hr’s paradox: adding value … without adding costs
DESCRIPTION
HR’s Paradox: Adding Value … Without Adding Costs. American Public Power Association Business & Financial Conference September 20, 2004. Why do companies, or their strategies, fail?. Lack of shared understanding and expectations. Our Findings. - PowerPoint PPT PresentationTRANSCRIPT
HR’s Paradox:
Adding Value …
Without Adding Costs
American Public Power Association Business & Financial Conference
September 20, 2004
Why do companies,or their strategies, fail?
Our Findings
Lack of shared understanding and expectations
Lack of clear ownership and accountability
Unrealistic or overly ambitious expectations
Out of touch with the market and/or the business
Inadequate attention to process and execution
F.O.C.U.S.
F – FAD FIGHTING
O - OWNERSHIP
C - CORE CAPABILITIES
U - UNDERSTANDING BUSINESS
S - STREAMLINE PROCESSES
FIGHT FADS
&
PRIORITIZE
F
Fight Fads & Prioritize
• Fight the temptations of fad surfing
• Too many or none at all
• Focus on multiple stakeholders
• Add clarity and rigor
• Measure the right things
Fad Surfing
New package – old goods
Quick-fix eventsInitiative du’jour
Fight Fads & Prioritize
• Fight the temptations of fad surfing
• Too many or none at all
• Focus on multiple stakeholders
• Add clarity and rigor
• Measure the right things
Finding The Priority Zone
Bu
sin
es
s H
ea
lth
Business Priorities
Does Your Company Have …
Yes No Sort of
A Mission/Vision statement?
Strategic Initiatives?
Core Values?
Balanced Scorecard?
Core Capabilities?
Critical Success Factors?
Compensable Factors?
Noble Values
• Agility
• Empowerment
• Fun
• Integrity
• Learning
• Teamwork
Value-less
F - FUN
A - AGILITY
T – TEAMWORK
L - LEARNING
I - INTEGRITY
E - EMPOWERMENT
Could These Be Yours?
Core Values Keys to Success Growth Strategies
Integrity Deliver Value Build on the competitive strengths of our technology
Teamwork Be Cost Efficient Centralize all planning, technology and capital allocation
Performance Resource Effectively Focus on best-of-breed product and service lines
Learning Engage Customers Leverage synergies and resources across business units
Respect Build a High Performance Culture
Institutionalize our core values in all regions and businesses
Fight Fads & Prioritize
• Fight the temptations of fad surfing
• Too many or none at all
• Focus on multiple stakeholders
• Add clarity and rigor
• Measure the right things
Possible
Solutions
Value to
HR (a)
Value to the
Business (b)
Value to
Employees (c)
Priorities
Low
Value
High
Value
Low
Value
High
Value
Low
Value
High
Value
Total
Score
(a) X (b) X (c)
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
A. Innovation•Ideas for saving costs•Ideas for improving processes
CREATING VALUE FOR MULTIPLE STAKEHOLDERS
Fight Fads & Prioritize
• Fight the temptations of fad surfing
• Too many or none at all
• Focus on multiple stakeholders
• Add clarity and rigor
• Measure the right things
Add Clarity and Rigor
• Know the essence of your business strategy
• Identify the top 3 business imperatives
• Continually ask the key questions –
• Is this really a priority and is it achievable?
• How will we do it?
• How will we know we’ve succeeded?
• How does it map to the strategy?
Fight Fads & Prioritize
• Fight the temptations of fad surfing
• Too many or none at all
• Focus on multiple stakeholders
• Add clarity and rigor
• Measure the right things
Metrics
Measure not what we can, but measure what matters!
HR Metrics
TRADITIONAL VALUE – ADD
Economic Process Performance Value Drivers
Payroll as a % of revenue
Acceptance rates PBT per employee Quality of hires
Benefit costs as % of payroll costs
Time to fill Hiring source diversity
Revenue per sales-maker
Cost per hire Promotion & transfer activity
Number of employee referrals
More ready-replacements
Legal costs Formal complaints Exit reasons Call Center metrics
HR to total hdct Turnover Employee survey Customer Loyalty
Per capita training Absenteeism Completed PR’s Process cycle time
Compa ratios Productivity Completed IDP’s New products launched
ALIGN
OWNERSHIP
FOR HR
O
HR Owners
• The HR Team – redefine “HR’s Job”
• Line Managers – complete people management
• Employees – increasing self-service
• Service Providers – increasing outsourcing
HR Activity Continue Eliminate Share Transfer Outsource Others…
Exit Interviews
Making Job Offers
Scheduling Training
Etc. …
The HR Team
HR Owners
• The HR Team – redefine “HR’s Job”
• Line Managers – complete people management
• Employees – increasing self-service
• Service Providers – increasing outsourcing
Line Ownership
“If a manager can’t be trained to handle every
kind of employee situation,
then we have the wrong person in the job.”
James Despain, Division VP and GM –
Caterpillar Tractor Division
CORE
CAPABILITIESC
Why Bother?
Creates intangiblesfor shareholder value
Helps align company &employee growth goals
Can enable or impair execution
Key linkage for HR &Business strategies
VISION –
TO BE OUR INDUSTRY’S
CORE
CAPABILITIES
INDIVIDUAL
COMPETENCIES
TYPES OF
MEASURES
Investment of Choice
Managing Relationships Effectively
Relationship Building
Political Savvy
Influence Skills
Business
Supplier of Choice Providing Seamless Global Service
Initiative
Pattern Recognition
Customer Focus
Customers
Employer of Choice
Integrating Products and Services
Consultative Selling
Strategic Thinking
Collaboration
People
CAPABILITIES THAT DRIVE RESULTS
UNDERSTANDING
THE BUSINESSU
Understanding the Business
• Relevant business/industry trends
• Key differentiators/market levers
• Knowing your firm’s value propositions
• Understanding financial statements
Business Trends Is This Trend Considered a … Explanation
Strength Weak-
ness
Oppor-
tunity
Threat
Industry Consolidation
Supply Chain Convergence
Commoditization of our Products and/or Services
BUSINESS TRENDS ANALYSIS
Understanding the Business
• Relevant business/industry trends
• Key differentiators/market levers
• Knowing your firm’s value propositions
• Understanding financial statements
Connected to the Business
What keeps the CEO up at night?
How would they handle a 10% budget cut?
What would they say about HR?
STREAMLINE
PROCESSESS
Three Main Areas
Perceptions about HR (ETDBW)
HR Effectiveness and Efficiency
B.U. Effectiveness and Efficiency
Work Processes
• load• flow
Work Protocol• procedures• structures
GETTING THE WORK OUT – Adapted from The GE Workout
LIST ALL ACTIVITIES IN
EACH CATEGORY
(Employee, Team, Dept, Company)
ELIMINATE TWO
ACTIVITIES FROM
EACH CATEGORY
ELIMINATE 20%
OF THE ACTIVITIES
IN EACH CATEGORY
REPORTS
REVIEWS
APPROVALS
R.R.A.M.M.P.O.
F.O.C.U.S.
FOCUS – on the top 2-3 things that impact the business and HR
OWNERSHIP – realign responsibility and management for HR processes
CORE CAPABILITIES – define HR’s role around strategy execution
UNDERSTAND THE BUSINESS – drive and measure business results
STREAMLINE PROCESSES – help improve overall efficiency and effectiveness
Bill Thomas, SPHRManaging Principal
www.centricperformance.com