HRExaminer v3.06 February 10, 2012
Table of Contents
My colleague, Jon Hyman at the Ohio Employers Law Blog wrote a post called The Digital Divide and Disparate Impact. Quoting internet use statistics and a great infographic on Mashable, Jon correctly pointed out that if minorities have limited access to the internet, then jobs that require online application could have a disparate impact on those minorities.
Since the Mashable post and infographic only talked about “home internet use by race,” I was curious about what overall internet use (computers, phones, tablets) looked like.
The latest study at Pew Internet was almost 3 years ago in July 2009: Wireless Internet Use by John Horrigan.
As of 2009, 92% of American adults had internet access:
- 92% had internet access
- 85% owned a handheld device (phone) with internet
- 47% owned a laptop
- 64% owned a desktop computer
When you look at the racial breakdown, it turns out that minorities own slightly fewer computers, but they do not have lower internet access or use rates. For example, 66% of Whites have desktop computers compared to 51% Blacks and 64% Hispanics.
But internet use for adult Americans on computers (laptop and desktop combined) is:
- White 79%
- Black 67%
- Hispanic 84%.
For handheld wireless devices, internet use is:
- White 54%
- Black 60%
- Hispanics 68%.
And the percentage of American adults who are internet or cell phone users is:
- White 91%
- Black 87%
- Hispanic 94%.
In other words, minorities have basically the same internet access as Whites, they just use phones instead of computers.
Disparate Impact Analysis
To prove a disparate impact case, the employee or applicant has to show that an employer’s practice or policy adversely affects some class of protected people. For example, a Hispanic files a lawsuit claiming a company’s online application process precluded Hispanics from applying because fewer Hispanics have computers with internet.
Right now, very few companies are set up for you to apply for jobs through your phone. Expect this to increase though, because many are working on it.
In the meantime, you can get all sorts of information about job openings on your phone, as well as information for how to apply. So the claimant would have to show not only that having an online application process might adversely affect Hispanics, but also that Hispanics were not applying because of it.
Then it gets even tricker. Most jobs that require an online application process require sufficient skills to actually use the process. This often means some college. A November 2011 survey by Student Monitor (a market research firm that tracks consumer trends for college students) found that 95% of college students have a computer and 100% have access to computers. (BTW: 98% use Facebook and 75% use Twitter.)
The primary legal defense to a disparate impact case is “business necessity” –that the challenged practice is “job-related for the position in question and consistent with business necessity.” (42 U.S.C. section 2000e 2(k)(1)(A)(i).) So if using a computer and being able to figure out an online application process is a legitimate skill required for the job, then it would be extremely difficult for a claimant to win a disparate impact case simply by showing that Hispanics or Blacks own fewer computers, or have fewer Broadband accounts.
The reality is almost everyone has internet access. But the fact that minorities use mobile more than computers is an interesting business case for developing easy to use mobile job application processes, because it would reduce the chance of disparate impact claims.
Accountability vs Engagement in HR
Here’s a phrase you don’t hear me utter frequently. Refreshing Approach To HR.
Four magic words. One great big promise. One ocean of previously unmet expectations.
When Jason Lauritsen sent me a note about his new venture. I immediately set up a phone call to learn more. Lauritsen is the innovative trainer who blew me away last year with his approach to “Hacking HR” (delivered fluidly with his comrade in crime at TalentAnarchy, Joe Gerstandt). “Hacking HR” is a recipe for launching lots of small focused innovations rather than trying to boil the ocean.
Lauritsen has partnered with Cy Wakeman to launch Bulletproof Talent. The company wants to ‘restore sanity to your workplace’. With rhetoric that echoes Paddy Chayefsky in Network, the company promises nothing less than refocusing HR away from the victims and on to the producers.
They want to foment a revolution in which HR focuses its attention on the people who create value. “It’s time to stop treating people as if everyone in the company were equals,” says Cy Wakeman. Some people power the ship and some are ballast.
The former therapist noticed, after being promoted into a head of HR job, that many HR Departments encourage the kinds of co-dependent behavior she was helping people to get over in therapy.
“Accountability is the key to great companies,” is her mantra.
