What do psychologists do, exactly?

In a source long since forgotten, I found a wonderful description of psychology.

People come to us for help when they have to make a big decision, and we earn our fee in three ways.

• We’ve helped people who have faced the same decisions.
• We write up our experience and have a pool of knowledge shared between psychologists (and taught at uni).
• We stand by our clients until it they’ve made their decision and tested it out.

I am a work psychologist and it won’t surprise anyone in the work world to know that during the last ten years, the issues that people bring to psychologists are changing fast.

This is how what I see happening, at work and in the uni's.  Have a look.  The changes at work are definitely relevant to you.  The changes to psychology may be important when you want to hire one one day!

Work psychology yesterday

In years gone by, we simply picked a job that seemed to match our ability and personality, we learned to do it, and we worked our way up the ladder of an organization, fitting in as best we could. 

We psychologists got good helping people at all three stages. 

• We developed nifty techniques to select people and help them choose careers. 
• We knew how to design complicated work settings like airplane cockpits and how to train you as fast as possible. 
• We knew the adjustments you had to make working in a team, who would listen to whom, and what made you influential at work.

Work psychology today

Now work is changing fast and my profession is at a wonderful point where every day brings new issues. 

During the autumn of 2010, I worked with a London Uni and I had a great chance to streamline my thoughts about the work we work psychologists are going to be asked to do in the next ten years.  These are the changes I see.

Selection to Opportunity

It is no longer an employers’ market.  It doesn’t matter that unemployment is high.  Putting blocks in square holes and spheres in circles is no longer the big issue facing businesses.

We need strategic thinkers who can come into a meeting and ask questions about

• The needs of our end users
• Our resources and abilities
• What we could do quickly if we put our heads together

We need people who sense opportunities and get to the bottom of things quickly.  The scientific literature talks about Sensing.  An older word might be Careers.  A better term might be Strategic Thinking.  Or even, Opportunity.

More and more, what people will ask their psychologists:

• How can we get a more fruitful conversation going more quickly?
• What’s blinkering us?
• How can we bring people into these conversations when they aren’t used to having them?

Team Building to SenseMaking

Fitting in to the team was the job of yesterday.  We would ask “What kind of a team player are you?” “Do you trust your team?”, “Will the team accept you as a leader?”

In today’s organizations, everyone is a leader.  Ideas come from anyone in a meeting.  The very valuable skills are

• Meshing ideas together and
• Building our sense that we can get things done

We need people who lead and follow, moving between one and the other seamlessly and gracefully, inspiring everyone else to be as thoughtful about group wellbeing and as flexible in their participation.  The scientific literature talks about Sense Making.

Universities are already teaching personal leadership to 18 and 19 year olds.  Advanced students can analyze Obama’s speech in Tucson and might well get jobs as speech writers for world leaders.  Students graduate knowing that we need them to positive and proactive now and not in twenty or thirty years’ time.  In larger and larger settings, people are going to ask us:

• How can we get people talking about what works for them?
• How can we build a keen interest in each other’s solutions?
• How can we have faith in each other long enough to begin?

Performance Management to Rapid Protovation

The sine qua non of old work was a boss who told you what to do.  Oh, to have a boss who knows what to do! Should we be so lucky!

We no longer believe that any one knows what to do.  We are all in an endless cycle of experimentation.  We make a prototype; we test it in the market.  Hence, rapid protovation.

Like sense-making, rapid protovation began with social psychologist, Karl Weick, who based his career studying the toughest environments – forest fires, nuclear disasters, flight carriers.  While the rest of us were thinking ‘Ready, Aim, Fire’, he was already talking about ‘Ready, Fire, Aim’.  Try it, get feedback, and think again.

Creatives use this process all the time.  They keep focused by working in short sharp bursts and testing each burst in the market.  The team’s goal is to test really often, usually weekly. Everyone has to be out there gathering market feedback that often.

Psychologists are playing catch-up in this domain. We can contribute bits and pieces but it is games designers and creatives who are using psychology to engage our mutual frontiers.  We will be asked, at least in the near term:

• To help people think through work systems based on rapid protovation
• To help design dashboards and social media to help teams communicate
• And to start working on specialist issues like teams including noobes and experts

Employment to Virtue

And not least, we aren’t going to be employees any more with an employee’s attitudes.  No more selling our souls from 9-5 and trying to live our real lives from 5-9.

The emblem of the second decade of this century will be strident demands to examine closely what makes a life living.  What makes the good life?  Can we do work that makes us proud?

Psychologists are ahead on this task.  Positive psychologists and positive organizational psychologists have been studying what it means to live ‘generatively’ – to be able to open up situations rather than close them down, to flourish rather than languish, and to ‘do well by doing good.’

