Launching HR initiatives and safeguarding information
President’s Column – April ’06

This month’s newsletter features two very different, but important business requirements – the role of leaders in launching new HR initiatives and maintaining secure data. Both of these requirements, if handled well, foster positive employee relations and business integrity. If not, they result in lost productivity and morale.

The first article describes how Costco Wholesale uses senior leaders in launching HR initiatives. Their Leader-Led Leadership approach works so well it enables the company to quickly and smoothly implement changes globally. The second article describes what data security really means it in an era when major databases are stored on a single PC.

Hopefully both of these articles provide some useful approaches you can utilize in your own organization.

Best regards,
Eric Herzog (eric@questcorp.com)

Leaders Launching HR Initiatives

Not many senior HR leaders look forward to the “dog and pony shows” they are asked to conduct in each location to inform the company’s workforce about the latest benefit change or new initiative. COSTCO Wholesale has proven that there is a better way.

While I was visiting with him in his office, the Senior Vice President of Human Resources at COSTCO asked me about the labor stoppage in the Southern California grocery markets. “What’s the problem? Why has it led to this disastrous strike?” Part way through my explanation, it occurred to me that there was a reason for his interest. It turned out that COSTCO was also planning to modify its benefit program, but was taking a unique approach. They were asking their Warehouse Managers to meet in small groups or individually with all their employees to explain the new benefit program and what was behind it. “No problem, as long as we understand it and have the necessary discussion materials” they said. Later in the year, COSTCO’s leaders implemented the company’s enhanced diversity initiative in a similar manner. As you might expect, both rollouts went so smoothly, the President didn’t receive a single complaint!

This was possible because for 7 years COSTCO has utilized Leader-Led Leadership Development® in COSTCO University and developed the role of leader/teacher throughout its entire global operation. Every leader is a teacher, including Jim Sinegal, the widely respected President. Leaders throughout the company acknowledge the positive impact this has had on the more than 12,000 managers and supervisors who have participated in the University. Many of the leaders talk about how much they personally have benefited from facilitating these programs.

Surely this makes sense in any organization. If we expect today’s leaders to “lead”, doesn’t it include assuming responsibility for company initiatives, HR policy, compensation and benefit packages, as well as developing their people? With this paradigm, HR becomes the “enabler” and partner, helping leaders successfully fulfill their responsibilities, instead of trying to speak on behalf of the company in each and every location.

Data security requires more than good fortune

Audits of 5 federal agencies (Bureau of Prisons, Drug Enforcement Administration, FBI, Immigration and Naturalization Service, and the United States Marshals Service) by the Department of Justice in 2001 may shock you. Three of the agencies lost or had stolen 400 laptop computers. Data from the DEA was so unreliable that it couldn’t be used and the INS didn’t make note of missing computers.

The audit (Report No. 02-31, August 2002, Office of the Inspector General) showed that the FBI alone lost or had stolen 317 computers. If FBI agents, who are trained to be cautious, can lose 2% of the computers assigned to them, you probably won’t be surprised to learn that portable computers are one of the most common losses that business managers report to insurance companies.

The cost of replacing the computer, substantial as it might be, pales when compared to the value of the data. A list of your clients or a detailed report on product development that disappears with a computer could find its way to a competitor’s office.

A lesson from highway engineers: Assume the worst

People who design highways know that errant motorists will hit anything – signs, light standards, guard rails. If it’s located on or near a roadway, somebody will hit it. They design with that assumption in mind. It’s why these devices are built to break apart when hit. The objective is to reduce injuries.

If your business owns portable computers, assume that they will be lost or stolen. As desktop computers become smaller, assuming that they will also be stolen isn’t a bad idea, either.

Once you’ve made that assumption, the way forward is clear. The information on every computer must be protected. This goes beyond the obvious steps of installing an antivirus application and ensuring that it’s up to date. It goes beyond installing a software firewall. And it goes beyond sending a cable lock along with every computer that leaves the building.

Cable locks can provide a false sense of security. Few hotel rooms have anything secure to which you can attach the cable. Besides that, any halfway competent computer crook knows how to defeat the lock in 15 seconds or carries along a bolt cutter that reduces the time required to about 2 seconds.

Most computers have the option of installing a CMOS-based password and this should be used for any computer that’s removed from the office. Because the CMOS password is effective only when the machine boots, users should encouraged to shut machines down, not to put them in “sleep” or “hibernate” mode.

Consider using data encryption on computers that leave the office, but be certain that data on those machines is backed up at the office in an unencrypted form in case the user forgets the encryption key.

Allow users to create their own passwords, but insist that those passwords be strong. A system-assigned password such as “eI8%FoWQQw” isn’t secure because few people will be able to remember such a password and will write it down. A password such as lLij2316Ner@k is just as secure and easy to remember if the person who created it has two daughters (“lLij” is “Jill” backwards, “Ner@k” is “Karen” backwards with @ in place of “a”, and “2316” is the house number the user had as a child). A secure password must have upper case and lower case letters, numbers, and symbols.

If you routinely carry mission-critical data, consider buying a removable flash drive (also called a USB drives or a thumb drive) that includes data encryption. Keep the flash drive with you at all times so that it cannot be stolen when you leave the computer in the hotel room.

Common sense

Imagine that your portable computer case is stuffed full of $100 bills. You wouldn’t leave a stack of $100 bills on the front seat of the car while you step in to a Chinese restaurant for take-out food. You wouldn’t leave the case unattended in an airport. You wouldn’t leave it in your hotel room all day as you’re attending conference sessions.

Computers have many enemies. Failing to recognize those threats and protect against them is costly and embarrassing. Just ask the federal agent who lost his computer when he left it in his car when he stepped in to a Chinese restaurant for take-out food.

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