human capital valuation: thought leadership and vision for the future

HumanCapitalValuation:ThoughtLeadershipandVisionfortheFuture

Steph Sharma, The Human Value Institute @MaximizealotPaul Herman, HIP Investor @hipinvestor

Gwen Migita, Ceasars Entertainment Corp @gmigitaBurk Pemberton, Stok

Besuretoengageintheapp:sb16app.com

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Human Capital Valuation: Thought Leadership and Vision for the Future

November 14, 2016 Workshop

•  Definition •  Why not yet? •  How do we know? •  Panelist Perspectives •  ‘My hope for the

future…:’

•  Breakout Session: 1.  NextGen Analytics 2.  Valuing Human Capital 3.  Report Out

•  Closing – Action

Workshop Outline HUMAN CAPITAL VALUATION

The Human Value Institute © All rights reserved. 2016

Human Capital Valuation 101

What is an Asset? �  Something of value that is owned �  Has or will provide a current or future benefit �  An Asset need not be solely a financial item, like cash, but

could be non-financial and/or non-tangible in nature (e.g. cash pile).

�  Culture • Principles and Procedures �  Assembled Staff • Ideas �  Staff loyalty • Location �  History • Experience

�  What is a Hidden Asset? �  Hidden means that the Asset in question is not readily apparent

because the Asset has been cloaked, camouflaged, or previously dismissed.

Charles J. Pendola BBA, MPA, MPS, JD CPA, ESQ, FHFMA, FACHE, CMC, CFE, CFF, CGMA

With permission from Charles Pendola

Examples of Hidden Assets �  Cash – most reliable �  Accounts Receivable –

most workable �  Equipment �  Land – Manhattan Island �  Plant �  Inventories – most easily

found �  Third Party Sources �  Accounts Payable

�  Human Resources – most valuable �  Mix �  Non-employed workers-1099

crowd �  Worked vs. Non-worked Paid

Hours �  Fringe Benefits �  Payroll �  Commercial Activities �  Insurance �  Intangibles – most important

�  Name �  Reputation �  Students/Alumni �  CASH PILE

With permission from Charles Pendola

So Why Not Yet? Forces Before Forces Now

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© 2014. Lead The Difference. All rights reserved.

Influencers

�  Strategy: architect of happy & healthy workplace �  Millennials: purpose-oriented mindset �  Investors: impact in practice, potential advisor �  Sustainability: social is integral to sustainable


How Do We Know Research Study – Investigative, In-depth

Thought Leaders John O'dea Rick Badgley Jeff Wells Hema Ravichander Roddy James Howard Behar Christine Pearson Michele Zanini Chris Worley Alec Levenson Keith Marton Arnold Schaffer

Ma

na

ge

me

nt

Paul Herman Rick Frazier Zach Gottlieb Casey Dilloway Vipul Arura In

vest

me

nt

Charles Pendola Katie Schmitz Bay Jordan

Ac

co

un

ting

Bob Kolm Laura Ippen Taushia Copeland In

tern

s

Burke Pemberton & Jolene Goldsmith, st�k Gwen Migita, Caesars

Erin Meezan & Lindsay Stoda, Interface Hal Haladay, Infusionsoft

Dr. T. Gardey & Dr. F. Vega, Seattle Healing Arts

Companies & Leaders

Bob Willard Marjorie Kelly Cynthia Figge Daniel Dias (Route 2) Tim Barker (Route 2)

Soc

ial

Re

spo

nsib

ility


RESILIANT REINVENT GENERALIST MEANING INDIVIDUAL

Human Value Attributes Characteristics that distinguishes human value oriented companies .

CATEGORY ATTRIBUTE HumanValueResearchDefini<on

STRATEGY Aplanofac*onorpolicydesignedtoachieveamajororoverallaim.(NOAD,2ndEd.)

Visionary Long-standing,founder-based,clear,beyondproductsorservices,beyondwhatcanseeortouch,inspira9onal.

Progressive Advanceincrementally,shi=andadjust,quadrupleorintegratedbo@omline,long-termthinking,short-termac9ons,emergent.

Societal Integratedintocommunity,social,environment,beyondprofit,enablechange,crea9ngprac9ces-leadingthatway.

STRUCTURE Thearrangementofandrela*onsbetweenthepartsorelementsofsomethingcomplex.

Empowered Agile,nimble,trustoriented,resourceaccess,leadershipdevelopment;forsome,thisbeginsasenabling.

Adap<ve Movingawayfromtradi9onalorneverhad,whatworksbestforuniqueorg,never-endinggrowth/development,beyondagile.

Coherent Meaningful,measurement,connec9ons,collabora9on,communica9on.

CULTURE Thecustoms,arts,socialins*tu*ons,andachievementsofapar*cularna*on,people,orothersocialgroup.

Recep<ve Diverse/inclusiveinthinking,doing,prac9ces;apprecia9on,acceptance,feedback(learning);permiJng,non-judgmental,trust-oriented.

Learning Growth,individualdevelopment,progress,limitless,individualized,con9nuous,aware.

Pioneering Firstmovers,change-makers,createnewstandards,newexpecta9ons,futurethinking. The Human Value Institute © All rights reserved. 2016

Human Capital, Framed by Strategy, Structure, Culture

STRATEGY

STRUCTURE CULTURE


Characteristics

Questions

Recommendations

REACTIONS

ACTIONS

STRATEGY & human capital


Visionary Long-standing,founder-based,clear,beyondproductsorservices,beyondwhatcanseeortouch,inspira9onal.

