goal summit 2016: the new organization – different by design

Global Human Capital Trends 2016 The new organization: Different by design

Josh Bersin Principal, Founder Bersin by Deloitte @Josh_Bersin

Demographic upheavals: Millennials make up more than half the workforce, and Boomers are working into their 70s and 80s.

Digital technology is everywhere: Technology is disrupting business models and radically changing the workplace and how work is done.

Rate of change has accelerated: Business must become more agile to keep up with the rapid pace of change.

New social contract between companies and workers: Younger workers demand rapid career growth, compelling and flexible workplace, and a sense of purpose at work.

Disrupting the workforce landscape

Sources: Deloitte Human Capital Trends 2014 and 2015

The overwhelmed employee

The “average” US worker now spends 25% of their day

reading or answering emails

Fewer than 16% of companies have a program to “simplify work” or help

employees deal with stress.

More than 80% of all companies rate their business “highly complex” or “complex”

for employees.

The average mobile phone user checks their device 150 times a day.

The “average” US worker works 47 hours and 49% work 50 hours or

more per week, with 20% at 60+ hours per week

40% of the US population believes it is impossible to succeed at work and have a balanced family life.

Productivity is suffering — is technology helping?

US productivity last ten years

1 billion smartphones

i-Phone launched

100 million Twitter users

Since 2011 productivity gains have

slowed to crawl

Why skills matter so much

Shift to a service and IP-based economy

Percent rating trend important

Importance of Human Capital trends to business

Organizational design

Leadership

Culture

Engagement

92%

89%

86%

85%

Learning

Design thinking

Skills of HR organization

People analytics

Digital HR

Workforce management

77%

74%

71%

84%

79%

78%

% very important

2016

56%

57%

54%

48%

44%

39%

36%

36%

32%

28%

% very important

2015

…

50%

50%

39%

…

39%

29%

…

…

Trend 1: Structure The Rise of Teams

Organizational design

The rise of teams say the trend is “very important” or “important” 92%

of large companies are organized functionally today

25% Only Shift from top-

down hierarchy to a network of

teams to deliver results faster

are reorganizing or plan to this year

feel expert at building cross-functional teams

believe their companies are very ready to effectively redesign their organizations

understand the way their people work together in networks

21%

14%

12%

83%

Shared values and culture

Transparent goals and projects

Free flow of information

and feedback

People rewarded for their skills and abilities,

not position

Organizational design

A network of teams

B A

D C F

A

C D E

B

G

How things were How things “are” How things work

E

Historic Perspective on Performance and Goals

HowOrganiza,onsEvolve

Startup Create

Sell

Functional Hierarchy

Scale

Efficiency

Distributed P&L

Expand

Delegate Manage

Federated Shared

Services

Consolidate Rationalize Watchdog

Network Of

Teams

Evolve Adapt

Collaborate Innovate

Agile Entrepreneurial

Control Grow

Delegate Decentralize

Coordinate Standardize

Innovative Mission-Driven

Agile, Shared, Fast Changing

Top-Down Structured

Delegated Aligned

Local and Global

Team-Centric Coordinated

Historic Perspective on Performance and Management

TheEvolu,onofManagementThinkingWeareHere

TheIndustrialCorpora4on

HierarchicalLeadership

Collabora4veManagement

NetworksofTeams

<1950s 1960s-80s Today1990s

AndrewCarnegieHenryFord

NeKlix,Google,Facebook,Amazon

JackWelchPeterDrucker

HowardSchulzSteveJobs

Profit,Growth,FinancialEngineering

CustomerService,EmployeesasLeaders

Mission,Purpose,Sustainability

Opera4onalEfficiency

2020

Purpose,Meaning,

andEmpow

erment?

IndustrialAgePeopleasWorkers

ManagementbyObjec4ve

ServantLeadershipWorkTogether

EmpowertheTeam

TheCorpora4onisKing

TheExecu4vesareKing

TheTeamsandTeamLeadersareKings

ThePeopleareKing(s)

Trend 2: Goals Rethinking Performance Management

13

Only 12% of companies believe their existing performance management process is “worth the time put into it.”

- Deloitte Human Capital Trends 2015

Performance Management

TheProcessisBroken

Goal Management

Organizations that revise or review goals quarterly or more are

3.5 X more likely

to score in the top quartile of business performance.

MoreFrequentGoalReviews

Note:Basedonouremployeerecogni,onsurvey,wecreatedabusinessperformanceindex(BPI1)thataveragesscoresonemployeeengagementandthreebusiness-relatedoutcomes(customersa,sfac,on,coststructurecomparedtocompe,tors,andmarketleadershipposi,on).Itthenranksorganiza,onsonthescale.Organiza,onsthatscoredinthetop25percentoftheBPIareconsideredtohave“strong”businessoutcomes.

16%

44%

21%

10%

9%

3%

24%

26%

31%

50%

No Goal Revision

Once Per Year

Twice Per Year

Quarterly

Monthly

Source:“High-ImpactPerformanceManagementUsingGoalstoFocusthe21st-CenturyWorkforce,”StaciaShermanGarr/BersinbyDeloiYe,December2014.

