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CalComp Considers HR a Business Unit

February 1, 1993
Related Topics: HR Services and Administration, The HR Profession, Featured Article
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When CalComp Inc. was profiled last in Personnel Journal in January 1990, it had been two years since the Anaheim, California-based company had set into motion a plan to reorganize the human resources department. The reason for the reorganization was two-fold: 1) to prepare for the future; and 2) to establish a world-class human resources department.

Back in 1987, when the plan was developed, Charles Furniss, then vice president of human resources at CalComp, described his challenge as head of the department this way: "Imagine being given a wrecked racing car and having to drive it in a race, while simultaneously restoring the car."

This negative perception wasn't confined to CalComp's human resources department. Within the company, such statements as "Don't get human resources involved; they'll just give you reasons why you can't do it," were common. Outside the company, human resources professionals and recruiters from Los Angeles and Orange County, California, openly criticized CalComp as a place in which to work. As a result, the company-which manufactures computer graphics peripheral products, such as plotters, digitizers and printers, and markets them internationally-was having problems recruiting top human resources professionals.

Today, those problems have all but been erased, says David Elling, president of JDK & Associates, a management and engineering recruiter located in Los Angeles. "In the early 1980s, CalComp was a name I didn't bring up early in a recruiting call because prospective applicants had the image of the company as being in a losing position," Elling says. "Today I lead with the company name. The image now is of a company that's a recognized force in the electronics industry. Applicants now perceive CalComp to be a good place in which to work."

How did CalComp engineer this turn-around? It began with the company's two-year plan in 1987, which turned the HR department into a business unit that had the responsibility for meeting the needs of its client base. Although this plan has been modified continuously to meet new conditions, its essential long-range goals and strategies, which guide human resources managers in the day-to-day delivery of services, have remained in place. They include:

  • Making CalComp and the human resources department a good place in which to work
  • Continually improving productivity and responsiveness in customer-service levels
  • Maintaining control and direction without smothering initiative or attitude.

A progress check of the developments and accomplishments during the last two years reveals the company's application of some key concepts related to managing human resources for success in the 1990s. CalComp has found that the process of becoming a world-class human resources department has involved three steps: 1) constantly applying the most-advanced phase of the model for organizational growth; 2) marketing human resources programs through the Success Model; and 3) maintaining control and keeping progress on track through the monitoring of key indicators.

Organizational growth is a process that has three phases.
In his book Grow or Die, George Ainsworth-Land uses the Growth Model, which includes three phases, to illustrate the progress of an organization through developmental stages.

Phase I organizations are struggling and trying to find the right business mix to survive and, they hope, to grow. Companies go through this in the start-up phase, which is characterized by an orientation toward survival, fast decision making and risk taking. Phase II organizations sometimes are called The Successful Replicators. In this stage of organizational growth, success patterns that were learned in Phase I are repeated and institutionalized. Systems emerge and the "struggle for survival now becomes a struggle for efficiency."

The danger in Phase II is that the system becomes the master, and sensitivity to customers takes a distant second place. No one pays attention to what the customers want, but instead, members of the organization write even more voluminous policies and procedures.

Phase III organizations are successful and engage in such activities as:

  • Running awake and close to their customers
  • Searching for new and innovative solutions
  • Being willing to take on acceptable risks
  • Being adaptable and change-oriented
  • Paying attention to quality.

There's another aspect to the Phase III organization, however. It involves decline, atrophy and decay, and threatens the life of an organization. According to Furniss, who now is senior vice president of human resources/ administration, this is the phase that best described CalComp in 1987. "The human resources organization was suffering from organizational arrogance. It had the reputation of always finding reasons why it couldn't do something, rather than listening to the customer, the way a real business that has a hard product does," says Furniss.

When CalComp's human resources department was reorganized in 1987, it became a Phase I organization because of the need to replace old policies, procedures and some of its personnel. Based on customer-needs research, Furniss built a two-year plan as the basis for innovation and setting new targets.

Simultaneously-because CalComp was an existing organization-it needed to reverse the decline of its Phase III characteristics and build better Phase II systems. Then it had to encourage the forward-looking characteristics of a true Phase III success organization.

"This has been quite a challenge, but I believe that today our human resources department has moved solidly into becoming a Phase III success organization," Furniss says. "We're just now beginning to feel that actions taken in the past years have stood the test of time. We continually encourage and explore new ways to improve our ability to serve the ever-changing needs of our customers."

Marketing supports long-term success.
Human resources at CalComp is operated as a business within a business. Its customers are the total company organization and the supporting outside resources that are needed for the organization to function.

