SumTotal & the Definitive Guide to Strategic Human Capital Management

 

   So Tom Peter’s manifesto is a bit ‘Jurassic Park’ apparently.  Well, I wouldn’t go that far but I did say myself it was far from new.

I’ve been thinking whether there is anything else I can offer you, other than the assembled thinking in this blog, my book etc, which will provide more valuable insight, and so have been taking a look at SumTotal’s ‘Definitive Guide’ to Strategic HCM which came out earlier this year (I think).

And I’ve been so annoyed by what I’ve been reading that I’ve been driven back to my blog.

The first paragraph starts off OK:

“In the realm of human capital management, there’s a new wave of thinking about what it means to be strategic and drive workforce effectiveness.  Riding the leading edge of this wave are the savvy human resources executives, driving their organizations with a forward-thinking, strategic and integrated approach to human capital management. This new wave is commonly known as Strategic Human Capital Management (HCM).”

 

But it doesn’t take long before the white paper looses the plot:

“At its core, Strategic HCM enables a whole set of so-called “cross-process” workflows, such as integrating recruiting and onboarding or pay-for-performance.  They are cross process because they span the classic silos of HR to provide a more efficient, effective approach to human capital management.”

 

I’m absolutely not arguing that HCM doesn’t require or enable integration (I can easily evidence the fact that I’m a big fan of this approach and of the use of technology to support it).  And there’s nothing wrong with SumTotal’s suggestions for typical cross-process flows (pictured).  But to try to define HCM in this way misses out on most of what is important in the approach.

At it’s core, Strategic HCM has nothing to do with process workflows at all.  Strategic HCM is about what it says on the tin – strategic management concerning human capital.  Tom Peters was absolutely right – human capital (but not training) really does need to be the top priority.

The other thing people get wrong of course is thinking that this means it’s management of people as human capital (yuck) whereas it’s really about managing people for human capital – creating this capability as a basis for organisational success and transformation.

Strategic HCM is about outcome, not about process / activity.

Yes, once you’re clear about what outcome you need to create it’s easier to identify the processes which will support this, and it’s also easier to define an integrated set of processes this way.

But processes (and by extension, technology) definitely aren’t the core.

So if you’re looking for the definitive guide to strategic human capital management, drop this and the other white papers, and continue reading here.  I know I’ve been a bit quite over the Summer but there’s loads more great insights coming your way soon.  Keep reading!

 

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Technorati Tags: SumTotal,definitive guide,strategic,human capital,management,HCM,outcome,process,integration

HR Technology and Social Innovations

 

   I’ve had this article on Social Innovations published in Human Resource Executive as a lead into my presentation at the US’ HR Technology conference this October.

I argue that those responsible for managing and leading people in organisations, and therefore their relationships, need to focus not just on social activities, which tend to be performed within silos, eg HR, OD, Communication, Enterprise 2.0, Facilities Management etc, but on the outcomes of these activities, ie social capital. Doing this helps ensure that these activities can be identified appropriately and more effectively integrated and combined.

I present innovation as an example of one of these social outcomes, and discuss how it can be developed in an integrated way. You can read more about this in the article which is available online here.

 

My presentation at the HR Technology conference, ‘HR 2.0—What It Means to You’ will focus on how HR can create social outcomes in innovation and other areas. You can find out more about this conference, including a discount code, here.

 

Cross-posted at Social Advantage.

Technorati Tags: Human Resource Executive,HRE,HR,technology,conference,Las Vegas,social,capital,outcomes,innovation

 

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The Even More Essential Advantage!

 

   I’ve been reading Paul Leinwand and Cesare Mainardi’s new book, the Essential Advantage (and Mainardi and Art Kleiner’s Strategy+Business article, The Right to Win both of which build upon their earlier article in Harvard Business Review, The Coherence Premium).  Given that all three texts are focused on ‘winning with a capabilities-driven strategy’ which is largely what I write about here, I had high hopes for these – which haven’t quite been delivered…

I do like the articles and particularly the book – it’s definitely one of the best recent books on business strategy, providing a very comprehensive treatment of existing strategy models - for example, in the detail and case studies supporting different strategic ‘puretones’ and ‘hues’.

And I agree completely with the book’s central premise about the need for coherence.  I also like the way the authors describe how this can be developed through coherent structures, innovative talent systems and informal conversations (although there’s a lot more that can be done here which they gloss over – even organisational structures become simple hierarchies – and there’s nothing at all about culture).

One thing I didn’t like was the authors’ choice of terminology which I found rather annoying.  So basically, the book argues that three things need to aligned: an organisation’s products and services, its ‘way to play’, which most readers will know as competitive positioning, and its ‘capabilities system’ which are really its core competencies:

Leinwand and Mainardi

 

For a book on coherence, it’s also surprisingly incoherent.  For example, “Having the same way to play as your competitors can work out advantageously if you have a better capabilities system”.  Where’s the coherence premium in this sentence?

I also don’t think the book’s suggestion that coherence starts with a focus on capabilities ie through a capabilities – or core competencies -driven strategy (“we prefer the phrase capabilities-driven, although other capabilities are involved, because the term recognises the significant role that capabilities play as an engine of value creation”) is correct.  That’s because these capabilities, ie core competencies, as both these authors and Hamel & Prahalad before them define them, do involve the skills of the workforce, but end up mainly being about business processes and technology.

But the authors note that:

“Patents and copyrights expire.  Business processes prevail until more proficient competitors appear… Technological monopolies are thretened by new innovations.

At the same time, most organisations are ‘sticky’: their identies, cultures and relationships are by nature slow to adapt to changing conditions.”

 

So if this is this is the case, why not start strategy development here, with real organisational capabilities based on an organisation’s people, their relationships and its culture -  as described by Dave Ulrich, and by me.  And then, also ensure that these real capabilities are coherent with the capabilities system (core competencies), way to play (competitive positioning) and products and services in the book’s model.