Improvement in Performance Based on Frequency of Goal Review

BoardofDirectors/CEO

Execu,veTeam/SeniorLeaders

BusinessLeaders

TeamManagers

TeamLeaders

IndividualContributors

TheIndustrialAgeProcess:TopDownCascadingGoals

The Old Model of Setting Goals

From Cascading Goals to Aligned Goals TheNewModel:LocalGoals,butAligned

Where Goals are Going

Goals in a Networked Organization

B

A

D C F

G E

Goals Today

Meaningful Culturally Aligned

Transparent Agile

Developmental

Trend 3: Leadership Rewiring the Leadership Model

Leadership awakened

Generations, teams, science say the trend is “very important” or “important” 89%

Need different types of leaders,

who are effective as an individual and in teams, at all levels

Initiatives to develop versatile leaders require rigorous structure backed by data

have little or no investment on diversity in leadership 59%

have strong programs to build Millennial leaders 7%

have strong programs to build Global leadership 13%

described themselves as “strong” at succession planning throughout the business

14%

Percent of companies rating leadership “important” jumped from 87% in 2015 to 89% in 2016. Percent of companies rating the problem “urgent” jumped from 51% to 57% from 2015 to 2016.

The problem is getting more urgent Yet progress is uneven and inconsistent

61% of companies are revamping or just revamped their leadership program in the last year and 30% are doing it this year. Yet 38% have no plans and 21% have no leadership development programs at all.

Deloitte Global Human Capital Trends

Leadership trends in 2016

Deloitte 2016 Human Capital Trends n=7,000

Inconsistent Management Training Content Available • No Development Process • Benefit to Employees

Level 1

Structured Leadership Training Core Competencies • Well-Defined Curriculum • Developing Individuals

Level 2

Focused Leadership Development Culture-Setting • Future-Focused • Developing Organization

Level 3

Strategic Leadership Development Championed by Executives • Talent Management Integration

Level 4 B

ersi

n by

Del

oitte

25%

38%

28%

10%

Leadership rewired

Why is the leadership market so broken?

8%

15%

9%

6%

13%

20%

15%

7%

Global skills and experiences in leadership program

Leadership programs for all levels (new, mid-level, senior)

Experiential leadership programs

Targeted Millennial leadership programs

2016 2015

Maturity growth in global and experiential programs, but not enough focus on Millennials

(% companies who are “excellent” at these areas)

Deloitte Global Human Capital Trends 2016, n=7,000

70% of Millennials

tell us they are receiving no leadership

development at all.

Focus areas

We are not building leaders fast or early enough

Essential Talent Activities Standalone disconnected staffing, training, and performance practices

Level 1

Critical Talent Growth Critical talent segments, focus on hiring, training, performance

Level 2

Managed Talent Relationships Workforce planning, development planning, leadership development integrated

into talent strategy

Level 3

Inclusive Talent System Talent strategies integrated with inclusion, diversity, and culture

Level 4 B

ersi

n by

Del

oitte

10%

19%

59%

12%

The New Bersin by Deloitte Talent Management Maturity Model

Source: Bersin by Deloitte, 2015.

Talent management has changed

Inclusion and diversity are key

Trend 4: Culture & Engagement A CEO Level Issue

Culture

Shape culture, drive strategy

Senior leaders must work with HR to align culture to business goals

Culture helps bind people

together and can drive execution and consistency

say the trend is “very important” or “important” 86%

believe “culture is a potential competitive advantage”

believe they understand their culture well today

believe they have the “right culture”

28%

19%

82%

Average 3.2

What are these companies doing?

Glassdoor ratings of employer recommendations — 200,000+ respondents

Engagement remains a global challenge

Culture, value, leadership, and career (The Big Four)

The issues that matter to employees

0.00

0.12

0.13

0.22

0.28

0.30

0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35

Year founded (age)

Compensation & benefits

Work life balance

Career opportunities

Senior leadership

Culture and values

Correlation of employment factors to glassdoor recommendations as place to work

Culture and leadership are 3X more important than salary in your employment brand.

Career development and learning are almost

2X more important than comp, benefits, and work environment.

Companies with “soul” had a

1026% return from 1996 through 2006,

8x higher than S&P 400 firms

Companies with “soul” experience: • Much higher engagement

and retention •  Better customer service •  Long-term profitability

Source: Simply Irresistible: Engaging the 21st Century Workforce, Bersin by Deloitte, 2014

Importance of Mission and Purpose

The Simply Irresistible Organization® What we have learned: An Integrated Approach is Needed

Meaningful Work

Hands-On Management

Fantastic Environment

Growth Opportunity Trust in Leadership

Autonomy Clear transparent goals Flexible, humane work environment

Facilitated talent mobility Mission and purpose

Selection to Fit Coaching & feedback Recognition rich culture Career growth in many paths

Investment in people, trust

Small Teams Leadership Development Open flexible workspace Self and formal development

Transparency and communication

Time for Slack Modern Performance Management

Inclusive, diverse culture High impact learning culture

Inspiration

A Focus on Simplicity

Trend 5: Learning Career Models Now Key to Success

“Over 300 years of economic history, the principal and most enduring

mechanism for distribution of wealth and reduction in inequality is the

diffusion of skills and knowledge.”

