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Remote Working Is Upending Onboarding

Remote Working Is Upending Onboarding

by | 03 February | , , | 0 Comments

 

Connecting with new peers is one of the necessary steps for success.

I have the opportunity to coach senior executives from large companies who have either changed roles or changed companies during the pandemic, and something that continues to be shortchanged is onboarding while working remotely.

This is a problem because onboarding is a critical starting point for any new employee. Within this process, connecting with one’s new peers is falling through the cracks, and this can have dire consequences for the success of that new executive down the road. That is why I suggest companies devise a new onboarding plan that is probably different than the plan they had before.

Reach Out to Peers
There is not only a gap in overall onboarding but a specific gap that is not so obvious. When onboarding, or starting a new role, it is rather automatic, I suppose, that new hires have remote conversations with their bosses and with their direct reports in order to understand the business. But in the process, they often forget about their peers. Having solid relationships with an executive peer is critical to success because that will cut down on infighting that inhibits productivity and efficiencies.

I continue to encourage clients to reach out to their peers when starting a new position. Head off this potential issue with your equal at the first pass by taking the initiative to introduce yourself and to warmly open the line of communication. What we continue to find is that recipients of this outreach are surprised because it is just not expected, or even thought of, but it is vital to develop those relationships. It can start with just a friendly discussion to say, “Hey, I’m here,” but more importantly, these conversations can be used to establish an understanding of mutual expectations.

More Listening Than Talking
When I coach my clients who have taken on new roles, I remind them that their first responsibilities at the beginning are to do more listening than talking. Realistically, newly installed executives should not know what their priorities are on that first day because they need to take the time to understand the position. After that process has been completed, I encourage our clients to share the key learnings with peers to discuss priorities for their teams, next steps, and working together.

The Bottom Line
When it comes to onboarding today, there are two key points that need to be addressed: Companies need to think differently about onboarding people in the current situation because so many people will be working remotely. And newly hired or installed executives need to take the time to learn about their new jobs before declaring priorities for their teams.

Global business leader Robert J. (Bob) Ryan is an executive advisor at Shields Meneley Partners, where he focuses on building strategic business partnerships and expanding service offerings to top leadership teams around the world. His career has included key leadership roles with companies ranging from $500 million to $84 billion, including Procter & Gamble, Tate and Lyle, Bombardier Recreation Products, Kimball Hill Homes, and Griffith Laboratories. Born in Montreal, Canada, Ryan began his career as a manufacturing engineer after graduating from Carleton University in Ottawa, and McGill University in Montreal with a degree in mechanical/aeronautical engineering. When approached by his CEO, he “jumped at the chance” to lead strategic human capital initiatives that directly impacted the bottom line. Ryan has served on the Boards of the British American Business Council, the Northwest Cultural Council, and the Human Resource Management Association of Chicago. He also has been on boards representing economic development, education, and the arts. Ryan is also a graduate of the Hudson Institute Coaching Program and a member of the International Coach Federation.

Link(s) to Article:

Remote Working Is Upending Onboarding

An Interview with Bob Ryan and Keith Goudy – TridePod Podcast

An Interview with Bob Ryan and Keith Goudy – TridePod Podcast

by | 14 January | , | 0 Comments

Courtney Lane interviews Bob Ryan and Keith Goudy.

ABOUT BOB RYAN Robert J. (Bob) Ryan, a global business leader, is an Executive Advisor at Shields Meneley Partners. Bob’s career has included key leadership roles with companies ranging from $500M to $84B that include Procter & Gamble, Tate and Lyle, Bombardier Recreation Products, Kimball Hill Homes and Griffith Laboratories. Born in Montreal, Canada, Bob began his career as a manufacturing engineer after graduating from Carleton University in Ottawa, and McGill University in Montreal with a degree in mechanical/aeronautical engineering. He quickly developed a reputation for bringing the right people together to address issues, guiding creative problem solving, and ensuring successful outcomes. When approached by his CEO, he “jumped at the chance” to lead strategic human capital initiatives that directly impacted the bottom line. His career progressed rapidly as he took on – and resolved — complex problems in global organizations. He is known as a gifted listener and go-to-coach for all levels in an organization. He has been described as “captain of the team, a master of common sense and the last guy off the ice.” Bob has served on the Boards of the British American Business Council, the Northwest Cultural Council, and the Human Resource Management Association of Chicago. He has also been on boards representing economic development, education, and the arts. Bob is also a graduate of the Hudson Institute Coaching Program and a member of the International Coach Federation. As an Executive Advisor Bob focuses on building strategic business partnerships and expanding service offerings to top leadership teams around the world.

