CIPD Hackathon – Hacking HR to Build an Adaptability Advantage; A reward perspective

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Introduction

The UK’s HR professional body, the CIPD has recently set up a “Hackathon” to look at how HR can build an adaptability advantage.  A good idea with an interesting approach.  There appears to be limited consideration of how reward will support and enhance the approaches.  Reward has powerful implements in its tool kit to support change.   So I set my mind to an analytical structure to think about building adaptability advantage.

Wisdom of crowds – a challenge

I am a great believer in the wisdom of crowds.  Therefore I throw a challenge out to all those interested in reward, change, innovation and HR to generate ideas as to how the reward toolkit can be used to support adaptability advantage.

The reward blockers

Reward is largely designed to support existing behaviour.  So, in some organisations, it is used to support the status quo.  Rewarding behaviour that supports the organisation’s ideology and putting reward power in the hands of managers who have an understandable vested interested in supporting the status quo.  The challenge is to design an analytical reward framework that supports creative destruction, moving on from the status quo to a new organisational state and ideology.

A suggested framework – resource based strategy

I have used the resource based strategy framework as a starting place.  I know this may be consider a little old fashioned, but it works for me and if you have a better structure I would be very pleased to hear about it!  Using the resource based strategy approach we look at:

  • Resources
  • Capabilities
  • Competencies
  • Value Chain

that support adaptability and how we can use reward to support these factors.

Resources

What are the resources that support adaptability – how do we identify and cluster them?  Clearly people are the key.  But, what sort of people?  One could argue that it is the mavericks and free thinkers that lead the charge on adaptability.  Yet these types of people do not always fit or engage well with the corporate environment.  How do we reward the disrupters in our organisation without descending in to some Faustian pit of chaos?

Capabilities

How do we build organisational and personal capability to support adaptability?  What would the reward structure supporting such capability building look like?  Would we know it if we saw it, how would me measure it?  Organisational learning and routines would be key in building these capabilities – but it has always been an interesting question in the management of knowledge as to how we measure and reward organisational learning?  (Even ignoring the concept that organisations do not “learn” people do the learning).

To sustain competitive advantage our capabilities in adaptability must be hard to imitate – otherwise everyone will copy us and probability at a lower cost.    So we have to reward not only specific capabilities but those that are hard to imitate.  They may be hard to imitate because they are specific to our corporate environment – but to gain competitive advantage they must be so much more than just organisationally or sector specific.

Competencies

The competencies we need should flow out of the capabilities – or perhaps not?  What specific, observable, rewardable competencies are required and with what and how are we rewarding them?

Value chain

What are the internal and external value chains using our unique resources and capabilities that lead to adaptability advantage?  We must look to our clusters of resources and capabilities and how these are combined to give our competitive advantage.  What reward tools do we use to strengthen our value chains and the activities that support them; perhaps across enterprises and organisations, turning rigid barriers porous?

Conclusion

There are far too many questions and too few answers in this blog.  If the reward perspective; which is incredibility powerful in encouraging behaviour change can be harnessed, using the wisdom of crowds, to the task of “Hacking HR to Build an Adaptability Advantage” we will not only add enormous value to the process; but we will be key in ensuring its enduring success.  Over to you O wise crowds.

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Visualisation – the new future of reward data presentation?

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Introduction

I am a firm believer in serendipity so I quickly picked up on an article in PCPro magazine on the subject of data visualisation.  Wikipedia defines data visualisation as “According to Friedman (2008) the “main goal of data visualization is to communicate information clearly and effectively through graphical means”.    When I explored the area in more detail I found a wealth of data visualization tools on the internet.  The graphic above is a data visualisation of my four hundred odd LinkedIn contacts.  My next thought was how could this be applied to reward?

Visualisation of reward data

The first major area that could use the visualisation approach is global market data.  How many times have we reward professionals had to present international reward data; often in forms of rows of tabular data.  Would it not be so much better if we could produce a visualisation of the global data?  This could show geo-mapped data at one level or perhaps by industry sector or level of employee.  There are many interesting permutations to explore. 

I have seen a number of interesting info graphics around UK pension data; this can be both a source of data rich information as well as being pretty impenetrable when presented again as tabulated number or on a PowerPoint presentation.  Data visualisation could help immensely in communicating key data to management and employees.

Interactive data presentation

One step further on from just visualising data is to make it interactive so managers can set their own parameters for looking at the data.   I came across one visualisation tool that took your favourite book or musician and produced an info-graphic of similar styles and types.  Could something similar be used for flexible benefits?  The employee could drill down the visualisation of options to help make the choice of benefit and level a much more exciting journey than the normal drop down lists.

Mission to explain – the reward narrative

Those of you who read my blog will know that I have a mission to explain and communicate the reward narrative.  To open up the black box of our profession and put tools in the hands of users so that instead of reward saying “here it is, take it or leave it” we realise that most of our employees are sophisticated consumers of our reward products and are capable of making informed choices if we present those choices in an intuitive and interesting way.

