The Dilemma of Human Resources Management

Jul 24, 2006

Mitchellene Terrence was the 42-year-old director of human resources for Wright, Skidmore, and Johnson, a top-line A/E/P firm in Los Angeles. She was proud to be there. Graduating with a BS degree in 1986 from the University of California, Berkeley, she went on to get her master’s degree in human resources in 1990 from there as well. The job was as high as she could go in her chosen field. She first majored in business because she wanted to be able to get a job after her folks, Depression-era non-college graduates themselves, paid for her four years of tuition. After a couple years in a “marketing” (i.e., sales) job for a big company, Mitchellene decided to go to graduate school and study human resources management. Sure— it was, at the time, one of the “hot new career specialties” and with her new education she would undoubtedly be more employable. But more than that, Mitchellene loved people, and wanted to be able to do some good. Mitchellene began her human resources career working for a large retailer in benefits administration. After three or four years, she tried a brief stint at an executive search firm. That only lasted six months. Recruiting was hard— and the tactics one had to use to be successful were sometimes challenging to her sense of ethics. Then Mitchellene stumbled into a job as human resources manager for Dingleheimer Associates, a 50-person engineering firm. She discovered she really liked this business— the people who worked there were intelligent and creative. They also seemed to be very well-grounded in terms of their business and personal ethics. And the owners of the firm— three principals— genuinely cared about the people who worked for them. It was a great job. The problem was, as she discovered after a couple years of working at Dingleheimer, that the firm was marginally profitable and just wasn’t going to grow. While they were nice to their people and had lavish Christmas parties and bought everyone special presents on their birthdays, they also represented a bit of a dead end in terms Ü of career development for those who were ambitious and wanted to move up the managerial and ownership ladder. So, when she learned about a job opportunity as the top HR person at the megafirm Wright, Skidmore, and Johnson, Mitchellene had to pursue it. She felt a little disloyal when she sent in her resume but felt she could do more good there as well as advance herself by moving. When she beat out a host of other candidates because she had A/E/P industry experience, she was both proud and excited. And the money was great— she got an immediate $30K raise plus much better bonus opportunity. To reward herself, Mitchellene went out and bought herself the new pearl white Infiniti SUV she’d always wanted. Wright, Skidmore, and Johnson was a hot firm. They averaged a consistent 20% or better annual growth for 15 years straight, made a 15% or better profit every year, and had a 47-day average collection period. With a broad base of ownership and a small group of large shareholders who ran the firm through a board of directors and tightly-defined managerial roles, these people had a machine that worked. To make this company so successful, Wright, Skidmore, and Johnson needed highly energized, highly motivated people. As Mitchellene quickly learned, it wasn’t like it was at Dingleheimer, where it was nearly impossible to get fired for any reason. If “Old Slow Joe” the technician didn’t want to learn CADD or “Cranky Sally” the bosses’ secretary was rude to her co-workers, that was tolerated at her old firm. In her new firm, those kinds of people, once discovered, were quickly dismissed. And one of the ways they made their money was through young people working 60-70 hours a week with the potential for ownership dangling in front of them as a carrot. Though 1 in 20 would ever make it to principal, and turnover for newcomers was expected to be high, the sweat-shop atmosphere was profitable. In any case, Wright, Skidmore, and Johnson was successful. With nearly 1,000 employees, they didn’t get there by accident. It was a “dog-eat-dog” environment, though, and Mitchellene wasn’t sure it was for her. After six months, she called Joe Dingleheimer and told him she’d made a mistake. He rehired her in her old job at a small raise over what she used to make there as they hadn’t ever replaced her. She sold the Lexus and went back. They had a party for her. Back at Wright, Skidmore, and Johnson, they got a new hotshot HR manager that they hired away from a national executive search firm. Two years later, they’d grown by another 50%. Dingleheimer— they were still 50 people. And Mitchellene was back to wondering if she’d made a mistake going back there. Originally published 7/24/2006

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