Remote Work and Distributed Organisations

I’ve been speaking at a few online conferences recently about building on remote work to create distributed organisations.

You can find out about what I mean by this in this article on Linkedin.

And you can see my presentations on Slideshare:

• KongressMedia's HR Innovation Summit
• ULeadMedia's HR LEADer Summit
• Symposium's Diversity and Inclusion conference (where I talked about Employee Resource Groups)

As I note in the Linkedin article, HR and OD need to be on top of this. We’ve potentially missed the opportunity of building distributed organisations during the full lockdown, but remote working isn’t going to disappear. So we can still recapture the opportunity for the reset, if we're willing to do so.

Jon Ingham
 

@joningham, http://linkedin.com/in/joningham 
info@joningham.com, +44 7904 185134

Top 100 HR Tech Influencer - Human Resources Executive 
HRD Thought Leader - HRD Connect
Mover and Shaker - HR magazine

#HRDLive COVID-19 and HR: 'the new normal'

I'm interviewed on the future of HR and 'the new normal' post-pandemic in the very first lockdown edition of the HRD Live Podcast.

You might be thinking both I and my interviewer, Michael Hocking, look far too happy to be discussing coronavirus, furloughing, downsizing and recession, and you'd probably be right.

Even for me, business is harder than it was. My wife generally works with me in my business but is now furloughed, mainly so she can lead on home schooling. And since we pay ourselves dividends on top of a minimal salary she won't get anything like the £2,500 many furoughed staff are getting each month even if her role remains in stasis all year.

But it was the end of the week, a Bank Holiday weekend, with blue skies and birds tweeting. We're still healthy. And hey, I'm enjoying all of these benefits, if not all the other things around them.

We also discussed HR and the 'new normal'. This wasn't planned as a title for our conversation but I dropped the term into one of my own points, so I can't complain. I just wish I knew what it is - are we looking forward to entering into a 'new normal' at some stage, meaning we're in a temporary abnormality at the moment?, or is this the new normal, meaning Michael and I were really discussing preparing for the new new normal that follows?

Whichever it is, I don't agree that the term is ludicrous - both now and future states will be very different from each other, and also different to the past.

The other term people have been using is the 'big reset'. I've also been a little reluctant to use this, as got into it in a big way after 2007 to then find out nothing much changed at all. However, this time around, I really can't see how things are not just going to be different, but really, really different from before.

To find out more, check out the podcast, or I'll also be elaborating here.

Jon Ingham
 

@joningham, http://linkedin.com/in/joningham
info@joningham.com, +44 7904 185134

Top 100 HR Tech Influencer - Human Resources Executive
HRD Thought Leader - HRD Connect
Mover and Shaker - HR magazine

No Ordinary Disruption - Labour Market Challenges in the Digital Age

I've been reflecting on the the 'new work order' in preparation for the Economist's Talent Management summit next week.  As part of this, I've been reading McKinsey's new book, No Ordinary Disruption, and today, got to talk to one of the book's authors, Richard Dobbs, Director of the McKinsey Global Institute (their research arm.)

MGI look at various long-term trends and you, like me, may have seen some of their previous reports on the labour market, social collaboration, technology and other areas.  However their clients wanted to know how these fit together.  And basically there are 4 forces, each one larger than what we’ve ever seen:

• A shifting locus towards the East (taking HSBC with it of course)
• The acceleration in the scope, scale and economic impact of technology
• A dramatically aging global population, growing less fast than in the past
• Flows of capital, people and information (increasingly South South.)

Sometimes the forces build together, sometimes they pull apart - leading to increased complexity and additional challenges.

Executives typically have a sense that the world is changing, but don't understand enough about how the change is working so we need to reset our intuition about the world going forward.  People don't reset enough.  The current changes are a bit like the British Industrial Revolution but ten times as fast, and 300 times the scale.

For example, Richard talks about Tianjin in China, which most Westerners have never heard of (I hadn't, despite spending 3 weeks in China last year) and compares its economy to that of Stockholm (but how will it compare by 2025?)

Resetting Intuition

I was pleased that even though McKinsey is well known for being very data based (and you can certainly see this focus in the book) the firm still sees a role for intuition.  To me, this is particularly important given the complex mix of forces suggested in the book.  I also think extrapolating data into the future is increasingly dangerous to do.  And in fact, the book notes that the 4 forces can "play havoc with forecasts and pro forma plans", but of course that's exactly what MGI has had to do.

Richard also described a balanced approach to using data and intuition:

"However data or analytically driven, many executives still reply on intuition.  And numbers never prove it 100%.  That can mean that executives leave a decision a bit or plan make it later.  The point is are they happy to make a decision on the basis of the data that they're getting?  It's a bit like what we think house prices are going to do.  Data underpins it in a way we're not even conscious of.  Over the last few years, asset prices have appreciated, driven by interest rates and global GDP.  We've got used to it.  So I won't make a good decision if I don't get a forecast, or by suppressing my intuition."

The idea of needing to rest this intuition recognises that our intuition which still underpins much of our decision making has been formed by "a set of experiences and ideas about how things worked and are supposed to work."