ABOUT KEITH GOUDY Keith joined the firm in 1997 and has over 15 years of experience in executive assessment, succession planning and leadership development. In recent years, his focus has been on helping clients create winning strategies for building and managing their leadership bench strength. His passion and expertise lie in helping individuals prepare to get to the next level of leadership, and helping organizations select and develop world class management teams. Keith works with privately held firms as well as public corporations, representing diverse industries including energy, utilities, manufacturing and healthcare. Keith completed his undergraduate education at Pennsylvania State University and received his Ph.D. in Industrial/Organizational Psychology from DePaul University in Chicago. He has authored articles, and presents at management conferences in the areas of talent management and leadership development. He manages the Assessment Practice at Vantage. Keith likes to spend time with his family and hopes his two young, wonderful children will learn to enjoy skiing out west and playing golf. He loves music and literature, landscaping, and the Philadelphia Eagles.

Link to Podcast:

Executive Onboarding During the Pandemic: Both Pitfall and Opportunity

Executive Onboarding During the Pandemic: Both Pitfall and Opportunity

by | 13 January | , , , , | 0 Comments

Talent managers, human resources practitioners, and executive coaches continue to perfect work-from-home and make it the new norm. As they do, they find a hidden pitfall in their work becoming more evident each day. We’re talking about executive onboarding – specifically, for those new team members C-Suite and just below.

So how, in a remote world of work, does the new team member get to know their new colleagues?
Let’s say you just started that new position in the (now virtual) executive suite. You are looking to become part of the team quickly. Chances are you have already thought about how you are going to talk to your direct reports. You have a sense of how to communicate and collaborate,
of course. To help matters, your new boss and you have already figured out how you will interact. As some of our clients initially thought, there is a general sense of feeling good about their new situation. And yet, the piece that is missing is an important one.

The fact is we miss the opportunity to connect in person – especially as the new addition. And we haven’t yet learned how to get to know our peers in the organization while working remotely.

Executive Onboarding: A Challenge Even in “Normal” Times
As is the case when working in-person at an office, remote teams and group leaders tend to become siloed. After all, when working alone, it is easy to become narrowly focused on our own departments. Although a natural occurrence, this makes it difficult for the new chief marketing officer, for example, to know much about what the chief financial officer is doing.

Scheduling video calls with equals is not typically on executives’ wavelengths. But in today’s world of work, it should be – it must be. Because when the left-hand does not know what the right hand is doing, problems result. Company efficiencies and productivity suffer. As we coach our clients: You are not just joining the team you will run, you are joining your boss’ team. Neglecting to invest in the development of relationships with team members and leaders at your level, in your situation, creates a leadership dysfunction that is not good for the company – any company.

Developing Relationships in a Virtual World
The key to a successful onboarding process and the development of one-on-one relationships is active listening. In the new work-from-home landscape – where the watercooler conversation, spur of the moment “let’s grab a coffee,” and unannounced pop-in are absent – how does one develop those relationships? Where are the opportunities for active listening? It is not through
only one’s direct reports, nor is it solely from your boss – a key source of learning comes from peers.

Your peers will likely have various levels of experience and institutional knowledge about the company. That experience and well-earned knowledge will likely become essential resources for your own team’s success at some point. After all, the Chief Procurement Officer will likely need to rely upon the Chief Supply Chain Officer, and vice-versa, to succeed. Not only will they know the business, but they will also know your people. And developing those relationships, over time, is an integral part of being a good executive.
So how does a new executive team member develop those relationships while working from home? Here are three suggestions:

Develop a Comprehensive Communication Plan
Along with your hiring manager, develop a detailed onboarding plan that ensures you will communicate with all stakeholders. This is especially important for connecting with new peers, an oft-forgotten cohort. It is natural to devise a plan to configure best practices for your new boss and those reporting to you. But developing those relationships with your equals is critical to your success because these people will help you navigate the workplace culture from your same vantage point.

