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    Tuesday
    Jul222014

    PODCAST - #HRHappyHour 188 - Live from the NBA Summer League

    HR Happy Hour 188 - Live from the NBA Summer League - Featuring The 8 Man Rotation

    Recorded Live from Las Vegas, Saturday July 19, 2014

    Host: Steve Boese

    Guests: Kris DunnLance HaunMatt 'The Professor' Stollak

    This week on a very special HR Happy Hour Show, the guys from The 8 Man Rotation series of Ebooks on Sports and HR made their annual midsummer pilgrimage to Las Vegas to take in a few days of the Samsung NBA Summer League competition, catch a little music courtesy of Soundgarden and Nine Inch Nails, and record a fun HR Happy Hour podcast over a few cheeseburgers.

    Steve and the boys talked basketball (of course), but also hit upon many of the angles that apply to non-sports contexts as well, and can be relevant to HR, talent management, and building teams of any kind. The NBA Summer League is one of the great, real-life experiments in talent management and development - you have players trying to learn and acclimate, coaches and on-court officials also trying to prove themselves, and you see played out how team executives talent management strategies manifest in how they try to build their teams.

    You can listen to the show on the show page here, or using the widget player below:

    Check Out Business Podcasts at Blog Talk Radio with Steve Boese Trish McFarlane on BlogTalkRadio

     

    Additionally, you can subscribe to the HR Happy Hour Show on iTunes, or for Android device users, from a free app called Stitcher Radio. In both cases just search for 'HR Happy Hour' and add the show to your podcast subscription list. 

    This was a really fun show, (apologies for the background music and the occasional interruption of the waiters), and many thanks to the guys for participating.

    Back to more 'normal' HR content in the next show, we promise!

    See you next year at NBA Summer League...

    Monday
    Jul212014

    NBA Summer League Part 1 - The Relative Value of Talent

    I'm just back from a great 8 Man Rotation trip to Las Vegas to take in a few days of the NBA's annual Summer League and tournament that features 24 teams of rookies, less experienced veterans, and guys trying either to hang on to their NBA dreams just a bit longer, or ones trying to crack that elite 450 or so of players that get to call themselves NBA ballers. It was a super fun trip with the boys, and I will have more on some of the really interesting things we saw, heard, and talked about during the trip, as well as a amusing in a watching a car accident kind of way, HR Happy Hour Show and Podcast I recorded with the 8 Man crew while having cheeseburgers and beers.

    In the run up to Summer League, much of the talk around NBA circles was centered around free agent player signings and player movement in general. Most notably, the league's best player LeBron James made the biggest news when he signed to return to his original NBA team, the Cleveland Cavaliers, which set off a chain of events including his former teammate Chris Bosh re-signing with the Miami Heat for a massive, 5 years and $118M. This Bosh contract led to tons of internet chatter about whether or not in the wake of losing James, that Miami was indeed overpaying to keep Bosh, their next most important player from the last four years, to maintain some semblance of competitiveness in the near term.

    The problem with most of the 'Miami overpaid for Bosh' takes, (and there are plenty of them), is that they usually fail to address the context in which the Bosh contract was given, and the set of circumstances that make Miami's decision to pay Bosh near the maximum amount allowed by the NBA's collective bargaining agreement with the Player's Association. This contextual factors, also apply quite often to the day-to-day decisions that HR/Talent pros have to make every day when tackling compensation issues - either offers to candidates, counter-offers, (probably a bad idea to even try them, but still), and the nuts and bolts of annual compensation package decisions for existing employees. In both cases, these are the kinds of questions that HR pros and NBA GMs need to think about, plus I will hit you with some of the rationale behind the Bosh decision from which (hopefully) you'll see some parallels to your comp-related challenges.

    What's the 'right' salary?

    What, in the classic 'perfect information' kind of economy that academics like to talk about, would be the 'correct' salary' for Bosh? This is close to the market rate, but not exactly the same, as the 'market' for any NBA player, as well as for that Ruby on Rails developer you can't find, is never truly perfect.

    What would the market value (and actually pay) for his/her role, skills, and ability to contribute to an organization?

    This is the classic, 'What did the last 3-5 players similar as we can find to Bosh actually get paid in their last contracts?' question. These numbers create an interesting set of data points that may or may not be relevant to your team. If that last team that signed a 17 and 10 guy like Bosh to an insane contract, does that mean necessarily that you should? Or maybe another team got a relative bargain for a different player (like a Tim Duncan), who at this point in his career is more concerned about winning titles than maximizing his personal earnings, and thus accepted a 'discount' on his deal. Don't think that applies to you? I bet you have lots of employees that turn down 10-20% bumps in salary from competing firms because their 'transaction costs' (moving, pulling kids out of school, learning a new corporate political game, etc.), seems too steep. These employees are probably already giving you the home team discount like we hear about in the NBA. Bottom line, the 'market' doesn't represent you, or anyone other specific firm for that matter. It is just more data. 