But that’s not all, there’s an internal need for coherence too.

So if you take each of the three elements in Leinwand and Mainardi’s business-focused / external model, they each have an equivalent from an organisation-focused, internal perspective too (what Julian Birkinshaw describes as ‘management’ vs ‘leadership’):

• The way to play / competitive positioning’s equivalent is a set of internal, organisational capabilities.  Both competitive positioning and organisational capabilities are the outputs of the business / external and organisation / internal systems in a company respectively.  This actually comes through in the book when the authors write about Ulrich’s leadership brand.
• The capabilities system / core competencies’ equivalent is the organisation’s HRM,or HCM, architecture.  These are the inputs to the two systems.
• The equivalents to the organisation’s products and services are its people.  This is what is transformed between the input and output into business / organisational value.

 

The HRM architecture, organisational capabilities and people also need to be coherent with each other, as well as with the three elements described by Leinwand and Mainardi too.  So the model actually needs to include two concentric circles, like this:

Leinwand and Mainardi (adapted by Ingham)

 

And this leads to my main criticism of the book.  The stuff on the outside is the easy bit.  It’s time to focus more on internal coherence now.  And there’s nothing at all on this in the book.

 

Technorati Tags: Paul Leinwand,Cesare Mainardi,the Essential Advantage,Art Kleiner,The Right to Win,the Coherence Premium,way to play,organisational capability,Dave Ulrich,Julian Birkinshaw,strategy

 

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A bit more on Capabilities from Thomas Stewart, New Balance, White & Case and KFC

 

   I had a chat with Thomas Stewart after his keynote at the HRD Business Summit on Tuesday.

We first discussed how his organisational capabilities relate to David Ulrich’s.

I explained that, to me, his capabilities seem quite like Gary Hamel’s and CK Prahalad’s core competencies.  For him, the two ideas are different because his have more focus (‘they talk about 20 to 30 core competencies’ – and ‘they don’t think in terms of systems’).

However, Stewart did agree that his capabilities are different to Ulrich’s, and this is because his own definition includes people and other things – although he also thinks Ulrich’s work on Leadership Brand comes closer to his own approach.

Mmm.  Maybe.  But I still think the analysis I provided in my last post is correct.

 

Secondly, we talked about examples of organisations’ capabilities which focus specifically around relationships between their people, ie social capital, and I’ve posted on this part of the discussion on my Social Advantage blog.

 

The other thing I wanted to do here is mention briefly some of the capabilities that some of the speakers seemed to be developing in their organisations (not that they were necessarily thinking or talking about it in these terms):

 

 

New Balance

Paul Kennedy from New Balance described the capabilities of this UK based manufacturing firm as its external relationships with customers (as well as sports people, the military and so on) which allow it to directly replenish stocks and customise orders etc.  To develop these deep relationships externally the company needs good internal relationships with its people too.

So it has invested in learning and teaming, for example:

• Introducing online learning resource centres linked to NVQs to open up peoples’ minds to learning
• Providing skills to work across jobs in the factory
• Closing the factory and taking all staff on two offsites to discuss their issues and ask for their ideas (they suggested reducing teams from 6 to 4 people) – empowering them to create their own future history and giving them confidence to take action
• Building cross-functional groups.

 

 

White & Case

Kate Griffiths-Lambeth White & Case described the capability of White & Case as specialism in international legal issues supported by experience in multijurisdictional issues in numerous legal systems.

This specialism makes recruitment more difficult, as does the company’s fast growth taking it to 600 lawyers in London.  So this has meant more focus in this area – looking for more people with the specialist skillsets required.  And also specific actions in other areas too, for example one of their award winning benefits is health screening – given the risk of skin cancer for those people who have been working in places that get a bit more sun than here!

 

 

KFC

Misty Reich from KFC described Stewart as a ‘kindred mind’ and her own company’s strategy as well aligned with his thinking on capabilities.  Her point in particular is that HR strategy needs to match the stage of growth your company is in.

KFC UK has 22,000 mostly hourly employees (it is part of Yum Brands with over 1m employees) and has 782 restaraunts which is growing by 30 to 40 restaraunts per year.  This means its main capability is being great at recruitment (or, since this is an activity, not an outcome, something about having the people available enabling it to grow).

Expectations are changing –“Gen X / Gen Y doesn’t know who to interact expect through technology”.  And it will get to a point that it will be awkward to turn off technology when wanting to explore employment.

But companies don’t currently make good use of this.  We’ve been recruiting online for 15 years and 78% of Uk employers now use corporate websites and 29% use commercial job boards for candidate attraction (but mainly just for perusal not online application ie there’s no power behind this).  And only 7% use social media for candidate attracting and networking – people don’t know what to do about social media.

So this has provided KFC with an opportunity to gain a competitive edge.  They have brought recruitment back in-house and made people experts in recruitment, supported by technology.

 

 

Technorati Tags: Paul Kenndy,New Balance,Kate Griffiths-Lambeth,White & Case,Misty Reich,KFC,capabilities,HR Directors Business Summit,2010

 

 

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European HR Directors Business Summit: Thomas Stewart and Dave Ulrich on ‘Capabilities’

 

    I’ve just got back from the last couple of days out at the HR Directors Business Summit in Birmingham, UK.  I’ve got a couple of posts coming up but wanted to start with the role of capabilities which were a key theme in both Thomas Stewart’s opening, and Dave Ulrich’ closing keynotes.

You know Ulrich, but might not know Stewart.  He used to be editor of Harvard Business Review and has written two very insight-packed books, ‘Intellectual Capital’ and ‘The Wealth of Knowledge’.  He now works as Chief Marketing and Knowledge Officer for Booz & Company.

I’ve long been supportive of Stewart’s writing – and included one of his quotes in my HCM book (pictured above).

In Stewart’s words, capabilities are a ‘source of essential – as opposed to transient – advantage’ - they ‘shape the right to win’:

 

Ulrich emphasises that capabilities are outcomes – which provide a more appropriate focus than activities.  But I think both speakers would agree with each others’ descriptions.

