Can employees have an expiry date in companies they serve..

When you come to think of it everything around us has an expiry date... food, medicines, assets, relationships, civilizations and for that matter even Human beings.. but do employees have an expiry date!

It has been ingrained in us that people are an appreciating asset and to think of an employee carrying an expiry date sounds like an oxymoron or crazy to even contemplate. And if you are the HR guy making such mention, its possibly the end of the road. In anyway I sometimes feel HR are more like educated and polished versions of Union leaders always coming to the CEO with an appeal for some benefit here or 5 day working or more holidays but lets not get there, we will deliberate that some other day.

In fact leave aside HR, most owners pride themselves of employees being with them through the ages and where loyalty weighs heavily for such individuals. Often such individuals in the company are protected with an emotional halo! touch me not types. From my experience and to make a generalized observation, such long serving individuals are actually a millstone round the neck of the company from a future perspective and particularly for the owner. I say owner because though the owner may usually have high regards for the contributions of such individuals he generally is aware of the limitations of these time tested war horses who unfortunately have passed their prime time. These are the individuals who have reached a glass ceiling and to put it in candid parlance-Attained their expiry date!

Most CEO's don't like to accept or acknowledge this aspect either because of ignorance or because of being in self denial and sometimes insecurity-What will happen to our Accounts if I tell Harish he has reached his expiry date!! what if he joins our competition etc etc So most owners try and reform these once upon a time accomplished individuals, counselling him, training him, shouting at him- all with the intent and wishful thought that he will achieve some escape velocity and move to the next level. The crux of the problem is that the owner expects the horse to now run like a Cheetah.... At best a horse can be trained and conditioned to become a fast horse but he can't morph into a Cheetah. Hence if you are looking for a Cheetah to man the position, companies need to realize they have an expired resource and they need to deal with it. This would benefit both the individual the Company and most importantly the new recruit.

Persisting with them and trying to make them work with newly recruited talent is the next big nightmarish experience. Potentially designed to fail...Trust me on this and take heed! I would go one step further to state that If you measure closely, the cost of these dysfunctional outcomes cannot be even imagined and some have bearing on culture which are irreversible.

The objective of this blog is to encourage your HR to do an audit of all the potential talent and those that have hit a glass ceiling. The next is to bite the bullet and move towards action in the most sensitive and articulated approach. Oh yes if you feel too hot to handle this subject there is always Bluesky:)

Even the Office Boy has talent

Quite often during my meetings and discussion with Entrepreneurs, I am often a witness to effusive praise for the "Office boy" in the Company(not all but a few remarkable individuals), the entrepreneur will take immense pride and credit in highlighting how he has grown and from where to where he has progressed. Nested with this comment is a statement that-"look our organization gives opportunities and career growth to the lowest staff and make them great employees.."

For quite some time I couldn't understand why entrepreneurs were making such a great deal about an “Office Boy”..After all he is an office boy meant to do the mundane work until I myself went through the experience of truly understanding the power of this resource.

In quite a few entrepreneurial companies some of these individuals are extremely "Powerful" or wield greater influence on the owner and this too was one thing, I could not understand  the reasons . In quite a few companies that I worked before founding Bluesky, the owner seemed to give more importance to the office boy than even some qualified executives. Of course this has abated in the recent past but the moot point is what makes the office boy so powerful….

On deeper reflection and only after I experienced an exceptional office boy in my own company that I actually realized, there was some merit in this acclaim. I tried to reflect and distill out what makes them get the timeshare and confidence of the owner which most other respected and distinguished executives seldom get…

While this is not to generalize all office boys, I observe that some have intense ambitions and a determined desire to grow. What powers these individuals especially where everyone looks down on them and most of them generally are devoid on any qualifications/degrees. But despite this many owners see something that other cannot, most owners are willing to fund their education, provide them a better life and even decide their increments before others in the company. Is it sheer philanthropy and compassion or something beyond...

On closer examination, I firmly believe its beyond just well intended thinking. To understand what makes owners go beyond, lies in the fact that this section of people are extremely simple(less of theories, jargons and more execution oriented), stable, loyal and street smart.

