Excerpt of Chapter 1
Client-Centric Strategy: A Blueprint for Human Resource Managers
“Give the people everything you can give them.” — Walt Disney, founder, Walt Disney Company
Researchers who study human resource management have documented that HR practices are leading indicators of a firm’s financial performance. Yet, many human resource departments are frustrated by the lack of recognition and appreciation they receive for the contributions made to their organization’s effectiveness. Further, HR managers have long wondered how they can offer input into crucial decisions and demonstrate how the services they provide can contribute to the organization’s overall effectiveness, efficiency, and return on investment (ROI). They long for the opportunity to lead the future thinking on HR management in their organizations instead of defending the value they add from constant cost-cutting initiatives led by those who will not or cannot see what HR contributes to organizational success. The key to gaining participation and defending the value of HR’s contributions lies in taking a client-centric approach to delivering HR’s services.
Fortunately, the service/hospitality industry provides a blueprint for how HR can remodel itself into a service-oriented department focused on the needs of the managers and employees it serves. Fundamentally, HR is a service department within the organization in which it operates. As such, there are lessons it can learn from benchmark service organizations such as the Walt Disney Co., hotelier Marriott International Inc., Darden’s restaurants, and USAA, a provider of financial services to members of the armed forces and their families, among others. Service industry strategies applied by HR managers can transform an HR department by improving its perception by the organization’s managers as a department of value-adding leaders, increasing the importance of its voice in the C-suite, and broadening appreciation for and recognition of its invaluable contributions to an organization’s success.
Client-centric HR service, informed by the lessons learned in the service industry, provides a straightforward path to improving HR’s ability to contribute to an organization’s success and to that of its units. Client-centric service is based on two simple steps practiced by successful benchmark service organizations. First, find out what managers and their employees need, want, and expect to be successful, and establish what they are capable of doing. Second, endeavor to meet or exceed their needs, wants, and expectations while enhancing their capabilities.
Although these steps sound simple to do, they are admittedly hard work. Doing what you want to do and know how to do is much easier than asking or studying clients to find out what they really need in order for them to be effective. It is always tempting to take time to solve HR’s problems rather than the problems within other departments. That is the traditional way things get done in nonservice organizations, and it is wrong. What HR can learn from Disney, Marriott, Darden, USAA, and many other outstanding service organizations highlighted throughout this book is to find out from clients what is important, valued, and useful — and then act on that knowledge. These service organizations offer HR clear lessons on how to learn from its clients in order to identify, design, and deliver what they truly want, need, and expect human resources to do to find and help solve organizational problems and improve everyone’s performance.
The first cardinal lesson to be learned from the service industry is to always start with the customer. Disney invented the term “guestology” to emphasize the company’s commitment to its customers, defining it as “the scientific study of a guest’s needs, wants, and behaviors.”[1] The way for an HR manager to become a respected, recognized leader in the workplace is to do the same for managers and employees: study the client’s needs, wants, and behaviors. The opposite approach is patiently sitting in an office and smiling pleasantly when someone asks an HR-related question or requests an HR service. Service is different than servitude, and the best client-centric service is not passive but proactive. HR must seek out how it can co-create solutions with all parts of the organization, even when other departments do not know how to articulate their HR needs. Regardless of what else you do as an HR manager, systematically discovering what the organization’s managers and their employees need to be effective is critical to your department’s ability to deliver service. When you know what your clients need, you can manage everything and everyone in your department to fulfill those expectations.
The typical human resource management (HRM) graduate-level curriculum emphasizes strategic planning, staffing, performance management, training, labor economics, industrial relations, organizational behavior, legal compliance, compensation plans, information systems, fringe benefits, and the like. What is missing in these academic programs is how to manage human resources in such a way that HR managers will be viewed by everyone else in the organization as “client-centric” enablers rather than as “watchdog” bureaucrats.
The purpose of this book is to explain ways that you — as an HR manager — can ensure that your team develops a strong appreciation for the power of anticipating and attending to the needs, wants, and expectations of managers and their employees first and foremost. Unfortunately, many HR departments lack knowledge of techniques for providing clients with true client-centric service. This lack of knowledge explains the failure of many HR departments in providing value-added services to help managers achieve their respective goals and the mission of the entire organization. Saying “we serve our clients” is one thing, but as you will soon see, benchmark service organizations make this commitment real in everything they say and do. Service-oriented HR departments know what makes them valuable in the eyes of all other managers and their employees. They take the time to learn what their clients need, want, and expect from them in order for their clients to be successful. They then demonstrate that their solutions to HR challenges are cost-effective, making HR’s service meaningful and memorable. Knowing the behavior and actions that make a service encounter with HR memorable for a manager is what differentiates the HR department that has influence in crucial decisions from one that is merely “there” in the organization.
