Category Archives: EBHR Solutions

There’s no such thing as a simple, straightforward or off-the-shelf solution to most HR issues but at least here are some suggestions and pointers.

Just run that HR hypothesis by me one more time would you?

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When HR tries to measure itself it always ends in tears and not just the ones running down the cheeks of the HR department: every executive who has had to endure yet another HR presentation, supposedly demonstrating its incredible value proposition, will know only too well what it feels like.  It would not be so bad if HR had learned from its previous mistakes.  Measurement is a golden rule for any organisation but the measures must be meaningful to the business and they have to follow the #1 Golden Rule, often ignored by HR departments, of sticking to a well-conceived hypothesis.

Is HR theory and practice founded on sound hypotheses?  The list of activities regarded as the unquestionable and indispensable orthodoxy of HR, the ‘givens’, includes -

  • Competence frameworks
  • 360° feedback (but including 180°, 540° and 473.5°) – OK, that last one was a joke
  • Leadership development
  • Engagement
  • Talent management
  • Diversity

All of these have been around for a while now so maybe it is about time someone checked out whether they are under-pinned by any sound hypothesis.  Let us take a fresh look, using the logic of EB-HR, to see if any of them really hold water?

The Competence Hypothesis

Every EB-HR hypothesis has to start with an intelligent question about an identified problem: this is called root cause, or cause and effect, analysis.  Presumably those who install competence frameworks believe they have a problem with the effects of management incompetence?  Yet cause and effect analysis demands that the ‘effect’ be measured, so they can only say they have a problem with incompetence if they have already measured it.  That conclusion, in turn, requires them to produce a very specific definition of competence and logically leads into that dreadful labyrinth comprised of the myriad of competencies supposedly exhibited by a multitude of managers in an infinite array of combinations or clusters. Now, even if they were able to unravel this Gordion knot of their own making, there is the equally important question of whether there is any close causal connection between these competencies and performance?  This will require an analysis of the competencies of high performing managers, showing how being competent in certain areas (e.g. negotiation, organisation, delegation etc.) causes their performance to reach a level superior to their competence-challenged colleagues.  Of course, to do this they would need a definition of performance based on a balanced set of performance indicators that could be compared between two distinct groups of managers over time (performing and non-performing) and we all know how problematic performance measurement is don’t we?  This is because performance itself is subject to the vagaries of organisational planning and market dynamics, which never stay constant long enough for meaningful comparisons to be made. These environmental complications then ultimately defeat any attempt to run a controlled experiment where answers to the original questions can be found.  Nevertheless, if the HR team soldiers on and somehow identifies a group that need some competence improvement they then incur the next practical problem of how to design individual, competence development programmes.  Plus, they would simultaneously have to run a control group of managers, who would be left to their own devices, while the target groups (incompetent and competent) were monitored. Phew!!

If this hypothesis strikes you as simple, and easy to explain to any serving manager, then good luck with your competence framework.  But remember – if your competitors are doing exactly the same then neither of you gain a competitive advantage after all this effort.

A simpler hypothesis, that addresses all of the complexities more directly and efficiently, is to regard each manager as a unique individual with their own unique combination of abilities and talents that you will never have the time or energy to fully fathom, explicate, delineate or codify.  So instead, why not just ensure each manager is regularly asking themselves a set of simple evidence-based questions:

  1. ‘What evidence do I have of our performance level today?’
  2. ‘What measure would I choose to indicate an improvement?’
  3. ‘What do I require to help us achieve that improvement?’

Please note – if the answer to question 3. is something as broad as – ‘restructure the whole department’, ‘re-design the system‘, ‘re-think the process‘ or ‘change our marketing strategy’ – then this suggestion needs to be treated with respect, systematically analysed for validity and resolved.

This hypothesis is based on 3 assumptions -

  1. We are always willing and able to improve.
  2. Everyone is allowed to voice their conclusions from asking these questions, without fear, through a systematic process for organisational problem resolution
  3. If we keep improving we will read that as evidence that we are becoming more competent.

This evidence-based hypothesis leads me to recommend that you consider ditching your existing competence framework.  Would anybody like to submit a better hypothesis for competence or any of the other ‘givens’ on the HR list?

