Replacing HR with HRT – the behavioural economic crisis in talent management

Behavioural economics is simply how our choices about what we do and how we do it – our decisions - affect performance, both hard and soft – results and reputation.

I never had much time for HR in my old corporate life. I was a commercial snob. They were on the margins of the business not seeming to understand what it meant to drive business and, frankly, being a bit irritating and time-consuming with their processes and procedures - so many loops to jump through. But now I see it differently. These poor undervalued, marginalised people professionals, experts in their field, never gave up trying to ensure that good people management and development decisions were made. While part of this was defensive, trying and keep everything legal, it was also to trying to build competitive advantage by getting the right people in the right places with the right support and culture to perform their socks off.

But now they’re not around, or they are fighting fires because there are so few of them left. In their wake, according to Harvard Business Review last month (Oct 2013), there is a significant problem for talent management which, in the hands of line managers, will result in a behavioural economic crisis.
HR used to put the rigour, balance and process in to these decisions but now we have no conscience challenging our assumptions, testing what the outcomes are that we really want; pointing out (with enormous diplomacy) that candidate ‘A’ might be a great bloke but Candidate’B’ will be the woman that delivers the result.

Men over-index on HRT

      HRT, in this context, is the Homosocial Reproductive Tendency – in other words the tendency to promote and recruit in your own image and in keeping with the current profile of a group or team. And men over index on this tendency*. This means white men will favour recruiting and promoting white men and compounds the issues of unconscious gender and ethnicity bias. So, the outcome of pulling back on HR will be the dilution of any gains in diversity. And here’s some stark evidence that this is already happening, even in our most successful businesses

        Since the Lord Davis Report in 2010, the aim of which was to address the lack of women in executive positions in the FTSE 350, there has actually been a decline in the number of female executive directors. With Burberry’s CEO Angela Ahrendts leaving for Apple we have now only 2 female CEOs in the FTSE 100.

         The fact is that the busier we are the more we rely on our judgement and our beliefs of what makes a good, great or just safe-bet for a key role. These beliefs are developed predominantly through the assimilation of the prevailing view and attitude of society, and rarely firsthand experience. Consider this - if you were in an aeroplane flying through a violent storm, how would you really feel if the captain spoke up and it was a woman’s voice? We all share the same default settings because that’s what we ‘know’, and the unknown – however logical - is just not what we go with when the chips are down. We know men are successful pilots, leaders, scientists but it’s only because that’s all there has really been till very, very recently and women remain the exception. Of course men are great leaders, they are also rubbish leaders and mediocre leaders and every shade in between.  But we assume that they are naturally a better bet than women. This is just how human brains work, but this is at odds with how we approach the question of making a business succeed. We must be bold, innovative, creative. We must do what others haven’t yet done. We must spot opportunities they haven’t identified and go for it. We must be externally focused and be prepared to make mistakes on the path to greater success.

•          Recent research has shown that the most successful innovation teams have a greater than 50% female composition**

So you must be as bold, as creative and as innovative in promotion, recruitment and project assignment. You must focus on what it is you want to achieve in order to be clear on the sort of talent you need and what sort of environment will enable that talent to thrive

•          Credit Suisse Research 2012: "In testing the performance of 2,360 companies globally over the last six years, our analysis shows that it would on average have been better to have invested in corporates with women on their management boards tan those without" ***

         Given we are human and our brains do prevent our judgement of people from being objective we must put in place check steps to give us the best chance of preventing behavioural economic damage – reputational damage and bottom line damage. And be really, really clear – you are not the exception to the rule (and neither am I). We must individually take responsibility - assuming it’s an issue for someone else is a classic response, as is, ‘it’s different here’. It’s not, and if you’re not acting on this issue then neither is anyone else.

        So, here are the simple Pause for Success™ check steps you should implement whenever you are making a choice about people (project roles, talent assessment, promotion, recruitment and even extra curricula socialising). The more literal you are about following these steps the more likely you are to succeed – and vice versa!

1.        Articulate the key capabilities you are really looking for; Articulate the traps you could fall into if you let your cognitive short cuts dominate your true objectivity; Articulate the type evidence that would indicate individuals have the potential to deliver the outcomes you want.
2.        Before you make your final decision PAUSE.
3.        Challenge any decisions that feel instinctive or gravitational (you are pulled towards them, but struggle to justify them). Go back over the first point and check you are being as objective as you can be.

This critical challenge is vital for business health and the pressure is now on individuals to get the right people, in the right places with the right support.

Try the process and let us know what your before and after decisions looked like, and what you have learnt about yourself and what benefits the new outcome will deliver.

