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Seeing people as assets: Perspectives from an HR leader

Ellen Raim, Founder of People Matter, shares insights during the latest People Developing People interview.

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Insights from Ellen Raim, Founder of People MatterWe focus more on solving than preventing People problems.

Insights from Ellen Raim, Founder of People Matter

Jason Lavender recently joined a Zoom room with Ellen Raim, an HR leader, a nonprofit board member and the Founder of People Matter, to chat about common opportunities and challenges for HR and People leaders, especially in the category of people development.

Within this conversation, Jason and Ellen discuss:

  • How too many companies focus more on solving than preventing people problems.
  • Why HR is at the forefront of organizational change.
  • Why the companies that invest in their people are the most successful.
  • The imperative of growing people to grow a company.
  • What would make developing people at work easier.
  • The virtuous cycle of learning.
  • The benefit of building connections.
  • How the speed of change impacts employee needs.
  • The rift that comes from categorizing employees as a cost instead of an asset.

Jason Lavender, CEO & Founder of Electives: Ellen, welcome! Do you mind sharing your background and what you're up to today?

Ellen Raim, Founder of People Matter: I started my HR/People career as an employment lawyer, and I handled matters when they got completely screwed up. I did that for a number of years, and I realized that people were putting a lot of money into these lawsuits. But nobody was going backwards to try to understand what was happening in the environment that made someone so upset that they felt their only recourse was to go find a lawyer.

I started telling my clients, “Look, I'll settle this case for you. Then, I want you to take the money that you're going to save and go back inside and try to figure out what the root cause of this was.” And nobody would do it.

We focus more on solving than preventing People problems.

So then I said to myself, “Okay, I've gotta get closer to where things are really happening.” So I went in-house to Intel as a lawyer, and I thought that would be better because I was closer.

But that still didn't work. People still only came to me after they thought they'd done something wrong.

Finally, a factory manager at Intel asked me, “Why don't you go into HR?” I then had to admit that, for all my big talk, I really didn't know how to do anything other than clean up the mess at the end. But that factory manager said, “Nonsense! You understand strategically what happens and how everything fits together.”

I am endlessly fascinated by what makes people inside organizations tick, and I did just about every HR job at Intel. Then I got recruited to be the VP of HR or CPO for a number of companies across all stages, including big companies, private companies, public companies, little companies, companies doing well and companies struggling. And now I’ve taken all of that experience and started my own consulting firm called People Matter.

At People Matter, we act as the senior resource to small HR teams or HR teams of one, where they’re making it up as they go. They’re doing the best they can, but they know it would be nice to have somebody who's been around the block and can help advise.

HR is at the forefront of organizational change.

Jason: I love that and congratulations on the launch!

The role of the People leader has changed so much over the last decade. Most people started talking about the change during the pandemic and it only continued. What do you think has been the most impactful change in terms of the role of the Chief People Officer? And what are you most excited about in terms of that change and its impact over the next couple of years?

Ellen: The whole world of People inside of companies has changed enormously, and businesses are starting to realize that. 

Employees want to work for and people want to buy from companies whose values match their own values. And that means more than the silly poster on the wall that says mission, vision and values on it.

It's about how you show up as a company. HR has been in the middle of this shift for the last several years because it's been such a tumultuous time. 

HR leaders are able to understand how you motivate, care for and create experiences for employees that augment the business rather than just taking care of the transactional and the compliance stuff.

The companies that invest in their people are the most successful companies.

Jason: What do you think are the factors that lead to companies being really successful in terms of developing their people versus companies that struggle to develop their talent?

Ellen: Companies that understand they succeed through people and spend the time and the money grooming and growing their people are the companies that are most successful.

The companies that either don't see people development as important or don't have an organized way to deliver training and career pathing are the companies that do well only in spite of the fact that they're not using their people resources in the best way.

It benefits both the company and every single employee if you understand that people want to grow. 

If you ask people what they want out of a career, people in the finance department think, “Oh, they want a big salary.” But that's really third or fourth down the line. What employees want is to do something that matters. And they want to be able to grow their skills and climb the ladder. You can affect all three of those things with training and development.

Jason: Human capital is typically the largest asset in any company. Yet, to your point, investing in that human capital feels like it sometimes creates tension or uncertainty. 

People often ask, “Do we really need to do this? Can it wait? Because we need to invest in these other projects.” Why do you think that tension exists? And, have you found successful ways to consistently overcome that tension?

Growth doesn’t happen without people.

Ellen: If you think about it financially, people are the company's biggest asset. But, if you actually look at the way that an income statement and a balance sheet are put together, people are not an asset. People represent costs, which makes them a liability. GAAP accounting causes (or reveals) some of the problem, which is that people are expensive. Somehow, along the way, there's been a break in the link between the expense of people, which is our salaries, and what employees deliver for the company.

