Human Resources and Organizational Resiliency
by Linda Gravett, Ph.D., SPHR

If you pick up the Wall Street Journal or Fast Company magazine, you’ll read about a handful of companies that constantly have the ability to bounce back after hard times and setbacks.  On the other hand, there are certainly a plethora of examples of companies that fold under pressure and adversity.  I’ve observed that the companies that have the resiliency for sustained success have some characteristics in common, and one of them is a Human Resources Department that is strategic, responsive, and creative.

Organizations that are planning to be in business 50 years from now have learned to make the transition to a global market economy, even if they’re small companies.  Companies that have leveraged their initial momentum, such as 3M and Hewlett-Packard, have developed a corporate culture that embodies a strong set of core values and ethics.  Individuals within the company understand, embrace, and live the company’s core values and have a firm grasp of what they must do on a day-by-day basis to support the company’s vision.

I thought it would be interesting to determine whether there are patterns across successful, resilient organizations that would inform start-up or poor performing companies.  This Spring my colleague Robin Throckmorton and I surveyed U.S. companies that have been in business for 15+ years (survey attached) and did discover some commonalities among them.

One-fourth of the CEO’s in the surveyed organizations have a sales background, with the other backgrounds ranging from Finance to Accounting to Human Resources (!).  In follow-up interviews, I asked CEO’s with a sales background how their experiences affected their approach as the company’s top leader.

The CEO’s I interviewed acknowledge that they tend to be numbers driven and results oriented.  When making decisions, they want to gather data and facts before taking action.  Prior to taking on a new project or developing a new product, concrete success criteria must be established.  Their primary interest revolves around customer identification and qualification, and these CEO’s expect their staff to follow that lead.  Their conclusion is that a key factor in their organization’s success and staying power is the ability to make their customers feel like they’re the only customer the company has.

One-fourth of the surveyed companies have had a diversity initiative in place for at least a year.  Key activities across these organizations are:  conducting a culture audit via survey and follow-up focus groups at least every other year; ongoing educational workshops on topics such as teambuilding and conflict management; and establishment of diversity councils to guide diversity efforts.

In follow-up interviews, HR staff in these companies reinforced the importance of aligning diversity efforts with business objectives.  They strongly believe that the connection between establishing core competencies required for organizational success and seeking and developing a diverse, qualified workforce is strong.

One-third of the respondents have had an ethics initiative in place for over a year.  The initiative components include:  establishing core values; communicating core values through recruiting, orientation, training and performance management activities; and developing and communicating written ethical guidelines (code of conduct).

In follow-up interviews, these company representatives said that their customers, employees, and the community clearly understand their stance on ethical issues.  This transparency and constancy of purpose have been a significant factor, they believe, in their organizations’ staying power admidst recent negative images of Corporate America.

The most often cited core competencies for leaders were (in descending order) visioning, communications skills, and (a tie) problem solving and decision making.  The reason provided for visioning as the most critical skill for top leadership is that innovation and creativity are required to move the company “ahead of the pack” with new products and services.  Otherwise, the organization will start to look like too many others and won’t be appealing to customers who want leading edge ideas.  Not surprisingly, “communications skills” was perceived as the second most critical competency.  Visionaries must be able to articulate why their ideas will succeed and entice colleagues and employees to pursue the dream along with them.

Half of the surveyed companies develop key talent through first line supervisors.  In follow-up interviews, CEO’s said that this level of staff is critical for the organization’s success in terms of people development.  First-line supervisors in these companies are viewed as an integral player in enhancing employee morale and productivity.  Their caveat, not surprisingly, is that supervisors must be carefully selected and trained in the areas of performance management, progressive discipline, and managing diversity.

One-third of the surveyed companies use these metrics on a regular basis:  health care cost per employee; turnover cost per employee; and operation expenses ¸ full time FTE’s.  Those that measure turnover cost rather than turnover rate indicate that appropriate interventions aren’t likely to take place unless top leadership is fully aware of the high cost of turnover.  The operating expenses to FTE ratio is often shared with employees in these companies, as part of regular discussions about how their role impacts the company’s “bottom line”.

Human Resources can play an integral role in ensuring that the corporate culture includes the expectation of excellence and the spirit of creativity and calculated risk taking.  HR can serve as a catalyst for change and ensure that the company’s leaders develop the skills, knowledge, and competencies that model “the right stuff” for all employees.

Perhaps you’re thinking at this point that this is too lofty a goal for a department that’s primarily responsible for hiring, legal compliance, and compensation.  I’m not forgetting that those functions are part of the daily responsibilities of Human Resources.  There’s a higher calling for us if we’re willing to be receptive to expanding our expectations of the Human Resources role.  Let me give you some “for instances.”

Human Resources can assist in the design and implementation of a training and development initiative that supports the strategic objectives of the company.  Rather than efficiently schedule and facilitate a specific number of routine management training programs, HR can instead conduct an in-depth needs analysis to determine where the critical gaps exist between current skill levels and competencies and skills needed to take the company to the next competitive level.  Effective training has a core component that teaches process improvement, problem solving, and critical thinking skills.  Effective training focuses on results, not activities.  The foundation of any training, however, should be the constant, steadfast commitment to the company’s core values. 

Economic conditions, competition, and the marketplace may be dynamic and organizational leaders may need to lead a build a commitment to change.  However, the core values are the bedrock upon which change is built.  If this sounds like I’m suggesting that Human Resources should act as the corporate conscience during good times and bad, you’re right:  this is exactly what I’m suggesting.

The corporate “contract” for employment has changed over the years.  Rather than an expectation of lifetime employment at your organization, employees can be provided with an opportunity to develop skills and competencies that will take them throughout their career.  Human Resources can play a pivotal role in developing a balance between organizational and personal needs so that skills and competencies the company requires for excellence are embodied in employees who are growing, contributing, and developing skills to ensure their individual success.

In addition to technical skills training, Human Resources can lead the organization towards education in areas such as conflict management, team problem solving and decision making, and building collaboration within a diverse workplace.  I’m not recommending that Human Resources should act in a paternalistic way and “tell” managers and employees what they must do in order to be successful.  I’m suggesting that Human Resources become a more strategic planning partner with the leadership of the organization to learn what together they can do to promote, build, and solidify a culture of resiliency.  I say this with one qualification.  If you want to be heard by the CEO and CFO with regard to your ideas for organizational resiliency, you must speak their language – the language of numbers.  Just consider how helpful it is to you when line managers and executives take the time to learn HR jargon (i.e., FMLA, Title VII, regrettable turnover).  The more you learn about your business and pertinent terminology that reflects company activities, the better will be your ability to “sell” interventions that you know from experience or benchmarking will help your company remain viable. 

If you have questions or comments on this article, I’d love to hear from you!  You can contact me at Linda@gravett.com.