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Pam never expected to become the Chief Human Resources Officer of Exalted Industries. With a meteoric sales career, she had been recruited to Trajectory Systems, an Exalted subsidiary in Silicon Valley, as its Chief Sales Officer. Weak revenues had threatened the company’s survival, and Trajectory CEO David Craig had brought her in to turn things around. Pam and team embarked on a series of data analytics initiatives, to transform sales enablement.
Article by Jenny Dearborn, Chief Learning Officer and Senior Vice President SAP & David Swanson (most recently) Executive Vice President of Human Resources – SAP.
In a relatively short time, the company was back on track to hit its revenue targets and after just a year leading Exalted, David Craig had flown Pam to Chicago for a mysterious dinner meeting, revealing that the company faced more serious challenges than he’d expected: revenue was down, as were margins, customer satisfaction ratings, and the stock price. The media was extolling competitors’ innovations, while Exalted, although still the market leader, hadn’t launched a new product in three years, instead making several acquisitions that were only moderately successful. Making matters worse, attrition was up, with some high-profile exits. The competition was taking both customers and an alarming number of top sales reps. That afternoon, she and her team began their day-and-a-half strategic planning off-site a few blocks away from headquarters. Gathered in the spacious room, surrounded on three sides by whiteboards, were Marcus Long, VP of HR Business Partners; Sameer Mahal, VP of HR Shared Services; Elke Andersen, VP of Talent Acquisition; and Martha Lee, VP of HR Centers of Excellence (Talent Strategy, Total Rewards, Leadership Development, Diversity/Inclusion, and Learning & Development).
“The numbers tell a pretty dismal story. And yet, the board has given David a goal of double-digit growth by the end of the year, in keeping with the average growth rate for the healthiest companies in our industry”
After some opening remarks to her staff, Pam dove right in: “We’re facing very serious challenges as a company. At this off-site I want us to start thinking as a leadership team about how we will address these challenges. Here’s the overview I got from David.” Pam displayed a PowerPoint slide on the screen: “The numbers tell a pretty dismal story. And yet, the board has given David a goal of double-digit growth by the end of the year, in keeping with the average growth rate for the healthiest companies in our industry. Help this newcomer out. What do we think is going on here?” Pam asked, with a tone that communicated she was looking to gain information, not place blame. Her team uncomfortably shifted in their seats, glancing at one another. “Any theories? Hunches? Facts? Rumors?” Pam asked with an encouraging smile. No one smiled in return. “Well,” began Marcus Long, taking a deep breath and adjusting the sleeves on his neatly tailored black blazer, “only the last two items on that list, about attrition, have anything to do with HR, and they’re pretty much caused by the first five. Among us here, I think people are jumping off what they see as a sinking ship. Some of the latest engagement survey results are so bad that we’re keeping them confidential, as I’m sure David told you. Employees are saying they don’t believe in our leadership or the direction of the company.”
“That’s right,” interjected Martha Lee, nervously playing with her string of pearls. “People are demoralised, so they’re seeking greener pastures elsewhere. I just wish our executives cared more and gave us budget to address it. They even downsized our holiday party this past December. How is that going to help us keep people? And besides, attrition may be at an all-time high for Exalted, but we’re still close to the industry average. We’re doing our jobs.” Elke Andersen cleared her throat and tucked a strand of her blonde hair behind her ear. “It’s no wonder our best people are leaving, given how little innovation is happening here. How could I be expected to attract new talent when we aren’t putting out new products? Never mind that I am continually dealing with the revolving door of sales reps. We’ll never get revenues up if Sales doesn’t stop driving away everyone my team brings in.” Pam glanced over at Sameer Mahal, who hadn’t yet spoken. “Sameer?” she asked, raising an expectant eyebrow. “I’m with them,” said Sameer in his crisp British accent. “HR gets blamed for everything, but most of the company’s problems have nothing to do with us. We are working harder than ever, but we never receive sufficient resources.” Marcus, Elke, and Martha nodded, clearly dejected. “Guys,” said Pam gently, “that kind of attitude won’t fly anymore. We need to think more like our business owners and how we can help them solve their problems. That’s especially true for Sales, which needs to be successful if Exalted is going to pull through this crisis. I’ve certainly heard plenty from Bobby Cash on that subject already. For right now, let’s get our own house in order. My peers on Exalted’s leadership team have told me what they believe is wrong with our HR organisation. I’d like to know what you think.”
“Well,” Marcus began cautiously as others again shifted uncomfortably in their seats, “Sales is definitely an issue. As Bobby’s HR business partner, I know he has a lot of complaints, and unfortunately, I think some of them are justified. He keeps asking me why it takes up to eight months to fill a Sales rep role and I don’t have answers.” “I wish you wouldn’t always take his side, Marcus,” said Elke defensively. “Bobby’s hiring managers are to blame here. They’re too picky and too slow. Good candidates don’t want to go through umpteen interviews, and they get snatched up by our competitors. By the time our hiring managers make up their minds, we end up with the worst candidates, who fail and leave and then we need to start all over again. And some hiring managers have the nerve to complain that we’re not getting them the right candidates when they give us vague job postings.” “Hold on Elke,” said Marcus, equally defensive. “I’m not trying to take sides. We all know Bobby can be abrasive. He’s a great guy but a tough client. He tells it like it is, and that’s hard to hear, but we’ve got to listen. Think about the repercussions of our hiring challenges. The reps we do have are struggling to keep up, and so managers jump in and spend more time in the field, which means they aren’t around to coach the new hires. It’s a mess.”