Conclusion

Data visualisation is not new although it is entering a new level of usability as computes become more powerful and the increasing use of tablets lead to a more visually intensive world – not to mention the alleged shorting of attention span in our internet world.

Data visualisation is, in my view, an important tool in increasing the power and relevance of our reward narrative – and it can be quite fun as well. 

  

Reward and Rock and Roll

ImageWhat are the similarities between reward and rock and roll?  At first glance not very much.  But the pending publication of Peter Cook’s new book “The music of business” got me thinking.  I first came across Peter when I undertook the creativity and innovation module of my MBA.  He was leading an improvised jam session to demonstrate the application of techniques of innovation and creativity.  I have, and still do, find his approach to business strategy meaningful, impactful and most of all, fun. 

Peter Cook is a polymath.  An unusual man who straddles several different “worlds” and not only brings them together but is able to translate and communicate the lessons from one field in to other fields of his expertise.  He is a gifted musician, educator consultant and social media expert.  A real renaissance man.

What has this to do with the world of reward?  There are many lessons from the world of rock and roll that could be applied in reward (albeit at a somewhat lower volume).  If we take creativity and innovation we see the examples of David Bowie and Kylie Minogue who constantly reinvent their persona to meet current tastes and trends.  We in reward need to constantly reinvent our products, communications and approaches to meet the demands of our challenging client base not to mention the changing agendas of regulators and rule makers.

To me, a large part of reward is the communication of our message.  Rock stars (or perhaps their management) are masters at segmenting their audience and thus their customers by all the normal demographics such as age and country. They then communicate short, impactful messages about the products they have produced to sell to their chosen demographic. We also need to segment our client base so we can provide meaningful products and messages to get the best bang for our buck.  I use the Prato rule – 80% of our impact will come from 20% of our communication.  Getting that 20% right will make the difference in our reward space between success and failure.

Leadership is another key area in which Peter is a specialist.  The lessons in product, strategy and marketing leadership in the face of changing environments, technologies and fashions by the rock industry (look at the move from CD’s to MP3’s)  can be usefully and creativity learned and applied to our own fields.  I have written before on how social media is going to not only change the way we communicate our message but will change the very products that we offer our clients.

I am a strong believer in using creativity in my reward work.  Part of creativity is being willing to move outside our comfort zone, outside our normal models of thinking and open ourselves to the unexpected.  Peter Cook’s new book and his general approach is about exactly that.  It is about moving outside the normal MBA approaches to business and to look to other industries and ways of doing business to allow us to think creativity about both our day to day activities but also about wider issues of strategy formulation – and perhaps to do it in a fun and interesting way.   Now where did I put my Stratocaster?

2013 – a crowd pleasing year?

In December “A box of Birds” by Charles Fernyhough was published.  I was particularly interested as I was one of about three hundred people who had “crowd funded” the publication of this book.  Fernyhough got his book published and I got a signed first edition.  I was speculating if this new economic model could be extended to Reward?  Executive remuneration is supposed to be crowd decided by shareholders via the Remuneration Committee.  It is a model that does not currently seem to work as well as it could; although this has far more to do with the increasing number of stakeholders, such as shareholder advocacy groups and politicians who all feel they should be part of the crowd sourced decision making.  It may be a way forward, but there will be a lot of pain before the model works in a way that is less combative and better at producing “good” outcomes.

The growth of social media, social networks and crowd sourcing are all going to impact on reward, often in an indirect way.  Not being part of strong, extensive, international social networks will leave us marginalised bit players in 2013.  Reward professionals need to be leading the way as opinion formers in our sphere and the best way to do that is through the propagation of good practice through social media conduits.  Combinations of existing and new technology are going to take us by surprise in 2013; we must work hard to be in the vanguard of change rather than following up in the rear echelon.

Many of the other issues facing us in 2013 are spawned by the poor economy both in the UK and worldwide.    The platoons of economists tend to skirmish over the fate of inflation in 2013; but if I was a betting man I would be look for odds on an outbreak of inflation.  This gives special challenges to reward, given low growth and even lower budgets how can we marshal our pay resources to give the biggest bang for our buck? This is at a time when real living standards have been in retreat for the better part of five years, if not longer.  Non-cash rewards and recognition activity continue to grow in importance in such a milieu.  However, addressing the core issue of falling living standards is more than just an economic question; failure risks further collateral damage to our social cohesion.