Beyond these points, however, Stewart and Ulrich mean quite different things.

For Stewart, capabilities are tools, processes and people:

 

For Ulrich, capabilities are more like behavioural competencies, ie social (inter-personal) rather than technical, but organisational rather than individual.  They’re what you should see as the focus of an HR vision:

 

Out of these two definitions, I prefer Ulrich’s definition of capabilities.  Take a look at some examples:

• Talent: intellectual capital, know-how, competencies, skills, commitment,workforce
• Speed: agility, adaptation, flexibility, cycle-time, responsiveness
• Share mindset: Culture change, transformation, firm identity, firm equity, firm brand, shared agenda….

 

These capabilities are really just about people (or at least the ‘organisation’ – rather than the ‘business’).  And I think that’s what they should be.  People really are the ‘source of essential – as opposed to transient – advantage’.   They are ‘our most important asset’.  They are the providers of our organisations’ capabilities.

Of course, the people focused capabilities need to be supported by the right processes and technology.  But in my view, we should select our capabilities based upon our people, and then worry about getting the right processes and technology, not mixing these all up beforehand.

My support for Ulrich’s form of capabilities is why I focus so much on human, and on social, capital – which I think are the two most important aspects of capabilities.

Where I disagree with Ulrich is his view that capabilities are “what line managers think will make the company successful”.

Behind this is Ulrich’s view that value is defined by the receiver (the business) more than the giver (HR).  I think this is a problem - yes, of course, HR needs to listen to, and satisfy, the rest of the business.  But…

Ulrich uses talking to his children as an analogy for this. If he says ‘clean your room’, they say ‘get out of my room’ and the conversations doesn’t go anywhere.  You can’t impose value on someone.

I don’t get the analogy.  You can’t impose room cleaning on your children (I can’t on mine anyway) but you can educate and incentivise them to want to do this for themselves (OK, that’s the theory anyway).

HR can educate business leaders and managers too.  It can propose certain capabilities to the rest of the business, it can explain how these capabilities would create value for the business, and it can identify the actions that can be taken to develop the capabilities which have been agreed.

HR can create value, as well as add it.  And it’s by creating value, proposing these opportunities for competitive advantage to the business, that HR becomes truly strategic.  Until this point, it’s still just a more up-market order taker.

 

 

Tomorrow I’ll provide a little more on Thomas Stewart’s definition of capabilities (which I still think is extremely useful for HR to understand) - taken mainly from a one-to-one meeting with Stewart following his session.

I’ll also be attending a seminar organisation by Kenexa, so I’ll probably be posting on that.

 

Then there will be more posts reporting on and following on from the HRD’s Business summit going into the weekend.  So keep tuned for more.

 

 

Technorati Tags: World Trade Group,European,HR DIrectors,Business Summit,2010,January,Birmingham,Thomas Stewart,Dave,David Ulrich,capabilities

 

 

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Visa Europe: What do you want to be when you grow up?

 

  Did you get through yesterday’s rather monster ‘HR in the Social Business’ carnival?  Well, apologies, but I think this is going to be an even longer post… (it’s well worth reading though!)

 

I recently attended a great event, ‘Delivering Outstanding Performance’, organised by Michelle Lawton from Consult HR and ‘MOK’ from The Innovation Beehive.

Opening the event, MOK suggested that to contribute to their employers’ success, people need to be clear about what they want to be, who they are, and how that fits with their organisation.

We then had a presentation from Derrick Ahlfeldt, SVP HRM at Visa Europe with a case study from his organisation that demonstrated these points. In fact, Derrick’s story provided a great demonstration of much of what I’ve been blogging about here over the last couple of years too.

So I’ve gone a bit to town in describing Derrick’s presentation – and have also provided some notes / links to previous thoughts that support and occasionally challenge some of this case study:

 

Visa Europe story	My perspectives (NOT Derrick’s necessarily!)
As an association, Visa Europe is about developing the whole market (the European credit card business) through collaboration. By 2004, following a major restructuring and re-engineering, people had initiative fatigue. There was a need to re-engage people and gain additional discretionary contribution. Since then, the company has been working to become a ‘Peak Performing Organisation’.	Derrick didn’t present it like this, but I’d suggest that collaboration is Visa Europe’s mojo. External collaboration is clearly critical to the company’s success and I think they understand (implicitly at least) that because of this, internal collaboration is equally as important.
A major part of this shift has been creating an environment in which people are put at the centre of the organisation – an environment in which people don’t feel they are ‘being done to’, but are ‘doing it for themselves’ – ‘making ownership and accountability personal’.	Visa Europe has clearly been ‘putting human capital first’ – treating people as providers of critical human capital rather than simply (human) resources (my Strategic HCM blog is all about putting people and human capital first). This is absolutely appropriate for an organisation whose mojo is about collaboration as people will need to take accountability in order to trust each other in order to support collaboration (the other way of saying this is that building human capital is a pre-requisite for effective development of social capital… - see below).
Kevin Roberts, CEO of Saachi and Saachi, suggests that a ‘Peak Performing Organisation’ has a ‘sense of family’ within the team. This has been another part of Visa Europe’s recent shift.	Visa Europe has also been developing social capital around a sense of family. Again, this is absolutely appropriate for an organisation whose mojo is about collaboration (my Social Advantage blog is all about developing the right social capital to support an organisation’s mojo).
This shift has been supported by documenting: · An inspirational dream (“to be the world’s most trusted company”) · Shared spirit (“what makes Visa Europe different to other organisations?” eg competitive yet collaborative, trusted, multi-cultural family) · A common set of beliefs (eg empowering and investing in the individual, nurturing the dynamics and diversity of the Visa family) · The “Greatest Imaginable Challenge” (an extraordinary stretch target which is unique to the organisation and inspiring to its people) · Focus It took over a year to “wordsmith” this document in order to ensure that everyone was comfortable with it.	I think this process demonstrates the need to develop a solid push behind whatever a company is trying to do (whether this is articulated through a BHAG, mojo or something else) as a way of translating this intent into organisational capability. I particularly like the way that Visa Europe’s shared spirit and common beliefs blend human and social capital (competitive yet collaborative, individual and family). I presume the “Greatest Imaginable Challenge” which Derrick didn’t want to discuss is Visa Europe’s BHAG. But note that this is developed from the mojo (an inside-out approach) rather than the other way around. I also think Derrick probably under-sold the work he and his team did to socialise this document – in my experience, the process of creating a joint ‘vision’ for the organisation is more important than the document it produces. It’s about creating a shared mindset, rather than a wordsmithed document!

