LEADING THOUGHTS

Does age have an impact on having and offering ideas at work? According to the “deficit model”, older people are less likely than younger people to be a source of innovation due to deficits from the aging process. Up to now, there is more evidence for a decline in innovative work behaviour and creativity during older age than for no age effects, though the findings are not conclusive.

To test this assumption, Birgit Verworn (HTW Dresden, Germany) studied the suggestion systems used at two German locations of a large European company, focusing on a sample of 633 submitted ideas. In these systems, suggestions were rewarded depending on their quality; quality was assessed by the resulting potential revenues or savings.

The surprising finding: the over-55 age cohort scored highest. “In contrast to our assumptions, older employees submitted more valuable ideas than younger employees,” Vermorn writes in the journal Creativity and Innovation. “The most and the most valuable ideas came from employees older than 55, who also achieved the highest average value per employee of that age group of EUR24,918.”

“Does Age Have an Impact on Having Ideas? An Analysis of the Quantity and Quality of Ideas Submitted to a Suggestion System,” by Birgit Verworn; Creativity and Innovation Management (Vol. 18 No. 4, 2009, pp. 326-334)

photo credit: Adam Melancon

Learning Orgs, Uncategorized demographics, innovation, learning

A couple of articles in the International Journal of Productivity and Performance offer signposts for managers wanting to get more out of performance management systems (PMS) such as the balanced scorecard. And there are likely plenty of you out there. By some estimates, the failure rate of PMS implementation is around 70 percent.

In their project, Andre A. de Waal and Harold Counet (Maastricht School of Management, The Netherlands) asked, What problems can organizations expect to encounter when implementing PMS? To answer that, they conducted a literature review and tested the validity and relevance of what they learned with a panel of 31 performance management experts from eight countries.

De Waal and Counet discovered that while practitioners and experts/academics may differ somewhat on why a typical PMS runs into trouble, both groups point to the lack of management commitment as a crucial reason for failure.

Top Five Problems Implementing PMS According to Practitioners:

1. The organization does not have a performance management culture
2. Lack of management commitment
3. Management puts low priority on the PMS implementation
4. The organization does not see benefit from the PMS
5. The PMS has a low priority or its use is abandoned after a change of management

Top Five Problems Implementing PMS According to Academics:

1. The current information and computer technology system does not support the PMS adequately
2. The organization is in an unstable phase
3. The PMS has a low priority or its use s abandoned after a change in management
4. Lack of management commitment
5. The organization does not have a performance management culture

De Waal and Counet conclude: “The results indicate the crucial role commitment – on all levels of the organization – plays in achieving a successful PMS, and the importance of management being a role model in consequently, consistently and visibly to the organization using performance management. In short, the research results in reinforcing that important adage: forewarned is forearmed!”

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Between 2002 and 2004, de Waal did great work identifying 20 behavioural factors that determine whether or not performance management systems were being used successfully. Elzinga (Shell Int. Exploration and Production), Albronda, and Kluijtmans (Open U of The Netherlands) took de Waal’s work one step further by determining which of the behavioural factors are more important than others.

The three researchers replicated de Waal’s study of four Dutch organizations in the private and public sectors. Their pattern matching anaylsis identified the following seven behavioural factors as most important:

• Managers realize the importance of key performance indicators to their performance
• Managers accept the need for performance management
• Managers have earlier (positive) experiences with performance management
• Managers’ frames of reference contain similar key performance indicators (KPI)
• Managers are involved in making the analyses
• Managers do not experience KPIs as threatening
• Managers clearly see the promoter using PMS

And these are the behavioural factors that are the least important in successfully implementing and sustaining a PMS:

• Managers have been involved in decision making about the project start time
• Managers work in a stable, relatively tranquil environment
• Managers are actively communicating about the PMS project
• Managers are involved in defining KPIs
• Managers do have insight into the relationship between strategy and KPIs
• Managers are involved in making the KPI report layout
• Managers use the KPIs that match their responsibility area

“Lessons learned from performance management systems implementations,” by
Andre A. de Waal and Harold Counet; International Journal of Productivity and Performance Management (Vol. 58 No. 4, 2009, pp. 367-390)

“Behavioral factors influencing performance management systems’ use,” by Taco Elzinga, Be Albronda, and Frits Kluijtmans; International Journal of Productivity and Performance Management (Vol. 58 No. 6, 2009, pp. 508-522)

photo credit: Jinho.Jung

General HR, Uncategorized assessment, balanced scorecard, performance management

One of my favourite interviews over the past few months was an exchange between Tim Brown, IDEO CEO, and Art Kleiner, author of The Age of Heretics. The Q&A in strategy+business focused on “design thinking” — why it leads to better innovation and how to encourage it in our organizations.