Plan for Spontaneous Connection
Leaders at every level must find a substitute for the unplanned office drop-in to say hello. Those interactions are typically low-stress and ultimately derive high returns when it comes to relationship-building. For WFH, we suggest keeping a pad near your computer to write down a reminder of what you might say when you virtually drop in. That means preparing what you want to say in that short text and quick call—no need to schedule a videoconference to relay that “job well done” encouragement.

Schedule Virtual Happy Hours
Carve out some valuable end-of-the-day time for an after-hours virtual coffee or cocktail with your new team and with your peers. New leaders should accomplish this task through one-on-one meetings or in small groups. Be sure to develop these relationships in a more casual setting because everyone a more relaxed environment will encourage team building and team bonding.

Connecting with one’s peers within the organization should happen regularly for established leadership teams, regardless of work circumstances. When it comes to onboarding in a remote work situation, we encourage our clients to intentionally reach out to their new colleagues via video call or telephone call. Not to accommodate formal meetings, but just to say hello. This
aspect of virtual executive onboarding will also help understand the company culture and, just as importantly, what you can anticipate others will expect of you.

How Will You Improve Executive Onboarding?
Deliberately making that introduction, sharing enough personal information to form a bond, and offering your help to new colleagues will surprise some new coworkers and fellow leaders.
Those actions will also make an excellent first impression and go a long way toward easing the transition into that new position—all while working from home.

Link(s) to Article:
https://talentculture.com/executive-onboarding-during-the-pandemic-both-pitfall-and-opportunity/

The Pandemic Is Bringing Out The Best In CHROs Today For A Better Tomorrow

The Pandemic Is Bringing Out The Best In CHROs Today For A Better Tomorrow

by | 23 December | , , , | 0 Comments

The post-Covid-19 workforce will hardly resemble itself from just a year ago

During the last 10 months, I have been actively keeping in touch with many high-performing CHROs across the United States and Europe from a variety of sectors. And while the pandemic has produced a significant amount of hardships for businesses in general, the current Covid-19 landscape has presented human resources leaders with the opportunity to show their stuff, and in most cases, they’ve done that very well. In many companies, these important leaders are not just creating the systems to manage through a crisis and to take care of their employees, but also influencing their chief executive officers to be proactive and helping them understand the need for higher levels of empathy, communication, and transparency with the employees.

Companies quickly adjusted to having more meaningful virtual town halls and creative ways to communicate that dig deeper into the humanity of employees and demonstrate an understanding from leaders that may not have been evident beforehand. This is a journey that many HR leaders are helping their internal clients successfully navigate.

Now that we are starting to think about post-pandemic – timing TBD – the bar has been set to a higher level in some of those areas that CHROs need to think about. For instance, once leaders improve the quality of communications, as well as the frequency of communications, employees will naturally expect both to continue. HR pros need to ensure the C-Suite maintains this when we get back to “normal.” We cannot backslide to vague and infrequent interactions between leadership and employees. This will likely take some prodding and nudging of the CEOs to make sure that happens.

As the pandemic intensified, several companies were setting up crisis funds to help employees in need and I strongly recommend to clients, and any leaders reading this article, to continue setting aside money in the budget to assist workers that have a personal crisis. HR leaders are going to play a crucial role in persuading CEOs to keep on with this practice. There is a great deal of fatigue in the workforce at all levels. Best-in-class companies are revisiting their EAP plans to ensure they have the capabilities to manage through the mental, physical and economic impact of the last 10 months.

There is another crucial element that CHROs need to be thinking about: Talent Management. Tied into this are questions about what the company is going to look like coming out of the pandemic. Everything is going to change and there is a tremendous amount of uncertainty. One thing HR people know for sure is the question of how to best collaborate between employees staying home and employees going to office need to be addressed almost immediately. But that is not the only change. HR leaders can help the company think about what will be needed to prepare and execute strategies for the changing consumer and customer.