The ‘Peak Performing Organisation’ programme	My perspectives
The programme currently consists of two phases:
Phase 1 - Individual Visa Europe has made participation in this phase of the ongoing programme voluntary in order to create a different dynamic from the past. This phase consists of: · Plenary introduction sessions (in the first year of the programme, Visa Europe ran three events, each with 150 people, which was helpful in getting the programme started – they now run just four smaller sessions per year) · Three small group sessions (6-8 people) facilitated by an inspirational player (someone who has “been there and got the T-shirt”) · Development and communication of a personal values-story, identification of implications and creation of an action plan   The key questions that individuals consider in this values story are: · Given you are this person and these are your skills and talents, what can you bring to this organisation? · How does this link? (are you doing what you wanted to do when you grow up?) · Are you in the right job and the right organisation?   (A volunteer kindly described for us his story – including his ‘home me’ and his ‘CV me’ – explaining that once he had identified his talents from this story and discussed this with his group, his ‘CV me’ became the ‘real me’ – the distinction was removed: “I’m now more passionate and enthusiastic for everything I do in life directed to what I’m good at and would like to do anyway.”)	I think this phase of the programme provides a really nice (whoops – sorry MOK) explanation of a human capital vs a human resources approach. Ie the phase is about employees as individuals, not the business. However, there is a limit to this. Derrick was keen to stress that employee empowerment should not lead to organisational chaos – employees still need to do what the organisation needs them to: “It’s about understanding what the opportunities are and trying to do more of what they want within their existing or another role”   (Or as MOK described it, it’s about “total freedom in a gilded cage”.) I’d suggest the next stage might be to open the door of the cage and see what happens…   The phase also starts to develop social capital too (via sharing values stories within the team). There are some really good examples (eg Herman Miller) where sharing this type of information has had a very powerful team boosting effect.
Phase 2 – Team In this phase, a whole team is taken away to consider: · Alignment – the team purpose, customer dreams and nightmares: o The team as a whole considers what they want to achieve o They then get some customers in to describe what keeps them awake at night o The team discusses what it wants to achieve for its customers   · Values – realigning purpose based on customer input · Implications – barriers and challenges for action planning	Another good approach – this time to develop social capital. But could it be even more strongly based upon the existing capabilities of the team (what the team can do rather than what customers currently need)?

The results	My perspectives
People have generally been very positive about the change. However, disbelievers are tolerated as long as they do the job they are expected to do. And some people have left the organisation.	I think people are always going to leave organisations during a transformation like this. And if they’ve left with a better perspective of whom they are and where they should be, this can only be a good thing for them, and is probably a good thing for the organisation too. If they’ve left because they’ve found the whole thing a bit too ‘fluffy’ then I think that’s a shame for them. But I’m convinced that doing this sort of thing will gradually become part of everyone’s normal expectations.
Since 2004, · Survey completion rates have increased from 83% to 96% · Overall engagement has increased from 72 to 90% · External customer satisfaction has increased from 6.8 to 8.1   There are other positive statistics too, but what the Chief Executive says is also important are the stories and what he’s seeing in the organisation.	The CEO’s focus on both quantitative and qualitative evidence is totally appropriate. Not everything that’s important can be measured, and I think this applies particularly to organisational capability, ie to both human and social capital. However, clearly when something important can be measured, it makes sense to measure it. And what’s behind Visa Europe’s success? I’ve discussed the role of mojo, organisational capability / human and social capital and making a solid investment behind this. The other two aspects that I believe are particularly important are: · Alignment – between each of these different concepts and Visa Europe’s programmes and practices · Best fit – the things that Visa Europe has been doing won’t apply for all organisations, but they apply for this organisation, with its focus on trust and collaboration, superbly well.   So the message isn’t do what Visa Europe’s done. It’s applying the same level of insight and sharpness to your own organisation. And if you do this, you should gain the same levels of Human and Social Advantage too.

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Phase 3?

We didn’t talk about this at all, but I’d suggest Visa Europe’s next step is towards even greater liberation of individual employees and of teams.

Derrick explained that as a result of the first two phases, Visa Europe is now confident that every person and every decision is linked with a golden thread to the organisation vision.

That’s great, but it still sounds rather too top-down?

I agree that they do need to manage performance against the organisation’s vision and objectives (top-down) but they would also benefit from taking ever greater advantage of the potential residing in each of the company’s employees – leading performance instead of just managing it (I’ll be talking about this in Greece next week) – ie bottom-up.

At the team-level, I’d suggest that Visa Europe continue to build social capital – perhaps by emphasising links across teams (bridging capital) as well as within the teams (bonding capital).

So I’d suggest they look at different opportunities that will help them do this – recognising that these may range from organisation development to social media; social events to reward practices; and social network analysis to facilities design.

 

Note - and I’ve emphasised this quite a few times - that the ‘social business’ (if this is what Visa Europe is) isn’t just about the use of social media.

 

So, for example, Michelle described a nice example from the BBC where people have been given the opportunity to go and experience different areas of the organisation for a few weeks (“the hot shoe shuffle”).

Note also that this isn’t in any way supposed to be criticism of Visa Europe’s story. They’ve done much more than most organisations would even dream of. I’m just explaining the direction I personally feel they should go.

