Archives for August 2013

Monetizing Leadership Development

A learning leader is sitting at “the table” about to make a proposal to the C-group for funding for a new leadership development program.

It is an expensive venture, and the argument will have to be compelling because this will be the only opportunity to make the sale. It requires an attention-getter.

Open with a sentence like this: “Effective leadership drives productivity, operating revenue, cost management and profitability.” No one will disagree with that.

The second sentence could be: “It is imperative that a leadership development program’s outputs make a connection with those financial outcomes.” That will grab attention.

Now, they are waiting to hear how to connect leadership to making money.

Management consultant Peter Drucker posed the most basic question about leadership. He asked, “Leadership for what purpose?” The learning leader can respond by describing how he or she will monetize leadership.

Simply put, leadership equals market plus organization plus individual.

Revenue-generating leadership is a function of analyzing market forces plus the organization’s culture and desired individual (leader) behaviors.

Then, through predictive modeling, learning leaders connect the human and the financial sides of the business.

Predictive Analytics

Learning leaders are smart enough to know they can’t just buy a leadership development program, plug it into an unanalyzed environment and expect positive results.

Leadership is a complex phenomenon involving more than just individual behavior. It is about the interactions among the organization’s vision, brand and culture as they are affected by market forces and management’s strategic plans.

Building an effective leadership model requires an analysis and integration of where — the market; what — the organization; and who — the culture with leader character and behavior.

1. Where — the market: When convincing the powers that be to fund leadership development, start by describing why it is necessary that the C-group provide intelligence on future market fundamentals.

They already have studied this to prepare their business plan. The learning leader needs their conclusions regarding the following issues. Do they believe:

• The economy will grow, be steady or decline in the organization’s market sector?

• Competition will become stronger or weaker, and are there market disruptors on the horizon?

• Customer trends and demands will affect innovation, price, delivery, quality and service?

• Technology advances will enhance employee ability to communicate and perform?

• Skilled labor availability will become easier or more difficult to acquire?

• Government regulations will affect the business?

Change will occur during the next three to five years, but the directions it will come from will have different consequences. For instance, a change in regulations drives one type of management change.

A change in technology will drive another, and changes in customer trends will require yet another type of response and therefore leadership.

2. What — the organization: When making the pitch for funding, the learning leader will describe how the CEO’s vision, the company’s brand and the corporate culture must be aligned and integrated.

These three elements must be coherent, otherwise the employees will be confused. They won’t know what to value or prioritize, how to treat customers or how to work together.

Will people come to the company for top quality or low prices? Will innovation, exceptional service or operating efficiency be paramount?

Leadership is different depending on the brand promise and the culture.

How will financials affect leading? Does the C-group foresee a long-term positive or negative trend in market growth?

Will there be major investments in technology? Leading growth is different from directing cost reductions or transforming the culture.

3. Who — the individual: Remind the C-group that the act of leading is a combination of character and skill.

What kinds of values, attitudes and beliefs do they want to see in their leaders? What are the most important and preferred behavioral skills? How do these support the desired corporate culture?

Assessment providers can carry out a study of the current and potential leaders along a number of predetermined abilities.

Accepting that the assessment provider has researched traits for effective leadership, the learning leader is still left with Drucker’s question: for what? Clarify the vision, brand and culture.

The following are a typical set of leadership traits from assessment company SHL:

• Leading and deciding.
• Supporting and cooperating.
• Interacting and presenting.
• Analyzing and interpreting.
• Creating and conceptualizing.
• Organizing and executing.
• Adapting and coping.
• Enterprising and performing.

Potential leaders are assessed on their level of proficiency on such a set. Now connect leaders to the business and predict how the leadership program makes money.

Note: A not-for-profit still must operate efficiently to fulfill its organizational charter, such as providing cost-effective services to its constituency.

Predictive Modeling

Next is the seminal task of the leadership development model: predicting value generation. The learning leader now has to show the C-group how to bond the leadership model to financial outcomes.

