How long should CEOs stay?

Richard Goff | 23 Jun 2011 | 10:51

At a recent HR leaders’ network event, CIPD’s immediate past president Vicky Wright quoted a new survey that found the average tenure of CEOs was 4.5 years.

This is interesting: is that longer than you thought, or less? Either way, it certainly means CEOs tend to be on their way before the five-year plan reaches full bloom, or ignobly fails. It’s also an average; meaning, of course, that a good proportion are in role less than four years.

If you square this against the average tenure of workers in organisations (median of 5.1 years), and the time it takes to change culture at organisations (rarely overnight), this means most employees tend to outlive CEOs, and get more than their fair share of cultural change - we all know how new CEOs love to tinker, if not tip the entire organisation on its head and shake it until everything falls out.

It’s even tempting to conclude that average employee tenure is six months longer than CEOs’ tenure because once another CEO comes in and undoes everything their predecessor did, a significant proportion of employees promptly quit, exasperated. But, of course, statistics don’t quite work like that.

Nevertheless, with a recent survey revealing that only 58 per cent believe their company is safe in the CEO’s hands, and with the zeitgeist billowing firmly against established authority - be that expenses-drenched MPs, Twitter-shy celebs or even entire sectors - it’s not an exaggeration to say that societally we have something of a leadership crisis, and organisations are by no means immune to that.

In seeking to play the longer game, in aiming for more sustainable organisations, should our leaders stay longer, committing themselves more explicitly to their organisations?

Or is there something to be said for a fresh vision re-energising organisations every half a decade or so, without which they become stale…?

Does HR have Clint Eastwood syndrome?

Richard Goff | 25 Mar 2011 | 17:03

Richard Goff

Believe it or not, there’s something called ‘Perry Mason syndrome’. Despite its name, this isn’t a tendency to thunderously pontificate in court rooms. Instead it describes over-simplistic misconceptions of the legal system, after watching too many episodes of the eponymous legal do-gooder – whose script writers clearly put dramatic tension some way ahead of strictly accurate depictions of the justice system.

We enjoy something similar in HR - perhaps accountants do, too. Seems it's all too easy for sitcom and drama writers to depict the HR person as comically weak and vague, prone to trends, ill-informed and largely irrelevant. Perhaps there are HR people like that, but I haven't met many.

Would this be “Clint Eastwood syndrome” – an over-simplistic misconception of HR, what it does, and the value it can bring? This is based on a line in the film “The Enforcer”, which friends never tire of quoting at me. Clint’s character is told he is being reassigned, downwards, to personnel. “Personnel?” he grumbles dismissively. “That’s for [offensive biological adjective here].”

But we’re no longer in that kind of cul-de-sac (even if we ever were). For the past 20 years or so, HR has been determined to demonstrate its value, and what it contributes to organisations. With our Next Generation HR work, we at the CIPD feel we're taking that a step further. But when will popular and cultural perceptions catch up with corporate perception?

Try naming one positive fictional HR person. Police, lawyers, doctors, ad men, even forensic scientists have their glittering fictional champions. So where, then, is our Don Draper (Mad Men), or our Alex Drake (Ashes to Ashes)? After all, dramas not infrequently concern people…

Here’s to growth – it's coming

Richard Goff | 2 Feb 2011 | 15:21

Conscious my last blog had a tinge of that sage commentator Eeyore about it, this time let’s look a little further ahead to the wide and sunlit savannahs of 2012 and 2013.

Although the last quarter was surprisingly poor, other reports have been a bit bouncier about UK growth and looking beyond another slow year in 2011. The Ernst & Young ITEM Club think UK growth will rise to the dizzy heights of 2.8 per cent in 2012, and there are suggestions that it may be above that in 2013. And while another report from Deloitte is not as Tigger-like, it does make the significant point that when growth returns it will be “more soundly-based than the growth seen over the past decade or so”. I think we‘ve all had quite enough of bubbles - property, credit or otherwise.