 

Anyone else any suggestions for Derrick?

 

Thanks to MOK and Michelle for the invite to the event, and to Derrick and his IT colleague for the story.

 

Photo credit: Joe Mabel

Technorati Tags: Derrick Ahlfeldt,Visa Europe,MOK,Innovation Beehive,Michelle Lawton,Consult HR,Kevin Roberts,Peak Performing Organisation,human capital,social capital

This post is cross-posted at Social Advantage.

 

 

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Organisational mojo – more reasons for an Inside-Out HCM strategy

 

     In his new (not yet released*) book, ‘Mojo: How to Get It, How to Keep It, and How to Get It Back When You Need It!‘, Marshall Goldsmith suggests that mojo is:

• “The concept of positive momentum: success building upon success. It anchors our self-esteem, shapes our careers and influences those around us.
• That much-desired sweet spot in an organization's year, a sports team's season, or an individual's career where everything is going the right way-and success builds upon success.”

 

Goldsmith explains that in order to gain, retain and recapture mojo, thereby gaining organisational momentum, business leaders must control three elements:

• Identity (Who do you think you are?)
• Achievement (What have you done lately?)
• Reputation (Who do other people think you are? What do other people think you've done lately?).

 

The organisational version of Goldsmith’s mojo is a bit of a different, although not too dissimilar, concept to my own version of mojo that I’ve posted about on this blog:

• “The organisation's real central essence that gives it its life and character and distinguishes it from elsewhere.
• A compelling strategy based upon a key purpose that is internally rather than externally generated.”

 

This definition fits most closely with the ‘identity’ element of Goldsmith’s concept.  To me, achievement and reputation are outcomes of mojo, rather than part of the thing itself.

I also suggest that there are two types of organisational mojo:

“The first of which is something absolutely central to organisational strategy and which is going to make this strategy real and achievable. The second is a complementary focus to the main business strategy - something that will fit beside and support (if not drive) the strategy, but which will be more motivating for employees.”

 

The key to both these types of mojo, and the thing that distinguishes them from a better known BHAG, is that they focus on HOW and organisation works, rather than WHAT it does (ie about how the organisation's going to be rather than what it's going to do).  This also seems to fit with Goldsmith’s ‘identity’ element.

The second area of agreement between our two concepts is that both our forms of mojo emphasise the need for it to be internally generated – ie it is based upon they way the organisation already behaves, rather than what it would like to do in order to compete more effectively in the marketplace.  In Goldsmth’s words, it “starts on the inside and is apparent on the outside”.

This is the core reason why I think HCM strategy should follow an inside-out approach.

Outside-in is fine for the development of a BHAG-led HR strategy, but as Goldsmith notes, mojo starts on the inside.

 

 

* This post was triggered by an article on Marshall Goldsmith / Mojo on BNet.

Technorati Tags: Marshall Goldsmith,Mojo,inside,outside

 

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HR Transformation - case studies

 

   I’ve already posted on Ulrich’s new HR Transformation book a couple of times (1 and 2).  But as I wrote in the first of these post, this was without the benefit of actually having read the book, which is always a rather dangerous thing to do.

I have now read it, and still feel I’m right to argue that:

• Organisational capability should provide our initial focus, from which we can think think about impact on the business, not the other way around.
• Organisational capability that will in itself provide competitive advantage is best identified through an inside-out, not an outside-in perspective.
• Each organisation needs to develop an HCM strategy after having identified its organisational capabilities, but before it moves into planning to transform its HR function.

 

Actually, for me, my third point above came out even more strongly as I read the book, and particularly the case studies at the back:

• Flextronics’ organisational capabilities are leadership, customer connectivity and efficiency.  And its HR strategy is design, discover and deliver.
• Pfizer’s organisational capabilities are organising the business for its best delivery and linking the outputs of the business units across the company to achieve results.  Its HR strategy is not to be an enabler of business success but a driver of it (nice one, Pfizer!).
• Intel’s organisational capabilities are fast innovation, brilliant talent and proactive collaboration.  It’s HR strategy is to reduce the cost and complexity of tactical delivery and to develop a strategic HR competency.  (There is a nice link here in that Intel HR is also seeking to foster innovation and collaboration within its own organisation – I don’t like the way it labels itself as a support function though).
• Takeda’s organisational capabilities are talent, accountability and innovation.  It’s HR strategy is to deliver talent, accountability and innovation (!).

 

For each of these, you need to understand the HCM strategy before being able to judge whether the HR strategy  is appropriate.  There’s just too tenuous a link between the organisational capability and the HR strategy otherwise.

Takeda’s HR redesign isn’t just about delivering talent, accountability and innovation (how would you organise your HR function to do this?).  It’s understanding what HR needs to do in order to deliver these capabilities (HR actions, learning and OD interventions, perhaps a bit more use of of social media etc).  And then organising to be able to do these things effectively.

The missing link is a critical one.

I wish I was able to a couple of case studies of my own.  Perhaps I’ll have a chat to a couple of clients and come back to do this in a few weeks time.

 

One reason I wanted to revisit the book was that I do feel I gave Mr Ulrich a bit of a hard time in my last two posts (maybe in this one too).  I’m not one of those bloggers who pour scorn on people for its’ own (or for SEO’s) sake.  I just find that the more closely aligned I am with a particular author’s thinking, the easier I find it to criticise.

What I do like about ‘HR Transformation’ is the way it pulls together just about all of Ulrich’s previous books (probably just with the exception of his three leadership books).  There are also a couple of useful corrections, for example that ‘there is no magic list of desired or ideal capabilities’ (a point I’ve made several times).

So if you’re new to Dave Ulrich, you really don’t need to read any of these other books now.

But then, you’d still be better off reading mine!