This predictive leadership model could open with a study of the market and the organization. This sets the stage to consider the current competencies and future capabilities of the workforce.

First, top management has made its strategic business plans. Competitive advantage comes from replacing generic skills with specific capabilities appropriate for the organization’s plans.

Objectives within the strategic plans are business side issues such as revenue, market share, EBITDA margin — or earnings before interest, tax, depreciation and amortization — and total cost of workforce, along with other financial metrics.

On the human side there are the assessment data. The assessment scores show the level of capability across the various leadership characteristics. To monetize leader skills with the business plan, apply structured equation modeling.

Depending on the problem, select a predictive statistic to link the two sides. Learn how each of the assessment variables can affect the strategic plan goals.

Development Experiences and Financial Connections

In a development tool kit there should be a number of methods to help people learn and grow. Developmental tools are the resources learning leaders apply to the individual skill and knowledge gaps that assessments expose.

For example, if there are deficiencies regarding decision-making, give people a model to study or a course to attend. Interaction problems might be dealt with through mentoring.

Analysis and creativity might be improved through some focused on-the-job training. The point is to match development resources with the assessed deficiencies.

Often development blankets are thrown over everyone regardless of specific needs. Experiments have shown the strongest correlation of effective learning is the recipients’ feeling about what they need to know. Absent that, the development investment is almost totally wasted.

The client’s initial reaction to the HCIS is, “We could never collect that data.” The second is, “We wouldn’t know what to do with it if we had it.” Someone likely will challenge the first objection by pointing out that their HR services already produce most of the raw data, but they have not organized it this way.

Handle the second concern through a couple days of training. The base is accounting logic. This model just requires a commitment to monetize the human capital side.

As the learning leader concludes the presentation to the C-group, they should recognize how the development program will contribute to financial results. Congratulations — the program should be funded.

Jac Fitz-enz is founder and CEO of the Human Capital Source. Reprinted from Chief Learning Officer

Online Learning Gets Massive, Open

Recruiting company Aquent is using a new twist on online learning to help its clients hire next-generation Web developers.

Faced with job requests from companies that it could not fill, the Boston-based specialized recruiter for ad agencies in 2012 launched a massive open online course, or MOOC, on skills related to HTML5, the latest version of the markup language that defines how Internet content gets structured. Ad agencies need Web developers well-versed in mobile technologies such as HTML5, yet many code writers seem to lack the necessary skills to compete for available jobs, said Alison Farmer, Aquent’s vice president of learning and development.

“Even though unemployment was high, companies were telling us that most candidates weren’t qualified,” Farmer said. “We wondered: ‘How do we take candidates that may have been competitive a year ago and help them acquire emerging skills?’”

Use of MOOC formats has been confined to academia, although Aquent’s businesslike approach could signal a shift in how corporate training is delivered. MOOC providers — Coursera, EdX and Udacity, all of which are start-ups — are locking up agreements for learning content with prestigious academic universities, including Harvard, MIT, Princeton and Stanford. Even well-established software company Blackboard Inc. recently announced it was getting in on the MOOC action, adding an optional MOOC platform to its Blackboard Learn product.

Precise data on how many corporations are exploiting the MOOC format, and why they’re doing it, is elusive, but the number is believed to be small. Companies have been slow to adopt MOOCs due to concerns about development costs, privacy and security, said Chris Davia, the chief technology officer at ConnectEDU, a Boston company that develops Web-based tools for college and career planning.

Another drawback: the MOOC format is so new that companies lack a way to connect the dots between what employees learn and remaining skills gaps. Since the courses are offered free of charge, attendance and participation rates are not formally tracked. The lack of such quantitative data makes it difficult to evaluate if people are actually learning — and more important, practicing — what they have learned.

“Without the ability to securely send (information about) employee progress back to the enterprise, companies aren’t likely to incorporate MOOCs into their training and development strategies in the short term,” Davia said.

On the other hand, Davia said it’s only a matter of time before the cost of deploying a MOOC platform is on par with learning management systems. “The market for (corporate) MOOCs will start to mature when large multinational companies realize they can use it to develop their talent pipeline,” from identifying new recruits to helping employees master competencies required for job proficiency, Davia said.

