Tuesday, July 13, 2010

HR lessons from the LeBron decision

From the most casual of sports fans, to NBA fanatics, “The Decision” was hard to miss last week. LeBron James, perhaps the greatest basketball player of this generation, and a Cleveland native, left the Cleveland Cavaliers to play for the Miami Heat, joining his good friend (and fellow superstar) Dwayne Wade and another star in Chris Bosh, who left the Toronto Raptors to be with the Heat. Following 2 years of deliberation amongst fans and interested parties, and a variety of potential suitors for LeBrons talents, the Heat ‘won’ and the three friends form what is potentially one of the most devastating 3-person groups ever to play together in the league.

To add further intrigue, instead of announcing his decision quietly, LeBron announced which team he was joining in a live, one hour special, billed as “The Decision”, but that has already been called “The Mistake”. Additionally, his former boss, Dan Gilbert, published an incredibly vindictive letter moments after the decision labeling James a coward, amongst other things.

The move has been commented on in every conceivable way amongst sport websites, publications, blogs and I’m sure has provided Twitter with serious need to review its current bandwidth. What has not been considered by anyone, as yet, are the incredibly interesting HR issues that this entire situation and series of events bring to the forefront. This article will discuss some of these.

The Cavaliers could not retain LeBron James, despite being able to offer him MORE money that their competitors. Despite 7 years of employment, not only did LeBron leave them, but hurt them in the worse possible way by announcing his decision on live TV. In Cleveland, fans burned his jersey and openly wept as the decision was shown on live TV. The bottom line though is that Cleveland did not do enough to retain LeBron James.

This demonstrates a serious issue in today’s workplace. Retaining key staff has never been more important, and it does not come down purely to money.

In Cleveland’s case, they lost LeBron because they did not build a contender around him, and provided only an average level supporting cast that could not carry the load when LeBron was ‘off’. In organisations, the provision of a ‘supporting cast’ can be applied to the provision of Employee Benefits.

Without a unique, creative and valuable Employee Benefits Program (EMP), employees feel less valuable and are provided less ‘ties’ to the organisation. An EBP cannot just include cash bonuses, pensions schemes etc, it must be more creative. Why not plan for team building events, off-site training to address specific needs, consider support for dependents of employees, provide staff loans at reasonable rates, plan staff events that will build unity and trust. It should be a holistic approach that takes in to account personal needs, not just financial needs.

Long term planning
The Cavaliers had 7 years to build a team around LeBron, but instead of applying a long term mentality to their moves (trades, acquisitions), they always went for the ‘home run’ summer whereby the team could win a championship immediately. If, 6-7 years ago the team had started to put the pieces in place around LeBron slowly, allowing a young team to grow together, the Cavaliers would have most likely become a championship-caliber team.

The short-termism of the Cleveland management team hurt them in the long run.

In HR, the same applies. At all times, senior management must be considering the needs if it’s team, and the growth of the team, not just this year but 3-5 years from now. Only then will employees feel a since of progression and be able to visualize the way the company is moving forward.

As much as Cleveland lost LeBron, Miami won by recruiting him… and recruiting him hard. Led by superstar in waiting Wade, a Miami hero for the past half decade, and Team President Pat Riley, regarded as perhaps the smartest and most creative executives in the sport, LeBron received the pitch from Miami, as well as 4-5 other teams, and eventually selected them.

Now, we don’t know what the pitch contained exactly, but it highlights the importance of having a strong recruitment policy, and ‘pitch’ for prospective employees.

In any interview, it is well known now that both parties are being interviewed. The employee needs to be impressed by the organisation as much as the organisation needs to be impressed by the employee. But how many organisations actually act upon this?

Every organisation needs to look at itself from the perspective of a prospective employee and ask itself honestly:
1.     Why would I want to work for this company?
2.     What would stop me working for this company?
3.     How does this company compare, as an employer, to its competitors?