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Organisational Maturity 3 – Off the scale, on a road to nowhere

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If you are interested in improving your HR maturity level visit IHRM -  The Institute of HR Maturity

The Learning and HR Maturity Scales explored in Parts 1 and 2 only apply to organisations that really mean what they say about making the most of their people.  They have been designed to offer such organisations a clear and coherent direction of travel towards a strategic, systemic and holistic approach to human capital management.

Of course some organisations, even if they understand the concept of organisational maturity, would not necessarily choose these particular models, which begs the question – what do they use instead?  If no model is followed it is no wonder that so many HR functions are chaotic and reactive.  Presumably some do have their own evolutionary and developmental continuum but where do they get their ideas from?  These Maturity Scales have been developed from the very best organisations I have ever personally encountered (see The Top 10 in HCM); they were not conjured out of thin air and have been road-tested for well over 15 years.

The most obvious alternative candidate is the one that HR functions already suggest they follow, Dave Ulrich’s.  For an introduction to what this looks like try viewing Ulrich’s “Master’s Class” (sic) presentation and note the date – March 2008 – and a question raised on slide number 4 under – “Your questions – HR”  -

“What does he think of RBS’ HR model given its probably the truest representation of the Ulrich model in Scotland?”

One month later – April 2008 – RBS imploded, so I would be interested to hear what  Ulrich said then and compare it to what he might say now.  I wonder if it would prompt Ulrich (or his consultancy arm – RBL) to change a few of these slides, or possibly re-visit the basis of their theory?

Whilst speaking at a recent conference in Norway I had the opportunity to hear Ed Lawler III for the first time.  Ed is held in some esteem in certain HR circles and declared Ulrich to be a good friend and collaborator.  His own presentation consisted of his ‘research’ using, what appeared to be, unsupported correlations between HR and organisational performance.  Ed did not raise the difficult question of causation and I didn’t see any reference to the collapse of RBS, or any other bank for that matter, and how that might influence future HR ‘research’.

Ed also remarked how PepsiCo had set out to produce the best HR people in the world.  Some of these have washed up in the UK.  Clare Chapman, ex-PepsiCo and Tesco, who flailed around aimlessly at the NHS, getting nowhere fast before moving on once again (a classic trait of the non-evidence-based).

These people are the epitome of immaturity – refusing to look at evidence, failing to learn and carrying on blindly rather than stopping for a moment to ask whether inflicting their dubious methods on unsuspecting (and unquestioning) victims has added any value or not.

I am sure PepsiCo is still a very ambitious and very successful business but one thing is for certain – they are very immature when it comes to strategic, human capital management.  Arguably they have managed to produce some of the very worst HR people in the world who have left untold damage in their wake.

If you need help in assessing your organisation’s HR Maturity contact info@paulkearns.co.uk

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Organisational Maturity 2 – HR is toddling around at Stage 2

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If you are interested in improving your HR maturity level visit IHRM -  The Institute of HR Maturity

In Part 1 of this 3-Part assessment of organisational maturity we considered to what extent organisations are designed to learn.  This can only ever happen as part of a wider HR strategy that aims to create a competitive advantage from managing human capital as effectively as possible.

Such a lofty ambition can only ever be achieved in an organisation that is grown up enough to take a realistic view of its situation: understanding and making the most of its strengths whilst acknowledging its failings and limited capabilities.  Maturity is not a rose-tinted view of the world but an acceptance of the truth.  The HR Maturity Scale reveals the HR function to be a toddler that has not quite dispensed with its comfort blanket and needs to hang onto something for support while it stumbles around at Stage 2.

HR people at Stage 2 like to call themselves ‘professional’ even though this is only about one third of the way along this continuum.  They use lots of professional support mechanisms (CIPD, job evaluation, psychometrics, competence frameworks) but they have not yet reached a Stage where their advice is really valued (Stage 3) because their systems have not grown sufficient teeth for them to add much value (e.g. competence frameworks that do not remove the incompetent).  Much of this immaturity is down to their deep-seated, lack of confidence in their own methods and capabilities.  However, organisational maturity does not come from any specific function changing, it is about the whole organisation growing up and developing together.

From an Executive perspective it starts with a full and open acknowledgement that they have no clear understanding of what managing human capital actually means (shown on the Scale as the Human Capital Barrier). There is no common language in the boardroom to discuss the value of people and no way of auditing the organisation’s human capital management.  Unless and until these issues are addressed the organisation is incapable of getting the best value out of its people.

