Creating Value with your HR Strategy - Entrepreneurship 101 (2013/2014)

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More small businesses are remaining small, and never get out of the “startup” mode of thinking, because they don’t grow in employee population. In reality, many businesses will remain small and nimble, and will become star business performers, so waiting for employee growth to “grow up” in business performance no longer applies. Small businesses are here to stay, so how can they reach top shelf business performance with small teams?

Margo Crawford will guide entrepreneurs through some basic aspects of hiring, while still considering limited human capital and driving business performance. The focus will be on achieving common business goals: building revenues, reducing costs, growing profits, building corporate value, sustaining this value and then transferring this value. Using these filters, Margo will talk about how HR impacts on all of these areas, from simple compliance and best practices to strategic thinking and organizational design and performance.

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Creating Value with your HR Strategy - Entrepreneurship 101 (2013/2014)

  1. 1. CREATING VALUE WITH YOUR HR STRAGEGY
  2. 2. Topics   Building, sustaining and transferring value   Individual and team competencies   HR Resourcing – punching above your weight   Finding the Best   HR Health Check – the basics
  3. 3. Building Value
  4. 4. Building…sustaining…transferring value THE STAKEHOLDERS: •  Investors, shareholders, lenders, acquirers care about this principle •  Look for (and invest in) the team that has the ability to create, build sustainable value OWNERS/LEADERS: •  Need to use this filter in growing the company and building the team
  5. 5. Value Formula Value = Profit that’s sustainable and transferable   6
  6. 6. 7 The decision to start a business or invest in a business – taking current potential and realizing future potential. Current Actual Value Future Potential Value WILD CARD Ability of team to realize potential
  7. 7. 8Business Drivers Addressable Market Positioning & Differentiation Brand Technology Barriers to entry Growth Customer Diversification Market Share Market (external) Factors Operational (internal) Factors Company / Reputation Sales & Marketing Financial Resources Operations Innovation Legal Human Resources Factors   Do you have team a that can execute to deliver future potential?   What are the resourcing plans and assumptions?   What are the team & individual competencies / gaps?   Are the basics in place to attract, retain, grow the team?   Is the company legally compliant & are risks being mitigated? Are key employees locked in?   Organization and team dynamics – working for or against progress?
  8. 8. 9Team Capability? Current Actual Value Future Potential Value WILD CARD Ability of team to realize potential 1.  Are the individuals you have now the same you need in the future?? 2.  Can they deliver?? The challenge is moving from early stage to mature. When do companies “grow up”?
  9. 9. 10Patterns of Struggle #1 – business inflections Time Corporate Leadership and Operations Build, deliver & support Design & development Marketing & Sales Headcount Product definition roles BusinessPerformance Headcount(mix/#s) Formation Early Growth Accelerated Growth Maturing Growth Next Stage Growth Business inflection points = challenges •  May require different skills & sometimes different people •  Adding bodies not always the answer •  Only gets more challenging not less •  Tendency to not change up the team can seriously impact ability to realize potential = capability of team
  10. 10. Corporate Operations Total Addressable Market Early Stage Focus: NEW CUSTOMERS Sales, Product Marketing Focus •  New products •  New features •  New customers Product Strategy Design & Development Manufacturing & Test Delivery & Support Patterns of Struggle #2 – early to mature stages 11
  11. 11. Corporate Operations Sales, Product Marketing Focus •  New products •  New features •  New customers Product Strategy Design & Development Manufacturing & Test Delivery & Support New customer focus drives the priorities - pressures the organization to gravitate towards the state of new customer wins. Total Addressable Market Early Stage Focus: NEW CUSTOMERS Early Stage 12
  12. 12. Corporate Operations Total Addressable Market Sales, Product Marketing Focus: products, features & customers Product Strategy Design & Development Delivery & Support Manufacturing & Test Existing Customers & Maturing Products New Customers & Products Future Customers & Products IMPACT:   Demands expand and resources thin or demands on personal time increases.   Priorities focus on problems and immediate needs and not growth and sustainability.   Result is organization with resources focused in wrong areas. Maturing Company 13
