People Power: Human Capital
in the Modern Association
Tom Morley, President, Snowflake LLC
www.highroadsolution.com www.snowflakellc.com
Founder and President
Snowflake LLC
www.snowflakellc.com
Tel.: +1.540.797.4932
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@snowflakellc
www.linkedin.com/company/snowflake-llc
Tom Morley
www.highroadsolution.com www.snowflakellc.com
Our Time Today
This afternoon, you’ll find out that…
• Human capital keeps us awake
• You won’t find answers on LinkedIn
• Human capital doesn’t walk alone
• There are many options to point it in the right direction
• If you understand it, human capital can change your life*
*Or, at least, your organization’s ability to deliver on your mission, affordably and sustainably
Human Capital in Context and
its Effects on the Business
www.highroadsolution.com www.snowflakellc.com
What’s Your Situation?
It’s easy to see “Bad Human Capital” at work
• Staff is disgruntled and unmotivated
• Skills are outdated or mismatched
• The best don’t stay long, and the worst stay forever
• Managers can’t manage their way out of a paper bag
• The workforce isn’t getting any younger
• You can’t hire the people we need
• There are few incentives to be great
• Culture is best defined as “None of the Above”
Some problems are a nuisance. Others affect results.
www.highroadsolution.com www.snowflakellc.com
Problem Solved!
It’s all there in neat little “Five Ways to…” packages…
• “Invest in employees”
• “Reward your people”
• “Give creative space”
• “Break down barriers”
• “Staff need to be engaged”
• “Create the burning platform”
• “Establish a culture of trust”
• “Walk the talk, don’t talk the walk”
…so maybe our work here is done!
www.highroadsolution.com www.snowflakellc.com
Not so Fast…
…human capital is part of a life cycle with “∞ Ways to…”
Use a sound business
model and structure
Know where
you are going
Set aligned business
and market strategies
Know what
you need
Know who
you need
Retain top performers with
key skills and experience
Find, attract, and secure
the right resources
Equip and
prepare
Motivate and
manage
Keep organizational
knowledge current
Deliver results
at affordable,
sustainable
aggregate cost
www.highroadsolution.com www.snowflakellc.com
This Isn’t a Simple Challenge…
…and your best solutions may not be where you’d look
Use a sound business
model and structure
Know where
you are going
Set aligned business
and market strategies
Strategic Business Planning
Performance Measurement
Strategic Business Planning
Market Strategies
Branding and Marketing
User Experience Architecture
Customer Relationship Management
Organization and Governance Strategies
Business Process Design
IT and Automation Strategies
Facilities and Space Utilization
www.highroadsolution.com www.snowflakellc.com
Know what
you need
Know who
you need
Find, attract, and secure
the right resources
Equip and
prepare
Motivate and
manage
It’s Actually Quite Complex…
…with multi-disciplinary requirements and options
Job Design
Workforce Planning
Competency Management
User Experience Architecture
Compensation and Benefits
Labor Market Analysis
Strategic Sourcing and Acquisition
Facilities and Space Utilization
Marketing and Branding
Recruiting and Hiring
On-boarding
Professional Development
Leadership Development
Performance Management
www.highroadsolution.com www.snowflakellc.com
Keep organizational
knowledge current
Retain top performers with
key skills and experience
You Can’t Just Address the Symptoms…
…and understanding “root causes” requires a broad view
Workforce Planning
Competency Management
Professional Development
Knowledge Management
Workforce Planning
Labor Market Analysis
Compensation and Benefits
IT Strategies
Facilities and Space Utilization
Culture Engineering
And these are only examples!
Of course, every change requires organizational change management!
www.highroadsolution.com www.snowflakellc.com
Everything is Integrated…
…defining the workforce isn’t even a simple equation
Accessible
talent pool
Organization
culture and
resources
Labor
market value
proposition
Required
skills and
experience
Organization
of functions
into roles
Business
model and
structure
Business
strategies
Technologies
and facilities
Desirable
individual
attributes
Objectives
and core
functions
www.highroadsolution.com www.snowflakellc.com
Integration Raises Lots of Questions…
…and a wide range of options to consider, e.g.:
Design jobs to match what you can attract now
OR
Invest in changes that will allow you to attract a different pool?
Resource for the optimal business strategies
OR
Alter your business strategies based on the resources you have?