 

Technorati Tags: David Ulrich,Wayne Brockbank,Jon Younger,Mark Nyman,Justin Allen,HR Tranformation,Building Human Resources,Outside In,HCM Strategy,organisational capability,inside out,Flextronics,Pfizer,Intel,Takeda

 

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The one church and the fat smoker

 

   One of the best things I’ve read around inclusiveness (some time ago) is a chapter in David Maister’s book, Strategy and the Fat Smoker, asking ‘are we in this together’?  I’m referring to it now as it came back to my mind after reading the recent IES report on fairness and rewards.

Maister stresses (mainly for professional services firms) that the need for people to want to achieve something together is a prerequisite for effective strategy.  But the situation is actually fairly scarce and leaders shouldn’t assume that people are ready and willing to work together to get things done.

Maister uses two dimensions of personality / belief: team, and time orientation, to show that most organisations have high levels of ‘biodiversity’.  I’d suggest this diversity of preferences is even greater if you look at other traits and attributes as well.  This is an important issue for organisations and Maister states: “Whereas there may be some logic and merit in like minded people being together, an organisation made up of an unmanageable mix of types is unlikely to function well.”

Two main approaches (other than spltting up or covering it up) are suggested to deal with this problems:

1. Try to accommodate differences: this is OK across but harder to do within individual groups
2. Work to change peoples’ orientation by crafting a sufficiently compelling vision – but this still isn’t going to be possible if there is a sizeable fixed component in peoples’ different attitudes.

 

(This presents an interesting challenges for banks trying to change their compensation systems to focus on long-term success.  As Maister notes, “It is really possible to get short-term individuals to do the right thing for companies’ long-term best interests through persuasion or systems? – to set individual goals that will further corporate goals?”)

 

Maister points out that none of these approaches are very effective, so actually organisations need to look at how they create an organisation of people that have fairly homogeneous attitudes (at least to the things that enable them to work together to support the organisation as a whole) which he also calls the one-firm firm.

I think Maister makes some good points, although I’d also emphasise that organisations need a fair degree of biodiversity for effective innovation and decision making.  But I do agree that some degree of commonality around critical factors (eg around whatever is the relevant organisational capability) is required if organisations are going to operate as ‘one church’ in the way that Duncan Brown at the IES describes.  So becoming more inclusive needs a bigger focus than just reward strategy (doesn’t everything).

 

 

Technorati Tags: David Maister,Strategy and the Fat Smoker,Are we in this together,inclusiveness,banking

 

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HR 2.0 strategy

 

Sunghwa Moon asked in his recent comment on this blog about what would be a ‘consulting methodology’ for HR 2.0.  This is what I use, although I’d describe it as a process rather than a methodology, as I’d only ever use it as a guide and would be unlikely to ever follow this exact flow.  And I’d see it as something that an organisation can use itself, rather than needing a consultant to support (albeit I believe that the right consultant would be extremely useful in advising and supporting on this).

 

 

The process starts with identifying the required organisational capability, ie what sort of social, as well as human and organisational capital, is the business (or public sector organisation) trying to create?  Based upon this required state, and a gap analysis of the current state, a strategy can be developed.  This also needs to be aligned with (informed by, but also informing ie both adding and creating value) the business strategy.  And because web 2.0 is likely to play a significant role in supporting the HR 2.0 strategy, I include the IT strategy here too.

Because the HR 2.0 strategy is all about people, and people are different, I include a step here to think about the different talent groups or other segmentations that exist and need to be treated differently.

At this point, a strategy map and scorecard can be developed to support the strategy, outlining the strategy’s objectives and measures, and how these relate across activity, outcome (ie social capital) and business results.  Various measurement tools, for example social network analysis, may be required to support this stage as well.

Onto implementation.  Here, I identify six main areas of focus:

• People.  I believe any HR strategy needs to touch on the key people in an organisation, not just on the processes that support them.  And I also advise that HR should have a hands-on role, not just a back-office one.  I think these two points are particularly important under a HR 2.0 approach, and therefore suggest that the strategy identify the key people (perhaps those who are key to social connecting in the organisation, eg brokers, mavens etc) and what actions are going to be taken to provide direct support to these individuals?
• Organisation.  What design changes in terms of structure, process etc would support the development of social capital in this organisation.  Also, particularly importantly, what OD interventions can be made to directly impact on the way people are connecting with and building relationships with each other?
• HR and management processes.  What changes need to be made to support a more open, collaborative approach?
• Web 2.0 and other technology.  How should these processes be best enabled?  What sort of tools would fit best?
• HR function capability and transformation.  What internal changes within the HR (and learning, communication etc) function need to be made to ensure HR is able to effectively implement and support the new strategy?
• Role of the manager.  This is often the biggest piece of this sort of project.  How can management itself be redesigned to operate in a completely new and empowering way?

 

Note that web 2.0 plays only a very small part of this process.  I absolutely agree that this can be a huge enabler to the sort of changes that HR 2.0 will bring, but I believe HR 2.0 is much bigger than this as well.

Comments?

 

Previous posts on HR 2.0:

• The dangers of a tyrannical approach to Web 2.0
• Reflections on Romania / HR 2.0 conference
• HR's accountability for social capital
• Jason Averbook: Creating and deploying a Digital HR strategy
• Scott McArthur: HR 2.0 – the end of the business delusion
• HR 2.0 and social capital
• HR 2.0 – a more strategic approach to HR
• Web, management and HR 2.0

 

Technorati Tags: HR 2.0,social capital,process,methodology

 

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HR 2.0 and social capital (update from Bucharest HR 2.0 conference)

 

    Organisation capability consists of three separate types of capital (something which is valued by investors in a private sector company):

• Human capital is the value which is provided by the people working in an organisation.  It’s owned by the people not the organisation, but invested by the people if they receive an appropriate return on their investment.  When the people go home at the end of a day’s work, they take their human capital with them.
• Organisational capital is the value provided by an organisation’s own business and management structures and processes etc.  When people go home, the organisation capital stays in the buildings and technologies of the firm.
• Social capital is an emergent property that results through people working in the organisation.  It’s a combination of their connections, relationships, and the conversations taking place within the organisation. If the people leave the organisation, it no longer exists within the people or the organisation.