Similarly, any employee (Generation Y or any other generation for that matter) who thinks the world owes them a living; or the organisation exists to further their career; or that somehow they are indispensable; needs to realise that however talented or important they might be the value of the organisation, long term, will be dependent on how they work together – systemically- holistically.

Of course, this all assumes that the organisation has an ambition to be as good as it can be and realises that the only forward is a more strategic approach to managing people – all of them.  As we will see in Part 3 though (‘Off the Scale’) to make such an assumption would be very simplistic, not to say immature.

You can find out more about the HR Maturity Scale and where you are along it by watching the explanatory video here, reading a short descriptive extract from HR Strategy or visiting the Consummate Professional Series for online tuition.

If you need help in assessing your organisation’s HR Maturity contact info@paulkearns.co.uk

 

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Organisational Maturity 1 – All organisations are immature when it comes to learning

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If you are interested in improving your HR maturity level visit IHRM -  The Institute of HR Maturity

Do you remember something called the ‘learning organisation’?  It was all the rage about 15 years ago.  All of a sudden everyone was calling themselves a learning organisation because if you were not a learning organisation then what were you – a stupid organisation perhaps?  It was a no-brainer that you had to jump on this particular bandwagon irrespective of whether you had any understanding of the concept and regardless of how many miles you were away from the reality of what a learning organisation looks and feels like.  No one wanted to be left behind but 15 years later banks, pharmaceutical companies, retailers, manufacturers, universities – you name it – everyone is more in need of effective learning than they ever were.  So let us re-visit what was always a noble aspiration once more and hope that this time around more organisations start to learn what it means to be a true learning organisation.

In effect, all of the early efforts were doomed from the start because organisations were too immature to understand or implement the concept.  Instead, training departments re-badged themselves as learning departments and pretended they could bring about learning across the organisation when, in fact, a learning organisation needs very little input from any department, particularly conventional trainers.

See also Part 2 – HR Maturity and Part 3 – ‘Off the scale’

So where are you and your organisation in terms of learning maturity today?  Try positioning yourself along the Learning Maturity Scale – you can watch the explanatory video here, read the article or visit the Consummate Professional Series

If you need help in assessing your organisation’s HR Maturity contact info@paulkearns.co.uk

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‘HR Best Practice’ is the enemy of Evidence-based HR practice

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Ask any HR director whether they are using ‘best practice’ and of course they will say ‘yes’ if for no other reason than they believe ‘no’ to be the wrong answer. Even if they genuinely mean ‘yes’ it is simply because they are copying what everyone else is doing. They follow the same ‘best practice HR’ shopping list which is now about as long as a till roll (e.g. talent, competence, engagement, 360 etc.)  It is just a pity that none of the goods on these shelves are evidence-based.

The term best practice used to actually mean something and became standard terminology when manufacturing companies tried to adopt total quality management in the 1980’s.  It became synonymous with that other well-worn cliché – ‘world class’.  The original reference point for both was the now famous Toyota Production System, which every self-respecting manufacturer has been desperately trying to emulate. Inherent in the Toyota Way (the Production System was only part of their total philosophy) was probably the first ever management philosophy of maximising the value of human potential – although if you looked for the words ‘human capital strategy’ in the Toyota lexicon you would not have found them.

Put these 2 facts together and you will understand why HR is in a mess.  It will also demonstrate how only those companies that can see the connection between human capital and organisational value will be able to reap all of the benefits on offer.  So HR needs to jettison any notion it ever had of  ‘HR best practice’ and start looking for evidence that anyone in their organisation has the slightest idea about what maximising human potential really means.  As always, HR’s biggest threat is also its best ever opportunity to put itself on the organisational map.

Evidence-based practice is the only best practice and, by the way, that is true of any organisation, not just manufacturing.

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EBM – Doing it for real – Lesson 13 – EB-HR Partners translate the Business Plan into Employese.

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Our dissection of what is required to do EBM for real all started with a framework that is analogous to the human anatomy.  Up until this point the Lessons have been about strategy and building organisational capability rather than delivery against specific performance indicators.  Where the rubber really hits the road though is in the Business Plan; defined here as any plan that looks further ahead than the current, 1-year, operating plan.