Rely on aging approaches and technologies familiar to your staff
OR
Upgrade and find affordable ways to adapt?
www.highroadsolution.com www.snowflakellc.com
A Real-life Example
“Two faces” of a cost control imperative
Less experience
Lower skills
“Processors”
Forces business
model changes
Transactional
Less independent
More direct oversight
Managers = supervise
Less technical focus
Limited external
Impacts
outcomes
More mistakes = risk
Greater cycle times
Few realized economies
$500k lower base
labor cost (five years)
However…
Greater mission risk
> $250k overtime
Higher turnover
Lower performance
$1.5m operating savings
Primary Strategy
Reduce salary
ranges across
the board
Alters
accessible
labor market
Requires
changes in
other roles
Perspective:
Cost Reduction
Net Effects
• $350k/yr savings
• Degraded performance
www.highroadsolution.com www.snowflakellc.com
Higher salary ranges
Expanded recruiting
Focus on retention
Allows changes
in other roles
A Real-life Example (cont’d)
“Two faces” of a cost control imperative
More collaboration
Analytical skills
Sound judgment
Enables
business model
changes
Professionalized
Distributed authority
Self-directed
Impacts
outcomes
Few errors = less risk
Less downstream work
Lower operating costs
$150k higher base
labor cost (five years)
However…
Reduced mission risk
< $100k overtime
$750k loss recoup
Better performance
$25m operating savings
Primary Strategy
“Clean sheet’
for business
requirements
Processes, skills
ensure delivery
and reduce risk
Requires an
upgraded
workforce
Managers = experts
More technical focus
Extensive external
Perspective:
Cost-effectiveness
Net Effects
• $5.2m/yr. savings
• Improved performance
www.highroadsolution.com www.snowflakellc.com
What This All Means
Human capital can do a lot for you, if you realize…
• It touches every aspect of the organization, and everything touches it
If you make operational changes, they will probably have human capital implications.
Similarly, if you undertake a human capital initiative, it will impact other parts of the
business. Embrace this…use it to your advantage!
• There are almost always multiple alternatives
This is why those “lists of five things…” are usually so simplistic—they have to be kept
at a level that applies to everyone. Practically, they’re basically useless. But, you can
do a lot if you know yourself and what’s out there.
• It supports creative solutions
With many factors and many options comes the opportunity to be creative. You just
have to think through the impacts, and accurately evaluate feasibility, costs, benefits,
and risks. Understanding integration will avoid unintended consequences.
www.highroadsolution.com www.snowflakellc.com
What This All Means (cont’d)
Human capital can do a lot for you, if you realize…
• It’s a means to an end
Don’t forget the “capital” in human capital. You’re dealing with people, but you have
them because you need them to accomplish business goals. Human capital actions
should conform to your organizational values, and be cost-effective.
• It’s an investment that needs to deliver returns
Along those lines, remember that people aren’t a costly inconvenience, but a key driver
of business results. You should make smart investments based on the attributes that
will help deliver and sustain organizational performance.
• You should optimize its contributions
Never lose sight of the “total business”—the aggregate costs and benefits of change
initiatives. This means that the right human capital solutions for you might cost more
than you spend now, if they contribute to a more cost-effective organization.
Making Human Capital Work
for You, in Practical Terms
www.highroadsolution.com www.snowflakellc.com
Finding the Keys to the Lock
People aren’t the problem, they’re causes and solutions
Starting Points
• Nature of the challenge – Value, Reach, Service, Cost, etc.
• Urgency of the situation – Caution, Warning, Existential
• Causal chain – What’s causing the problems?
www.highroadsolution.com www.snowflakellc.com
Finding the Keys to the Lock (cont’d)
Context and conditions influence human capital choices
Solution Factors
• Your resources – Human, Financial, Physical, Intangible
• Organizational values – “Staff as family” vs. “Strictly business”
• External conditions – Economy, Labor Market, etc.
www.highroadsolution.com www.snowflakellc.com
Assessing the Situation
Correctly identifying the problem and causes is critical
Problem Statement
We’re not
getting new
members
Haven’t
realized market
changes
Subject matter
knowledge isn’t
current
Outdated
delivery
technologies
Not meeting
people “where
they are”We’re not
reaching the
market
Products don’t
match how
data is used
Membership is
considered too
expensive
Messages
received are
being ignored
Not adapting
to younger
consumers
Dues are
driven by our
operating costs
Outdated
marketing and
media skills
www.highroadsolution.com www.snowflakellc.com
Assessing the Situation (cont’d)
Need to understand and prioritize root causes
We’re not
getting new
members
Haven’t
realized market
changes
Subject matter
knowledge isn’t
current
Outdated
delivery
technologies
Outdated
marketing and
media skills
Need skills that
are scarce and
expensive
Long-tenured
staff no longer
connected
No dedicated
people research
the market
Aren’t aware of
technology
environment
Few incentives
to learn or
innovate
Management
not open to
new ideas
Related areas
do not
collaborate
www.highroadsolution.com www.snowflakellc.com
You have to thoroughly comprehend the need
Understanding the Details
Need skills that
are scarce and
expensive
What does
the market
look like?