George Koenig, former Senior HR Vice President for Sodexo Education Food Services, tells how one HR department at an organization in the food service industry established talent benchmarks for employees against which their talents could be measured and assessed, so managers could see instantly where employees they managed ranked in their preparation for other jobs. Appropriate training and career guidance could then be initiated for future job match and success. Since the results of training sessions were connected to the unit’s profitability and productivity in quantitative measures, line managers were able to see the value of the training to their own success and to that of the organization. Rather than providing a list of training programs for whatever purpose the manager wished to make of them, the HR department established for those managers the connection between the training offered and the results available in profit terms the managers could readily see and understand.
Client-centric service strategy can elevate HR departments across industries and sectors. Jim Taylor, former Vice President of HR for newsprint maker North Pacific Paper Corp. (NORPAC), jointly owned by Weyerhaeuser Co. and Nippon Paper Industries, made the following observation:
“In a continuous process industry or 24/7 type of business, it is essential for HR to be responsive at any hour to the needs of line managers. If an employee is injured on the job at 3 a.m. and has to go to the hospital, an HR staff member showing up at the hospital to help the line manager and the employee’s family deal with the insurance and communications issues can make for a memorable experience for the family and line manager. That care doesn’t have to be limited to on-the-job injuries, either. Showing up for serious injuries that occur outside the workplace can also be highly impactful for showing that the company ‘is there’ for the people it employs.”
NORPAC’s HR department believes memorable service encounters can be made in many ways. Become the line manager’s “right hand” when dealing with pressing employee issues. Whether the situation involves dealing with a problem employee, supporting a team-building session, or facilitating conflict resolution, you as an HR staff member provide a valuable service to the line manager by being an engaged and active partner in the process. For example, a service-centric HR department in the manufacturing sector helped its production managers also see the value of becoming service centric by designing a process for including customer feedback on product quality, thereby increasing the production managers’ appreciation for how tying a service to the physical product added value to the product and profit to the company. By co-producing this process with production, the company benefits from this department’s new appreciation for client-centric service taught by a client-centric HR department.
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CLIENT-CENTRIC CONCEPTS
Two fundamental concepts in the service industry ensure customer satisfaction. These concepts should be used by HR departments seeking to become client-centric.
First, a client-centric HR department’s every action should be focused on and directed to the client. Many HR managers say they think first about their clients. But their behavior and time allocations may indicate that in reality they give top priority to their own department’s needs and requirements. The first fundamental concept in service requires HR managers to manage from the outside in: Start with the clients. Study the overall organization, its managers, and its employees endlessly: Learn their language, embrace their mission and goals, and support their success by knowing what they want, need, value, do, and expect. Focus everyone in HR on figuring out how to do a better job of meeting and exceeding managers’ expectations in ways that help them attain the organization’s goals and achieve their mission.
The second fundamental concept practiced by hallmark service organizations is value each and every client. In client-centric HR departments, HR staff members constantly and consistently show in word and deed that they value each client. Training the HR staff to think of managers and employees as valued clients whom they serve on behalf of the organization makes a difference in how managers and their employees will see the HR department and its value to them. This approach is more than mere “client orientation.” It is recognition that the client should be treated with the respect and attention of any honored and valued guest welcomed to a person’s home or table. While we will use the terms “guest,” “customer,” and “client” throughout the remainder of this book, we want to underscore the noticeable difference between being treated as a partner in a commercial transaction — a customer — and being an honored and valued guest. It is more than a term difference. It is an attitude difference that is noticed by clients and matters to them.
Benchmark service organizations such as Disney know the difference, and HR managers in all organizations should too. Failure to consider your organization’s employees as honored and valued clients can lead to a number of negative outcomes, ranging from them ignoring HR’s advice to — at the extreme — recommending cutting the HR budget or even outsourcing HR management. If managers view HR as unresponsive and impersonal and an outsourced firm can do the same work as the HR department for less cost, why not trade a high-cost, nonservice-oriented department for a less expensive one?
Seeing managers and their employees as valued clients, however, changes everything the HR department does and how it does it. A line manager comes to the HR department seeking to obtain advice on a subject in which HR has expertise. If HR provides a memorable experience by demonstrating a client-centric attitude and taking client-centric actions while delivering that advice, the line manager will think “Wow! This HR department is fantastic.” Creating an experience that revolves around the client, instead of merely providing a cost-effective service, is a simple way to turn line managers into champions of Human Resources. Doing so requires a genuine willingness to listen to clients, demonstrating a caring attitude that turns an otherwise routine transaction into a client-centric experience that impresses them.
Clearly, exceptional HR departments are already putting the principles of client-centric service to work. At Weyerhaeuser, a forest products company, HR staff members serve as internal consultants to line managers. They (1) coach managers on how to cope with problem employees, (2) help employees appeal denied medical claims, and (3) provide advice on ways to get “relief” from a restrictive company policy without violating the intent of that policy. This kind of personal service creates positive client-centric experiences for line managers and their employees alike. Actions such as these have greatly enhanced HR’s stature and effectiveness at Weyerhaeuser.