The special office boy, (the one who shows ambition and eagerness) I am talking of is extremely resourceful and highly dependable; he knows how to get his work done. One element of his success could probably be that he has been brought up by "Not depending on Google for any help" (even though many of them have smart phones). He is crafted with a mentality that I can’t sink any further from where I am and the only way forward is upwards. Hence the special office boy can have ambitions and dreams and has no social pressures and fears of failure. He derives his appreciation out of loyalty. He does not need to be bothered of peer pressure and most importantly he is not in the dog race but is extremely passionate. He is trying to give definition to his career unlike most of us professionals who feel that we have already got defined on post graduating from our colleges and now are compelled to be ahead in the race and have social peer groups that decide our trajectory.

BTW, any new employee that truly wants to be successful  must actually befriend the office boy. You win his confidence and you will quickly succeed.They are like moving archives that will tell you everything that happened in the past and that is why owners also like the special office Boy. He is the ears and eyes of the owner!!

Remember most traditional owners know everything that happens in the company and its because of this live Information system that makes it happen. Its natural that the owner will take special care and provide special support to the special office boy-sponsoring for higher studies, higher responsibilities, loans, family privileges etc

 If only professionals could borrow some attributes from the office boy which include flexibility, simplicity, resourcefulness, perseverance, passion and street smartness of the Office Boy.

In fact look around in most companies and you will see the office boy reaching greater heights in the structure and I must also state that grooming an office boy for greater heights is not such a bad idea after all. But the strange part is that the HR does not create any career plans for the "Potentially Powerful Office Boy"....

Employee Succession, Continuity and SOP's

Most SMB's have limited elbow room to ensure that more than one person handles any task/job at a time. The limitation is more to do with constraint on resources and budgetary limitations. Succession Planning for such SMB's is not at all a priority or rather should I say cannot be a priority because of the restrictive cost involved with such exercises ..

However in the same breath every entrepreneur knows the risks he/she carries with such individuals but prefers to procrastinate such thoughts let alone acting on it. Hence if in case the person leaves or merely proceeds on long leave the entire system comes to a grinding halt. The vulnerabilities are more pronounced in functions like Sales, Operations and sometimes in Finance and Accounts. More often than not such responsibilities are filled in by the CEO himself.

The biggest drama that unfolds is when such employees decide to tender their resignation! Much of my experience tells me that such resignations are more an act to seek attention; I have known many cases where the individual has tendered his resignation and taken it back at least 3-4 times like a customary ritual.
Frankly the bigger excitement is when the owner/entrepreneur comes forward with all the freebies and bonanza offers including immediate promotions, increments, car, bonuses and what not. Such negotiations generally prolong throughout the entire notice period and are also a mix of emotional exchanges between the two parties.

And of course all of this is in hush hush where the concerned employee is strictly told not to tell anyone....This indeed is the best kept secret with everyone knowing about the deal except the owner who feels no one is aware??
But internally the entrepreneur is literally seething with anger and tries to take such steps that ensure, the gun is not kept on his temple once again.

Invariably such employees are also quite smart to ensure that they are always reluctant to share the privileged skills and knowledge they possess with any other individual so as to create indispensability. The situation gets exacerbated if the Company has not defined robust processes and SOP's which mandates the transfer of knowledge. In fact you would be surprised to know that in most companies which intend to document internal processes, the respective executives who are supposed to prepare them are extremely reluctant to document them-Most common excuse is-shortage of time!!

Most entrepreneurs are aware of these intense dependencies and vulnerabilities but generally avoid acting on it-remember the famous adage if it ain't broken why fix it. In the process the Company creates prima donna's and power centers which often becomes dysfunctional in the long term and the bigger damage is done when new skilled professionals are inducted. The old hands become obstacles to the new professionals and ensure that they do not settle.

If Companies cannot afford Succession given their size, they definitely can adopt Employee Continuity which is similar to business continuity. It's the next best person that can take over if a person leaves.