What are the
skills we need?
Where can a
person get
them?
What traits are
common to the
holders?
What traits will
succeed in our
organization?
Does an
affordable
pool exist?
Do we consider
organizational
changes?
What is needed
to motivate
and retain?
What can we afford, financially and time-wise?
Training? Education?
Experience?
If not, how
badly do we
need the skills?
www.highroadsolution.com www.snowflakellc.com
Evaluating Potential Solutions
There may be many options to consider
Need skills that
are scarce and
expensive
Pay them and
recoup the
costs elsewhere
Hire the
essentials, train
on the rest
Outsource the
function
Hire for the
skills part-time
Partner with an
organization
that has them
Find other
incentives to
attract them
Change your
strategy so
there’s no need
www.highroadsolution.com www.snowflakellc.com
Evaluating Potential Solutions (cont’d)
Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Pay them and
recoup the
costs elsewhere
Will the new skills generate more revenue?
Is a person with the skills likely to fit the organization?
Will competition keep increasing the resource cost?
Can existing staff be refocused to cost savings activities?
Are we willing to separate people with outdated skills?
www.highroadsolution.com www.snowflakellc.com
Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Hire the
essentials, train
on the rest
What does a candidate need walking in the door?
Is it feasible to “train up” on the rest in 90, 180, etc. days?
Will we be creating an asset that will walk out the door?
How long do we need to retain to make it worthwhile?
Can the person train others to develop those skills?
Evaluating Potential Solutions (cont’d)
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Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Outsource the
function
How does the cost of outsourcing compare with hiring?
Are there key functions an outsourced resource can’t do?
Are we likely to get the “complete package” or have gaps?
Is the contractor likely to “leave behind” knowledge?
Do we have the capability to manage the contract?
Evaluating Potential Solutions (cont’d)
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Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Hire for the
skills part-time
Are we going to find the skills in a part-time resource?
Can a part-time person pick up the “nuances”?
Are there a lot of “off-hours” or “urgent” demands?
Can our business model work with a part-time schedule?
Will someone likely to work part-time fit our culture?
Evaluating Potential Solutions (cont’d)
www.highroadsolution.com www.snowflakellc.com
Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Partner with an
organization
that has them
Is this a common problem in our business community?
Can the work be effectively performed remotely?
Can we work with a rigid schedule and competing priorities?
Is there important intellectual property at risk of exposure?
How would we manage oversight, payment, etc.?
Evaluating Potential Solutions (cont’d)
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Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Find other
incentives to
attract them
Do we have a compelling cause vs. “the money”?
Are we better as a “stepping stone” or “destination”?
Can we invest in branding to create the right image?
Do the “right” incentives also advance our objectives?
Can we deliver on the “intangible promise” once they join?
Evaluating Potential Solutions (cont’d)
www.highroadsolution.com www.snowflakellc.com
Every answer impacts other issues and strategies, too
Need skills that
are scarce and
expensive
Are we pursuing what’s “practical”, or what’s “popular”?
Is there another approach that will deliver our objectives?
If those skills were “off the table”, what would we do?
We might generate less revenue, but what’s the net?
If we get a person and then lose them, what’s the plan?
Change your
strategy so
there’s no need
Evaluating Potential Solutions (cont’d)
www.highroadsolution.com www.snowflakellc.com
Making Human Capital Decisions
Remember, “aggregate cost-effectiveness” is key
• Clearly articulate the problem
• Understand and prioritize both the surface and root causes
• Recognize the integrated implications
• Use the entire tool kit to identify alternatives
• Model all of the impacts of the options
• Assess the viability of potential solutions
• Consider tangible and intangible costs, benefits, and risks
• Choose the total solution that is most cost-effective for your business
www.highroadsolution.com www.snowflakellc.com
Summary
Hopefully, you’ll take away the following, at the least…
• Human capital is at the heart of many business performance challenges
• Don’t get snowed by “if you just get better, you’ll do better”
• Human capital is everywhere, all at once, in all things
• There are tons of ways in which human capital can improve your results…
• … as long as you see it in its proper context
• The obvious answer isn’t always the best… optimize for the system!
Be creative. Many solutions have yet to be found!