To comprehend the importance of this fundamental concept of client-centric service, think about the organizations with which you interact in your own daily life. To some companies, you are only a face in a commercial transaction; others treat you as a welcomed guest or valued customer. The difference is so clear it is unforgettable. Anyone who has been to a Hyatt Regency hotel knows the special way guests are treated. Your HR staff can and should treat clients in your organization with the care that great hotels treat their guests. Any HR department seeking success in this modern era must learn this basic service lesson: People are increasingly aware of who treats them “right” while solving their problems, delivering expertise, or helping them achieve their goals.
While these two concepts — focus on the client and value each and every client — sound straightforward, they create challenges that the benchmark organizations in the service industry spend time, energy, and money to meet. The lessons they have learned offer invaluable lessons for HR managers. The purpose of this book is to share these lessons with you.
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THE BASICS OF “WOW”: HR’S CLIENTS KNOW BEST
Among the challenges for client-centric HR departments is to ensure that their staff consistently offer the high level of service that managers and employees want and expect. They must understand the truth that service managers know well: Service quality and service value are defined solely in the mind of the client. While Consumer Reports from time to time evaluates an airline, hotel, or restaurant, in HR decisions about the quality and value of an HR department is made anew by each individual client in every transaction with HR.
To create a service-oriented, client-centric department, HR must study its clients to know what they expect, what they need, what their limitations are, and how they get things done. The client experience has three components: the service product, the service setting or environment, and the service delivery. In short, HR strategy, staff, and systems can be aligned to meet or exceed the client’s expectations regarding each of these three by systematically studying managers, their employees, and their performance needs and goals. This way, HR leaders can identify what managers need and want from HR, how they want to be treated when they interact with HR, and how to make them satisfied that HR provided the service they wanted — even if they did not know initially how to define their needs.
One such expectation is HR staff’s accessibility. Weyerhaeuser, for example, knows that older employees in their hourly workforce are often uncomfortable going to the HR department, especially if the department is not easily accessible (for example, far away from the pulp mill, saw mill, or logging site). Weyerhaeuser does not expect most hourly employees to be comfortable going to the HR department if the office contains expensive furniture and if HR staff members wear dress attire. Weyerhaeuser’s HR department knows the significance of going to the employees. Consequently, they visit the worksites regularly. In an effort to remain approachable, they ask questions and listen closely to their clients.
By studying managers, particularly their performance goals and how their operation contributes to the organizational mission, HR will know how to design systems, develop processes, and craft an effective strategy to enable managers to attain major objectives. Studying the managers and their jobs allows HR to co-create with its clients practices that deliver outstanding service to them. “It all starts with the client” is not just an inspirational slogan. In a truly client-centric HR department, it is a standard that everyone in HR must accept and rise to. Building materials manufacturer Louisiana-Pacific Corp. practices this kind of client-centric service. Chief Executive Officer Rick Frost affectionately describes his HR manager as having big ears and a soft touch.
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GOING FORWARD
For businesses big and small, from an international airline to a neighborhood sports bar, surviving and prospering in the present competitive environment requires mastering the principles of service. Human Resources, too, faces increasing numbers of competitors who advertise themselves as doing the same quality job as an organization’s HR operation yet faster, cheaper, and more client-focused. HR departments that seek to survive and prosper must master the principles of service. Not only will a client-centric HR department be better able to demonstrate its added value to the organization, it can serve as a role model to other departments in the organization, in much the same way as the Disney cast members picking up trash in the Magic Kingdom model good behavior for park visitors. The HR department should be seen as the exemplar of how to be client-centric and take the leadership in infusing a client-centric orientation across the entire organization.
Charles Revson, founder of cosmetics maker Revlon Inc., drew a distinction between what his organization makes and what the clientele buys: “In the factory we make cosmetics. In the store we sell hope.” What does the HR department provide in the eyes of its clients? How effective is your HR staff in supporting and empowering a manager who must maneuver through a maze of laws and regulations that affect line managers’ ability to make a better product or to deliver a better service than competitors? Does your HR department instill hope, helping clients believe they can achieve their goals?
The HR department must unshackle itself from the role of “police officer” in the organization. HR staff members can increase their perceived value in the eyes of line managers and their employees if they act as internal consultants who are known for helping clients achieve goals that in turn lead to organizational success. They can help by making their expertise available to clients in all aspects of human resources, including goal setting, strategic planning for goal attainment, training to teach employees how to achieve the goals, performance management, and coaching techniques for motivating employees to use their abilities to execute strategy. HR manages the most important resource in an organization. HR’s value to managers across the organization lies in its ability to help them effectively manage human capital — enabling the organization to succeed.
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