Using people to sail to new horizons!

by David J Bilinsky

Anchors Aweigh my boys; Anchors Aweigh ...
Original words by Captain Alfred H. Miles, USN

If you asked most lawyers about managing their staff, they would probably say that finding, training, rewarding and retaining good staff is the single-most troublesome issue in law firms today. To be sure, there certainly are other big issues at work – such as the implementation of technology. But staff costs are the largest single expense on most law firm profit and loss statements. And unlike computers, employees raise issues of recruiting, shaping, assigning, developing, rewarding, promoting, retaining, pensioning, and eliciting productivity.

Accordingly, it isn’t surprising that some lawyers treat human resources (HR) as an expense center (especially as Christmas bonus time approaches) and treat staff as people temporarily in their employ who are merely waiting to bolt to the next better-paying opportunity. Yet the growing trend is for business organizations to implement a human capital strategy that is linked to their overall business strategy and measures HR’s impact on the bottom-line. In this new trend, staff are viewed not as an expense, but as human capital assets. The new math of management looks for metrics to measure the ROI on human capital investments.

What is human capital? Mercer Consulting defines it as “the sum of the skills, experience, and knowledge – residing in an organization’s workforce – that produces key business results.” Accordingly, human capital strategy is a set of management practices, if you will – a “system” that produces the right workforce for the business and manages it in ways that optimize performance.

The United States Navy is an employer of note and faces the challenge of competing for talent with a better paying private sector. Accordingly, it has undertaken a best practices process in their management of HR. Not unexpectedly, the Navy understands the strategic implications of a HRM system. Some of the best practices that they identified are:

• Organizations that intentionally aligned their HRM systems with their business strategy and corporate values reported improvements in business results. Examples include directly tying performance management, training, and compensation to strategy, values, and desired outcomes.
• Some organizations substantially reduced their HR costs and overhead by streamlining, automating and contracting out transactions, purchasing specialized expertise (such as compensation and benefits), and refocusing remaining staff to play strategic HR roles.
• Some organizations have a state-of-the-art HR information system. Such systems are major enablers to many other HR advancements because they free HR staff to be strategic, improve HR service exponentially, and encourage employees to take responsibility for their personal HR transactions and their careers.
• Some organizations use a balanced scorecard to measure the management of their organizations’ HR.
• Some organizations identify the core competencies needed to be effective that go beyond just technical competencies (i.e., ones related to the values and culture that they want); they then select, promote, and develop people for these competencies.
• Line managers have a primary responsibility for the state of human resources in the organization; HR managers are there to support them in this effort. Succession planning is taken seriously and focuses on the future needs of the organization. People are coached, developed, and tested in a variety of assignments. They often receive 360-degree feedback to help in development and measure progress.
• Continuous learning is an integral part of the organization’s culture, both for the individuals and for organization-wide development. Excellent organizations feel the imperative of continuous learning and act to make it happen.

What is perhaps remarkable in this document is the finding that the Navy needs “to build systems that fit Sailors and Marines rather than trying to make Sailors and Marines fit systems.” How often in the legal setting are we looking for people to fit jobs rather than building systems to use the best talents of people? And if the Navy can do this, surely law firms can become less regimented!

Here are some of the Navy’s Task Force recommendations for getting under way:

• Cross-cutting Issues: Recruiting, retention and career paths are of such magnitude and so important that they should be strategic considerations in any discussion of HRM.
• Continue HR Best Practices: The provisioning of HR best practices information is a priority concern of senior leadership.
• Determine Strategic Direction: Improving human resource management starts with strategic planning. The need to focus on longer-term issues was identified.
• Develop HR Professionals: The Navy needs HR professionals who understand the new roles and responsibilities of human resource management. They will look for people with the ability to adopt new roles, utilize modern information technology, and recruit/develop new members with organizational development, industrial psychology, and business management education and/or experience.
• Develop a Balanced Scorecard: Organizations need to develop a balanced scorecard; first, to establish the set of leading and lagging indicators that reflect the health of the organization in terms of its strategic intent and, second, to focus accountability for achieving those ends. They also recommend studying human resource accounting techniques to learn more about managing people as assets instead of costs.
• Exploit New Technology To Improve Quality of Work and Quality of Life: The edge in successful competition (e.g., the “war for talent”) goes to those who seize opportunities and act. Technology can be used to improve personnel effectiveness and satisfaction. The DoN can either choose to adopt these in a measured fashion or to be a proactive, early adaptor. Leadership seizing the initiative is one way to show that people do come before platforms.
• Support a Culture of Change: Current leaders need to understand the implications of change, need to become risk-takers, and should provide encouragement and support for trying new approaches. An effective future HRM system will be flexible and adaptive; specifically, authority must be delegated so that the organization can align its set of policies and practices with its mission and its changing environment.

By abandoning anchoring mindsets, by viewing HR as an investment that pays off over the long term and by adapting a position to a person’s skill, experiences and knowledge rather than the person to the position, we then chart a strategic course to new horizons.

David J Bilinsky is the Practice Management Advisor at the Law Society of British Columbia. He can be reached on the Internet at dbilinsky@lsbc.org.

The views expressed herein are strictly those of the author and may not be shared by the Law Society of British Columbia.

This article originally appeared in the December 2003 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.