Jim Woods of Woods Kovalova Group joins The HR Risk Podcast to discuss how to manage situations when senior business leaders avoid addressing HR risks. Subscribe to The HR Risk Podcast on iTunes/Apple Podcasts, Stitcher, or your favorite podcast app!
Jennings: Our topic today is HR Risk and Executive Ostriches. This is an issue some of our listeners may have experienced before. It happens when an HR team raises issues that relate to the workforce, but business leaders don’t seem to get it, or maybe they don’t even want to get it. In a way, they’re like ostriches, burying their heads in the sand. Joining us today to talk about executive ostriches is Jim Woods. Jim is the president and co-founder of the Woods Kovalova Group, a Denver-based consulting firm focused on performance improvement and diversity and inclusion. Jim founded Woods Kovalova in 1998 and has worked with clients in a broad range of industry since then. Jim, before we get started, can you tell us a little bit more about your background and the work you’ve been doing?
Woods: Well, certainly. I started this company about 1998 and it was kind of interesting how it started. It wasn’t any momentous way of doing so. I just simply tried out of the work I was doing as a salesperson. I sold over one-million dollars at one year and decided that I wanted to take my experience and go on and do something different altogether. And so I created the business and I did so not wanting to borrow ideas, if you will, from other people. I was very disciplined and wanted to create my own ideas about our organization, particularly leadership team building. And I went on to school and completed my master’s in organizational development and human resources and created a very substantial recruiting firm. Since that time, we have worked with the government, the U.S. Army, military organizations, and defense contractors. We have worked with a number of businesses, large and small, and particularly Fortune 500 companies.
Jennings: Our topic today is HR Risk and Executive Ostriches. What are some of the typical workplace issues that an HR professional might run into that could lead to there being some ostriches in the C-suite? Is it things like retention issues, harassment, compensation concerns? What are the big hot potatoes that might lead to this problem?
Woods: When I taught fifth grade years ago the kids used to call them the “bugaboos,” they’re like the boogeyman. Things like dust bunnies, they’re always there laying around the floor. And once you clean them up, there’s another one just like it. And usually a company’s the same issue you just brought up just now, every one of them. However, as the more as time has gone on, I began to see the problems less about people, but more about the leadership of those people. And I can trace every one of those problems to the leadership of the organization. And what’s really surprising is that no matter how much we talk about technology and HR, we go to the conference, the forums, nothing, absolutely nothing changes: same problems, the same people. Nothing changes at all. You just spend more money on it and nothing changes and that’s frustrating.
Jennings: What is, from a leadership perspective, something that might motivate a business leader to be an ostrich when it comes to HR issues? Is this something that he or she carries across the enterprise? For example, if I’m an ostrich and my logistics or my product team comes to me with a problem, am I avoiding that too, or is there something unique about HR issues that people sometimes want to avoid?
Woods: Well, there are indeed HR people who deserve a proverbial seat at the table. And they are meeting with the temperament and the skills desired by employers and what I mean by that is they may be passionate and eager to do the very best job possible, but they’re often in a position because employers expect people in that position to just be anybody that can do it. I went to a, I digress, a basketball game with a publishing executive, a large firm that owned multiple newspapers. And here we are sitting side-by-side and he has a number of his employees below us sitting as well. And he looked down, he said, “Jim, this is what I decided to do with my HR department.” He showed me the person that he placed in his HR department and he said, “the reason I put him here is because he didn’t work out any place else in the company and this is the only place we could put him to keep his job.”
Woods: And it worked out okay. Now the person didn’t know anything about HR. The person who didn’t know anything about the policy and the functions, he just didn’t work out any place else in the company and they put him there. And I’ve seen that countless times that they want someone who’s placid and someone who really won’t rock the boat, who deserves a seat at the table. But in order to get the seat at the table, you’d have to have a certain temperament, someone you wouldn’t have to tell the employer “wait a minute, I think we should do this” and be forceful about it and get it done.
Jennings: So what I’m hearing is from the perspective of the HR leader, part of the motivation, part of the reason for there being ostriches, whether it’s intentional or not among the business line, might be a failure to take up that mantle of leadership and to assert HR’s strategic role in the organization?
Woods: Yes, that is absolutely correct. HR people are, I mean this in all sincerity, they’re the rock stars in the company. At the last moment, I changed my degree from a supply chain management to HR because I began to see that HR people are people that can really be the real rock stars, more than any other department in the organization. But somehow the leadership, their leadership has somehow found a way to be lukewarm, to make the position less than what it can do. They don’t see the advantages of their position and what they can actually do in the organization. It’s actually the most formidable department in the company.
Jennings: In some ways it’s a little bit of a cliché when you say “our most important asset is our people,” but when you actually think about how the company operates and when you look at the overall spend on both salaries and benefits and the cost of training and all these things, it really is a substantial part of the company and it is strange that it’s a little bit of a ministerial function in many organizations. And many organizations are trying to move it into more strategic direction. But it’s odd that it hasn’t really been at that point already.
