Hey HR: Don’t Throw Good Money After Bad

[Photo credit: Stephen Rees]

On my way to work at iFractal World Headquarters I walk past a construction project on 17th Street in Philadelphia that makes me shake my head. It’s been in the works for over a year now, and they’re finally above ground level. For six months, all they had was a giant pit that was dug 30 feet into the ground. Guess what they’re building? A luxury apartment building. And when I say “luxury” I mean apartments that *start* at $3 million. Every time I walk past there I want to scream: FILL IN THAT HOLE. STOP WHAT YOU’RE DOING. MOVE ON TO SOMETHING THAT WILL MAKE YOU MONEY.

We’ve all been victims of throwing good money after bad in our HR endeavors. When we have a good idea we want to see it through. Damn the torpedoes, full speed ahead. That’s a bad approach in the good times; it’s a disaster now.

If you’re building a building that has no chance of making money, knock it down. If you’re putting on training that lost its relevance, pitch it out. If your pay plans and performance management encouraged the kind of behavior that got us where we are, toss them aside. Don’t stick to what you know just because it’s on a project plan. And while you’re at it, deep six your project plans too. They’re half the reason that people get tunnel vision — they have to check off all the boxes on their plan. (I’m not saying “Don’t plan.” I’m saying, step back every once in a while and critically examine why you’re doing what you’re doing.)

Throwing good money after bad is what got us here. It sure isn’t what’s going to get us out. Spend every HR dollar like it’s your own and you won’t go wrong.

Silence Is Not Golden When the Economy is Crumbling

You know how flight attendants and pilots never seem to shut up when the plane is on the ground or in clear air, but then as soon as there’s turbulence, nothing? Silence. You sit there in your seat, nervous and wondering what’s going on, and they don’t tell you a thing?

That’s what’s going on in a lot of businesses right now. Here’s a little communication hint: Silence is not golden when the economy is crumbling and people are scared. And here’s a little hint to employees: Your bosses are scared too.

So, it’s time for HR to step and be the calm in a storm. You know that your people can read. And what they’re reading right now is that there are lots of layoffs, unemployment is high and getting higher, the stock market is spinning like a whirligig, and their pay and benefits are affected. They’re sitting in their seats, nervous and wondering what’s going on. It’s time to tell them. ‘Silence is golden” is great for 3-year-olds. It doesn’t work for 30-year-olds.

It’s Time to Do the Right Thing

When you get a Federal bailout, you don’t go to a spa to work on strategy. HR has a role to play in setting the tone in a company — and right now with the economic tsunami at full force, that tone needs to be one of scrupulous ethics. Anything less isn’t good enough.

Rethinking HR

Happy bailout, my HR friends. Something like $700 billion is coming Wall Street’s way. But the odds are, not your way.

Human resources is going to be a different beast when this economic crisis is over. This isn’t going to be your father’s HR. Heck, this isn’t even going to be your HR when this is all over. This is one of those deals like freshman chemistry for pre-med: Take a look left and take a look right. Those people sitting next to you won’t be there by the time this class is over.

I’m not trying to be an alarmist. In fact, I think for the talented people in HR, this can be your shining moment. For people who are junior functionaries or are walking demonstrations of “The Peter Principle,” buh-bye. Have a nice day. Thanks for flying with us.

Here’s what is gonna happen: If you’re working in an affected industry, you”ll be asked to exit people. Those who aren’t in HR know this as “being fired.” Lots of people are going to lose their jobs. People you know. Friends. Family members. If you’re lucky, you won’t be asked to turn out the lights as the last person out the door. It’s gonna be a real headache. That’s the really bad stuff.

Here’s what else is gonna happen: Your best talent is going to get jumpy. Their stock options are underwater and have no chance of recovery. Pay raises — hah! Benefits? I’m gonna guess that even Google is going to cut back on their Skittles budget. And when times are tough, you need your best people. What you did during the halcyon days are going to come back in karma now. I hope you treated them well.

So now’s the time to rethink HR. It’s your time. It’s time to dig in, move fast, and make money. The time for thinking big thoughts is over. It’s time for action.

Send Some Advance Money, Please

I have a lot to say about the economy and its effects on HR. That’s coming. In the meantime, Chuck D sent me this funny variation on a Nigerian 419 scam that I thought you’d like to see.

SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON