The Brexit Vote: Scenarios for Business Leaders and Boards

This Thursday, the United Kingdom (UK) will vote in a referendum on whether to leave the European Union (EU)—referred to as the “Brexit.” Opinion polls have shifted sharply over the past two weeks to indicate that the likelihood of Brexit has increased substantially, but Frontier Strategy Group continues to believe that the UK will vote to remain in the EU, albeit by a very small margin. Opinion polls have been extremely inaccurate in the past two UK elections and we believe some hesitant voters will choose to remain in the EU in a conservative bias that we saw in both the parliamentary elections last year and in the Scottish referendum. Markets are also interpreting the murder of pro-EU Labour MP Jo Cox as likely to damage the Leave campaign.

A narrow win for the Remain campaign—our baseline scenario—is unlikely to alleviate the grievances of those supporting Brexit and would cause deeper tensions within the UK’s Conservative Party, raising the likelihood of early elections and another referendum in the next couple of years. While the economic impact of these trends would be relatively modest, lingering uncertainty would cause investments to underperform.

Should Brexit happen, however, multinational businesses would be affected in several key ways. Besides the initial financial volatility and somewhat weaker growth in Europe, most of the broader effects of Brexit outside the UK would be slow-moving, although their long-term implications could be significant enough to reshape the European Union. Companies need to be prepared for short-term volatility—particularly of currencies—but should Brexit occur companies can expect to be gradually adapting to its effects for at least the next two to three years.

Financial-market volatility and currency depreciation

The possibility of Brexit has already rattled currency, bond, and equity markets and this volatility will increase in the immediate aftermath of the event should Brexit occur. The British pound could depreciate by as much as another 10–20% against the United States’ dollar (USD) in the aftermath of Brexit, and the euro would also likely lose value, possibly as much as 5–10% against the USD. The scale of the losses would likely be temporary, but neither currency would be likely to recover to pre-Brexit levels. Brexit would also dampen investment confidence, softening commodity prices and causing overall financial market uncertainty. Added to a backdrop of weak global growth and deep concerns about China’s slowdown, Brexit would prompt another bout of volatility that would cloud corporate expectations and complicate 2017 planning for emerging markets generally.

Growth in Europe

Brexit would cause a slowdown in UK investment and business activity. A similar, though smaller, effect would be likely in the EU as a whole. Markets strongly linked to demand from the EU—such as North Africa, Eastern Europe, and parts of Asia—would see a softening of demand for the next 12 months that would affect industrial performance but would not disrupt growth trajectories. The demand effect for other parts of the world would likely be negligible. As corporate leaders gear up for 2017 planning, they would have to dedicate more analytical energy to identifying sources of growth in Asia, the Middle East, Africa, and the Americas to compensate for weaker performance in Europe.

Policy predictability

Brexit would raise a host of trade issues from the future of the Schengen Area to the outlook for the Transatlantic Trade and Investment Partnership, all of which would increase uncertainty over the cost and structure of supply chains that involve the EU. Any tangible effect on supply chains, however, would likely materialize over a period of several years, giving companies ample time to respond. It would, however, raise fundamental organizational issues such as where companies’ European headquarters will be located, tax rates, distribution-chain structure, and other concerns that should be factored into 2017 and longer-range planning as well as profitability targets. Making changes earlier could yield valuable competitive differentiation for cost and talent.

Political risks

Brexit’s most dangerous effect could be to galvanize anti-EU sentiment and populist parties across the EU, setting into effect a series of policy disruptions in the region that could weaken the EU, slow down EU integration, or even lead to other EU members exiting the union. All of this would undermine the EU’s economic outlook, and force multinational corporations to manage political risk in this usually stable region much more closely. While that would be unlikely to have ripple effects globally, it could contribute to greater instability in the Middle East and Eastern Europe if it coincided with increasingly isolationist foreign policy from the United States.

Overall, Brexit would put greater pressure on regions outside of Europe to deliver strong results that can compensate for years of underperformance by the UK and the EU in corporate portfolios. This may be a big challenge in the current global growth environment, requiring an even greater focus on agile strategies that emphasize strong competitive positioning, careful risk management, and a reshaping of how companies plan to win in emerging markets.