Cy is a great debunker of HR Mythology. Here are some samples:
- Open Door Policy: “The practice actually limits the growth potential of employees who utilize the option and exhausts the leaders who practice it.” (FastCompany)
- Fighting Reality: You’re arguing with reality if you are judging your current situation in terms of right and wrong. (FastCompany)
- Performance Management doesn’t work: Most managers teach their employees learned helplessness. Learned Helplessness afflicts the mindsets of employees who have come to believe that they are truly at the mercy of external circumstances. These employees begin to believe that there is little they can do to impact the outcomes of their actions, company processes, or succeed in the face of decisions into which they didn’t get to provide input. (Forbes)
- Engagement: It doesn’t produce results and creates a bizarre sense of entitlement.
You can find much more if you google her work on FastCompany and Forbes.
So, there’s the core team. A brilliant analyst of the State of the Art in HR and a genius solution developer. Actually, I’m not sure which is which.
If all they did was throw stones and recommend approaches to innovation, it would be a silly business. Cy is particularly vocal about ‘eating her own dog food’. “Our message about personal accountability begins with the way we do business,” she reminds me. “We diagnose, train and measure.”
At the heart of BulletproofTalent is a survey instrument that pairs a proven engagement analysis with a personal accountability measure. According to Wakeman, “We find no correlation between engagement scores and productivity. What you want to do is focus engagement activities on the real producers and away from the organizational deadweight. Our tool gives a clear assessment of where the strengths and weaknesses are in the organization.”
Here’s the sort of training that they deliver as they help their clients refocus HR on to the things that matter and away from the chunks of drama that suck manager’s time:
Take a gander at the BulletProof Talent Channel if you want to get charged up about this stuff.
So, why is this so refreshing? Jason and Cy are building a company that is focused on business outcomes, not internal HR Metrics. They are killing sacred cows while reestablishing common sense. If you look back at last week’s dialog about HR Standards, you should note that business results and accountability do not appear on the certification exams.
Bob Corlett returns to the HRExaminer Editorial Advisory Board. Bob has worked in staffing and consulting for over 25 years. He is the founder and President of Staffing Advisors, a retained search firm near Washington DC. He developed The Results-Based Hiring Process® and is one of Washington’s best known thought leaders on staffing and recruiting. Full Bio…
The Rise of the Misfit Toys
by Bob Corlett
Many successful executives have an embarrassing problem that’s becoming more painful by the day. Their hiring instincts are failing. And HR is fiddling while Rome burns.
Titans of industry often built their careers by sacrificing their individual wishes to effectively work within the system. They hire people willing to make the same trades and sacrifices they have. They like people who play well with others—who know when to push and when to back off. They call this “hiring people with political acumen.” And when times are good, the corporate diplomat is king.
But when the world economic order is being radically reshaped, many organizations need to hire a revolutionary, not a politician. When your business is under siege, the corporate diplomat is an effete dilettante. When the chips are down, the Misfit Toy is king.
Hiring a revolutionary is profoundly uncomfortable, because misfits, well, don’t fit in. Most hiring functions are exquisitely calibrated to meet the hiring preferences of corporate overlords diplomats. The selection process reflexively looks for a progression on a straight-line career path, steadily upwards–no mistakes, no diversions, no jagged edges– just continuous success on the established path.
For the candidate, the best way to build that kind of resume is to “play ball” and avoid big risks. Don’t do anything outlandish, don’t make enemies, stay within the norms. Should a Principal take on troubled school? No that could take years and derail your safe ascension toward Superintendant of Schools. Should a manager give up a six figure salary to try their hand at a start-up? No, it might fail. Should you fiercely advocate for the user experience in that next software release? No way, dude. Keep quiet. Your time will come.
Misfit Toys aren’t wired that way. Some may have an obsession with creating an insanely great user experience. Some Principals unrealistically believe that every kid can go to college. Some people cannot accept that their entire industry would create and sell something toxic or useless to their customers. Some people just … don’t fit in.
So how do companies find and hire a revolutionary to drive some high-stakes business result? How do you find and hire people for jobs that didn’t exist yesterday? How do you find and hire people for jobs you don’t quite understand … where the conventional wisdom is failing and the entire field is rapidly evolving?
Look for people who are obsessed with achieving the results you want.
- People who are more interested in achieving the goal than in maintaining appearances.
- People who can fail quickly and without drama, learn from it, recover, and come back smarter.
- People who are relentless–like a dog with a bone, they simply will not let it go. Knock them down 10 times, they get up 11.
I’m not talking about the egotistical jerk who has to win every argument– quite the opposite. Look for someone who can make a spirited argument, but is comfortable conceding a point, especially when she gets to learn something in the process. Find the person who is curious enough to look at things from a new perspective. Find the one who can eagerly learn from anyone, even if it means he might be wrong. You see, when you are a knight on a quest (or a Misfit Toy), your comfort and your ego is subservient to the goal.