Why learning is so important to employees

The learning curve is the earning curve

Training is key to Millennial engagement

Learning as Employment Brand

6%

6%

8%

14%

19%

22%

0% 5% 10% 15% 20% 25%

Greater vacation allowance

Retirement funding

Free private healthcare

Cash bonuses

Flexible working hours

Training and development

Millennials in the workforce For Millennials, “Training and development” is the most coveted job benefit

Source: KPCB

Percent indicating job benefit in first place

Back office, operational, contingent employees

Top Management

Senior management

First line management

SMES (Consultants)

Senior specialists

Functional specialists/front-line employees

Middle management

Career management

The traditional view

Back office, operational, contingent employees

Top Management

Senior management

First line management

SMES (Consultants)

Senior specialists

Functional specialists/front-line employees

Middle management

Career management

The reality

Contract hire

Job intern

Developmental assignment

Lateral promotion

Stretch assignment

External assignment Upward

promotion Lateral

assignment New

assignment

Part time loan

New candidate

New leader

Exec succession

Changing Goals to Focus on Career

Juniper Networks Goal Model

Trend 6: Feedback Always-On Listening

The Feedback System

How Does Feedback Work Today?

Engagement Survey

Senior Management Team

Employees

Line Managers | HR

Performance Review

Filtering and Cleaning

Time Per Year

How Engagement is Evolving

Enterprise “Listening” Architecture

Integrated Reporting & Analytics Sentiment Analysis Network Analysis

Social Media Monitoring

Job Boards & Ads Employment

Brand

Customer Satisfaction

Anonymous Feedback

Tools

Pulse Surveys

Annual Survey

Performance Check-ins

Exit Interviews

Performance Appraisals

The context of people analytics has changed

Recruiting & Workforce Planning

Comp and Benefits, Rewards

Performance Succession Engagement

Learning & Leadership

HRMS Employee Data

Engagement & Assessment

+

Sales Revenue Productivity

Customer Retention Product Mix

Accidents, Errors, and Fraud

Quality Downtime Losses

Groundbreaking new insights and tools for managers to make better decisions

Data management, Analytics, IT, and Business Consulting Expertise

+ =

Defining People Analytics

Location, Travel, Meeting Time

Organizational Network Analysis

Sentiment, Heart rate, Voice +

People Analytics: Taking Off

2015 2016 % Change

Performing multi-year workforce planning 38% 48% + 26%

Correlating people data to business performance 24% 39% + 63%

Correlating people data to business performance (% excellent) 5% 11% + 120%

Using people data to predict business performance 28% 36% + 29%

Using people data to predict performance (% excellent) 4% 9% + 125%

Progress Rapidly Accelerating

Deloitte Global Human Capital Trends, 2016 and 2015

Plan

Correlate

Predict

Using Data to Measure Performance and Goals

42

Finally Digital HR: Design Thinking and New Platforms Emerge

Benefits & Compensation

Hiring Recruiting E-Learning Performance Talent Network Based

Applications New Systems of

Engagement

15 Year Evolution of HR Systems M

AR

KE

T G

RO

WT

H -

AD

OP

TIO

N

2 0 0 0 2 0 1 5 P R O G R E S S I O N O V E R T I M E

Compensation

HRIS Benefits

Administration

Applicant Tracking

Recruiting Sourcing

Learning Management

Workforce Management

Succession Management

Performance Management

Integrated Talent Mgmt

Analytics Tools

Social Recognition

Network Recruiting

HRMS + Talent + Workforce Management

Self-Service Apps

Personality and Pre-Hire

Culture Assessment

Predictive Analytics

Real Time Engagement

Mobile Apps for HR

Process Automation

Integration & New Talent Apps

Analytics Driven “Systems of

Engagement”

Apps that “Make Work Life

Better”

Employee Feedback Pulse Surveys

Wellness Life Balance

Video Learning MOOCs, Career Devt

Culture and Self-Assessment

Work Productivity

Integrated Self-Service

2016 and Beyond: A New Set of Disruptive Applications M

AR

KE

T G

RO

WT

H -

AD

OP

TIO

N

2 0 1 6

Pulse Survey

NextGen Engagement

Mobile Feedback

Fitness Self-Tracking

Location and Travel Support

Culture Assessment

Self-Assessment

P R O G R E S S I O N O V E R T I M E

Video Learning

Video Sharing

Gamified Onboarding

Career Planning

Help Desk Case Mgt

Integrated Self-Service

2 0 2 0

Communications Messaging

Virtual Work Management

Document Management

Goal Sharing Goal Tracking

Design thinking comes to HR

CommonWealth Bank of Australia — Sidekick Project

GE New Performance Feedback Tool

Total Redesign for Mobile: PD@GE

The New Organization: Different by Design Goals

Meaningful Culturally Aligned

Transparent Agile

Developmental

Reinventing Goals for The Future The new organization: Different by design

www.deloitte.com/hctrends @Josh_Bersin