LEADERS LEAVE LEGACIES

“The only thing you take with you when you are gone is what you leave behind.”
John Allston (1666-1719).

I find that one of the things that you think about as you get older is whether you will leave anything worthwhile behind after you are gone, particularly when it comes to elements of one’s life (other than children and grandchildren) such as whether after 40+ years of working you have left some sort of legacy in the businesses for which you worked. I accept that it is a bit arrogant to hope that you were able to make a significant enough contribution to have made a real difference to other people’s work lives. I also accept that I am no Bill Gates or Steve Jobs, to pick on two obvious examples, but there is a part of me that would like to feel that I had made a difference to at least some small extent.

Author: World Economic Forum; CC BY 2.0 license; via Wikimedia Commons

About 10 years ago, while visiting New York on vacation and after I had recently taken up the role of Global Head of HR at SAP, I was asked whether I would be prepared to do a press interview about my new role. It seemed that my having moved from the post of a Regional CEO at SAP to an HR role was considered to be so unusual as to be mildly newsworthy.

Patrick Kiger, the journalist who interviewed me, was charming and very relaxed and we chatted about topics as diverse as what I believed about HR, the role that I felt I needed to play, my priorities, my background and a 100 other different subjects like the meaning of life, and even the accidental creation by the KGB of an anti-hangover pill.

Author: Paul McIlroy; CC BY-SA 2.0 license; via Wikimedia Commons

The interview subsequently appeared in Workforce on July 30, 2004 and despite a few small typos (such as my finding 100 rather than 1000 different HR programmes underway which we cut to 30, rather than to 300 as was stated in the article) it was fairly accurate.

Just a few days ago, I had a close friend send me the article after she had accidently stumbled upon it whilst trying to find something that I had written in one of my blog posts. I had completely forgotten about this particular interview so it was interesting to reread it, to revisit my thoughts of a decade ago, and to consider whether I had actually managed to achieve the things that I had discussed in the interview. It turned out to be a bit embarrassing to do so.

I have long believed that one of the key measures of successful leadership is whether there is a sustainable legacy left in place after departure. I have met many managers who appeared to be good at holding things together, and who were capable of running a successful operation as long as they were in place, but who left very few long term sustainable initiatives behind them. I consider that there are important measures for true business leadership success beyond just financial health, such as did they build talent for the organisation, did they grow future leaders, did they build a culture based on strong values that could live on after they were gone and did they leave customers and partners who were loyal.

In my own assessment, I felt that I had mostly achieved this in both my roles as Regional CEO for SAP Asia Pacific and later for SAP EMEA, but having revisited this interview, I now wonder whether I had actually managed to do so, in my final full time role before retirement, as SAP Global Head of HR.

In my business management roles, I had always felt that I had left behind a strong management team and that my chosen successor had been ready, and champing at the bit, to take over from me. I had felt that the culture that had been created during my stewardship was one that enabled people to thrive and grow, that engendered passion and commitment from my people, and was one that encouraged calculated experimentation and risk-taking without fear of failure.

Now when I look at that interview in 2004 and at the goals that I had set for myself and for the HR organisation those 10 years ago, unfortunately I cannot say the same things.

When I was asked to step out of business management into the HR role, I was initially very hesitant to do so, but eventually acquiesced because I seriously and honestly believed that I could make a measurable difference.

As an existing board member, I believed that I would be able to position HR into a more strategic role and that we could ensure that people, as well as technology, would be at the forefront of business strategy. I believed that I could build an HR management team that would be seen as adding value to the business and that would be seen as being a “player” in helping to build business success (see “HR … Polite to Police to Partner to Player” posted August 26, 2010).

Author: RickyMartin (own work); CC BY-SA 3.0 license; via Wikimedia Commons

Former American football head coach Bill Parcells set the challenge into words when he said “When asked what I want my legacy to be, I am content at this point to say that it is those who will follow me”.

The reality is that since my retirement from SAP in 2006 no subsequent head of HR has lasted more than 12 months, the role of global HR Head has been vacant for longer than it has been filled, the status of HR has remained one of low strategic value, and HR is still not perceived as being of significant value-add to the business. My planned successor whom I worked with during my 3 year tenure and who, I still believe today, was one of the few true HR professionals capable of doing this job at SAP, was never given the role and subsequently left the company.

If the measurement is as defined by American entrepreneur and author Jim Rohn (1930-2009) when he said “All good men and women must take responsibility to create legacies that will take those that follow to a level we could only imagine”, then I can only conclude that during my tenure as a global head of HR I did not really achieve a great deal (see “HR … Why is no-one listening” posted July 30, 2012).

