From our preceding post, Financial Literacy (Part 1): The Income Statement, we discussed how to avoid HR malpractice by developing HR solutions aligned with the financial conditions of the company.
Just as a medical doctor requires checkups prior to handing out Rx slips, the conscientious HR practitioner will gauge the strength of the company – measured as financial health by investors and executives alike – through a financial check prior to recommending the best course of human capital intervention.
In the next 18 minutes, take another important step toward financial literacy by understanding the balance sheet and cash flow statement while also learning to create additional financial ratios that will make you a conscientious HR practitioner.
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email issuppa@suppa.org.
You may be able to work in Italy without speaking Italian. Perhaps you can find a career in Thailand without speaking Thai. There are even people who hold jobs without speaking the language of business. But in each case, it’s much better if you do speak the language.
While we know what languages are spoken in France and China, what is the language of business? The language of business is finance — and few ever make it to the executive level without speaking it. It’s how businesses measure success versus failure. Even nonprofit organizations must have their revenues exceed their costs to continue their work.
For our HR professionals, let’s talk about HR malpractice. Imagine a doctor giving you a checkup before prescribing you medicine. Now imagine that same doctor giving you a prescription without taking the time to examine you. Well, HR people do the equivalent of that all the time.
The only way to gauge the health of a company is to review its finances. When HR professionals, however, don’t speak the language of finance, they are forced to prescribe solutions without ever examining the health of the company. Imagine a long-term HR solution for a company whose liquidity ratios or burn rates reveal what is really needed is immediate relief.
The HR professional who can read an income statement knows — long before being told by the CEO — that their product is becoming commoditized, and either a new recruitment strategy or L&D initiative can restore margins.
In 18 minutes, take the first step toward financial literacy by understanding the income statement and some of the most fundamental financial ratios that serve as leading indicators to making the business decisions that help companies thrive.
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email issuppa@suppa.org.
You viewed our last webinar and now you know exactly what Big Data and datafication are. But how would you apply it in your day-to-day business? What important Big Data role could you play tomorrow at the office, even with the soft skills you already bring to the table?
In 18 minutes, learn how intuition is being replaced with data-driven decisions and what skills you should develop to stay relevant. We will cover specific examples of how big data solves real business problems and how deciding upon dependent and independent variables on your way to setting up a hypothesis is your first step before bringing in a data scientist.
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email issuppa@suppa.org.
Your company loses its competitive differentiator when HR functions as admin.
Look at any organizational chart. Administration is still necessary, and yet you’d be hard pressed to find an admin department.
Decades ago, companies had admin departments with many administrative employees. Today, firms have fewer administrators against more regulation and increasing bureaucracy!
In our knowledge economy, people remain the differentiating competitive advantage as companies require fewer operating assets, with even those assets – computers and software – now commoditized. Since regulation tends to center on differentiators, government compliance focuses increasingly on employees.
Admin deserves its own department as does HR.
But does filing more electronic forms and enforcing compliance make it less of an admin function because it involves humans? The answer is in the Shakespearean quip, “A rose by any other name…”
If administration is being performed by companies bereft of admin departments, then who performs admin? Admin departments, of course. Only they are now called HR departments.
When companies misclassify administrative employees as HR, they do so to the detriment of both professions. We recognize administrators’ unique skillsets distinguishing them from HR. Unfortunately, HR departments now absorb admin to the dilution of HR.
By confusing the two roles but only giving one its own department, we undervalue the importance administrators provide while denying them their own career path.
We also cloud the career paths of HR professionals. Once their jobs get outsourced to vendors efficiently handling payroll, compliance and other benefit administrative work, they realize all too late they actually worked in admin despite their HR title.
We make this claim because companies only outsource functions on which they don’t compete. For those functions, they accept industry standards vendors provide equally to all clients, including competitors.
True HR cannot be executed by vendors since employees are the great differentiator. And firms never outsource what they compete on. (For more on this, watch the video below and read “Why Your Company is an HR Company.“)
Merely giving administrators HR titles offers little security when algorithms are able to perform the same functions more efficiently against newer technologies.
Sadly, administrators with HR titles realize their admin role only after their companies decide to cut checks to vendors instead of them.
What can both administrators and HR professionals do to protect their own unique careers? We have ideas on that too!
