Wednesday, February 02, 2005
New Professional Digs
In the meanwhile, I can be reached at email@example.com
Wednesday, January 05, 2005
Linking the corporate and employment brand
Tuesday, December 14, 2004
A Tale of Two Employers: Your Internal Brand in the Best and Worst of Times
Here’s how the story goes. Whether you’re a leader, an independent contributor or line staff at a profit center, if your work at a large company, you have at least two employers hiding under the same internal brand (that is, if you’re lucky enough to have an internal brand). Unlike London and Paris, separated as they are by geography, language, history culture and aristocracy, these two employers share so many of the same attributes that it’s quite easy to miss the important distinctions that divide them.
Employer number one—call it “your work”—is the one you keep closest to. Your job is typically defined on your end by the unique (or not so unique) competencies you bring to the table, your boss, manager or leader, your peer group, and your daily activities. Generally, these factors, along with some help from the marketplace and your other employer, define your cash compensation as well as a significant portion of your bonus or incentive pay. Clearly, because it includes both your professional skill set and your daily operating environment, your relationship to your work is fairly intimate, even emotional.
By contrast, employer number two—call it “your organization”—operates at an arm’s length from you. Your organization is defined by the overall organizational mission and values, the strategic direction of senior leadership, and, as a result of these two factors, is generally expressed through HR via policies and procedures, but also—and more importantly—through recruitment positioning, learning, training, benefits, as well as “soft” compensation such as time off, vacation, flex scheduling, and so on. If your relationship to your work is intimate, your relationship to your organization is both more philosophical and more all-encompassing. Your boss, manager or leader may ultimately determine whether you have a good or bad day, but your organization determines how you’ll fare in retirement, how much time you can take off to care for a sick parent, spouse, or child—and quite often, what kind of care you’ll be able to provide them.
To understand why this distinction is so important, we need to add one more element into the mix: your internal brand. If you have one—and you should—it articulates what the organization stands for. It’s complementary to the external brand, but not identical, because while the external brand represents what the organization promises to deliver,* the internal brand messages to the value proposition behind that delivery. If the external brand answers the question “what does the organization do?” the internal brand answers the questions “how and why do we do it?”
Here’s where the tale of two employers gets interesting. Recruiters like to say “recruitment is about getting the front door open; retention is about keeping the back door shut.” This makes good common sense, except the doors are on different buildings. Recruitment efforts typically focus on reasons to join the organization—that is, to join employer number two. But if you look at stats on why people leave, it’s typically because of a bad fit between you and your work—employer number one, be it an unresponsive boss, poor management, problems with your work group, whatever.
What’s the problem with lumping both employers together? The problem is that while it’s generally HR who’s asked to create retention solutions—because retention is, after all, an HR issue—HR typically has limited operational influence. That is, HR controls most of the levers that shape your organization, but it has to get permission to move the dials on your work. So while everyone may agree that operational changes would be a good thing while sitting at the leadership table, there’s a strong likelihood that HR will only be able to change what it actually owns.
Let’s get a bit more specific. Let’s assume key employees are leaving, that we’ve developed consensus that there’s a problem, done our due diligence by conducting exit interviews and qualitative and quantitative research among current employees. If our research indicates employees are being lured away by more generous time policies, better retirement plans—or even better pay, if there’s money and will to address it—HR may be able to do something about it. Now, I don’t want to suggest that HR has no operational impact: if research shows managers lack management skills, for example, HR can create training programs to address issues like this, too. But if the root problem is a misalignment between what the organization says about itself and what’s true about it, HR will need help to effectively address the operational issues that define “your work.”
This is where the need for a resonant, robust internal brand comes into play. Because it messages to what we do and why we do it, the internal brand serves to unify “my work” and “my organization.” Think of the internal brand as a clear light on a dark night: by aligning what we tell the marketplace with what we ourselves believe, a strongly-articulated internal brand helps managers and employees voluntarily align their work with their organization’s mission and values. And that voluntary alignment is a much stronger key to retention success than anything leadership can put in place if the recruitment promise doesn’t receive a payoff in the real day-to-day work experience.
