HR, Recruiting, and Candidates

I read a well intentioned post on LinkedIn today that really got me thinking about the recruiting process. This being near and dear to my heart since I’m going through the process of finding a new job. While at my last job I was fortunate enough to be both a hiring manager for 2 employees and involved in the hiring process for 5 positions that would not be reporting to me. Discussing with my manager the different requirements for positions he and I aligned on one thing, we wanted the best person regardless of how they looked on paper. In many cases this directly conflicted with the requirements of HR since the salary bands the employees we were hiring for required degrees or certifications.

For example one of the Business Analysts we decided to hire didn’t have a college degree, but because of the salary band required to get high quality candidates we had to have a college degree as a requirement, even though we didn’t believe it was truly a requirement. This BA turned out a better hire than one of the other BAs that had a college degree and a great deal of BA experience. Another perfect is example is the face that one of my hires was “required” to have a nursing certification to earn the pay band we knew was required to find a highly qualified candidate. I had to fight HR and argued it wasn’t truly required for the position. I eventually won and the person I hired worked out amazingly well and in fact is more highly regarded than his counter part that has that certification. Finally, one of our POs for the product had neither certification nor college degree. He has done extremely well without those certifications – granted he earned a certification and a great deal of trial by fire experience, but he started out strong because of his business experience.

These are just examples from my personal experience. This is ignoring the number of great people that have become famous despite their credentials that would have had them relegated to the dust bin in less than 6 seconds by the recruiter above. If this is the best system our current Recruiting and HR experts have developed, it’s a deeply flawed system that needs some serious rework. Finding the right candidate is difficult. It requires team work between HR, Recruiting, and the Hiring Manager. These conversations and dissociation of salary and degree requirements from applications will likely reverse the trend of college degrees required for every position. I think our thought leaders in Recruiting and HR need to do better, the article above indicates there’s a great deal of waste and non-value added activity in the vetting process because a good fit that is excluded after 6 seconds is a defect and any candidate that looks good on paper but is clearly a bad fit is also a defect to the process.

The hiring process is extremely expensive as is the onboarding and training of a new hire. Any clear poor fit from the start indicates there defects and waste in the hiring process that need to be addressed. Bragging about a 6 second “review process” isn’t the right thing to be doing, figuring out how to fix the process to ensure that the right people are hired the first time at the right time should be the goal of recruiting.

Legacies and Self Reflection

Last night while listening to Pandora, Fall Out Boy’s “Centuries” came on, not a huge fan of the song, but it got me thinking about how difficult it is to be remembered for “Centuries.” Even 100 years after a person’s death is impressive. Considering the fact that most people if asked who the richest person ever is, they wouldn’t come up with John D. Rockefeller even though his legacy is likely to last more than 100 years.

This made me think about my legacy at the companies I’ve worked. Once you leave a company having a positive legacy for years to come is difficult unless you implemented a major project or new product. This is important to me considering I’m going through a “Career Transition” according to my previous company. My last day is on Friday the 13th, because I’m being laid off. At my previous company my only real lasting legacy will be the impact of the process improvement training program and my help on the new medical management system. The latter will likely not be a long lasting legacy, while the former might last as long as the people I trained.

I am being let go because my organization didn’t prioritize process improvement, so my position was eliminated to make room for higher priority employees. It happens, i’m disappointed because we were just getting our program off the ground. We had several completed Kaizen events and one of them is up for a Blues Innovation award. I’m excited to have made that much of an impact so quickly with my student’s work and jobs. I believe that my students will continue to thrive and make significant changes to the organization using the skills I taught them.

I hope that my previous job’s legacy for me is to have learned from what I did well and did poorly at the organization. I know I was far from perfect and have room for improvement. I believe I can and will improve and that I will end up in a better position because of my experience at this job.

Economics is failing

Yes, that’s right, traditional economics is failing, but then we knew that. We hear talk that we’re out of the recession, but for a lot of people that doesn’t seem to be true. Many businesses are out of the recession and the “market” seems to think we’re out of the recession. However, what does it mean when the market is out of the recession? A lot of the market runs on high frequency trading, so the market can make money without a lot of people participating. Based on traditional economics theory, these markets should behave in a specific manner and they aren’t.

Slate calls this the difference between salt water and freshwater economics. Where the freshwater economics is based upon a lot of the traditional neoclassical theories, while the salt water economics is what the market traders are using. They’re using physics or other sort of network models that aren’t included in traditional economics theories.

Many of them have begun to use various forms of evolutionary economics, because it works. However, there’s a disconnect between the market and many of the leading theorists in Academia. Why? because those economists have made a career out of developing these theories. I believe that economics is at the beginning of a paradigm shift and it’s going to be painful. A lot of things are going to be changing because of this paradigm shift.

We’re staring at the end of jobs within the next 40 years, not all jobs, but a huge amount of the works force is going to be automated. Google’s working on industrial robotics with Foxconn, multiple companies are working on driverless cars, a few companies have developed drag and drop software so you don’t need to know how to code to develop software which will automate work because you build in your process rather than building your process around the system. This is radically going to change work. In the Race Against the Machine book it’s clear we’re going to be seeing changes in how our society works.

We’re going to be entering a time period where traditional economics doesn’t work and neither does capitalism. A blog post I read the other day has an interesting discussion of how we can move beyond capitalism (based on Star Trek). By the way, when I’m saying capitalism isn’t working, what I mean is that it’s not going to work to fundamentally keep the majority of the people working or provide any realistic relief to non-working people. It will be working quite well for a subset of the population that figure out how to survive or thrive in that economy. The question at that point becomes not what we think our economy is or should be, but what we value as a society.