    What kind of compensation would this person be likely to get from a specific competitor that might be interested in their services?

    This piece of 'market' data is much more interesting (and valuable). In the NBA GMs often have to factor in what might happen if a given player like Bosh were to end up on a specific rival team, and how that move might impact competitive balance (and chances to win). Overpaying to keep a player away from a specific rival can happen, and might be one of the few times in the NBA, (and possibly your business too), that tossing money at a problem makes sense from a business standpoint. This takes more insight and effort than simply looking at the 'market' rate, and knowing the compensation and business strategies of your rivals.

    What is this person worth to his/her current company or team?

    This is the flip side of the last question - what specific skills, capabilities and knowledge of company-specific operations, products, culture, politics, etc. does the person have that are uniquely relevant to your organization, and need to be factored in to the discussion. With James leaving the Heat, Bosh now assumes the role of the team's #1 star, and the Heat elected to offer him a contract reflective of what #1 stars in the NBA are making. He also knows the city, the coaching staff, the other players on the club, etc. There aren't any 'transaction costs' with retaining Bosh, and there is some value in that. There has been a fair amount of research that suggests that in many fields that employee performance degrades when switching organizations. The amount and importance of local, situational understanding of people, process, and culture can provide employees a performance boost that is immediately lost when they jimp to a new organization.

    Simply put, Bosh was probably 'worth' more to the Heat than to many other teams in the league, and while seeming to overpay him, the Heat might have made the smart move for their own team.

    With Bosh, and with compensation decisions for just about every other important contributor, context matters. 

    Wednesday
    Jul162014

    Off Topic: The Refrigerator Door

    On the right is a (partial) picture of my very cluttered and busy refrigerator door.

    Maybe yours looks a little something like that too - unless you have one of those shiny stainless steel refrigerators that don't like to cooperate with 'fridge magnets, then chances are there are at least a few things pinned up on the door. click for ginormous view

    According to researcher and co-author of Life at Home in the Twenty-First Century Anthony Graesch, families with small children at home have on average about 50 magnets and items tacked up on the refrigerator, (you can see more from Prof. Graesch in a recent interview that aired on CBS Sunday Morning, hat tip to Trish for sending me the link to the video).

    That number of 50 seemed pretty high to me, until I began counting up all the stuff I have up on my 'fridge door, mostly mementos from trips or events or airports I have passed through in the last few years.

    One funny side note about my door, when I mentioned to my 13 year old that I was going to post something on the blog about refrigerator doors and magnets, he took a closer look at the door and asked, "Why do you still have a picture of you and that MetLife dog up there?"

    I replied, "Do you mean Snoopy? That is the dog's name, he isn't 'The MetLife Dog'. He was in Peanuts for about 50 years. You know Snoopy, right?"

    "Whatever, Dad. I know him as the MetLife dog."

    Welcome to 2014, when stainless steel refrigerators, smartphones, and social networks are eroding the power and majesty of the well-decorated refrigerator door.

    And where a generation of kids only knows Snoopy as "The MetLife dog."

    Note: I am heading to Vegas for the next four days with most of The 8 Man Rotation crew to soak up a little NBA Summer League action, so the blog will probably be dark until next week.

    Tuesday
    Jul152014

    CHART OF THE DAY: Unemployed workers per job opening

    The latest Job Openings and Labor Turnover Survey (JOLTS) was released last week by the Bureau of Labor Statistics and it showed that US job openings as of May 2014 stood at about 4.6 million, up from 4.5 million in April.

    Taking the JOLTS openings data and combining it with gross unemployment data (also from the BLS), and you get the chart below that shows the trend over time in the ratio of unemployed workers per job opening. Take a look at the chart, (from Business Insider) and then some comments from me below.

    1. The latest ratio of unemployed workers to job openings is 2.11, the lowest level since early 2008, and extremely lower than the post financial crisis high water mark of almost 7 in mid-2009. 

    2. The trend seems to suggest a continued lowering of this ratio, as increased hiring will likely be only partially offset by more entrants into the labor marker, (students leaving school, folks getting coaxed back into the labor market due to improving prospects).

    3. As an HR/talent pro, you might start finding for more jobs a relative reduction in the number of applicants for your open positions. Unless you are offering so-called 'good' jobs, have a compelling employer value proposition, or have a proven pipeline of candidates, there will be, at least in aggregate, fewer available people for your jobs. 

