CEOs talk (Dec. 16, 2002)

|Canadian HR Reporter|Last Updated: 03/07/2003

Canadian HR Reporter

has gone to the top of the org. chart to learn what HR issues look like from the chief executive’s chair. We spoke to Canadian business leaders about their people management issues and how HR planning ties into corporate strategy. Are they getting their organizations ready for a fundamental shift in workplace demographics as baby boomers retire en masse? How are current HR issues affecting the bottom line and what do they expect the HR department to do about it? And finally, we wanted to know which is the better measure of an organization, customer or employee satisfaction.

Frank Clegg
Microsoft Canada Co.

Microsoft Canada, headquartered in Mississauga, Ont., employs about 550 people in Canada.

Change management is a top priority for Frank Clegg and his senior team at Microsoft Canada — and there has been a lot of change to manage.

For the most part it’s been really positive, he says — new markets developed and growth opportunities explored. “This past year we have focused on moving our company from primarily just a product desk top focus to more of a solutions focus,” he says.

But even when the change is good, it’s important to give employees the support they need to adapt. “How do you get people to absorb the change, accept the change, understand the change and still go about their duties without getting too sidetracked in their new worlds,” he says. And keeping employees happy and engaged is crucial.

As a rule, good employee satisfaction is a better indicator of performance than customer satisfaction, says Clegg, simply because comfortable, engaged employees are the key to good customer satisfaction and therefore bottom-line success. “If your employees are not happy your customers are not going to be happy,” he says.

But for the next while at least, he’s going to be more focused on his customers than his employees.

“For the next year we decided customer satisfaction is more important, because… there is more work I need to do on that one and I think there is more of an improvement that I need to make,” he says. And in any case, taking steps to improve customer satisfaction will likely push up employee satisfaction.

“I think I can have a huge impact on employee satisfaction by focusing on improving my customer satisfaction, because a lot of my issues from my people right now are that customers are not happy with some of the things we have done,” he says, in particular a change to Microsoft licensing arrangements.

“What are (employees) spending their time on? They are spending their time on stuff that I should be taking off their plate,” he says.

The rapid changes at Microsoft will also require them to grow their workforce by about 10 per cent, putting them close to 600 employees. Right now they are actually beating their hiring targets, thanks in part to online recruiting. “Almost half of our people that are joining us come through our Web site, where as two years ago it was probably less than 10 per cent.”

And while the market for talent has cooled down slightly in the past couple of years, the basic battle for the best talent hasn’t changed nor will it in the years ahead. “Every day I worry about getting the best talent,” he says.

When you want the very best it doesn’t really matter how large or small the pool of talent is. “There is always going to be a shortage of great talent because everyone wants to hire the top two or three in the field. I can’t imagine working for a company where they say, ‘You know what, we’re happy we got the bottom two.’”

And once Microsoft lands those top people, it’s important to make sure the company is doing the right things to keep them. “I spend more time on people issues than just about anything,” he says. “Our business is about intellectual property, so we could lose all of our intellectual property at any minute because it could just walk out the door.”

A key plank in the Microsoft retention strategy is providing opportunities for employees to grow and develop. “I want people to say, ‘When I come to work I have more things to work on, more things to learn and more things to grow with than I ever thought imaginable.”

Clegg worked closely with his HR team, lead by Kerry Tompson, to create a new employee development process. “I can personally attest to it. I was the guinea pig with my direct reports,” he says. “I went through the process personally myself. I built the tool and I used that tool when I did my team’s development plans.” His direct reports then built development plans for their teams and Clegg took two days to meet with his HR team and an external consultant to review each of those plans for all 80 managers.

Ultimately it is up to the organization’s managers to effectively implement the development plans. “They have to own it they have to absorb it they have to embrace it,” says Clegg. “Every manager at Microsoft is an HR manager.”

But he also depends on HR to be there to help the managers when they need it. “HR can’t be responsible for change leadership at Microsoft Canada. My senior team has to own that, but my HR team can be the absolute coach, can be the best to help us build it, make sure we are monitoring it and give us some feedback.”

Dave Codack
President and CEO

Headquartered in Concord, Ont., iSTARK was established in 2000 to provide e-business portal solutions and Web-based productivity tools for the international cement and concrete industry.

Often young, fast-growing companies try to get by without a full time HR person until they have about 100 employees, says Dave Codack, CEO of iSTARK. But his company, with only 48 employees, has a full-time director of HR who sits with Codack and his strategic team. “I am very passionate about HR,” he says.

“I know a lot of companies, small companies, who don’t have human resources and it is the executive that tries to do that and does a lousy job,” he says.

HR people sometimes complain they can’t get a spot at the table, but unfortunately they do it to themselves, he says.

“HR, in my opinion, they don’t give themselves enough credit for the role that they are supporting. And really they allow themselves or they are content to play a supporting role and they are not. I think they are absolutely critical when you start looking at knowledge capital.”