The Business Plan is meant to spell out what performance is required over the next 2 or more years; it is the ‘evidence’ in Evidence-Based Management.  If you don’t achieve the Business Plan it is evidence that management has failed in some way; although plenty of excuses will be ready and waiting in the wings.  It is rare though for business plans to use a simple, common language that translates business numbers into what is required of each individual employee, which is at the very heart of evidence-based human resource management.  If the Business Plan expects a 5% improvement, for example, what is that in Employese?  How will it affect every single employee in their own particular position, situation and set of unique, personal circumstances?  The role of the EB-HR Business Partner is therefore to ensure everyone is speaking the same language of value.

Lesson 13

Translating the Business Plan into the universal language of personal value

Practical application

The best way to apply this Lesson is simply to pick up your latest business plan (assuming you have one) and just go for the numbers; ignoring all of the accompanying verbiage for now.  Pick any one of these numbers (e.g. a cost reduction of 5%) and go to the most senior manager available and ask them what this means for their division or function? Expect some strange looks initially.  Any COO asked to explain what a 5% cost reduction means is likely to suggest you get your bumps felt or maybe even that you start looking for another employer.  When you, and they, get over this reaction you can explain yourself a bit more by asking

‘What exactly does a 5% cost reduction mean for every one of your people?’

but to avoid dragging this out quickly add -

‘… does it mean cutting corners by 5% or doing exactly what they used to do, at exactly the same quality level, but at 5% lower cost?’

A 5% cost reduction that sacrifices 5% output or a 5% drop in quality is not going to create more value: shutting a well-used library might save money but there has been a loss of amenity that needs to be factored into the total value equation. And why are the percentages always so simplistic?  A 5% improvement might be a cakewalk for some while others face a Herculean challenge.  Good people management means offering an accurate and tailored number that means something to everyone.

We have all become inured to conventional business planning, in all its forms.  Whether it is the slow death of incrementalism (e.g. let’s reduce costs again this year by 2%) or the blind setting of stretch targets (e.g. let’s double turnover in 3 years).  The Business Plan is where the prevailing mindset amongst the executives becomes manifest and subliminal messages become explicit in the eyes of the workforce.  From an EB-HR perspective this is where individuals take a personal view of what the future holds for them: is it likely to be just one long, continuous grind or will it offer them a much better deal than they can get elsewhere?

The ultimate goal of Evidence-Based HR is to get the best value, willingly, from every single employee (and everyone else in the supply chain).  We have spent just over a year and 60 posts to get to this point where we can finally re-visit one of the most fundamental building blocks of organisational performance from a very human perspective.  Grab hold of your own business plan now and start translating because the Business Plan of today is the Operating Plan of tomorrow and the subject of Lesson 14.

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EBHR is worth $ billions

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No organisation is ever going to try out EBHR if they cannot see the $ value in it so it is about time I put my money where my mouth is, so to speak.  There cannot be a better example than the pharmaceutical industry.  All large pharma companies have large HR and learning departments who are supposed to be adding some value, and they may well be, but only a tiny fraction of what they could.  They do not focus on the highest value aspects of pharma, which are unsustainably high development costs combined with low success rates. Figures quoted in a Sunday Times article “Glaxo enters the dragons’ den” on 21st August 2011 (attributed to Evaluate Pharma) showed that –

“… spending by pharmaceutical groups on R&D was $88 billion in 2004.  It has risen every year, bar one, since… and this year is forecast to reach $133 billion. Yet the companies investing these vast sums are getting fewer and fewer results.  …. For every 5,000 new compounds that enter pre-clinical trials only 5 will end up being tested on humans. Of those 5 only 1 will make it to the market.”

Pharma has become one huge sink hole with fewer and fewer blockbuster drugs to compensate.

None of this is news to anyone observing the industry and I have been tracking it from an evidence-based, human capital perspective for many years now.  I have worked with a wide range of pharma companies over the years and only once did I see an HR team trying to do anything about it, about 15 years ago, and that was GSK.  They failed though because they did not adopt the simplest tenets of evidence-based management; even though pharma is inherently an evidence-based industry.  When I asked them what they were trying to achieve they said they needed to improve the success rate of their ‘drug discovery’ process but nowhere in their efforts did they produce any evidence or measure who were the most and least successful researchers in discovering the drugs that got to market.  EBHR is not complex, it is simple and even a small improvement is worth billions to these corporations and the societies that have to pay for them.