 

Each of these three different forms of capital need to be developed in different ways.  So for example, organisation capital can be developed in fairly mechanistic ways.  Human capital needs developing in ways that acknowledges its intangibility, and the complexity between factors.  This is why, while you can redesign a process very quickly, it gets time to get people to use the new process in the right way.  Social capital is even more complex and intangible.  It’s therefore much more difficult to manage than either of the previous two forms.

But it’s also more important.  Thinking about this in more traditional, non-capital terms, the point of performance is most organisations is no longer the individual, it’s the team.  So the value that will be most important to investors won’t be the human, but the social capital.

Going back to my previous two posts (1 and 2), I’m suggesting that HR 2.0 is defined as the management of people in a way that accumulates social capital (in the same way that HCM accumulates human capital).

Note that social capital is a better outcome to focus on than something like collaboration, because it’s more strategic.  As this month’s Harvard Business Review notes, excessive collaboration can reduce rather than increase performance.  But, as I mentioned previously, capital refers to something of value to investors in an organisation.  Collaboration can be good or bad.  Social capital is always good (or or more likely, great) to have.

So how are you managing your people and organisation to accumulate social capital and increase the value of your business?

 

Technorati Tags: HR 2.0,social capital

 

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Engagement surveys: the next generation. Survey your human capital (*)

 

     In my last post, I provided some advice on surveying the engagement of your workforce.  But why stop there?  What's so magical about engagement which means this is the only thing you think about surveying, when human capital consists of so much more?  As I've described, engagement is just one bucket inside the bigger bucket of human capital.  And this itself is contained within the even bigger bucket of organisational capability (human + organisation + social capital).  So why not survey these?

 

What's in your bucket?

The first step is still to decide what you need to put in your bucket.

To do this, you need to think about the organisational capability you need to create value for your business - for instance a coaching culture (as a topical example).

(In reality, this is a bit more complicated than I've just described it of course.)

 

Or less ambitiously, you could think about the human and organisational resources you require to add value to specific, short-term business goals.

 

Beyond engagement

The second step is to think about what measures you can take to help you understand the development of these outcome?  Some of these measures can be provided by the use of employee surveys, and some through other things (eg management information systems for absence, turnover etc; exit interviews; joiner interviews; turn-down feedback; 360 degree feedback; performance rating distributions etc).  But if you follow this process, I bet you'll end up with questions you want to ask your employees that go beyond engagement outcomes into other things.  For example:

 

Human capital

• Demographics (for diversity)
• Health
• Capability
• Quality of output
• Utilisation
• Productivity

 

Organisation capital

• Fitness for purpose
• Changeability

 

Social capital

• Connections internally and externally
• Level of support
• Nature of conversations

 

 

Link back to activities

The third step is to identify measures for the activities you are undertaking to try and achieve the agreed outcomes.  Some of these measures can also be informed using the employee survey and in the same way that outcome questions will extend beyond engagement, these activity questions will extend beyond satisfaction to include employees' perspectives on different aspects of human, organisation and social capital.

 

 

* = I'm not calling people human capital.  I'm saying you should survey your people ABOUT human capital.

 

 

Photo credit: Pilaf 

 

Technorati Tags: Engagement survey,employee survey,human capital,human capital survey

 

 

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The Differentiated Workforce (Put Strategy, Not People, First)

 

     I've just read the first chapter of Becker, Huselid and Beatty's Differentiated Workforce.  I agree with a lot of the the book's suggestions, but disagree with some others.

 

Differentiated strategy, differentiated workforce (they're too different things!)

I agree that "most firms don't really have a workforce strategy" and clearly, this is a bit of a problem!  I agree that "Despite the tremendous attention in recent years to measuring the financial contribution of HR and talent, there is much less attention to getting the underlying workforce strategy right".  I've made this case several times - measures are important, but it's what you do with them that counts.

I also agree with the need to differentiate workforce (or people management) strategy.  I like the authors' point: "Just as any good business strategy involves making the right choices and the right investments, the same is true of a workforce strategy", and also Lucien Alziari's comment in the endorsements: "If you read your company's HR strategy, would you be able to tell which company it was written for?".  I'm a firm believer that you should be able to do so.

And I also believe in differentiating the workforce.  So, for example, I was fairly unimpressed by Paul Turner's comments at the recent CIPD conference that best practice in talent management is the inclusive approach - treating everyone as talent - and that this is what the majority of organisations do.  Firstly, because just because most organisations do this (based on a very limited sample), doesn't make it best practice.  Secondly, because I believe that organisations need to identify best fit solutions, rather than rely on best practice (which supports the points the book makes that I address above).  And thirdly, because I also believe that exclusive approaches - identifying a small group of people as talent - tends to be the right approach for many, if not most, organisations.

But not necessarily all.  What about an organisation that has an organisational capability around inclusivity.  They're not going to want to differentiate, are they?  The authors promote best fit over best practice, but then promote differentiation as a best practice that all organisations can use.  I don't think that logic works somehow.

A bit like Boudreau's belief in pivotal talent, the authors seem to assume that a strategic approach has to involve differentiation of the workforce.  They state that "differentiation is not just a feature of a successful workforce strategy, it is the most important feature" and "Differentiating the workforce strategy ultimately means investing disproportionately in certain employees and groups of employees, based on their strategic roles".  Why, and where's the evidence for this?  The closest they get is to say that: "Just as strategic differentiation reduces external homogeneity, internal homogeneity should also become much less important".  But I don't think this closes the case.  In fact, despite my comments above, I actually think that the global reset is pushing us towards greater inclusivity, eg towards reduced reward differentials, so we need to be careful not to extend a differentiated approach too far.

There are some other recommendations I don't totally support as well.