Codack’s experience in the manufacturing sector allows him to appreciate how truly different it is doing HR in a tech firm, where employee expectations present some special human resources management challenges. As a company that develops and operates online portals for the cement and concrete industry, iSTARK’s greatest challenges revolve around keeping IT experts happy.

“Technology people require more work and oversight to make sure they are satisfied than what you need to worry about with employees on the line, for example. And that is why I think it is critical to have HR because they have to be in tune and in touch with those employees.”

High technology people get bored very quickly doing the same thing over and over again, he says. At first, as the company grew rapidly it was relatively easy to keep employees interested, but soon — sometimes in as little as six months — they want to move onto new projects, rotate into new roles and work on the next best thing.

“You really have to work hard in managing your organization to do that effectively,” he said.

“I have always said, ‘You lose your aces if you are not careful but you’ll keep the donkeys.’ And that is the problem, if you are not careful the good ones will look elsewhere,” he says.

“I had two cases in the last year where two of my key people were saying, ‘Can you give me something else to work on that is going to excite me.’ And I thought, ‘Geez I thought I was doing a good enough job.’ But if they are really good, they are groping for something to do. You’ve got to be careful not to lose those ones.”

One of the things iSTARK does is give people on the operations side of the business (as opposed to development) special projects to keep them excited. In fact, their enthusiasm is such that workloads are seldom an issue and target dates never a problem, Codack says.

“I tell you honestly, they’d rather dive into the project stuff, and so they quickly go through their operational tasks because what excites them is the project stuff. You never have trouble with them meeting a date, generally they will exceed that date.”

For the company to be successful, it has to make sure employees are happy and engaged. “If you don’t have that then they’re not going to contribute to good customer satisfaction,” he says.

However, organizations focused on making employees happy run the risk of going too far in that direction. It is possible to have happy employees but unhappy customers, he says.

“If you are not careful, if you focus on one over the other, then you have huge problems.”

Rebecca Keeler
President and CEO
Dimethaid Research Inc.

Dimethaid, a Markham, Ont.-based pharmaceutical company, employs 140 people with manufacturing facilities in Quebec and Germany.

Rebecca Keeler, president and CEO of Dimethaid Research Inc., isn’t afraid to go with her gut feeling when hiring new people, even if they don’t necessarily meet the exact job requirements.

“We look at employees with all ranges of experience, people with traditional experience and without,” Keeler says. “We have had tremendous success with employees who may not have all the credentials but have excelled (regardless).”

Keeler recalls one hire who had more of an academic background than a business one, and she also was a stay-at-home mother for quite some time.

“She wanted to go back into the workforce but her (credentials) weren’t bang on in terms of the area of our research,” she says. “Then we thought this person received a PhD while trying to raise a family, (she) was disciplined and those qualities could be transferred to other areas.”

Dimethaid trained the person and it was a success, Keeler says.

“There are other people we’ve taken right out of school without any business experience, we trained them, and to say their work is excellent would be an understatement. We’ve been very pleased.

“And we have hired people with decades of experience too, but we’re trying to go beyond the particular experience and look for fundamental traits, that speaks volumes.”

One important HR issue for Dimethaid is attracting and retaining talented people. Keeler says it’s important to recruit good people as well as continually train staff in order to have them meet the demands of the globally competitive pharmaceutical business.

“We want our employees have a say in the direction of the company, having them involved in the decision-making process. We want them to know their suggestions are taken seriously.”

One benefit of working here is that there is intrinsic value in the kind of work Dimethaid does, and that is a selling point when recruiting, says Keeler. Employees can say they made a difference in someone’s life — that’s very motivating.

Keeler says customer satisfaction and employee satisfaction exist together in a continuous loop.

“In our case, the customers are patients and one of our goals is to improve their quality of lives, to manage their diseases. When we get positive feedback from customers, it’s rewarding for employees, to know they’re making a real difference.”

Dimethaid employees are not far removed from customers. On more than one occasion, patients who have been positively affected by a particular drug have written thank-you letters to the company — letters Keeler will post on the lunchroom board.

“To see the end result in what you’re contributing to the company, it’s definitely a motivator,” she says.

HR plays a strategic role in every aspect of the business, says Keeler. If HR isn’t at the table, knowing where the business is going, they can’t do their job effectively and the future of the company is in jeopardy because “your people are your future. I can’t imagine how people can operate without HR.”

Fred MacGillivray
President and CEO
Trade Centre Limited

Halifax's Trade Centre Limited is a group of multi-purpose facilities, such as the Halifax Metro Convention centre and Events Halifax, where sports and cultural events are held. In business for more than 20 years, it employs 350 people.

In the last decade, HR has risen from zero to 10, becoming one of the major players at Trade Centre Limited, according to Fred MacGillivray, president and CEO. MacGillivray knows the importance of keeping his staff happy, which is why he puts emphasis on meeting their needs through HR.