I’ve talked about this in other posts in the past, however, I think that when we are looking at the “market place of applicable ideas” and we see that the people that should be influenced the most by economic theory AREN’T using it, but our government is, we have a serious problem. People at banks making huge sums of money on trading should be influenced by economic theory because they deal with vast sums of money and are actively driving a huge portion of our economic activity (valuable or not is another question). If they don’t see value in using those theories, then our leaders that are still applying them need to seriously rethink what theories they are applying to “manage” our economy.

When the prevailing theory in a discipline is failing, for the discipline to survive it must move beyond it. Typically the new theories that save it come from outsiders and indeed in economics it has – from two sources, Biology and Physics. Hopefully our leaders and teachers can see it before our current economic theories destroy us all.

Work, Lean, and Health

I just visited a nutritionist today. I’ve had issues with Gluten for years and I’ve also been diagonosed with Hypoglycima which is a condition where my blood sugar levels aren’t well regulated by my body. The combination of the two has caused me no end of issues. At this point, it’s been difficult to tell the difference between a glutening and low blood sugar, at least a low level glutening anyway, a serious glutening it’s pretty obvious. I feel drunk within a few hours and then have the shits the next day or two. It’s pretty bad. Anyway, the combination has been pretty difficult to pull a part. When i have spikes in my blood sugar it makes me feel out of it as well. So, I’m going to really address both of these issues through better nutrition and probably more working out as well.

How does this connect to work and lean process improvement though? Well, at Cambia, we get a discount for eating salad’s and other healthy foods, so I’ve already been doing that, but that’s not the work connection I’m talking about. I just started reading a book called “Lean is Healthcare” which I picked up because I thought it was actually a book on Lean in Healthcare – pretty understandable confusion I think. I’ve only read a few pages, but as a lean practitioner it really ressonated with me. The premise is that Lean is a way of improving your employee’s health. Thinking about it now, it’s pretty obvious, but it definitely was an Ah HA moment when I read that.

Lean helps create flow in work. This is for both the product as well as the worker. Flow can be described as feeling you get when everything is just clicking. It’s like when a basketball player can’t miss a basic, they are in a state where they are relaxed and feeling good. It’s similar to a meditative state – think about any of the projects that you’ve gotten into and time just flew by. When you think about work, you never think about flow like that. I’m sure you’ve had bits and pieces of flow – but they don’t last very long. However, imagine if you were able to get into a job where everything you did flowed like that. Where you walked into the office and you walked out feeling accomplished, got things done, and excited to come back tomorrow.

I think there are a few companies that encourage that – companies that encourage creative coding and design are likely the best at this type of work. Why? Because they are all about thinking and connecting ideas and concepts to each other. It’s easy to get into a meditative state when you’re really jamming away at code. I feel a similar mode of thought when I’m blogging with a keyboard that works.

Work like this makes you feel better. It’s better for your health, better for your life balance, and better for your confidence. With that in mind, shouldn’t it be a moral imperative for a company to shift to enabling work like this? Work that makes you feel accomplished, healthy, and productive? Isn’t it also a financial imperative as well as all these things increase the value the company gets out of you as an employee?

I think the answer is yes to all these questions. I will be thinking about this as I work at Cambia continually driving towards for productive work and healthier stress balance for the employees.

Intellectual dishonesty in corporate America, CEO Salaries

Apparently CEOs are upset that the Security and Exchange Commission is going to require calculation of CEO pay based upon median salary of all employees rather than Mean or average. They argue that this would burden them with unnecessarily complex calculations. This of course is an absurd statement. Let’s do a thought experiment to walk through the difference between averages and medians.

You, a friend and Bill Gates get on an elevator, your current net worth is $100,000, your friend’s is $200,000 while Bill Gates is somewhere near $60 Billion. The average net worth of the three of you would be $20 billion, while the median is $200,000.  The difference in ratio between these examples are staggering. In the example of averages, Bill Gates is only 3:1, while in the second example it’s 300,000:1. Major difference correct? This example is specifically designed to highlight the massiveness of the differences between averages and medians.

As you can see in the chart above with a skewed distribution there will be a gap between the median and mean. We hear this routinely when people discuss home prices, they are always discussed in medians, because the average price of a home is positively skewed by millionaires in most cities. Like the one above.
So what would the difference in salaries be if salaries are calculated off of median rather than means? Well, let’s use some real numbers, in 2004 the US the average annual income was: $60,528 while the median was $43,318 (source wikipedia). We’ll look at the extremes for ratio difference compared to these numbers, the JC Penny CEO earned 1795:1 the mean worker, so his salary could have been: $108,647,760 for the Mean compared to $77,755,810 or $31 million less (obviously the mean and median salaries for JC Penny’s employees are lower than the median or mean values for the US). On the lower end the CEO for Agilent Technologies earn a measly 173:1 or (mean) $10,471,344; (median) $7,494,014 or $3 Million more. 
Limiting CEO salaries based on the median means dramatically less money for the CEO. It also highlights disparity in numbers of people that are making really low salaries. I would imagine that for a company like McDonald’s or Wal-Mart the median salary for employees is between 20-30k/year, which would drive down the maximum salary well down if the limit is something like a ratio of 100 (median of 25k*100 = 2,500,000). 
The true concern of the complexity comes from not the new method of calculating the maximum ratio a CEO can earn using medians – especially as it’s built into excel (=average()/=median() ) and nearly all financial tools, but in the complexity of creating compensation packages to get around that law. If the law is strictly implemented where there is absolutely no wiggle room where all stock options, bonuses, and base salary cannot be above some set ratio on the median salary, then the only way to pay CEO’s more is to shift that median up. This would impact profits and most likely profit margins. A way around this would be to outsource manufacturing and exclusively design in the US thus shifting up median salaries. It will be interesting to see how CEOs and leadership address this.
Otherwise they might have to make a lot less money per year and save shareholders a lot of money.