So has GSK learned any lessons?  Here is a quote from the article by Moncef Slaoui, GSK’s Chairman of research and development and “a 23 year Glaxo veteran” about their latest ‘dragon’s den’ attempts -

“Three years is long enough to know whether we are failing but too short to know whether we are succeeding. I don’t think this system has failed; we are moving in the right direction.  How successful we are, we’ll see. … I would like to see another (funding) round in three years – that’s the time it takes.”

I’m sorry Moncef, you have had a lot longer than 3 years to start getting this right. You are not being evidence-based and neither are you managing your human capital well.  If you do not know whether you are succeeding or not then neither do your researchers.  GSK’s ‘plan B’ , using external development labs, is not the best solution though because it will seriously limit GSK’s capability for creating value, impacting on their share price and market capitalisation.

The whole of the pharma industry, more than any other industry I know, needs EBHR.  We should all hope they discover it soon because we cannot afford $133 billion a year to provide so few drugs.

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We can measure what we call ‘talent’ even if we can’t define it

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This is part one of a 2-part post.

One of the earliest pieces in this series looked at a truism in human performance – any population will form a normal distribution – the bell curve – the highest and lowest performers will be minorities and the bulk of people will be somewhere in between.  As a truism it gives EB-HR managers great confidence when they use it to analyse organisational strengths and weaknesses.

It is also perfectly adaptable to any type of organisation. If we take Goldman Sachs as an example, we know they offer some of the highest rewards in banking, which might lead you to believe they only employ great performers (i.e. their performance curve is skewed to the right), but the performance curve is always relative, so even Goldman Sachs will always have some people who are deemed to be under-performers relative to what their best achieve.  It is also worth adding that their ‘worst’ might be much better than the ‘best’ their competitors have to offer.  In effect, other banks start from a lower base (as shown in the graphic).

Goldman Sachs performance curve is ahead of other banks

Let us apply this simple tool and insight to what has come to be called ‘talent management’.

It is a decade since ‘The war for talent’ was published by Harvard Business Press – regular readers of this blog book will know I hold HBP responsible for publishing some spectacularly vacuous management books – and history has proven the authors so wrong (McKinsey’s chose Enron as a paragon).  From the very beginning the more astute management critics could see there was no substance behind McKinsey’s hype and even Wikipedia points out that the authors failed to define ‘talent’.  Yet this has never deterred ‘talent managers’ from selling their non-evidence-based, indefinable wares with great enthusiasm.

In the age of evidence-based HR let us at least get back to some basics.  Whether you can define talent or not we all know it is rare – that’s why we give it a name – and we also know you can only manage what you measure, even though the non-evidence-based refute this*.  Ideally the measures will be objective (output, cost, revenue, quality) but a subjective measure is better than no measure at all.

One group we naturally associate with having innate talents are sportspeople; whether they be high jumpers, footballers or basketball stars.  Their performance is measured every time they compete (height, goals, baskets) and we tend to read across to say how talented they are (e.g. the top goal scorer in the league must be one of the most talented) knowing that the context, and their team-mates, have a significant part to play in their success.  We also recognise some people as being highly talented despite poor performance – they are ‘off form’.  So there is no automatic correlation between talent and performance; we just have to keep working at making the best of whatever talents we have at our disposal.

It is an HR dictum that you should ‘hire for talent and attitude’ because we cannot endow people with attributes they do not possess.  You cannot give someone a talent and trying to change a bad attitude is more trouble than it is worth but if we want to manage talent it is worth measuring it.  Try it now by focusing on one particular talent – say negotiating.  I picked this one because it encapsulates many of the common issues surrounding discussions about talent. You can teach negotiating skills (e.g. save your big guns for later, when you say ‘no’ mean no) and train in how to prepare for a negotiation (e.g. what information do you have about the other side, how high can you afford to go?) but we all know good negotiators who just have a passion for negotiating and a personality that enables them to get away with things that others cannot – they have a natural talent for it.

If you send managers on negotiation training it can become evidence-based (without perfect evidence) by giving each trainee a baseline score from 1 to 10 before they start (as explained here) but also consider a few people who are not automatically on the list – they might have a talent as yet untapped.  For anyone getting a 3 or less I would recommend saving time and money by taking them off the list.  Anyone between 4 and 7 will probably need some motivating to improve their negotiating ability (they don’t have a natural talent and/or it is something they do not welcome) and with the 8 and over’s it might be worth considering what successes they have actually had before sitting down with them to try and work out what makes them so good.  If you are clever enough you might even help to make some of it rub off on the others.