Here’s how a MOOC typically works: hundreds or even thousands of students enroll in self-paced digital courses of study, which typically include virtual “lectures,” completing online graded exercises and extensive participation in collaborative online forums.

Aquent includes webinars, online forums and project assignments in its MOOC focused on HTML5. The projects are especially important since they enable aspiring Web designers to build a portfolio of digital creative work, Farmer said.

About 10,000 people enrolled to take Aquent’s free training course on HTML5, with 180 of those who completed the training receiving job placement with digital ad agencies, Farmer said. Aquent provided the course content and instructor.

The next phase of the project is Aquent Gymnasium, which launched in July. It essentially functions as a hybrid LMS-corporate university format, except without tracking metrics. It offers free courses geared to designers, front-end developers and marketing professionals.

Farmer said the courses in Gymnasium will be developed based on interviews, focus groups and surveys of corporate clients. The aim is to bridge the skills gap encountered by companies in the creative fields.

The first course in Gymnasium, “Coding for Designers,” teaches students how to transfer graphic design to the Web and focuses on the basics of HTML, CSS, JavaScript, Flash and other programming languages.

People who complete the MOOC curricula receive a certificate of completion from Aquent, which serves as validation to employers, Farmer said.

Advertising agency Fish Marketing, based in Portland, Ore., is among the early beneficiaries of Aquent’s MOOC. Finding HTML5 Web developers is crucial to serving its customers, said John Moore, Fish’s interactive director.

“Web building accounts for about 50 percent of our revenue. We use HTML5 because it enables our clients to get a website that’s going to last a long time,” said Moore, who has hired Web developers that completed Aquent’s inaugural MOOC course.

Moore said MOOC-credentialed candidates have initiative — since attendance is voluntary — and can showcase a solid portfolio of completed projects to demonstrate their applied skills. “I typically give extra credit to a candidate who’s actively sharpening his acquired skill set through online training, especially for writing software code. Online training is one of the few places where you can further your coding skills.”

Farmer said Aquent is using its massive open online courses to “manufacture the workforce our clients need.” The company also has big plans for its newly christened Gymnasium platform. The early goal is to serve at least one course a year for the first year or two, with hopes to eventually add courses over time. “We would love to get to the point where we can do one new course a month,” Farmer said.

Garry Kranz is a Workforce contributing editor. Reprinted from Workforce.com

Let’s Clarify E-Verify

With the passage of the Immigration Reform and Control Act in 1986, employers were introduced to the brand-new Form I-9 as a way to verify the employment eligibility of all new hires.

Then in November 1997, the federal government introduced the Basic Pilot Employment Verification Program to five states as an electronic barrier to prevent ineligible individuals from being employed in the United States. Eventually that program morphed into E-Verify, an electronic, Internet-based employment verification system that today is operated by the U.S. Department of Homeland Security and Social Security Administration.

Though more than 400,000 employers rely on E-Verify to access the employment eligibility of their new hires, the federal government does not require all employers to use it. It is only required for government agencies, government contractors and companies operating in one of the 17 states where its use is required universally. Otherwise, an employer can use the Form I-9.

However, private employers are able to voluntarily implement E-Verify if they choose. That could change soon though if the Border Security, Economic Opportunity and Immigration Modernization Act of 2013, which is the hotly contested immigration reform package being debated in Congress, becomes law.

Though it’s lost within the rhetoric about border security and citizenship for people who have entered the country without legal permission, a major focus of immigration reform is addressing the growing skills gap between U.S. workers and high-tech jobs, says Lynn Shotwell, executive director at the American Council on International Personnel.

“Employers need to be able to access the talent that they need, whether they’re recruiting internationally or recruiting at U.S. universities, where half of the graduating classes—if you get into the advanced degrees in science and technologies—are foreign nationals,” says Shotwell, who believes the U.S.’s ability to remain competitive in the global economy is largely dependent on the passage of immigration reform.