  13. 13. Corporate Operations Sales, Product Marketing Focus: products, features & customers Product Strategy Design & Development Delivery & Support Manufacturing & Test Business Pressures:   Expectations on the business increase and change – the “promise” now includes quality, support, scalability   More pressure to continue to innovate – new offerings to continue to lead   Need to manage full product life cycle – not just new products   More products, more customers = more complexity Total Addressable Market Existing Customers & Maturing Products New Customers & Products Future Customers & Products Maturing Company 14
  14. 14. Corporate Operations Total Addressable Market Sales, Product Marketing Focus: products, features & customers Product Strategy Design & Development Delivery & Support Manufacturing & Test Existing Customers & Maturing Products New Customers & Products Future Customers & Products Dominate tendencies: •  Priority continues to be winning new customers with existing products – other demands overlooked until a crisis •  When pressure increase – add bodies BUT not necessarily the right skills and resources •  Dull and difficult/pesky problems – annoyances to fix vs. structural issues to overcome Start-up or expanding business culture/ focus Shift from early stage to maturing stage 15
  15. 15. Corporate Operations Sales, Product Marketing Focus: products, features & customers Product Strategy Design & Development Delivery & Support Manufacturing & Test Existing Customers & Maturing Products New Customers & Products Future Customers & Products 1.  Must continually be looking for new opportunities with new customers and products 2.  Need to support, manage and grow business with existing customers and mature products 3.  Looking up and beyond now – where are the future opportunities, future markets, future types of products or offerings. 4.  The transfer of both customers and products from ‘new’ to ‘mature’ must be planned, clear with clear hand off points. 5.  Need to be able to transfer future opportunities into actual products and actual customers….so a future view, but with a road map to how the company brings product to market and bring the market to the products of the future. 2 4 1 5 3 Shift from early stage to maturing stage Five organization elements to build value that is sustainable & transferable: 16
  16. 16. Sales Product Design New Product Immediately?? Late?? Gravitates to the newest, the best, now. Gravitates to released design, when it is ready. Customer’s perspective Customer’sperspective Mature Existing Product Patterns of Struggle #3 - Organization Structure & Natural Business Forces 17
  17. 17. Sales Product Design New Product Mature Existing Product Immediately?? Late?? Finance, Operations, Delivery, Support Gravitates toward the predictable and precision (forecasts, schedule, eliminate risk) Organization Structure & Natural Business Forces 18
  18. 18. Sales Product Design New Product Mature Existing Product Immediately?? Late?? Finance, Operations, Delivery, Support Product Strategy Needs to balance all of the business elements •  Technology intelligence •  Customer intelligence •  Business intelligence Organization Structure & Natural Business Forces 19
  19. 19. Sales Product Design New Product Mature Existing Product Immediately?? Late?? Finance, Operations, Delivery, Support Product Strategy Needs to balance all of the business elements •  Technology intelligence •  Customer intelligence •  Business intelligence Organization Structure & Natural Business Forces 20
  20. 20. Sales Product Design New Product Mature Existing Product Immediately?? Late?? Finance, Operations, Delivery, Support Product Strategy Needs to balance all of the business elements •  Technology intelligence •  Customer intelligence •  Business intelligence Organization Structure & Natural Business Forces 21
  21. 21. •  Has there been any additions or changes to your leadership team? •  Does your organization achieve relatively less with more people? •  Pressure on margins despite revenue growth •  No or exceptionally low turnover OR exceptionally high turnover •  Confidence around leadership team •  Succession plans – single points of failure •  Productivity & performance – a team that can achieve results (revenue/head) •  Cost of over loaded team •  Skills to achieve what the business needs Value DepressorsIndicators of Workforce Weakness 22
