How to Prepare for the Future of Work?

Johnny C. Taylor, Jr.: The work experience has very much been transactional. It's been us versus they. We've got to focus on inclusion and inclusion of everyone.

SHRM and the book “Reset”

Michael Krigsman: Today, we are speaking about the future of work with Johnny C. Taylor, Jr. He is the CEO and the president of the Society for Human Resource Management. He just wrote a book, and it's a really good book. It's called Reset, and it describes leadership during this period of change and upheaval.

Johnny C. Taylor, Jr.: The best way to think about SHRM is if you think about what the American Bar Association is for lawyers, what the American Medical Association is for Physicians, we are the professional society for human resources professionals all over the globe. In fact, we have about 310,000 members across the globe in 165 counties. We're based here in Washington, D.C. where our main, the mother office is, but we have offices in India, in Dubai, so it's a global operation focused on work, workers, and the workplace.

Michael Krigsman: I enjoyed reading your book. It's very well organized. It's well written. You have lots of great stories. Tell us about the book. What is the premise behind it?

Johnny C. Taylor, Jr.: I put this in the context of March 2020. I remember Friday the 13th, it was March 13th, 2020. I think we all came to the realization that we were going to have to go home.

The President at the time comes out and says, "We're going to have to work remotely. We're going to have to change our existence," essentially, and it's globally.

All of us (I know for one) thought that this was a 14-, 21-day, 30-day shutdown. While in those 30 days enjoying my time working from home with my 11-year-old daughter, I thought I was going to write a book called The Great Pause because even that was new for us, right? We had never had a 30-day period where the world shut down and then we'd get back to our lives.

Well, as this dragged on, by June or July it became clear to me that this was going to be more than a pause and, in fact, it was going to be a reset. Everything was going to change, and it was like nothing any of us have ever experienced.

I began to spend time writing and thinking about those ways that business, the world of work, how human beings were going to change from this point forward and, thus, the premise of my book is that we've got to equip leaders with literally a new mindset as they come out of the pandemic experience, and it requires a reset, a reimagination, a re-innovation, re-everything if we're going to be successful. It would be horrible for us to simply hit the proverbial pause button and pick up where we left off.

Future of work trends: What are the key issues?

Michael Krigsman: What are the key issues around which leaders and people working in organizations need to rethink and need to reset?

Johnny C. Taylor, Jr.: There are three main categories.

Number one is policy. I'm talking governmental policy. No matter where you are in the world, we are rethinking how worker and workplace or employee management experience and the social contract (in some cases the actual contract) between employees and the employers.

Especially in the United States, our laws essentially haven't been updated since 1938: The Fair Labor Standards Act. It's been a long time since we've actually sat down and rethought the eight-hour workday, five days in a workweek, overtime. All of that has to be revisited.

Even when we made these slight modifications to the employment laws – say the Family and Medical Leave Act in 1993 – it was for unpaid leave. What the pandemic told was this is precisely why people would come to work sick and, therefore, spread because, yeah, you're telling them technically it's unpaid if you're not feeling well this morning but, by the way, now you can't pay your rent, feed your children, et cetera.

We have had to revisit all of our policies. That's the number one issue, in my mind.

Number two is people's relationship with work, specifically our employees. This whole notion that we have of what is work/life balance has gone out the window.

By the way, I never really believed in that anyway. I always spoke to work/life integration because it really never was at balance, right? That's kind of a ridiculous notion.

The idea of how are people going to experience work and, out of that came conversations around hybrid work, working remotely. All of those sorts of things and how people think about work are important.

The final point is really about culture. This is a conversation that, for many of you all who are listening, you're hard-driving business leaders, right? Culture was a soft word, and you never really thought about that as a business imperative.

Well, now, more than ever, as a result of employees experiencing their COVID-clarity, as a result of a real tsunami – whatever we're calling it – a turnover tsunami, great resignation, whatever you're calling it, people are voting with their feet. They've had a period of time to decide, "Do I want to work with you anymore? Do I even like you? Am I aligned with your organization?" - All of these questions, which we've never experienced.

I predicted that we'd have some major, major turnover, but it is now the norm to hear companies talk about 25%, 30% annual turnover. It's the norm!

Those three big shifts are the things that are most pronounced over the last 18 months.