“When I came in here nine years ago, we never had an HR department,” MacGillivray says. “HR is clearly my major focus now. If we keep talking and listening to our employees, we can do a good job. We went from no focus to total focus.”

Total focus includes keeping communication open at all times and having an open door policy. Trade Centre makes a concerted effort to keep workers updated on the business activities. No topic is off limits, MacGillivray says.

“We have a promise to our employees that they won’t hear anything in the media before they hear about it from us first.”

MacGillivray meets with the managers and supervisors of the various business units on a weekly basis, along with HR, to keep on top of the latest developments. Trade Centre also conducts employee surveys annually and produces a company newsletter on a regular basis.

While communication is one of MacGillivray’s most pressing people issues, retention is just as important. Unlike some other organizations, Trade Centre does not have to worry about the much-talked about labour shortage because it doesn’t have a large number of workers retiring in the next few years. However, finding and keeping the right kind of people is a big challenge.

“We’ve got to be focused on our recruiting, it’s more of a marketing process. We like to market ourselves as a good place to work,” MacGillivray says. “ Most people are here for positive reasons and we think we can help by branding that.”

If employees aren’t happy, customers will not be either, he says. If staff enjoy working at Trade Centre, the customer satisfaction will follow.

“We have to concentrate on employee needs and making it a safe and healthy workplace that you can come to work and feel good about it and want to come back.”

Trade Centre has been able to attract a lot of qualified people through the “buddy system,” which is a strong indication employees are satisfied, says MacGillivray.

To continue to meet the needs of workers, MacGillivray makes sure HR is at the table all the time. HR is tied to the business objectives Trade Centre wants to accomplish.

“There’s no question that I feel HR goals can be tied to shareholder value. Our employee satisfaction helps us to succeed.”

Recently, Trade Centre received the 2002 Atlantic Canada Human Resources Award (ACHRA) for its HR innovation. The HR department, comprising three full-time staff, created a unique customer service rewards program, “Catch A Star.” MacGillivray is directly involved in the initiative. If an employee is going above and beyond the call of duty, a co-worker, manager, or even a client may refer the person for an award. It’s a monetary gift and the only way to redeem the prize is by visiting MacGillivray. When he meets these winners, he greets them with a horn that toots “happy music.”

Colette Curran, HR director for Trade Centre, says MacGillivray insisted he meet every winner.

“He asks them what they did to receive the award and they get a chance to talk. That really shows the support from the top,” she says.

Kevin Boyce
Unilever Canada

Headquartered in Toronto, this subsidiary of Unilever PLC employs 2,700 in Canada and produces a range of home products from sauces and dressings to soaps and shampoos.

Attraction and retention is always a little bit harder in more mature industries like packaged goods, but at the moment Unilever Canada isn’t having trouble finding people, says president Kevin Boyce.

It’s still a challenge for Unilever’s food factories to get highly qualified blue collar workers who are willing to stick with the company for the long term, but as far as white collar workers go, all is well.

“For now we are having no trouble attracting people by and large. We get lots of applications, we get more applications than we really need,” he says, but adds that could change.

In the unlikely event another technology craze was to hit, “that would cause us some problems in terms of attraction as a company. Because there is no doubt that the growth offered by those companies, growth in terms of personal growth and the potential for financial growth was huge.”

A more pressing need is to adapt to the demands as young people enter the workforce and older workers get ready to retire in droves.

“I think that companies like ourselves are going to have to find a new way to attract people down the road. What motivates a 21-year-old coming out of any of the universities today is significantly different than what motivated me coming out of university,” he says.

“I think that we are going to have to look much more seriously at flexible work hours, which we have already started. We are right now almost on year-round Friday afternoons off, modified work weeks. We are looking more extensively at part-time work, we are looking at how we can utilize our resources in a different way, not necessarily working from the office but working from home. That is not an easy thing to do overnight, because most of us are used to working a certain way but the younger people coming in are challenging us to work different ways and I think it is going to be up to us to address that challenge because there is no doubt they will move on if we can’t keep them happy.”

How soon will the effects of a generation change be felt?

“I don’t think it is urgent to look at it today… if we didn’t do certain things today I don’t think we would be overly hurt by it,” he says.

“But I do believe that many of the things that we are putting in place are equally appealing to people who have been working for 20 or 25 years and I think (those changes) become for us a competitive advantage in the marketplace,” says Boyce.

“I think a lot of the changes that we are anticipating that we think will happen in five or 10 years will actually happen quicker because many of the benefits that we see young people wanting are actually benefits that everybody wants and that is something that will attract not just young people, but all types of talent,” he says.

“Every new generation presents its own challenges and like most companies the people who are managing this company do come from a slightly different generation,” he says. And one thing the younger generation wants is training and development.

“It is a very important retention tool. It is one of the reasons we can attract young people because they know we train them well,” says Boyce.

“But what we don’t want is to train them well and then have them say, ‘Thank you very much we are going to move onto another company, you’ve done what you can for us.’ The trick for us is actually not the first two years. It is probably years three through 10.”

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