In case the UK votes next week to leave the EU, boards and executive teams should ask themselves several urgent questions to effectively prepare their response:

  1. What is our company’s exposure to short-term currency volatility of both the British pound and the euro? How would significant depreciation against the dollar affect our overall revenue and profit targets for this year?
  1. Have we developed alternative international growth strategies that rely less on demand in Europe?
  1. What production and distribution disruptions are we likely to face in our European operations?
  1. How should we adjust our long-term outlook for doing business in Europe? What economic and political risks are now more likely and more significant to our company?

Joel Whitaker is Senior Vice President of Global Research at Frontier Strategy Group (FSG), an information and advisory services firm supporting senior executives in emerging markets.

Creating a "Return on Employee Investment" Culture

As we look at the changing world of work what is very critical to the success of organizations moving forward is:

  • The importance of creating and sustaining a high performing culture
  • The hiring and retention of employees who understand and embrace the importance of growth
  • The need for market driven organizational changes
  •  The flexibility and adaptability of employees as they help drive their ownership of “return on employee investment”.

SOME FACTS:

Harvard Business Review May, 2014 in addressing the disengaged workforce stated that corporately 70.2% of the workforce is disengaged which accounts for $350,000,000 annually

Return On Employee Investment

THE AIM OF THIS ARTICLE is to:

  •  Uncover how people experience current leadership and to start a company-wide conversation about what leaders do and should do at each level to re-engage employees
  • Understand the LEADERS ROLE in achieving company goals and objectives, helping create clear lines of sight as to what is driving the business and the company’s marketplace is a crucial 1st step.
  • LEADERS AT ALL LEVELS reported feeling less stressed, felt more energized by their ability to act, and felt more confident that they were making a contribution to the company.

FOUR STEPS IN CREATING A ROEI CULTURE 

  1. RESPECTED SENIOR MANAGERS spearhead the process. Their engagement is not ceremonial. They conduct interviews and draw the canvases.
  2. EMPLOYEES ARE ENGAGED in defining what leaders should do. The process makes employees feel more deeply engaged with their leaders because they have greater ownership of what their leaders are doing.
  3. EMPLOYEES AT ALL LEVELS should have some say in the final decision.
  4. IT’S EASY TO ASSESS whether expectations are being met. Clarity about what needs to change to move from the as-is business climate to a more engaged one is simple to monitor.

NOTABLE FACTS

  • “AT LEAST 70% OF OPERATING EXPENSES in most organizations are paid out in  “THE RETURN ON INVESTMENT (ROI) is measured as a result of the total costs saved or efficiency gained, divided by the Total Cost of Ownership TCO)”
  • “AN INVESTMENT is a cost that creates future value and pays out over time”  ROI
  • “INCREASED EMPLOYEE ENGAGEMENT has a DRAMATIC positive effect on improving job performance and capturing business value”.  Or another way, ROI.
  • “WHAT IS THE DISTINCTIVE DIFFERENCE between a good company and a truly great company? IT’S PEOPLE. The people who make up a company are that organizations unique and biggest asset. It’s also the largest investment”.

Return On Employee Investment

  • “A COMPANY IS AS GOOD AS ITS EMPLOYEES.” We are used to talking about a company as if the organization itself is a PERSON. But an organization does not generate ideas, does not give service, and by itself is neither efficient nor productive. People make all those things HAPPEN”.                     
  • “COMPANIES ARE ACCUSTOMED to paying competitive wages and good benefits to attract talented managers and professionals. Yet often very little is paid to creating the best circumstances for each individual in the organization to perform at his or her best potential”
  • “FROM RECRUITING TO ON-BOARDING, from motivating and developing talent to supporting people managers and creating an ENGAGED workforce, the effectiveness of employee management has a DIRECT impact on business results and competiveness.”

METRICS : The Advantages of Engaged Employees 

  • “FOR ORGANIZATIONS, the difference between engaged and disengaged workers can equate to success or failure. Disengaged employees are estimated to cost the U.S. economy as much as $350B per year in lost productivity, accidents, theft and turnover.”
     