The difficulty is that this acts a bit like recency bias and the anchoring effect in psychology, or inertia in physics.  "However we identify it, there is a powerful human tendency to want the future to look much like the recent past."

So "if we look at the world through a rearview mirror and make decisions on the basis of intuition built on our experience we could well be wrong.  In the new world, executives, policy makers, and individuals all need to scrutinise their intuitions from first principles and boldly rest them if necessary."

I'm not quite sure about the suggestion that intuition anchors people to the current state - surely it depends on what people pay attention to?  And although I think Richard used the Tom Watson quote about there being room for 4 computers in his session at LSE this week, there are also plenty of examples of forecasts being well over the top, for example ones suggesting that we’d all be flying around with personal jet packs by now.  

However the book does provide a couple of good examples of anchoring, for example companies allocating the same resources that they had done in the previous year, even when things change drastically, for example in the global recession.

My remaining worry is that 'boldly resetting' is likely to be a bit harder to do than the words might suggest.  So I think the book is probably right in referring to executives needing to develop the capabilities to rest their own intuition.

Skills Challenges to meet the 4 Forces

Given that I've been blogging about digital, we focused mostly on the trend / force around technology:

"HRDs are seeing the impact of cloud systems like Workday.  They're not taking 5 to 10% out of their transaction costs but by a factor of 2 or 3 times as they move towards self service vs forms and people.  It's a strategic issue because it costs less and people get better service.   Employees find it more convenient. 

But as technology disrupts more jobs and people have to refocus.  How prepared is HR to help in that journey?"

That led us onto a conversation about employment and skills.  As noted earlier, global labour market growth is due to start falling, and finding talent in skilled positions will become yet harder.  However as robots and computers take on a growing role in performing activities, and undertaking knowledge work, less lower value roles will be needed.

This means that by 2020 "businesses could be short of 85 million workers with college degrees or vocational training; at the same time, 95 million lower-skilled workers could be unemployed."


Part of the solution to this problem is about better use of online talent platforms (see McKinsey's new research report on this.)

However there needs to be more action too, including better links between business and education.  I mentioned an earlier McKinsey labour market report I'd seen which described how South Korea (where Richard has just returned from) transformed their whole eduction approach to provide the skills that country needs.  But this is harder in a Western democracy like the UK.

Richard didn't have a complete solution to this but suggested that whilst the UK isn't as bad as other places, we need to do more to develop STEM skills, particularly in numeracy, computer programming and confidence in technology.

"I find it extraordinary that people can give up maths at 16 and go to university with just a maths GCSE.  But the coding in schools curriculum is great - every policy maker around the world I've mentioned it to has asked 'why aren't we doing that?'"

We talked about three other needs supporting this as well:

1.  Much more external focus.  Many execs are very internally focused.  That may have made sense during the last few years, to drive performance and productivity. But now they're still not spending enough time with customers, understanding the disruptions.  They need to go round Silcon Valley and meet the disruptors. 

2.   Ability to make companies agile.  It's difficult to get actions exactly right so you need to be able to respond.  It's amazing to see how some companies respond - for example long debates about cannibalisation. 

3.   Attitudes.  It's easy to see the four forces as a perfect storm where everything is negative.  but some of the changes will be very exciting, for example taking a billion people out of poverty, creating a consuming class of another billion people, creating a cancer drug that be tailored to your genome and so on.  We think the winners will be disproportionally the optimists.

I finished by asking about income inequality which I had noticed Richard had described in a session at LSE earlier in the week but didn't seem to come through that strongly in the book. 

Partly because of the impacts on employment that I described above, inequality is going to grow further too.  Some cohorts of the population have done badly from the changes.  In fact Richard suggested that because of automation, de-unionisation, immigration and trade or offshoring, male school leavers have seen salaries decline since 1995.

Well inequality isn't in the book because McKinsey are still working on their first research report on it but Richard agreed with me that the impact will be important to society and to businesses too.  If we're struggling for skills that last thing we want is more people with-holding their discretionary effort too.

I'll be posting on some of the additional challenges of operating in this complex, digital environment, over the next few days and weeks.

In the meantime, thanks to Richard for his time and insights - I do think the book presents a compelling outline of the need to reset.

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#ECTalent Managing in the Great Reset / 1

 

  A lot of the Economist's Talent Management conference did focus on changes in the world of work.  Dean Royles even nicked Peter Cheese's phrase about work, the workforce and the workplace.  Here are my highlights:

 

Firstly, Will Hutton provided en excellent context for this change.  The great reset is being caused by the depth and length of the current recessionary period.  This of course varies by country - Will is upbeat about the Eurozone but pretty pessimistic about China.

In the UK, we've got to deal with ineffective innovation, the dysfunctionality about our approaches to ownership (I think Will was talking about housing but I'd put the stock market in the same category).

