Inspired by Fortune Magazine’s business person of the year I decided to pick my personal favorites from the list, and identify a few things I think HR can learn from each of them.
- Warren Buffet, CEO, Berkshire Hathaway
- Irene Rosenfeld, CEO, Kraft Foods
- Eric Schmidt, CEO, Google
- Reed Hastings, CEO, Netflix
- Jeff Bezos, CEO, Amazon.com
- Alan Mulally, CEO, Ford
Warren Buffet, CEO, Berkshire Hathaway. Well
known for his long-term approach to investing, he has the same approach
to his talent. When Warren Buffet’s Mr. Fix It, David Sokol,
flopped a new technology for a $200 million loss, and when he told
Buffet, his boss, replied “Don’t make a habit of it.” When dealing
with high-potential employees it’s a leading practice to give them
challenging assignments and stretch goals. This is good for the
company, and for our employee. However, when we put talented
employees into these situations we need to be aware that they may
occasionally fail. We need to be willing to forgive the occasional
mistake, but if errors become consistent we need to re-evaluate the
situation.
Irene Rosenfeld, CEO, Kraft Foods. Rosenfeld recently lead the takeover of Cadbury, despite concerns from a number of parties (including Buffet). The takeover resulted in significant gains for both Kraft and Cadbury. She demonstrated the value of taking a calculated risk. I think this is something HR can work on, as in my experience a lot of traditional HR people prefer process and risk mitigation over innovation and risk taking. Sometimes, in order to be a more effective business partner we need to get outside our comfort zone and take calculated risks when required.
Eric Schmidt, CEO, Google. Eric Schmidt is in charge of an organization grounded in logic and analysis. Full of engineers, programmers and other types who focus on logic and reasoning. Laszlo Bock, his recently appointed vice president of people operations, exemplifies this analytical approach. In addition to traditional human resource functions he improved the analytical and business approach of the HR function. This improved the credibility of the work the were doing, leading to Schmidt promoting the head of HR from reporting to the CFO to reporting to the CEO. I believe the methods used by Bock are something a lot of HR shops should move towards. So how did Bock do it?
…the Three Thirds model refers to an HR department made up of one-third traditional HR people, one-third “high-end, strategy-consultant” types — including some with non-HR backgrounds — and one-third master’s- and doctorate-level analytical professionals.
“If you are able to operate your HR function in a fundamentally different way,” Bock says. “You can prove what you’re doing, and you can understand your clients’ businesses and your CEO’s business in a way that’s far deeper than you could if you had just grown up in a single function. More.
Reed Hastings, CEO, Netflix. Netflix is known for disrupting the business of movie rentals – taking down blockbuster, and now taking aim at Hulu. But we in HR have always had trouble disrupting our own operating models. Netflix can help – their talent management / compensation systems are as unique as their business model. Freedom & Responsability. Employees are given extensive freedom, as long as their tasks are completed. They work their own hours, and even their own vacation days. Give up some control, hand-over transactional tasks where possible and focus on what adds value. Of course, this will also require a culture of accountability and execution, and culture is an area HR can readily support managers in developing.
Jeff Bezos, CEO, Amazon.com. Differentiation. He sold books differently…then everything else. Now he is changing how we read books with Amazon’s Kindle (e-reader). With Sony releasing a more expensive e-reader, and Apple’s iPad entering the market Bezos has kept the Kindle different. HR can learn from this – differentiate your organization from your competitors with a great employment value proposition. Set yourself up to attract the talent you want, at a better price than your competitors by differentiating the benefits of working for your organization from their organizations.
Alan Mulally, CEO, Ford. Honestly, I think he should’ve been 2010’s business person of the year. His remarkable turnaround of Ford during the recent financial crisis was amazing. Some things really stood out to me in how he approached it.
- Get Perspective. Mulally increased the number of direct
reports at his weekly reporting meeting. This gave him more access
to the source information. Less filtering = better
perspective. This is simple, and I think most HR shops are trying
to do this by engaging their stakeholders and clients. Then again,
maybe at your next management development focus group you invite some
employees to see what they think managers need training in. Perspective, get it.
“When I arrived there were six or seven people reporting to Bill Ford, and the IT person wasn’t there, the human resources person wasn’t there,” says Mulally. “So I moved up and included every functional discipline on my team because everybody in this place had to be involved and had to know everything.”
- Get the truth out. Mulally implemented a system of color coding for reports: green for good, yellow for caution, red for problems. Managers coded their operations green at the first couple of meetings to show how well they were doing, but Mulally called them on it. “You guys, you know we lost a few billion dollars last year,” he told the group. “Is there anything that’s not going well? This is where HR needs to be realistic. Look at the business, our clients. There is always good and bad, but often we seem to focus only on one or the other. When it’s bad, say so. When it’s good, don’t only focus on the bad. This way when things get off track, they can be caught earlier or fixed so they stay on track. Read more about the Ford turnaround here.
So there you have it, my list. Any opinions? Did I miss something, or do you think I’m way off base? Well then let me know in the comments, LinkedIN or Twitter.
Tyler Totman
Twitter: @FAPhoenix