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The Need For a Human Capital Audit

One of the most powerful tools available to small business owners is the “Human Capital Audit“. The human capital audit is a process I teach business owners to use, in order to most effectively leverage the specific skill sets, past experience, and core competencies of each and every employee in the company.

For each employee, look at their current roles and responsibilities. Then, identify their core competencies. What are their key strengths? Based on their day-to-day functions, ask yourself which core competencies they are using. It is absolutely critical that each employee be placed in a position in which they are performing ALL of the tasks that they are most skilled at. Where you identify areas for your employees to begin doing new tasks that fall into their skill set “sweet spot”, you need to develop a plan including a time frame to have them implementing these new skills, a set of metrics to measure their performance in these new areas, and identify the resources required to make this new part of their day to day functions a reality.

As you introduce these new skill sets into your people’s repertoires, you need to also determine any contingencies that might affect their ability to perform these tasks, perhaps finding mentors and other training assets you can provide for them.

This is a very easy, highly effective and tremendously powerful tool to leverage in these tough economic times. But to make the human capital audit work for your company, it needs to be implemented across the ENTIRE company, form senior management to front-line personnel, and it has to be developed as a company process that is NOT punitive, but a way to make employees, happier, more engaged in the success of the company, and a means to increase employee retentiaon by aligning their work processes withtheir strengths and interests.

What do you think?

Our Visionary Corporate Leadership

It’s been quite a decade for our Captains of American industry.

598k jobs were lost in January, the fifth striaght month that the American workforce lost more than 400k jobs. 2.6M jobs disappeared in 2008. That’s more jobs than in any other year since 1945.

Let’s start our tour by checking in on banking, which is in a state of ruin. Their reckless lending practices have led to the current sub-prime mortgage fiasco, which began in 2007 and has turned the collective American dream of home ownership into a nightmare. American Insurance Group, at one time one of the world’s most powerful insurance companies, reported losses from the mortgage crisis of up to $5 billion.

Those bastions of visionary leadership in the financial services industry have not fared much better of late. For proof, one only has to look at Merrill Lynch and Citigroup, who had to go seeking investments from Asian and Middle Eastern Governments last year to improve their balance sheets. U.S. investment bank Bear Stearns collapse is epic, even by Depression-era standards. Its stock price dropped from a high of $169 to $2 last year, and it had to be bought by J.P. Morgan with backing from the U.S. Federal Reserve.

And then there is automobile manufacturing, struggling to compete and failing miserably for nearly thirty years with aggressive foreign competitors and shifting market conditions. It got so bad for GM last year that at one point it announced a $15.5B quarterly losses, third most in its 100-year history. Ford Motor Company announced a loss of $8.7B, Chrysler decided to stop leasing cars and trucks, and GMAC announced a $2.5B second quarter loss. Then GM and Chrysler went backing for cash to remain in existence in 2009.

Cable and telecom companies have practiced their own fair share of questionable business practices, such as price gauging their customers by charging them for hundreds of unused channels of content or burying inexplicable surcharges and taxes in overwhelmingly complicated monthly consumer statements.

Even more unsettling than the incompetence of American business leaders has been the seeming proliferation in a lack of ethics that American business leaders exhibit to excess. Senior executives at Enron, Tyco, Adelphia, Global Crossing, etc. merely reinforced the belief that business leaders use their companies as a tool to ensure their personal financial well being at the expense of their employees and all other considerations.

Given all of this bad economic news spread across the American business landscape, now seems an IDEAL time to ponder whether anyone in corporate leadership is awake at the wheel.
We have to ask ourselves who will step forward from today’s American enterprise to lead with vision? American companies seem devoid of any ability to combat global economic threats and paradigm shifts. The “C” suite of Corporate America is sputtering and flailing for a lifeline, grasping at desperate acts such as outsourcing and off-shoring many of their core functions. Their knee-jerk decisions are aimed solely at achieving ill-defined, short term gains. Business leaders in most industries and sectors seem to only have one solution to deal with rapidly changing economic challenges, that being massive layoffs.

Our military industrial complex is comprised of companies that (intentionally or not) allow significant military secrets to migrate to global powers such as China, India and The former Soviet Union as we outsource key top secret development to them as we pander to gain access to their markets.

All this begs the question, what is going on in the mind of the American CEO? The answer today remains the same as it did at the turn of the last century…the sole pursuit of profit at any and all costs. When will American business be driven by ethical visionaries with a moral compass and the fortitude to tackle problems with creative new solutions, make knee jerk reactions that only serve to ensure their own economic situation? Only time will tell, and unfortunately the business leaders guiding our future have not established a stellar track record to garner much hope.

