Hr's Role in Business Growth July 2013

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  • 1. HR’s Role in Business Growth Accelerator or Speed Bump ?!?!
  • 2. © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 3. Raising HR’s Strategic Contribution 1. Understand what strategy is and isn’t; and why so many fail. 2. Sharpen the ELT’s strategic focus and related capabilities. 3. Redefine HR’s value proposition and role in the enterprise. 4. Create and illustrate the connection between HR and business processes. 5. Design and follow an HR Plan that drives growth plans and execution. Five Critical Success Factors © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 4. Strategy – a framework of choices that determine the nature and direction of an organization. Source: The Art and Discipline of Strategic Leadership by Mike Freedman & Benjamin Tregoe First…What It Is © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 5. Lack of clear ownership and accountability Lack of rigor and challenge in planning phase Out of touch with the market and/or the business Inconsistent focus and prioritization Inadequate attention to process and implementation Culture, leadership, people or skills can’t support it Design (Customers) Implementation (Capability) Why Strategies Fail © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 6. SWOT Analysis Gap Analysis Needed Organization and Capabilities Strategic or Operating Plan Monitoring and Continuous Improvement HR Plan for Closing the Gaps HR’s Strategic Context © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 7. Know the Vision Know the Business Know the Options Decide and Do What do we want to be known for or achieve? How will it affect financial performance? New markets, capabilities, or relationships? How will we prioritize and implement? Basic Strategy Framework © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 8. Defining HR’s Strategic Contribution 1. Understand what strategy is and isn’t; and why so many fail. 2. Sharpen the ELT’s strategic focus and related capabilities. 3. Redefine HR’s value proposition and role in the enterprise. 4. Create and illustrate the connection between HR and business processes. 5. Design and follow an HR Plan that drives growth plans and execution. Five Critical Success Factors © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 9. Sharpen the Strategic Focus & Capability • Help shape their vision & aspirations • Add clarity by asking the tough questions • Help align & equip the broader organization Influence & Support the ELT © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 10. Company’s Capabilities Customers’ Needs Competitors’ Offerings Strategic Hot Spot * Sharpen and Challenge Their Aspirations Know the Vision…Know the Business…Know the Options…Decide and Do © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved * Harvard Business Review – April 2008
  • 11. Add Clarity By Asking Tough Questions Questions about our talent demands and supply of talent Questions about our mission, vision or strategic direction Questions about our organization structure and effectiveness © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 12. Defining HR’s Strategic Contribution 1. Understand what strategy is and isn’t; and why so many fail. 2. Sharpen the ELT’s strategic focus and related capabilities. 3. Redefine HR’s value proposition and role in the enterprise. 4. Create and illustrate the connection between HR and business processes. 5. Design and follow an HR Plan that drives growth plans and execution. Five Critical Success Factors © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 13. FACT #1: Non-financial (intangible) considerations constitute 35% of investor decisions. FACT #3: 60 – 80% of a typical company’s Opex is tied up in workforce costs. FACT #2: For every $6 of market value, only $1 occurs on the balance sheet. The other $5 are based on intangibles. Understanding “Intangible” Value © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 14. TRADITIONAL VALUE – ADD Expenses Process Performance Value Drivers Payroll as a % of revenue Acceptance rates or time to fill Profit Before Tax per employee Quality of hires Benefit costs as % of payroll costs Absenteeism or Safety Results Call Center Performance Revenue per sales-maker Cost per hire Promotion and transfer activity C-SAT or customer loyalty ratings Employee Engagement HR – related legal costs Formal complaints Succession Plan Ready Replacements Customer Engagement HR headcount to total headcount Turnover rates or exit interview data Completed Performance Reviews Process cycle time Per – capita training costs Reasons given in exit interviews Completed Individual Development Plans New products or services launched Shifting HR’s Focus © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 15. The ultimate purpose of strategy is to create, optimize and sustain stakeholder value. Top and Bottom Line Impact HR’s Strategic Role Is To: • Ensure the organization has the people it needs to execute its strategy • Continually evaluate, build and strengthen its capability to execute • Help protect and ensure the value- creating potential of its talent © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 16. Defining HR’s Strategic Contribution 1. Understand what strategy is and isn’t; and why so many fail. 2. Sharpen the ELT’s strategic focus and related capabilities. 3. Redefine HR’s value proposition and role in the enterprise. 4. Create and illustrate the connection between HR and business processes. 5. Design and follow an HR Plan that drives growth plans and execution. Five Critical Success Factors © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 17. Your Employees Your Customers Your Business •Talent Value Proposition • Employee Segmentation • Employee Engagement • Employment Brand • Internal Performance • Customer Value Proposition • Customer Segmentation • Customer Engagement • Product/Service Brand Promise • Marketplace Performance Enterprise value is created at the customer – employee interface Aligning HR and Business Processes © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 18. Defining HR’s Strategic Contribution 1. Understand what strategy is and isn’t; and why so many fail. 2. Sharpen the ELT’s strategic focus and related capabilities. 3. Redefine HR’s value proposition and role in the enterprise. 4. Create and illustrate the connection between HR and business processes. 5. Design and follow an HR Plan that drives growth plans and execution. Five Critical Success Factors © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 19. Organizational Plan Human Resource Plan Deployment Development Retention Alignment Acquisition BUSINESS STRATEGY METRICS METRICS METRICS METRICS Integrated HR Strategy Competencies: the common link © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved Technology & Risk Mgmt Applied Throughout
  • 20. Q & A Wrap Up © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved
  • 21. © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved Appendix
  • 22. 1. Are key leaders aligned to and accountable for our vision or purpose? 2. Which initiatives drive most of our strategy’s value? (80-20 Rule) 5. Do we have action plans that drive everyone’s effort and outcomes? Questions About Our Direction © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples 3. Do our top initiatives have clear goals and milestones? 4. Are those goals translated to the individual level?