If you want to deprogram from hiring dilettantes, start reading everything you can about failure, grit and resilience.
Jay Cross is a champion of informal learning, web 2.0, and systems thinking. He has challenged conventional wisdom about how adults learn since designing the first business degree program offered by the University of Phoenix. Full Bio
Productivity in a Networked era: Not Your Father’s ROI
by Jay Cross
Today’s networked era requires a new way to make investment decisions that incorporates intangible assets and more accurately depicts how value is created.
The industrial age has run out of steam. Look at General Motors. Look at Chrysler. We are witnessing the death throes of management models that have outlived their usefulness.
The network era now replacing the industrial age holds great promise. Networked organizations are reaping rewards for connecting people, know-how and ideas at an ever-faster pace. Value creation has migrated from what we can see (physical assets) to intangibles (ideas). Look at Google and Cisco.
Understandably, seasoned executives, chief learning officers among them, are having a devil of a time shifting from the industrial age mindset of logic, certainty and bounded constraints to the network gestalt of interaction, self-organization, unpredictability and fewer limits to potential. The pressure is constantly on to meet quarter-to-quarter revenue and earnings targets that in turn accentuate the need to take decisions that support achieving those targets. At the same time, we are shifting into an era in which knowledge work and learning occur where re-engineered business processes collide with a participative and interactive ecology of information flows.
How can a chief learning officer hope to make informed judgments in this continually expanding networked environment that’s flowing ever faster, spreading power among its members and producing outsized impacts in unpredictable ways? What to do?
One cherished industrial age concept that is proving particularly difficult to let go of is return on investment (ROI). But like Pontiacs and Oldsmobiles, old-school ROI’s day in the sun is waning. In an environment of continuous flow and interaction, there’s a need to consider an emerging metric: return on investment in interaction (ROII). The working definition of ROII is the observable development of capacity and capability to create economic values out of intangibles.
Consultants and smart-aleck MBAs will tell you if you want to sell a big project internally, you’ve got to talk ROI. It’s the language senior managers understand. Being fluent in ROI talk addresses the “hard” tangible returns stemming from an investment in a specific project or capacity. It is supposedly the secret handshake that gets you to the inner circle of those who control budget dollars.
Let’s look at what ROI was, how it needs to be changed and how to recapture its original intent in the network era, in which continuous learning and knowledge work are becoming inseparable. As Steven Forth of the LeveragePoint division of the Monitor Group puts it, “Too many people who talk about the ROI of learning are focused on being precisely wrong rather than directionally correct.”
ROI is an accounting and financial management concept businesses use to decide where to make investments and to assess the success of investment decisions after the fact. ROI reduces both return — R, what you expect back — and investment — I, what you expect to put in to numbers — making it possible to compare one investment opportunity to another. The numbers tie back to categories on the balance sheet and income statement, (i.e. tangible assets and hard-dollar returns).
ROI is what you get for your money, divided by what you spent to get it. It’s R/I expressed as a percentage. In a business culture that is skeptical of nonnumerical reasoning, ROI implies disciplined, mathematical rigor. It ties actions to intended results. It shows the logic of how results will be achieved.
Companies set up ROI hurdle rates to gauge whether there will be sufficient payback over a reasonable and defined period of time to justify the capital invested to acquire additional capacity or produce a defined result. Companies also use ROI to evaluate past performance. In retrospect, what was spent and what benefits were received? This simplifies making the case for similar projects in the future.
What You Can’t See
In the network era, things you can’t see are more valuable than things you can. Thomas Stewart sounded a clarion call in his book The Wealth of Knowledge with his exhortation that building the capacity to create economic value through things such as innovating and enhancing brand reputation is as important, or more important, than generating specific results from a specific initiative. Twenty-five years ago, intangibles accounted for less than a third of the value of the S&P 500. Today, intangibles can make up more than 80 percent of that value.
On paper, Google’s net worth was about $30 billion at the end of 2008. That’s what it paid for computers, buildings and stuff you can see, minus debts and the expense of wear and tear. Stock market investors value Google at $125 billion. Where does the extra $95 billion come from? Intangibles.
“Intangible assets — a skilled workforce, patents and know-how, software, strong customer relationships, brands, unique organizational designs and processes, and the like — generate most of corporate growth and shareholder value,” wrote NYU Professor Baruch Lev in Harvard Business Review in June 2004.