  22. 22. •  Expectations not articulated •  No communications around corporate goals •  Connection of corporate goals to individual goals and behaviours •  Lack of approaches to reward behaviours that drive value •  Missed milestones and key deliverables •  Star performers not identified and not locked into business •  Nothing in place to push performance – possible low caliber team Value DepressorsIndicators of Low Performing Team 23
  23. 23. MORPHING THE TEAM 24
  24. 24. Valuation Time Current Value $50M Future Value $70M $30M $60M $20M $40M $90M $80M $100M How do you get the team driving this additional valuation? A team that can drive value… •  Fill in the gaps – solve structural issues (balance immediate and long term) •  Attract and retain stars •  SMART resourcing •  Take care of the basics to sustain and retain the value that is created 25
  25. 25. 26 Can the current team execute to realize future potential? AND Through the transition from early stage to maturity? Current Actual Value Future Potential Value WILD CARD Ability of team to realize potential
  26. 26. Formation Technical Milestones Proofof Concept V.1 Product V.1GA Product V.2 Product V.2GA Product Financial Milestones Seed Funding SeriesA SeriesB Strategic Revenue +Margin Revenue Yearly Revenue Growth Quarterly Revenue Growth SeriesC IPO/M&A Customer Milestones Company Launch Early Customer BD Customer Trials Strategic Customer Sales Repeat Sales Repeat Sales Repeat Sales New Accounts New Accounts New Accounts V.1 Sustaining V.2 Sustaining Organizational Milestones CEO R&D Lead CFO (P/T?) PLM Sr. R&D Marcomms Int./Jr. R&D BD/ Sales QA SE’s Sales (Hunter) Sales (Farmer) CTO Sales Support Customer Support HR (P/T?) VP Sales VP Marketing Admin. Support CFO (F/T) Accountant COO? HR (F/T?) Workforce Planning – mix Company Stage – business inflection points Pre-revenue Early revenue Repeatable revenue Maturing Products Major Revenue Growth 27
  27. 27. 28Be honest and brutal in the assessment Not at all likely 50/50 Good probability Very likely Low probability Likelihood of achieving results with current team. MILESTONES 1 Milestone 1 2 Milestone 2 3 Milestone 3 1 Milestone 1 2 Milestone 2 3 Milestone 3 Not at all likely 50/50 Good probability Very likely Low probability Likelihood of achieving results with a modified team. MILESTONES Modified Team Recommendations:
  28. 28. Team Strength Snapshot ✔ ✗ ? Lead Support Create Sell Build Deliver If you have at least 3 ✗ or ? in any column, you have team weaknesses that you should be addressing. Corporate Leadership Internal Operations Product/ Service Strategy Marketing & Sales Design & Develop product or offering Deliver & Support Product or Service 1. Do you have a leader for this functional area? 2. Is this leader fully accountable for delivering a known result this year? 3. Does this individual have the capability to drive results to the next level of growth you want for the company? 4. Does this leader know what the overall corporate goal is this year and longer term? 5. Will they be rewarded for helping to achieve this corporate goal? 29
  29. 29. PUNCHING ABOVE YOUR WEIGHT 30
  30. 30. Flexible resources used as needed for: •  Peak work •  Special skills/expertise •  Bench strength Time HeadcountSMART WORKFORCE PLANNING Build, deliver & support Corporate Leadership and Operations Design & development Marketing & Sales Product definition roles Strategic Core Team Technology Platforms that support ‘just-in-time’ resourcing: Contests Platforms Collaborators Platforms Complementors Platforms Crowd Labour Markets Platforms 31
  31. 31. SELL •  What is your core? •  How and when can you strategically resource? •  What is critical IP, knowledge, know-how that is fundamental to the product/service offering? PLAN & DELIVER CREATE & INNOVATE LEAD & MANAGE THE BUSINESS Core Team Flex Team ASK 32
  32. 32. FINDING THE BEST 33
  33. 33. Employer Value Proposition 34
  34. 34. Employer Value Proposition Not everyone can be 35
  35. 35. BUT You Can Tell Your Story 36
  36. 36. BUT You Can Tell Your Story •  LEADING INNOVATION •  PULLING WITH A TEAM TO ACCOMPISH BIG THINGS •  SEE CREATION FROM START TO FINISH •  BIG SUCCESS WITH SMALL TEAMS 37
  37. 37. Speak to your stars…. Every chance you can: •  tell your story – job postings; blogging; web site; let them know why they must join you (now or in the future) •  Compelling job postings – speak to your future stars •  DO NOT leave this in the hands of those who will simply staff a role – this is critical to your business to create value 38
  38. 38. 39Resourcing for what Current Actual Value Future Potential Value WILD CARD Ability of team to realize potential What problem are you solving with this hire and is it the right problem?