Michael Krigsman: What do we do about this? Let's start from the perspective of employers. How do we manage this?

Johnny C. Taylor, Jr.: The federal laws establish the floor, not the ceiling, so this is an opportunity for us as leaders to sit down and say, "What kind of workplace are we going to offer going forward, from paid leave, from learning, asynchronous learning as opposed to having to travel and sit down in groups? What does the workplace of the future look like?"

These are discussions that the smartest leaders are sitting down and having at the highest strategic levels with their HR teams. Yes, I come from SHRM, so it may feel like I'm pushing HR, but I'm not because I'm from SHRM, but I am because we're in a knowledge-based economy, because employees are voting with their feet, and because if you want to win as an organization – guess what – you're going to have to win the talent game.

This is no longer a nice to have. You're going to have to do it.

That's what I would say employers have got to do. We really have to sit down and do two other things.

You talked about the workplace and workplace policies, but culture. We, as leaders, have got to sit down and be real honest and intentional about our culture – that formerly soft word.

I don't know about you all, but every time I'm interviewing an employee, one of their first questions isn't how much do you pay, what are your hours, your vacation policy, 401(k) match. They're like, "Tell me about your culture here."

[Laughter] And I'm like, "Okay. I wasn't ready for that," because they want to know, and you have got to be able to articulate it as a leader or they will bypass you for other opportunities because it is truly a seller's market when it comes to talent right now.

Then finally, this whole idea of talent strategies. Listen. If you had asked (almost every HR person I know) 18 months ago, "Could you hire," so recruit, "actually hire, onboard, train, fire people remotely?" the answer would be no. Well, the pandemic has literally challenged all of that and said, "No, you have to do all of that."

I was talking with the CHRO of Walmart the other day. She says, "We will never go back to hiring people in-person. Yes, we are literally able to hire, fire, transfer, promote, onboard people remotely," and that is something all of us have got to do is revisit our talent strategies in this new world.

HR, innovation culture, and talent strategy

Michael Krigsman: You talk a lot about innovation. You were just talking about a variety of different kinds of changes, and the foundation of innovation is change. So, where does HR fit into this innovation culture that you've been describing?

Johnny C. Taylor, Jr.: Oftentimes, and I know in times past, when we talked about innovation it was for the technology group. You kind of just think in your mind, "What group is responsible for innovation in an organization?" It's because technology does enable innovation a lot.

But what we as an HR function have got to do is two things. We've got to recruit people who have innovation in their DNA.

Part of the recruitment cycle, what we bring to bear as HR professionals and what is a requirement for us now, is not to just say, "Can you do the job I'm hiring you for?" but "Are you curious about other things?" Bring that cultural norm into the recruitment process, into the promotion process. We literally have to make it a part of how we do business, and that requires the constant reminder from HR and the facilitating from HR of innovation in our talent because innovation doesn't happen but for innovative people. That's number one.

The second thing that HR has to do, and I alluded to it earlier, is we've got to innovate HR. It's not an area where you expect to see innovation.

Again, we've got to resist all of the ideas of, "Well, this is how it worked five years ago, ten years ago." Hell, it may not matter if that's the way it worked five months ago.

We've got to embrace change, which is really hard for a profession that has historically been charged with eliminating if not reducing risk, and innovation carries with it risk. We have been wired to absolutely manage that and eliminate it, and it doesn't work anymore – our relationship with change and innovation.

I want to say one other thing, and it's really important. Innovation does not live in HR. Our job is to facilitate it within the organization.

It's a bit of what I was saying earlier. If an innovation gene is not in your culture then the organization will fail.

Michael Krigsman: We have a really interesting question from Arsalan Khan, who is a regular listener. He says, "If the future of work is technology (and a lot of it AI) then why do we need the talent strategy that you were just talking about?

Johnny C. Taylor, Jr.: There's this funny thing about technology. It is sort of that term "virtual reality." It's not reality; it's virtual reality, right? [Laughter]

There will always be, in many roles, the need for the human veneer. Machines do what machines do. They will make us more efficient. They will make us less prone to mistakes and, therefore, you'll have more certainty, et cetera.

There is a lot of advantage to embracing technology, but I would, Mr. Khan, argue a little bit differently. I don't think the future is technology. I think technology will enable the future.

In enabling, it will enable people to be better at what they do. Yes, there will always be human beings required to do a lot of things.