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email is suppa@suppa.org.
Twenty five years ago, to ask a company if they were on the internet was a legitimate question. Today, even the most Luddite companies have a web presence.
Ten years ago, to ask a company if they deploy BIG DATA to drive their decisions was also a legitimate question. But today, BIG DATA is as ubiquitous as the internet, and while people today would not ask if a company uses either the internet or BIG DATA – of course they do! – investors and employers alike are asking how well they are using BIG DATA.
But when asked what BIG DATA is, all too often we hear how it must be about lots of data. We have always been surrounded by data, so there must be something more to it, no?
In eighteen minutes, learn the least you need to know about datafication – a word so new that most spell checks still deem it a misspelled word. In a few minutes, understand enough about BIG DATA to explain it to others, including the three most fundamental shifts manifested by BIG DATA:
Once disrupted, can your product be repositioned for the luxury market? (Image: Pixabay)
We recently talked about how the best companies combine talent and technology in the most efficient way to innovate in their field.
Most leaders inside the boiler room pave their way in pure technology plays. But some companies build their new competitive advantage upon the premise that most of us have moved so comfortably into the digital world that it has elevated analogue products to where they can now be monetized as luxury goods.
Disrupted by digital files, vinyl recordings now sell for larger margins to audiophiles. (Image: Pixabay)
Vinyl recordings, excluding their content value, were commodities as a sound medium. Now they are an expensive, high-margin acquisition for audiophiles.
Think of how traditional analogue watches were gradually replaced with digital timepieces in the 1970s. Once the transition was nearly complete, traditional timepieces regained lost market share by repositioning themselves even further into the luxury market.
A hand-written note becomes treasured when most messaging is digital. (Image: Pixabay)
Fountain pens lost their dominant share of the market in the 1950s with the arrival of the ballpoint pen. Today, a fountain pen is a high-end luxury good with higher margins than their 1950s’ counterpart.
Inside the Boiler Room celebrates disruption. As disruption increases the efficiency and productivity of the market, disrupted industries can reposition themselves from high-revenue, low-cost commodities to high-end, high-margin luxury goods.
As communication is now almost exclusively digital, handwritten letters, especially those showcasing beautiful calligraphy, are even more valued by their recipients .
HR Avant-Garde spent timewith Kunal Sheth to see what he had to say about our premise on how, with enough disruption, analogue can sometimes trump digital with higher margins than before.
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email is suppa@suppa.org.
In an age of ubiquitous digital communication, Fountain repositioned the hand-written greeting card for the high-end market.
Kunal Sheth has responded to the digital revolution by moving analogue into the luxury space. With digital communication now the default, Kunal empowers real estate developers and dutiful sons and daughters alike to send beautiful hand written cards to clients and parents, respectively.
The sentiments and words are from Fountain Greetings‘ customers. The outstanding calligraphy is from his trained staff. Don’t worry about backing up these messages in the cloud because his cards are beautiful objects on their own displayed by the people who probably cannot remember the last time they received a greeting card in the mail. (more…)
The future of HR is business-line specialties replacing conventional HR categories. (Image: Pixabay)
As technology becomes more powerful, which HR specialties remain relevant in the marketplace? In our previous post, we illustrated why middle level management jobs are being decimated. Because most tactical HR jobs are in middle-level management, we are changing the paradigm of what constitutes an HR specialty to ensure skill security and earning power.
Strategy cannot operate beneath another strategy; the former is tactical by definition. With algorithms automating tactical executions using big data, people become less relevant to the process.
Computers excel at defined routine tasks. They play chess well. Yet even the best algorithms can’t innovate original strategies. We can transition HR from tactical executions beneath strategy by developing HR specialties along business strategies.
HR Avant-Garde has notable success mentoring HR protégées in disciplines as varied as big data and social media. While attending HR career fairs, they find themselves with few rivals. If you specialize in traditional HR functions, how many people are competing with similar skills? How much smaller is the applicant pool for HR experts specializing in pre-IPO startups requiring post Series A funding ramp ups?
An HR specialty in turnaround companies reorganizing under bankruptcy protection is another in-demand niche with few competitors.