* Eagly, A. and Carly, L. (2007). “Through the Labyrinth”. Published by Harvard University Press

** London Business School. The Lehman Brothers Centre for Women in Business (2008), “Innovative Potential: Men and Women in Teams”

*** Credit Suisse Research Institute (Aug 2012) “Gender Diversity and Corporate Performance”

Exit Stage Left - Female Talent

-           If you aren’t increasing women’s wages at least as fast as men’s ACT NOW

The poor old politicians of the UK and Europe are tormented.

McKinsey, Goldman Sachs, Credit Suisse and many others have shown them a significant strategy for step-changing economic performance– a recession buster. All they need is a critical mass of women at top of businesses. But how the hell do they make this happen any time soon when 40 years of Equal Opportunity legislation hasn’t done it?

Recent quotas and targets for female Non-Exec Directors on boards of leading companies have resulted in an apparently promising shift in the number of women who attend the board meetings of leading companies in various countries in Europe. But those are the only days these women are in the building, because, unlike Executive Directors, they work on, not in the business.
The number of female Exec Directors is static – and very, very small. So there aren’t the role models to encourage the up-and-coming female talent to hang on in there, demonstrating that it can all be worthwhile. So, there aren’t the individuals who have felt the pain of trying to find a route through the labyrinth to leadership that women face, who could champion the changes needed to make the journey more straightforward and tolerable for women.

And, what of the next layer down that feeds the boardrooms? Think tumbleweed, not female talent. Leading companies have recruited non-execs but they’re not succeeding in bringing their own existing female talent up through the business.

One of the reasons for this is linked to the fact that the vast majority of women don’t ask for pay rises and promotions, or the high-profile assignments that get them noticed. Unlike men, they don’t apply pester-power techniques, routinely engaging in “pay-me-more / promote me, or I leave”, negotiations. Why does that matter? Because if you don’t proactively give them what they merit without being asked, they won’t tell you they’re unhappy - they’ll just leave.

Maybe your competitor will gain.

However, more and more women now are setting up on their own. If the corporate world can’t reward their talent and give them a working environment that works for them, they’re choosing to make their own culture and rewards. And, my God, they’re making it work. Whereas the UK gender pay gap stands at 15.5%, the UK’s female entrepreneurs are reversing that imbalance and earning 17% more than men**. In the US, research has shown that women -owned firms (>50% female ownership) have grown at twice the rate of all privately held firms in the past two decades****.

That's a huge win for them as individuals, a win huge for their business. Oh, and a loss for you... and your shareholders

In a recent selling meeting, I was asked how the Board could possibly be convinced to introduce the Women’s Sat Nav to Success™ given one of the outcomes is that women cost more money through the pay rises and promotions they secure. The answer is clear. The short version is - can they really afford not to. To spell it out - the opportunity costs arising from the loss of their talent [back to Credit Suisse]; the costs of recruiting and training their replacements and the reputational costs will be far higher.

So, companies must learn how to read the deeper implications of the gender pay gap for their business. They must understand the implications for their bottom line, their shareholders and our economy of not securing the female pipeline. They must invest in developing the capability of women to speak up, and when they do, for their voices to be heard, and their contributions valued –in every sense.

* The Credit Suisse Research Institute. Gender Diversity and Corporate Performance. Aug 2012

** Barclays Wealth & Investment Management. Survey January 2013
***Eagly and Carli, “Through the Labyrinth”. Harvard Business Press Aug 2007

Guest Blog: What do my pelvic floor and job prospects have in common?

.

 .... I fear they’ve both been shot by having kids

I recently interviewed for a new job in Switzerland.  The interview was held in London and to my delight, the conversation quickly advanced to discussing details about relocation. Not only was the job in my dream location, but the role and the boss seemed fantastic.

As the conversation progressed, a second interview with another Director was suggested and would be set up the following week. The plan was to fly me to Switzerland for the next stage. And on the topic of relocation, I was told, “It’ll be no problem initially as we would just put you up in a hotel until you can find somewhere to live”. 

Yep, I definitely thought the interview was going well. I replied that ‘I’ was actually four, as I have two children and a partner (and I’m pretty sure there are morals, if not laws, about just skipping the country without them).  Surprise was quickly followed by a commitment to get HR to contact me next week to help with knowledge of schools etc.

I left Kensington beaming and I travelled home excitedly researching Swiss properties and schools (and imagining my impending fuller figure from a new diet of fondue and chocolate). Premature? Hmm, maybe, but it was a pretty good way to leave an interview wasn’t it?