In the genius versus process innovation debate, Brown falls on the side of process. His point is that you don’t have to be creative to practise “design thinking,” which he defines as a combination of intuition and rational thought.

Here are the landmarks along the path of design thinking”:

• Produce the design brief: What question will you address?
• Observe the world in new ways: It’s not a question of getting a great idea  out of your head. “The wonderful ideas come from noticing things and exposing yourself to the world in different ways.” The more you observe, Brown says, the more interesting your questions become.
• Find a systematic process for developing your insights. That might involve deliberate discussions on what comes out of your initial rough of thinking.
• Visualize your ideas. That means taking the time to make prototypes and redesign based on what you learn. According to Brown, “We need to get much more comfortable with building to learn, that is, making things to figure out what they should be, rather than to show how good they are.” Key indicator: how often are your senior managers looking at rough prototypes to see how ideas are evolving?

In his Q&A, Brown references examples from Amtrak, Virgin Airways, Shimano, IDEA, and Bank of America.

The Thought Leader Interview: Tim Brown, by Art Kleiner; strategy+business (Issue 56, Autumn 2009)

photo credit: mp_eds

Org Development, Uncategorized design, innovation

I just realized that I have quite a few papers in the queue relating to corporate social responsibility (CSR). If there are no objections, I’ll offer super-abbreviated overviews of these articles in this one post. That means you’ll be spared CSR posts for at least another two months. Deal?

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“Is the socially responsible corporation a myth? The good, the bad, and the ugly of corporate social responsibility,” by Timothy M. Devinney; Academy of Management Perspectives; (May 2009; pp. 44-56)

Devinney (Australian School of Business) argues that a socially responsible corporation is a “fundamental impossibility.” He writes that we must be willing to accept the good and bad character of the corporation. “We want the corporation to engage in good social activity, but to be nice and not use it for competitive advantage that forestalls competition. We want managers to act benevolently when making choices about the social investments of corporations, but to do so in ways that align with our conceptions of what is socially right. But all of this is impossible. We must accept that as a social organism the firm will be a complex mixture of virtues and vices that cannot be separated.” Devinney also offers several challenges that will bedevil researchers trying to measure CSR activities.

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“Making the most of corporate social responsibility,” by Tracey Keys, Thomas W. Malnight, and Kees van der Graaf; McKinsey Quarterly (December 2009)

In the ill-defined world of CSR, “smart partnering” is emerging as an effective way to create value for both businesses and society. In these partnerships, business are not seeking to avoid risk or burnish their reputations but instead to improve their “core value creation ability by addressing major strategic issues.” The authors, from the Swiss-based International Institute for Management Development, offer two examples of creative partnerships involving Unilever in India and Kenya. They figure there are three principles guiding smart CSR partnerships: concentrate your CSR, build a deep understanding of the benefits, and find the right partners.

Download this article (registration required)

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Valuing social responsibility programs,” by Sheila Bonini, Timothy M. Koller, and Philip H. Mirvis; McKinsey on Finance (No. 32, Summer 2009)

Companies with environmental, social, and governance (ESG) programs have difficulty linking operational metrics (say, tons of carbon emitted) to real financial impacts, often claiming that such programs are too deeply embedded in the core business to be measured meaningfully. The McKinsey consultants counter that some companies are developing hard data to measure even long-term or indirect value of ESG programs. Some examples:

• Growth: Access to new markets through exposure from ESG programs
• Return on capital: Higher employee morale and lower costs related to turnover or recruitment
• Management quality: Development of employees’ leadership skills and ability to adapt to changing political and social situations by engaging local communities.