There are big shifts in technology underway as well.  The last century has seen 9 general purpose technologies - technologies which impact other technologies - the internal combustion engine, electricity, motor vehicles, aeroplanes, mass production, the computer, lean production, the internet and biotechnology.  But the next generation will see about 20 - the mobile phone, nanotechnologies, fusion energy, advanced materials, carbon sequestration, space, managing the nitrogen cycle, water, health informatics, durable customised infrastructure, customised medicine, the brain, cyberspace security, enhanced virtual reality, personalised learning, new manufacturing methods eg 3D printing, and the internet of things.  Oh and big data? - eg the driverless car and pilotless airplane are dependent on sensors and communication networks - transport as big data (so car manufacturers are having to learn from Google about the next generation of cars!)

In her later session on how HR is impacted by all of this, Naomi Stanford mentioned Anybots too.  Well, their impact may be less profound than most of the above but they're a great example of how technologies can be humanised too:

 

 

We need to get serious about innovation - no company is smart enough alone to navigate this new world.  So we need to be open to outside influences, ideas, people and agencies.  Firms need to be really clear about what they think is their core business and hence which ecosystem they need to join.  Then open up - co-invent, co-create and co-produce, eg P&G and Unilever with their 'open innovation' orchestrators.  Develop absorptive capacity.  Organise open innovation calls, exploratory 'dates' and open contracts.   Change behaviours (and change rewards - especially of top executives who Will thinks are well over-paid):

 

 

(The point about unknown unknowns is why I'm down on big data in HR - at least in aspects of this which are strategically important.)

 

All of this, and other factors, are causing big changes in the nature of employment and hence talent management.  One of these shifts is the move to knowledge based roles which are driving improvements in the economy.

 

 

According to some economists, this is leading to the people-less economy, a world in which 50% do not work.

The remaining jobs are moving into things like micro-production, human well-being, 'wicked' issues and the digital world itself, from cyber security to digital clutter management!

We're also seeing labour market flexibility morphing into indentured labour.

More in part 2...

 

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Technorati Tags: Economist, talent management, Will Hutton

Vineet Nayar: Employees First

 

   Here are some notes on my meeting yesterday with Vineet Nayar, CEO of HCL Technologies and author of ‘Employees First Customers Second’:

 

How vs What

I thought I knew this from his book, but wanted to be sure, so asked Vineet what has led to HCL Technologies’ success – what is its source of competitive advantage – is it competitive positioning, core competencies or is it simply EFCS?

 

Vineet explained that in 2005, HCL Technologies started an innovation in what they were doing, developing new products and services and the rest of the 4Ps to outserve their customers.

But there’s a commoditisation taking place in the industry – you’re either good enough or you’re not.  It’s OK if you’re Apple etc, but service companies are finding that they’re less and less differentiated.

At around this time, the book Blue Ocean Strategy came out so HCL asked themselves can they could apply this to how they run their company.

The resulting differentiation from their competitors works at three levels:

1. what is our business – providing value to customers
2. where do we create this – in the interface between customers and employees
3. who creates it – employees (which means that HCL’s management needs to enthuse and encourage employees).

 

That’s HCL Technologies’ competitive advantage - how they run the company.  EFCS isn’t about being employee friendly – it’s about using employees as a way to grow faster that your competitors. Employees are your strategy and differentiation.

 

The family model

An important part of EFCS is the family model which is about building a trust based environment based upon the family unit.

Vineet wants to avoid the separation that occurs when people say good-bye to their families, go to work, hang their costs on a hook and leave their emotions, subjectivity, personality and connections to family life behind.

This leads to the following unwritten rules of the workplace:

• Do not trust your manager
• Don’t get too emotional about anything
• Remember it’s not personal, it’s only business.

 

Vineet believes these are outdated thoughts left over from the industrial age.  So he’s led HCLT to become more transparent, sharing plans and financial information with everyone in the organisation.

I wanted to ask about this because it goes so clearly against much conventional wisdom.  In particular, Vineet talks frequently about the need to provide an appealing environment for Gen Y, but there is a view (yes, I’m thinking about you Laurie) that Gen Y desire an even more transactional and less close relationship with their employer.

 

Vineet responded to my question with three of his own:

1. Where is growth going to come from: – emerging markets and new products
2. Who will provide this growth? - employees
3. So what to do about it? – you need to develop relationships with your employees – what will you be doing to bring them closer to you over the next 2 years than they were over the last 2 years?

 

Vineet described an organisation where someone said it felt like Russian Roulette, there had been so many redundancies.  His advice was that you’ve got to care, not for people who go, but for the people you leave behind.  Don’t let go of them – or let them go but care for them.

In any case, things have changed, outside the workplace at least.  Our generation want to be friends with their kids, who are generally more collaborative.

So CEOs have no choice in this - if they want to grow, the only way to do so is to innovate through their teams.  So they need to go back to their ‘family members’ and say let’s reset the whole thing.

 

Reward and Engagement

Vineet doesn’t mention rewards in his book, but it was an obvious area to ask about.  If everyone is accountable to, and supporting everybody else, and if the traditional pyramid’s inverted, then to me, this means that there needs to be more equal sharing of rewards.