We think a lot of times in this notion that technology can do it. Listen. Robots can do a lot. They can't make beds in hotel rooms, and they can't manage the people who make those beds in the hotel rooms. There are just things that human beings will be required to do.

Even the machines that we drive our technology on need to be repaired. I'm reminded of the movie Hidden Figures – if you remember.

What's great about it is, if you recall, it's a story about three African-American women who worked at NASA. Well, they were called "computers." If you go back and watch the movie, if you remember that, they were actually referred to as "computers."

They saw the advancement of actual physical computers, hardware coming into place, and so they didn't just go away. Their jobs began to be programmers of computers or repair people of computers, et cetera.

No matter how advanced technology is, human beings will be a necessary part of every society that we know.

How to create a culture of innovation?

Michael Krigsman: What should business leaders do if they're not innovating, if the company culture is not as you've just been describing? Especially in large organizations, that seems like an almost insurmountable challenge.

Johnny C. Taylor, Jr.: It's surmountable, but it's hard.

Let me tell you, to share with your audience, I was the youngest ever officer of Blockbuster, so I can tell you exactly what happens when you don't innovate, and a very short period of time, so this is not some business school study that I read. I lived it.

I was the vice president of HR at Blockbuster. We made several mistakes. Namely, there was no surprise that at some point technology was going to advance to the point where you could offer a video on demand, all sorts of entertainment right from someone's home. That they wouldn't have to leave and go outside to buy a video, rent a video, in the snow, and pay those late fees that you all complained about.

Here I was as the head of HR. The organization refused to believe that change was coming. Many people didn't believe it. The others said it was further off than we thought.

I remember sitting in meetings when they said, "Oh, that's 20 years from now. That's 25 years from now. By then, we'll just take all of these real estate, these boxes that we have," that's what they referred to a Blockbuster store as a box, "and we'll convert it. Maybe it's a shoe store now. Maybe it's an auto dealer. I don't know. We have the real estate, and that real estate is king." We were wrong.

First of all, none of us saw what technology was going to do to the entire retail ecosystem. Hell, people aren't even going to those boxes to buy shoes anymore, right?

We thought it was just a video issue. Well, no. It literally transformed the game, and it was because – I will tell you as someone who sat in these meetings – we did not embrace innovation, we resisted change, and we held on to this notion that what we need to do is just do what we do better, more efficiently, et cetera, and raise prices, and it'll take care of itself.

In literally a decade, we went away from Blockbuster being as big a brand as Apple is today – if you remember, it was everywhere – "Make it a Blockbuster night" – to not existing. That happened in a decade.

What does that tell you for any organization today that refuses to change and embrace innovation? I can tell you; you will cease to exist.

Michael Krigsman: Who is responsible for the creation, the shaping, the evolution of this culture that then enables the innovation you've been describing?

Johnny C. Taylor, Jr.: Ultimately, it's the CEO. I believe the CEO is the chief executive officer of business, of culture, of diversity, of everything.

A friend of mine who is now deceased, the former commissions of the NBA David Stern, he was asked in an audience why didn't the NBA have a chief diversity officer, and he says, "Because I am the chief diversity officer and every CEO should be."

Well, to that point, every CEO should be the chief architect of their culture. I think their HR business lead and expert should help them facilitate, nurture, build it out, describe the behaviors, et cetera. But those two people sitting together and facilitating half to (with the collective management) say, "This is what our culture is."

By the way, for everyone listening, I don't believe in good or bad cultures. I say this in my book.

Now, say for unethical, criminal, illegal, I'm not talking about that. Obviously, those are bad cultures. I mean in the traditional sense.

Just because company A values X doesn't mean company B needs to value X. You've got to figure out what it authentically is going to be like to work at your organization.

There's nothing worse than someone saying, "Oh, Jack Dorsey said everyone can work remotely, so that's what we're going to do." Well, Netflix's CEO said, "Eh, not so much. That doesn't work here."

By the way, neither one of them is wrong. One is not a better culture because they allow their people to work remotely and the other one somehow is substandard because they require and actually find advantage in people collaborating in the office.

That's what culture is all about. It's an executive team sitting together and saying, "This is going to be more than words on a wall, on our plaque. This is what we're going to do, and we're going to live it."

Who can be an organizational change agent?