  • “A MAJOR OPPORTUNITY for corporate performance improvement and employee retention lies in ENGAGING the workforce to drive better customer engagement, better revenue and higher profits”
  • “MOST LEADERS AND ORGANIZATIONS know the difference between a fully engaged worker and one that is marginally engaged or disengaged. The former brim with enthusiasm, they contribute ideas, are optimistic about the company and its future, are seldom absent from work, they typically stay with the organization longer and are among the organization’s most valuable ambassadors.”     Allen Schweyer
  • “TOWERS PERRIN discovered that high engagement firms grow their earnings-per-share (EPS- is a crucial measurement looked at by investors) at a faster rate (28%) while low engagement firms experienced an average EPS growth rate DECLINE of 11.2%.
  • “THE CENTER FOR HUMAN RESOURCE STRATEGY at Rutgers University found that highly engaged business units were ON AVERAGE 3.4 times more effective financially than units that were less engaged.
  • “HEWITT FOUND THAT HIGHLY ENGAGED FIRMS had a total shareholder return that was 19% higher than average in 2009. In low-engagement organizations, total shareholder return was ACTUALLY 44% below average”   

The Advantages of Engaged Employees (CONT’D)

  • A 2008 BLESSING WHITE STUDY demonstrated a correlation between engagement and RETENTION- 85% of engaged employees planned to remain with their employer for ten or more months”.
  • “UPPER MANAGEMENT ESTIMATES-COST to replace a $150K executive: 300% or $450K”.
  • “MIDDLE MANAGEMENT ESTIMATES-COST to replace a $80K manager: 150% or $120K”

HOW EMPLOYEE ENGAGEMENT AFFECTS FINANCIAL PERFORMANCE

Companies with  LOW Engagement

Companies with HIGH Engagement

12 Month Change In Operating Income  37.2% DECREASE

12 Month Change In Operating Income

19.2% INCREASE

12 Month Net Income Growth

3.8% DECREASE

12 Month Net Income Growth

13.2% INCREASE

12 Month EPS Growth

11.2% DECREASE

12 Month EPS Growth

27.8% INCREASE

Eight Elements of Employee Engagement

  1. LEADERSHIP: Employees are desperate to have meaningful relationships with their managers.
  2. COMMUNICATION: Good Management starts with open, honest and continuous communication.
  3.  CULTURE:  A positive corporate culture results in a more profitable company yielding a larger return than the overall market.
  4. REWARDS & RECOGNITION: More than two-thirds of employees say they would work harder if they were recognized more.
  5. PROFESSIONAL & PERSONAL GROWTH: Find out how your employees like to stretch, giving them the opportunity for growth.
  6. ACCOUNTABILITY & PERFORMANCE: Everyone wants to belong to a winning team. People who perform well feel good about themselves.
  7. VISION & VALUES: If employees feel like a part of something bigger than themselves, they will go above and beyond to contribute to that greater purpose.
  8. CORPORATE SOCIAL RESPONSIBILITY: Employee Engagement levels are twice as high among employees who say they are proud of the contributions their company has made to the community.

Questions to Ponder

  • As you took the leadership effectiveness questionnaire and guessed at the national metrics, and as you scored your organization, how did you do? 
  • How would you feel members of your leadership team would rate your company?
  • What internal or external dynamics/issues are holding your company back to achieving the desired growth at both the top and bottom line and anticipated ROI sought by senior management/investors?
  • How many of you or your team make it a point in partnering with or to sit with the CFO during the functional budget cycle when reviewing headcount by department i.e. during the AOP, annual operating plan, regarding rationalization of existing headcount and/or adding headcount?
  • How many of you actively seek to ensure the HR function is significantly represented in the strategic planning process?
  • Do you have the right people in the right positions in alignment with current business goals?

What are your next steps as you work together as a leadership team to create a culture that is focused on Return On Employee Investment?            

Effective Use of Personal References

Prospective employers faced with the challenge of hiring qualified employees routinely check job references and interview past employers to verify the employment history and qualifications of their applicants. Checking references is one of the real means of verifying the truthfulness of the information provided on a resume or during a job interview.