How will you future-proof your HR career? (Image: Pixabay)
How many of your colleagues have developed expertise in the HR complexities surrounding mergers and acquisitions? US companies are horizontally integrating into Asia and Latin America lacking HR specialists who can integrate and incentivize international teams around a coherent strategy.
This new paradigm of HR disciplines avoids being obviated by technology by centering on strategic business lines instead of HR categories. These neo-HR specialties with their business-line focus are in high demand while remaining in short supply, because they go against the conventional HR approach.
The Least You Need to Know:
Consider being the HR guru in these business specialties to give you a competitive advantage in a market saturated with conventional HR practitioners:
Pre-IPO Startups
Social Media
Big Data
Mergers & Acquisitions
Turnaround
Internal Marketing
Innovation
Companies horizontally integrating across boarders
Companies increasing or decreasing their vertical integration
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email is suppa@suppa.org.
Can you be replaced by an algorithm that feeds on big data? (Image: Pixabay)
Which HR specialty will maximize your paycheck while limiting your exposure to redundancy in today’s on-demand economy?
Computers excel at defined tasks. Tasks accomplished through explicit rules, no matter how complex, can be completed by software. This is why tactical jobs’ wages against inflation have decreased since the 1970s. Most middle management jobs are tactical and continue to be eliminated by algorithms feeding on Big Data.
Just as previous humanoids have become extinct to make way for modern man, the middle-level manager is a concept of the past. (Image: Pixabay)
Looking at transactional jobs as historical examples, consider the 1960s workplace and how voicemail and email has eroded the secretarial professions.
Middle-level managers reached pinnacle earning in the pre-computer age. Their function was not to generate strategy but in directing flows of information between worker bees and executives.
These jobs still exist, but with shrinking numbers and declining real wages. Jobs that cannot be done via explicit rules – manual labor and strategy creation – are safe from elimination and explain much of income inequality.
Many HR specialties are both middle management and tactical. They include recruitment, ER, compensation, benefits, training and HRIS. These functions remain vital, and as more intelligence is programmed into software, their value added will even increase. However, as technology requires fewer workers to accomplish more with less training, HR tactical specialists will continue to see their real wages decrease.
Even before the financial crisis of 2008, real wages for US workers were trending downward. (Image: Wall Street Journal)
When technology hit the US agriculture sector, the new motto was, never have so few fed so many, as the number of farming professionals decreased while crop yields increased.
As technology becomes more powerful, mobile and cheaper, which HR specialties will keep you relevant in the marketplace? We’ll explore the answer in our next post.
The Least You Need to Know.
The intersection of algorithms and big data is automating many middle level management functions. This pushes wages down.
This automation means fewer middle level managers are needed; most traditional HR jobs are middle level management jobs.
Machine to Machine Learning (M2M) and Master Algorithms will exacerbate this phenomenon.
Vincent Suppa works with startups and investors and teaches graduate courses at New York University. His email is suppa@suppa.org.
Innovation comes about in two ways: creation of new technologies and recombining existing technologies. The US Patent Office’s Handbook of Classifications illustrates this point. The Patent Classification system includes classes and subclasses; the former contains creation of new technologies, while the later combines varying processes with different structural and functional features of existing technologies.
Edison recombined existing technologies to create the light bulb. (Photo: Public Domain)
When new technology is invented, the USPTO issues a new single classification code. However, the majority of issued patents are not granted on the basis of new discoveries, but on recombining existing discoveries. Instead of a new single code, a new recombination of class and subclass codes is issued.
In the 19th century, half the patents were for single code inventions – new discoveries. In the 21st century, over 90% of patents are for inventions combining two or more codes – recombination.
Today’s innovations combine existing technologies in new ways by people who see new interactions in previously made discoveries. When Edison created the light bulb, we already had filaments, electricity and glass to create vacuums. It was Edison’s patentable recombination of previously discovered technologies that created the lightbulb.
Today’s patents are mostly recombinations. (Photo: Public Domain)
Figuring out how to recruit and incentivize talent responsible for each subcomponent across a startup’s value chain is what avant-garde HR professionals do before placing the right talent into optimal combinations.
By the time Tal Givoly created Medivizor, he had the sum total of medical science and the computer science of algorithms at his disposal. By recombining discoveries of these two broad disciplines across the apparatus of the internet, he created innovations with huge social gains for society supported by a sustainable business model.