Building that internal brand is a topic for another posting, but I don’t want to close this thought without one really important caveat: an internal brand cannot succeed if it’s just an empty promise. It must reflect the reality of both your work and your organization.
How close to the promise does the payoff need to be? Different industries and different specialties will have different answers. A few years ago, when IT was hot, most IT professionals were well taken care of. Then came mass layoffs and, for lots of IT professionals, anything was better than nothing. Today, in almost every industry, if you work in IT, you’re likely to take anything your employer tells you with a grain of salt. Or two. So even if the promise is “steady employment,” if the payoff is “for now,” that’s going to work, at least until the IT marketplace heats up again. But it’s worth remembering how recently those rules were written, and how expensive good IT hires were just a bit before then. External brand professionals are fond of saying that “branding is the promise you make, while your brand is the promise you keep.” This is true in the long term, but less so from day to day. As consumers, we’re only aware of the brands we experience when we experience them. I might see a hundred Saturn ads before I decide to take a test drive, and until I do, unless I run across other information by chance, the ads are my brand experience. Great or terrible things may happen at Saturn over the two or three years those ads run and I’d never know it: but Saturn’s employees will. While my brand experience can be little more than an occasional drive-by, their experience of Saturn’s internal brand promise is lived every day, on Saturn’s best, proudest day, and on the worst.
The Moral of the Story
So if your internal brand connects your work with your organization, how does this solve operational problems? Simply put, it doesn’t. It can’t. Operational problems can only be fixed by operations. But most people go to work with the right frame of mind. They go to work for one reason: to work. They want to be productive, to contribute, to add value. As the old aphorism says, it’s the pebble in your shoe, not the mountain before you, that slows your progress. Employees: same. Absent underlying problems with the health of the organization—that is, if the equipment works and you can produce widgets—they have the skills, the knowledge, the experience and the dedication to overcome most of the issues that stop them cold today. But only if they know where the organization is going—and if that understanding is shared by the other folks who determine the contours of their work. Earlier, I said that your internal brand was the mechanism by which managers and employees could voluntarily align themselves and their work with the organization’s larger goals and objectives. That’s why a strong internal brand is so important, because it’s the tool—perhaps the only tool—your organization has to strongly influence your work in the best of times—and in the worst of times.
* Yes, I know: external brand positioning is more complicated than simply what the organization delivers; it includes everything the marketplace knows, thinks, believes, understands and misunderstands about the organization. But this is the most relevant aspect of the external brand for my purposes here.
Wednesday, September 15, 2004
The Promise of Vertical Integration: Getting the Brand Bang Your Benefits Bucks Bought
The Numbers are Compelling: The Issue is Real
I'm going to advocate a radical, sensible realignment of benefits and brand that I call vertical integration. But befote I do, I'm going to start with some big concepts and big numbers. You’ll see that the numbers are compelling and that the issue is real.
Let’s begin with Fortune 500 employers. As you know, they’re crucial to our economy. And as you probably know, they’re influential model purchasers: what they do, others will typically do.
What’s important here, though, is to understand that these Fortune 500 corporations not only model, but cover, a substantial piece of the marketplace. Together, the Fortune 500 firms cover about 20 million employees and many more dependents and retirees.
So what does this coverage look like in terms of costs? Widen the lens to a landscape view across the U.S. economy and the picture is stunning: in 2002, according to EBRI, benefits costs averaged $6.07 per hour worked, or 27.4% of total compensation costs.
Let’s look at just one of these cost drivers: health care. Health care spending alone accounted for $1.7 trillion dollars in 2003, or more than $5,800 per person, making up more than 15% of the GDP. What's worse, it’s estimated that annual healthcare spending will reach $3.4 trillion, or more than 18% GDP, by 2013.1
Now, let’s put those dollars into context. In 2004, the California deficit, which received so much press late last year, is estimated at $30 billion. That amount is approximately equal to 20% of state spending, or 1/3 of California’s operating budget, but it ONLY amounts to about $1,000 per Californian.