Your resume may get you an interview, but your references will get you the job. Don’t underestimate the power of your references.  When choosing job references for your resume careful consideration should be given.  One bad, lukewarm, or incomplete reference could be the deciding factor between you and another qualified candidate.

A good reference candidate is someone who has known you for at least one year – preferably three – and should include four or five of the following:

Former/present bosses, supervisors, managers, colleagues, subordinates, former customers or clients, former professors, or professional colleagues from work-related associations or volunteer work.

Bear in mind that even if you do not list a former employer as a reference, they may be contacted and interviewed, which makes a very good reason to include one or two on your list.

A good reference candidate should be someone who bolsters and confirms the details of your resume and offers positive feedback regarding your work or educational skills and experience.

Basic Reference Check Sample Questions

Below are samples of the types of basic questions that reference checkers might ask. The phrasing of each question is just an example, but the gist is typical.

  • What were the beginning and ending employment dates for this individual?
  • What was this individual’s beginning and ending salary?
  • What positions did the individual hold?
  • Did this individual earn promotions?
  • What were the individual’s most-recent job duties?
  • Why did the individual leave your company?
  • Is there any reason why your company would not rehire this individual?
  • Would you recommend this individual for a position at another company? Why or why not?
  • How did this individual’s performance compare to other employees with similar job duties?
  • In your opinion, what are the individual’s strengths? Weaknesses?
  • Did this individual get along well with management and peers?
  • Was this individual a team player?
  • Was this individual a motivated self-starter?
  • Did any personal problems affect this individual’s work performance?
  • Do you think this individual will perform well as a [job title]?
  • What kind of job is best suited for this individual’s abilities?
  • How would you describe the individual’s overall performance?
  • Is there anything of significance you’d like to add?

Additional Reference Check Sample Questions

Below are samples of the types of questions that reference checkers might ask for professionals, managers and executives, in addition to the basic questions above. As with the basic questions, the phrasing is just an example, but the gist is typical.

  • How would you describe the individual’s leadership, managerial or supervisory skills?
  • Is this individual able to think strategically?
  • Does the individual communicate well orally and in writing?
  • How do you rate the individual’s ability to plan short-term? Long-term?
  • Did the individual make sound and timely decisions?
  • Did the individual get along well with management, subordinates and peers?
  • Did the individual plan, administer and make budget well?
  • How would you describe the individual’s technical skills?
  • Did the individual demonstrate honesty and integrity?
  • How well did the individual manage crisis, pressure or stress?
  • Describe the individual’s ability to attract and counsel top talent.

Once you have chosen four or five potential references, you should call them and ask if they mind providing a reference for you. If it has been awhile since you have talked to them, this is a great opportunity to bring them up to speed on what you have been doing, and also to confirm their phone number, address, and preferred method of contact. Prospective employers are not detectives and will not waste time tracking down outdated information. No reference could be just as harmful as a bad reference. Therefore – verify your contact information.

 

Headhunters secrets revealed!

Our experience with recruiters revealed that they are most impressed when candidates are able to provide 3 references covering all levels, i.e. their immediate superior, their peer and their subordinate.  This represented a good spread of coverage, i.e. the candidate displayed ability to work well with all levels.

 

 Make it easier for your references!

 

Bear in mind that your references are doing you a favour and therefore, you should make it easier for them to say yes!  It also makes sense for you to save them time by providing a write-up of yourself to them as reference material.  We came across good candidates who provide very comprehensive write-ups of themselves and impress their references further to show that they are proactive.

Imagine the confidence you will have when you walk into a job interview knowing your references are going to speak positively about you.

Globalization in the Workplace

Some of the globalization trends over the last few decades such as automation, digitization, call centers and off-shore processes have impacted the worker in a number of ways.

Innovation and speed are keys to business success in a world of exponential change and technological advancement. These market trends will ask that both organizations and individuals think creatively and quickly to break inflexible strategies and old paradigms that no longer function in a constantly changing environment.

Outsourcing and automation are cost saving strategies that reduce the numbers of jobs but individuals can enhance their employability by taking responsibility at whatever level of the hierarchy they function.

