR from the Outside In. (New York: McGraw Hill), 2012.
Flickr photo by Sean MacEntee

So You Think We Need to Hire a Businessman for the White House? Really?

There are a number of important occasions when almost everyone believes an idea is true, but scrutiny of the facts reveals very flawed thinking. The most politically prevalent, currently, is that we need a businessman in the White House. Indeed, the mantra is that America needs a leader with strong business credentials, not just a political hack. Say, Jeff Immelt, Indra Nooyi or Steve Case?  Candidly, that’s nonsense from the get-go and a sign the media, the politicos and the populace are clueless regarding our own American history.

So I was delighted to read Todd Purdum’s article in which he debunked the entire notion with concrete data. Purdum was the Times’ LA Bureau Chief as well as White House correspondent. On the one hand, what surfaces this discussion is Mitt Romney’s candidacy, but on the other hand the notion that this is merely liberal bias won’t stand scrutiny. It was Todd Purdum’s scathing article on Bill Clinton, which earned him Clinton’s scathing response, "He's a really dishonest reporter...and I haven't read (the article). There's just five or six blatant lies in there. But he's a real slimy guy." When reminded that Purdum is married to his former press secretary, he responded: "That's all right - he's still a scumbag" and later added "He's just a dishonest guy - can't help it." 

As Purdum says, it’s the business experience and success that both Romney and others point out “most emphatically” as having prepared him for the presidency. Republicans rave about this and Democrats keep quiet, fearing there’s some truth in the mantra. Or, at least, that everyone believes it.

But when you do the analysis, what are the real facts about the presidency and a business background? Here, according to Todd Purdum, are the issues. My college major in history and my background in political science tells me he’s got the first set of facts right. The conclusion regarding what makes for a successful presidency is another ball game, but worthy of consideration.

The greatest presidents were notable business failures.
Abraham Lincoln had so many unpaid notes as an Illinois storekeeper that “he referred to the obligations as his ‘national debt.’” Fifteen years after Harry Truman’s haberdashery went under, he was still paying off his creditors—as a US senator. The silver-spooned Franklin Delano Roosevelt, who led the nation through the Depression and WWII arguably never worked a day in his life in spite of the time he put in to pay his dues as a Wall Street Lawyer. George Washington’s business affairs were a mess by the time he finished his first term in the presidency. Purdum should have added Thomas Jefferson to his list of notable presidents who were business failures. Although Jefferson sold a lot of property to cover his indebtedness, his grandson posted an announcement at his death for an estate sale, indicating that Jefferson owed $107,000. That’s somewhere between one and two million dollars in today’s figures.

Two successful businessmen became president: Herbert Hoover and Jimmy Carter. But as Purdum notes, no one would call either of them “successful presidents.”

And also, as Purdum notes, “Mitt Romney would be only the second president with an MBA. The first was George W. Bush, and we know how that worked out.” Still, at this point my agenda is about the wrongheaded notion that we need a businessman in the oval office, not just whom you vote for in 2012.

Why is business the wrong background for the presidency?
Purdum points out three fundamental issues that limit the successes of businesspeople in the presidency.

1. The basic goals of business are not completely congruent with the presidency. Certainly it’s often important to run the government in “businesslike” ways, but the very definition of the bottom line is different in the public and private sectors—and needs to be. The general welfare of the nation may be neither efficient nor profitable in the business sense of those terms.  
2. The very qualities that make a successful C.E.O. not only are not especially useful or effective in politics but are actually inimical to political success. The presidential qualities of good listening, team building and terrific translation abilities aren’t the same as attention to detail, perseverance, efficiency, analytical thoroughness and an ability to work long hours—all of which, according to recent studies, are typical of successful business CEOs.
3. CEOs succeed by dominating their environment and their employees who jump when told to jump and a hierarchical structure in which their word is law. Politics, in stark contrast, is always the art of the possible, a game in which personality, charm, people skills, the ability to communicate and a swing-for-the-fences style all matter so much.

Purdum summarizes his conclusions with a highly significant truism: Most businesspeople have never dealt with the wily, needy, fickle types who populate a typical legislature. I’d add that the goals of subordinates are far more closely aligned with their CEO than what a president must face. In contrast, legislators are first and foremost driven by their constituents needs, then by their parties’ policies and last of all by the president. FDR was highly successful because he was able to be ruthless in the giving and taking of power. I doubt that any president since has taken that much and has been willing to be ruthless in his achievement of goals.  VP Cheney, more than most 20^th century politicians, made those attempts, but was often rebuffed.