Michael Krigsman: You're talking about the ability to recognize change and then respond to that change. We have another great question from Twitter. Who is responsible for identifying this change? Is it the CEO? Is it HR? Whose job is it to be the change observer and, ultimately, the change agent?

Johnny C. Taylor, Jr.: Well, I'd like to think of your business leaders, all of you CXOs will be involved in making these observations because it depends upon the context. HR isn't everywhere, but HR should be the central repository.

If there are trends that you're seeing as the chief technology officer or chief marketing officer or chief strategy officer, all of that should be collected. Dump it, if you will, into the HR world. Then the right HR person is going to take that, synthesize it, and then follow the research.

Here's the problem. We all as leaders get anecdotes.

One of the employees walked in and said X. Well, one person does not a trend make, right? Just because you have an anecdote from one person doesn't mean you should follow it. But if all of this is collected, and we see data coming from different people inside the organization and outside of the organization.

By the way, a lot of the trends around the workplace come from other parts of the world. We jokingly call the state of California the People's Republic of California, but you know the story. A lot of their workplace trends come across the country and end up on this coast – in this case, I'm in Washington, D.C. – influencing what are our policy decisions.

The idea is, gather all of this information. You can see trends.

I'm a Floridian, and I talk about hurricanes. Before the hurricanes are a threat to the Florida coast, they started – some meteorologist somewhere else saw it coming. There are some things happening in the atmosphere (pressure, et cetera) and they say, "That's a hurricane and it's headed your way."

So too is the case with change. It's all about, we need all of the members of the executive team listening and filtering this stuff back through HR so it can figure out, "Is it really a trend or is this a little ripple?" and then make good decisions to get in front of that trend.

Michael Krigsman: Johnny, let me read a tweet that you wrote, to ask you to elaborate on it.

Johnny C. Taylor, Jr.: Okay.

Michael Krigsman: Here is your tweet. You said, "Businesses are tired: tired of the pandemic, ineffective DE&I efforts, employees and employees. They're also tired because of a lack of empathy. As HR professionals, we have an opportunity to make an empathy impact that will be felt in homes and communities around the world." What did you mean by that?

Johnny C. Taylor, Jr.: As I've reflected during this reset moment on what's the one thing – and there's never a silver bullet – what's missing when we take all of the data?

We at SHRM, for example, have a group of Ph.Ds., I/O psychologists, statisticians, all of the Ph.Ds. in the smart area. I call those the smart people. They are actually filtering in information and surveying the entire workforce and employers alike.

I started getting the sense that people are tired. They're frustrated. I said, "What is the one thing that we can do that can lead to some sort of support for these folks and for the organizations they work in?"

What we heard was empathy – not to be confused with sympathy. Sympathy is fine, but empathy.

The employees began to feel like you thought we were machines, like we could run 24/7. As long as you keep the room cold, then the machines will remain cool, and you can continue to generate and process.

Employees were becoming tired. As a result, they were becoming angry, disenchanted, distrusting of management.

Management, conversely, was saying, "Well, because of you all making these demands and leaving us with less than two weeks' notice—" no one trusted each other at all.

We found out (by really digging into the information) what they were saying is, "We need empathy." By the way, not to also be confused with the concept that our chief knowledge officer Dr. Alonso calls "me-pathy" because there's a difference.

Everyone wants someone else to be empathetic toward them, but they're not necessarily prepared to give it to them. We saw that in the workplace.

Employees say, "I want the company to be more empathetic toward me," but they don't think they have any obligation to be more empathetic toward management.

Managers are people too. They too have problems.

I had someone come in. I've got to tell you. Someone came in, and she was complaining about her manager. "He's just in a bad mood today. He's a horrible people manager."

I said, "Okay. Has it ever dawned on you that maybe this morning he got up and had a dispute with his wife? Or maybe his kid is flunking out of school. Or maybe his grandma is really, really sick and is now being checked into a nursing home. Have you ever for a moment stopped to ask yourself why is this manager acting this way?"

"Well, no." So, you want us to be empathetic toward you. You're not empathetic toward us.

What we have is this collective problem where no one is exercising their empathy muscle. They have atrophy, literally. As a result, we have tensions in the workplace that are at a level that none of us have seen.

I use a statement from a diversity perspective. We all thought diversity was going to solve a lot of our problems, but here we are. We are as diverse as we've ever been as a country and, at once, we're as divided as we've ever been.