Even at the Federal level, the 2004 deficit is estimated at around $521 billion. Though the White House and the Congressional Budget Office can’t seem to agree on what the number should be, one thing is clear: it’s a whole lot less than last year’s spend on health care.
Do employers pick up this entire tab? No. I don’t have numbers for 2004, but according to EBRI, in 2000:
- private sector employers paid out $334 billion
- private sector employees paid out $80 billion
Again, these are 2000 numbers, and they’re within spitting range of the 2004 federal deficit. The key points to take away are these:
- employers are paying these costs; and
- we’re only looking at one cost.
Add in pension costs, defined contribution plan costs, and the rest of your typical mid-size or large employer’s benefits suite and you’re looking at some very large costs--on average 27% of total compensation.
So now let’s turn to brand costs. It’s much more difficult to draw a bead on exactly what employers spend on brand, and this amount varies hugely by sector and by industry within sectors, but ad spending is a good rough measure, since every ad dollar ultimately supports a brand.
- in 1991, US ad spending was $126.4 billion
- in 1994, it was $150 billion
And those numbers only know one path of travel: up. Compare those numbers from a decade ago with spending today:
- in 2002, the largest 100 US advertisers spent .31 to 3.6 billion on ads
- in 2004, US ad spending is anticipated to reach $248 billion
The largest 100 advertisers are not the same as the Fortune 100. What drives a lot of ad spending--and we’ll come back to this later--is the need to differentiate products. So, for example, colas, jeans, bottled water all need to move large volumes of similar products, so they must spend hard to differentiate themselves from others.
Niche product lines with more differentiators--like, for example, marine diesel engines--can spend less. But even among the big spenders, you can see a large range, from 1/3 billion to three and a half billion.
Here’s the key takeaway. This year, ad spending will reach nearly two hundred and fifty billion dollars. That’s:
- eight times California’s deficit
- nearly half of our federal deficit, and
- more than two thirds of what private employers are paying in health care spending.
In sum, employers spend billions providing benefits and billions promoting brands. The question is, do these billions reinforce the same messages? And if they don't, is that a problem?
In both cases, the answer is clear, but not comforting. Employers spend heavily on brand and on benefits, but rarely tie dollars spent together in a meaningful way. Simply put, they "talk the talk," but don't "walk the walk." And while it's difficult to calculate the cost of missed opportunities such as these, it's not hard to demonstrate the impact when all the brand elements line up.
In coming posts, I'll take a closer look at:
- What internal brand is--and what it isn't
- How we brand benefits
- What vertical integration is
- Why you should do it
- How to get started.
1. Wall Street Journal, 2/12/04 rpt. in Hewitt Daily News.
Tuesday, August 31, 2004
"Intranetworks:" The Next New New Thing
LinkedIn (www.linkedin.com) and Friendster (www.friendster.com) are good examples of relational databases, but you'll need to use your imagination a bit to bend these models to fit the opportunity. I'll explain how this technology could work in a moment, but first, let me outline the critical problem it will solve.
The Problem: who you know is how you succeed
In most large, politically-complex organizations, you walk in to your role with the knowledge and skills you need to get the job done. As a result, the hardest, most time-consuming part of work is often finding the right contacts to help move things along, or to connect you with the folks who will. The organization's only formal solution to this problem is the org chart, which allows you to find the department who owns the business, the person who owns the piece work, make a cold call, and hope for the best.
Org charts aren't terrible tools, but there are two important needs they can't address. First, they aren't very good at indicating where the real power and influence are hidden. For a quick illustration, think for a moment about the incredible influence a typical good executive secretary holds. Anyone who's had any business success at all knows that following the org chart to the business owner without tapping in to the executive secretary can be a bad miscalculation.
The second problem with org charts builds on this idea: the quickest path to the influence you need is the influence you have. Said another way, warm transfers work better than cold calls.
For example, say you need to influence Rudi. You don't know him, but you're both good friends with Karl. It doesn't take much to realize that Karl may offer the quickest path to influencing Rudi--even though talking to Karl adds another step to your process.
