Why Diversity Matters Now

Posted by Warren Carter | Posted on 26-11-2009

Category : Executive Search, Job

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by Joe Gerstandt  Nov 24, 2009

Diversity and inclusion may be the most poorly understood issues in business today. While many of us have come to believe that investments in diversity and inclusion are primarily about compliance, political correctness, sensitivity or special treatment, the truth is something different.

Diversity means difference. Difference can show up a lot of different ways, but within the context of work we can probably focus primarily on identity diversity (age, race, gender, geography, etc.), cognitive diversity (different thinking styles, mental orientations, and mental tools), and behavioral and communicative diversity. Diversity and inclusion work at its core is about sustainable and profitable practices — especially the effective and efficient identification, support, and deployment of talent to achieve business objectives.

Not only is there still need for clarity on what diversity and inclusion are, we should also get clear on this business case stuff. Do not be confused by what you have heard or read claiming that there is no business case for diversity, or that the business case is somehow fuzzy. Hogwash. Again, organizational diversity and inclusion work are largely about successfully finding, keeping, and using talent, which is increasingly business critical. The business case for diversity and inclusion is alive and well.

A specific business case is dependent upon the organization and the nature of the actual investment, but a few of the sources of value (explored in more depth in the December 2009 Journal of Corporate Recruiting Leadership) a case can be built on include:

Competitive Advantage

For more and more organizations in more and more industries, innovation is the new opportunity for competitive advantage. This is no secret, as there has been a great deal of discussion and analysis regarding the evolving role of innovation. Innovation is about more than just bringing new products or services to market. It also includes other aspects of business, such as approaches to collaboration, talent management, and engaging new markets.

Despite our affection for the myth of the lone genius, innovation does not take place in isolation. It happens at intersections. It happens when different experiences, perspectives, professions, organizations, and cultures rub up against each other. Without an understanding of, and some appreciation for, the value of difference (in opinion, identity, culture, profession, perspective, etc.) organizations will be hard-pressed to drive sustained innovation. Frans Johansson examines several great examples of this in The Medici Effect, including the story of the great Bletchely Park collaboration, where an incredibly diverse group of characters gathered to break the German coding system during WWII.

Demographic Changes

We are approaching a point where racial and ethnic minorities and women will represent 70% or more of new entrants into the workforce. Organizations that are not good at attracting, engaging, and retaining women and people of color need to fix that quickly, or they are going to be competing for a shrinking percentage of the available talent. Companies that only fix part of this will find themselves with costly retention and engagement problems. Real commitment to workforce diversity is no longer optional.

Talent

Regardless of our intentions, diversity is one of the social variables that can drastically diminish our ability to actually identify talent. In Blink, Malcolm Gladwell shows us an example of this from the world of art. In the not-too-distant past, classical music was largely the domain of white men. “Women, it was believed, simply could not play like men. They didn’t have the strength, the attitude, or the resilience for certain kinds of pieces. Their lips were different. Their lungs were less powerful. Their hands were smaller. None of this seemed like prejudice at the time. It seemed like fact, because when conductors and music directors held auditions, the men always seemed to sound better than the women.”

As part of the push for legal protection, benefits, and fairness in hiring, musicians wanted the audition process to be formalized. This included erecting screens between the auditioner and those evaluating them. “In the past 30 years, since screens became commonplace, the number of women in the top U.S. orchestras has increased fivefold.”

Some of the women who stood out the most in these new auditions were the same women that had auditioned numerous times before the screens were added without making the cut.

I am not talking here about hateful people intentionally discriminating against others. That is another topic altogether. I am talking about human nature getting in the way of our identification of talent. If we want to improve our ability to really identify talent, we have to be aware of the influence of human nature and work to offset it as individuals and organizations.

People, teams, and organizations that are indeed serious about talent must also be serious about diversity and inclusion. Once, again, I am not talking about being tolerant or being sensitive. I am talking about understanding the value of difference and understanding what can easily and quietly get in the way, regardless of our intentions or our character.

The future of your organization may very well depend on it.

http://www.ere.net/2009/11/24/why-diversity-matters-now/#more-10816

Warren Carter is an Executive Recruiter in Qualifind, Inc. You can share your responses with Warren by e-mail at: wcarter@quali-find.com  Qualifind, Inc. provides professional and executive search services for specific disciplines and industries throughout the U.S. and Mexico. We are a U.S. based firm with our corporate offices in San Diego, California. We have branch offices and recruiting staff in the U.S. (i.e Chicago, Austin) and Mexico (i.e. Monterrey,  Mexico City).

For Rent: Chief Financial Officer

Posted by Warren Carter | Posted on 22-09-2009

Category : Executive Search, Job

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By RAYMUND FLANDEZ
This past year, Al Lovata, chief executive of Be Our Guest Inc., cut expenses for his party-equipment rental business by laying off staff and reducing workers’ salaries. He credits an “outsourced” chief financial officer with helping him prepare for the worst of the economic downturn.