As with everything in HR though it is never entirely straightforward is it?  Talent is not a one-way street; it can bring with it all sorts of problems and unexpected consequences.  Recognising talent can create primadonnas, prompt them to demand too much, encourage them to move elsewhere or just disrupt the team.  Defining talent does not help much and calling it a ‘competence’ just confuses the issue.

The only thing that matters is that you at least have some measures that tell you two things – you believe you are getting better at ‘it’ and ‘it’ is improving your performance. Alternatively if you think talent cannot be measured, because it is  ‘intangible’, don’t be surprised if it never produces anything tangible.

*Those who say you cannot measure ‘intangibles’ like talent and leadership seem to have missed the obvious point that they have already attached some relative importance to it – a subjective measure that says it is more important than the other things they could be doing.

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EB-HR, Human Capital Reporting and International HR Standards are all closely connected

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There are three, seminal, management ideas that have been moving inexorably towards each other over the last 50 years and they are finally beginning to meet up at the same junction: -

  • Evidence-based management is emerging as a superior approach to management
  • Employees are increasingly being viewed as another form of very valuable capital that has to be expertly managed to achieve differentiation and greater returns
  • Tougher standards have to be imposed if HR and L&D are to achieve the same level of credibility and gravitas as other professions

The first of these, the concept of being evidence-based, is extremely simple – only do those things where you have evidence that they work.  Human beings are already hard-wired to do exactly this – we made fire because the evidence was obvious that it would keep us warm and feed us.  Intelligent managers, with common sense, will already be basing most, if not all, of their decisions on the obvious evidence of costs, output and quality figures.

However, the larger an organisation becomes the more its managers tend to lose sight of any direct connection between their decision-making and outcome.  Take pharmaceuticals, with a 12 year product development cycle, or the long-term planning of health services: here, simple common sense is just not up to the job anymore because the complexities and organisational dynamics involved require a higher, more sophisticated level of management capability.  We have already witnessed the evolution of concepts such as ‘total quality management’ and ‘balanced scorecards’ whose schemes try to ensure the whole organisation is working well as an organical.  This thinking exposed the weaknesses in old-fashioned managerialism and stretched it to breaking point; as evidenced by the on-going, sovereign debt crisis in Western economies that has yet to find a coherent or sustainable response.

Meanwhile, it has become widely accepted that the difference between the market and book values of large corporations is connected to how well they manage their human capital.  This has placed managing the expectations and performance of people firmly at centre stage.  Despite early resistance the term ‘human capital’ is beginning to stick because the players most interested in understanding these connections, the financial and investment analysts, are struggling to come up with explanations themselves so they are the ones putting pressure on organisations – and their HR ‘experts’ – to come up with answers.

All of these forces have put HR management in the spotlight and so far the HR profession’s response has been woeful.  Initially, in the early 1990’s, HR departments thought the answer was to measure themselves (e.g. Saratoga-type data of input and transactions) but it has become increasingly clear, especially in the wake of the financial crisis, that this does not offer the right evidence.  Consequently the whole concept of what it means to be an ‘HR professional’ is called into question because the traditional skill-set of the HR practitioner is being seen as inadequate; hence the drive to the business partner model.  The evidence is also clear that many companies have failed to perform, notably the banks, despite having adopted ‘progressive’ HR policies.

HR still has a lot of convincing to do and it has to start by ensuring its own professional standards are up to the job; hence SHRM’s current project on professional standards and metrics under the auspices of a Director of Standards and its efforts to move towards an ANSI (American) standard for HR that they hope will eventually become a globally-recognised (ISO) standard.

Behind all of this though lies the simplest tenet of all that underpins evidence-based management – the need for BASELINE EVIDENCE before you start trying to manage people more effectively.  The majority of conventional HR and learning methods are fixated with process, technique and ‘best practice’ rather than on any evidence of outcomes required in a particular context.

So HR Directors need to be acutely aware of what this potent mix of EB-HR, HC Reporting and International Professional Standards means for them.  Regardless of what credibility they might have earned in their careers to date, and irrespective of the ‘best practices’ they espouse, they will have some serious thinking and explaining to do when one of their international competitors manages to mix the perfect cocktail with these three, key ingredients.