I spoke to my Dad that evening, who was concerned I had dropped the ‘I-am-a-Mother” bombshell.  I reassured him, stating that if it were a problem, then the role and company would not be right for me. (And anyway, a next interview was in place and HR would call me, so that clearly wasn’t an issue).

·         The first week passed. Must be very busy.

·         The second week passed. Yes, very busy indeed. And maybe ill from doing too much, propping up an incomplete team.

·         Week three. Perhaps they’re now on holiday. Or maybe the illness is more serious? How selfish of me to expect contact when they’re that poorly!

My over zealous imagination would have seen the dog dead, mother infirm and both arms in plaster, unable to lift the phone (let alone croak out the details of the next interview as advancing glandular fever would be ravaging the vocal chords). I knew something must have happened.

So I called.

Within 30 seconds I was advised “that despite my brilliant CV, unfortunately it’s not good news.” Someone with more relevant sector experience had been found.

How disappointing! The next 16 minutes & 23 seconds of the call were filled with advice my ‘dream boss’ had gained following our meeting;

1.       School opening times are a nightmare (closed Weds & every lunchtime). I would need a full time nanny to cope, especially as you can’t always leave work at 5pm.  And watch out, as an employer will be able to assess if you can afford an expensive nanny by your salary and judge if I’d be able to do the job.

2.       Then there’s shopping, which is not 24/7 like in London. Working, managing a kids’ schedule and doing the shopping would be incredibly difficult.

3.       Don’t commute! Live and work in the same place, as adding a train journey to points 1 & 2 would just make things impossible, as transport links aren’t very good.

4.       And consider not mentioning your family to the next interviewer. Not that that had made any difference in this case of course, but you never know.

During the call I felt the need to interject. I have managed to juggle kids, childcare (at a painful £1,350 per month), shopping and have thrown in an hours’ commute for good measure, whilst working in demanding roles in London. Also, international schools are open all day and I have a partner to share these things with.

I wondered how Swiss families managed to work, have kids AND eat all in the same week! Those professing a higher quality of life in Switzerland were clearly mistaken. We parted the call exchanging wishes of future success.

It took me about 10 minutes (and a glass of wine) for a conspiracy theory to take hold in my head. Was I really pipped at the post by someone with more relevant experience?  Or (please no), was my Dad right?

The role had been re-advertised that morning, so had it really been filled? My partner asked me if I had any regrets in having children, as he believed the job would be mine if I had less ‘baggage’.

Amongst the disappointment of my Swiss bubble being burst, was disbelief. Yes, time had elapsed since the interview, but it hadn’t been left as “we’ll be in touch”, but rather with a pledge to fly me over and manage initially with being put up in a hotel.

To top it all off, I was shocked at how I’d been misled.

Shock may seem a strong word to use.  But you see, my interviewer was a woman. An English woman. And about the same age as me. A fellow member of the 30% club*, which surely boasts the more enlightened in society, striving for more women in business and to break barriers of gender-biased thinking?  Shocked that surely I hadn’t been just been ‘dissed by the sisterhood’ for the beautiful baggage I have created by way of a family?

 

Would I have been less affected if I had been dealing with a man? Possibly.

Would I have been as open about mentioning my family in the first place? Probably not.

Knowing that I may have been less upfront if I were talking with a man is telling.  And I clearly had different expectations of how that information would be treated.  I obviously had preconceived ideas on the level of empathy or degree of judgment I would be afforded in speaking to a fellow woman.

All of this is academic. As after all, I was out-shone by a candidate with more relevant experience. Re-advertising the role must have simply been an administrative error on their part.

One thing I have learned is to err on the side of caution. In future I will keep information sharing strictly to that concerning the role, as I fear the art of spotting those with stereotypical views on working mothers, seems as challenging as pinpointing that elusive pelvic floor muscle.

* The 30% Club was founded by Helena Morrissey and consists of individuals “committed to bring more women onto UK corporate boards, by supporting and encouraging successful women in business.”While the author of this blog is keeping her identity hidden, we'd both love to hear your thoughts, views, experiences. What would you have done and why? Have you faced this dilemma from either side of the table

If not targets, teeth...

The great McKinsey has spoken ....

“Treat gender diversity like any other strategic business initiative with a goal and a plan that your company follows up at the highest levels over many years“ (Nov 2012 “The Global Gender Agenda”)

 But, for sure, the response from the likes of the Government, the CBI,  individual company boards and, sadly, the 30% Club will continue to be:

          1.     “We can’t possibly put in targets or quotas – it’ll upset the women who get promoted as they’ll think they’re just token”.