I've been in a million C-suite meetings where somebody from FP&A comes in to show a projection, and they’re like, “We're going to make all this money… and look at this chart, it's going up and to the right…” That doesn't happen without people. That's a wish, and that wish only comes true if you can motivate, engage and direct the people to accomplish whatever it is to make that line on that chart go up and to the right.

Education needs to happen with executives to teach the beauty and the magic of growing people and understanding how to get work done through people in a way that's motivating and not frightening.

Moving on to the second part of your question, yes, I have seen it work.

There are some leaders, some CEOs and some CFOs, who understand this [the importance of developing and motivating people]. In those companies, the purse strings are squeezed a little less tight, and you can get money to develop people the way they should be developed.

When I was at companies where that wasn't the case, I started out with the mantra that I was going to ask for forgiveness and not permission. I started building with the very first people that I hired. When I build an HR team right, I hire a learning and development person, because I know that the only way to really give employees the experience they want is to help them learn.

Developing people at work would be easier if managers believed in development.

Jason: We often talk about how hard it is to develop people at work. So I'm curious to hear how you fill in this blank: “Developing people at work would be easier if [blank].”

Ellen: It [developing people] would be easier if the managers of people believed in development. 

We're herd-like creatures, and we're always looking to the alpha to see what the alpha thinks and does right. For example, you look up to your manager and think, “Do they want me to do this? Do they not want me to do this?” 

At most companies, there's some training available. Of course, it’s often one-minute sound bites on some video channel (and don't get me started on how I don't think that that's good enough), but there's usually some kind of training in a company. But if you feel like your manager doesn't support you taking that training, you don't [take it]. Because it means you're going to have to work into the evening. Or you're going to be missing meetings. 

It's really about the support that you believe your manager is giving you.

At some companies, it seems they think training is an extracurricular activity, even though it is really central to employee success.

We can create a virtuous cycle of learning.

Jason: Have you seen any managers get KPIs built into their performance reviews that are specifically around their team participating in training?

Ellen: It's been years and years since I've seen anything like that. 

Pepsi used to have a section on their performance review about how managers managed, and there were a series of things underneath it that would suggest what “goodness” looked like. But, I don't think they do it anymore. I'm not aware of any companies that do. And, I think it's a miss.

I think most managers in today's world are player-coaches, because there's so much that needs to be done, and we're running lean organizations. But there's still that coaching aspect.

I'm experimenting with an idea around a coaching culture. There's a very old saying, “Each one, teach one.” I don't know the origins of it, but I hear that it's attributed to Gandhi trying to help with illiteracy in India. The idea is, if you know something, you should teach it to the next person. 

If we're always relying on the managers to teach things or make it okay for people to go to classes, maybe that's an unfair ask. Maybe if we were able to move the whole culture so that everyone could learn something, then there could be many teachers. Like in staff meetings, each person could teach something that they learned.

I think that this plays really nicely into what Electives is trying to do with Electives Membership allowing people to take classes without it having to come through the organization, because that will give each person some level of knowledge that maybe everybody else doesn't have. And so if we can, we should practice “each one teach one.” I think that's a way, maybe, to get a grassroots of development going.

Jason: We have a client who was an early adopter of the Electives Membership model that had all of their employees choosing the classes they wanted to take each month, and then they asked five people at every monthly all-hands meeting to share for three minutes on what they learned in their class. To your point, it felt like it made everyone even more engaged in their class, because they knew they had to teach it later. So they're really into it. They're taking notes. They're sharing back. And now you have all the employees learning five different things. 

Ellen: If you create grassroots interest, you can build on that, too. So it doesn't just have to be everybody teaching each other. But, maybe you have a groundswell of employees who then say, “We would like you to bring in someone that teaches us about X.” It becomes a virtuous cycle.

Connection builds trust and collaboration.

Jason: At Electives, we're big believers in helping people connect. Particularly in this hybrid/remote world, we think connection is super important.

How do you think about connection as it relates to overseeing the People and HR function? Have you seen anything work really well, particularly in the last couple of years, to make people feel connected to each other or the business?

Ellen: One of the reasons I'm not a fan of quick video training is because I think if you're going to learn something, you have to put in the time to actually learn it. And the hook for a lot of these things seems to be, “I can teach you a foreign language in 11 seconds if you just click on this thing every day.” And I just don't think that those things work very well.

Conversely, I really like interactive things. When you can get people sharing with each other, it's so much more of a meaningful experience. If you can get people speaking up, and you can get them speaking to each other (and not only to the person in the front of the room or the front of the Zoom call), it's a much more meaningful experience because people relate to each other.

How do you create connection? And how do you help people relate to each other? I think you have to get them outside of their roles. While the things you've heard companies do, like happy hours and offsites, sometimes seem hokey, they actually do work.

I worked at a company where we built an adult-sized ball pit in the middle of the lobby, and on each ball, there was a question. If you were in the ball pit and somebody else came in, you had to ask each other and answer each other's questions.

All those things work. They feel awkward at first because we're adults. But we really haven't lost the spark of having best friends and going to the playground. And so the more that you can do those kinds of things, I think the better off you are.