To be sure, all of these unknowns can be unsettling, but at the same time, we are also presented with an exciting opportunity to create a future that requires a different type of talent. If you are not sure of the future, create it! That means, human capital and performance tomorrow will not be the same as it was yesterday.

We often talk about seeing around corners. Well, I think now we need to be able to see through walls, create the future, and then make sure that we have the talent that will then drive us forward and make companies successful in the future.

Link(s) to Article:
https://www.hr.com/en/magazines/hr_strategy/december_2020_hr_strategy_planning/the-pandemic-is-bringing-out-the-best-in-chros-tod_kj2bfft9.html?utm_source=email&utm_campaign=essentials-hrstrategyandplanning&utm_content=thepandemicisbringingoutthebestinchrostodayforabettertomorrow-email&uid=1580750345519

Executive Onboarding During the Pandemic: Both Pitfall and Opportunity

Here’s Why Today’s Leaders Should Choose “And” Thinking

by | 23 November | , , , , , | 0 Comments

HR Strategy, Work Culture by Elizabeth K. Olson
To the detriment of talent development and work cultures everywhere, we most often employ “either/or” thinking. Let’s talk about why today’s leaders should more often choose “and” thinking….

So many important aspects of human capital are nuanced and interrelated, yet seemingly polar opposites. For instance, recognizing the individual performer or recognizing team efforts. Showing respect for each person or showing respect based on performance and rewarding managerial-style performance or rewarding leaders.

Some organizations state only half of these pairs as desired values, hence the “or” between them. This is a mistake because when we see these values framed as either/or choices, we miss the synergy from leveraging the best from both sides. We cause harm from overfocusing on one value to the neglect of the other. After all, many values are interdependent, and ideas we think might be opposites are both highly desirable. The misleading part about this is that they need to live in tension with one another over time. These pairings can be called paradoxes, wicked problems, or polarities that require “and thinking.”

“And” Thinking Versus “Or” Thinking

Both inside and outside of work, complexities exist that require us to think about these tensions between seemingly opposing pairs, rather than choosing A over B. For instance, one critical thinking point for leaders is the push-pull between continuity and transformation.

Those business leaders often find themselves executing complex change initiatives that enable their companies to compete better. At the same time, they must create and maintain consistent foundational cultures employees can lean into – no matter what. All too often, when the message is only why complex changes are necessary, without acknowledging what has been going well (and what needs to remain in place), even the best plans blow up.

Everything done “the old way” is now wrong. Right?

This pervasive contradiction lowers morale and confuses, thereby sabotaging the energy and focus needed to implement the change.

Centralized Versus Decentralized Coordination

One of the biggest derailers for employees is the pendulum swing between centralized coordination and decentralized coordination. Organizations are frequently in a seesaw around this polarity. It’s as if one is better than the other, so they over-focus on one at the expense of the other.

For instance, a new chief executive officer is instituted and says: “We’ve lost the entrepreneurial nature of this organization, and we must decentralize and give control to each of the business units.” Because centralization and decentralization are interrelated, people complain there is no coordination and little ability to share services effectively. That causes the next CEO to say: “We have to centralize; everything is all over the map. Nobody knows who’s on first.” After finally getting used to the new structure, it whipsaws back to some version of the old one. With the average tenure of CEOs being three-and-a-half years, organizations must simultaneously focus on centralization and decentralization.

The Solution: Mapping Versus Gapping

One way around this conundrum is to institute a mapping process…

Instead of executing a gap analysis, which is how most people approach change, we think about the upside and downside of their preferred value or pole in the polarity equation. We then do the same for the countervailing pole. Then, as the diagram illustrates, we outline action steps for gaining the upsides from each pole. We also design strategies for avoiding the downsides of each if we over-focus on one pole to neglect the other.

That is “and” thinking.