The first step for companies who recognize this as a problem is to de-risk such vulnerabilities by undertaking the task of identifying Key & Critical resources in the company. Bluesky has a validated model that it adopts for its portfolio clients. Note that criticality can exist at any level within the company and has little to do with hierarchy and position. The next step is to mitigate the risk by identifying whether we have some one internally within the organization that can take over (Either vertically within the structure or at a peer level). You can categorize them as Red Amber and Green depending on their readiness. In some cases the mapping may also be done externally so that if the incumbent leaves, the options in the external market are well researched and available.

Incentivizing people for cross skilling is also another method to de-risk and the most effective method is to digitize that not only standardizes the work flow but also ensures consistency. As the company progresses it must make an audit at regular intervals on such criticalities and the intensity of impact in case of attrition. Hiring back ups and second/third level is another priority thrust that must be examined. To sum it up talent and vulnerability exercises must be undertaken as a conscious exercise with the HR function and create mitigating plans to derisk and future proof the company.

Do share your views. Since we have created the blog there has been an overwhelming response. Your viewership is most appreciated.
If you have any challenges or topics you would like some opinion on, feel free to express.

Can employees truly become Owners!

Most CEO's I meet, have one consistent grouse-My employees don't think like owners, they don't think as if the company is their own. They are often indifferent to the outcome and most often task/activity based. Though they may be aware of the financial difficulties and the business environment they still insist on increments at the end of the year and that too anything less than 15% is reciprocated  with raised eyebrows…

Per se there' nothing wrong with entrepreneurs thinking on these lines and most entrepreneurs are tempted to think some time or the other in this direction especially when frustration from business takes the better of them(I mean us, I too am included).

Calmly we should pause and ponder on whether there is legitimacy in thinking on such lines with sustainability or are we being merely opportunistic and desperate to tide over the present economic realities. While I shall not sit in judgement on this aspect, I may have some insights to offer....

If we were to examine the definition of ownership, out of several dimensions involved in ownership one aspect is the possibility of an infinite upside and even the reality of a significant potential downside!!! I think we would all agree out here on this aspect. That’s also one of the main elements that differentiates an employee from an owner.

For an employee, rarely is there any downside in the form of penalties for things not happening right or for not achieving even the base expectation for which he /she was hired. The upside for an employee is more in the form of increments, incentives (generally limited) which in most cases is generally semi-structured in SMB's.

In quite a few traditional, family run enterprises, the incentive is extended to employees during Diwali as a Bonus. Invariably the employee is unaware of how much he will receive...and it’s given towards a mixture of loyalty, obedience, good performance etc. Rarely are there structured KRA’s against which payouts are made.

Another observation is that immaterial of the debtors situation/outstanding and cash flows, most owners pride themselves to pay on time for the past 20 years without delay. Hence immaterial of the cash position, immaterial whether the owner has to borrow to fund the payroll-employees must be paid. The best part is that there is a high possibility that the situation was created by employees in the first place for wrong billing, not completing work as per the phased development to bill, weak collections etc

So while most owners take a Raja/Praja view we still expect the employee to be owners in the format?? Incidentally this term of Raja/Praja was shared during one of my interactions with an owner….

Now while the thinking is magnanimous and not for a moment, I am advocating that it is incorrect, does it weaken the argument of employee ownership!!!. One may argue that employees must be paid on time which is not something that should be debated and indeed there may be merit! but does this not also apply to owners, should they not be paid on time????

I know of several instances when the owners draw salaries less that the top executives employed. Owners generally take their compensation last, they have no fixed remuneration and generally take drawings as and when there is a requirement or scope to draw cash.

So the moot question is can employees become true owners within the perimeter of their operations. 

The answer is "YES" but it needs to be structured and crafted within certain riders and within a culture that fosters ownership. Ownership within an enterprise at the minimum would mean making employees being accountable for the outcomes of the job they manage. As the levels increase ownership must graduate to include P&L responsibility. 

During my recent discussion with the Managing Director of one of our esteemed clients, he mentioned that he wanted his senior management to be more of owners whose compensation is aligned with the output they produce. The higher business they achieve, the higher amounts they can earn. Moreover if they can't fit into this system of thinking either they should downgrade their role or refrain from requesting for annual salary increases. Strong views and approach but this is one thing which plagues entrepreneurs immensely...Employees are always in a queue to ask for increments immaterial of the realities of the market or business. In this matter they are extremely persistent (wish the same extended to business!!)