Woods: Well, you’re absolutely correct, Andrew. the current head of Gallup Organization came out with a fantastic article three or four years ago. He talked about conferences, seminars, 360-degree feedback, forums. None of those things changed management and they don’t do anything good. Yet organizations still spend millions and millions of dollars on 360 feedback. They still do all of these things. They send people to conference and all these meetings and nothing changes whatsoever. The problems haven’t changed. The problems are the same. Every conference you go to the problem, it’s still the same and every time you go to a meeting it’s still the same issue. It’s all been exactly the same and yet nothing gets done.
Woods: It’s frustrating because I see people, organizations with employees who are really passionate. People there aren’t lazy. If they have retention problems, if they have problems of absenteeism, there’s a good reason why. And that’s as Jim Clifton of Gallup said: “people don’t leave companies, they leave their managers.” There’s a reason for that. It’s not the fault of millennials. It’s not that the workforce is incompetent or they feel like they are entitled. It’s all goes back to the management and still has this hierarchical approach to ideas that “what got us here would keep us here.”
Jennings: I think that’s really getting into the reality that we might have with executive ostriches is that sometimes, when it comes to HR issues, just because an issue isn’t getting the attention it needs, or maybe is even being overlooked entirely, doesn’t make the issue go away. Of course, it’s still there. What are the stakes? What are some of the consequences for an employer or for employees if issues aren’t being taken up by senior managers that need to be taken up by senior leadership? What can be the result of inaction?
Woods: Well, from the outset you mentioned several of them. You’re going to have retention problems. You’re going to have absenteeism. People have negative feedback, but you know, the only time they get to give feedback, usually it’s when something detrimental has happened. And the only time that somebody’s feet are held to fire as far as management goes is when someone is let off. And then we just shake it up and put a check mark because someone else has taken that person’s place and we say, “well, that didn’t work out,” or “they didn’t meet what we expected from them; they didn’t deliver on time.”
Woods: And we looked back at that employee and I could tell people, quite frankly, many times management has lost touch with the employees. They don’t know what they’re doing and they don’t know the repercussions of their policies. And I would place them on the front lines, let them see what it’s like and roll their sleeves up for a while. I mean stand with the people that are affected most by the policies and by their leadership once a month. When I used to work for HR in a large corporation years ago, I actually pulled my sleeves up and got on the production floor. I’d have the safety training. Once a month I went and worked alongside these people to know who they are. I put all of those things together and I knew what it was like to work 10 to 12 hours a day doing this work and how they felt.
Jennings: It sounds like one of the biggest consequences is you put issues aside, you don’t really take them with the level of seriousness they deserve. And before you know it, you didn’t really notice it at the time, but you don’t really have the people that you used to have and maybe the quality of the workforce is lower than it once was because you haven’t really tended to the people that you had before.
Woods: Right. We’ve created this vacuum of us-versus-them and it’s where we lose touch with people. I see that even in all sizes of organizations where when the company first started, they had this startup mentality. I recall a wonderful article in Fast Company on how big companies lose the startup mentality where everybody’s a family from the beginning. We’re putting our arms around each other, taking the great photographs and want to make sure everybody’s okay. “You’re okay at home, right? Okay, good. You’re getting paid enough? Great. You guys working out over here?” And you’re doing this, doing that. Everybody really cares, may care passionately because they know the company can’t get off the ground and be great unless they feel this, not just thinking but actually feel it. And then what happens is they get a hundred employees, 200 or 300, they get some more investors now. And pretty soon everybody is guarded. Now what they used to do in the beginning to get them there, they lose sight of it.
Jennings: Let’s say that I’m an HR leader. I’m raising an issue with my team. Maybe I’m saying, “hey listen, we’ve got retention issues. Look at these trend lines with retention. We’re behind our peers in retention or maybe our compensation isn’t competitive as compared to some of our competitors out there.” And I’m raising those issues and I might run into an ostrich situation. But I assume that nobody’s going to come out and say, “I don’t care about that,” or “let’s slow walk this issue” or “let’s just put it on the back burner.” It’s probably going to be a little bit more subtle if I’m facing an ostrich situation. Are there any particular warning signs I should be looking for to diagnose the situation and realize when this might be a problem with my senior managers?
Woods: Oh yes. There’s a number of behaviors. Years ago Nokia was I believe right next to Apple and Samsung as one of the top phone makers in the world. And then all of a sudden, one day Nokia was no longer there. And what happened is you have senior leaders in the organization, in the C-suite, that actually found a way to give the boss ideas and strategies that are not the correct strategy. They only gave him the information that he wanted to have: only the good news and most of the good things are actually made up, which is kind of surprising.