Once we get the tension right between the different energetic poles, my clients find themselves comfortably resting in a virtuous cycle. They begin to get the best of both options, no matter how opposite those options seem. For many leaders, this comes as such a relief. Because those leaders, rather than focusing on the power of both – the “and” – tend to over-focus on one side of the equation. They then find themselves in a vicious and contentious cycle that isn’t good for them, their fellow leaders, or their teams.

Harness the power of both poles. Expand your thinking to “and.” You’ll soon create a virtuous cycle that will enable your organization to thrive, freeing your teams to unify under healthy “and” tensions versus the opposing camps that can form from “or” decisions.

Link(s) to Article:
https://talentculture.com/and-thinking/

The Pandemic Is Bringing Out The Best In CHROs Today For A Better Tomorrow

Executing Talent Planning And Management When You Are Not In The Office

by | 21 September | , , , , | 0 Comments

When the pandemic started, HR pros and talent managers learned very quickly how to use platforms such as Zoom, Teams, Skype, etc. The ramp-up was quite remarkable, really, and comfort levels were soon realized because after all, that was all that we could do. That was then and this is now. As the shutdowns stretch into the winter months, we are beginning to see that there are certain tactics that are missing.

Based on what I have heard from leaders in North America, Europe, and Latin America the piece that is missing is that two-minute conversation that you have when you’re walking down the hall. As all HR leaders know, those unplanned, spur-of-the-moment meetings are critical to leadership opportunities, team building, and coaching. Gone are the days of ducking your head into somebody’s office and saying, “hey, great job on that account,” or, “let’s take a couple minutes to just talk about another approach.”

What is the solution? Let’s get old-school and pick up the phone. Dropping a text or making a short phone call to say “good job” is where leaders need to be right now. The issue is that leaders need to remember to do this because these outreaches can easily fall to the backburner and then become old news or forgotten. These communications take little effort, but they are important. I recommend adding some structure to that. Having a list that you keep beside your computer that helps remind you to call a certain employee to say, “Thank you,” tell them they’ve done a good job, give them some feedback on something that maybe they could have done better. Make it a point to have that coaching moment.

To be sure, it is important for managers to find impactful ways to talk with their direct reports and manger during the pandemic, however, let’s remember that leaders should also do a good job of communicating frequently with his and her peers. Check in to let them know what your team is working on, your priorities, and of course, explore how you can support their priorities.

Link(s) to Article:
https://www.hr.com/en/magazines/talent_management_excellence_essentials/september_2020_talent_management/executing-talent-planning-and-management-when-you-_kf5ddvt4/

Work-from-Home Can’t Work Forever: Blackstone CEO

Work-from-Home Can’t Work Forever: Blackstone CEO

by | 03 June | , , , , , , | 0 Comments

The massive work-from-home experiment that businesses globally have adopted in response to coronavirus-related travel lockdowns has fueled a great debate on the future of offices: Will the practice become a permanent feature for employees? For Steve Schwarzman, CEO and chairman at Blackstone Group, the answer is not likely.

“This working from home is on one hand very efficient,” he said last week during a Sanford C. Bernstein investor conference. “At one of our meetings, somebody said, ‘Well, why don’t we do this all the time?’ And I said, ‘Well, you know, one reason is you can’t train new people like this.’”

Working from home appears to function well for existing employees, Schwarzman said. The crux is in the difficulty for new employees to absorb a company’s culture without personal interaction, he added.

“To run a great organization, you have to keep hiring people,” he said. “Particularly if you as a business are growing, you need more people. And those people have to learn your culture.”

Culture entails many aspects that require picking up cues from the more experienced, established members of a team on how the company does business, Schwarzman said.

“They have to know not just the mechanics of how you do a piece of work, but how do we think about it?” he said. “How do we think about risk? What do we believe is the right and wrong approach to be doing things from an ethical perspective?”

Communications over video can’t easily replicate those informal and formal discussions a team would have in an office setting, Schwarzman said.

“That’s really hard to do on television,” he said. “You have to have people sitting around talking about situations. It’s much more iterative.”

But some human capital experts say while new employee training is indeed a likely snag, it’s not impossible to maintain and build a corporate culture through remote technology.