Diversity didn't solve the problem either. I think the problem is rooted in a lack of empathy. We never stopped to ask ourselves how, why, what is this person's lived experience. I think it's the root of all of our racial reckoning problems, gender, and me-too problems. No one is trying to think through the lens of "What is that person's experience?" and it will make you operate differently.

That's the number one issue that we have found facing organizations is this lack of empathy. It literally is across. It transcends the organization.

How to create a culture of empathy?

Michael Krigsman: There's no doubt that what you're saying is true. After all, most organizations are created, built very functionally, transactionally: I do this; you do that. I pay you – and so forth. I think the question then becomes (from an operational standpoint) how to bring empathy into the workplace within this construct of this very transactional set of relationships.

Johnny C. Taylor, Jr.: Well, you nailed it, and the work experience has very much been transactional. It's been us versus they. Think about it. That's the labor problem every day.

In fact, I was just watching the President of the United States bring labor organizations to the White House and talk negatively about management, which is bizarre.

This "us versus they" mentality is a real problem. How can we fix it? Well, it starts very simply with obviously organizations committing to really test out and give some training to their empathy muscles, but we do it through our people managers.

I want to say this. Listen, I'm a CEO. Many of you all are chief somethings. We can announce and proclaim whatever we want.

Ultimately, people work for (or choose not to work for) their people managers, not your organization, not you. Okay? So, what we've got to do is equip people managers with the skills to be more empathetic.

I know some of you are likely sitting down saying, "Oh, gawd. This seems so soft." Right? But it is, it is the key. If we are going to keep employees and, more importantly, keep engaged employees who are loyal to us, then you're going to have to try to walk in their shoes or at least understand what it is for them to walk in their shoes.

At SHRM, we created a new product, by the way. You should check it out. It's called the People Manager Qualification.

The idea is, it's not for HR people at all. It's actually for managers and supervisors to go in and diagnostically determine where you are on the continuum. Where are your managers on the continuum of really good manager to, eh, one who needs help or, God forbid, someone who could never be a great manager? Then once it's assessed where you are, it has interventions to get that person better.

Let me tell you, most of the underlying training is all about building empathy within your people managers. That's the way you do this: one manager at a time.

Michael Krigsman: We have another interesting question from Twitter, from Lisbeth Shaw, who is asking, "So, then how do you create a culture charter?" which is, in a way, partially what you're talking about, "that doesn't just turn into policy but actually gets integrated into the life, into the activities, into the operations of the organization?"

Johnny C. Taylor, Jr.: I've talked about what you do as an executive team. Well, the next step is to then take that into your organization, literally, in its own forms of focus groups.

You sit down, and you say, "Okay. This is what senior management believes is the right culture for us. React to it."

More importantly, help us identify behaviors; behaviors that are examples of when this is great and when it's not great, when it shows up, when it doesn't show up. So, it's very much about actually showing people (through behaviors) what it looks like. Okay? That is the missing element.

We put the plaques on the wall. We send out statements. "These are our culture statements, our guiding principles, our values," whatever. Then people say, "But what does that mean?"Behaviors, identifying the behaviors. You're right, it's a bit of a charter then.

Here's the magic. I include them, and I would encourage you all to do this.

You know how we're doing those performance evaluations (whether you do them once a year, twice a year, quarterly – whatever)? Part of that should be, yes, here's what you do technically in your job. But then ask yourself, is this individual living our values, living our culture?

You will have those behaviors. If they've not been observed, then the person isn't doing it, and it should be reflected in the performance assessment. That's the way.

What we know is that which is rewarded is repeated. If you reward it by including it in the performance assessment process and then giving people money (if you will) or other types of perquisites to do it, it will become a part of your culture. But it's not enough to stop at the charter point because people will just check the box and continue being whatever they are.

Michael Krigsman: Essentially, you're saying have a clear mandate, a set of expectations, but back it up with metrics and then performance rewards.

Johnny C. Taylor, Jr.: Accountability. You have to hold people accountable for it. It's not okay, and I use this example a lot. We were just talking with someone from the University of Toronto.