In fact when I quizzed him further he mentioned that senior management should look at it in a way where he was providing them space, infrastructure, clients and a certain minimum guarantee on compensation but beyond that they should earn it. Wow…It’s sounding quite like a variation of a franchisee system. Interesting perspective…. and the rigors of the market are forcing all of us to align in this direction. Bluesky is working on providing him with a viable solution which we hope to leverage across the portfolio of the clients we service…

These are real issues before HR and the concept of ownership will only advance from here. Top level executives must be tied to the top line and bottom line of business and must have something to lose if they don't meet the numbers. If businesses can have penalties in the form of SLA's why not these getting appropriately passed to employees. 

Bluesky has implemented the Incentive and Penalty structure for quite a few clients with encouraging response. Of course these things will take time as it goes against conventional mindset. But the business environment globally is forcing entrepreneurs to be unconventional and instilling ownership among employees is not only unconventional but also a strategic advantage to business. 

Do share your thoughts, views, perspectives including your disagreements.

OK.... But do you know why I have to do things that I am not supposed to!-Part II

So the dialogue with Shradha continues....with a tone of irritation, I rebutted saying "look, I can't have these things fall apart just because you are not attending to them". At best in 6 months to 1 year, you may walk out of the door flashing your resignation with a one month notice(That too is hardly given nowadays)...So what do I do.. the monkey will be on my back and I will have to manage the mess"
Shradha seemed indifferent and probably didn't seem to understand why I was making a big deal.

However every entrepreneur must have encountered this situation sometime during the life cycle of their enterprise. We often put our faith in the employees and often invest both financially as well as in resources; we think employees will manage everything with full ownership, with all the passion, zeal and commitment but unfortunately this rarely happens to our expectations and invariably the ball is chucked back to us...So with the existing balls already in our hand, we also add this one. Does this situation ring a bell. May be, may not for some fortunate entrepreneurs.

Another most common observation is similar to the game of volley ball... CEO's often handle multiple roles, One of the entrepreneurs I work with calls it P2P(Peon to President). As long as the owner handles it normally nothing goes wrong after all most entrepreneurs rarely sleep..but as the enterprise grows there are specialists and employees entrusted with these roles. So like in Volleyball where the owner was manning more than 2-3 positions; Now, since he has hired a "Manager-Accounts" he leaves it to him thinking he will clear the ball.... he will pay the taxes on time, he will follow up for outstanding, he will bill accurately.... But since we are not in a perfect world invariably such seamless working does not happen and mistakes, slip ups will happen drawing the entrepreneur/owner back into these activities. Sometimes the entrepreneur also expects too much from the employee-perfection, commitment, flexibility. In fact I wonder why employees fall sick and why entrepreneurs rarely miss a day of work!!

At Bluesky we have studied that there are many reasons to why this happens, it could be competence, training, delegation of authorities and most important accountability and ownership. Ownership is one of the most misunderstood words in employees dictionary. For an employee ownership means he/she can only earn incentives but never gets penalized for the slip ups. In fact in many cases it's earning incentive to do their basic jobs?? Is that fair, if not, are we fooling ourselves to think they are truly owners.....

Stay tuned in and do share your experiences

What I love to do.... vs What I need to do... Dilemma of every Owner!

Two days back I was admonishing my Senior Manager-Shradha(name concealed) stating that she was not doing what she was supposed to do according to her role and more often than not, I had to get into it filling in this gap for her which indeed was not my job. I also went further to state that because, I was doing her work, I was unable to give time to things I needed to focus on from a business point...

Shradha looked at me in the eye and with a pause mentioned something which shocked me--"Don- that's because you love to do such things". Now whatever we may say, we as CEO's, generally don't like being wronged and often we get into defensive justifications to disclaim such expressions from employees. But I held back and told Shradha, "I have the option of getting upset but will choose not to get defensive and retort if she explains and justifies her comment and if she could not convince me, I would attempt to convince her!!
No prizes for guessing who got convinced in the process, of course the CEO always wins such bouts, that's a privilege and a perk for all the risks we take as an entrepreneur, but Shradha's comment began to sink into me to comprehend what she really meant and often this happens with most of us; the dilemma between What we love to do vis a vis what we should be doing ..