  • 23. 1. Do we have non-core or non-value add processes or functions? 2. Can we gain economies or efficiencies by centralizing? 3. Can we get closer to our markets by expanding or decentralizing? 5. Are we victims of our own silos? 6. Do we have too many layers and filters? Questions About Our Organization 4. Where are our process disconnects and bottlenecks? © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 24. Demand • Business strategy’s capability and talent implications • S/T planned & L/T anticipated • What talent do we need? • What are we missing? • What trends (business & people) concern us? • Which roles are critical? • Which critical roles are at risk or sub-optimized? • Which needs can we build or fill internally? • Which ones must we acquire? Supply • What talent do we have? • What does our skill/competency inventory look like? • Which people are critical? • Who is a successor for what role? • Who is placed in a talent pool? • Who is at risk? • How do we segment, evaluate, calibrate and deploy? • What does our external talent pool look like? • Which skills/roles are no longer needed? Questions About Our Talent © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 25. The 80 – 20 Rule Can Be Applied to Your Talent Base Talent Segments © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 26. The 80 – 20 Rule Applies to Your Customer Base Too! Customer Segments © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved Brand Advocates Loyal Customers Price Buyers Convenience Buyers Value Buyers High Cost Customers See Strategy Alignment Tool for more information and examples
  • 27. BRAND PROMISE COMMERCIAL EMPLOYER Creating solutions for business and home Providing products that lead in innovation and design Legendary customer service…and a lot of fun Relationships drive success Providing an innovative workplace Legendary opportunity…a fun place to work Creating a world of possibilities and opportunities for a meaningful life We turn relationship specialists into industry experts Aligning Your External and Internal Brands © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved Seizing All Opportunities to Differentiate See Strategy Alignment Tool for more information and examples
  • 28. SUPPLY Multiple Sources of Prospects Applicants Phone Screens F2F Interviews In-depth Interviews Offers Acceptances HR Process DEMAND 776 97 63 47 40 194 Cold Calls Appointments Actual Visits Proposals / Bids Negotiations T & C’s Sales Process Customer and Talent Acquisition Both Assets Require Similar Processes and Levers © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 29. Aligned Comp and Pricing Approach Parties Pay More for Receiving More Value PAY PRICE PREMIUM BASE (Fixed) (Variable) PAY Compensation paid for employee meeting expectations Compensation paid for employee adding value Customer views and pays for standard value Customer views and pays more for extra value PRICE © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved See Strategy Alignment Tool for more information and examples
  • 30. About the presenter: Bill Thomas has over 30 years of experience in HR/OD, Customer Experience Management, TQM and Operations management. Prior to joining Centric, he held national and global management roles with PricewaterhouseCoopers and Dell Computers, respectively. He was the co-architect of PWC’s Service Excellence initiative, and helped design and launch Dell’s Customer Experience effort. He co-authored the recent book “Anticipate: Knowing What Customers Need Before They Do,” and his work has been featured in CEO magazine, Human Resource Executive magazine, Quality Progress, HR Advisory and others. He can be reached at 866.302.9099 or via email at bill@centricperformance.com. About the company: Centric Performance works with organizations of various types and sizes to help them accelerate growth and improve results – at the enterprise, business unit, function, team or individual level. We do this by identifying, evaluating and improving their efforts and performance in four areas proven to create stakeholder value: • Strategy, Leadership and Organization Effectiveness • Optimizing the Customer Experience • Human Resource Practices and Processes • Business Transition Planning and Implementation Further information is available at www.centricperformance.com. © Copyright 2001 – 2013 Centric Performance, LLC – All Rights Reserved Accelerating Growth…Improving Results