    4. As a consequence of this labor market tightening, your Econ 101 book will tell you that wages are going to have to begin rising more steeply. Again, this is what the economists predict, but for you, all Economics is local. If indeed you are finding it difficult to attract adequate numbers of qualified candidates, then you are going to have to take a long, hard look at the compensation you are offering for these roles. More and more categories of workers are going to at least perceive they have more leverage, (same goes for existing employees too).

    5. With fewer unemployed people per job in the labor pool, it is going to be paramount, even for many entry-level jobs, that you get better at identifying talent from competitors and companies in adjacent industries in order to maximize your candidate flow. It could be the days of simply posting a job online, or placing a Help Wanted sign in the window simply to get the candidates you need are disappearing.

    OK, that is it on this from me. What do you think, are you seeing the markets for your open jobs getting tighter?

    Monday
    Jul142014

    Germany, Spurs: Welcome to the Machine

    The German men's national team won the World Cup with a 1-0 victory over Argentina yesterday, completing a march to the title that at times seemed almost incredible and surreal, (their 7-1 demolition of host nation Brazil in the semifinal), and absolutely workmanlike (the title match, their group stage tussles with Ghana and the USA).

    But no matter how any individual game for the Germans developed, in the end they were always able to find the right combination of talent, strategy and tactics, and individual moments of inspiration and excellence needed to raise the most prized trophy in all of world sports. For US fans, continuing to warm up to the highest levels of a sport that almost (it seems) every American child has played at least some in the last 20 years, watching the German team in this World Cup had to be at least somewhat reminiscent of the recent San Antonio Spurs NBA Championship.

    While there were certainly some differences between the two team's achievements, the similarities, at least to me were pretty clear, and might (apologies in advance to anyone already sickened by 'What can we learn about career management/leadership/workplaces from LeBron James returning to Cleveland' posts), I as a member of the 8 Man Rotation feel obliged to call out a few keys to both of these victories, and to take a stab at what broader application might be found therein.

    Talent and system are not the same as culture, (and are more important) - Tim Sackett had a great take at Fistful of Talent last week about 'system' hiring and it is well worth a read. Both the Spurs and Germany 'play the right way', i.e., organize their players and approach the game in a particular way in that each player understands their role, and how it contributes to the overall goals of the team. While each team has recognizable and extremely successful individual players, (Duncan and Parker on the Spurs, Muller and Klose for Germany), none of the games and the strategy ever seemed to be about these individuals. From beginning to end each team approached and played the games as a team. Not once in the NBA Finals or in the World Cup late stages did I recall hearing any commentator say something like 'The Spurs (or Germany), will only go as far as player XYZ takes them.' It was always a team effort, not one that relied on one or two talents. In fact, many of the players on the Spurs for sure, probably only succeed because they are in the Spurs system, and they have found the right fit for their talent.

    In the long run, discipline and belief trumps emotion - In the pre-game of the World Cup semifinal the home team Brazil had cranked up the emotional meter to 11 - they had 70,000 fans behind them, they 'felt' like it was their destiny to win on their home soil, and even held up the jersey of their injured and unable to play star Neymar in the pre-game line-up. It would have been easy for Germany to succumb to that emotional and psychological pressure, and give up and early goal or two. Instead, the German side stuck to their plan, withstood the first 10 minutes or so of Brazil's efforts, and then set on a goal scoring flurry not seem ever before in a World Cup semifinal. Similarly, in the final game of the NBA Finals, the two-time defending champion Miami Heat jumped out to an early lead against the Spurs, only to find the Spurs back to just about even by halftime, as the Spurs system and discipline proved more that Miami could match. When you have a system, and the right talent that has bough in to the system, then the lesson is to stick with it, don't panic when your opponent seems to have the upper hand, and double down on what you know will be successful in the long game.

    Most of us are really bad at evaluating talent - The Spurs had the NBA's best regular season record. The German side are full of top-level players from the world's most famous clubs. Yet neither was favored to win their respective championships prior to the final series or game. The Heat, with best player in the world LeBron James, and Brazil with their history of success (and home nation status), were expected to lift the trophies that ended up being held by the Spurs and Germany. We kept looking for excuses why the Spurs or Germany could not win (the Spurs were too old, Germany had not won the World Cup in 20+ years, and never outside of Europe), that we let ourselves be fooled. Even the leaders of these great teams might not understand talent completely. The World Cup winning goal was set up and scored by two players that were not even in the starting team of 11. I think this is is often the same thing that occurs in day-to-day talent assessment and evalution. We are trained to look for the reasons why someone won't or can't succeed, instead of focusing on the things that they are talented and strong at, and thinking about ways to leverage the skills they have. 

    Bottom line - Spurs = Germany = a great way to think about how systems and strategy lead you to find the right talent you need to succeed.

    Look for more sports takes later in the week, (I know you can't wait), from the NBA Summer League in Las Vegas.

    Have a great week!