There is no guarantee that our jobs will be protected but if we respond as if we are no longer contained in a “silo”, working across disciplines so that:

  • We all think for the business
  • We are all in a “sales” role
  • We are all in “customer service”

In sum we all become “eyes and ears” for the business to innovate change for whichever processes we manage. In addition all of the individuals with whom we interact are our “customers” so that we regard all business processes as part of the overall “sales” process.

NACD Names Dr. Karen Horn as Board Chair

Karen HornNACD elected Dr. Karen Horn as its board chair last week during its board of directors’ meeting. She succeeds Dr. Reatha Clark King, who had held the position of board chair since 2013 and will now serve as chair emerita.

“I am delighted to welcome Dr. Horn as our next NACD board chair,” King said. “She brings to the position several distinguished leadership experiences in business, board governance, and associations. Her demonstrated commitment to board excellence will enable her to work with NACD’s board, management, members, and many partners to further advance board leadership and excellence.”

As NACD’s incoming chair, Horn has high ambitions for NACD’s future. “As shareholders, regulators, and stakeholders hold directors to an increasingly higher standard, NACD will continue to play an important role in shaping and upholding exemplary board-governance standards,” said Horn. “I am honored to be NACD’s chair and I look forward to supporting NACD’s mission to help our members lead with confidence in the boardroom.”

Horn, who was a commissioner of the NACD Blue Ribbon Commission (BRC) on the Effective Lead Director and co-chair of the BRC on the Board and Long-Term Value Creation, joined NACD’s board in 2011 and has most recently served as NACD’s vice chair. She also serves as the chair of the nominating and governance committee of the Simon Property Group Inc., as vice chair of the National Bureau of Economic Research, and as vice chair of the U.S. Russia Foundation for Economic Development and the Rule of Law.

Previously Horn was a director of Eli Lilly and Co., where she was lead director and chaired the compensation committee; of Norfolk Southern Corp., where she chaired the audit committee; and of T. Rowe Price Mutual Funds.

She is a senior managing director of Brock Capital Group. Horn also has been the global head of Marsh Private Client Services, the head of international banking at Bankers Trust, and the sixth president of the Federal Reserve Bank of Cleveland—the first female president in the Federal Reserve System’s history.

For more information about NACD’s board of directors, visit www.NACDonline.org/NACDBoard.

Determining Fair Director Pay

Because board members set their own pay, director compensation is a wide-open opportunity for shareholder litigation. In this BoardVision interview–moderated by NACD’s Publisher and Director of Partner Relations Christopher Y. Clark—Marty Coyne, experienced director and president of NACD’s New Jersey chapter, and Dan Laddin, partner at Compensation Advisory Partners, discuss ways boards can limit exposure to litigation when it comes to director compensation:

  • Both the compensation committee and the governance committee are involved in determining director pay.
  • Director compensation aligns with that of company peers.
  • Director compensation is based on the responsibility of directors—which may see little change from small to large companies.
  • Companies may consider adopting a shareholder-approved limit for director compensation.

Determining Fair Director Pay

Here are some highlights from the discussion.

Christopher Y. Clark: Do you think that the [nominating and governance] committee or the compensation committee should [have primary responsibility for setting director pay]?

Dan Laddin: Chris, if we look at the market, it’s pretty mixed—a little bit leaning towards [the] compensation committee versus [the] nom/gov [committee]. At the end of the day, I think it really comes down to the principles you use for compensation of your directors overall. One, you may want to make sure you have an objective committee, which obviously you would [with]…either. You also want to make sure that compensation for directors aligns with the philosophy of the directors, and so in that sense, maybe the compensation committee is a little closer to that. At the end of the day, there’s a lot of cross-pollination usually across those two committees, so either works fairly well. We do see a little bit [of] leaning towards the comp committee though.

Clark: Thanks, Dan. Marty, you’ve been on all types of boards. What is your take?

Marty Coyne: I prefer the compensation committee…mainly because the comp committee is much more familiar dealing with the compensation consultant and much more familiar with the peer group. And so when you look at all of the data inputs, the comp committee understands the source, where the weaknesses are, and the strengths. I think one of the key things, though, is the full board approves director compensation. So regardless of which committee brings it forth, and brings forth the recommendation, the full board has to vet it and approve it.