As entrepreneurs, the biggest disadvantage is that there is no one to correct us, we often get into a zone of doing things we like doing or are habituated, this could be different things for different people, like some entrepreneurs like excessively going into micro details of controlling the last penny, some like to excessively get into administrative tasks including why attendance of people on a given day is low, or attendance and punctuality with reports and calls to be made including sophisticated setups like CCTV for surveillance, expenses of people, seeking perfection in policies which really don't carry such significant impact etc etc etc Of course all these are important, undoubtedly... the question is, Is it worth your time!

I can go on with several examples but often a lot of time expended on such aspects means that other things are not getting the deserved attention which would strategically benefit the company, These are the "Need to Do" actions like aggressive marketing and business development strategies, rigorous review systems, branding, improving the quality of MIS, Embedding good behaviors as a culture, talent audit and review, digitization maturity etc Invariably and naturally we procrastinate such matters for a later date when everything is streamlined.

This reminder of what I should be doing vs what I am naturally polarized to is something that every CEO needs to remind oneself and the best starting point is have KRA's and goals for the CEO itself which cascades from the strategic/operating plan. A dashboard is another good example..

Bluesky's association with several CEO's convey that some indeed get it right and never get their eye off the big picture, some know they need to change but are not clear how to come out of the day to day trivia and some are blissfully unaware or in self denial..
I do hope you will start today assessing this aspect sooner than late. Tough times need tough actions and this indeed is a tough action....

Do share your views and experiences

Entrepreneur, managing Human Resource for the Mid-SME Sector : Blue Sky...

Everyone wants to go to Heaven but no one wants to Die....

Some time back I heard the above phrase from a Priest at a Sunday mass during his sermon. . The statement left a deep impact when I relate this to SMB’s. Every entrepreneur want to scale but no one wants to change!!

Most CEO’s of mid growing enterprises are excited and ambitious of the next level Growth but unfortunately are not ready to retire their present set of practices and methods of doing things to achieve results. Many imply, though not explicit-that let’s continue with these practices and still make it to the next level. Often the situation is more of bad habits dying hard. They believe that should change but just don’t find the resolve and urgency to adapt to the environment and systems that are aligned with next level growth. Those that demonstrate the rigor to change generally see results but that too after significant patience because such changes do not bring instant results. Often entrepreneurs  have limited tenacity and patience and the first sign of results not forthcoming is a good enough reason to revert to the previous system. Such approaches are regressive and slow down a Company’s growth momentum and at times even dwarf them to a size that they are unable to breach. In such cases a competent and experienced HR function or a change agent in the form of a Coach can help such corporations move forward from such a inflexion point.

Digitization in HR...HR is no longer joining formalities, final settlements and payroll processes

Pick a resume of any HR professional with an experience base of 1-5 years and invariably you will observe that the experience is inundated with trivial operational matters like joining formalities, master trackers, final settlements, induction, payroll and recruitment coordination.

While some of these tasks are essential and needed to be performed , the real problem is in this being the end in itself. Most of these HR professionals do not know much beyond this elementary work and hence are unable to provide solid value adds to the companies they advise.

Fortunately at Bluesky all these mundane tasks are handled by our in-house HRIS software called Bluebuddy which is introduced free of cost to our clients. Bluebuddy is more of a decision making support system for HR and CEO's informing you of the strategic decisions needed to be taken and also simultaneously relieving the HR professional of the operational chores.

Digitization in HR is finding great favour and initially while it focuses more on the operational chores like payroll and compliance's, going forward it would focus on aspects like talent pool, competency development and performance system.

SMB's do not have heavy budgets for HR and the budgets that they can expend get consumed in hiring HR professionals that relegate themselves doing such base level work leaving them with no time to handle the crux of HR challenges. In fact SMB's need support systems and advisory services on talent acquisition, accountability of people, measuring systems, compensation aligned with performance and talent depth.

I wonder if the present HR set of professionals are able to fill in these shoes...