 You know what – they’ll get over it (or so the post-quota legislation female leaders in Norway tell us) – they’ll be too busy doing what they love and have been over-working and over-performing all their careers in the hope of.

               2.     “The boys will be upset and throw their teddies out of the pram.”

 Try explaining that all the evidence says that companies do far better with a critical mass of women at the top than those that don’t*; that teams that need to innovate are at their most productive when they have at least 50% women** and that in a global economic melt down its a no-brainer to invest in out-smarting competitors.

OK, fine, if you don’t have the courage to commit to the strategic benefits of delivering gender-diversity within the company plans, follow McKinsey’s plan B:

“Where targets are rejected, other mechanisms “with teeth” are necessary”

And where should you apply these teeth? To the communities that feel the pain the most:

•        Those who are responsible for delivering business performance: LEADERS
•        Those that will join your competitors (or set up on their own) if you keep over-looking their actual and potential contribution – WOMEN

Leaders can’t manage what they don’t know – right? OK, so they need to know whether or not their decisions on teams and talent are balanced, or whether unconscious gender bias towards the pale male is negatively affecting results.

Start here – https://implicit.harvard.edu/implicit/research/ and get your leaders to assess their unconscious gender bias. Guaranteed - they’ll be shocked. I was when I measured mine and I've been working on gender diversity full time for 7 years, and I was born a feminist (gosh, did I say that out loud?)

Then get them to identify the range of decisions this could impact and then task them with identifying sustainable, measureable mechanisms to address them.

Women need dedicated support with teeth, not patronising presentation skills workshops. They face a labyrinth of barriers, detours, dead-ends that their male colleagues don’t. However, women often resist support, and HR worry that it’ll be discriminating against others if they provide support just for women. Get over it!! Use these teeth to bite the bullet. Women do not get there on merit because of this unconscious bias (there own bias included) – so if you’re going to manage talent to ensure it’s all utilised then make it happen.

Here’s what should be on the list of women’s development strategies with teeth:

•       Assessment: to identify where they are against the range of labyrinthine challenges (defined within the Women’s Sat Nav to Success™) and to create individual development plans
•       Coaching  (against pre-defined objectives for their progression)
•       Senior sponsorship (to champion individuals to secure pivotal assignments, higher profile and more strategically significant, stretching work)
•       Training to understand the nature of the barriers and strategies to overcome them (www.womenssatnav.co.uk)

As McKinsey says, 

“successfully transforming gender attitudes and performance requires much greater leadership attention and dedication than even committed CEOs and top teams are currently giving to it”

So, in the absence of the leadership courage needed to embed binding targets (in the face of overwhelming evidence of the economic need for delivering diversity) “mechanisms ‘with teeth” are necessary’”.
Here's to the future...

*McKinsey, Goldman Sachs, Credit Suisse, Catalyst reports between 2007 and 2012

**London Business School “Innovative Potential: Men and Women in Teams” 2007

"I just don't feel valued"

If I got a fiver for every time I heard a woman say "My results should speak for themselves - I should get rewarded based on how well I'm doing"...I'd have retired at a shockingly young age.

Are you one of the women who could have been contributing to my early retirement on this thinking? Or are you one of the 3.7%* who habitually give employers the opportunity to stop their talent boosting their competitors performance, by asking for an improvement in their package? 

Here's a sobering question - when did you last ask for a pay rise? Really, think about it. How long ago did you actually ask for more money? Not just pitch up and attend an appraisal with all your homework showing your multitude of development areas balanced by a token strength. In honesty, have you asked at all in the last 5 years?

And in all of that time politely waiting to be spotted and rewarded for your diligent contribution, do you think the boys (your male colleagues) have been doing the same thing?

You are not allowed, at this point, to state the defense for the organisation -  "it's not a good time because of the economy...cut backs... the market...the  full moon....there's an 'r' or an 'a' or an 'e' in the month".  Nor are you allowed to reel off the standard list of personal reasons - "I'm not quite ready yet...when I've got / done / achieved / experienced x,y and z then it'll be different".

Do you think or say these things or something along these lines? And do you really believe these reasons are valid?  

The fact is that women individually carry the burden of contemporary perception of the role and value of their gender in society and in the workplace. (A perception built throughout history, which remains robustly intact despite a few decades of equality legislation in the west). The impact is that we feel, subconsciously, worth less than our male counter-parts. We often feel grateful for the job we've got and the pay that we are given. Many women say to me, "I''m just waiting to be found out, as I feel like a fraud". The implication, in our minds, is that if we go and ask for a pay rise we are asking to be told that we're actually as rubbish as we thought,and not only are we not getting a pay rise, but that we should get our coat instead, and do the organisation a favour by leaving!!!

