hr's role in business growth (2013)

HR’s Role in Business Growth

Accelerator or Speed Bump ?!?!

Raising HR’s Strategic Contribution

1. Understand what strategy is and isn’t;

and why so many fail.

2. Sharpen the ELT’s strategic focus and related capabilities.

3. Redefine HR’s value proposition and role in the enterprise.

4. Create and illustrate the connection between HR and business processes.

5. Design and follow an HR Plan that drives growth plans and execution.

Five Critical Success Factors


Strategy –

a framework of choices that determine the nature and direction of an organization.

Source: The Art and Discipline of Strategic Leadership

by Mike Freedman & Benjamin Tregoe

First…What It Is


Lack of clear ownership and accountability

Lack of rigor and challenge in

planning phase

Out of touch with the market

and/or the business

Inconsistent focus and

prioritization

Inadequate attention to process and implementation

Culture, leadership, people or skills can’t support it

Design (Customers)

Implementation (Capability)

Why Strategies Fail


SWOT Analysis

Gap Analysis

Needed Organization and Capabilities

Strategic or Operating Plan

Monitoring and Continuous

Improvement

HR Plan for Closing the Gaps

HR’s Strategic Context


Know the Vision

Know the Business

Know the Options

Decide and Do

What do we want to be known for or achieve?

How will it affect financial performance?

New markets, capabilities, or relationships?

How will we prioritize and implement?

Basic Strategy Framework


See Strategy Alignment Tool for more information and examples

Defining HR’s Strategic Contribution









Sharpen the Strategic Focus & Capability

• Help shape their vision & aspirations

• Add clarity by asking the tough questions

• Help align & equip the broader organization

Influence & Support the ELT


Company’s Capabilities

Customers’ Needs

Competitors’ Offerings

Strategic Hot Spot *

Sharpen and Challenge Their Aspirations

Know the Vision…Know the Business…Know the Options…Decide and Do


* Harvard Business Review – April 2008

Add Clarity By Asking Tough Questions

Questions about our talent

demands and supply of talent

Questions about our mission, vision or strategic direction

Questions about our organization structure and effectiveness


FACT #1:

Non-financial (intangible)

considerations constitute 35%

of investor decisions.

FACT #3:

60 – 80% of a typical company’s

Opex is tied up in workforce

costs. FACT #2:

For every $6 of market value, only $1 occurs on the balance sheet. The other $5 are based

on intangibles.

Understanding “Intangible” Value


TRADITIONAL VALUE – ADD

Expenses Process Performance Value Drivers

Payroll as a % of revenue

Acceptance rates or time to fill

Profit Before Tax per employee

Quality of hires

Benefit costs as % of payroll costs

Absenteeism or Safety Results

Call Center Performance

Revenue per sales-maker

Cost per hire Promotion and transfer activity

C-SAT or customer loyalty ratings

Employee Engagement

HR – related legal costs

Formal complaints Succession Plan Ready Replacements

Customer Engagement

HR headcount to total headcount

Turnover rates or exit interview data

Completed Performance Reviews

Process cycle time

Per – capita training costs

Reasons given in exit interviews

Completed Individual Development Plans

New products or services launched

Shifting HR’s Focus


The ultimate purpose of strategy is to create, optimize and sustain stakeholder value.

Top and Bottom Line Impact

HR’s Strategic Role Is To:

• Ensure the organization has the people it needs to execute its strategy • Continually evaluate, build and strengthen its capability to execute • Help protect and ensure the value- creating potential of its talent


Your Employees

Your Customers

Your Business

•Talent Value Proposition

• Employee Segmentation

• Employee Engagement

• Employment Brand

• Internal Performance

• Customer Value Proposition

• Customer Segmentation

• Customer Engagement

• Product/Service Brand Promise

• Marketplace Performance

Enterprise value is created at the customer – employee interface

Aligning HR and Business Processes



Organizational Plan

Human Resource Plan

Deployment

Development

Retention Alignment

Acquisition

BUSINESSSTRATEGY

METRICS

METRICS

MET

RIC

S METR

ICS

Integrated HR Strategy

Competencies: the common link


Technology & Risk Mgmt

Applied Throughout

Q & A

Wrap Up



Appendix

1. Are key leaders aligned to and accountable for our vision or purpose?

2. Which initiatives drive most of our strategy’s

value? (80-20 Rule)

5. Do we have action plans that drive everyone’s effort

and outcomes?