Here's what happened. An organization says, "We treat each other with collegiality, respect, and civility." Then you have this amazing salesperson who is just knocking through walls, three times the productivity of the last person, but she's a jerk. Okay? Just an outright jerk, universally understood. It's not that she doesn't agree with one person. Very few people want to deal with her.

The organization has this moment. You've said we treat each other with empathy, respect, and civility, and then you have this person who is delivering. Will management tolerate it?

When management does not commit to its charter, when other employees look and say, "Oh, so that's what you say, but this is what you do," you lose all credibility and you cannot build a culture that people will trust.

This is where I really mean it. We have got to be prepared.

Now, that doesn't mean any of us are perfect, and that doesn't mean you immediately go out and fire this sales executive. It may mean there are some interventions, executive coaching, things to make sure that person becomes more aware of who they are and how they can be better colleagues.

If you get to the point where you see this person will not change, then the question from the organization's standpoint is, "How committed are you really to your culture?"

Michael Krigsman: That becomes a really tough problem.

Johnny C. Taylor, Jr.: Yes.

Michael Krigsman: Whether it's the star salesperson or it's your best programmer. That's hard.

Johnny C. Taylor, Jr.: Listen. Business is hard. News alert. [Laughter] And it becomes really hard when you're dealing with human beings because human beings – I'll tell you.

Someone joked with me. They said, "Johnny, I want to get into HR because I like people."

I said, "Well, that means you don't want to come to HR [laughter] because 10 or 15 minutes into this practice, you'll say, 'I'm just not real sure I like people. I want to be a veterinarian or something.'"

Seriously, it is hard and I'm glad you made that point. That's why, for those of you who are listening, historically, HR was the place where not necessarily the smartest, most talented people went because it wasn't considered hard. It was soft.

The reality is, this is really hard because human beings, they morph. They're worse than a virus.

I mean we talk about COVID and Lambda and Mu and Delta. Human beings morph almost daily (depending upon what's happening in their lives).

Take a star performer who is going through a divorce. A different person shows up in your workplace.

Trying to manage through all of that change at a human being level is really complicated, which is why it does take really good HR people to deal in a knowledge-based economy.

Equality, equity, and fairness

Michael Krigsman: Relating to all of this is how can organizations, how should organizations balance this? Most people are good people. I view it that way. How can organizations balance the desire to be empathetic, supportive, and helpful against the equally strong (maybe in some cases stronger) desire to get maximum efficiency out of each of these – to use the term in the movie, as you described – "computers" or, shall we say, workers rather than people?

Johnny C. Taylor, Jr.: What I believe, and I do it right here at SHRM – we're a .org, a nonprofit. By the way, that doesn't mean we don't make a lot of money, and it doesn't mean we just don't pay taxes like the rest of you all. I still run a $200+ million a year business.

What we've done is said two things can be true. You can be committed to people and committed to the business. The reality is, you have no business and, therefore, those people have no jobs, and their families have no income stream if we aren't both equally important.

We have to deliver a product, a service that customers want. We've got to do it timely and reliably. And we have to do so through people, so the people have to ensure that this thing is mutually beneficial. You make money; I make money. You treat me with respect; I treat you with respect, et cetera. That's where the balance comes in.

We have found that it's really come down (at its core) to three big areas.

• One, you've got to pay people equitably. That includes not just base pay but benefits and all of the packages (health and welfare benefits, et cetera), so an equitable fair share.
• Secondly, though, we've got to treat people with dignity, respect, and civility, which is hard these days. It's hard because we are a society that no longer values that.

People can hide behind the moniker of some pseudonym on Twitter or on these sites and say all sorts of really bad, cowardly things. And so, we've built a society now that doesn't know how to do anything but attack people who are different, despite all that we say about our commitment to diversity and inclusion.

I'm not just talking about race, gender, and age. I'm talking about all forms of diversity, all of the dimensions (political affiliation, perspective). We can attack people.

We're busy trying to balance that. I'd like to come back to that.

• Then the final thing is we have to make a return for our investors. There's just no question. Being honest with employees that without money there is no mission, there is no company, and just very directly doing it.

I think we as leaders oftentimes try not to have that conversation. I get it here a lot. This is why I brought up our nonprofit status.

I was told when I got here – I came from higher ed at one point in my life before I was a true corporate guy, and I was in corporate for 25 years – they'd say, "Well, we shouldn't talk about money."

"What are you talking about? You have to talk about money. We're in a capitalist society. This is how this works.