The Boston-based company had sales growth in the double digits for the past few years, when revenue fell flat last fall. Now, thanks to the part-time CFO’s guidance, the company is stable with revenue down 20% to 30%, but profitability higher than in the previous months, he says.

If we hadn’t had this service, “we would still be struggling,” Mr. Lovata says.

Mike Loria of Re.Source Partners Asset Management, in Detroit, consults his CFO, Sheri Pawlik of B2B CFO.

Mike Loria of Re.Source Partners Asset Management, in Detroit, consults his CFO, Sheri Pawlik of B2B CFO.

Mike Loria of Re.Source Partners Asset Management, in Detroit, consults his CFO, Sheri Pawlik of B2B CFO.
Some small-business owners in need of accounting help to balance their books and guide them out of a financial black hole are renting CFOs rather than hiring them. The strategy comes at a time when the deep recession has forced small companies to look for money-saving alternatives that can yield good returns yet avoid substantial overhead costs.

“They’re looking for ways to streamline and be efficient as they can,” says Glenn Dunlap, a co-founder of Milestone Advisors LLC, a small-business consulting firm in Indianapolis that provides CFO services.

The average annual salary for a full-time CFO in a small- to medium-size businesses ranges from $94,250 to $175,750, according to a 2009 Salary Guide by Robert Half International Inc., a Menlo Park, Calif., staffing services firm that serves the accounting and finance fields. Renting one can be significantly cheaper.

B2B CFO Partners LLC, a Phoenix, Ariz., firm that has over 100 CFOs-for-rent, charges at least $300 to $400 per month for the service. The company has doubled the number of small- to mid-size business clients to 650 since 2007, says Jerry L. Mills, founder and chief executive.

Business owners often want such a service when their company’s finances are getting more complex and need someone with more financial expertise, says Germain Böer, professor of management and director of the Owen Entrepreneurship Center at Vanderbilt University in Nashville.

Still, he cautions that some small businesses that have simple financial structures or are completely self-financed may find renting a CFO not so useful. But “if you have a loan in the bank or an outside investor, something like this is well worth considering,” he says.

These CFOs have a bigger role than accountants, who mainly keep track of the company’s books. They work with business owners to manage their accounting and finance departments, connect them with business sources that can help them grow and provide financial data to help make strategic long-term or day-to-day decisions. Many are certified public accountants.

The payment structure varies. Some are on project-oriented deals, such as developing financial projections, assisting with raising capital or completing a business plan. Some are on-going in nature and can be based on an hourly or flat monthly fee.

Concerns regarding privacy from such consultants can easily be mitigated by nondisclosure agreements, experts say. Mr. Mills suggests that small businesses interview at least three CFO candidates, assess the quality of the firm they work for and avoid long-term contracts, if possible.

Ruthann P. Lacey

Ruthann P. Lacey

Some business owners turn to CFOs to establish proper bookkeeping systems. Ruthann P. Lacey, owner of a law practice in Tucker, Ga., brought in a part-time CFO in October. Before, an office manager handled bookkeeping while she also turned to her husband for ad-hoc financial and tax-preparation advice. “I didn’t really know what the big picture was,” she says. “I only knew we made payroll every month.”

Upon the advice of her rented CFO, she installed QuickBooks software, hired an accountant and sorted out the company’s accounts-receivable system, billing those customers who owed the company.

Ms. Lacey also began reviewing monthly reports about cash flow and profitability that’s making it easier for her to make hiring decisions or put more into the marketing budget. She says she’s quite happy paying the rented CFO’s $185 per-hour rate about 15 to 20 hours per month, because she can’t afford a full-time executive. “This is something I should have done a long time ago,” she says.

Entrepreneur Bob Compton, founder and chief executive of Vontoo Inc., an Indianapolis-based voice-messaging company, says he has rented CFOs for six companies he has started or been a lead investor in. “To hire a CFO in the early-going is a waste of money,” Mr. Compton says. “It’s much better to invest that money in engineers and sales people.”

For Vontoo, he pays $5,000 a month for the CFO’s strategic advice, bookkeeping services and accounting expertise. “It’s a tremendous cost-saving,” he says.

A company outsider can also help deliver a reality check. Re.Source Partners Asset Management Inc., a reseller of technology products in Detroit, has used cash to fuel growth since 2001 but is now using a line of credit for the first time, and needed help managing the new financing. In 2007, Mike Loria, the company vice president, brought in a part-time CFO who advised the company to rein in aggressive plans for growth and prepare for flat sales this year of about $9 million.

The CFO is more objective and “someone who can prevent us from making any bad decisions,” Mr. Loria says. “It has really given us a level of confidence that we did not have in decision making.”

Write to Raymund Flandez at raymund.flandez@wsj.com

http://online.wsj.com/article/SB125358186243529783.html


Warren Carter is an Executive Recruiter in Qualifind, Inc. You can share your responses with Warren by e-mail at: wcarter@quali-find.com  Qualifind, Inc. provides professional and executive search services for specific disciplines and industries throughout the U.S. and Mexico. We are a U.S. based firm with our corporate offices in San Diego, California. We have branch offices and recruiting staff in the U.S. (i.e Chicago, Austin) and Mexico (i.e. Monterrey,  Mexico City).

