Successfully Onboarding New Employees

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Fast Company's Julia Phelan has written a good article titled "The ultimate guide to onboarding an employee successfully."  As I read the article, several key points resonated with me, and led me to think about what else I might consider as suggestions about the onboarding process.  Here is a synthesis of Phelan's recommendations and my own:  

1.  Put yourself in the new employee's shoes.  Think about a time when you were brand new to an institution, whether it was a company, a school, or a volunteer organization.  Empathize with the new team member.  Recognize how and why they might be stressed, confused, or anxious.  If you have been at your firm for a long time, putting yourself in their shoes will be more difficult.  Therefore, companies should think about having recently hired employees be part of the onboarding process, and not just rely on seasoned managers. 

2.  Set them up for a small, early win.  Don't give them a huge project right off the bat.  Give them something manageable so that they can get some experience working within the organization and delivering desired results.  

3.  Make sure they know where to go for help. Beyond their direct supervisor, who else can be a resource to them?   What other sources of information and training are available to them?  Who are the key people they need to get to know as soon as possible, including key employees in other departments?

4. Establish a clear schedule for the initial set of one-on-one meetings with their supervisor.  Make sure that these meetings can put on the calendar right away.   

5. Introduce them to other new or relatively new hires.  Help them build a cohort of new members of the organization who can help each other navigate the onboarding process.  

6.  Make sure they understand the big picture.  It's important that they understand their personal goals.  However, it is also very important that they understand the broader organizational goals and priorities.  How does their work fit into the bigger picture?  Providing that clear viewpoint will help them discover purpose and meaning in their work. 

7.  Be clear about what technical skills and capabilities they will need to learn as soon as possible to succeed in their role.  Take a quick inventory.  Make sure you know what they can do and what they can't do.  Is Tableau required for the job?  If so, make sure they know how to get up to speed on that software?  What if they know Tableau, but it is not currently used in their department?  Could it be useful?  Could they teach others, or introduce the software to make key activities more effective and efficient?   

Thinking about these key questions can take onboarding to the next level.  It is about far more than insuring new hires know the company policies and procedures.  Onboarding should be about setting people up to succeed and thrive in the organization. 

Careful about Romanticizing Failure

Source: Vistage

Have we come to romanticize failure at times in business and in the society at large?  Perhaps we have.  Is that detrimental to us at times?  New research suggests that we should be careful about romanticizing failure.  Lauren Eskreis-Winkler, Kaitlin Woolley, Eda Erensoy, and Minhee Kim have published a paper titled "The Exaggerated Benefits of Failure" in the Journal of Experimental Psychology: General.   They conducted a series of studies that demonstrate that we often overestimate the likelihood that people will rebound from failure and achieve success.  They write,

Across 11 studies, people in the lab and professionals in the field overestimated the rate at which health failures, professional failures, educational failures, and failures in a real-time task were followed by success. People thought that tens of thousands of professionals who fail standardized tests would go on to pass (who do not), that tens of thousands of people with addiction would get sober (who do not), and that tens of thousands of heart failure patients would improve their health (in fact, they do not).

The scholars argue that people consistently tend to overestimate how much we will learn from our failures.  In reality, we often are not effective at reflecting upon our failures, identifying the root causes of poor performance, and implementing corrective courses of action.  

I would argue that we need to stop repeating overused and inaccurate cliches about failure.  One that often bothers me: We learn more from failure than from success.  Actually, research suggests that we learn most effectively when we can compare and contrast failure and successful outcomes.  Reflecting on both success and failure leads to more improvement than only conducting lessons learned exercises after we fail.   

For those interested in practical guidance for how failure can lead to learning, I highly recommend Amy Edmondson's book, The Right Kind of Wrong: The Science of Failing Well.  Edmondson does not romanticize failure. Instead, she offers a clear-eyed view of different types of failure, some that are more preventable than others, and some which can lead to a great deal of learning if we approach them the right way.  

Why Might CVS Be Breaking Up?

News reports indicate that CVS Health may be splitting up in the months ahead.   Company leaders apparently are mulling their strategic options while under pressure from Glenview Capital and other investors.  CVS Health has diversified through acquisition over the past two decades.  In 2006, CVS acquired Caremark, a pharmacy benefit manager.  Then in 2017, CVS acquired Aetna, making a major move into the health insurance business.  More recently, they have made other moves to expand in the healthcare delivery space, such as by acquiring Oak Street Health - a primary care provider.   Unfortunately, the company's stock has underperformed the S&P 500 by a wide margin over the past two years, leading to increasing pressure from investors. 

Why might CVS Health be considering a break-up after moving so aggressively to transform themselves from a pharmacy retail chain to an integrated healthcare company?  Several factors may explain the potential strategy reversal.   

1.  Diversification works best when the different business units within a corporation operate by the same "dominant logic."  C.K. Prahalad and Richard Bettis coined this term in a very famous academic paper published in the 1980s.  They defined dominant logic as "the way in which managers conceptualize the business and make critical resource allocation decisions..."   In short, what is the mental model that leaders use to think about the business and make choices?  Do the businesses make money in a similar manner, or are the value propositions and business models fundamentally different?  They argued that strategic variety and complexity means that multiple "logics" exist across the portfolio of businesses, making it very difficult for the top management team to lead them all effectively.  They cannot apply the same criteria, rules, and principles when making decisions across the businesses.   One could easily argue that the dominant logics at CVS vary considerably from pharmacy retail to health insurance to primary care provision.  Can one CEO and her leadership team manage all these businesses effectively?  

2.  Scale and scope do not always yield economies.  We often hear about the benefits of bringing multiple units together.  In short, what are the economies of scale and scope?  I would argue that managers often focus on these potential economies when justifying acquisitions, yet they underestimate the potential diseconomies of scale and scope.  How might the increased complexity of the business make it more difficult to manage effectively?  What conflicts might emerge among business units?  What costs and disruption might occur as a company tries to secure key synergies?  Do the costs outweigh the benefits of collaboration and integration?  CVS Health has become a behemoth, and at some point, that sprawling conglomerate becomes very hard to manage.  

3.  The existence of potential synergies alone does not justify mergers.  One has to ask whether one could achieve some of these benefits through some other sort of organizational arrangement (stretching from contracts and partnerships through strategic alliances and joint ventures).  Firms don't always have to merge to coordinate and collaborate in pursuit of certain economies of scale and scope.  Consider Target's decision about its own pharmacy business.  The company wanted to continue to have pharmacies within each of its stores.  However, it came to the conclusion that it was best not to try to manage and operate these pharmacies themselves. Instead, they sold the business to CVS, letting the pharmacy experts run the "stores within a store" at each Target location.  Target shed a business, but it retained some of the benefits of having a pharmacy within each of its stores (the pharmacies are good traffic drivers and lead to other incremental sales for Target).  

4.  Vertical integration has many potential benefits, but it does not come without substantial risks. One risk is that you find yourself competing with your own customers at times.  That brings challenges for many companies, including in the healthcare space.  CVS Health has embarked on quite a bit of vertical integration over the years, creating these potential conflicts of interest that can be challenging to manage.