And to me, it’s a critical enabler for building trust.  So in his book, Vineet suggests self-orientation is one barrier to trust – people need to know that those they’re interacting with are thinking beyond their own self-interest.  And surely focus on high personal compensation is a major part of this.

However I think that in Vineet’s view the question was missing the point and we soon moved onto HCLT’s ‘engaging the whole person’ approach:

 

Everyone needs to be rewarded appropriately. The definition of this varies individual to individual and country to country.  Think of the Head of BP getting them out of the current crisis – any compensation is less that they deserve because they are the man in charge.

Trust is the key. And lack of trust is the reason these questions are being asked. Do you ask your father how much do we spend? 

Everyone has work to do and the market determines their compensation (he’s not talking about obnoxious compensation).

In any case, there’s a lot more to me as an employee than my compensation.  And just because I’m being paid I won’t jump up and down for you.

You go to church on Sundays.  You pay to go to church and make a donation and provide your time and maybe do some social work and the church doesn’t pay you but you still have passion – why?

So why do we assume that just because we pay you you’ll feel good.

People have multiple interests - social activities, sports, technology etc - and the only way to engage them is in multiple directions.

HCLT gains a lot of motivation by involving people in giving - for example by teaching for 2 hours per week.

This leads towards thinking about concentric circles - like a Facebook.  If you’re interested in a community, you can belong to it, if not, don’t belong.

But if you’re a member of 6 or 7 communities, it provides a higher possibility of creating passion in you.

 

 

I really appreciated the chance to have a conversation with Vineet, and highly recommend his book.  I’ve also moved HCL Technologies experience up towards the top of my list of great HCM case studies.

Why?  Well look at these aspects of Vineet’s story from an HCM point of view:

• HCLT’s competitive advantage comes from its organisation, not its business (Julian Birkinshaw would describe this as from HCLT’s management rather than its leadership)
• It has a clear focus or mojo which describes how the organisation is going to work: EFCS
• It has understood the journey it has needed to undertake in terms of organisational outcomes, moving from Point A - being tolerant of gradual change - to Point B – the v’iew on the other side of the mountains’
• It has used innovative and unique activities like the provision of financial information of each employee’s team on his or her desktop to support these outcomes
• The company uses the resulting organisational capability (or human capital) to create vs simply add value (red ocean is about adding value, blue ocean is about creating new value)
• This has helped drive performance in HCLT’s ‘value zone’ and has contributed to new business ideas through unstructured innovation.

 

Also see my post on HCLT’s collaborative organisational structures including more on Vineet’s concentric circles at Social Advantage.

And you can read Vineet’s blog posts at vineetnayar.com or blogs.hbr.org.  You can follow him on Twitter at @vineetnayar.

 

Technorati Tags: Vineet Nayar,HCL Technologies,Employees First,Customers Second,HR,HCM

 

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Kenexa Leadership seminar: leading change; changing leadership

 

   Busy day today with a couple of afternoon appointments following a seminar on leadership hosted by Kenexa, ‘The Science of Outcomes’.  Despite the title, the key theme for me was the emerging / additional aspects of leadership.  MC’d by Kenexa’s Director of Consulting, Dave Millner, the presentations focused on:

 

 

Leadership in a Social World

Matt Alder (recruiting futurologist, who I met recently at a Changeboard event, and will be working with again soon at TRU London 2) presented on social media and the connected organisation.

Social media is changing the way people buy things, the way they complain, and the nature of brands (“it’s like word of mouth on steroids”).

It’s changing corporate communication, recruitment and other HR practices.  In fact, it affects every area of your organisation – the opportunities are enormous.

So it’s a strategic issue, not a policy one (although having an appropriate social media policy is important too).  And the threats of not participating significantly outweigh the threats of doing so.

In response to my question, Matt explained that in his view, one new challenge for leadership in this environment is about responding to the connected generation (Gen Y) who are used to using these new social channels.  This requires leaders to understand the opportunities provided by the new techniques which are fuelling these generational differences.

 

For more on social media and the connected [social] business, see my other blog, Social Advantage.

And for comments on leadership in this environment, see my reviews of Emmanuel Gobillot’s two books.

 

 

Developing Leaders in Emerging Markets

Tommy Weir (VP of Kenexa’s Leadership Solutions and author of CEO Shift who I met at his former employer, Nakheel, on one of my trips to Dubai, and is pictured above) presented on what expat (and local) leaders need to understand about leading in emerging markets.

Just as with developed markets, success in leadership is about knowing your employees, and there are some considerable differences in employee perspectives in countries like UAE, China etc:

• A youth bulge vs an aging population
• A group orientation (in which life is designed to be a group) vs an individual orientation
• A family mentality to business (where business has until very recently been conducted in an agrarian setting and in a family context) vs a corporate mentality
• Informal learning (learning in small settings over a cup of tea) vs formal learning
• Leader vs employee-centric (patriarchal societies in which an elder person has more status).