Author: Ramine5677 (own work); CC BY-SA 3.0 license; via Wikimedia Commons

Interesting development … A week after I actually wrote this piece for posting on January 13th, SAP announced on January 9th that my original planned successor, after a 3 year absence, would re-join the company as Global Head of HR (http://finance.yahoo.com/news/stefan-ries-joins-sap-global-120000529.html) … strange synchronicity !!

HR … DOES PERISH COME NEXT AFTER PARTNER AND PLAYER ?

I have long believed, written and spoken about the fact that HR organisations need to go through a major transition to be allowed to survive as a business unit, rather than just ending up handling administrative functions in a shared service centre in some low cost country. (see “HR … Polite to Police to Partner to Player” posted August 26, 2010).

Author: indo consultores; CC BY-SA 3.0 license; via Wikimedia Commons

I have based this belief on the fact that if HR organisations cannot transition from a “run the company” position to a more strategic “change the company” role, they will continue to come under pressure to do more and more with fewer resources, as companies drive hard to cut costs to be able to survive the new economic realities which we all face today. I have therefore felt that becoming an “HR Business Partner” is not enough, as a partner is someone who may be asked to help implement the strategy built by others, but an “HR Player” is someone who is actually an integral part of the creation of the strategy. This ensures that the strategy is built around people, and takes into account critical issues such as ensuring that the strategy is actually supported by, and synchronised with, the corporate culture, and that the skills and competencies needed for strategy execution can be developed and/or acquired.

I have also long believed that a critical element of any corporate success is the commitment to building “management as a profession” rather than just a vocational add-on, which unfortunately tends to be most prevalent in European companies today. A critical part of professional management is an understanding of how to recruit, lead, motivate, develop, challenge, evaluate, reward and inspire your people, in other words those areas of concern that are generally associated with HR.

I had therefore concluded that the stronger and more capable is the management of the company, the less does the company need to be dependent on an HR organisation to identify and take responsibility for human issues.

Hence my belief that for HR the future is to either transition to a more important strategic role, or just stagnate as merely administrators of payroll and personnel records, roles that could easily be outsourced or even taken over by a capable F&A organisation.

However, I recently had the opportunity to hear an exciting young man called Heiko Fischer speak at a conference in Zurich, who made me wonder whether I needed to add another word to my alliteration to make it “Polite to Police to Partner to Player to Perish”, and whether the true ultimate goal of HR is to make itself totally unnecessary, by making management more capable.

Heiko is the founder of Resourceful Humans Consulting and he believes that the word “perish” should apply to our traditional understanding of management as well as to HR. He believes strongly that companies that adopt the principles of resourceful humans can do away with both HR and middle management.

They believe (from their web site) ….

“ … to sustainably produce meaningful contributions for your customers in the 21st century marketplace, a few great leaders are simply not good enough. To succeed in such highly demanding environments you need a critical mass of great people who can all lead and innovate when needed. To that end the RH-Way combines a proven entrepreneurial management mindset with a shared leadership architecture from the Gaming Industry. The Way of Resourceful Humans helps you enable your people’s potential, by relentlessly structuring the enterprise around their desire to produce results.”

Heiko postulates that while we all want to live in a democratic country, we do not translate the core elements of democracy to the way we work, and particularly as companies grow. He believes that the key elements to building companies that can succeed through continuous innovation is firstly to understand that making a profit is necessary for a company to survive, but that contribution to the entire ecosystem of staff, customers, partners and community should be the primary goal, and if successful then profit is one of the valuable by-products.

My simplified interpretation, of his three critical elements (in the space available) are:

– Democracy. Note that he does not advocate anarchy nor the abolition of management, but that its function is to create the minimum structure needed for an environment where people can be successful through having a greater say in what they do and how they do it. He sees our current management structures as being like a hamburger where management is the oversize bun, and where the people are what tends to be a very small patty squeezed in between. Heiko feels that modern structures need to be more like a burrito where the wrap is very thin and the major part is the filling.

Author: Pete Souza; via Wikimedia Commons

– Information. We need to ensure that people are kept informed of what is going on in the company at all times so that they can manage their own behaviour and actions based on what is needed. His belief is that if you give people the chance to work as entrepreneurs within a company environment, they will do so, and they will work towards their own success and therefore that of the business.

– Gain sharing. His feel is that the way that we reward people today is all based on management handing out largesse, whereas a more realistic way to reward people, particularly in a networked environment, is to base it on company success, but on value and contribution to the team as viewed by their peers.

Heiko uses the example of the Starship Enterprise of Star Trek. James Kirk is the captain and sets their direction under their broad strategy of going “where no man has gone before”, but doesn’t spend a lot of time telling people what to do, as his team understand their roles and how and when to perform them. On top of that, no-one on the Enterprise has been ever known to pick up a communicator to talk to HR.

