Can HR Evolve Faster? What's in Its Way? - and

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1 Can HR Evolve Faster? What's in Its Way? - and How to Remove It John Boudreau April 19, 2010

2 Extending the Paradigm Compliance Maintain compliance and control Services Provide effective services Human Resources Decisions Improve organizational decisions i Talentship Personnel

3 Elements of A Decision Science Decision Framework Management Systems Integration Shared Mental Models Data, Measurement and Analysis Focus on Optimization

4 Role of Business-Unit HR Professionals Compliance HR generalists who are agents/brokers of HR systems and processes Services HR leaders who are at the table Human Resources Decisions HR leaders that bring a unique decision perspective to the organization Talentship Personnel

5 Business Unit HR: Engagement Model Decisions Where do HR Business Partners focus their efforts? Change Management Determine Talent Implications of Business Strategy Services Focus HR Deliver Professional Services Staffing Compensation Performance Management Development Succession Management Leadership Development Talent Pool Strategy Leadership Team Effectiveness Resolve Complex Workforce Relations Issues Compliance Manage HR Transactions Value (Proximity to Strategy Formulation)

6 HR Functional Planning Process Compliance HR doing what is required by law and for effective risk and cost control Services HR engaging with the business units to determine the services desired Human Resources Decisions HR facilitates resource allocation decisions based on the talent implications of the strategy Talentship Personnel

7 Strategy Lenses: Business Unit Level Strategy Element Industry Context Competitive Positioning Analysis While examining strategy through each lens on the left, determine where having better talent than the competition is most critical What are the most important industry assumptions? What are the major external assumptions within the strategy? Are there critical areas where you are making assumptions about the industry that are different than key competitors? What unique value do we create within this industry? What makes our advantage difficult to duplicate? How do we generate returns from the value created? Resources y p g What are your sources of competitive advantage? What resources do you have that competitors want? Vice-versa? Processes Growth Algebra Where does the performance of specific business processes/sub-processes most directly limit the results we intend to achieve (I.e., which constraints are most critical)? How do you intend to grow revenues? - Enter new markets - Increase product lines within existing markets - Grow distribution channel(s)

8 HR Professional Value Proposition Compliance HR professional value defined by technical expertise (programs and requirements) Services HR professional value defined d by personal credibility and history with constituents Human Resources Decisions HR professional value defined d by a unique strategically relevant functional discipline Talentship Personnel

9 HC BRidge Framework ANCHOR POINTS LINKING ELEMENTS Sustainable Strategic Success 1 Impact Resources and Processes 2 Effectiveness Efficiencyi Organization and Talent Interactions and Actions Culture and Capacity Policies and Practices Investments

10 Basis of HR Engagement Compliance HR systems that achieve goals by requiring participants to do what they must do Personnel Services HR implements changes by encouraging Human Resources Decisions HR systems that achieve goals by teaching participants and providing the tools to improve decisions Talentship

11 Retooling HR (Boudreau, Harvard Business Publishing, June 2010) Applying Proven Business Tools to Talent Using Logical Frameworks that Stakeholders Already Trust and Understand Knowing The Business MODELS, Not Just Knowing the Business Stakeholders Must Ask the Tough Questions Making Stakeholders As Accountable and Adept at Talent as Other Resources

12 The Logic of Critical Talent What do HR stakeholders define as critical talent? Ifyou asked 15 stakeholders where would improving talent 10% make the biggest difference to our strategy What would they say? What do stakeholders define as critical supply chain or manufacturing processes? If you asked 15 stakeholders where would improving process capacity make the biggest difference to process outcomes? What would they say?

13 The Logic of Strategic Workforce Plans How do your strategy scenarios connect to your strategic workforce planning? Faced with multiple possible futures, how do you prepare your talent portfolio? How do strategy scenarios connect to planning for manufacturing facilities, R&D, product tdevelopment, etc.? Faced with multiple ltiplepossiblepossible futures, how do you prepare your financial portfolio?

14 Typical Turnover Analysis Logic Spend months defining the rightturnoverturnover rate Benchmark against industry competitors Report turnover and benchmark to stakeholders Calculate the costs of separating and replacing employees to show the millions of dollars saved What is the right thing to do about employee turnover of 15%? What if produce had a spoilage rate of 15%?

15 Inventory Retools Employee Shortages What do HR stakeholders consider the right level of employee surpluses and shortages? What do HR stakeholders consider the right amount of time to fill open requisitions for talent? What do stakeholders consider the right level of surpluses and shortages for raw materials or unfinished goods? What do HR stakeholders consider the right amount of time to fill open orders for products or materials?

16 Supply Chain Retools Talent Acquisition What do HR stakeholders consider the right amount of time to fill open requisitions for talent? What do HR stakeholders consider the right amount of time to fill open orders for products or materials?

17 Consumer Research Retools Total Rewards Should I mass customize the deal we make with different employees? What do we do about Gen X, Boomers, Gen Y, Millenials, etc.? What do HR stakeholders consider the right amount of customization or standardization? What do HR stakeholders consider the right amount of customization in products and services for consumers?

18 HR Measurement Focus Compliance HR measures costs and compliance Services HR measures external benchmarks and perceived quality of services from internal customers Human Resources Decisions HR measures the quality of talent t decisions Talentship Personnel

19 Lighting the LAMP Valid Questions and Results (Information, Design, Statistics) The Right Analytics Rti Rational ltl Talent Strategy (Competitive Advantage, Talent Pivot Points) The Right Logic HR Metrics and Analytics That Are A Force For Strategic Change Sufficient Data (Timely, Reliable, Available) The Right Measures Effective Knowledge Management (Values, Culture, Influence) The Right Process

20 LOOKING AROUND THE CORNER The Evolution of our Capability Model The focus for 2010 But we also know where we want to go in the future Talent Culture Transitioning to Impact HR

21 HR Evolution: Emerging Issues Will Human Capital Strategy be the Domain of HR or Strategy? Will Organizational Design Reside Within HR? Will HR Be the Discipline of Organizational Communication? Who HR Be The Chief Reputation Officer? Is Labor Relations the Entry to Social Responsibility? Will HR Connect Values and Culture to Sustainable Strategic Success?