Questions About Our Direction



3. Do our top initiatives have clear goals and

milestones?

4. Are those goals translated to the individual level?

1. Do we have non-core or non-value add processes or functions?

2. Can we gain economies or efficiencies by

centralizing?

3. Can we get closer to our markets by expanding

or decentralizing?

5. Are we victims of our own silos?

6. Do we have too many

layers and filters?

Questions About Our Organization

4. Where are our process disconnects

and bottlenecks?



Demand • Business strategy’s capability and talent implications • S/T planned & L/T anticipated • What talent do we need? • What are we missing? • What trends (business & people) concern us? • Which roles are critical? • Which critical roles are at risk or sub-optimized? • Which needs can we build or fill internally? • Which ones must we acquire?

Supply • What talent do we have? • What does our skill/competency inventory look like? • Which people are critical? • Who is a successor for what role? • Who is placed in a talent pool? • Who is at risk? • How do we segment, evaluate, calibrate and deploy? • What does our external talent pool look like? • Which skills/roles are no longer needed?

Questions About Our Talent



The 80 – 20 Rule Can Be Applied to Your Talent Base

Talent Segments



The 80 – 20 Rule Applies to Your Customer Base Too!

Customer Segments


Brand Advocates

Loyal Customers

Price Buyers Convenience Buyers Value Buyers

High Cost Customers


BRAND PROMISE

COMMERCIAL

EMPLOYER

Creating solutions for business and

home

Providing products that

lead in innovation and design

Legendary customer

service…and a lot of fun

Relationships drive success

Providing an innovative workplace

Legendary opportunity…a

fun place to work

Creating a world of

possibilities and

opportunities for a

meaningful life

We turn relationship

specialists into industry experts

Aligning Your External and Internal Brands


Seizing All Opportunities to Differentiate


SUPPLY

Multiple Sources of Prospects

Applicants

Phone Screens

F2F Interviews

In-depth Interviews

Offers

Acceptances

HR Process

DEMAND

776

97

63

47

40

194

Cold Calls

Appointments

Actual Visits

Proposals / Bids

Negotiations

T & C’s

Sales Process

Customer and Talent Acquisition

Both Assets Require Similar Processes and Levers



Aligned Comp and Pricing Approach

Parties Pay More for Receiving More Value

PAY PRICE

PREMIUM

BASE (Fixed)

(Variable)

PAY

Compensation paid for

employee meeting

expectations

Compensation paid for

employee adding value

Customer views and pays for standard

value

Customer views and pays more for extra

value

PRICE



About the presenter: Bill Thomas has over 30 years of experience in HR/OD, Customer Experience Management, TQM and Operations management. Prior to joining Centric, he held national and global management roles with PricewaterhouseCoopers and Dell Computers, respectively. He was the co-architect of PWC’s Service Excellence initiative, and helped design and launch Dell’s Customer Experience effort. He co-authored the recent book “Anticipate: Knowing What Customers Need Before They Do,” and his work has been featured in CEO magazine, Human Resource Executive magazine, Quality Progress, HR Advisory and others. He can be reached at 866.302.9099 or via email at [email protected].

About the company: Centric Performance works with organizations of various types and sizes to help them accelerate growth and improve results – at the enterprise, business unit, function, team or individual level. We do this by identifying, evaluating and improving their efforts and performance in four areas proven to create stakeholder value:

• Strategy, Leadership and Organization Effectiveness • Optimizing the Customer Experience

• Human Resource Practices and Processes • Business Transition Planning and Implementation

Further information is available at www.centricperformance.com.


Accelerating Growth…Improving Results

hr's role in business growth (2013)

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