Author: McFadden, Strauss, Eddy & Irwin for Desilu Productions; via Wikimedia Commons

I am not yet a total convert to the concepts of “resourceful humans” as seen by Heiko Fischer, though I may not be a long way away. I do believe in simple, flat management structures and am an opponent of complexities such as matrix management (see “Stupid management ideas” posted August 29, 2011). I also believe that skilled management includes being very people focussed, and that many tasks generally seen as belonging to HR really belong with line managers. However, I will need to have some more discussions with Heiko Fischer to decide if I am really ready to add “perish” to my transition list.

HR …. WHY IS NO-ONE LISTENING ?

Everyone continually tells HR people that they need to become more strategic, that “HR needs to get a seat at the table”.

Author: TUBS (own work); vie Wikimedia Commons

I have been hearing this admonition for decades, and yet beyond the advice that HR needs to get closer to the business, there is little real understanding of what this should entail from either side of the discussion.

I have always believed that HR organisations have to make the difficult transition from just being a Business Partner to becoming a Business Player, a Player being someone who is part of building the strategy rather than someone who only helps to implement a strategy built by others. (see HR … Polite to Police to Partner to Player posted August 26, 2010).

I also strongly believe that it is impossible today to build any business strategy, which can actually be successfully implemented, without “people” being at its core. One of the most critical elements of any successful strategy is always whether the culture (sum of the behaviours) in the company is in line with the strategy. For example it makes no sense to build a strategy whose success is based on creating a large, strong, loyal partner ecosystem if the company culture is one that sees partners as “a necessary evil of vultures that live off our success” (actual quote from a CEO). You need to change the attitudes and behaviours first to ensure that they support rather than oppose the strategy. While most companies struggle with doing this alignment in a way that ensures that they have at least some chance of succeeding, and the obvious fact that this is an area where any HR organisation that is worth keeping can add significant value, it is very rare that HR is actually asked to be part of ensuring that the strategy is executable from a people perspective.

Author: Theunixgeek (own work); via Wikimedia Commons

So if this is so critically important today, why is it not happening ?

I think that the single core problem is that it is virtually impossible for most HR professionals to achieve this strategic status, despite it being at the heart of business success.

Firstly, very few business executives give their HR Organisation the chance to even try. Most CEOs in today’s tough business environment have a critical challenge to address, being “How do they cut the costs of running the company, so that they have enough money and resources available to go about changing the company to be able to meet the future ?”. HR, like IT, is seen mainly as just being part of “run the company” and so are being squeezed more and more as a part of cutting down on overhead costs. If HR cannot position itself as being an agent for change, it will never be accorded a position reserved for strategists who can add value by helping to “change the company”. It is a serious cleft stick for HR Organisations. At the same time as they are being told that they have to cut their costs and their manpower, they are being told that they have to become more strategic and more valuable to the business.

Secondly, the sad reality is that very few HR professionals would actually be able to fill the role of a strategist even if they should be given the chance to do so. Very few HR people that I have met over the last 40 years have any serious understanding of the underlying characteristics of the business that their company is involved in, and even less understanding of general business and market fundamentals. Even when attempts are made to try and educate HR people in their understanding of the business, it is rarely more than at a very superficial level.

Thirdly, even in their core areas of HR responsibilities, most HR professionals struggle with converting from theory to practice. The theories of key areas such as recruitment, engagement, succession planning and performance review and management are well understood and keenly discussed and debated by HR professionals. However, for example, very few recruitment strategies deliver future talent for the organisation, being based almost entirely on either selection from the best of what the recruitment net happens to land at that time, or the enticement of people from competitors who are currently in a similar role to the one needing filling. The first may bring in the best of what has been found, but not necessarily what is really needed, and the second “musical chairs” game may meet today’s need but is just playing-the-odds that it will be any benefit for the future. The same tends to be true with employee engagement, which is measured in employee satisfaction surveys and various employment metrics, but rarely translated into remedial actions that are agreed and are then actually implemented by line management. I have seen attempts to include employee engagement metrics in management bonuses with minimal success, and have even seen them being totally disregarded when a manager has made his financial goals despite leaving a mound of body bags in his wake.

Author: indo consultores; via Wikimedia Commons

Finally, very few HR professionals are tough enough to be able to change the situation. When faced with limited budget availability, it is a rare HR person who can win additional resources and funding for management development programmes for example, against the field organisations desire for more quota-bearing sales reps, or the engineering teams demand for more software developers for the next generation of products. This remains true despite the fact that the quality of management in any company is what drives nearly all elements of success, and that building the next generation of capable and skilled management for the organisation remains one of the key challenges for most companies today.