In 2013 the differences between rich and poor will again be greater and more visible.  We have already seen the outward manifestation of the damage to social capital by way of riots on our streets, greatly reduced political legitimacy by way of very low turnouts, for example in the election for police commissioners and greater apathy if not hostility towards politicians; seeing Osborn being booed at the Olympics is a demonstration of the depth of ill feeling.    I still remember studying sociology in the 1980’s – Emilie Durkheim talked of anomie, a social condition characterized by instability, the breakdown of social norms, institutional disorganization, and a divorce between socially valid goals and available means for achieving them.  We in Reward must look to reflect societal concerns as we scan the battlefield for threats if we are to add value to the current debates.

Issues around high pay and executive reward will continue to drive our and the business media agenda this year.  We are seeing attempts to make reward as much about how results are achieved as what those results are.  However, arguably not only is it too little too late (at least for investment banking pay) but it does not address the issue of “fairness” in pay; be it from the viewpoint of the shareholder, who provides the capital, or the employee who provides the effort.  Least of all it does not address the media sniping and politics of envy.  Increased transparency will be a loud demand on executive pay in 2013; although as US reporting has shown more does not mean better.  Executive pay is too complex and subject to too many variables to be reduced to one or two easy numbers.  (Vince Cable, please take note).  One of my New Year wishes is that we could find a way to define what really is meant by “fair” pay.

Another challenge facing us due to the economy is that of the apparent changes in employment structures.  I, like many others, am seeking a full-time permanent role.  But, organisations responses to the current depressed labour market are, understandably, to regroup by using more temporary and contract roles.  Pay levels in the market have been depressed.  With, on average, seventeen people in the UK chasing every vacancy, new roles are being advertised with lower levels of starting pay.  Bath University has produced some excellent work on organisational engagement and I find it interesting to ponder how companies encourage engagement while downsizing their permanent employees   and employing far more casual labour in the fight for cost advantage.  The Bath study showed a strong correlation between commitment levels and long term organisational economic success.  This competitive advantage is in retreat when faced with the economics of 2013

I do hope that 2013 will be better than I expect, many of the issues discussed above can be seen as opportunities and challenges where innovative practice and creative solutions in UK and global reward will allow us to bring light to the darkness of incipient anomie.  I wish all of you a happy and prosperous 2013.

The narrative of reward

I was rereading a collection of essays by William Gibson (the inventor of the term “cyberspace”) called “Distrust that particular flavour”.  Gibson has a wonderful narrative style.  As an example he writes, “The end point of human culture may well be a single point of effectively endless duration, an infinite digital Now”.  Reading it made me reflect on the power of narrative and how it may be harnessed to benefit the communication of reward.
The power of storytelling in business is well known; http://www.forbes.com/sites/patrickhanlon/2011/10/10/8-master-storylines-for-business-storytellers-part-1/, but how can we undertake successful storytelling to develop a narrative for reward?  Telling a story gives meaning, cohesion and structure to complex subjects.  It allows our audience to engage in a powerful way and leads to a much greater understanding of our subject than a dry, dusty, factual exposition.  My children seem to pick up more history from the comic story telling of the BBC’s “Horrible histories”   than from well-crafted history lessons at school.
In this time of social media and press scrutiny of reward we have a vast audience of interest.  It includes politicians, shareholders, staff, non-executive directors, compensation committees, regulators, tax authorities. the public, journalist and pundits.  All have different understandings, agendas and viewpoints.  By using a good story of what we are achieving and what we hope to do we can craft a broad canvas to interest and engage our audiences.
The recently published best-selling book “Thinking, fast and slow” by Kahneman strongly extolls the importance to human thinking of making things simple and memorable rather than presenting concepts that require a lot of mental effort and thought.  It argues that people bring to mind the simple and memorable far quicker and perhaps in a more positive way than something that requires to be thought about.  Providing an engaging and interesting tale of success will frame the way our audiences view our work.  With that achieved we can perhaps seek to reveal the complexity and ambiguity that is the actual context of so much reward work.
Engagement is key to understanding.  A well-crafted story creates the images and metaphors that define how people think about reward.  Many of us have read Gareth Morgan’s “Images of Organisation”.  This has a powerful narrative of how the way we use metaphors about our organisation defines how we visualise and think about them.  Do we think of our organisation in warlike terms, “the fight for success” or sporting metaphors, “going for gold” (very apt after the successful Olympics)?  These metaphors will largely define how we think about our organisation.  In the same way the story and metaphors we use in our reward narrative will define how our audiences think about and visualise our products.  Think for a moment about the different images that arise from the use of the word “reward” as opposed to “compensation”.  Reward has positive images, compensation perhaps less so.  Are we rewarding people for their contribution or compensating them for their time and effort?
A good narrative also helps us as reward experts in carefully defining the “well-formed outcomes” that we hope to achieve as well as giving coherence to our thoughts and approaches.
My two final challenges to myself is to work out how I can craft a powerful story that is relevant to the multi-country, multi-cultural environments in which I operate and how I can find time amid all the operational pressures!  Any offers for a solution or some amazing stories on those complex issues?