Insights from Ellen Raim, Founder of People Matter‍

Jason Lavender recently joined a Zoom room with Ellen Raim, an HR leader, a nonprofit board member and the Founder of People Matter, to chat about common opportunities and challenges for HR and People leaders, especially in the category of people development.

Within this conversation, Jason and Ellen discuss:

• How too many companies focus more on solving than preventing people problems.
• Why HR is at the forefront of organizational change.
• Why the companies that invest in their people are the most successful.
• The imperative of growing people to grow a company.
• What would make developing people at work easier.
• The virtuous cycle of learning.
• The benefit of building connections.
• How the speed of change impacts employee needs.
• The rift that comes from categorizing employees as a cost instead of an asset.

Jason Lavender, CEO & Founder of Electives: Ellen, welcome! Do you mind sharing your background and what you’re up to today?

Ellen Raim, Founder of People Matter: I started my HR/People career as an employment lawyer, and I handled matters when they got completely screwed up. I did that for a number of years, and I realized that people were putting a lot of money into these lawsuits. But nobody was going backwards to try to understand what was happening in the environment that made someone so upset that they felt their only recourse was to go find a lawyer.

I started telling my clients, “Look, I’ll settle this case for you. Then, I want you to take the money that you’re going to save and go back inside and try to figure out what the root cause of this was.” And nobody would do it.

We focus more on solving than preventing People problems.

So then I said to myself, “Okay, I’ve gotta get closer to where things are really happening.” So I went in-house to Intel as a lawyer, and I thought that would be better because I was closer.

But that still didn’t work. People still only came to me after they thought they’d done something wrong.

Finally, a factory manager at Intel asked me, “Why don’t you go into HR?” I then had to admit that, for all my big talk, I really didn’t know how to do anything other than clean up the mess at the end. But that factory manager said, “Nonsense! You understand strategically what happens and how everything fits together.”

I am endlessly fascinated by what makes people inside organizations tick, and I did just about every HR job at Intel. Then I got recruited to be the VP of HR or CPO for a number of companies across all stages, including big companies, private companies, public companies, little companies, companies doing well and companies struggling. And now I’ve taken all of that experience and started my own consulting firm called People Matter.

At People Matter, we act as the senior resource to small HR teams or HR teams of one, where they’re making it up as they go. They’re doing the best they can, but they know it would be nice to have somebody who’s been around the block and can help advise.

HR is at the forefront of organizational change.

Jason: I love that and congratulations on the launch!

The role of the People leader has changed so much over the last decade. Most people started talking about the change during the pandemic and it only continued. What do you think has been the most impactful change in terms of the role of the Chief People Officer? And what are you most excited about in terms of that change and its impact over the next couple of years?

Ellen: The whole world of People inside of companies has changed enormously, and businesses are starting to realize that.

Employees want to work for and people want to buy from companies whose values match their own values. And that means more than the silly poster on the wall that says mission, vision and values on it.

It’s about how you show up as a company. HR has been in the middle of this shift for the last several years because it’s been such a tumultuous time.

HR leaders are able to understand how you motivate, care for and create experiences for employees that augment the business rather than just taking care of the transactional and the compliance stuff.

The companies that invest in their people are the most successful companies.

Jason: What do you think are the factors that lead to companies being really successful in terms of developing their people versus companies that struggle to develop their talent?

Ellen: Companies that understand they succeed through people and spend the time and the money grooming and growing their people are the companies that are most successful.

The companies that either don’t see people development as important or don’t have an organized way to deliver training and career pathing are the companies that do well only in spite of the fact that they’re not using their people resources in the best way.

It benefits both the company and every single employee if you understand that people want to grow.

If you ask people what they want out of a career, people in the finance department think, “Oh, they want a big salary.” But that’s really third or fourth down the line. What employees want is to do something that matters. And they want to be able to grow their skills and climb the ladder. You can affect all three of those things with training and development.

Jason: Human capital is typically the largest asset in any company. Yet, to your point, investing in that human capital feels like it sometimes creates tension or uncertainty.

People often ask, “Do we really need to do this? Can it wait? Because we need to invest in these other projects.” Why do you think that tension exists? And, have you found successful ways to consistently overcome that tension?

Growth doesn’t happen without people.

Ellen: If you think about it financially, people are the company’s biggest asset. But, if you actually look at the way that an income statement and a balance sheet are put together, people are not an asset. People represent costs, which makes them a liability. GAAP accounting causes (or reveals) some of the problem, which is that people are expensive. Somehow, along the way, there’s been a break in the link between the expense of people, which is our salaries, and what employees deliver for the company.

I’ve been in a million C-suite meetings where somebody from FP&A comes in to show a projection, and they’re like, “We’re going to make all this money… and look at this chart, it’s going up and to the right…” That doesn’t happen without people. That’s a wish, and that wish only comes true if you can motivate, engage and direct the people to accomplish whatever it is to make that line on that chart go up and to the right.

Education needs to happen with executives to teach the beauty and the magic of growing people and understanding how to get work done through people in a way that’s motivating and not frightening.

Moving on to the second part of your question, yes, I have seen it work.

There are some leaders, some CEOs and some CFOs, who understand this [the importance of developing and motivating people]. In those companies, the purse strings are squeezed a little less tight, and you can get money to develop people the way they should be developed.

When I was at companies where that wasn’t the case, I started out with the mantra that I was going to ask for forgiveness and not permission. I started building with the very first people that I hired. When I build an HR team right, I hire a learning and development person, because I know that the only way to really give employees the experience they want is to help them learn.