If the chief executive of a company performs so poorly they are urged to resign by the company’s board, they are allowed to sail off in the sunset5 with golden parachutes of millions of dollars.

On the bright side, there is ONE industry that seems to be doing quite well for itself of late, as evidenced by Exxon Mobile’s second quarter 2008 earnings reached a record high of $11.68 Billion. British Petroleum also reported record second quarter 2008 profits of $9.46 Billion, as did Royal Dutch Shell at $11.56 Billion. It seems like the $4 per gallon gas threshold being breached in 2008 before coming back down to $2 didn’t hurt ALL of America’s industries.

At least we can drown ourselves in the mind-numbing insipid formulaic unreality of our reality TV.

Employee Training and Development Program

Your people are your business. They are the heart and soul of your company’s brand, the front line facing clients, your image, the company’s face behind your products and services…everything! Therefore, a top priority for your business should always be the development of your employees.

Before you develop an in-house training and development program, you will need to conduct an up-front skills assessment to identify specific metrics that will be employed, in order to define a successful program and to objectively assess employee increase in some pre-defined level of performance before and after the employee completes the program. Some metrics to apply when assessing the success of the training program on employee performance include:

Increase in company standardized test scores
Increases in productivity
Feedback from program attendees’ managers
Improvements in performance as defined in specific skill categories

Some examples of how a Training Program can impact performance across the Functional areas of your business include:

Increase in data entry skills or a reduction in errors for administrative support staff

Increase in calls handled over a given time period, decrease in average per call time or increase in the number of calls successfully handled in a single session for customer care professionals

An increase in the number of records processed by medical billing professionals

The selection requirements used to identify standards for employee participants need to be documented and communicated to your entire organization, to foster an inclusive program. You need to avoid the perception of, or the actual preferential treatment of, certain departments by including all employees.

Two types of skill sets for development include hard and soft skills are ideal for development:

Soft skills: Communications skills, team-building, problem-solving, presentation skills, project management skills, negotiating tactics, etc. These skills cannot be measured quantifiably.

Hard skills: Task-oriented training to accomplishment specific technical requirements, measurable skill sets required from the job.

Training requirements vary by industry and by functional area so you will need to establish a program that adequately addresses the specific needs of a broad range of program participants. Some standards to apply include:

Manufacturing firms require skills in kaizen-style lean manufacturing processes, which demand entirely new skill sets for production line workers to acquire.

Companies in logistics management (ex. freight forwarders and shipping companies) need skills in all of the latest inventory management tracking and product flow management techniques.

Finance professionals need to remain on top of the latest applicable regulations i.e. Sarbanes-Oxley compliance, ACH Check 21 rules and regulations, etc.

Prior to each session, the candidates enrolled in the campaign should have their performance review evaluated, with an emphasis on areas identified requiring improvement. The Train Me program committee assigned to implement the program should also revisit each participants’ goals and objectives for the year, and the roles and responsibilities identified in the employees’ job posting in order to determine potential areas for development.

Dress For Success

As you think about yourself as a product to be marketed to potential hiring managers, then dressing for success can be considered the PACKAGING. Some clients that I counsel consider their dress style to be reflections of their personal style and refuse to follow conservative guidelines as they feel it will marginalize them as individuals. Nothing could be farther from the truth. You want to distinguish yourself in terms of your professionalism, the way you carry yourself and the extensive research you conduct so that you come across as extremely qualified, competent, and heading in the right direction.

Here is the rub – before you ever get a chance to speak to a complete stranger in order to convey beliefs about you, they have drawn conclusions in the first few seconds of ever setting their sights on you. The opinions the draw about you immediately are based on your physical appearance, and just as importantly ,to what you wear, how you carry yourself, if you remind them of anyone, perhaps even the non-verbal cues you give off.

Here are some general guidelines on dressing for success strategies that apply equally to men and women:

Your dress as a whole should add to your appearance – not detract from it

Clothes should never detract from your business persona. If you want to be taken seriously you have to come across seriously in your PACKAGING

Everything should be neat, clean and shined – pay attention to all of the little details, as they add up.

Navy blue, medium to dark grey are best. Conservative color patterns are always a safe bet

Avoid bright, flashy colors as they detract from the image you are trying to convey as a professional

Wear comfortable clothing that doesn’t require any distracting adjustments – the last thing you need to distract you from focusing 100% on acing the interview is uncomfortable clothing that doesn’t fit you well

Use a minimal amount of perfume cologne. The sense of smell is people’s strongest sense. It has the power of conjuring up a lot of very strong connotations with people including: past boyfriends/girlfriends/spouses, family members, etc. and by association their past experiences.