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A Test of Common Sense for Evidence-Based Managers

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Do you walk under ladders? No? Is that because you

  • a. Are superstitious?
  • b. Don’t like ladders?
  • c. Believe things are more likely to fall from ladders than out of the sky?
  • d. Cannot see any conceivable benefit to be gained from choosing to walk under a ladder?
  • e. Have studied research that says the probability of having an accident is 4.73 times higher than if you walk around?

I only raise this question because so far in this series we have not really considered where, when, or even whether academic research should fit into evidence-based, management decision-making.  Leading academics in the field state that  -

“Evidence-based management is about making decisions through the conscientious, explicit, and judicious use of four sources of information:

  • practitioner expertise and judgment,
  • evidence from the local context,
  • a critical evaluation of the best available research evidence, and
  • the perspectives of those people who might be affected by the decision.”

They would argue that only option e. above would satisfy this definition of EBM and the highest grade of evidence would need to be based on randomised, control group trials (e.g. sending volunteers under ladders while a control group walked around).  That is all well and good but, in practice, we cannot afford to ignore any of the other options because they all have something to tell us about the sort of very human, management behaviour we are up against.

Option a., superstition, is at the opposite end of the evidence-based spectrum but is regularly relied on by some human beings to support their behaviour.  Think of top flight sports stars who have some ridiculous routine which they think is connected to their performance in some way.  Or those managers who just take a dislike to something, like ‘Six Sigma’, because they don’t like anything which is new, ‘not invented here’ or sounds like jargon.  Academics, and their research, will have as much of a problem overcoming these classic hurdles of change management as the rest of us.

Option c. could be viewed as the CSM (‘common sense’ manager’s) response because it is the most obvious course of action.  You don’t have to be a genius to work out that the ladder is there for a purpose and someone is likely to be at the top with tools and materials in their hands.  Option d. could also be described as common sense: it would be stupid to decide to take an action which has no perceivable benefit yet carries some risk.

Proponents of EBM though need to make even the best managers aware that the utility of their instantaneous, mental arithmetic (based on their logic, experience and senses) will diminish rapidly as the complexity of the situation rises.  At some point they have to consciously switch from one mode to the other – from simple to complex.  This is why EBM is so relevant for strategic HR because it has so many competing and conflicting facets – such as the balance between controlling and motivating people – that the complexity of the subject soon exceeds the outer limits of most managers’ common sense.

This produces some incredibly chaotic, idiotic, simplistic or even toxic behaviour.  Like sending lots of people on lots of training courses (or offering lots of ‘e-learning’) without asking too many questions about business objectives, learning objectives or individual patterns of motivation.  Or bonus schemes that decide, in advance, which percentage of people will receive a bonus that is so small as to be an insult.  Or wanting people to learn but chastising anyone who dares to speak out.  Or the client I had who decided they had ‘too many people attending too many meetings’ and designed an expensive, generic ‘solution’ that was bound to fail because no one actually produced any evidence to say how many meetings, and which ones in particular, were wasting peoples’ time.

Conversely, is it idiotic or good sense to put prospective job candidates through as much assessment as possible before making selection decisions?  Anyone thinking of applying to Goldman Sachs, for example, (currently No. 2 in the Top 10 in HCM) should expect to have to suffer between 15 and 20 interviews before they can hope to be hired and, if successful, they need to make sure they do not find themselves in the bottom 5% who are released every year.

GS has learned that this works for them and has become part of their HR strategy; one that is based on a virtuous, self-reinforcing cycle of success.  It seems to produce some very high-flying and high-earning executives who continue to make the company very successful. It is a judgement call backed up with plenty of contextual evidence in “the perspectives of those people … affected by the decision”.  Yet GS is also always eager to learn and so might well re-visit this approach at some time in the future. My guess is they would only look at academic research though if it held out the prospect of significant benefits and related to their specific context.

So what about GS’s competitors?  Why don’t they just commission some academic research to reveal GS’ secrets?  Well, for a start, GS would not take part (for obvious reasons) and even if they interviewed ex-GS executives, who were prepared to reveal everything they knew, that would not make the slightest difference to other banks who do not posses GS’s vision, history, ambition, strategy, culture, systems, processes – oh, and people of course.  It strikes me as simple, plain, common sense that when it comes to HR strategy copying your competitors is never the same as replicating what they do.

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