Pace of Job Losses Sets Stage for Quick Labor-Market Rebound

Posted by Warren Carter | Posted on 10-08-2009

Category : Executive Search, Job

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By JUSTIN LAHART
The rapid pace at which businesses shed jobs during the recession comes with a flip side: Workers will need to be hired back quickly as the economy improves.

So deep have companies cut jobs that Friday’s employment report, which showed that the U.S. economy lost a quarter-million jobs in July, was seen as a relief. Since the recession began in December 2007, U.S. payrolls have fallen by 6.7 million, according to the Labor Department. That’s a 4.8% decline, a level not seen since the late 1940s.

“Firms were unusually aggressive in cutting costs and cutting employment,” said James O’Sullivan, an economist with UBS. “The flip side of that remains to be seen, but it could mean that companies will be quicker to bring back people because they were more aggressive about getting rid of them.”

Businesses say they are running lean. Philadelphia staffing and outsourcing company CDI Corp. has seen demand for its services fall sharply in response to the recession. Its engineering services business, for example, has seen a 22% drop-off, said Chief Executive Roger Ballou. But the company has cut staff deeply enough that it doesn’t have many idle hands, and Mr. Ballou said that’s true at CDI’s customers as well.

“I’m unaware of any firm out there today that has lots and lots of people sitting on the bench, waiting for business to come back,” said Mr. Ballou. As a result, he thinks jobs will come back more quickly as the economy recovers than they did in 2001.

Milwaukee-based Wisconsin Steel & Tube Corp., which sells precut steel bars and tubes to manufacturers and machine tool shops, has seen business pick up recently as customers move to replenish inventories and is moving to add workers.

“We’re a lean company — we don’t have a VP of this and a VP of that,” said company President Joseph Teich. “We got rid of some temporary workers and some other people, but now we do anticipate hiring people.” Last month, the company brought in a salesman that a competitor had let go, and it will likely hire two shop workers this month.

To be sure, even as more companies begin to hire as the economy recovers, it could take years before payrolls reach their prerecession level. With Americans spending more cautiously in response to the massive losses in wealth associated with this recession, some jobs may simply never come back.

“We are going through an important transition in the U.S. economy away from consumer discretionary and housing expenditures towards more exports and research and development,” said Northern Trust economist Paul Kasriel. “It’s going to take a lot of time for workers to retrain and get skills in those areas.”

Moreover, with manufacturers continuing to make strides at wringing more production out of fewer workers, even as demand picks up, they may be able to hold off on hiring. Manufacturers began cutting workers in 1998, long before the 2001 recession started, and they kept cutting them through the subsequent recovery and into the current downturn.

And a quick labor-market recovery would be a break from what has happened in recent downturns. After the brief 2001 recession ended, the economy continued to shed jobs for nearly two years, and after the 1990-91 recession, jobs growth sputtered. The two experiences led economists to conclude that there had been a shift in the behavior of the job market, which in the past recovered quickly after recessions.

That said, one thing different about this recession — and one more reason the job market may come back more quickly than in the downturns of 2001 and 1990-91 — is that so many of the job losses have been at the service-related companies that have come to dominate U.S employment. Since the recession began, 3.3 million service-sector jobs have been lost, a 2.9% decline that is the largest in data going back to 1939. In comparison, the previous two recessions each saw service-sector jobs fall by 0.5%.

Many service-related firms may have a more pressing need than manufacturers to rehire workers as demand comes back.

“In our industry, staffing is driven strictly by the number of guests we have to take care of,” said Peggy Mosley, owner of the Groveland Hotel in Groveland, Calif. “In the hospitality business, that’s where we have to excel.”

With 30 employees, Ms. Mosley’s hotel, near the northern entrance to Yosemite National Park, is at its highest staffing level in 19 years of business. More Americans are vacationing closer to home, she said, and because she doesn’t cater to business travelers, she hasn’t seen the drops in occupancy many of her counterparts across the country have seen. In July, there were 140,000 fewer hotel, motel and other accommodation workers than a year earlier.

But the biggest reason jobs might bounce back quicker from this downturn than the past two recessions, said Comerica Bank economist Dana Johnson, is that the economy looks likely to see a much bigger bounce as it recovers.

Gross domestic product — the value of all goods and services produced by the economy — has fallen by 3.9% since economic output peaked last year, marking the steepest decline since the end of World War II. In contrast, the 2001 and 1990-91 recessions were among the shallowest on record.

History says that given the depth of the downturn, GDP should grow at a 6% to 8% rate over the next year, according to Mr. Johnson. But because of the financial stress that has come with this recession, he expects it will grow at a 4% rate.

“What people forget is that a deeper recession has consequences,” Mr. Johnson said. “There is a considerable relationship between the depth of recessions and subsequent recoveries.”

Write to Justin Lahart at justin.lahart@wsj.com

http://online.wsj.com/article/SB124984512901117509.html

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