If not business experience, then what makes for a successful presidency?
The data for this issue is largely subjective, differing from the concreteness of the previous issues. Furthermore, presidents walk into very different contexts which impact their success. In addition, this is an issue that has been studied for many years, and surfaces many conclusions. Among those are personal adaptability, communication expertise and citizen empathy. I’m skeptical of such traits, not least because trait theory has been significantly challenged over the years.

But as Purdum notes, the men in the oval office came from a vast array of trades and talents, including soldiers, teachers, farmers, ranchers and one professional tailor (Andrew Johnson). Twenty-five as of this date have come from the law profession.

In summarizing his approach to the presidency, Purdum argues that the successful presidents all faced adversity before entering the oval office and overcame that adversity. Furthermore, conquering adversity could be said to be the essential job description of the presidency.  In spite of the subjective nature of his conclusion, I suspect that the writer has his finger on an exceptionally important issue, an issue undergirding many of the typically affirmed traits of the presidency.

I write this blog for two reasons: to indicate that the presidency is so different from the business CEO, that there is no correlation of significance between business success and presidential success, and second, to underscore my understanding that the best ideas usually come from challenging the status quo.

Extensive quotes from Todd S. Purdum, The Hiring of the President. Vanity Fair, September 2012, p. 224-225.

Eight Keys to Credible Political Candidates

What makes for a truly credible political candidate? In yesterday's Star Tribune Opinion, David Banks argues that for the first time since he started voting (1988), we have two credible candidates running for the presidency. And, he begins with some smart definitions of what makes for credibility. Credibility, in Banks' mind, doesn't mean ideologically correct.

With sincere hope that this might be of value to voters, I'll list eight of Banks' keys, make a few comments about them, broadening his emphasis to all legislators.

1. The courage to be decisive when necessary, to be deliberative when it's not, and the wisdom to know the difference. MIT's Sherry Turkle suggests that technology has caused (forced?) us to sacrifice conversation for mere connection. Since I take deliberation to be a mature conversational competency, media technology may be a basic reason for the lack of deliberation. One thing is certain: there seems to be little, public deliberation among candidates today--and the constant flow of ideological statements are the result. 
2. The intellect to entertain conflicting ideas. Entertaining conflicting ideas, what Leon Festinger called cognitive dissonance, is inevitably discomforting. But reality majors in conflicting ideas, making this key highly valuable.
3. The ability to explain complexity to a divided population that prefers simplicity. I revere high intelligence, but more and more I suspect I'm in the minority. How else to understand Bush's comment that he doesn't "do nuance." Thus, the ability to explain complexity is a desperately needed attribute in today's political environment.
4. The judgment to appraise challenging situations soundly on short notice--plus the ability to reflect this skill in public. Thinking and speaking in the same person? That's asking a lot.
5. The warmth to lead cheers, and to come across as authentic in doing so. Both cheerleading and authenticity are characteristics that do not come naturally, but they can be learned. 
6. The empathy to understand a diverse America, personal background notwithstanding. This is two competencies: both insight and emotion. 
7. The breadth and depth of experience suitable for the challenges most likely to arise. Those whose experiences were cloistered, neutral or highly homogeneous offer limited opportunities for the development of critical, practical wisdom. Heartfelt, funbled semi-articulateness is not enough. 
8. The integrity to respect the office and the role. Thankfully, my experience with both parties reveals that legislators are marked by significant integrity in respect to their relationships and role. I'm aware that many, perhaps most, don't believe that to be the case. But in spite of my blogging about the "political idiocracy," and complaint about the lack of "public" deliberation, I've found that a high majority of legislators can be trusted.

Realistically, when we get into the voting booth, we're all going to have to compromise. But Banks' keys to credible candidates are a useful template.

David Banks, "At last, a clash of credible candidates." Minneapolis Star Tribune Opinion, August 15, 2012.
Flickr photo: BoksVotes 

Quotation of the Month: Ibrahim Ali Iraqi of the Muslim Brotherhood

Those with some political interests may remember that Minnesota's Michele Bachmann (R.) accused Huma Abedin, an aide to Hillary Clinton, of ties to a Muslim Brotherhood conspiracy. Although her accusations drew the appropriate criticisms from within her own party, a recent comment from the Muslim Brotherhood is telling. It was a dismissal of her accusation. 

Here's the response from Muslim Brotherhood member, Ibrahim Ali, quoted in Time magazine's "Briefing" of August 6:

    The Muslim Brotherhood can't even penetrate the Egyptian government.

Enjoy!