"Few businesses can achieve and maintain success without aggressive and continuous marketing of their product," says Furniss. "Every member of human resources must realize that they're a part of a dynamic business, providing a product to customers. When this happens, attitudes shift from 'How much more work are you bringing me today?' to 'How can I help you-today and tomorrow?' Then you have the foundation to support long-term success." (See "HR Activities Offer Numerous Marketing Opportunities.")

CalComp's HR department and Furniss have used the Success Model to develop a business-oriented outlook. The Success Model, which is used to focus attention on the basic requirements for creating and sustaining changes in attitudes and performance, includes continuous marketing as its centerpiece. The three elements of marketing include:

  • Uncovering customer needs
  • Delivering the right product at the right time
  • Continuously keeping the customer informed and involved.

Accomplishing these three marketing elements involves a three-step process of planning, development and delivery. The steps are all interactive and are interrelated continuously during the process.

Planning must occur to provide direction and leadership, whether it involves a long-range direction or a short-range project. Getting the customer involved and then keeping the customer informed of the constantly changing plan as it relates to him or her is the marketing phase of this first segment. Human resources takes a company leadership position by being willing to modify plans based on customer input and by applying the quality principle, "If it isn't broken, improve it anyway."

Development of proper attitudes and commitment to the plan are needed by both the human resources staff and the customer. Creating and sustaining the proper level of commitment to the plan is a function of marketing. Plans will be presented, modified, scrapped, redone and, ultimately, accepted having the full commitment of the customer. The customer now has become part of the solution and knows what to expect during the next activity: delivery.

Delivery represents the infrastructure of the department-recruiting, training, and so on. The delivery of products will be monitored, and results will be reported to the customer, who will provide either acceptance or suggestions for improvement. This feedback and reporting is the marketing phase of product delivery.

Marketing is the center of the Success Model. It keeps the other three elements in constant, positive motion and results in modifications of delivery activities to accommodate new and changed needs (planning) as well as added customer involvement and commitment (development).

"This generates executive commitment to human resources that's more powerful than just permission," Furniss explains. "For example, Bill Conlin [CalComp's president] always takes an involved and visible position on human resources issues. His advocacy creates the mood of empowerment to try new things and places a value on our human resources that we never could achieve without his active support."

In the Growth Model, it's the Phase II organization that becomes bogged down with the infrastructure of the delivery process and then becomes complacent, using systems that worked in the past. A true Phase III organization requires dynamic application of the Success Model. The results of delivering products constantly are marketed to the customer. Listening to the ways in which they want to improve next time, plans are changed to meet the needs, and ideas for change constantly are communicated for approval. New levels of customer commitment are added. Positive attitudes toward and within the human resources organization are strengthened.

Key indicators help HR maintain control.
Balancing the concepts of a Phase III organization with the need to operate HR as a business within a business, as addressed in the Success Model, isn't a simple task. As he would with any good business, Furniss uses some key indicators to keep HR management on top of results and trends, and keep customers informed.

CalComp's key indicators are reported up through the organization to track and communicate performance. Most of the indicators are tracked on a monthly basis. They include:

  • Turnover rates (voluntary and involuntary)
  • Cost per hire
  • Training (as days per student)
  • EEO complaints
  • Employee-relations grievances
  • Number of suggestions
  • Number of internal transfers and promotions.

Indicators that are tracked less frequently include:

  • Benefit cost, year-over-year
  • The annual review statistics
  • Internal pay versus market pricing
  • Compa-Ratio=Internal job value versus individual pay.

The members of senior management receive a summary, along with any significant one-time activities. Furniss and his managers create additional marketing opportunities with this information, scheduling one-on-one meetings with executives to review items that have a special significance to them.

"As a marketing tool, key indicators help HR report the results of program delivery and develop additional communication opportunities with its customers."

"We try to keep the control issue at a minimum. Our preference is to focus on improvement and innovation, but we must keep some fundamentals in place," says Furniss. "All our managers understand that these few key points allow us to take the pulse of the organization, both internally and externally, without an overwhelming administrative effort. As a marketing tool, these key points help human resources management report the results of program delivery and develop additional communication opportunities with their customers."

Having been involved in the process of turning CalComp into a world-class human resources organization, Furniss realizes that just "doing our job" isn't enough. "The 1990s won't tolerate resting on past accomplishments or present systems," he says. CalComp's human resources department is setting an example of Phase III leadership by continually working toward doing more with less, developing new solutions to meet new problems and eagerly improving existing systems to remain competitive. Says Furniss, "We're living the future every day."

Personnel Journal, February 1993, Vol. 72, No. 2, pp. 36-41.

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