Clients are already asking us:

• How to find meaning in work and work with meaning?
• To facilitate large scale interventions in which we find what is ‘good and true’ and do more of it
• To help languishing groups reconnect with each other and flourish as people and as a business unit

Opportunity, Sense-making, Rapid Protovation, Virtue

In short, these are my picks for the most popular requests from clients during the next ten years.

Opportunity

• How do I read the business landscape to detect opportunity?
• How do I engage other people in my vision?
• How can I chair good business meetings so that we build confidence in each other and build on each other’s ideas?

Sense Making

• What does it mean to keep my head when everyone around me is losing theirs?
• How can I bring disparate ideas together when they are still rough and unfinished?
• How can I use my confidence in the group to help other people feel the same way about each other?

Rapid Protovation

• What is rapid protovation?
• How can I change around my work  to get fast feedback from the market?
• How can I underpin my new way of working with accountability (e.g. managing privacy & confidentiality, keeping financial records, having sufficiently qualified people working on a task like surgery, say)?

Virtue

• How can I develop the confidence to follow my own calling and what can I right now?
• How can I provide a climate within my business that lets people to discuss what is ‘virtuous’?
• What matters in work teams and why do some languish and some flourish?

Lucky me to be in a profession that is changing and centrally relevant to the issues in the world right now!

Systems Integrator, Martijn Linssen, kindly listed today the revenue, profits, R&D spend and employees in the top seven IT firms today. 

Not surprisingly, Google comes out a winner.  Which firm would you like to work for? 

Reading the numbers with a keen HR eye

As a psychologist, I often bring my talents to bear through the HR system.   To many people, HR are those rather officious souls with too many forms and a rather off-putting manner.  I don't know why a profession presents itself so badly to the world.  We need to ask sociologists about that.

What I have offer in this post is the HR thinking that might help you judge the quality of a company as an employer.  Even if you aren't looking for an employer, the thinking of sophisticated HR is quite interesting.

What is HR really about?

Like all business, HR brings together a wide range of factors that respond to other factors in the business - the market, the suppliers, the technology, the money. 

Our specific role is to create a system that delivers the right skill at the right time. 

People who don't really get HR might wait for the need to arise and start looking for the right person then.  They will be too late.  The opportunity will move on before they find the person.  And the person will probably be expensive.  A new employee is walking away from established relationships to join you.  If they have any sense at all, they will want a large deposit up-front.

The trick in HR is to get started early, really early.  While the rest of the business thinks in quarters, we think in years.  As a general rule of thumb, if you want something done tomorrow, I must have started between three to ten years ago. 

How do I watch and shape a system over such a long time?  The very first thing I must do is know what to watch. Which are the main numbers and which are the supporting numbers?

Martijn's post led to a comment that was rather long - so I moved it here.  

These are five guiding principles that you might find useful for 'reading' a firm's financial numbers and thinking about their desirability as an employer.

And are otherwise just interesting.  

#1 An HR eye for Revenue & Profits

With an HR eye, we look at two figures

• % revenue spent on HR
• Average salary as percentile of the market.

Few firms report these figures, so you may need to dig a bit.

Paradox

If you are lucky enough to have access to a good set of figures, (ask industry specialists like Martijn Linssen for numbers) you will usually see a pattern that appears as a paradox.

The most successful company in a sector usually has a spends less on salaries (% revenue spent on HR) than its rivals yet pays better (higher average salary). 

This seeming paradox is simply explained.  The leading company probably commands a better competitive position - a better product, a better market.  If this was a military battle, they would be the army with machine guns on high ground with air cover supplied by their air force.  That's all.  In their position, it is easier to make money.  Because their margins are better, their costs are a smaller % of revenue.  And because they make more money, they can pay better.

Rule 1:  Become a strategist and understand your sector.  Who holds the high ground and who will hold the high ground in the future.  Which side are you on?

#2  An HR eye for Statistics and Variations in numbers

Business people often toss HR numbers away.  We deal with huge spreads.  The % of revenue spent on HR from business unit to business unit in the same company varies enormously and a novice often thinks there is no rhyme or reason to the numbers.

Understanding not targets

What is important to HR is not squeezing numbers into pre-ordained range.  We prefer to understand what is driving the numbers. For example, we may simply have a lot of older people in business unit with high HR costs.  Or, the unit may simply have older less reliable machines than another unit that appears to be more productive.

We aren't fussed by spread, itself, but we want to understand it.  If we feed back the numbers to staff, with a list of cost and value levers, then staff can 'make a plan'.  We are contributing to running the business calmly, and sensibly.