The answers to these questions are important. Even if you are a (on the surface) relatively boring organisation managing accounting services for clients, this doesn’t mean you have to be a boring employer. Why would an employee choose you over your competitors? What are the benefits that might sway their decision? Can you effectively communicate the benefits of being employed at your organisation to a prospect? Consider your benefits program, corporate culture, emphasis on HR planning, plans and growth of the company, the interesting and fun teams, exciting elements of the work, responsibilities, opportunities for creativity and investing ideas. Do your pitch to the prospect during the interview.

Have Miami done something brilliant or ridiculous? Every organisation has a budget that they wish to stick to. In the NBA, this is made more formal via the application of a salary cap. Teams cannot spend more on salaries than the salary cap figure, un less it is resigning current players, and even them they are to pay what is called a luxury tax. In today’s climate, most teams are working very hard to keep spending below the salary cap.

For Miami, to sign these three top players has taken the vast majority of their available ‘cap space’ or budget. Given that a team MUST have 15 players under contract, the Heat are left with the problem of filling the gaps and not having much money to do it with.

Time will tell whether 3 superstars can win a championship with 12 low cost role players and rookies, and it will be interesting to see the results from an HR perspective. For SME’s especially, there is always the temptation to break the bank and hire a superstar General Manager to manage the business, and trust that this one person can carry the load of the Managing Director, and handle marketing, operations, HR and sales. Sure, maybe they can, but if that budget was instead spent on hiring 4-5 lower cost managers in each department, would this provide more stability and a better structure. What happens when your superstar decides to leave (or for the Heat, gets injured)?

Whilst we may look at HR as an internal issue, it should be remembered that there are greater stakeholders in the mix too. Look at Cleveland fans, who cried and shouted and screamed and were silent after hearing the decision. Yes, in sports this is more relevant, but organisations also need to consider the effect on other stakeholders when managing their HR function.

As an organisation, hiring and firing effects employees yes, but also families, competitors, customers, suppliers and more. Consider the relationships you have in place with these stakeholders, and how a staff addition or replacement might affect these groups. In the end, the best business decision needs to be made, but sometimes the best business decision is also one that takes in to account factors not directly related to business itself.

Greater good
What the Miami Heat have done especially well is create a team spirit already. Their two superstars, and star, have all accepted LESS money than other teams could have paid them in order to ensure they could play together and build something special. This seems like an alien concept in today’s “I want” economy. Accepting less for yourself, in order to achieve the greater good for the team.

This can come down to corporate culture. The best organisations can retain their employees without having to break the bank. By creating an interesting corporate culture where success is recognised and rewarded, politics are minimised, hard work is prevalent and fun is had by the team, employees WILL stay longer for less money. Looking back at Employee Benefits Programs, these should enhance benefits for employees over time, thus keeping the employee looking forward… “just 2 more years until my bonus plan doubles”… “wow, in 6 months my department gets free tax planning training”.

The HR issues that come from “The Decision” are interesting and provide a slightly different view on the entire event.

Written by Stuart Blott, General Manager, Sutlet Group Co., Ltd

Sutlet Group is Thailand’s leading provider of business services and solutions, including accounting, visa and work permit management, HR, legal services and marketing solutions. See www.sutletgroup.com for more information on how to start up, development, support, management and grow your business in Thailand. All the HR issues outlined above can be addressed by the Sutlet Group.

Thursday, July 8, 2010

Sutlet Group continues its support for the Gift of Happiness Foundation

Sutlet Group, who have for years supported the Gift of Happiness Foundation, today announced that this support would continue throughout 2010 and 2011. 

Over the past few years, Sutlet Group have sponsored dozens of Gift of Happiness events all over Thailand. These events bring laughter and joy to children and schools, many of whom need to enjoy themselves for a day.
The Gift of Happiness Foundation, led by the famous Clown Eckie (Mr. Eddie Harworth, a British National) is a non-profit initiative that involved entertaining clown shows and other events for children. 

His most recent Sutlet Group sponsored event was the ANZAC day performance in Kanchanaburi, in association with the Australia Chamber of Commerce Thailand.

For more information on the Gift of Happiness Foundation, see www.gohappiness.org.

For more information on the Sutlet Group, Thailand's leading provider of business services and solutions, including accounting, financial services, legal support, HR and marketing, see www.sutletgroup.com