Carry all of your paperwork in a briefcase and/or portfolio. It adds to the overall appearance of being organized and professional

Clean and polished conservative shoes – while male interviewers may not focus on the state of a candidate’s shoes, a female interviewer WILL. Studies show that women focus almost immediately on the condition of a candidate’s shoes.

Keep jewelry to a minimum – large and gaudy jewelry can serve a s a distraction and detract from your attempt to achieve an overall professional and competent appearance.

Practice good hygiene – nothing can serve to sidetrack a candidate’s chances for employment than strong body odor, stained teeth, bad breath. If you are a smoker, be sure to wear dry cleaned clothes, brush and use mouthwash the day of the interview, abstain from smoking. It’s a small price to pay if it means the difference between getting the job or not getting the job.

No visible body piercing – you might think it’s cool and articulates your originality/creativity. Chances are it probably will do nothing but freak the hiring manager out.

Well groomed hairstyle is a must

Manicured neatly trimmed fingernails – this falls under the category of paying attention to detail. How can you manage a $100 million budget it you can’t keep clean fingernails.

Winter coats cleaned and pressed

Professional umbrellas (no South Park or Scooby Doo patterns to detract from the impression you are trying to convey of being the consummate professional)

Allow time to dress with care and deal with any emergencies

Favorite color of most Americans is blue – it conveys trust, calm and confidence

Tips for women
Wear a belt if wearing skirt or pants with hoops
Style hair tastefully and professionally
Low conservative heels
Shoes color-coordinated with outfit
Blouse white or ivory are safest
Clear and conservative nail polish
No more than one hand on each hand
No purses carry a briefcase instead
No more than 13 total accessories

Tips for men
Over the calf dark dress socks
Wear a belt if wearing pants with belt loops
Professional haircut or trim
Clean shaven is a must
No earrings
Conservative Color coordinated shoes – black lace ups are best
Always stick with natural fabrics – wool, wool blend for suit, cotton for shirts, and silk for ties

Researching Employers in the 21st Century Workforce

Long gone are the days of having to comb through shelves and shelves of books in the dusty, dark hallways of your local library to find relevant publications that can provide insights. The Dewey Decimal system and card catalog have been replaced by the ubiquitous Internet and 24x7x365 access to infinite background information on nearly every conceivable phase of a business’s operations.

How do you comb through this Galaxy of available information in an efficient manner, and find out what you need to know about the industries and companies that you are interested in pursuing?

The answer lies in three words: research…research…research.

Researching Yourself
First off, you need to understand that as you attempt to match your own values, needs, personality and ideal working environment you need to conduct a personal assessment of yourself. That can be accomplished by working with an outplacement firm or engaging the services of a career coach / employment consultant to conduct a personal assessment.

A few of the most notable assessment personality typing tools that are available to you online that you must complete, in order to have a better understanding of yourself include:

Myers-Briggs Type Indicator – MBTI (
The Birkman Method (
The Keirsey Temperament Sorter (

Researching Companies and Industries

There are countless resources available to you for conducting company and industry research. First, you need to realize that there are two types of information that you can gather about a specific company; its formal culture and its informal culture. You need to have an understanding of both, in order to target companies effectively.

The formal culture of an organization is their spin – what they attempt to convey about themselves. That is the information that they disseminate to the market through their public relations efforts, what their Senior Management says about themselves, and what their website says. IT IS WHAT THEY SAY ABOUT THEMSELVES AND THUS THEIR ATTEMPTS TO DIRECTLY INFLUENCE WANT THEIR INDUSTRY THINKS THEY ARE.

The information they put out about their company is useful to the extent that it highlights what their company wants to be. It all starts with their mission statement and vision, and their policies towards hiring, employee retention, professional development, benefits, pay, philanthropic (goodwill) efforts they make in their local communities, Green policies, level of influence they attempt to exert in public policy, etc. It is the collective sets of values and emphasis that they are making to the markets they compete to and the business community at large. Therefore, there is significant value for you in understanding the FORMAL culture of the organization.

And then there is the informal culture. The informal culture of any organization is the actual environment that they have created through their systems and processes, office dynamics, actions they take in the marketplace. It’s how they actually operate, and what their culture is like when you are actually working there. In effect, it’s the “No Spin Zone” or the way things actually are when you begin working there.

For company press releases, check out

To obtain background information on the company, start out with the Securities & Exchange Commission Electronic Data Gathering and Retrieval (EDGAR) Database of company annual 10K and quarterly 10Q Filings – (

For general information some great websites are: –

Dun & Bradstreet:

Hoovers Research:

Vault: –

Company overviews can be found on –

Zacks offers company investment research (for investment research)

Some great online tutorials for you to obtain research on companies online:

QuintCareers –

The Riley Guide –

For information on Manufacturing and Engineering industries start with:

Thomas Publishing –

For privately held companies an excellent resource is the MacMillan Directory of Leading Private Companies.