 

Strategy is more than just differentiation

One of my problems with the book is that its approach to people management strategy is purely adding value (requiring that "line managers define success but that HR professional deliver the solution" by identifying the 'strategic capabilities' - business processes - which best align with the business strategy).  I agree that adding value is essential but to me, people management can only be truly strategic when it creates values too (ie it identifies other capabilities which will inform not merely support business strategy).

The authors seem to disregard the opportunities for creating value by competing on intangibles by explaining that "the line line of sight between workforce strategy and strategic success is typically so indirect that figuring out how to get from here to there is difficult... There are few instances where a selection system, a performance management system, or leadership development has a direct impact on the firm's bottom line, making it hard to see how these decisions translate into strategic success."  I agree with the authors here - it is hard.  But this doesn't mean that we shouldn't try to do it.

And I believe that HR will have much more of an impact if it improves the capability of the whole workforce - in line with an overall human capital management strategy, rather than by just enhancing the capability of those people in the most strategic jobs.

 

Of course, I may change my opinions on the book once I've read the later chapters.  I'll let you know if I do - or we'll probably be discussing the book in the next episode of TalkingHR.

 

Technorati Tags: Becker,Huselid,Beatty,the Differentiated Workforce,book review

 

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Beatty: 'CFOs: don't trust HR' and the Employer of Choice

 

   I've been tracking the HR blog discussions arising from the CFO.com article, Memo to CFOs: Don't Trust HR.  This described a presentation made by Rutgers professor Dick Beatty to a conference of CFOs, at which Beatty laid in rather heavily to HR.

I think these other bloggers' posts cover most of the criticisms I would make just fine, so I won't bother repeating them myself here.

However, there are a couple of areas in which I'd make slightly different points to other bloggers.  One of these is about engagement vs satisfaction, but I'm planning a short series of posts on engagement, so can deal with this then.  And another area is a response to Dick Beatty's point that  "while the language of organisations is numbers, HR isn't very good at data analytics".  Quite a few bloggers have pointed out that we're getting much better at this now, and I wouldn't disagree.  However, I think the bigger challenge to the sentence is that we should perhaps now change the language we use to manage our organisations.  But I've made this point several times before, for example, here and here (which interestingly dealt with some of the differences in perspective between HR and CFO).

So what I wanted to pick up in this post is Beatty's points about HR's "silly" idea that a company should try to be the "employer of choice":

"If you are the employer of choice, he asked rhetorically, who's going to be applying for your jobs? 'Everybody and their dog's brother,' he said. 'You want people who are excited, enthused, and understand how to contribute to what you do, as opposed to those who simply want to find a good place to hide out'."

 

I think this is just nuts.  Being an employer of choice has always, in the way I've understood it, being an employer of choice for the people you choose, or as Jim Holincheck describes it, the employer of choice - for top talent.

As long as we're referring to a particular type of talent here (the people with the values, competencies etc etc desired by a particular organisation), then I don't see how Beatty can argue against the phrase.

Being an employer of choice should be about being clear about what sort of organisation you're working in (its vision, values, big idea, mojo etc etc), and therefore what sort of organisational capability (human, organisation and social capital) you need, and then building your HR and management practices around this, allowing you to easily recruit, engage, develop and retain people whose own vision, values etc etc align with those of your organisation.

I actually think Beatty's probably arguing for much of same thing in the Differentiated Workforce.  So maybe his criticism is really directed at the way 'employer of choice' is interpreted in most organisations - few of which follow anything like the thinking or process that I've just described above.

Maybe he's got a point after all...

 

Technorati Tags: Richard Beatty,Memo to CFOSs,Don't trust HR,employer of choice

Photo credit: Morio

 

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Kennedy Recruiting Conference / Adidas Employer Branding

 

    I didn't see that many presentations at Kennedy's Recruiting conference - the pull of the sunshine was just too strong.  But my favourite of those I did was from Steve Bonomo and Steve Fogarty at Adidas as this was a great combination of insight, perspective and practical experience.

Bonomo and Fogarty explained, referring to Frank Lane’s book, Killer Brands, that a brand enables a company to "derive a disproportionate amount of success… because of a compelling and differentiated expectation that comes to be associated with its name".

A true killer brand "will be chosen over competing brands—in any category, in any country, at any time, and often at any reasonable price" and its constituent elements include:

• Choice: every $ you spend or will ever make depends on choice
• Expectations: every choice that will be made depends on expectations
• Focus: is that single, differentiating factor
• Alignment: is connecting everything you do in perfect harmony
• Linkage: getting that focus, that expectation carried in the minds of your people.

 

The key to this is the 'differentiating factor' - to find something about your company that is different in your organisation from others / its competitors, and different in kind not simply in degree.  Bonomo and Fogarty recommended that people should "pull, grab, tear the essence of brand from your corporate bureaucracy and bring it to life!".

This can then be built, with design, simplicity and beauty into all relevant delivery mechanisms, eg job templates, recruitment posters etc.

For Adidas, the differentiating factor is the love of sport.  Someone asked a good question - that finding this differentiating factor is relatively easy if you're into spots, or are the US Army, or Cirque de Soleil, but more difficult if you're in transportation.

Like Bonomo and Fogarty, I lean to the view that although it may be more difficult, it will still be possible.

I think the differentiating factor falls out of an organisation's big idea, or BHAG, or what I think it often more motivating, an organisation's mojo.  As I've previously posted, I think this can come from something which is absolutely central to organisational strategy (like an interest in sport), or something which is a complementary focus to the main business strategy - something that will fit beside and support (if not drive) the strategy, but which will be more motivating for employees, eg corporate social responsibility (maybe the solution for the transportation firm).

Whatever it is, I also agree with Adidas, it needs to go way beyond the "canned speeches" organisations often use for this type of thing.

 

 

Technorati Tags: Steve Bonomo,Steve Fogarty,Adidas,Frank Lane,Killer Brands,employer brand

 

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