Count the cost and scare them too

If, however, you are a confidant of the CEO and the rest of the top management team then don't hold back. By the way, many senior managers over the years have told me that they rely on their HR director to keep the CEO in line, and manage him or her when it comes to any organisational issues. Therefore there is no reason to hold back.

My thought, based on what HR professionals and external experts have told me, is that this is a three-phase attack:

• Phase one: count the cost and scare them.

• Phase two: make the case for change.

• Phase three: reinforce the message from the outside.

Let's see how the attack might work.

Count the cost and scare them

People issues may be considered ˜soft' by some. This is not a soft issue. It has its roots in the success or failure of the business by its ability or inability to attract and retain the right people. Therefore, it is initially a strategic issue. If you don't tackle it properly, you will have failed in your job as the people person in your firm.

Some years ago, I was lucky enough to meet a woman called Nancy Cravsin McClain, the then head of HR at Abbott Laboratories. Headquartered outside Chicago, they thought they understood a lot about talent. That was until Nancy Cravsin McClain told them the bits they'd been missing. Tired of trying to get people on to the agenda, she did an audit and put ˜bounties' on the heads of the top 200 plus people in the firm.

Then she got on to the CEO's radar screen and showed him how much it would cost the company if these people left. The effect was staggering. People issues, recruitment and retention issues moved rapidly up the strategic agenda.

And this is what any HR professional needs to do. For part of your time, stop thinking people and think numbers (I have already stressed this). CEOs, CFOs, CMOs and so on, don't just like numbers they live them. Join their game (stop trying to make up your own game, they won't want to come out and play). Show them numbers reflecting what happens if:

• They lose critical members of staff (in lost business, contacts, experience, credibility and cost of rehiring).

• They lose critical teams of staff (in lost business, contacts, experience, credibility, opportunity and cost of rehiring).

• They fail to recognise that people want a different deal than the one they've been working with (the cost of effective talent and people management versus the likely costs of ˜voluntary attrition').

• They don't have a real succession policy (not a ˜plan', but a real succession policy that managers are judged and rewarded by meeting).

You do the engagement audit (involve a couple of other top managers in the initial processes if you can), you add up the figures. Then take the Horror Show to the boardroom.

Calculating the cost

If your organisation has a sales team look at how much more the top 10 per cent of your sales reps bring in compared to the average of the bottom 90%. That's the average that losing those people will cost you - but only part of it. That's the average that you'll be down once their replacement is up and running. How long will that take? Track how long an average sales rep takes before they are bringing in an average level of sales (two months, three, six, a year?) Calculate what your star performer would have delivered during the same time. Finally try to work out the cost if your top sales people took some of your customers with them to a competitor - remember your customers may be more loyal to your sales rep than to your company.

Alternatively, look at your IT systems. If you are like most organisations you probably have a few pieces of out-dated legacy software that make doing some simple things very complicated. Somewhere in your organisation there is a, probably low-ranking, long-time employee who knows all the shortcuts, who knows how to get things done. He or she is the person that others go to, to find out how to work around the beast . They may only be paid 10,000 a year but they are providing IT consultancy that would cost you & pound ;100 an hour if they left. You need to know who that person is.

 

If you have done your maths homework correctly, you will get their attention. And you should get action. Lots of it.

But you are not finished. What has to happen now is reinforcement. And that comes in two ways.