 

 

Changing Requirements

So if employees are different do leaders need to do something different?  Clearly, yes.  Tommy Weir took us through the following changes, which I think apply to the new social world as well:

 

Imagination

Things aren’t necessarily going to be at your finger tips – you need the ability to connect different piece of information (think about the imagination needed to create the man-made islands in Dubai.

 

Magnets

You need to know how to hold onto your talent.  Matt’s connected generation are used to pressing the reset button when playing computer games – and they have similar expectations in organisations too (in both developed and emerging markets).

 

Multilingual in one language

Just because we’re all talking same language doesn’t mean we have the same understanding.

 

Rapid talent developer

Promotions are having to take place at a very early age (either because this is the only way to sustain growth, and / or because this is the expectation of the new workforce).  This increases risk – leaders need to be able to get talent developed faster – by starting earlier / condensing development or mitigating the extra risks.

 

 

The Paradox of Leadership Potential

There are some opposing trends too.  Tommy suggested leaders in emerging markets need to have abilities in navigation – they need to be expert in giving direction in an ambiguous environment.  In the social world, leaders need to avoid giving direction, and enabling the workforce to make decisions for themselves.

So how do you handle leadership in social and emerging businesses?  There are no easy answers to this one, but it’s clearly possible as I think social media’s developing nicely in the UAE at least (see my interview with H2.0).

But I think the tension between the two trends also emphasises the complexity and ambiguity involved in developing leadership skills and in particular, the difficulty predicting how these skills are going to change…

 

John Mahoney-Phillips (Global Head of Human Capital at UBS, who Sandy Campbell introduced me to briefly quite a few years ago) referred to this difficulty in predicting leadership requirements as one reason why traditional ‘9 box’ approaches to performance and potential have significant problems, and also why many organisations aren’t getting huge returns on their investments in talent.

His / Kenexa’s new Leadership Potential Quotient tool focuses instead on the attributes of individuals now which may enable them to reach leadership roles in the future:

 

 

 

Technorati Tags: Kenexa,Leadership,seminar,Science of Outcomes,Tommy Weir,John Mahoney-Phillips,UBS,Matt Alder,social media,emerging markets,potential,LPQ

 

 

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Forecasts and predictions

 

   In today’s Talking HR show, Krishna and I are going to be talking about our thoughts on the last year, and our predictions, requirements, resolutions etc for this year.

I know one prediction I want to make, but thought I would check everyone else’s to inform my own thinking too.

Here are some of my favourite lists:

• DDIs’ list of talent resolutions
  • Expand succession management to talent mobility (great post from Josh Bersin)
  • Quit sacrificing talent (build dual career tracks)
  • Ask more, tell less (I’d suggest we need to build autonomy, not just a perception of this!)
  • Manage your millenials (I’d say build targetted and personalised strategies)
  • Vaccinate for growth (they say growth won’t happen because we have great HR programmes – I say it will if we have great Human Capital!)
  • Walk the talk (great post from John Hollon)
  • Pull your head out of the sane
  • Repair the reputations of leadership (from Dan McCarthy)
  • Be the love (NO IDEA what this one is about)
  • Live the crisis mindset (I’d say yes, but we need to do more).

 

• The Global Human Capital Journal’s predictions (despite it’s name, this has a much broader focus than HCM but I really like its review of opportunities re social media):
  • The economy will continue to be unpredictable
  • Company failures will continue to make headlines
  • Employment for executives will be stagnant
  • Marketing 2.0 will conquer numerous big brands
  • Social business will see mixed results
  • Companies will build social media teams in earnest
  • Changes in social networking platforms
  • Social tech will relentlessly drive rich experience into the cloud
  • More case studies for social business models and tactics (crowdsourcing, community companies, professional amateur collaboration, gaming and virtual worlds)
  • Consumer empowerment
  • Mobility and mobile social networking
  • Video will be increasingly mainstream.

 

• Knowledge Infusion’s suggestions (from their 'lesson learned' document – I’m looking forward to their ‘things you should know’ webinar as well)
  • Focus on strategy
  • Manage your data
  • Integrate your technology and processes
  • Think about the end user
  • Understand the business case for talent technology.

 

• Tammy Erickson’s predictions for the way we work
  • Two-job norm
  • Less "off hours" work
  • Competition for discretionary energy
  • More diverse arrangements
  • Transparent, "adult" arrangements — Tammy’s favourite change, and mine too:

 

• “My favourite change is the growth in what I like to call "communities of adults" — a philosophy of recasting the employment relationship from one of paternalistic care to adult choice. A simple example is offering a menu of benefit options and letting employees choose those that work best. Further along the spectrum would include encouraging employees to "own" their own feedback process or even set their own compensation levels. These sorts of changes won't settle in this year, but they're coming. I expect we'll see more examples as the year progresses.”

 

Mmmm.  Still not yet sure what my top three are going to be though…

 

 

Picture credit: Magnus Manske

Technorati Tags: 2010,HR,Talent,predictions,DDI,Knowledge Infusion,Global reset,Human Capital,Journal,Tammy Erickson

 

 

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Business changes and HR plans

 

   I’ve just got a few more posts to do on human capital / talent / workforce planning for 2010.