One of the most striking things about this recession is not the job losses (which, while always one of the worse things about economic slowdowns, are hardly unexpected) but the fact that talent management has remained absolutely top of the agenda for HR directors across all sectors. What this means is, despite the large volume of talent released into the labour market over the past two years, competition remains intense for the kind of people who can take your organisation by the scruff of the neck and drag it kicking and screaming towards those sunny savannahs.

It’s where HR, arguably, can make the most difference, and HR directors know this. When asked for the two or three things that keep them awake at night, it’s not uncommon for HRDs to reply: “It’s all about talent, talent, talent.”

So: a tough year in 2011. But looking a little further ahead, times of growth – and resting on more sustainable foundations, all being well.

Good luck with those growth strategies. It may not feel like it yet, but we’re going to need them.

Government cuts and UK Plc

Richard Goff | 21 Dec 2010 | 15:56

I can’t honestly decide whether previous recessions weren’t as profoundly serious as this, or whether I’m just less uninformed as I hurtle into middle age - and therefore more conscious of the implications.

We all know about the big punches to UK Plc’s jaw: the deficit, the unemployment figures, the sluggish-at-best economic growth. But the real detail of what this means for you and me is yet to become apparent. I’m not saying it isn’t a matter of urgency to cut the deficit, or even reform certain public services; nor, I hope, am I being needlessly apocalyptic. But it’s one thing to hear Stephanie Flanders or John Philpott quoting huge figures; quite another if Auntie Hilda abruptly doesn’t get the quality of care she’s used to, or your child’s much-valued local library closes.

After all, our expectations as customers over the past 20 years have soared. This is no bad thing. Good customer service has, like cable TV, been imported from the US. And, also like cable TV, we think it’s probably a good thing, even though we’re not quite comfortable with it yet; but we certainly know enough about it to demand we’re given it.

So how will we react when customer service levels, broadly improved during the good times, inevitably go south, as tough decisions have to be made about resources? And how will representative bodies react? Already some unions are opposing all cuts on principle – even when those cuts are being proposed to save jobs. At what point should principles be shuffled off in favour of something flawed, but arguably less worse?

There’s 13 per cent unemployment in Ireland, one of our biggest export markets. Here, JobcentrePlus must be struggling to cope with the sheer volume – and with very different customers, including out of work professionals, such as architects. And that’s just as the public services start to release thousands of jobseekers into regions where opportunities are already threadbare.

Then again, the detail of some of the cuts, once finalised, hasn’t seemed quite as bad as originally advertised. Perhaps there’s been some canny expectation management here by HM government, whereby we’re counselled to expect the worst, and relieved when it turns out to be merely awful. Politically, whatever they say, I’m not at all convinced the Conservatives would have behaved any differently if they had been in power before 2010; or that Labour would behave any differently if it were in power now. Maintaining our triple AAA rating, with its implications for the interest on all those vast loans, is key – and that means cuts. It’s what the cuts themselves mean that is, of course, the real worry.

Despite serious misgivings about 2011, looking into the medium term, there’s every chance UK Plc could emerge leaner, fitter, more robust and more competitive – although it’s difficult to say now how public services will perform as we head towards the middle teens, or where employment opportunities will be found as the economy recovers. Will the UK reinvent itself as a result?

At this point, the most we can say is that at least nothing stays the same for long. Fortunately, that applies to bust times just as much as boom.

Be dynamic: refresh the talent pool

Richard Goff | 1 Nov 2010 | 08:19

PM recently covered a report from Aon Consulting which found that “the UK workforce is the second most dissatisfied in Europe”.

In short, 47 per cent of UK employees plan to look for a new job by the end of the year. The Irish are the only workforce more likely to want to swap jobs (49.4 per cent) than the British. If it’s any consolation, a different survey found that “54 per cent of employed Americans report that they are likely to look for new jobs once the economy turns around”.

This should cause HR functions everywhere to first break out in a cold sweat, and then break out their succession plans. As the report concludes, nobody wants to see their talent dance out of the door. So much so that it’s debatable whether you need your talent most during a recession, in times of tentative growth or when profits are rolling steadily in. Talent is the key that always unlocks doors for organisations.

