In a previous blog we discussed the general nature of the laboratory. We noted that there are at least two types:
- The Commercial Lab
- The Internal Lab
We noted that this is something of a simplification, but makes a useful working model. The Commercial Lab is seeking external clients and doing work for a fee. The Internal Lab is a “captive lab” that responds to the needs of the parent organization. The term “Internal Lab” refers to the organization and mission. This should not be confused with geography. The Internal Lab could be many miles away from its “clients.” There could be “fees” associated with an Internal Lab, but they are not market driven. They are usually driven by some kind of cost recovery based formula that is often tangled up in transfer pricing issues. The Internal Lab could even be a government lab that provides testing based on a governmental mandate – although this is becoming rarer. The growth of the Commercial Lab business has resulted in the downsizing, closure or commercialization of many government labs that used to serve the public.
As we noted earlier, the mission of the laboratory determines the resources and activities needed for success. Nowhere is this clearer than in the area of Human Resource Management. The types of people needed and the skills they must have differ greatly for Commercial and Internal Labs. Since a Commercial Lab is a “going concern,” the most important skills are business skills. These include:
- Sales and Marketing Skills
- Financing Skills
- Budgeting Skills
- Contracting Skills
- Personnel Management Skills
- Organizational Skills
- Quality Control Skills
Technical skills are still important in the Commercial Lab, but they are secondary in nature. Often the technical aspects of the Commercial Lab are already prescribed by regulations or industry standards. There is little in the way of innovation or science compared to the challenges of finding prospects, closing sales, delivering reliable and valued customer service, controlling costs, maintaining margins, satisfying investor expectations, keeping an effective and cost efficient staff, offering the right mix of services and staying out of hot water on service quality. We will say more about the details of these skills in the next blog, but for now it is enough to say that HR Managers need to be aware that the Commercial Lab is not primarily a technology driven endeavor.
This reality can come as a great shock to those who work in Commercial Labs – especially those that are spin-offs of Internal, technology driven Labs. Highly skilled and well trained chemists and engineers often fare poorly in Commercial Labs. Frequently they feel underappreciated, over worked and mentally unchallenged in this environment. The HR Manager needs to be sensitive to these feelings and the potential for these feelings when looking at job descriptions, pay scales, company benefits and hiring practices. Very often the job tasks are not a match for the person doing the job and performance suffers. If the job really is primarily made up of “production” tasks, highly skilled scientists and engineers are not the best fit. Over specifying skills for such a position is not only cost prohibitive, it is often a way to ensure disappointment, dissatisfaction and turn-over. The HR Manager should work with tact, skill and persistence to ensure that jobs are properly specified and staffed. Production type jobs should be filled with persons expecting that kind of work and satisfied with performing it with skill and reliability.
At the same time, the HR Manager needs to be aware that laboratories always have a technical component. It is not sustainable, in the long run, for a laboratory to be stuck with aging technology. There must be some technological savvy, even in the Commercial Lab, to evaluate the competitive implications of technology for the business. Furthermore, the technological evaluation must be tempered and even driven by commercial considerations. Commercial Labs can ill afford to be found on the “bleeding edge” of technology. A few technical blunders such as a poor implementation of a LIMS or the purchase of new instruments that do not work well, and the Commercial Labs can find itself in a “death spiral.”
The HR Manager is well served in a Commercial Lab to review the entire list of skills above and ask, “Do we have these covered, and by whom?” If the Commercial Lab has been successful for a time, the answer may be, “Yes.” If the Commercial Lab is a new or troubled organization, the answer is almost certainly, “No.” In the former case the HR Manager may proceed to more of a maintenance mode and evaluate the depth and breadth of the skill set. He or she may proceed to such things as succession planning, competitive upgrading, career planning and all the longer-term HR policy tasks that can make HR Management fun and rewarding. In the latter case, however, the HR Manager may be in a serious situation requiring immediate and even emergency action. Commercial Labs organizations can quickly fall prey to a self-reinforcing downward spiral. Because Commercial Labs are often selling a commodity service (i.e. a service specified by regulations or standards), clients can readily change Labs. Hence, problems with service or quality can result in revenue reductions that can induce layoff that, in turn, put serious downward pressure on the ability to provide superior service or maintain adequate quality. This can lead to more layoffs and renewal of the downward spiral.