However, even though I promote the view that the energy for HCM should come from within the organisation (an inside-out perspective), organisations clearly need to take account of the broader and longer-term context too.

One of the inputs that organisations (at least those based in, or with operations in, the UK) may want to use is the CBI’s latest report: ‘The Shape of Business – The Next 10 Years’ (thanks to Alice Snell for highlighting this on Taleo’s blog).

The first part of the report focuses on the reset in the business environment and the effect of the financial crisis and the recession on three existing drivers of change. Here’s my summary (focusing on the themes which are of most interest to me / this blog, and which does not cover the whole report):

 

1. Increasing importance of, and declining levels of trust

Our expectations of businesses are increasing, and the internet gives us the power to ensure that businesses live up to these expectations, Businesses are under the spotlight and need the trust of their stakeholders to retain current degrees of freedom to operate.

However trust in businesses and the profit motive have declined and are at risk of remaining depressed.

• 79% of UK respondents said they don’t trust business leaders to put the interests of their employees and shareholders ahead of their own personal interests (Edelman Trust Barometer - supplementary survey)
• 51% of respondents said UK businesses behave ethically - compared to 58% in 2006 (Institute of Business Ethics, 2008).

 

To redevelop trust, businesses will need to demonstrate their ethical credentials. This relates in particular to executive pay, environmental responsibility and openness with information (I’m going to have to come back to this with another post).

 

2. Social and demographic change

Businesses will be challenged to manage four different generations of employees, each with different motivations and expectations.

In addition, although pension problems will force some older employees to work longer, businesses will still need to take action to address gaps in critical skills (including science, technology, engineering, maths and project management).

Businesses will need to capture the knowledge and experience of individuals before they retire –and to retrain other employees, and/or seek new skills from elsewhere.

Businesses will also need to adapt if they are to attract, retain and get the most out of the new generation of employees (an important point and again, the subject of a future post).

 

3. Further technology change

Digital technologies are fundamentally changing business. Personalised web-based applications, cloud computing, real-time interaction and always-on web features are likely to become commonplace within 5-10 year years. Teleconferences, videoconferencing, webinars and remote working systems are all improving. Generation Y use these technologies in a different way and will expect increased technological capability at work.

Businesses will need to increase their use of Facebook, Twitter and other web 2.0 and social networking applications.

Businesses will also need to invest more in building their corporate cultures as a higher proportion of employees work away from central offices and/or reside in the periphery to the core of permanent staff.

The report also suggests that businesses are concerned about the impact of technology on work / life balance (though this wasn’t seen as a major issue in a recent Google Wave on the area).

 

 

More on the business response to these challenges shortly.  But perhaps you’d like to think about how you’re going to respond to them first?

Technorati Tags: CBI,The Shape of Business,The Next 10 Years,HR,talent,human capital,business,plan,strategy and the Fat Smoker,environment

 

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Developing your 2010 Human Capital / Talent / Workforce / HR Strategy & Plan

 

I’ve previously posted on my Human Capital Management Strategy, Talent Management Strategy and Workforce Planning processes, but I haven’t written about how these processes can be combined.  This is partly because doing so may seem a little nit picking (these terms are generally used indistinguishibly).  But I believe the differences are important (according to Peter Cheese’ data, organisations that score in the top quartile of business results score an average of 3.4 for maturity of Human Capital Strategy, compared to just 1.8 for those organisations in the bottom quartile).

And although I have a lot of time for InfoHRM and their Workforce Planning process that I described in my last but one post (remember that I tend to be most critical over areas that I largely agree with), I think HCM Strategy involves more – and provides more benefit.

For InfoHRM, WFP is the maths behind Demand –Supply = Gap.   And HCM Strategy is about the actions taken to deal with the gap:

 

 

It’s all very well thought through.  But for me,  HCM Strategy is about the type of place an organisation wants to become.  It’s a higher level of strategy / planning than WFP and needs to come first if an organisation is going to maximise the value it gains from its people:

 

Human Capital Planning

This is about choosing the sort of human capital or organisational capability that’s going to make a difference to a particular organisation; doing a diagnosis of the current level of capital; working out how it can be best created and setting objectives for this (in the top row in the HCM Value Matrix).

It’s about deciding on the type of place an organisation wants to become; what it wants to provide to its people; what sort of people it needs and what it needs its people to deliver etc.  And it’s a vital step in meeting Richard Boyatzis’ challenge about accumulating rather than liquidating human capital which I think is essential is an organisation is going to create value and provide competitive advantage through their people.

It doesn’t need to be performed every year necessarily but I’d suggest it should when facing major changes in the environment such as the one we seem to be entering at the moment ie recession to jobless growth.

Note that I’ve put Human Capital Planning at the same level of business planning in my slide, above to emphasise that the business plan should be informed by the Human Capital Plan as well as the other way around.