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“What matters to managers?: The whats, whys, and hows of corporate social responsibility in a multinational corporation,” by Esben Rahbek Pedersen and Peter Neergaard; Management Decision (2009, Vol. 47 Issue: 8, 1261 – 1280)

To explore the different managerial perceptions of CSR, the researchers conducted a survey of 159 managers plus interviewed 10 top-level managers in one multinational manufacturer. Most of the managers surveyed consider CSR “the right thing to do,” though a large number also see their company’s CSR initiatives as relating to image and brand. While managers generally feel CSR is well integrated in their company, CSR is of second-tier concern because it is not tied to managers’ bonuses. The authors discuss how the alignment and misalignment of managerial perceptions are likely to affect corporate social performance. One possible benefit of “misaligned managerial perceptions: it can be a source of development and innovation.

photo credit: edmittance

General HR, Uncategorized csr, ideas

When it comes to fostering innovation in organizations, does less leadership lead to better results? After all, creative people have a high degree of “achievement motivation” and exhibit strong characteristics of autonomy, flexibility, cognitive complexity, self-confidence, dominance, and introversion. Given the nature of creative people, say researchers Byrne, Mumford, Barrett, and Vessey (U Oklahoma), “it is often thought that leadership influence is not always necessary.”

In fact, leadership has a substantial impact on the innovation process. Writing in the journal Creativity and Innovation Management, Byrne et al review the literature on leadership of creative efforts and advance a model of core leader functions tailored for creativity.

What do effective leaders of creative people look like?

They have substantial knowledge of the area in which they work and have creative problem-solving skills. According to the researchers, “Expertise allows the leader to: effectively represent the group; communicate clearly with the group; assess the needs of followers; and cultivate and encourage less experienced followers.”

They define the mission, providing structure and goal orientation. “Creative people are likely to respond better to concrete goals that guide project selection and evaluation, rather than idealized end states that rely on affective appeal.”

They provide support for ideas, the work, and social needs. “A leader’s role is to buffer her/his creative followers from the negative contextual influences that are often associated with large mechanistic organizations, while simultaneously capitalizing on the available resources and expertise provided by that organization.”

They have a broad understanding of their organization. “This understanding will allow the leader to tailor the creative ventures pursued
to the organization’s strategy, which in turn will make these ventures easier ‘to sell’ to top management.”

The authors suggest that leadership training should focus on creative problem-solving skills and reshaping the common assumptions often held about creative work. “Leaders must be able to recognize and respond appropriately to original ideas,” they write, “as well as be able to provide a direction for their followers’ problem-solving activities.”

“Examining the Leaders of Creative Efforts: What Do They Do, and What Do They Think About?” by  Cristina L. Byrne, Michael D. Mumford, Jamie D. Barrett, and William B. Vessey; Creativity and Innovation Management (Vol. 18 No. 4 2009; 256-268)

If you cannot find this journal is your local library, email me for a copy of the article at Alan [at] AlanMorantz.com

photo credit: jeanbaptisteparis

Leader-Follower, Uncategorized engagement, innovation, leadership

Trade union mergers in Europe and North America have been going strong since the Second World. It is almost always a question of survival: mergers or absorptions are thought to help unions maintain or grow membership to sustain their financial base and increase bargaining power.

While in the past mergers occurred among unions in the same industry or occupation, more recently unions from different parts of the economy have merged to create super-unions, such as ver.di in Germany and UNITE in the UK.

Across the pond in the U.S. starting in the 1980s, five unions led the way in multi-jurisdictional mergers: the Service Employees’ Union, the Union Food and Commercial Workers, the Communications Workers of America, the International Brotherhood of Teamsters, and the United Steelworkers of America.

You could understand their logic: the trade union movement saw the decline of master agreements, which led to decentralized bargaining and greater administrative costs. There was a sudden decline in organizing and subsequent loss of union revenue. “Mergers came to be seen as a potentially cost-effective alternative to organizing as a means of sustaining membership levels,” writes Kim Moody (Centre for Research in Employment Studies, U Hertfordshire) in the British Journal of Industrial Relations. “With smaller unions looking for mergers to survive, jurisdiction became less important for both those willing to be absorbed and those seeking more members.”

Moody took a detailed look at multi-jurisdictional unionism in the U.S. In particular, he assessed the three major arguments in its favour: that it improves the union’s finances, that it increases organizing capacity, and that it boosts union bargaining power.

Moody’s conclusion: Conglomerate unions “do not achieve notable improvements in these three areas, nor do they perform better than other large unions that have engaged in fewer mergers over time. All that can be said is that mergers may prevent even worse performance outcomes, hardly what the advocates of conglomerate mergers claim.”