Onboarding is clearly one of the challenges, says Bob Ryan, executive advisor at Shields Meneley Partners, an executive coaching consultancy, and managing partner at the Sierra Institute, a coalition of chief human resource officers.

“There are things that can’t be done as well virtually, and it’s very difficult to build a culture when people are not together,” he says. “Senior management helps to define the culture of an organization… and that’s hard to understand when you don’t see them day to day.”

Onboarding new employees virtually would be a challenge, Ryan says.

“Important training could be lost unless the new employee puts in a concerted effort to meeting all of their peers and stakeholders,” he says. “One of the most important groups that you need to learn from is your peers.”

Onboarding in a virtual environment is indeed “suboptimal,” says Laura Queen, CEO at 29Bison, a human capital consultancy.

“Video cannot replace face-to-face human contact,” she says.

But there are many ways that companies can still build and maintain culture via remote technology, and even increase productivity using such tools, Queen says.

“You don’t have to have face-to-face contact all of the time,” she adds.

Corporate culture often entails values, beliefs, and assumptions about the work experience transmitted through language and storytelling, Queen says. It’s possible to find new mechanisms to do that via technology, especially through tools that support learning and assimilation, she says.

One tool her team uses is Nuclino, an internal wiki platform where individuals can share intelligence on particular topics, a concept that also can work on communication systems such as Slack. Queen recently posted information about an arcane defined benefit pension question that sometimes comes up with the firm’s clients, so that other colleagues can tap it as a resource in the future, she says.

Ryan says his team has built a customized, confidential customer relationship management platform to similarly share internal information, specifically in response to the recent work-from-home shift.

Ongoing regular training and development can even be more effective in virtual settings, because many professionals have proven their willingness to participate and shown the ability to focus even better in video meetings, Ryan says. Zoom, Skype, and Microsoft Teams are all effective for such gatherings.

“What I am hearing over and over again is that virtual meetings are going to become a more consistent part of the future,” he says.

A bigger question that companies face is whether their embrace of working from home capabilities will define their identity to the marketplace, Queen says.

“If your viewpoint is that culture can’t be transmitted virtually, then it can become a self-fulfilling prophecy,” she says. “Long term it may be that a firm attracts people who are more willing to work face-to-face and less willing to work in a virtual environment. And that says to people who want a work-from-home opportunity, that this firm is not a place for you.”

That may become an important distinction, she adds, because working from home has gotten a big stage to showcase its utility.

“I think the horse has left the barn for knowledge workers with regard to the work-from-home situation,” she says. “There is an expectation that if you’re going to be a credible competitive attractive employer you’re going to have to provide some level of remote work capabilities.”

Link(s) to Article:
https://www.fundfire.com/c/2771153/340603/work_from_home_work_forever_blackstone?referrer_module=issueHeadline

CalPERS diversity strategy using strength in numbers

CalPERS diversity strategy using strength in numbers

by | 16 April | , , , | 0 Comments

Vivien Killilea/WireImage

For private companies, fund forgoing 1-on-1 engagement

Betty T. Yee wants more engagement on diversity for private company boards.

CalPERS has a well-developed plan to encourage diversity on public company boards on its own and as part of industry organizations, but when it comes to private companies, officials at the largest pension plan in the country are choosing to work as part of an industry group rather than go it alone.

Asset owners haven’t tackled the issue of diversity at private companies until relatively recently. But as the number of private companies choosing to stay private longer increases, more investors are asking their managers about it.

In October, California Controller Betty T. Yee, who also is a CalPERS and CalSTRS board member, sent letters to the two public pension funds on Oct. 29 urging greater diversity on private company boards and asking them to put the matter on a future meeting agenda. So far, the investment committee chairmen have not decided whether they will do so, spokeswomen at both pension funds said.

Ms. Yee noted in the letters that just one-third of private companies have a goal to diversify their boards, citing data from the 2019 National Association of Corporate Directors Private Company Governance Survey. According to Preqin, women make up 19.7% of the alternative investment firms’ workforce, an increase of 0.9 percentage points compared with 2017, and less than 12% of senior roles in alternative investment firms. Ms. Yee, citing Preqin, noted that only 5.7% of private equity board members are female.