If an HR Manager or Executive suspects serious weaknesses in any of the skills listed above, they should take immediate corrective action. That action should include seeking outside consulting help. Outside consultants can often shore up the deficiencies temporarily while pushing the organization toward rapid repair. The HR Manager or Executive should not delude themselves into thinking that this exercise will be pleasant. It will not. It will likely lead to changing out a significant number of the incumbent managers. Some will be found to inadequate for their current position, while others will be found to be obstructionists. The organization simply doesn’t have the luxury of waiting for ship to right itself. The Commercial Lab market is notoriously unforgiving of failures.
When we turn our attention to the Internal Lab, we find that the HR Manager has a much different challenge. Here technical expertise is extremely important. It is not that the business skills listed above can be ignored. There is almost always a need to control costs, purchase wisely, organization efficiently and maintain quality performance. For Internal Labs, however, these are not enough. Technical excellence is also required. This is very hard to achieve for several reasons.
First of all, technical excellence is very difficult to gauge. Although every organization claims to hire the “best and the brightest,” the truth of the matter is that they get whom they can. Often the “best and the brightest” work for the competition. Furthermore, it should be remember that, on the average, people are average. I have seem more than once that the “technical guru” of the organization actually didn’t know the technology that well, but had been quite successful at convincing HR and Executive Management that they were the cat’s pajamas. All the “failures” were the fault of other, mere mortals, and had nothing to do with impossible expectations. Whenever there are persistent and inexplicable failures, HR and Executive Management would do well to bring in an outside consultant to review the technical knowledge base. If there really is a gulf between perceived technical excellence and real technical knowledge, an outsider can usually detect it. There is almost always enough published literature, competitive information and expertise in the “public domain” (universities, other consultants, retirees, etc.), that a diligent outsider can shed light on serious technology gaps. This kind of a task is best done by an outsider since it has the grave danger of wrecking relationships. If the “technical guru” really does know his or her stuff, the outside consultant can be dismissed as a troublemaker or told to quit being a jerk and focus on other issues.
The second difficulty with technical excellence is that those that have it are often complete Cretans. It seems an immutable law of nature that personality and technical excellence are inversely related. Our technical training methods only seem to exacerbate this. Those with high IQ seem to be drawn to graduate studies where they learn firsthand methods of abuse, degradation and mental torture from experts in these techniques – their graduate advisors. This is a tremendous exasperation to HR Managers. Often the HR Manager and even the Executive are called upon to referee crises that are of little more substance than a food fight. The result is organizational dysfunction that prevents the good technical expertise of a few from being embraced or effectively applied by the many. In some cases the organization is completely frozen.
Again, bringing in the right consultant can break the logjam. The key is setting up objective rules of engagement. Egos have to be defused and focus placed on objective tasks, processes, hypotheses, measurements, reports, reviews, etc. It will require engagement of most of the organization as they – together – decide the rules and procedures that work for them. This will require confrontation with the “technical guru(s).” There will be at least one “explosion” as the old power brokers try to flex their muscles. Nevertheless, if activities can be kept of an objective nature, most technical people will eventually come around to the obvious merits of a planned method for doing business and engaging the efforts of the whole team. Eventually the disenfranchised will see that there are ways for their ideas to be heard and valued. They will feel inclined to re-engage in supporting organizational goals. The process takes time, but if given enough time and the persistence of HR and Executive Management most organizations can, with the help of the right outside consultant, overcome most of their dysfunction. When that happens the consultant can be fired as a costly pain in the butt.
SALLC specializes in the evaluation and improvement of laboratory performance. We have been engaged in setting up and managing all aspects of Commercial Labs from building buildings to running sales organizations. We have also been deeply engaged in evaluating and improving performance on mission critical tasks for Internal Labs. This has ranged from developing and validating new testing procedure, designing and building new test equipment and performing statistical evaluation of data for technology evaluation and improvement. SALLC Associates bring specific laboratory critical knowledge in the areas of HR, analytic techniques, experimental design, data evaluation, database management, sales management, cost measurement and control, sampling, project management and many other specialized skills.
Next time we will take up some of the details of business management skills as they apply to the
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