Woods: And so there’s this idea that he didn’t want to hear bad news today. He wanted to hear the good news and that’s what they get. They didn’t tell him about the supply chain problems. They didn’t to tell him about production problems. They didn’t tell about this or that. They swept things under the table and only gave him the positive news. While Nokia now is making money, they’re no longer in that part of the realm and they were once at the very top. This happened because in that organization, the people only want to hear good news. They set the things aside. They don’t move on the issues. So you have people in HR who are expected to be placid and not to raise the issues, versus saying, “this is what needs to be done. We put this back too many times and these are the repercussions were going to have by doing it again.” I’m going back now to the publisher with the HR person at the basketball game. Now, they could have brought the right person, someone who is going to tell them what needs to be done. But instead, what did they do? They bring in someone they know, who is going to squeak by, who is very passionate, but not passionate enough.
Jennings: It sounds like a big warning sign is I’ve got the senior leader on my team who is just overly focused on the positive and really never takes up the negative. And it sounds like that might be something that might carry over to other segments of the business as well. Not just the human resources function, but supply chain. That might be an issue that might spread across the company.
Woods: It does. HR touches upon every department in the company. It doesn’t matter if you have engineers. It doesn’t matter if you’re sitting there trying to redesign widgets or anything at all. It touches upon every thing, every person. Some people think it’s just a matter of hiring the right person and retaining the right person. But all of this stuff goes with the managers. Again, Gallup said there’s no training bad managers. And most of the time, 81% of the time, HR is by and large the people responsible behind the managers.
Jennings: Let’s say again that I’m an HR leader with an ostrich situation and maybe in the past I haven’t filled a role that is as strategic in the company as I’d like. Issues are accumulating. They are having a consequence for the company and maybe it’s a retention issue; maybe legal issues are starting to develop. What are some concrete strategies that I can use to to get leadership’s attention and say, “hey, we’ve got a problem here. This needs your attention. This needs your action and this is urgent. We can’t ignore it anymore.” How could I go about that?
Woods: Well, HR is going to have to be adept. They have to be adept at getting that information to the right people in the organization. Meaning they have to be suave. They can’t be just cavalier, but they have to walk in and speak with their manager and the other people in the organization. But there’s a rule where you can’t just do what’s compliant. You can’t do what’s just legal because if, forgive my analogy, but I love the part in the movie The Company Man where these guys that worked for this company for countless years, building it, building ships from the ground up, when they had zero employees, and somewhere along the line they, all the top management teams, get pink-slipped, let go from the organization.
Woods: And they thought they were immune to all this because they have been deciding upon the layoffs of the lower echelon of the organization for a long time in order to manipulate their stock. And these people, they were told by the CEO that he was happy that his stock price is increasing dramatically. And he said, “well, we did everything to meet compliance and meet legal scrutiny.” And one of the people who was fired said to him, “I thought we were seeking a higher level, that we’re looking for ethical scrutiny, not just legal scrutiny.” Meeting a higher level is what HR can keep them in line to do, bring in the right people in their organization. And what they can do is realistically, they can talk to a manager and say “this is what we can do.” What data is going to tell the story?
Woods: I’m a big fan of having the data because the data doesn’t lie, usually. And I’m a big fan of having that information presented to the right people at the right times.
Jennings: I think that’s right. I think the data don’t lie. They can tell a story. If you can come up with a chart or graph, it can tell the story more compellingly, particularly if somebody doesn’t have a lot of time to spend with it. In terms of “I’ve got this issue and I think that it’s not really being taken seriously or with urgency,” what support should I enlist inside the company? Should I go in alone, or are there other people, say the legal or the finance departments, that I should try to go in with to press the issue? How should I go about recruiting those allies, if that’s something that I need?
Woods: You make a great point. And this goes back to the data we should have. You’re going to have a career progression data and you’re going to have training data, absenteeism figures. You’ve got to have productivity data. And all of those are important and you’re going to have allies. You’re not going to burn the people that you work with. You want to see them as becoming as successful as they can possibly be as well. You want your C-suite members to work with you. You guys want to put heads together and talk about how we can do it. But by the same token, you want to make sure that when you’re speaking with these people in finance and seeking the people in the other departments that they are people that’re building an organization.
Jennings: Jim, if guests want to get in touch with you to continue the conversation, how can they reach you?
Woods: They can reach me at my website, WoodsKovalovaGroup.com, or give me a call. I love conversations with someone who wants to call me to disagree with something that I said, because you know the great thing about conversation is that you don’t care whether they disagreed or agreed. You want someone who’s going to stir up your thinking.
Jennings: Our guest today has been Jim Woods of the Woods Kovalova Group. The topic has been HR Risk and Executive Ostriches. Jim, thank you for joining us.
Woods: Thank you so very much, Andrew. Take care.