Progressive Advanceincrementally,shi=andadjust,quadrupleorintegratedbo@omline,long-termthinking,short-termac9ons,emergent.

Societal Integratedintocommunity,social,environment,beyondprofit,enablechange,crea9ngprac9ces-leadingthatway.

A plan of action or policy designed to achieve a major or overall aim. (NOAD, 2nd Ed.)

STRUCTURE & human capital


Empowered Agile,nimble,trustoriented,resourceaccess,leadershipdevelopment;forsome,thisbeginsasenabling.

Adap<ve Movingawayfromtradi9onalorneverhad,whatworksbestforuniqueorg,never-endinggrowth/development,beyondagile.

Coherent Meaningful,measurement,connec9ons,collabora9on,communica9on.

The arrangement of and relations between the parts or elements of something complex.

CULTURE & human capital


Recep<ve Diverse/inclusiveinthinking,doing,prac9ces;apprecia9on,acceptance,feedback(learning);permiJng,non-judgmental,trust-oriented.

Learning Growth,individualdevelopment,progress,limitless,individualized,con9nuous,aware.

Pioneering Firstmovers,change-makers,createnewstandards,newexpecta9ons,futurethinking.

The customs, arts, social institutions, and achievements of a particular nation, people, or other social group.

Ø  Evaluate Organizational Value •  Across 5 areas: Financial

to Potential •  In-depth review HC

practices Ø  Assess 9 attributes - Human

Value •  Internal - all employees •  External – customers •  Correlate to org

performance Ø  Determine inputs of

performance •  Internal •  External •  Draft and test initial

measures

Human Capital Valuation @stok From theory to practice, pioneering a new approach to recognizing the human as an asset


Burke Pemberton stok

Burke’s core competency is his ability to facilitate the attraction and development of human, technological, and financial capital and ensure that they are performing at optimal efficiency. As an MBA, Burke possesses a deep passion for team building, growing sustainable enterprise, and a unique ability to maintain the ever-critical balance between achieving profitability targets and maintaining a healthy and inspired workforce. He has played a key role in developing stok’s strategic vision, growth plans and financing activities, and co-creating stok’s self-managed organizational design. Burke’s recent accomplishments include spearheading the development of stok’s proprietary Life Cycle Cost Analysis tool and the launch of the world’s first push-button Fossil-Free 401(k) platform through a partnership with HIP Investor.

BURKE PEMBERTON

945 Front Street ZNE headquarter office of DPR Construction & stok

Partner, stok

In everything we do, we take a broad-thinking, partner-focused approach in order to solve complex challenges and build lasting relationships. SERVICES: • Strategy • Tenant Representation • Project Management • Performance Design • Certifications & Branding • Quality Assurance

stok pushes the boundaries of what’s possible when it comes to finding, designing, building, and supporting our partners’ spaces.

ABOUT STOK

945 Front Street ZNE headquarter office of DPR Construction & stok

TEAM ACCOUNTABILITY ROLES

• Strategic Coach (30%)

•  Tactical Facilitator (30%) • Sales Liaison (40%)

• GSD (90%)

• Coordinator (90%)

HUMAN CAPITAL CONTRIBUTION SCORECARD

HCC Qualities: o  Emotional Intelligence

o  Effective Communication

o  Work Style

o  Guidance

o  Entrepreneurship

o  Relationship

MEASURING HUMAN CAPITAL

50

Engagement Turnover Ratio

Happiness Index Workforce Diversity

Professional Development Inclusive Governance

Productivity Hours worked

Indoor Air Quality Daylighting

Job Flexibility

Fair Wages Minimum Wage

Living Wage Gender Pay Equity Pay Scale Equity

OLD METRICS (Outputs-Based)

NEW METRICS (Inputs-Based)

My hope for the future is… [for Human Capital Valuation]

“that the historical failure to reflect the value of human capital as an asset on a firm's balance sheet be corrected. In accounting terms when Firm A acquires Firm B "accounting goodwill" is "created". That goodwill relating to Firm B's assembled staff existed long before the acquisition by Firm A and should have always been reflected in their accounting statements.”

My hope for the future…. Charles Pendola


“is that we can agree on consistent ways to assess if, and how, we are positively impacting human capital so that we can ensure our efforts are making a real difference.”

My hope for the future…. Bob Willard


At each table: � Determine the

NextGen Analytics

� Valuing Human Capital - putting our greatest asset on the balance sheet

� Report Out

BREAKOUT SESSIONS Designing for the Future


What are the NextGen analytics that will best inform executive decision making?

�  What do we NEED to know as leaders to make decisions that 'center' human-based value?

�  What information is missing? What information gets in the way? (i.e. human capital = highest cost of business)

�  How will we use these? How will we ensure these INFORM our leadership vs. manage to them?

How could we represent human capital as a real asset in our companies?

�  Dollar amount on it; summary sheet of the formulas for valuing human capital.

�  How would we dispel the concerns that we are 'monetizing people'?

�  What would doing so change in how we do business?


Human Capital Valuation: Thought Leadership and Vision for the Future

Closing Comments

human capital valuation: thought leadership and vision for the future

Business