the value of aligning hr with the business strategy

The value ofaligning HRWITH THE BUSINESS

STRATEGY

What on earth does amarketer have to say about

ALIGNING HRwith an organisation’s

overall strategy?

marketers are concerned withPRODUCT, PRICE

PLACE, PROMOTIONwhy someone would buy us

now & in the future

“Marketing is too important to be left to the marketing department.”

DAVID PACKARD

CO-FOUNDER

HEWLET-PACKARD

So what’s all this got to do with

When it comes to influencing someone’s perception of a brand

PEOPLE > MARKETING

HR IS OFTEN DISCONNECTED FROM

THE REST OF THE ORGANISATION

AGREE THAT HR HAS

A COMMERCIAL MINDSET

52%

12%FOCUS ON

DRIVING

REVENUE

THIS YEAR

USING HR AND COMMERCIAL

EXPERTISE TO ADD VALUE

26%

What are theseguys doing?

2,000 > 1,600

innit!

BEDQUARTERS

SHOWROOM

on their websiteFANTASTIC CUSTOMER SERVICE

PASSIONEXPERTISEPROFESSIONAL STAFF

they talk about

CEO explaining the benefits

giving customers confidence

owning the experiencebecoming the most recommended bed company

3 MINS AFTER

ARRIVING

NATIONAL RETAILERTRY BEFORE YOU BUY

COMPETITIVE MARKET

on their websiteOUR PEOPLE MAKE US WHO WE ARE

WOWEXPERIENCE

they talk about

CEO “GIVING OUR CUSTOMERS

GREAT SERVICE SO THEY KEEP COMING BACK”

aligned with strategy

0 1 2 3 4 5 6 7 8 9 10DETRACTORS PROMOTERS

PASSIVES

THE NET PROMOTER SCORE

How likely is it that you’d recommend brand [ABC] to a friend or colleague?

% OF PROMOTERS

MINUS

% OF DETRACTORS

Net Promoter Score Calculation

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

0% 10% 20% 30% 40% 50% 60%

Change in S

ale

s

Net Promoter Score 1999

US Airline Growth and Net Promoter Score

1999 – 2002 (Satmetrix)

American

Delta

United

Continental

Alaska Airlines

Southwest

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

-20% -10% 0% 10% 20% 30% 40% 50% 60%

Sale

s Volu

me G

rowth

Net Promoter Score

Effect of Net Promoter Score on UK Car

Industry 2004 (LSE)

Peugeot

Fiat

Vauxhall

Renault

VW

BMW

Ford

Toyota

Honda

-5%

0%

5%

10%

15%

20%

-30% -25% -20% -15% -10% -5% 0%

Sale

s G

rowth

Net Promoter Score

Effect of Net Promoter Score on UK

Mobile Networks 2004 (LSE)

O2

T-Mobile

Vodafone

Virgin

Orange

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

-20% -10% 0% 10% 20% 30% 40% 50%

Change in S

ale

s Volu

me

Net Promoter Score in 2012

Large Supermarkets Sales Growth Since 2012

TescoMorrison’s

Waitrose

Asda

Sainsbury’s

5 key drivers of aKNOWLEDGEABLE

INTERESTEDEXPLAINING BENEFITS

SUGGESTING PRODUCTS

SAYING GOODBYEcustomer’s net promoter score

XX

X

5 key drivers of aKNOWLEDGEABLE

INTERESTEDEXPLAINING BENEFITS

SUGGESTING PRODUCTS

SAYING GOODBYEcustomer’s net promoter score

50%

Net Promoter Score

75%

£4.45It’s worth more than

per transaction

250 STORES X10 TRANSACTIONS PER DAY X 363 SHOPPING DAYS PER YR X

£4.45 INCREASE IN AV BASKET VALUE

= £4,038,375

Thingsto takeaway

USE HR & COMMERCIAL

EXPERTISE TO DRIVE VALUE

TO THE ORGANISATION

26%

be in this group

1

What is your organisation’s strategy?

BROCHURES

REPORTS

MAGAZINES

WEBSITE

ASK

a single metricthat matters

BUILD

MEASURE

LEARN

HYPOTHESIS

Make friendswith themarketing dept.

Thank You

RESOURCES

NET PROMOTER SCORE• www.satmetrics.com• www.npsbenchmarks.com• www.hbr.org/2003/12/the-one-number-you-need-to-grow

STATISTICAL SIGNIFICANCE• http://docs.statwing.com/examples-and-definitions/t-test/effect-size/• Calculator http://getdatadriven.com/ab-significance-test

OTHER• CIPD HR Outlook 2015 http://www.cipd.co.uk/hr-resources/survey-reports/hr-

outlook-winter-2014-15-views-profession.aspx• The Lean Startup• Slides and Video – Search Google – Octopus HR Software CIPD Presentation• Free trial of Octopus, quotes, white papers, product videos etc.

www.octopus-hr.co.uk