But what do you do if you don't know that Rudi and Karl are friendly?
What tools does your organization provide to help you tease out the soft links between people--the links through which so much work gets done?
In a word, none. But for tomorrow's smart organizations, relational databases will change that--and fast. When this trend begins, it will completely transform the practice of work in corporate America.
The Solution: everyone you know knows someone you need
So let's talk about relational databases. Imagine an organization in which each employee has a Web page. On this page are a number of fields, including name, title, phone, and so on,* but also including fields entitled "recent projects," "recent roles," and "my network."
This first data set--data unique to that user, like name and phone number--is "dead" data. It's just there, on the page, providing static information. But the second data set--the projects, roles, and network--is live data.
You can click on it.
And when you do, the underlying technology aggregates all the like entries into a new web page.
Let me give you an example.
Let's say you're looking at my page. You see my name, my phone, maybe my photo, and so on. Below this, in the "recent projects," you see "MetLife Transition." It's underlined in blue, so you know it's an active link.
You click on the link and a new page appears, showing the name and contact information of everyone who worked with me on that project.
So if you want to get the 411 on how that project went from multiple sources, the hardest part of your homework is done with a single click.
Recent Roles would follow a similar logic. In that field, you'd see a listing of my past titles and departments. Click on the link, and you'd see who I reported to, what I did, and even, who I worked with.
But to understand the real promise of this technology, you need to imagine the next field: "my network." In that field, you'd see a listing of all my friends throughout the organization. These are the folks with whom my word, my opinion, carries weight. They trust me: I trust them. I picked each of them, and each of them picked me. These people are my real network, a network you won't find reflected on any org chart.
In this workplace of the future, you'd have a similar page. So would each of the people in my network, in your network--everyone in the organization would. And each of these pages would radiate out to a different network. And each of these networks would connect through the aggregating ability of the underlying relational database.
To bring this back to earth, let's go back to the problem of Rudi and Karl.
You want to influence Rudi, but you don't know that Rudi and Karl are friendly...until you type Rudi's name in on the "search" field of your page and find that your networks both list Karl.
You call Karl.
Karl calls Rudi.
You have the warm transfer you need.
And more importantly, the organization has the tool it needs to enable you, Rudi and Karl to do what you've all come to work for: to get work done.
Imagine how much it would simplify your life if you had this technolgy today!
So why isn't anyone doing this yet? I just don't know.
As I said in my lead, the technology is in play at Friendster (http://www.friendster.com/), at LinkedIn (www.linkedin.com), and I'm sure it's in play in a dozen other places. But to the best of my knowledge, no large organization has seen the promise they hold.
Nor have the folks who own the technology (friendster, linked in, etc.).
Nor have the folks who own the relationships for which this technology would be the best value-added (PeopleSoft, Oracle, SAP etc.).
But when they do, things will change. Fast.
The intranet will become an "intranetwork." And as more and more organizations adopt these "intranetworks," it's only a matter of time before they escape the intranet and spill out into the public domain, reshaping everything from how we shop for realtors to the way political campaigns are contested on the local, and even the national stage.
When it happens, just remember you heard it here first.
*Some fields--including contact information, title, place in the organizational hierarchy, even scheduled time off--could be live data imported from the enterprise's HR information system, but most fields would be customized by the user.
Monday, August 30, 2004
Coming to This Space Soon
Thursday, August 26, 2004
Let me introduce myself...
The purpose of this blog is to:
- provide a forum for introductions;
- share my thoughts on great communications practices--and great under-utlized opportunites for communications to add value.
To that end, you'll find links to my network of professional associations and samples of my work on--or linked from--these pages.
You'll also find commentary on trends and opportunities in the fields I follow closely--communications, human resources, internal and external branding, and health care.
If you've never visited a blog (short for "web log") before, you may wonder why I didn't just create a web site. The short answer is simple: web sites are great for broadcasting, but blogs invite discussion. If you want to respond to anything you find here, just follow the "make a comment" link below the posting.