Clark: In many cases, for leading governance practices, company size does matter. [Companies] are affected by different policies and regulations. The boards are occasionally very different; occasionally they are not. But when it comes to director compensation, it is a hot button and it certainly affects that board’s reputation [and] the company’s reputation, but most importantly, that individual director’s reputation. So, Dan, again, let me start with you. Do you feel that there is a company size factor here when it comes to compensation and reputation?

Laddin: I think reputation risk exists regardless of the size of the company, and that’s somewhat borne out by the compensation data we would take a look at. … [T]here’s a basic responsibility of directors that doesn’t really change, regardless of company size, and that’s really reflected in the compensation data.

Coyne: There is a scale that the bigger the company [is], the more the directors are paid. The exposure potential for larger-company directors is far greater than the smaller-company directors because they just make better news than the smaller companies. There is a point though; it’s almost like a minimum size where, when you hit it,…the director workload is pretty much the same regardless of the size of the company. And, to attract and retain good directors, you’ve got to pay a fair compensation for those individuals.

Clark: Many companies have director compensation limits. My question would be why, and what is a fair compensation limit?

Laddin: Sure. So this concept of the limits really [has been] coming to play in the last few years, as there were a few lawsuits against companies that said directors are inherently conflicted when they are setting their own pay. And in those specific companies, the view was that they set it well above any credible norm… The attorneys came in and said, “We can basically put in a shareholder-approved limit on directors’ compensation,” which then gets us back within this business judgment rule.

Clark: For the shareholder-approved limit, what’s the status today?

Laddin: We’re seeing most companies, as they go back to shareholders to renew their plans in the normal course, that that’s when they go back and put in a limit. When they go back for new equity plans or just general approval from shareholders, that’s when it’s happening. I wouldn’t say there’s a mad rush to do it, but it is normal course.

Clark: Well, Marty, what has been your experience? You’ve been on public boards, [and] you’ve been on private boards.

Coyne: I think…having a limit is very, very valid—and it’s necessary. I don’t see any resistance to putting limits on directors’ compensation. If I were a shareholder, I would expect my compensation plan that I’m approving to have limitations for director compensation.

Clark: When we look at the umbrella of business judgment and compensation, I’ve got to ask you, is the litigation environment lukewarm or is it red hot?

Laddin: I would say it’s lukewarm at this point. The lawsuits have really been at the extremes where director compensation was well above the norm.

Coyne: I think…there’s been a quantum step forward on the nom/gov side in choosing the right directors sitting around the table. I think the next step is going to be how do you compensate your directors? What is your philosophy to attract and retain good directors? How does director compensation correlate with company performance? Is there potential pay at risk? I think there will be some…comparisons of director comp to the TSR. And if a company is not performing well, I think directors are going to have to answer a lot of tough questions about why are we paying you when the company performance is so poor? But I don’t see any dramatic changes in the next couple of years.

For further considerations on director pay practices, please review the Report of the NACD Blue Ribbon Commission on Director Compensation.

Additional NACD Resources

2015–2016 Director Compensation Report

2015–2016 Director Compensation Report: Appendices

Report of the NACD Blue Ribbon Commission on Director Compensation

A Social Step Up the C-Suite Ladder: The Conclusion

As we continue the journey up the ladder of success this next step will require you to dig into the habits and patterns of your C-Suite, without stocking them.  I suggest this be done off the clock as you still have a job to do at work each day.

Rung two – Develop an executive presence. Not just seen physically, but actively contributing in the social media and internet space that the C-suite frequents.  Read what they read, comment on what they read, and share what you have learned.

Executive presence requires a degree of learning if you are to discover where your C-Suite spends their time.  According to CEO.com,

  • A whopping 68% of Fortune 500 CEO’s have no social media presence
  • Of those who do 23% of them engage in only one platform
  • 74% of the CEO’s who only participate in a single network join LinkedIn

The average CEO reports spending about two and half hours in meetings per day. They meet with executives 37% of the time, with clients 20% of the time and prospects 15% of the time.  Legal is the department CEO’s meet with the least.  The majority of their time is spent with finance, followed by operations, clients and professional informers and finally sales.