The bill would increase the minimum amount of H-1B visas to 110,000 per year from 65,000, with a cap set at 180,000. It would also create a new “W” visa for low-skilled, temporary workers.

In addition to the provisions that would increase the total amount of temporary work visas, the bill contains a provision that would require all employers to start using the E-Verify system.

If the immigration reform bill passes in its current state, there will be a five-year phase-in period for employers to implement the verification system. The system works by comparing the information presented on a new hire’s Form I-9 with information in the Homeland and Social Security databases to confirm the employment eligibility of that worker. Employers with 5,000 or more employees will have two years to complete the process, whereas companies employing 500 to 4,999 people will have three years, according to the Senate’s summary of the bill.

Regardless of how long it takes to implement E-Verify, extensive preparation and procedural fastidiousness will ultimately determine how successful a company will be at using the system.

WHY USE E-VERIFY AND ASSOCIATED RISKS

Planning to use E-Verify is like choosing to enter a swamp. The risks are innumerable, but with a skilled guide and unyielding vigilance, they’re easily manageable.

Take, for example, insurer Prudential Financial Inc., whose HR department oversees the company’s E-Verify procedures and has a 100 percent compliance rate, says Marietta Cozzi, the company’s vice president of human resources. Nancy Roman, director of process management for staffing at Prudential, says they haven’t encountered any legal troubles during

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the three years since its implementation.

While using E-Verify as successfully as Prudential isn’t easy to do, implementing the system is most likely easier for a large company than smaller organizations. “It involves setting up a system, training the appropriate people, and building it into the system of the company. It is a significant effort. It’s something that big companies are used to doing, but it is a significant effort to do it,” says David Grunblatt, a partner at New York-based law firm Proskauer Rose who heads its Immigration & Nationality Group.

Prudential’s 100 percent compliance rate doesn’t seem to be that much better than the 99 percent nationwide average, but that small difference could produce a breeding ground for a slew of employee lawsuits ranging from wrongful termination to discrimination, Grunblatt says.

Not every company has been as successful as Prudential in avoiding lawsuits stemming from the misuse of E-Verify. To further illustrate Grunblatt’s point that large companies are better equipped to implement E-Verify, one can look at Pacific Steel Casting Co., which in 2011 was sued by the Glass, Molders, Pottery, Plastics & Allied Workers International Union Local 164B because it implemented the electronic verification system without first notifying or bargaining with its unionized employees.

Berkeley, California-based Pacific Steel, a midsize employer that has between 500 and 1,000 workers at any given time, argued its business relationship with a federal contractor required implementation of E-Verify and therefore did not have to inform its unionized employees. The National Labor Relations Board, however, disagreed and ruled in favor of the union workers, finding Pacific Steel was in violation of the National Labor Relations Act. Under the act, it is illegal for an employer to refuse to bargain in good faith about wages, hours and other conditions of employment.

The manufacturer agreed to reinstate employees who lost their job as a result of unlawfully implementing E-Verify and pay those employees’ lost wages and benefits, according to the NLRB’s ruling.

Because Pacific Steel had ties to a federal contractor, it volunteered to implement E-Verify. Prudential, however, decided to implement the system because the company thinks the government will soon mandate its use by all employers, Roman says.

This sentiment appears to be increasing among employers, most likely because of a federal push to make the use of the system universal through the immigration reform bill.

Many businesses “are anticipating that this is going to become the law of the land anyway, so they might as well get started on it and get a system in place while it is still a voluntary program and look like a good corporate citizen by doing it,” Grunblatt says.

Another common reason why employers are volunteering to use the system already is that some companies feel they’re providing themselves another layer of protection against a government audit of their Form I-9s. But that isn’t necessarily how an audit works. Companies hiring in good faith can still find themselves in trouble with the Department of Homeland Security.

“We’ve had members that were sanctioned and fined on the I-9 for not writing out the full state’s name on it. So it’s not really a ‘knowingly hire’ violation, it’s a paperwork violation,” says Mike Aitken, vice president of government affairs at the Society for Human Resource Management.