Pullquote: “Why are these breakdowns happening, especially if we have such great KPIs that beat industry standards? It doesn’t make sense that our key measurements would be green if all the business results are red. Until we understand WHY, we are experiencing these challenges, we won’t fix a thing”
“If you want Bobby off your back, maybe you should tell him how our Talent Acquisition department meets or exceeds every industry benchmark for key performance metrics,” Elke insisted. “Our time to post is only five business days, and we get fifteen candidates for every open position – that’s three times the industry average! I hate to say it, but things could move faster if Sameer’s people would get offer letters out right away.” Marcus, growing irritated, looked at Pam, who nodded to him to continue. Dozens of one-on-one meetings could never yield the kind of insights this discussion was surfacing. “Sameer, is that true?” Marcus asked. “We receive plenty of complaints about how long it takes to provide new hires badges and laptops. I didn’t know there were also problems with offer letters.” “Elke, how can you blame me?” exclaimed Sameer, straightening up in his seat. “We can only dispatch offers when your team sends us the information. That’s also the problem with badges and laptops: you don’t give us enough lead time. Our Service Level Agreement clearly states that we must have at least seven business days to respond to a new hire request, and we have had demands for turnarounds as short as from Friday afternoon to Monday morning. I don’t have teams working over the weekend!” Elke shook her head repeatedly. “Sameer, this is Bobby’s fault. Just dealing with the Sales attrition mess has us totally over-extended. We can’t possibly keep up. And then your team messes up an offer letter and we take the blame.” Sameer’s graying moustache began to twitch. “Elke, you only deal with incoming hires. We get them coming and going. All this churn is killing my team. It seems like all we ever do is process terminations and new hires for Sales. The final checks, the COBRA set-up, the equipment return, I could go on and on. How can we possibly deliver a quality employee experience under these circumstances?” “You can complain all you like about Bobby, but without Sales, Exalted would come to a grinding halt,” Marcus declared, his voice rising. “And as much as we all say that HR doesn’t get respect, we have to earn it. When we can’t nail the basics, like making sure people have correct offer letters and the right equipment on their first day of work, it makes us all look bad. Only I’m the one who takes the heat for it in Bobby’s weekly staff meetings.” “That’s just it,” exclaimed Sameer. “These things would be basics except we’re working with old systems and unrealistic timelines. And then we’re scolded when we can’t deliver. Marcus, you know how these executives can get. They have, you request endless urgent reports from me, and we move mountains to chase down data, but for what purpose? It’s demoralising to jump at every fi re drill and never even know what you do with the data. And I’ve got people jumping ship from Global Shared Services for better paid jobs in Finance. Martha, can’t you please give me a decent comp budget? And maybe give Sales better comp? And training? Maybe then reps will stop quitting to go to the competition and we can get off this bloody hamster wheel!”
Sameer’s outburst took Martha by surprise. “Well, Sameer, I never knew how much this upset you,” she said, swiveling her chair slowly in his direction and trying to remain calm. “But tell me, how can I deliver new hire training if the new hires don’t have their laptops? People are always late to New Hire Orientation because they’re filling out forms you should have sent them weeks earlier. With a new hire experience like that, it’s not surprising that they don’t stick around.” “Martha, I’m sorry to say, Sameer is right about compensation,” Marcus interjected. “Our financial performance isn’t exactly a secret, and the press has been fawning over our rivals as innovators, even though they’re obviously selling snake oil. We need to offer more attractive comp packages to get top talent.” “Well, Marcus,” Martha huffed, “our comp is at or above market. Our Total Rewards people are the best in the business, and you know how fussy they are about considering every detail in their calculations. I’m certain we’re competitive. And you know what else? If reps actually went to training they might have a chance at meeting quota. Sales leadership doesn’t care, so no one makes them go. Or they go and someone yanks them out in the middle to send them back into the field. We worked so hard to put together a new enablement curriculum, but is anyone using it? No. And new reps continue to struggle. We try to do everything the executives tell us, and still they’re not satisfied. This is a thankless grind. I’m exhausted just thinking about it.” Marcus, Elke, and Sameer all began talking at once, their voices rising in frustration. Pam Sharp, all 5 feet 11 inches of her, rose to speak. “All right everyone,” she said firmly, “thank you for playing what I call The Blame Game. You’ve just given me a very enlightening education about what’s going wrong around here, and only one thing is for sure.” All eyes were fixed on their new CHRO. “Starting right now,” said Pam, “we focus on understanding and fixing problems. We’ll never make progress or gain the respect of our senior leaders by throwing around accusations or blaming each other. We need to understand the why. Why are these breakdowns happening, especially if we have such great KPIs that beat industry standards? It doesn’t make sense that our key measurements would be green if all the business results are red. Until we understand WHY we are experiencing these challenges, we won’t fix a thing, and we won’t serve our ultimate customers – Exalted employees.”
Jenny Dearborn is the Chief Learning Officer and Senior Vice President at SAP. She is recognised as one of the 50 Most Powerful Women in Technology and is an industry thought leader and authority on applying data and analytics to workforce development and human capital transformation. Dearborn is the author of Data Driven: How Performance Analytics Delivers Extraordinary Sales Results. David Swanson was most recently executive vice president of human resources for SAP SuccessFactors. He has over 25 years of experience in global technology companies. He is a frequent keynote speaker and panelist on the future of HR, focusing on how human resources can impact business through analytics and big data.
This is an edited extract from The Data Driven Leader: A Powerful Approach to Delivering Measurable Business Impact Through People Analytics by Jenny Dearborn and David Swanson (Published by Wiley). www.wiley.com