Are multi-jurisdictional unions in better financial shape? One measure is the degree to which the membership itself finances the union through dues and fees. All the unions studied by Moody rely heavily on income from investments and the sales of assets to cover total costs. As well, bigger unions mean ballooning staff and administrative costs.

Do union mergers lead to increased organizing? “While greater resources could increase organizing capacity,” Moody writes, “a good deal of these resources appear to go on staff and administrative costs as the number of sectors and agreements proliferate.”

Do these unions have greater bargaining power? The reality is that strikes are more infrequent, real weekly wages have declined, and benefits won in earlier times have been rolled back. “As measured by the outcomes of wage agreements in the major jurisdictions of these unions,” writes Moody, “there is no evidence of improved or above average performance. In fact, many of these agreements fall short of the average increases for unionized workers generally and in their major economic sectors.”

“The Direction of Union Mergers in the United States: The Rise of Conglomerate Unionism,” by Kim Moody; British Journal of Industrial Relations (47:4 December 2009 0007–1080 pp. 676–700)

If you cannot find this journal is your local library, email me for a copy of the article at Alan [at] AlanMorantz.com

photo credit: Tobias Higbie

Labour Relations, Uncategorized mergers, unions

Researchers at the Centre for Performance-Led HR (Lancaster U Management School) argue that organizational design is fast becoming a strategic capability, particularly for those organizations undergoing business model change. And where should that strategic capability reside? “For HR to be truly strategic,” they write in a white paper, “the function needs to develop the capability of influencing business model design at each level of analysis (industry value web, organisation value proposition, and component structure).”

In this video, the researchers make their case.

At the 0:38 mark, Paul Sparrow discusses what organizational design capabilities involve, and makes the distinction between org design and organizational development. He says HR is in the perfect position to marry the two.

At the 1:10 mark, Craig Marsh offers a series of questions that HR directors should ask of themselves around the need for leading the charge in org design.

At the 3:00 mark, he says HR directors need to think bigger, more broadly, and in a more integrated fashion.

Download the CPHR white paper, Integrated Organisation Design: The New Strategic Priority for HR Directors, here or send me an email at Alan [at] AlanMorantz [dot] com.

Org Design, Uncategorized change, Org Design, strategic hr, video

Fun is in the eye of the beholder. So it is with workplace fun and the growing efforts by organizations to engage employees with games-playing and other officially-sanctioned hijinks.

Researchers are now turning their attention to measuring when workplace fun initiatives have a positive influence and when they are counterproductive. Eric Lamm and Michael D. Meeks (San Francisco State U), for example, conducted a study to find out whether or not there are generational differences in how workplace fun is viewed, and if there are different outcomes depending on generation.

In the journal Employee Relations, the authors write that, based on generational theory, we would expect to see these attitudes:

Baby boomers (born between 1941 ad 1960): “Boomers’ win-at-all-cost perspective and reliance on success as a measure of self worth likely results in a perception that workplace fun is counterproductive to their competitive edge.”

Gen Xers (born between 1961 and 1980): “Since Xers have a preference for fun and embrace balance in their lives, planned organisational fun activities may engage these sometimes disengaged workers and more fulsomely direct their energy toward the organisation instead of individual, non-work pursuits.”

Millennials (born between 1981 and 2000): “Unlike Boomers, who may oppose workplace fun, and Xers, who may be indifferent to workplace fun, Millennials are likely to regard fun in the workplace not as a benefit, but a requirement.”

Armed with this background, Lamm and Meeks surveyed 701 individuals from all three generational groups. They found that indeed there are measurable generational differences in how workplace fun is regarded.

Millennials, for example, showed stronger links between workplace fun and organizational outcomes such as job satisfaction, task performance, and “organisational citizenship behaviour (OCB).”

Surprisingly, though, the authors found that baby boomers were not as negative about workplace fun as originally thought. “This has large implications because Boomers, with a reputation of ‘achievers at any cost’ and thus regarded as likely impediments to the successful implementation of planned workplace fun, may in fact not only benefit from workplace fun, but may be supportive, whether as a participant employee or facilitating manager.”

“Workplace fun: the moderating effects of generational differences,” by Eric Lamm and Michael D. Meeks, Employee Relations (Vol. 31 No. 6, 2009, pp. 613-631)

If you cannot find this journal is your local library, email me for a copy of the article at Alan [at] AlanMorantz.com

photo credit: inf3ktion

General HR, Uncategorized demographics, engag, fads, fun, hr practices, incentives