"Your employees have to understand that when we say we're not giving you major merit increases this year, it's because this funny thing called COVID happened and it ate into our profits. We don't have the money to give you."

Those are the real honest, transparent conversations that businesses have to have that all of these things have to be balanced, and it's when the employees don't understand that or won't accept it. Many of you are thinking, "Yeah, Johnny. We've told our employees, but they seem not to get it." Well, that's a whole different conversation, but you have to know that it's your job to ensure that they have the information.

Michael Krigsman: You mentioned equality versus equity.

Johnny C. Taylor, Jr.: Equity.

Diversity and inclusion

Michael Krigsman: Maybe that's a great way to transition into talking about diversity and inclusion. You write a lot about that. You emphasize that in your book. Maybe you can share your views on this topic with us.

Johnny C. Taylor, Jr.: I do. Let me take you all the way back. For 20, 25, 30 years, we've been talking about diversity, and if you think back to how that all worked.

I remember some of the training. I was a labor and employment lawyer and an HR executive at the time. We talked about valuing our differences, and everything was focused on our differences and not our commonalities.

I think that's where our problem is. We've literally led people to go into their tribes, into their corners, people who are like them, and we've not made our employees realize that we're more alike than we are different.

All of the traditional diversity training over the years has been really rooted in our differences. I think that has not done well for us over time because – guess what – surprise. Twenty-five years later, we're all acutely aware of our differences [laughter] and not those things that we have in common.

It's counter-human. It's counter to the way human beings actually operate, and I'll tell you why.

Imagine going to a cocktail reception. You walk into a room where you don't know anyone. You've never met them.

You walk up to someone. The first thing you say to them is something to find what do we have in common. "Where did you go to school? What fraternity or sorority did you join? Where were you raised?"

What you're looking for – it's obvious that we're different. But what I'm trying to do is, "What do we have in common?" so that we can use that as the bond. Then we grow from there and explore our differences.

HR and diversity initiatives didn't do that back in the day. They were very much – and I think – wrongly focused on our differences.

Okay, so now fast-forward. Okay, so we're focused on differences. By the way, we're now maniacally focused on equality. All of our programs were designed around equality.

Equality is great, a wonderful word, but let me tell you how it works. It says Johnny comes in, and he works 9:00 to 5:00. Mary, a single mother, has to drop her kid off at 8:45, so she doesn't get in until 9:15.

Johnny says, "Well, if you let her come at 9:15, then you have to let me come in at 9:15 because you have to treat us equally." Garbage!

We built our systems around equality as opposed to equity. The idea that you treat your employees—

My mother would always tell me. She'd buy something for my sister, a younger sister, and then wouldn't buy me something. I'd say, "Wait a minute. I want one just like her."

She said, "My job is to treat you equitably, not equally." Right? These concepts have been lost on us for a long time, and we've brought all this equality into work.

The final problem – and I know I may be very, very critical of this work because I think, on balance, it has not been particularly good diversity work – is that we have spent too much (almost inordinately) amount of time on this notion of civil rights diversity. Yes, there's race, gender, age, national origin, disability. But there are other forms and dimensions of diversity.

We've been unwilling. The irony is, someone will say, "I'm embracing diversity," but what they really mean is, "I'm embracing diversity that I agree with," especially when it comes to perspective.

There's nothing worse than seeing a person – I've had employees come in and say, "You know he voted for Trump."

I'm like, "Okay. Why are we whispering?" [Laughter] "Why can't he vote for Trump and be happy that he voted for Trump?"

We've just gotten to this point where we really don't value diversity. We don't value inclusion. We're only willing to provide safe spaces for people who we decide need to be made safe, not everyone. This has become – I'm a southerner, so I'm going to say this – a shit show. Right? [Laughter] I don't know how to say it any other way.

Fortunately, I think we've taken all of the work that occurred as a result of George Floyd's senseless killing and not double-down on race, necessarily, racial reckoning, but it made us rethink, reset our entire lens of diversity, equity, and inclusion. So much so that at SHRM (and in a lot of places) we now talk about IE&D instead of DE&I.

Why? Because diversity is coming. Look at America's public school systems. They're majority-minority. Your workforce for the future is going to be diverse.

What we've got to do, the real goal, is to figure out how to make all of these diverse people feel included and to be treated equitably. When we get that right, that is success.