And in September, private equity investor industry group Institutional Limited Partners Association expanded its due diligence questionnaire, template and codes of conduct for managers, limited partners and portfolio companies aimed at supporting greater diversity and inclusion in the private equity industry.

ILPA is in the process of creating a road map to advance diversity across the alternative investment money management industry that will include research links and other resources. Organization executives expect to release it in the first quarter of 2020.

Promoting diversity
At the Nov. 18 investment committee meeting of the $385.1 billion California Public Employees’ Retirement System, Sacramento, Ms. Yee asked pension staff what they are doing to promote diversity at private companies.

In response, CIO Yu Ben Meng said ILPA represents the entire asset owner community and that that organization can have the most impact on the matter.

Private company board diversity has been a topic of lively debate in the private equity community, said Anne Simpson, CalPERS director, board governance and strategy, in an interview. She added that CalPERS has adopted principles encouraging diversity that apply across its portfolio, including private markets. “It’s a question of control,” she said. Limited partners in funds have no control over portfolio companies including diversity at the executive team and board levels, she said.

The question of control in its relationships with private equity general partners appeared to be a stumbling block for CalPERS on other ESG-related topics, too. Also at the Nov. 18 investment committee meeting, board member Ramon Rubalcava asked what CalPERS was doing regarding human capital issues arising as a result of private equity ownership of companies, such as the mass layoffs at the private equity-backed Toys R Us, which filed for bankruptcy in 2017.

Greg Ruiz, CalPERS managing investment director for private equity, replied that staff considers manager integrity when it is deciding whether to invest with a manager.

“When we assess managers, we assess them across many dimensions. … It’s important to partner with people with integrity so that is kind of first and foremost, and there are many complexities when you get into managing companies,” Mr. Ruiz said. “Once we enter into a partnership we are not in control. We are only one voice but (we are) an active voice.”

Expanding due diligence
Other institutional investors and a growing minority of alternative investment managers are turning their attention to portfolio company-level diversity. Some asset owners are adding questions about diversity at the executive and board level of portfolio companies as part of their due diligence before investing with private equity managers, said Emily Mendell, Washington-based managing director of ILPA.

The aim of the expanded due diligence guidelines and template is to measure employee gender and ethnicity by role, she said.

The association is hearing anecdotally and with consistency that limited partners are asking questions about diversity at the portfolio company level more and more, Ms. Mendell said.

“It’s no longer taboo and uncommon” to ask general partners what they are doing to diversify their investment team and portfolio companies, she said.

Investors are absolutely thinking about diversity, including at the portfolio company level, and CalPERS is at the forefront, Ms. Mendell said.

“GPs are almost expecting the question now,” she said.

But it’s up to the GPs to promote diversity at their portfolio companies and more of them are asking human capital professionals and others for help to get more women and minority executives on their portfolio company boards, she said.

Regulators weighing in
A recent global regulatory push to diversify public company boards is also having an impact on private companies and their private equity backers.

These efforts include the International Organization for Standardization’s December launch of a human capital reporting framework that includes workforce diversity, Congressional bills and the U.S. Securities and Exchange Commission rule under consideration that would require public companies to disclose workforce diversity.

The Human Capital Management Coalition, an institutional investor organization, had proposed the SEC rule in 2017.

Private equity firms are taking notice because portfolio companies that file to go public would have to disclose the diversity of their workforces if the proposed SEC rule is adopted, said Laura K. Queen, Doylestown, Pa.-based founder and CEO of 29Bison, a strategic human capital adviser for middle-market private equity and venture capital firms and their portfolio companies.

Investor action, pending regulations and a desire by many GPs to diversify their executive suites and boards as well as those of their portfolio companies and boards are causing some general partners to take action, she said.

“Boards of portfolio companies tend to mirror the networks and connections of their founders and so are mostly made up of highly educated white males,” Ms. Queen said.