  39. 39. Understand your perfect candidate! Same principles as understanding your customer SEGMENTATION •  Research the profile of the perfect candidate for each role •  What are the attributes, behaviours, career patterns and indicators of high potential •  What are the relevant career satisfaction factors   This will inform key messages to these target candidates   AND channels to reach them HOW - Strategic Sourcing vs. Recruitment 40
  40. 40. Understand your perfect candidate! Same principles as understanding your customer MESSAGING •  Based on what you know and what you discover – develop the messages and brand that speaks to these passive candidates •  GOAL is to implant the idea of your company as a career choice to all passive and active ideal candidates •  This messaging will be heard through branding, recruitment activities, marketing programs, speaking notes, and on-line activities and promotions HOW - Strategic Sourcing vs. Recruitment 41
  41. 41. Understand your perfect candidate! Same principles as understanding your customer CHANNELS •  Based on what you know and what you discover – develop strategic sourcing programs that address a full spectrum of channels to REACH the active, near- active and passive candidates •  Develop plans and programs with a view to:   find talent   nurture relationships   convert passive candidates to active candidates   close on perfect candidates HOW - Strategic Sourcing vs. Recruitment 42
  42. 42. Understanding who you are targeting; what they care about and how to reach them will result in: 1.  Clarity on what a successful candidate looks like for your organization 2.  Creating a compelling job posting that will speak to the best candidates for your company – giving higher likelihood of good matches 3.  Roll out a deliberate and effective recruitment campaign that will reach the target candidates that are best for your organization HOW - Strategic Sourcing vs. Recruitment 43
  43. 43. Reach is Key DIRECT  SOURCING   Job  Boards   User  Groups   Schools   Relevant   Associa@ons   Networking   Events   Awards  of   Significance   •  Post  ac@ve  (hiring   within  next  2-­‐3   months)   opportuni@es  on   target  job  boards   •  Post  ac@ve   opportuni@es  in  UG   job  sites  that  exist;   broadcast   opportunity  in  UG.   •  Note  do  not  overuse   this  -­‐  only  when   opportuni@es  are   real.   •  Post  ac@ve  opportuni@es   in  university  job  boards  -­‐   target  schools  with   relevant  programs.   •  Connect  with  someone   from  schools  if  possible   to  properly  promote   opportunity   •  Post  ac@ve   opportuni@es  in   relevant   associa@on  sites;   •  Make  contact  with   associa@on  to  see  if   there  is  a  way  to   tap  into  their   community.     •  Only  if  networking   event  has  known   recruitment  focus  -­‐   consider   par@cipa@ng  with   ac@ve   opportuni@es.     •  Explore  awards   related  to   employers  of   choice.   •  Coordinate  any   promo@on  of   these  with  direct   recrui@ng   opportuni@es   44
  44. 44. Reach is Key  INDIRECT  SOURCING   Job  Boards   User  Groups   Schools   Relevant   Associa@ons   Networking   Events   Awards  of   Significance   •  Examine  boards  for   opportunity  to   create  banner  ads   and  other   promo@onal   opportuni@es   •  Have  team  join   relevant  groups;   par@cipate  in  group   discussions  to  build   presence   •  When  opportuni@es   become  ac@ve  can   send  message  out  to   group.   •  Networking  with   schools,  alumni,   etc.  to  raise   awareness  of   Prolucid.   •  Team  to  join  relevant   associa@ons  that  have   high  value  in  terms  of   reaching  target   audience.     •  Will  want  'speaking   notes  around  who  we   are  always  looking  for'   •  Team  to  aWend  'high   value'  networking   events  that  promote   Company;  speaking   opportuni@es  to  be   explored.       •  Want  speaking  notes   on  resources  we  are   always  looking  for   •  Explore  awards  that   posi@on  company  in   a  highly  valued   technical,  sector,   work  environment.   45
  45. 45. Tight Execution is Key Focus in on a tight plan in the context of a bigger picture Effective Recruitment •  Know what you are looking for and when •  Think of a highly targeted approach •  Process from start to ‘in-seat’ will generally take no less than six weeks WITH all stars aligning – plan for 2 months or more if highly specialize role •  Think before you act – a little preparation will make the effort much more productive Organizational Milestones CEO R&D Lead CFO (P/T?) PLM Sr. R&D Marcomms Int./Jr. R&D BD/Sales QA SE’s Sales (Hunter) Sales (Farmer) CTO Sales Support Customer Support HR (P/T?) VP Sales VP Marketing Admin. Support CFO (F/T) Accountant COO? HR (F/T?) 46
  46. 46. TAKING CARE OF BASICS 47
  47. 47. Taking care of the basics… •  Protect IP & assets •  Retain or lock in key employees •  Appropriate liabilities and obligations; mitigate risks Contracts Compensation Sales Incentives Policies Workforce Planning & Recruitment Performance Management •  Appropriate compensation for market •  Motivate and Reward performance •  Sales compensation plans that drive quota attainment •  Models that make financial sense and are in line with market •  Terms that create appropriate obligations •  Policies that ensure compliance with laws •  Practices that align with business values, motivate the right behaviours, and ensure sustainable business operations •  Exceptional recruitment process and selection practices – resourceful and diligent sourcing; hire for best fit •  Workforce plans that align with business goals •  Effective feedback tools; programs that build goals that align with business goals The basics protect the value that has been created and helps drive additional performance 48
  48. 48. Thank You! Questions?

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