Social media is not to be neglected in your discovery process as over the past few years more and more in the C-suite are finding the value of using this resource.  Social media is a great tool for attraction of better talent, publishing news and creations that share the contributions and communicate a message of the influencer in their communities. Keep your ear on the pulse of the company through social media and the pulse of your C-Suite. One of your roles is to use this tool to make your presence known and felt.

Follow your company website and news releases from your C-Suite especially corporate videos.  Re-post items of interest when appropriate.  Your savvy use of social media will increase the respect and recognition of your C-Suite and help him/her to build better communications with clients, employees and the community. Your name on the re-post gives you a unique presence.

Consider producing a blog with content that establishes you as a thought leader in your industry. A consistent post will reinforce your position as the go-to source for solutions that are of interest to your C-suite and of creative content that is read and followed.

In the LinkedIn world, posting discussions in groups that your C-suite is a member will get you noticed, especially when you end with a question and then respond to the comments.  The more active you are the more your name will come up as a member with executive presence and a person of contribution.

A great resource for you to keep up with C-Suite thinking and thought leadership is www.c-suitebookclub.com. With today’s technology your automobile can be your mobile master’s degree advantage.  Every time you are in your vehicle is an opportunity to learn on the go. If you are like me I like to take notes on something of interest.  Be careful not to be distracted as you drive.  Reading and keeping up with what the C-Suite reads will keep your conversation relevant for this rung of the ladder to smash open the doors and give you the coveted seat at the table.

Taking A Step Up the C-Suite Ladder: A Continuation

As a follow up to last week’s blog, ‘Ten Steps Up The C-Suite Ladder‘ we will begin to delve deeper into each of the individual rungs. Hang tight, we will get a good work out.

Rung one – Master the essentials of your chosen industry. If HR, then become technically proficient in culture, comp, compliance, hiring, on-boarding etc.

Shrewd Executive leadership wants and seeks business partners who will add significance to the bottom line.  Human Resources has been invited but must deliver value, moving from administrative to a strategic partnership in alignment with leadership’s 30,000-foot view of the people side of the business.  We live in a global economy and HR must be able to create a culture of high performance to compete in today’s market.  A key question leadership demands to know the answer to is “how well is our workforce performing and how are we helping them to improve”. It is more than having top talent; it is about performance that gets their attention.

Feedback to the executive level must not be inflated or exaggerated.  “Just the facts “Ma’am”, cut the fluff or you find yourself outside the table.  Leadership understands value and sees the results and is not interested in a scramble of activities that are waste of time and of no benefit to the overall vision of the company. 

HR is comprised of many areas of discipline including benefits, comp, performance management, employee relations, recruiting and learning and development.  None of these areas are a silo unto itself but of great importance in your role as the HR professional at the table.  It is a part of the big picture of what leadership wants from its strategic partner. Until HR and the leadership team jointly ask “how well is our workforce performing and how are we helping our employees improve” nothing will happen to secure a seat at the table for the partner.

I deal with HR professionals all the time and ask about success dealing with the executive leadership team.  A few years ago I was talking to a lady who told me of her success at the table.  She always says yes to the requests she gets from the C-Suite at the first opportunity.   You might be asking yourself, leadership is not looking for “yes men” and you are right.  Her response moves quickly to asking what their vision is for this request she has said yes to.  She then focuses on the why and not the what or how as this will come when we all understand why we do what we do. Once she knows the vision of the C-Suite and the why, she follows with a discussion about what it will look like when it is completed.  It is your job as an HR professional to then provide the knowledge as a contributor to the vision to accomplish the goals clearly understood by all parties.  Your executive team values your input at this point.  You are known as a person that will not lead them down the wrong path but the best path to reach the vision of the request. You are a master of your profession and you know how to manage the C-Suite with the best interest of the entire company. You are now on the rung of influence you desire and deserve. 

How do you master the essentials? 

Don’t miss our next post about Rung 2 where we will focus on Developing an Executive Presence and actively contributing.