A “knowingly hire” violation occurs when an employer hires a worker it knows is not eligible for employment in the U.S. One way this kind of violation can happen is if a company does not follow up on a “tentative nonconfirmation” administered by the E-Verify system within the required eight-day period, and instead allows the new hire to continue working. A tentative nonconfirmation means Social Security and/or Homeland Securitycould not confirm that an employee’s information matches government records.

Dawn Lurie, a partner at law firm Sheppard Mullin Richter & Hampton in Washington, D.C., says a new hire can even draw a tentative nonconfirmation from something as simple as a name change after getting married. The new name may not match the Social Security number listed in the agency’s database. In a situation like this, the employer must be sure to help the employee remedy the error.

“There’s a whole process that has to be put into place,” Lurie says. “The company has to notify the employee, tell them what they need to do, what agency they need to visit or call. And it all has to be done very carefully to protect the worker, to ensure there’s been no due-process violation.”

Carefully following Homeland Security’s legal procedures normally ensures a company can avoid E-Verify lawsuits; simply using the system to demonstrate good corporate citizenship will not.

“Once a company enrolls in the program, it must use it consistently and must resolve any initial nonconfirmations. Any pending, unresolved nonconfirmations could later expose the company to charges of knowingly hiring undocumented workers if the worker is deemed to be illegal, but the company failed to definitively resolve the discrepancy,” said Geetha Adinata,a lawyer with Atlanta-based law firm Ford & Harrison, in an email.

INCREASED USER-FRIENDLINESS

While the potential risks and strict oversight required to manage them may make E-Verify seem like a difficult system to use, most employment law experts, as well as Prudential’s Roman, agree the system has become much more user-friendly and accurate in the past few years.

Ultimately, human error is what tends to get companies in legal trouble over E-Verify more often than systemic mistakes.

“The one thing about the E-Verify system is that it’s incredibly improved over the years. There used to be a lot of problems with the system that aren’t there today. I mean, certainly, it has holes in it. Identity theft, for example, is a big issue. But it’s not the system that it was three or four years ago,” Lurie says.

Max Mihelich is a Workforce associate editor. Reprinted from Workforce.com

Own the Training Assessment, Not the Course

Think in a different way about the age-old question, “Which came first, the chicken or the egg?” Which comes first, the assessment (the test) or the course? Do you have to have the course before you know what to assess or test? Or must you first define what you hope to accomplish—and how to best assess that accomplishment—before you can build the course that gets you there?

I favor the latter. We ought not to proceed in any learning development project until we know what defines success and how we will measure it (the assessment). Actually, the assessment may be more important than any training course or curriculum that supports it. Here’s why.

Results trump activity

Clients and customers look for results, not activity. Unfortunately, we often get requests for training (“I want a course”) without much concern for what it is to accomplish. We should push back, asking, “First, what do you want to accomplish and how will you know you’ve done it?”

If the client or customer can’t answer this question, any training activity we come up with will be a risky venture.

Assessment clarity clarifies learning strategy

Jane Bozarth talked about this in April. Sometimes, clients or customers don’t know what type of learning solution they want, or even what they should teach. But asking them first what results they require helps them to focus. From this statement of results, an assessment plan can evolve that

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literally prescribes the most appropriate learning strategy to pursue.

If you want to get your client or customer on board—begin with the end in mind.

Assessment is what really matters to the people who really matter

If your focus is predominately on courseware, registrations, and hours of training, etc., be careful. We certainly have to manage our operations well, but senior managers, customers, and clients—the people who pay us—are not too interested in this (or at least they shouldn’t be).

What they want is results. “What can my people do now that they couldn’t do before?” they will ask. “How are our learning efforts affecting the performance of my business?” We constantly ask for a “seat at the table;” answering these questions is our ticket in.

Measuring competence is more valuable than tallying completions

What would you rather say is the result of your efforts in, for example, sales training: a) “A thousand people completed our entry-level sales course this year”; or b) “We were able to certify the sales performance of three hundred front-line sales professionals this year?”