So far, so obvious. Pausing briefly to wonder whether there are cultural differences or differently-sized job markets afoot in these survey results, it’s timely to reflect that churn is not exclusively a disaster but one of those changes which, if forced upon us, can bring unexpected benefits.

Sure, you lose talent, but who knows what talent you might attract as a result? Refreshing the talent pool and indeed the organisation is no bad thing. In any case who wants dissatisfied people, whether talented or not, dragging down the working environment just when you’re labouring hard to improve it?

Darwin’s theory of “survival of the fittest” is famously misunderstood to mean “survival of the strongest”, when of course it means “survival of those most adaptable to change”. In our world, that’s not just the change levered onto organisations by external circumstances (principally the economy), but also changes, often wide and deep, to our own colleagues – who they are and what they can do. Which makes the dynamics of HR, or the dynamics of people, arguably the fastest-changing and most significant in organisations.

But is your HR function as dynamic?

The death of core skills

Richard Goff | 28 Sep 2010 | 10:04

As CIPD chief economic adviser John Philpott indicates, the only way we can avoid three million unemployed people next year is if the UK hits its growth targets, and the private-sector job market sweetly hoovers up the people made jobless from the public sector.

John calculates that “the UK economy would need to grow by at least 2.5 per cent (ie, ahead of most current predictions) for each of the next five years for the private sector to create enough jobs to more than offset the employment impact of the squeeze on public spending. Will fiscal pain spur private-sector jobs gain, as the coalition's economic strategy assumes? Yes, but probably not by very much and certainly not any time soon".

But even this presupposes like-for-like replacements – that, say, a fireman can find a similar job in the private sector. Worse, with the private-sector job market still suffering badly, it seems to me that any recruiters (and there are few enough of them as it is) can insist on an absolute fit with their understanding of what the role requires. Candidates won’t stand a chance unless they have precisely the requested skills, experience and behaviours - there’ll be too many people ahead of them in the queue that have exactly what’s being asked for.

I know of one HR director who applied for a job. He had appropriate sector experience and knowledge of the specific industry, both at senior level; he happened to be local, so knew the area; he didn’t even get an interview. The recruiting organisation was so swamped with applications, they didn’t even have time to give feedback or explain how our contact had missed out.

Quite apart from the implications for the unemployment figures, does this mean the death of recruiting by core skills? Will recruiters bother? They have the luxury of being able to be very precise and demanding. It’s a saturated market, very much a buyer’s market – there are plenty enough people with CVs that fit to the letter.

But where will this leave organisations in the medium term? Will it mean bringing in less people with innovative perspectives, as a core skills approach would allow you to do? True, you’re taking a risk with the lack of direct experience, but arguably that can be learned.

Are we silently drifting into a “same old, same old” recruitment strategy?

Can HR be transformed any further?

Richard Goff | 17 Sep 2010 | 14:44

Until recently, the issue most likely to disrupt HR directors’ flights - like an ash cloud - to the land of nod was: “transforming HR”. In support of this, a member of our Leaders’ Network who we had connected with a number of other HRDs confirmed that everyone we’d sent him was either transforming HR; just completed transforming HR; or was about to start transforming HR.

I guess “transforming HR” can mean if not a multitude of sins, then certainly a multitude of people strategies. To an extent, it’s answering the corporate bugles in the charge uphill to cut costs – although we did record the issue of “recession/bringing down costs” separately in our “What’s keeping you awake at night” list.

But our sense is that this is about more than returns on investment, important though that is. It was more the kind of white-knuckle determination to get the best out of employees that attracted many HRDs to the profession in the first place. This can sometimes be misrepresented as HR’s eagerness to jump on whichever bandwagon has the prettiest ribbons - but a people function by definition needs to be more self-analytical than, say, finance.