 So, we don't ask. But we must. 

 You must ask. You must make it a habit. You must know your market value and be clear on alternative employers. You must separate your capability as a unique individual (who happens to be a woman) from this sense of lesser-value that hangs above us, inside us and around us.This is far,far, far from easy, for deeply-seated psychological reasons. But be very clear - these reasons are not connected with your capability, your value or your potential. By definition, as psychological reasons, they are all in the mind!

So, here's my top tip to ease your way into this new habit...

...START SMALL & SAFE

Build up your confidence and a body of evidence that proves it's OK to ask by starting with  small requests. Re-frame the conversation - you are giving your employer opportunities to continue to benefit from your talent. They'd hate to lose you**

Ask to go on a course that hadn't been planned into the budget; ask for a piece of software to support your role; ask to lead a project. Notice what the result is, how the request was received and the truth about how difficult it wasn't in reality.What can you learn from that small, safe experience? And, what does that inspire you to do as the next step up?

Warning: do not start the conversation with "I know it might be a bad time but....". Leave the reasons why not to the person making the decision (they won't be as creative as you... and they may have been waiting for you to speak up for so long that they'd almost lost the will to live!)

In fact, women I interviewed in the creation of The Women's Sat Nav to Success™ told me wonderful stories of responses to finally asking for assignments or promotions, along the lines of "thank God, we thought you'd never ask and we'd have had to settle for someone else [less]".

And, the most common feedback from our Fast Start Seminars is the news of promotions, pay rises and sponsorships - and within days and weeks of the event!

So, go and ask. Tomorrow. Then write and let me know about your successes

*estimated percentage based on the proportion of women who say they have asked for a pay rise in the last 5 years when asked this question during our Women's Sat Nav to Success™ Fast Start Seminars (http://www.synapse-li.co.uk/index.php/women/our-approach)

**A note to employers: often the first time you'll find out that a female employee wanted a pay rise is in her exit interview. If she is waiting to be offered a [good] pay rise and its not forthcoming, she wont ask, she'll become discontented and then leave.

Not Being Heard

Have you ever had the situation when you’re in a meeting and you put forward a solution to something that’s being discussed, and it’s as if you were in a parallel universe, not actually the same meeting?  No one responds to what you’ve said. It’s as if you hadn’t said anything. And then, a few minutes later one of the guys says exactly what you’d said. And this time it’s different. “Great idea Mike”, “we need to build that in”, “fantastic solution” “you’d better get started on that straight away”. Your jaw and your motivation is on the floor. Your idea, your opportunity gone.

If that’s happened to you, you are far from alone. In fact, you’re in great company. Most of the top women I’ve interviewed in the process of developing The Women’s Sat Nav to Success™ have recounted their stories of this happening and what they’ve had to do be seen, be heard and be respected for what they bring.

So what’s going on? The content of the suggestions was the same, but the gender was different.

There are some critical dynamics in human psychology – our behaviour and how our brains work - that explain why our voices are not heard.

Firstly, we see what we expect to see. If you’ve ever sailed passed a turning that you should have taken because it was on part of a route you use regularly, you’ll have experienced this. If you’ve ever put down your keys but not found them again although they were staring you in the face because they weren’t where you expected them to be, you’ll know what I mean.

And this is the way that our brain works. It’s an unfortunate bi-product of how it makes sure it’s not getting clogged up in details that we don’t need. And it applies to what we hear as well.  We don't hear what we don’t expect to hear.

I don’t expect my 11 year old daughter to know how to mend my computer, so while I’m swearing at it and fighting the urge to throw it out of the window I’m also dismissing “Mummy, have you tried clicking this?”. If I finally calm down and try what she’s said after everything the older and wiser Me can try - then, bingo, problem solved. So much time and temper wasted – if only I’d considered her worthy of listening to. If only I’d valued her intelligence, her experience with IT and her less limited thinking.

So that’s the second part – my stereotype of an 11 year old is that she can’t help solve “grown-up” problems.

The workplace schema*  (in the majority of cases) is that men have the answers because they’ve been the only source of answers in the past, and therefore we expect to listen to them. They are the default setting. So we don’t pick up on what is being said by people we don’t expect to have the solutions.

I’d love to hear your examples of when and where you’ve struggled to be heard and in my next blog, “Making Yourself Heard”, I’ll talk about what to do about it.

* A schema can best be understood as a dynamic stereotype; a stereotype of an event or process.So, if the stereotype is a leader then the schema is leadership (how it is done). We have a schema of how a meeting works or what the experience of going to the cinema involves. 

I've landed!