Part 2 of Interview with Karen Usher, Founder and Chair, TPO, Inc.

February 5th, 2014
Written by: TPO

This interview is part of a yearlong retrospective blog series commemorating TPO@20!–TPO’s 20th Birthday. These conversations with TPO partners, clients and executives focus on what has and hasn’t changed in “how we work” over the last two decades–and what we can learn for the next 20 years.  This is Part 2 of the interview with TPO Founder and Chair, Karen Usher.

TPO: Karen, earlier we talked about what led you to start TPO. Let’s focus on the company’s early days. How did it go from just you to being a “real” business with employees and overhead?

Karen Usher: It’s a fairly typical story. I got too busy and hired another person. It seemed like a natural evolution–although looking back, I had no idea what I was doing at the time. I had only been an independent consultant to that point. While there was the whole challenge of managing people and scaling, the business opportunity was so huge I kept at it.

TPO: Was it difficult early on to generate business?

Karen Usher: Not in the slightest! There was almost no competition. We told CEOs, “We provide HR support on a retainer basis.” And they’d say, “Can we sign the contract before you leave today?” At one point, our hit rate was like 87%.

TPO: What types of marketing and business development did you do at first?

Karen: I sent a survey to 25 association CEOs. In it I introduced myself as an HR consultant doing research on personnel policies and asked if I could interview them for an hour. And if they agreed, I’d give them the results. Then I asked each one for an introduction and ended up interviewing 100 CEOs. Over the years, about 60 of those CEOs became clients.

TPO: What did you learn from that experience?

Karen: In doing the initial HR projects, in almost ever case I realized these people didn’t have HR help although they needed it–but they couldn’t afford me full time. I thought that what we ought to create is a sort of “personnel in a box” service. And that ended up inspiring the original name of the company: The Personnel Office–now known as TPO.

We thought about how to package this and came up with a 3-tiered offer: on call, basic consulting and projects. So we had “boxes” 1, 2 and 3. The word “outsourcing” didn’t exist in HR; we just called it helping you with your personnel.

TPO: This was before there was a large inventory of independent HR consultants. How did you find them?

Karen: There weren’t as many independent consultants as there are today, but there were plenty who hated doing their own marketing and administration. So they were thrilled at the prospect of maintaining a consulting lifestyle, working as much or as little as they want, and dumping the rest of the stuff like chasing collections and finding new business. They were–and still are–averse to the “feast or famine” cycle that most independents face. For most independent consultants, it takes years to figure out that balance of hours spent billing vs. marketing themselves. There’s nothing like a collective or co-op to smooth that out for you.

TPO: How did you qualify new consultants to make sure they shared TPO’s “business-first” ethos vs. just focusing on day-to-day HR tasks?

Karen: Actually that ethos was never really specifically called out–until recently when we expressed it on our new website (you should put a link to the site here). But it was understood as core to what we did and how we did it. I just couldn’t imagine how we could deliver services without understanding the business context. How could you deliver a report on compensation without considering the goal–what do you want to compensate the team to do? How do you evaluate performance without knowing what we need to accomplish?

In terms of finding like-minded consultants, over the years I had met HR people who were employed full-time–as well as those who were part-time or consulting. So I picked the ones I’d gotten to know and like. Chemistry–with TPO and the client–was everything. It was never about having to find someone to “place” with a client–there had to be a great fit. That’s how we built long-term trust and relationships—with staff and clients. 

Once they were on board, I stayed involved in everything–selling accounts, servicing them and following up. So I knew how each consultant was perceived by the client. Most TPO consultants “got it”–the philosophy that HR is only valuable when it connected to the overall business strategies and priorities. Over time the relationships with clients relied less on me, and I felt comfortable and backed off–said another way, I micromanaged them less.

TPO: What were your proudest moments?

Karen: Our greatest triumphs in the early days were when we beat out Hay or Mercer–vastly bigger and better firms–because of the service we provided. We got it early on that the relationships we were developing were different–not just because we were young and perky, but because of the way we delivered our services.

TPO: What’s been the biggest change over the last 20 years?

Karen: The maturation of senior leadership around the topic of people as assets. If you said “our people are your greatest assets” 20 years ago, people would see you as a nincompoop or be embarrassed because they thought that thinking about people that way was demeaning and impersonal. For a long time, I think people thought that being a good CEO was like being a good dad. They viewed their jobs as making sure employees were safe, cared for and happy. When they needed to fire someone, they’d say, “He has family, let’s see if we can save him.” Things were very paternalistic–there was a desire for loyalty in both directions. People of course had longer tenures.

Unlike today, there was not a lot of discussion of what the job was, how to get it done and how to move the organization forward. Those concepts have really accelerated over the last 20 years. 

TPO: Why was the word “asset” a negative back then?

Karen: The word “asset’ was very interesting because it somehow implied a thing, not a person. It was the same as calling someone a “cog.” People didn’t like it. It seemed clinical and cold and there was even the implication that its use implied being manipulative.

And that was really the issue–manipulation. What bothered people about being labeled as an asset was the implication that one managed or manipulated assets—even if in a benign sense. People want to be recognized as individuals. That’s why we have different clothes and wear our hair differently. 

TPO: What challenges did this present?

Karen: The question was, how do we collectivize people while making them feel like individuals? In the military, you’re signing up for it so you expect to be treated like one of many–a cog. But in business you’re still an individual.

TPO: And today, the word asset is ok to use?

Karen: Absolutely. CEOs recognize the workforce is in fact an asset—in most cases their largest asset. It’s both a lever and an expense, even in small companies and associations. And with that realization, there’s been a tectonic shift away from the three P’s–personnel, paperwork and payroll—and toward the widespread understanding that Human Capital is a critical strategic element of business.

TPO: What challenges has this shift presented?

Karen: Early on there was a need to professionalize the relationship between an organization’s leaders and its workforce. Everything couldn’t be informal and personal. There had to be policies and rules that resulted in active management of “the asset”! I refer to this as the “de-paternalization” of companies. And of course that created resistance.

Some people would say this change was also in part due to the MBA/”bean-counter” trend. The numbers-driven view of business began to open executives’ eyes that people are an asset or lever and all assets require management to get maximum results.

TPO: Have people changed in the last 20 years?

Karen: That’s a great question. I’m leaning towards no. The fundamental elements remain constant in a positive way. People essentially want to help each other, to achieve things together—to do the right thing, to be part of success. That sense of the good side of humanity is stronger today than I’ve seen it in many years. So I’d say, while people of course do things differently today, and their lives are crammed with more stuff, their fundamental characteristics are same.

TPO: Karen, thanks again for some very enlightening observations. And congratulations on TPO’s 20th Birthday!

Karen: You bet, thank you. It was my pleasure.