The Immediate Benefits of Applying RO at Novus - An HR Perspective

Speaker A Early on in Novus, the President, who was a level six, mid six at the time, decided that we needed a way to manage people. We needed some tools for the CEO to use to work with his leadership team to explain to people what they had to do by when the expectations qqtr identifying levels in the role. How are we going to manage this company without having the flavor of the month? The President at that time heard about Elliot Jackson and brought him in with Nancy Lee. And back in the very beginning, we worked together with Thad Simons, the current President and CEO. Thad, in my opinion, right now is probably a level seven plus. We decided that we needed something that would be real time, real simple and long term. And we think Ro is it. We worked on it for, I guess, a year. We rolled it out to the organization. We educated by level senior people on down, and it's worked very well for us because it's easy to understand for the reasons that I gave. There is a key accountabilities document, which in my opinion, replaces a static job description. Our key accountabilities document is global. Everyone receives a key accountabilities document and right on the document itself, we use the mid year review and the Personal effectiveness Appraisal. So it creates a framework for dialogue with the manager. The reason that I like it more than some of the other systems that are there is because it makes the manager do what he or she's supposed to do, face to face contact with the employee. When every employee comes to Novus, we roll out the Novus management training. They learn about the Kad. They learn about the mid year review process. They learn about the personal effectiveness. Appraisal they learn about what is expected of them, of their manager, and of their manager once removed. They understand when they can come to me, but they know that if they come to me and they've not gone through the process of trying to talk to their manager, first, I'm going to listen to them, but I'm going to send them back because they really do need to have that dialogue. And then I'm going to hold the manager accountable. I'm going to want to understand why their employee felt they had to come to HR before going to the manager. So it's a good framework for the company. It keeps us honest. It makes us do our jobs the way we're supposed to do them, and everybody participates. When we do the mid year at a very, very high level, we do what we call a goals cross checking exercise to make sure that we are tracking where we need to be to achieve our goals for the year. We go out and we have individual departmental meetings globally. We come back in and we do another cross check, and by that time we basically know where we are going to end up in the year. Unless, and there's always an unless. What do you do if a hurricane hits in our business? What do you do if some unforeseen disaster happens? How do you manage that's? What's good about this management system, you have to be able to identify capability, that you've got the right fit in the right role, that somebody's going to know a hurricane just hit. There is no manual to pull out right away. What are we going to do if you don't have the right person in the role to know what to do, you're going to fail. And I believe that it sets it out very clearly. Also, what I like about it is that it takes away a lot of the favoritism that you see in a lot of systems because there is not enough commentary and dialogue going on between the manager, the subordinate and the manager once removed. A lot of systems where you give percentages for this and that or point systems, where is the real dialogue? We have technology. We're going into a new enterprise resource planning system, SAP. And we have payroll systems, we have personnel systems, but nothing takes the place of the one on one contact with the manager and subordinate. I believe that requisite is a great tool. One of my selfish reasons is that it saves me money. And if it saves me money, it's saving my company money. And that impacts our bonus structure. So let me talk a little bit about total compensation. I adopted the welfare pay system years ago. I've been able to manage global compensation with minimal use of external compensation consultants. I'm not saying that they're not needed. So if you're out there in the audience, don't feel bad. This could help you better service your customers and still make money. Because when you're adding value to your customer, you're going to make money. So I add value to my customers by saving on SG A to digress a bit, I had a very, very small budget in human resources. Even though we were a pretty complex company, but we were small, 160 people. I had a very, very low budget, I'm not embarrassed to say, for many, many years. Under a half million dollars. How in the world, even with 160 people globally, can you manage a structure with a half million dollars? Now, there was a separate legal budget, but I'm told by my general counsel that I used very little bit of that. How did I do that? I think that Requisite helped me. The way that it helped me is one again clarity around what work is needed. Making sure we had the right person for the role as much as you can. Be sure, it wasn't 100% perfect, but it's better than I've ever seen it in other companies because we took the time to ensure that we had the role plays properly in the organization. That is so critical and it takes away as I said, having a lot of the game plan when it came to somebody's favorite. Well, I like this person, so I want them in this senior role. If they're not at that level of capability and you force them into that role, you are setting them up to fail. You're setting the company up to fail and it's going to cost you and