While GPs have a long way to go to diversify portfolio company boards, there has been progress. When Ms. Queen and her team starting bringing up the topic of diversity and inclusion on portfolio company boards and executive teams in 2013, few GPs wanted to discuss it, she said.

Now, some 25% of the private equity firms 29Bison works with are considering populating their boards and portfolio company boards and executive and operations teams with more diverse individuals. The conversation most often comes up in succession planning, she said.

So far, the definition of diversity includes women and people of color.

“I would argue over time, it’s a limiting definition of diversity,” she said. Firms should be looking more broadly to include diverse personnel from groups such as the LBGTQ community, people with disabilities and people from different cultures, Ms. Queen said.

Hugh A. Shields, a co-founder and principal in the Chicago office of Shields Meneley Partners, an executive coaching and consulting firm, said he also sees investors putting more pressure on private equity firms to have better representation of women and minorities on portfolio company boards.

Particularly, the larger private equity firms and larger portfolio companies are trying hard to get better representation of women and minorities on portfolio company boards, he said.

“We are really starting to see more and more … portfolio companies are more open to diverse candidates,” he said.

Link(s) to Article:
https://www.pionline.com/governance/calpers-diversity-strategy-using-strength-numbers

Work-from-Home Can’t Work Forever: Blackstone CEO

COVID-19 Forces Work Culture Shifts for Private Equity Firms

by | 13 April | , , , , , | 0 Comments

COVID-19 Forces Work Culture Shifts for Private Equity Firms
April 13, 2020

The private equity industry, historically hesitant to accommodate flexible working arrangements, has had to embrace work culture shifts as the coronavirus pandemic forces employees to stay home.

Before Covid-19, flexible working in private markets was not indulged very often, according to a survey conducted by eVestment Private Markets and MJ Hudson of 311 employees from across the global private markets industry, including GPs, LPs, and outsourced practitioners of core functions. The survey found that prior to COVID-19, just 7% of private markets respondents regularly worked from home. Of the individuals who regularly worked from home 80% were executives or senior staff while not a single junior staff member reported regularly working from home.

“Hierarchy is important in private equity,” says Dale Rose, president of 3D Group, a consulting firm that works with private equity firms. “It’s harder to hold a hierarchy when working remotely.”

Working from home will be particularly difficult for junior members of the workforce, since they may have a less-established personal network, which is hard to expand and develop via digital channels as opposed to the “trust-factor and comfort” that accompanies in-person interaction, Rose adds.

On the other hand, this may be an opportunity many people have long been hoping for. “I think there is a lot of desire from people in the industry for flexible working,” says Graeme Faulds, director of private market solutions at eVestment.

Prior to COVID-19, working hours for employees of private equity and credit managers were already long. According to eVestment’s survey, 53% of respondents work more than 48 hours at the office per week on a regular basis, the upper limit of the European Working Hours Directive.
Nine percent of respondents say they regularly work more than 58 hours per week, and five individuals report regularly clocking more than 68 hours in the office each week.

While many workers may welcome the shift to flexible working, it’s not without potential negative side effects. In an industry where long hours are already the norm, and where many struggle to put work away, remote work could lead to an increase in overall work hours. That could  boost productivity in the short-term, but it also increases the risk of burnout, Rose says.

“It could be detrimental to the psychological health of these individuals who now can work harder and more,” says Rose. “They may be working in their sweatpants and their suit tops but they’re working 20% more time.”

In addition to working long hours, the survey found that many people in private markets already had a hard time putting down their work prior to COVID-19.

The natural pauses that were built into the workday, such as commuting, meals and weekends have eroded under lockdown, says Robert Ryan, executive advisor at Shields Meneley Partners, a consulting firm working with private equity firms.

“You can work all day, you can work every minute of the day. You can stay busy for 60 hours a week,” says Ryan.

https://www.fundfire.com/c/2707203/331553/covid_forces_work_culture_shifts_private_equity_firms?referrer_module=emailMorningNews&module_order=15&code=YldGeVkwQmpZWEprYVc1aGJHTnZiVzExYm1sallYUnBiMjV6YzNSeVlYUmxaMmxsY3k1amIyMHNJREV5T1RBd056QXpMQ0