Another important aspect of my approach is that the focus of energy is inside the organisation – on the things the organisation can already do well and can be developed into differentiators (ie its mojo / organisational capability)

See:

• Richard Boyatzis on human capital accumulation
• My HCM strategy development process
• Organisational capability and strategy
• Organisational capability and the inside-out approach

 

Talent Planning

This process is about identifying the talent groups that require particular attention within the strategy.   These people may be high performers (‘A’ players), but they may be other people / groups too (see my last post on differentiation).

One important part of this process is the identification of Employee Value Propositions (EVPs) for each of these groups.

This is a really vital step in HCM strategy development, and lies at the heart of the Human Capital Strategist programme that I deliver for the Human Capital Institute (in UK and Europe).  I also think Dick Beatty describes its value well.  But I believe it needs to come after Human Capital Planning as the identification of talent groups needs to be informed by organisational capability, not just critical business processes.  But it needs to come before Workforce Planning because the identification of talent is an input, allowing WFP to focus on what’s really important, rather than an output of this process.  (There may however need to be some iteration of this, for example if WFP throws up critical constraints in the supply of various groups which then may also need to be considered to be talent).

• Six varieties of talent management
• Differentiation for Workforce Planning
• Dick Beatty on differentiated metrics for a differentiated workforce
• McKinsey’s War for Talent: ten years on
• More about the talent problem
• Human Capital Strategist certification

 

Workforce Planning

This process is about a more granular level of planning, diagnosis and strategy development, and as much as possible should be data based.  (I don’t believe you need to get into numbers earlier on in the human capital strategy development process, and I’ve been involved in several cases where doing so has obscured rather than clarified strategy making.)

See:

• My Workforce Planning process
• Lacey All, Starbucks on Workforce Planning
• Mary Young, Conference Board and Workforce Planning

 

HR Planning 

Another input into Workforce Planning is more traditional HR Planning.  This looks at how people can be used as Human Resources to help meet an organisation’s mission, BHAGs, business plans and objectives.  It leads to the setting of objectives in the middle row (adding value) in the HCM Value Matrix.

It’s it at this level that HR needs to be business first, HR second (at the left-hand side of the slide, I think we need to be HCM professionals first).

See:

• Leading the HR function

 

HR Process Planning

The third level of planning looks at HR processes and how these can be improved, based on best practice, benchmarking etc (rather than how these fit the particular needs of the organisation).  These requirements become objectives in the bottom row (value for money) in the HCM Value Matrix.

See:

• The future of HR (more proactive support function or real driver of competitive advantage?)

 

Scorecard Development

At each level of Human Capital Planning, Talent Planning and Workforce Planning, an organisation should develop then iterate objectives for their HCM Strategy.  Once they’ve completed this analysis it makes sense to develop measures to support these objectives.  This process provides an HCM Scorecard based upon the HCM Value Matrix.

See:

• CIPD conference: measures and metrics
• Which direction Beyond HR?

 

Scenarios

InfoHRM note that scenarios help manage change and risk by developing alternative views of the future based on events outside the organisation’s control.   This helps the organisation rehearse how it might adapt to future events today (what if?).

I agree with the importance of scenario planning but believe it needs to start at the beginning of the strategy development process (ie in Human Capital Planning) and be iterated at all three levels

See:

• Scenario planning
• Scenarios for HR’s future in the global reset

 

 

Note, whenever I work with organisations this process ends up looking very different from the one I’ve described here.  I’m not actually a big supporter of methodologies, at least in this sort of area.

But the process I’ve described is the ideal one I’ll have at the back of my mind when I’m talking to a potential or new client.  And we’ll then develop something that will work best for the particular client based upon this insight, but also the client’s particular strategies, external environment, internal context etc.

See:

• HCM consultancy

 

 

Technorati Tags: Workforce,Human Capital,HCM,Talent,HR,Plan,Planning,Strategy,Measurement,Scorecard,2010

 

 

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CIPD conference summary: Authenticity

 

   Authenticity was also at the heart of many of the presentations.

Rebecca McIntosh and Claire Jelley, working for Indi Seehra at the University of Cambridge explained that authenticity is about substance, being knowledge-led, inner satisfaction, serving others, gratification from sustainability, multi-focus and outcome objectives.  It’s not about style charisma, ego, self-interest or even greed, instant gratification, singe focus or output objectives.

My favourite presentation in this area was given by Normal Pickavance from Wm Morrison.  Pickavance explained that for Morrisons, authenticity is about dealing with reality as it really is.  It’s not about the ‘Best companies to work for’ criteria!

And for him, it something that marks the end of an era – the ‘fast company era’, with its associated ‘fast company mindset’ (in which talent is seen as scarce – and can be, and needs to be singled out; in which talent can be bought; and in which talent should and does command a massive premium in rewards) – also see my post on the global reset and differentiation / inclusivity.

At Morrisons, authenticity is built upon the following four pillars:

• Authenticity begins with your own people
• Grow your own people your own unique way
• Top performance comes when everyone works together
• Everyone’s got talent = sustainable performance.

