Maybe this post will get me back in the good graces with McKinsey after my rant about their HR's Dearth of Talent in Europe article a few weeks ago. Anyway, this new article called Building the Healthy Corporation, focuses on what companies are doing to ensure their long-term health.
Basically, this article boils down to being able to manage of the dilemma of short vs. long term growth. This really is not a new business challenge. These are the typical dilemmas senior management teams are dealing with every day. (If you have quarterly reviews with your shareholders like we did at Oskar/Vodafone, you quickly learn that short term results are as important as the long term results. I don't think that will ever change...)
This dilemma seems as old as the hills to me and there is no either or solution. It is a both and scenario for executive teams. You have to be able to do both even though they may seem inherently contradictory. You have to also able to show and prove to boards that you encompass an overall "systems perspective" in how you are approaching your short and long term results. Boards want to see the connected picture and it is the senior's team job to help them see it. (At every quarterly board meeting at Oskar, each member of the executive team reported results and long range views for their areas which provided an overall longer term company view.)
It's the execution of the long term initiatives that often gets difficult when the realities of the day-to-day get in the way. The following is so true:
"What underlies the breakdown of many long-term initiatives is the tendency of managers to defend the performance of their own silos instead of debating and helping to shape action across the whole organization. In silo-structured companies, managers typically argue about the virtues of one metric as opposed to another (especially if transfer prices are involved), deflect debate to other parts of the organization, and set up barriers to change. This kind of behavior isn't deliberately malevolent; it is driven by deeply held beliefs about a manager's roles and boundaries and reinforced by the idea that the body corporate is the sum of many discrete units, each with independent characteristics, that should be monitored with a battery of metrics. Unfortunately, this mind-set undermines any systemic understanding of how to manage activities coherently, across the whole organization, to underpin healthy growth."
HR in partnership with the senior executives and CEO needs to be able to identify where and why this happening and implement approaches to put this behavior to an end. (New mind-sets are required - change before you have to!)
McKinsey notes five areas of focus that contribute to overall performance and health: strategy, metrics, communication, leadership and governance. The things that stand out for me and that are important for HR professionals to be considering in the future of their work include:
Strategy: Have a balance of short-term and long-term initiatives. (This is a good one because I know that in the majority of places I worked we had so many initiatives and they would all be due to hit the biz at the same time and of course the biz couldn't handle it all at the same time. It causes "initiative whiplash." Senior teams need to be more realistic in the timing of initiative roll-outs and focusing on what is really important. They usually pay lip service to we need to focus and prioritize, usually talk about how they have to do, and nothing ever comes off the list. (Is this a company's addiction to activity for activity sake?)
Metrics: Narrow it down and make sure there are talent retention and management depth metrics - ie, percentage of employees available for promotion/movement: ready now, ready soon and ready later players; percentage of top talent on retention programs and comprehensive development plans.
Communication: Positioning of key messages to analysts and employees are not only about results but about the longer term vision and where the company is going. There are so many ways that this can be happening now given the rise of new collaborative technologies such as wikis - this could be a good way to capture input, ideas, feedback throughout the business as input to strategy development and business planning. It could give the company a more "holistic" frame of feedback for all parts of the business. It also creates the opportunity for bottoms up feedback and capturing the voices of those who are interacting the most with customers and those who represent the company's brand externally.
Leadership: In addition to traditional leadership development programs which I will always argue are important - the skills of being a good manager, the ability to shape and articulate vision, the ability to be aware of yourself and your impact on others, the ability to really care about the success of others - leaders need to have an holistic view of the business (Marketing, HR, Finance, etc.) and a variety of hands-on experiences running different functions and/or organizations.
HR should be able to assess how capable the organization is to handle the kinds of initiatives required to be succesful in both the short and long term. Do the people have the right skills, capabilities and mind-sets needed for the long-term? How will you plan to develop not only skills but expand mind-sets? How do you push back and say there is too much going on and the workforce can't absorb any more? Do your HR initiatives support and drive the strategy? Do your development programs foster what is required for future success? Do your comp programs align with the strategy from both a long and short term perspective? Do you have the right technology supporting the notion of inclusion and feedback? Does your culture reinforce and hold managers accountable for being good managers and leaders? Do your communication plans align with both the short term and long term view? Do you have the right metrics in place? Does the culture promote health living and lifestyles? if not you might want to think about that if you introduce an overall health metric!! Maybe you will want to keep apples in the office for all employees as a reminder about health...their own and the company's.