In the role of Global Head of HR in my last 3 years of a 40 year career mainly in business management, I came to understand the critical role that HR can and needs to play in a company’s success, but sadly I also came to the conclusion that it is also virtually impossible to actually achieve.

HR … WHAT’S HR GOT TO DO WITH INNOVATION? ISN’T THAT R&D?

Why is it that when you talk about innovation most people can’t look beyond product innovation?

It’s a wonderful thing to have superior products, particularly if you can create products that people just love to have and to use, like Apple. My wife only got her first Apple product, an i-Phone, about 6 months ago and quickly followed up with an i-Mac. She is now very keen on the idea of an i-Pad.

Apart from the fact that I can’t play “Angry Birds“ I am quite happy with my Blackberry, which I see as being a reasonable competitor to the i-Phone.

I believe that what makes Apple unique is not just its product line as whilst I can accept that this is outstanding, I also understand that there are serious alternatives, and that under the law of averages I am sure that someone, fairly soon, will come up with another quantum leap in “hand-held magic”, and that this will become the newest god to the cognoscenti. I believe that what makes Apple so unique and competitive is that on top of their great products, they also seem to have a great culture, and it’s this culture that drives their innovation, and hence their superior products.

It’s interesting that even though Apple has been around since the 70’s it doesn’t seem to have developed the rigidity that long established companies tend to have, despite the changes in CEO over the years and despite their growth. They have somehow managed to retain a casual and free character, and resisted any real push for policies and procedures or dress codes or time sheets. As a result, they seem to have created a common desire, energy and enthusiasm to create great products and to beat and baffle their competition.

I believe that this ability to grow from start-up in 1976 to a company of about 35,000 permanent and 2,500 temporary staff and revenues of US $ 43 B in 2009, and yet retain this “maverick” culture after 35 years, is a rare and enviable achievement, and I believe that this ability to help create, protect and build culture is a critical role for HR to play, as it is a major driver of innovation.

I have always believed that innovation is not just about genius (hiring the brightest and the best), but more about “How we do things around here” (culture), and as Peter Drucker says “ … hard work over a long period of time … “ (see “The 3 great business lies” posted August 2, 2010).

I was once asked to help a senior software development manager who was having a problem with his team, which was made up of about 20 young “geniuses”, and who just weren’t delivering the goods. I was in his office listening to his complaints about his team’s lack of creativity, when one of his young team members interrupted us in an obviously high state of excitement. It seems that he had been up most of the night working on a technical roadblock that had been bothering the team for over a week. After I pushed his boss into accepting the interruption, this young man proceeded to describe his breakthrough with considerable pride. His boss heard him out, and then without missing a beat described his own solution, which he had come up with some days earlier, but had kept from the team to see what they could do. As the young man left the room, his boss turned to me and said “See that … no creativity”. I added “… and even less tomorrow”.

I have found that the further you move up the management structure, the less is management aware of the real culture of the company, and the more there is a belief that “… if you write it, so it shall be .. “, and hence a belief that as it is written in the published mission, vision and values statements it must be true. This is one of the reasons that companies sometimes struggle to execute a strategy, as the culture will oppose it, and for a company to be successful it must ensure that its culture, being its values and behaviours, are aligned to its strategy.

It is important to understand that culture is evolving and changing all the time. As the company grows, it will change. Every time new recruits come in to the company, they will bring their own behaviours and values with them, and will have some impact on the culture, even if only a little if the company culture is very strong. But if the company is going through significant growth, these changes can be dramatic. Culture will also be impacted by external conditions, like changes in legislation, competition or market conditions, and whilst some of these may be positive and some may be planned, a vast majority happen clandestinely, and out of sight and awareness of senior management.

This is where a strong HR department can play a critical and pivotal role by working with management to help identify and develop the patterns of behaviour and values that the company needs for it to be successful.

HR needs to be able to assess what is the true company culture, (for example, by noting what people do rather than what they say), to work with management to develop what they see as being the desired culture and the roadmap to move from one to the other, by determining the elements in the current culture that should be kept, and the elements that need to be changed.

This whole process of change is one of the key platforms for driving innovation, and HR organisations have a key role to play in its successful execution. This covers many areas that HR has traditionally been responsible for anyway such as stringent recruiting practices, induction programmes that ensure recruits understand the integrity of the company, being “What we believe is what we say is what we do”, and the values that the company holds to be true. Adding to this the management, protection and development of the required company culture should be a critical step for HR, and will bring HR closer to the CEO as it should be his priority as well.
I see this as being a key business “value-add” role for HR to deliver, and a significant step towards an HR organisation becoming a “Player”. ( see HR … Polite to Police to Partner to Player posted August 26, 2010).