 

Other organisations seeking to act authentically need to:

• Be clear about who they are (linking and aligning core capabilities, operations, culture and competence to create a sustainable point of difference)
• Understand what makes them different (which Helen Rosethorn from Bernard Hodes referred to as their cultural strengths and weaknesses, and Allan Leighton, former CEO at ASDA used to call “the stuff other buggers don’t do”!)
• Be proud of what they do
• Consistently align employee and customer experience (being true to themselves)
• Communicate extensively.

 

 

Technorati Tags: Rebecca McIntosh,Claire Jelley,Indi Seehra,University of Cambridge,Normal Pickavance,Wm Morrison,Morrisons,Jackie Orme,CIPD,Manchester

See my previous post on Transparency.

See my other conference posts.

 

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Developing social capital for the ‘improving economy’

 

The next HR carnival at Blogging 4 Jobs is going to focus on talent management strategies in the improving economy.

My first response is to ask ‘what improvement’?  The US may now be technically out of recession, but the UK’s still got some way to go…  see the latest housing prices figures (and I’m having a tough day!).

Jessica Miller-Merrell at Blogging 4 Jobs notes that even in the US, the recovery is going to have a “"W” or a slow “V” shape.  And over at the Business Execution blog, Erik and Keith predict it’ll be a “U” shaped recovery.  Perhaps the appropriate letter for the UK is an “L” (see, I told you).

Jessica suggests the following very sensible proposals:

• Poll our employees
• Seek feedback
• Take action
• Follow Up
• Build a Candidate Pipeline.

 

And Erik suggests companies need to:

• Have “Execution Agility” as well as “Strategic Agility”
• Let people inform the strategy
• Make amends for cutting headcount, freezing pay, slashing benefits, decreasing hours, etc, and invest in Status and Fairness.

 

I think Erik and Jessica are right to focus on engagement. This is clearly going to be an issue for employers as (when!) the economy improves.  I thought Management Today summed it up nicely:

“More than one in five UK workers reckon that they rarely or never feel fulfilled by their jobs, according to a new survey by workplace assessment specialists SHL. This dissatisfaction (which is particularly prevalent among young people) has apparently got even worse as a result of the recession. And although workers are reluctant to act on it for the time being, it supposedly could mean a mass exodus once the job market starts functioning properly again...”

 

Rather over-optimistically perhaps, I spent quite a bit of time focusing on how companies could engage people to prepare for the recovery at the beginning of the recession (naive fool!), and these suggestions are probably more relevant now, so you might want to check out:

• Scenarios for HR’s future in the global reset
• HR’s main priority
• CIPD Managing through a Downturn Conference
• Talking HR show #10: Navigating your way out of the recession.

 

But I’d like to make one more suggestion too.  And this pick’s up on Erik’s comment that “what drives high performance is a person’s social and emotional connection to work”, and also Jessica’s that “it’s the relationship that matters”.

To me, the new priority is to develop social as well as human capital.  Yes, human capital is still going to be vital.  But if the  W/V/U/L recovery is, as many people are predicting, a relatively jobless one, then organisations are going to need to do more than just optimising the engagement and alignment of their people.

They’re going to need to optimise the way their people work together too.  I think this is going to involve much more than just the use of Linkedin, Twitter and Facebook.  Instead, it’s going to have to be about an appropriate mix of effective leadership, HR and management practices, OD interventions, and yes, web 2.0 tools as well.

More about this soon…

 

Technorati Tags: Social capital,talent management,improving economy,Jessica Miller-Merrell,blogging4jobs,HR carnival,SuccessFactors,Business Execution

 

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HCM in the recession

 

    I’ve been thinking about anonymous’ comments, particularly in connection with my presentation next week on Globoforce’s webinar looking at using HCM, compensation & benefits, and employee recognition to drive positive change in the recession.  (Not that I think my thoughts can have as much impact as anonymous’ comments seem to infer!)

Actually, there’s not that much I can think of to add to some previous posts, so I thought that instead of redoing this from scratch, I’d simply refer to and link together some previous posts.

However, I will say that at the moment, I’m feeling a lot more cheerful than I have been – there’s a growing amount of good news about – even Robert Peston is seeing signs of green shoots of recovery!  But then everyone also seems to think that the next decade is going to be much harder than the last, so I would suggest the posts I link to below are likely to apply for some time to come.

The first thing to note is that it’s very difficult to predict exactly what is going to happen from this point on.  So the use of scenarios is probably an appropriate approach.  I think, to a large extent, which of these scenarios emerge will depend upon upon how much peoples’ attitudes, the role of business, or even of capitalism itself, changes within what has been called the global reset.

But no matter what happens, there seems to be two key roles for HR / HCM.   The first role is about managing through the downturn, responding to the impact of the recession.  This includes making layoffs and managing survivors, but also avoiding redundancies by, for example, introducing salary reductions.

The second role then is about navigating a way out of the recession - particularly as a lot of innovation tends to occur in difficult times.  Linked to this is taking advantage of the slack in the system (I know it may not feel as if there is) to increase the capability and the impact of HR.

Anonymous, I hope that helps!

 

Technorati Tags: Recession,dowturn,HCM

 

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