Corporate decision makers say their goal is to increase shareholder value. In a networked, information-based environment, shareholders value brand, reputation, ideas, relationships and know-how. These assets don’t appear on the balance sheet, but more and more often they provide a corporation’s competitive edge. These most important aspects of the business aren’t recognized by old-school accounting and therefore aren’t factored into ROI calculations.
Organizations that make decisions based solely on things that are sufficiently tangible to be counted directly might as well consult a Ouija board to set their goals. Leaving the most important sources of value out of the ROI equation is not conservative — it’s foolish.
Measuring intangibles involves making judgment calls, so managers often exclude intangibles from their ROI calculations. Several purported authorities on calculating ROI suggest taking intangibles into account by putting them on a list but refusing to estimate their value. This leads you to comparing numbers to words, apples to oranges.
You Must Manage What You Can’t Measure
“You can’t manage what you can’t measure” was a mantra of industrial age management. Adopting F.W. Taylor’s brilliant research and models, generations of managers have carried stopwatches and pored over measurements in a continual quest to make things work better. Efficiency was the road to riches in the slower-moving, predictable industrial age, and measurement was the proof of the pudding.
While the measurement meme works when your goal is to tweak the way you’ve been doing things and other operational decisions, it doesn’t apply to making judgment calls, strategic choices or disruptive innovations.
Executives manage immeasurable things all the time. The more powerful the executive, the more likely he or she is involved in effectiveness — doing the right things rather than doing things right. Intuition, judgment and gut feelings guide these more important decisions. Qualitative assessment often can make up for a concrete numeric result.
Make a hypothesis of cause and effect. Interview a statistically significant sample of the workforce to see if the hypothesis holds up. Often, results obtained from social science research methods will produce more meaningful feedback than solid counts of the wrong thing.
The old “can’t measure, can’t manage” dodge doesn’t free businesspeople from making decisions under conditions of uncertainty, and the network era ushers in uncertainty in spades.
Making Decisions in the Era of Networks
A business network is a group of individuals or organizations that are linked together by factors such as values, visions, ideas, financial exchange and collaboration to further the ends of the corporation. Business networks share common characteristics with all networks:
• They multiply like rabbits because the value of a network increases exponentially with each additional connection.
• They naturally become faster and faster because the denser the interconnections, the faster its cycle time.
• They subvert hierarchy because previously scarce resources such as information are available to all.
• Network interactions yield volatile results because echo effects amplify signals.
• Networks connect with other networks to form complex adaptive systems whose outcomes are inherently unpredictable.
Intangibles travel via networks, and networks are the infrastructure for doing business in the future. An overarching caveat here: Strategist and practitioner Stuart Henshall said trust is critical. “It’s the one qualitative factor all networks depend upon.”
ROI, the tool we once used to evaluate projects in stable times, clearly is not up to the task. The impacts of collaboration-based knowledge work are accelerating. However, the Western world is lurching from crisis to crisis, and executives are under constant pressure to perform. It’s difficult for them to give up models they understand well.
In the future, organizational effectiveness will be defined by the interaction of workers in a networked environment. Exchanges of information and knowledge are what make peoples’ brains work on a purpose and what gets the imagination going to formulate pertinent responses. However, the return on networked collaboration is less tangible than the results generated from stable and ordered sequential tasks that dominate the efficiency-oriented industrial era.
So we face the problem of convincing managers to adopt new mental models that incorporate the intangibles generated by a whole system, the organization and its interconnected networks. Making a business decision to invest in new ways of working is a complex process involving many factors and intricate tradeoffs, such as:
• Risks must be weighed against rewards.
• Short-term vs. long-term aims.
• Alignment with strategic initiatives.
• Scarce resources call for shrewd horse trading.
Identifying and Measuring ROII
The focus in this new world of work is to do what’s important and involve those who know what’s important, why it’s important and what they know (or know how to find out) about a problem or issue. To begin measuring increases in productivity and value in a networked social computing environment, we propose return on investment in interaction (ROII), derived from the principles of Metcalfe’s law of networks.
Some core assumptions about ROII :
• Continuous flows of information are the raw material of an organization’s value creation and overall performance.
• Information flows are carried by links, alerts, RSS feeds, search engines, aggregation and filtering of content.
• All leading vendors’ productivity platforms now feature collaborative social networking and computing.
• These platforms’ architectures facilitate purposeful cross-silo communications and exchange.