After all, numbers are pretty consistent; double entry was invented 600 years ago. Whereas much of the key thinking in HR is brand new; employee engagement and the Ulrich model, for example, are barely 20 years old. People don’t so much change as remain in a permanent state of flux – and that’s just individuals, never mind whole teams, or organisations. If you’re a function devoted to people, it therefore follows that you’re going to be in a state of permanent innovation - not just because of business turbulence or the givens of “ever-present change”, but because people are wilfully complicated, and getting the best out of them is a mystery that requires ongoing solutions.

You probably find this challenge either fascinating or exhausting. Understandable, then, the plaintive cry from another HRD: “We can’t transform HR any more!”

UK plc at crucial turning point

Richard Goff | 16 Aug 2010 | 15:04

In my last piece I covered what was keeping HR leaders awake at night at the moment, and I promised to reveal to you the current No 1 of what we’ll call The Insomnia Top 20.

Utilising PM ’s innovative new “Trumpet Fanfare” app, I can reveal the No 1 as… talent management.

Yes: I feel your pain - yada yada, war for talent. But to put this in context, what this means is that talent management is more important to HRDs at the moment than bringing down costs in a recession; or performance management; or engagement; issues that might more obviously fit the economic morass in which we find ourselves. It is also a time when certain tabloids might think it’s the “talent” that got us into this mess in the first place, at least in certain financial institutions.

So are they managing that talent to fight their way out of the recession? Certainly. But in some quarters at least it’s also symptomatic of returning confidence, with HRDs turning their thoughts from cost-cutting and restructuring - and all the pain those euphemisms imply - back to issues that support growth.

The Office for National Statistics recently announced UK growth figures for the last quarter, which was almost four times as good as the previous, and nearly twice as good as most commentators expected. So it’s time to look after your talent – as well as play a careful hand. After all, although a double dip seems unlikely, the next quarter isn’t predicted to be quite as strong. So we’re not out of the woods; indeed, we can’t even be said to be holding the map of the woods the right way up yet.

After a summer break spent breathlessly chasing my children around various parts of South Wales, I shall be back to reveal the issue that has plagued HR directors’ otherwise restful dreams for most of the last nine months, before talent management swooped to victory.

Post-recession employee retention

Richard Goff | 19 Jul 2010 | 15:14

When my CIPD colleagues and I meet with HR directors we always start with the question: ‘What’s keeping you awake at night?’ This gives you a glimpse of which issues are climbing up the agenda, and which are lying doggo – at least for the moment.

Retention, having enjoyed only one mention in the four months up to January, has now shot up to No 5 (with 17 mentions) on what we should probably call The Insomnia Top 20.

Nobody in HR will be surprised by this meteoric rise up the charts. The recession is ebbing – which is probably the most that can be said – but that’s enough for key staff to start thinking: “Right: where now?” That’s an inevitable risk of managing talent, but the context today is highly unusual. For many sectors the job market is still as flat as the England flags still flying forlornly on certain car aerials; but the bad news for organisations is that the recession was so sudden, and so deep, that putting money and time into retention strategies, and into managing talent carefully, probably wasn’t possible. It was all hand to the pumps. Now the hold’s no longer flooded with water – but people are beginning to think of jumping ship.

In short, what organisations will be trying to tackle is retaining key staff – who are arguably even more important during an economic recovery – probably with little budget or much flexibility in terms of what they can offer. Worse, as one HR director commented at one of our Leaders’ Networks recently, employees have been paddling furiously to get their organisations out of the recession, despite being buffeted by pay freezes, and redundancy programmes. As a result of that hard work, organisations are starting to pay out dividends and make profits again; but what’s in it for those employees who are still with the organisation and have yet to see any reward - beyond being ‘lucky to have a job’?

Organisations need a people strategy specifically for coming out of the worst recession since the second world war. Context is all – but today, doubly so. After all, none of us have experienced anything like this – and hopefully won’t ever again.

Little wonder, then, that retention’s keeping leaders awake at night. More on which areas are keeping HRDs from their valuable zzzzzs in my next piece - including the no 1 duvet-bothering issue of the moment.