the company money. With a little budget like that, you had to do some things wisely. I figured out the self fair pay structure, putting in a spreadsheet, deciding where X was. I did a little bit of work to make sure X, which is a management level position, and I used that to build our compensation structure. Yes, I have a parent company to be accountable to, so I had to use survey data to double check for them to say look, this felt fair pay thing works and this is how I know because these roles are aligned with the external market as well. But it goes deeper in my system. A lot of times when you use survey analysis, you need to make sure that the people that you're working with truly understand your role, who understands the roles in your organization better than you. And if you're working with an external consultant who doesn't necessarily understand your role, then it's different. So if you're going to use a consultant, use an Ro consultant because they understand this stuff and I know there's good ones out there, but once you build this structure, it can last for years. I look at it about a three to five year timeframe for my compensation structure globally. With this system, you can use it globally to where you can pay a sales manager in the US, a sales manager in Brazil, a sales manager in Brussels, a sales manager in Shanghai, and on total compensation, total cash compensation, they'll make about the same money. That's how it works. Yes, there may be 13 and a half months paid one place and twelve months another. Yes, there may be socialized meal tickets somewhere, but when you add it all up, this system really, really works. So if you look at an external traditional compensation consultant, you may end up paying anywhere from 1000 plus dollars per job match. If it's a senior level, it's a whole lot more. So you're talking about hundreds of thousands of dollars in a global compensation. I spend maybe five grand plus a year on a few books to show my parents that it's not just something that I thought of, that it really works. But you have to get the jobs right first. Your organization structure must be designed properly and you must have the right people for the roles. It really, really will save you a lot of time, a lot of money, and you'll be more confident in what you're doing. Requisite also helps me save on legal fees. If you have clear accountability, clear authority, and you have a relationship between the manager, the subordinate and the mor, and you address the issues as soon as they arise, it's going to keep you out of court. If you treat the employees fairly and they feel like the system is equitable and it works, then you're not going to spend all that money on lawyers getting you out of trouble later. A part of the Novus management system is that we requisitely establish the Novus learning system as an umbrella for all of our training. This includes the Novus Management System training, which is our Requisite management system of, as I said, clear accountability, clear authority and effectiveness appraisal. In addition to that, it could be role specific training. So product training, technical training, sales training, marketing training. Our elearning system. Let me tell you a little bit about that. I mentioned the fact that we believe in having every employee come through the management training one on one, a personal contact with a member of HR, a senior member of the management team, because I think that's important. It's ultimately important that any management system, especially Ro, needs to be supported from the most senior management person, the CEO and president and the leadership team. That's why it's important to have that initial contact. Afterwards. We do management retraining and then we use Elearning as another means for doing refresher training or some basic training or education materials. Everything from language skills to presentation skills to labor related training that's required. It's a very, very good way to reach all of employees all over the world. And we structure all of our training, including Elearning, around our requisite theories. The requisite system that we use to manage our business is a CEO tool that's invaluable in aligning HR to the business. You have to be a value adding HR practitioner to be at a strategic and senior level. We use these tools to cascade from our goals. We use a long term planning document that translates down to our three year objectives and then to our short term goals. These are the twelve to 18 month goals that we need to accomplish. We've identified critical success factors. They are people reputation, growth and profitability. HR has to be a lead on the management team in aligning the organization with requisite practices on how to come together to achieve our goals. This is a very valuable tool for the CEO. It makes it work. It makes it come throughout the organization. Each and every individual know what they need to accomplish toward achieving our critical success factors. The reason that Requisite principles work for novice is because it makes sense. Just good old fashioned common sense. Although I'd have to say, my mother would always say if it was so common, everybody would have some. So requisite establishes a way for you as an HR professional to educate and train the senior management team and other levels in the organization to manage in a very practical way to accomplish the CEO and the corporation goals. It really works. I urge you to get with some requisite professional or consultant and have them talk to you about this. It's lasted in Novus for 18 years. For 18 years. Our bonus is paid out at or above target on average. We've had an excellent year this year. It really does work. It brings people together with a common language of how to achieve your goals. Thank you.