In a June 2008 “The Network Thinker” blog post, social networking pioneer Valdis Krebs outlined four generic metrics that are becoming widely accepted as leading to observable, tangible measurable outputs:
• Increase in size of network.
• Increase in internal network connectivity.
• Increase in connection to valuable third parties.
• Increase in number of projects formed from all three factors above.
It’s important to note here that we are not proposing a definitive answer, but rather the need to debate and clarify the issues. Each of the principles outlined above proposed by Krebs addresses the productivity of network activity. Unpacking them can help us understand how to begin to assess ROII.
Increase in Network Size
If we follow the logic of two heads are better than one, and therefore X heads are better than two, in social- and knowledge-building networks, we can expect to find:
• More engagement with an issue.
• More analysis by more people.
• More input from more people.
• More possibilities that may have been overlooked.
• Quicker and more comprehensive analysis.
CapGemini’s relaunch of its knowledge management initiatives offers a great example. Its initial program wasn’t working: 20 percent year-on-year usage decline, three and a half year average document age and an average of seven years to refresh current knowledge. It relaunched informally via word of mouth and within six months had 27,000 of 83,000 employees using it, involved in 900 communities exchanging information and pertinent knowledge on a daily basis. All that activity came without spending a single dollar on formal internal communications or training.
Increase in Internal Network Connectivity
Increases in network connectivity involve the degree, frequency, density and concentration of information flows between nodes in a social network. The organization is able to define better business and market intelligence, more frequent and tangible customer centricity and responsiveness, and clear instances in which cross-silo knowledge exchanges lead to tangible results.
At CapGemini, six months after the informal launch, the 900 communities of practice were using 500 forums, 500 wikis and more than 250 expertise- or project-focused blogs. Business results as defined in the previous paragraph are not long behind.
Increase in Connection to Valuable Third Parties
In today’s increasingly interconnected environment, ignoring external parties that have an interest in products or services is a guarantee for trouble. These interested parties talk about brands or offer up opportunities, and organizations that respond rapidly and effectively to issues gain competitive advantage.
Ford Motor Co. opened up its launch of the new Sync service to customer input and conversation. With 1 million page views in less than 12 months, the company experienced a significant reduction in customer-service support costs as 10,000 customers began to offer each other tips, pointers and answers. Further, it began to receive significant tangible market intelligence as engaged users began to share product integration and compatibility experiences, tips and tricks.
Increase in Number of Projects
ROII is obvious when the scope, degree and intensity of interaction increase due to implementation of the three above principles. An increase in the number of projects creates value as people learn to work together effectively in networks, putting informal learning to work on resolving issues, creating opportunities and generating activity that enhances an organization’s reputation for listening and responding effectively.
Fast Company recently published an article on Cisco Systems’ large-scale adoption of social computing as the main means of working with information and knowledge. CEO John Chambers said that as a result, Cisco has gone from being able to focus on three to five strategic initiatives at a time, to now working on 26-27 strategic initiatives in parallel.
The heart of the matter is providing decision makers with an informed business case that ties investment to the results that it brings. A solid case describes results in business terms, such as increased revenue, better customer service, reduced cost or speedier time to performance.
Network returns are asymmetric, so simplistic count-’em-up approaches are no longer viable. But how can one make a solid network-era case to an executive who is still playing by yesterday’s rules?
The answer is to improve the corporate network as a continuous process, not as a project with a hurdle rate. Improving network performance need not be all-or-nothing. It can be implemented in small stages. Break major decisions into numerous low-risk incremental decisions. Instead of making one major decision a year, CLOs might look at boosting network results as a series of monthly decisions. Continuous monitoring of the statistics of ROII would guide mid-course corrections.
Life was simpler when you could measure performance by counting the number of widgets produced, shipped or sold. Given that the networked workplace and markets are here to stay, how can managers begin to adapt and refocus long-standing mental models about what and where to invest precious energy and time? An effective response to this conundrum is qualitative assessment.
Create a hypothesis and use existing techniques — surveys, focus groups, facilitated brainstorming — to find out what employees and customers are doing and how they want to work together. Then, check it out with a wider sample of the workforce to see if it holds up. It’s clear we are moving rapidly into a networked world in which responsiveness, innovation, gaining competitive advantage through learning faster and embedding knowledge into products and services are all important.
In a world of intangibles, we need to contribute to the productivity, viability and profitability of any given enterprise. We should rethink and expand our methods for making judgments about where, when and how we invest in the ongoing interaction between our employees and customers. That is the return on investment in interaction.