It is also important to know that the interquartile range in pre-selected group of companies or business units may be as much as 100%.  In plainer language, the top case of the middle 50% of cases will be double the lowest case of the middle pack.  If you aren't good with statistics, it is best to draw that out and note there are 25% of cases on either side who are still higher or lower.

It follows that I can always hire.  At any time, 50% of people earn less than the median.  50% earn more than the median.  The range of salaries is huge.  Moreover, people who earn less than the median might be more knowledgeable and competent than people who earn more.  Not so?  Salaries are a financial cost but they tell me little about how to run my company or how to do the work our customers want done and are willing to pay for.

Rule 2:  So, if you are looking at employers, my advice is this   There is always someone who earns more or less than you.  Get over it.  So many factors go into these numbers.  Rather concentrate on what makes the company run well. Your long term future is determined by working for a successful company.  You can crank up your earnings with some short term plays but when you leave that company, you might find you cannot match your income at the next for what are almost random reasons (to you at least).  What you earn does not make you a player. What you can do to make the group successful makes you a player.  What are the drivers of successful business performance in your sector?  Can you take on bigger and better assignments in your industry?

#3 An HR eye for profit-share schemes

Aren't we in such a tizzy about bankers bonuses!

Let me state this baldly.  We should not cede profits to employees.  For  two reasons.

Employees with profit earnings get weaker

The first reason not to hand over profits to an employee, over and above their salary, is that we will create a moral hazard. The employee becomes the equivalent of a rich man's son with no need to compete. 

Employees make their way in the world based on their ability to handle bigger and better assignments in their industry.  When we reduce that imperative, we undermine their very call to the status they seek and cherish.  We undermine our labour supply and their futures.

Profits belong to people willing to lose their capital

The second reason not to pay employees a profit-share is that profits belong, in our economic system, to the person who risked capital.  The capitalist, and it might by your granny down the road, lends the company $100 dollars and expects to get back a slightly higher rate than if they lent the same money to the government to build a school or road.  If the employees want profits, they must put part of their salary in the pot as risk capital.  It is simple to buy shares but how many employees do?

There can be sophisticated reasons for leaving part of our salaries on the table in exchange for a greater chunk of money if everything comes together, but in the interests of clarity, I leave those for another day.

Rule 3:  As you are planning your career, map out the assignments, from small to large, that you want to do well. In this day and age, you should probably redo your list annually, or even every six months.  Forget the money.  Forget the status.  Forget the job title.  What are the incremental steps in getting good at your trade?  Your investment and savings plans are independent of this step-wise development.  They aren't your relationship to the world.  When you stop focusing on your step-wise development, know that you will have abandoned your decision to relate to the world through your skills.

# 4 and # 5 What else can you learn with an HR eye?

HR has more to say about reading the financial statements.  For now, let's just touch on thoughts that probably crossed your mind.

Developing the value of employees

We can, and do, collect information on the quality of the employment experience and we can use inputs or consequences or both. 

Martijn Linssen used R&D spend per employee.   Most firms used their training budget as an input.  I'd also look at the careers of people who leave. Do they go onto greater things or does the firm suck them dry?

Rule 4:  Find out what happens to people when they leave the firm.  (Or are they stuck there forever?  Be particularly wary of ponzi schemes where there are 50 people in level 1 and 2 on level 2 - where do the other 48 go?)

Shift Happens
We also look at the most central HR problem - matching supply of skills to demand for skills. 

When we need skills, are they on hand?   Do we have to wait?   Are we depending on the education system of another country or the training system of another firm? 

The movement of skills within an industry is fascinating and often counter-intuitive. Did you know, for example, that universities can hire chefs from five star hotels with alacrity?  Never accept a mediocre meal in a university, school or hospital again! 

But, the style of cooking will reflect the day the person was hired because not a lot of development will take place after they've shifted sectors.  The money that is spent on development in a hotel is simply handed over to the employee in a catering role. 

So remember you can down-shift from a hotel to an institution for more money, but you can never go back!

What is the role that you really want to play in the world?  Are you proud of your skill base or are you willing to 'retire on the job' so to speak?

Rule 5:    Do be clear about who you are and who you want to be.  Everything takes time in the world of skills and if you de-skill you may find you have to "Pass Go" (go back to college) to re-start.  Be clear, be knowledgeable, and lead! This is your life and you live it forwards!

Five rules for judging an employer

#1  The firm holding the highest ground pays more to employees and capitalists.  Others pay less.

#2  No's in HR swing about a lot.  Find out the why behind the what. Control the cause to control the effect.

#3  What are the steps in assignment-size that take you from noobe to expert in your sector?

#4  What is the life-destination for people who join any group of players in your sector?

#5  The skills for holding high ground and holding low ground are subtely different. Play the game!!

Martijn has promised a sequel for systems integrators.  I am looking forward to it.