Diversity is what it is. We have got to focus on inclusion and inclusion of everyone.

Michael Krigsman: You've painted a very clear vision. The question then is how do we realize that vision. Why don't we start just inside organizations? As hard as that is, it's easier than looking at our broader society. What should HR professionals and other business leaders do?

Johnny C. Taylor, Jr.: Organizations are an aggregation of a whole bunch of individual people. What I think every organization should do is really ask yourself, "Do I have the right people in this shop?" That's number one.

If you have people who are technically very good but not culturally aligned or, vice versa – they're very, very nice people that people like and they work together, but they're not particularly good at doing the thing you hired them to do – then we've got to make a plan to either skill those people up or remove them from the organization. That is critical, and that's the hardest part of HR – we are seeing, oftentimes.

No one is entitled to a job. No one! Even if you have a contract.

Hell. I have a contract. What that says is if they fire me, they have to pay me. But it doesn't mean I get to keep the job.

This whole notion of people are entitled to be in a job is wrong. The flipside is all employees (every human being I know) should be able to experience the dignity of work.

What we've got to do and practice within an organization is spend some real-time assessing our talent and where we think someone can be made better, we do it with them. It requires an investment, oftentimes. Just because someone can't do it now doesn't mean they won't be able to do it in the future, so I believe in investing in people.

When we get to this point where we have people who aren't going to get on board, then you've got to remove them from the organization. What I oftentimes say is, "You owe it to yourself to be happy. It's clear you're not happy here, so [laughter] I want you to go somewhere else and be happy there." That's really the way you do it, and that's not so soft side of HR.

Michael Krigsman: That's the hard part and having the clarity to know when to make that decision. When is it time to cut loose?

Johnny C. Taylor, Jr.: Right. Sometimes the worst part of that is when people quit and stay – that phrase that we use. There are folks who aren't ever going to be better than they are.

In fact, they essentially tell you they're not going to be better than they are, but they wait you out because there are management changes. It's just right. It's its own form of just whatever.

But I think we as leaders – especially in this knowledge-based economy where the winners and the losers are going to purely differentiate it by who has the best people – if you don't get that right then you're not serving your shareholders, your stakeholders. And, by the way, other employees don't want to work around people who are not aligned with the company's culture.

Michael Krigsman: Can you just tell us what are the key metrics to look at when it comes to these issues you've been describing? Literally, in just a minute or less.

Johnny C. Taylor, Jr.: If you want to look at metrics, look at employee engagement. How engaged are your employees?

By the way, I want to just say, not employee satisfaction. That's not the standard anymore. It's engagement.

Secondly, turnover: look at where you're losing people, and differentiate between voluntary and involuntary. That'll speak volumes about you.

Then, finally, always-always-always go talk to your alumni (after they've left). I use that term because we think of it in higher-ed only – alumni. Where do people go when they leave you and what do they have to say about their experience?

Even the people who have negative things to say about their experience when they worked with you may give you some valuable insights. Maybe they say negative things because they were the wrong person, not because you need to change your culture but they weren't right for your culture. But they also might be able to give you some nuggets on how you can improve and retain the best talent.

Michael Krigsman: What message or advice or final thoughts would you like to share to your constituency, as well as to the broader community of business leaders?

Johnny C. Taylor, Jr.: This is the moment. It's the moment for HR. One thing about it, I refer to this as the lemonade of the pandemic, sort of lemonade to HR people.

I talked with a CEO the other day who said to me, "I have had more meaningful conversations with my CHRO in the last eight weeks than in the previous eight years," and that's because there is finally this moment when we realize that the companies that win are going to have the right HR strategy, the right professional leading it, and the right HR team supporting him or her.

This is the moment to really take advantage of the human resource function.

Michael Krigsman: Okay. With that, I would like to say a heartfelt thank you to Johnny C. Taylor, Jr. He is the CEO and the president of SHRM. Johnny, thank you for being here. I really appreciate it.

Johnny C. Taylor, Jr.: Thank you, all.

Michael Krigsman: Everybody, thank you for watching, and especially those people who asked such great questions. Before you go, please subscribe to our YouTube channel. Hit the subscribe button at the top of our website and check out CXOTalk.com. We will see you again next week. Take care, everybody. Have a great day.