And if you can't do that [create in-person connection], then the more you do at the beginning of meetings, like where you go around and you ask people a question that doesn't have anything to do with work, the more you humanize each other. The more people can find that they have in common with each other. The more benefit of the doubt they'll give each other. The more help they'll give each other. And the more willingness they have to take direction or negative feedback from each other.

People need to know how to thrive in ambiguity and be resilient to change.

Jason: I remember seeing an exercise years ago that always stuck with me. To kick off a meeting, everybody had a blank piece of paper and a pen. We each paired up with a person, and we had to draw them. We only had 30 seconds, so the drawings were just terrible. At “pencils down,” everybody showed their drawings, and everyone said, “I'm so sorry.” 

The point was to show that 99% of adults apologize for their ideas. But when you do that exercise with kids under the age of 8, everyone gets so excited to share their pictures.

We used that exercise at the start of a brainstorming conversation to essentially say,  “There will be no apologizing for ideas today. Be the kid, and just be proud of your idea.”

Transitioning back into questions… In the next couple of years, what do you think people are going to need to learn more than ever?

Ellen: The ability to thrive in ambiguity and be resilient to change. The world is so sped-up right now. If you just look at what's happening in the work world, hundreds of jobs are not going to be here five years from now. 

AI is the “newest thing” everybody's talking about. But AI is real. It's going to have some effect on the workplace.

There's a big shift in the way I think about work — in the relationship between employees and employers. If you think all the way back to “once upon a time,” we had sweatshops and bad relationships between employers and employees. Then unions came along and they fixed wages, hours and working conditions. Then unions waned because a lot of really big companies like Motorola and IBM put people initiatives in place. They were the first ones to come up with health insurance, pensions, vacations and those kinds of things. And then those things started to morph. (For example, we don't have pensions anymore, we have 401Ks.) The relationship between employers and employees keeps changing.

And then we had the pandemic, and people had a whole new way of thinking about what work meant and what they were willing to contribute to work. You can see that now with the “great resignation” that happened and people's continued unwillingness to leave their living rooms and come back into the office.

That's not done. Unions look like they're on the rise again. The actors are striking. The writers are striking. Ford and GM employees are striking. You throw AI back in the mix, and I don't know where all of this is going to end. 

I believe both employees and those who manage and run companies are going to need to understand how to stay above it all as things are falling out.

Jason: I agree. The term “unprecedented” is starting to lose its power, because there are so many unprecedented things that we've lived through in the last couple of years. It's overwhelming.

Ellen: And I don't think it's finished. A lot of the pundits proclaim, “It's a Gen Z problem…. It's a Millennial problem…” I don't think so. I think it's a shift in the way the relationships or the contracts between employers and employees are being created right now. I think we'll reach another place of calm for a while. But I don't think we're there yet.

Jason: Is there a data point or statistic that you have recently learned about that you find troubling or exciting in a positive way?  

Employees need to be given more credit for corporate growth.

Ellen: I am really fascinated by the fact that people are treated like a cost. They're the one thing when companies are not doing well that they can sever the cost on quickly, because everything else is contractually based. That just seems so odd to me.

There's no place on a company's financials where the employees are getting credit for coming up with the innovations. I am truly puzzled by the disconnect between the way employees are seen in the financials and the way they are seen by HR.

Now that I'm not working inside of a company all the time, I have more time to ponder this deeply. I don't have an answer yet.

If you think about it as human capital versus machines as capital, it's ridiculous. You depreciate machines over time. So they're not a cost forever. 

There ought to be some kind of grace for the fact that employees are not just a cost. 

HR + people leaders should prioritize learning the business.

Jason: What advice do you have for one-person HR or People teams?

Ellen: Learn the business. I mean really learn the business. Because that gives you so much more credibility when you talk about the people things. 

There is a belief that HR people are sort of fluffy bunnies, and they're all about feelings, and they don't really understand. And there are many of us in HR that either have law degrees or MBAs. But that's still not good enough. You still have to learn your business.

It’s hard to be a people leader.

My second piece of advice is to be kind to yourself. This is a really hard profession. It's hard for a lot of reasons. It's hard because you have to do a lot of influencing without authority. 

You see a lot of the sadness and the problems with employees. And you can't share what you're seeing or learning with too many people. So it's not like you can go to lunch with one of the other people on the executive step and say, “Oh, my gosh! Let me tell you what happened today.” 

HR is really hard, so be kind to yourself. Give yourself a break and realize that you're doing a good job.

About Ellen Raim

Ellen Raim, Founder of People Matter, has passionately navigated the world of HR, becoming a beacon of transformative solutions. With a background in law, behavioral economics and organizational design, Ellen is uniquely positioned to fuse human behavior with business needs. From her early days as an employment lawyer to spearheading global HR teams, Ellen’s journey is a testament to her dedication. Through People Matter, Ellen is transforming HR from administrative to strategic, by designing systems and cultures that drive growth.

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