by D. Kevin Berchelmann | May 2, 2006 | Brazen Leader, Human Resources, Kevin Berchelmann, Organizational Effectiveness
Real, strategic budgeting for Human Resources must done from three perspectives:
1. Internal, expense-based management of the function itself, including headcount and required resources for day-to-day management as well as planned initiatives,
2. Operationally, pushing out potential budgeting numbers to operating units, and
3. Organizationally, allowing the entire firm to complete budgets based on planned Human Resources initiatives, interventions, and planning.
The first of these is entirely tactical and functional, with emphasis pointed inside the human resources shop. The second shows meaningful synergies within the organization, while the third perspective is where Human Resources can have appreciable, strategic impact for the organizations planning, budgeting, and forecasted performance.
Internal budgeting is simple, and simply requires a determination of how much the discrete HR function will “spend” during the budgeted period. Headcount payroll, benefits burden, task vendors, some outsourced efforts, and paper clips. Much of this data is readily available, as prior budget “actuals” have historical spending patterns. Those may be used as a “go-by,” but any accurate budget – and all support functions, in my mind – should be “zero-base.” In other words, start with “nothing,” not with last years’ actual spending. Build the budget from the ground up.
Operational budgeting pushes some human resources costs out into the operational world. Frequently, many hiring costs such as testing, travel, etc., are charged directly to the gaining operation (not human resources), so sharing an idea of how many potential candidates may have to travel to interview, relocate, etc. is useful information. Other categories could apply here, also, including specific HR staff travel to an operational location, unique efforts for a single operation, and so forth. Sharing this operational budgeting information allows the organization to work together to roll up a more accurate estimate of true costs.
Organizational budget considerations are “the real deal.” Here, human resources leaders have to make a commitment, and prepare to held accountable for the results. If we say that, through our negotiations, we intend to reduce the Benefits Costs Per Employee by 8%, then the organization should plan on it. Further, if we are spending money and effort to increase real productivity through various means (training, hiring, performance management) in specific operations, those increased productivity numbers should be reflected in the period’s budget. Further, joint efforts should be reflected here as well.
At one company, I spearheaded a “Tiger Team” that was mobilized whenever we opened a new facility or had serious performance issues needing a turnaround. As the champion for that cross-functional effort, I was accountable for determining the financial value (ROI), and distributing that value correctly throughout the organization for budgeting and forecasting.
All three of these perspectives may occur somewhat seamlessly, but should be purposeful nonetheless. It’s another area where we can move the human resources effort from simple functionality to an integral part of the organization’s success.
by D. Kevin Berchelmann | Apr 21, 2006 | Brazen Leader, Executive Improvement, Kevin Berchelmann, Organizational Effectiveness
Not too long ago, I worked with a group of division presidents for a fast-growing company. Two things struck me as interesting, and somewhat of a paradox: First, they were all reasonably successful in their jobs (and their jobs were substantially the same, just different geographic regions). Second, they were all incredibly different. Yes, they each had similar behavior characteristics, such as intelligence and work ethic. In other areas, such as sales, marketing, people management, organizational skills, strategy, planning, and do forth, they were all over the charts.
So what? Well, I’ll tell you “so what.” You hear a lot of garbage about understanding your “strengths and weaknesses,” and then you’re supposed to work on your weaknesses. Let’s look at it differently. How about we assume that succeeding in a position can be done in any of several different ways, using a variety of skills. Using that reasoning, you don’t have strengths and weaknesses, you have learned skills and skills you have yet to learn.
Wow!
So, then, we should then simply “learn more skills,” right?? No, no, no… We should, instead, clearly identify our skills, since we know that we can succeed with them, and work on improving our strengths! That’s right, improve our strengths, since we already know that they work for us. Learning new skills is time consuming, and depending on application, may or may not work for us the way they work for others.
Now, this logic assumes current success, so don’t confuse this with those managers who are clearly unsuccessful, though I would argue this could help them with their improvement also. In other words, as Bum Phillips (retired Houston Oilers coach) would say, “Dance with who brung you.” Use the skills you have — improve and hone them to a razor’s edge — and continue your increasing levels of success. Over time, identify some additional skills you would like to pick up, and develop a aplan to learn them in a reasonable time and fashion.
But don’t break what works…
by D. Kevin Berchelmann | Apr 21, 2006 | Brazen Leader, Executive Improvement, Kevin Berchelmann, Organizational Effectiveness
With one of my clients, a start-up, we scoured the nation for the best and brightest — real “top of the food chain” sorts of executives. And we were pretty darned successful, since we hired a bunch of ’em.
All brilliant, and at the top of their respective games.
All came from intense, successful, team-driven environments.
All clearly had incentives — cash and equity — to work together as a cohesive group.
Seems like a recipe for some serious kumbaya, doesn’t it?? If it were, I wouldn’t have a story for my blog today…
It was nearly a disaster.
You see, though as individuals, they clearly and personally believed in the team concept, and promoted it — honestly — to all that came near, the truth is, they were each accustomed to being in the center of their respective teams, not linked arm-in-arm in a big, egalitarian circle. Not that they were insincere, because they certainly were not. In fact, we were all confused in trying to determine “what’s wrong with this picture??” It took a good deal of effort and introspection to discover the real issue.
So, the lesson learned is “don’t hire best-of-the-best” executives?? Of course not. But realize that in doing so, if we want several “best-in-class” horses to run with each other as one, we need to identify the concerns and issues up front, and possibly take some unusual actions to make this thing work.
Because 6 of the world’s best horses, pulling in 6 different directions, doth not a team make…