Ten Steps Up the C-Suite Ladder to Effectively Smash Open the Doors

The first Human Resource conference I attended in the early 90’s was titled “How to gain a seat at the table.”  For over a quarter of a century this has been a dream for most HR professionals and others trying to have impact in the organization’s core strategies and decision making processes. The seat at the table is elusive, but all of us can have influence and it involves some purposeful ladder climbing techniques.

A ten step strategy to put you on course to capture the seat this year – this is your year!

  1. Rung one – Master the essentials of your chosen industry.  If HR, then become technically proficient in culture, comp, compliance, hiring, onboarding etc.
  2. Rung two – Develop an executive presence.  Not just seen physically, but actively contributing in the social media and internet space that the C-suite frequents.  Read what they read, comment on what they read, and share what you have learned.
  3. Rung three – Learn to crunch the numbers with analytics and data on matters the C-suite has an interest in.  Include events that impact the bottom line like turnover, benefits as compared to competitors, employee surveys, client satisfaction scores, attraction etc.
  4. Rung four – Invest in your skills by taking a course in project management.  Volunteer to take a company project from beginning to the end and this will get you noticed.
  5. Rung five – Continued education and certification including a MBA to give yourself credibility that you understand the moving parts of a successful business.
  6. Rung six – Know you organization through and through and why your business works the way it does.    Involve yourself in departmental discussions to learn what each area is dealing with in conjunction to its impact on the strategic vision of the company.
  7. Rung seven – Numerous positions including human resources are considered cost centers within an organization.  Think clearly about making your role a revenue generator.  Your value to the C-suite will go up exponentially if you understand what you bring to the table.
  8. Rung eight – Do not isolate yourself from your employees, rather build strong relationships by listening to others, respond thoughtfully and offer suggestions that encourage collaboration.
  9. Rung nine – Find a mentor or someone more advanced in their career and watch them as they build relationships and provide value to their organization.
  10. Rung ten – The instance you have moved to the level of influence you desire, contribute, contribute and then contribute some more.

You must become skilled at the language of the C-suite.  What do they deal with?  M&A, industry language, know what success looks like to this select group you have managed to climb into the bunk with and know the space that you own and why you are the expert.  You are a contributor and that’s what the C-Suite is looking for to join the table.

The next several posts will go into deeper detail on each rung.  Share with me additional rungs that you feel are necessary to take you to the top of your organization in the comments section.

Using Assessments for Onboarding Insights

The work of HR or the hiring manager doesn’t end when an offer is made.  Onboarding is the next step and an essential part of a successful human capital process.  How you communicate your company’s mission and values and how the new hire relates to the mission and values will set the course for his or her success in the organization.

SHRM’s research shows that new employees are almost 70% more likely to stay at a company for 3+ years if they have a well-structured onboarding process.  Research also indicates that 40% or more of executives fail or quit during the first 18 months in a new position.  An effective onboarding strategy and process can dramatically improve new hire integration and retention.

Many organizations use pre-hire assessment tools to help ensure a match between the job and the person.  There are a number of very good assessment tools on the market and the best are able to measure specific job-related competencies and organizational core values and how a candidate “fits” or matches those competencies/values.  Too often, the results of these assessments are used for interviewing and selection decisions but then filed away and not used. 

Using the assessment feedback during the onboarding phase of early employment, whether it is from a pre-hire tool or administered post-hire, can provide valuable insight for both the new hire and the manager.  Getting early feedback on strengths and weaknesses and having a structured discussion on how those may impact the new hire’s success in his or her role are key benefits.  Discussing communication and work styles is another key benefit.  Most effective pre-hire assessment tools have a development version of their reports.  Consider using this valuable information to positively impact the success of your onboarding process.

Many onboarding processes include an engagement survey to gauge new hire commitment and enthusiasm.  Engagement surveys can provide key data on program effectiveness but they don’t provide direct benefit to the new hire and shouldn’t be viewed as a substitute for individual assessment feedback.  Sharing self-insight assessment feedback in the context of organizational competencies, missions, and values provides a compass to help the new hire navigate his or her integration into a new organization, a new manager, and a new set of expectations he or she needs to meet and exceed to be successful.