Of course, the answer is b, even if the numbers are less.

But too often, we assume that taking training is the same as performance certification. This is dangerous. The first is a measure of attendance; the second is a measure of competence. Showing up means very little if you don’t learn much. This gets into the touchy areas of mandated training and whether course completions alone are legally defensible if someone challenges an individual’s or organization’s actions. (This is worth discussing at length, but not here.)

Certification is a big deal

Let’s talk more about certification. Increasingly, organizations are realizing that controlling the means to demonstrate competence may be more important than controlling the means that prepare people for such demonstrations.

The American Bar Association and the American Medical Association issue standards that influence Bar and MCAT exams, but they don’t directly offer preparatory services, leaving that to individual law and medical schools. The Educational Testing Service doesn’t run a single school; but it owns the SAT exam, and that, as any high school student will tell you, is plenty.

Many universities may freely offer their courses online, but you pay big time for their certification—the degree. The Motor Vehicle Department doesn’t care how you learned to drive, but you’d better pass their road test. Even in our field, both ASTD and ISPI offer certification, and while they do offer some optional preparatory programs, they accept that people can achieve certification whether or not they had formal training by anyone.

What does this all mean for us?

If we believe, as we should, that certifying what people can do, rather than just reporting on the courses they have taken, should become the mainstay of evaluating the worthiness of any training or learning function, it then becomes essential to own and enhance the assessment process as a matter of strategy—and perhaps survival. To effectively certify competence is a huge advantage, not just for your training or learning function, but also for your entire organization.

Technical and instructional expertise may abound, but many training or learning functions have a dearth of knowledge in evaluation and certification. We talk about evaluation all the time, but do we consistently do a good job at it? Probably not—and this is a big problem.

Writing a few multiple-choice questions at the end of a training module is not nearly enough. Evaluation and assessment is more important than ever, and it’s not so easy to do. In the end, it is both sophisticated science as well as art.

Build your capabilities here.

Not convinced? Think about it from your learners’ perspective. Would they rather say, “I took a bunch of courses,” or “I am certified?” We don’t diminish the value of training by elevating assessment, but if we don’t assess well, how will we know if training was worthwhile in the first place?

Reprinted from Learning Solutions Magazine

10 Attributes of a Retirement-Ready 401(K) Plan

As a 401(k) plan sponsor you have no doubt embraced the concepts of retirement readiness. A significant part of helping employees achieve retirement readiness is providing a 401(k) plan with features that guide participants down the path to retirement readiness.

The following 401(k) plan attributes are generally felt to promote employee retirement readiness:

Plan Design

1. Auto-enrollment. Automatic enrollment of all new participants at a default contribution percentage of at least 3%.

2. Auto-escalation. An increase in participant contribution percentages of 1% per year, typically up to a maximum of 10%.

3. Auto re-enrollment. Automatic enrollment each year of any participant who opts out of initial enrollment at their time of hire or who stops contributing during the year.

4. Hardship withdrawal provisions for loans. In an effort to plug leakage, requirement of hardship withdrawal criteria in order to take a participant loan.

Contributions

5. Roth 401(k) availability. Participant ability to elect to make after-tax Roth 401(k) contributions.

6. Extended employer match. An employer match spread over a larger percentage of employee contributions. For example, 25% of the first 12% rather than the standard 50% of the first 6%.

7. Catch-up contributions. For those participants age 50 and older, the opportunity to make additional 401(k) catch-up contributions.

Investments

8. Availability of index funds. For those participants who believe that passive investment is the only way to go.

9. Right number of fund choices. More is not better with regard to fund choice. More is confusing. Most experts feel that the right number of funds is generally around 12 (not including target date fund options).

10. Availability of target date funds. Professionally managed target date funds for those participants who prefer to have someone else manage their account.

How many of these retirement ready features does your 401(k) plan have?

About the Author:

Robert C. Lawton is president of Lawton Retirement Plan Consultants, LLC a Registered Investment Advisory firm. Reprinted from Employee Benefit News

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