For research into professional Associations, check out the Encyclopedia of Associations.

The Death of Human Resources

The HR Department still exists in Corporate America, but as an advocate of employees and defender against senior management abuses, the HR profession seems to have gotten away from the role it once served.

I am not quite sure when this happened. I have worked in the private sector for twenty years in many industries and company cultures. I have witnessed first-hand how Human Resource professionals act less as an agent of protecting employee rights. I have been downsized a number of times, when companies merged or when the economy turned sharply down as we are witnessing now. Through all of the periods of significant downsizing, right-sizing, re-engineering, off-shoring, outsourcing, and Union-busting, the HR profession has reminded relatively silent, despite the significant negative long-term impact to the American economy.

Another area in which the HR profession seems to want to remain silent, in my opinion, is in the area of employees being mistreated by Senior Management. This trend is even more alarming given the active role that HR served in the past in its defense of employee rights. In the past, HR seems to have been much more proactive in support of employee rights by ensuring that employers were in compliance with EEOC regulations, while defending employees against harassment, wrongful terminations, etc.

In the past few years, it seems much has been written about HR seeking a seat at the management table. But the critical question that begs asking is, how can HR earn that seat at the table?

The opportunity for advancement for American workers is another area in which Human Resources seems much less active than in the past. Employee human capital development programs like training and development, coaching and mentoring, and other employee development programs seem much more likely to be outsourced, or managed by corporate training departments, if they are still being offered at all.

One area in which HR seems to have become much more active is in the role of administrative gatekeeper, by processing paperwork, routing resumes, etc. Worst yet, HR is now tasked with enforcing draconian senior management directives by monitoring employer behavior by tracking employee personal email, the websites employees visit at work, the time employees spend out of office, on leave, vacation, etc. The term “draconian” applies to such management behavior as: not reimbursing employees for work-related expenses like travel, monitoring employee email, phone calls, and Internet activity even beyond what is expected, restricting employees from leaving early certain days to pick up children from school/camp/aftercare, etc. allowing employees to work in a “timeshare” basis, forcing employees to come in to the office 5 days a week.

When has HR actually driven cutting edge policies on flexible work plans, job-sharing, issue resolution/conflict avoidance, job rotations, retired employee hire-back policies, etc?

Is there still a belief that HR should be the functional area within the American business enterprise to humanize the employee experience in work environments? Are there still rights to be had by employees in the employee/employer “contract?” Are we truly at the end of one employer for a career IBM culture of the 1950s.

Who will speak for the employee, if not HR? The answer is no one. Is it safe to assume that the American workplace of the 21st century could do away with HR altogether (through outsourcing or elimination) and the impact to the American enterprise would be minimal?

Where was the outcry from the HR profession when banking and financial services firms were initiating scandalous abuses by charging clients excessive fees, falsifying financial documents, and running their businesses into the ground. Where were the senior HR managers when companies imploded in a whirlwind of ethical impropriety exhibited by the likes of Tyco, Enron, Adelphia, and Global Crossing?

HR needs to establish processes to monitor unethical behavior of a company at all levels, including senior management. They should push senior mgmt that it is in their best interest to be involved in monitoring work done by outside consultants, accounting and auditing firms that are engaged by senior management on a project basis. Why wasn’t HR the consistent whistle-blower against corporate excess of the 1980s, 1990s and 2000? The answer is that HR no longer possesses the sort of relevance that would enable it to have an impact.

HR staff should have to work on a rotational basis in cross-functional departments, and should conduct focus groups with front-line staff to understand the challenges these people face in serving the business. They should create Idea Generation programs to gather input from employees at all levels on how to improve the company’s processes, behaviors, benefits, employee programs, etc. Quarterly Town Hall meetings are an excellent tool for HR to leverage in order to enable senior mgt to report on the state of the company to all employees on a regular

I suggest that HR professionals do some soul-searching by asking themselves why they ever decided to enter the profession in the first place.

The challenge for senior-level HR professionals that wish to reverse these alarming trends is how can HR resume its role as social conscience and activist within their organizations? Stated differently, how can HR revisit the “HUMAN” tendencies that are required in world-class organizations? From a strategic standpoint, becoming a world class employer known for hiring, retaining and training/developing the best talent will give companies a true competitive advantage to help the firm survive through the most extreme economic downtowns as we are experiencing now.

Doing so will enable senior HR professionals to obtain their much coveted seat at the management table.