Creating Sustainable Change through Organizational Alignment and Managing an Increasingly Diverse Workforce Peter Cheese, Global Managing Director, Talent & Organization Performance, Accenture NASSCOM India Leadership Forum 2008, Mumbai

Global market forces are leading to talent management and workforce challenges Economic – economic power is becoming more dispersed Growth of emerging market economies and multinationals Growth of multi-nationals in emerging markets New generational norms Social – dramatic social change A billion new customers will enter the global marketplace Climate change is seen as a reality and is driving changes in technology, regulation and investment Technology – technological labor is no longer the preserve of developed economies Industrialized world is witnessing a shrinking pool of young skilled employees Governments of emerging economies are aggressively pursuing policies to move up the value chain Emergence of technology clusters and the global supply chain Demographic challenges Aging workforce Increasing female participation Retaining and motivating the workforce Increase in occupational mobility and work-life integration Growing polarization of workers Skills crunch The rise of the knowledge economy A middle management gap Importance of skilled workforce from emerging economies

Growth of emerging market economies and multinationals

Growth of multi-nationals in emerging markets

New generational norms

A billion new customers will enter the global marketplace

Climate change is seen as a reality and is driving changes in technology, regulation and investment

Industrialized world is witnessing a shrinking pool of young skilled employees

Governments of emerging economies are aggressively pursuing policies to move up the value chain

Emergence of technology clusters and the global supply chain

Aging workforce

Increasing female participation

Increase in occupational mobility and work-life integration

Growing polarization of workers

The rise of the knowledge economy

A middle management gap

Importance of skilled workforce from emerging economies

The talent management and alignment challenge is compounded by multiple generations in the workforce For the first time in history, four generations are in the workforce. Each generation has distinct characteristics and necessitate specific approaches to managing talent. Tenure Silent Gen 1 (1925 – 1942) Baby Boomers 1 (1943 – 1960) Net Generation 2 (1982 – 1998) Retirement Entry into Workforce Source: 1 Howe, Neil; Life Course Associates, 2007. 2 New Paradigm – Net Generation Strategic Investigation; 2007; co-sponsored by Accenture Generation Y Generation X 1 (1961 – 1981)

The sheer size of the Net Generation cannot be ignored “… this generation is bigger than the baby boom itself, and through sheer demographic muscle they will dominate the twenty-first century.” — Wikinomics, Don Tapscott Source: New Paradigm – Net Generation Strategic Investigation; co-sponsored by Accenture

Engagement and alignment – what are the issues? Considerable Majority 1 of Employees Understand Strategic Priorities Considerable Majority 1 of Employees Understand Their Contribution to Strategic Execution Agree 12% Disagree 88% 6% Agree 17% Disagree 83% A Gallup survey of 3 million employees… Accenture HPWF Study 2006 Declining loyalty and job satisfaction Falling employee loyalty and engagement, 5 th year of decline (FT Nov 04) Key factors for people leaving work - lack of opportunity (37%), lack of incentives (28%), dissatisfaction with the corporate culture (28%), and lack of recognition or praise (25%) – Martiz Poll, World at Work Nov 06 Increasing lack of alignment As little as 5% of employees understand the corporate strategy (Kaplan and Norton 2004) 88% don’t believe most employees understand their firms strategic priorities (HPWF Study 2004) Different Values of Generation Y Different value sets – life of jobs vs jobs for life, balance of life, corporate citizen values Higher expectations on integrity, feedback, opportunity Engaged 29% Not Engaged 55% Actively Disengaged 16%

Declining loyalty and job satisfaction

Falling employee loyalty and engagement, 5 th year of decline (FT Nov 04)

Key factors for people leaving work - lack of opportunity (37%), lack of incentives (28%), dissatisfaction with the corporate culture (28%), and lack of recognition or praise (25%) – Martiz Poll, World at Work Nov 06

Increasing lack of alignment

As little as 5% of employees understand the corporate strategy (Kaplan and Norton 2004)

88% don’t believe most employees understand their firms strategic priorities (HPWF Study 2004)

Different Values of Generation Y

Different value sets – life of jobs vs jobs for life, balance of life, corporate citizen values

Higher expectations on integrity, feedback, opportunity

How well are we doing ? Key findings from the India High Performance Workforce Study Talent management – specifically the ability to attract and manage critical skills and leadership – emerged among the top 2 of 11 capabilities driving high performance Organizations by and large, are not equipped to manage and enable Change of the magnitude that is being experienced today Indian CEOs have rated the HR function as their most important workforce – but they believe there is a significant need to improve its performance A critical HR challenge - operation in a silo , with little support offered to and received from key workforces. HR needs to facilitate solutions to strategic business issues – Yet, the focus of HR today is on transactional activities potentially reducing the bandwidth for the transformational

Talent management – specifically the ability to attract and manage critical skills and leadership – emerged among the top 2 of 11 capabilities driving high performance

Organizations by and large, are not equipped to manage and enable Change of the magnitude that is being experienced today

Indian CEOs have rated the HR function as their most important workforce – but they believe there is a significant need to improve its performance

A critical HR challenge - operation in a silo , with little support offered to and received from key workforces.

HR needs to facilitate solutions to strategic business issues – Yet, the focus of HR today is on transactional activities potentially reducing the bandwidth for the transformational

Extensive C-Suite involvement in their human capital management initiatives Focus support to workforces in the more strategic talent management areas of Learning and Change management; compensation is not a differentiating factor Leaders are able create burning platforms boosting the “perceived need for change” Leaders use metrics extensively to evaluate HR performance What distinguishes Human Performance Leaders from the rest of the organizations?

Extensive C-Suite involvement in their human capital management initiatives

Focus support to workforces in the more strategic talent management areas of Learning and Change management; compensation is not a differentiating factor

Leaders are able create burning platforms boosting the “perceived need for change”

Leaders use metrics extensively to evaluate HR performance

Greater workforce diversity is the new norm and creates greater alignment challenges Diversity today: Generational values Educational background Social background Ethnic and cultural diversity Geographic dispersion Type and style of working and learning Leading to: Greater challenges for leadership at all levels Greater complexity of engagement Greater challenges for alignment and managing change Importance of alignment of values, measurement and objectives, organization, managing change etc

Diversity today:

Generational values

Educational background

Social background

Ethnic and cultural diversity

Geographic dispersion

Type and style of working and learning

Leading to:

Greater challenges for leadership at all levels

Greater complexity of engagement

Greater challenges for alignment and managing change

Importance of alignment of values, measurement and objectives, organization, managing change etc

Aligning the dimensions Talent Leadership Technology and Business Processes Culture and Organisation Execution Alignment Results Strategy Informal aspects of how and with whom work gets done, foundational values, norms, assumptions Business infrastructure & mission critical processes/systems Understanding of talent needs Integrated talent management capabilities top down driven talent mindset and culture Personal effectiveness of leaders, leadership teams/groups, and governance processes Customers, value proposition, key priorities

Experience is the best teacher of leadership Organizations can leverage experience and practice to grow more leaders, faster Leadership capability, particularly in managing people and diversity must be developed at all levels These behaviours and practices must be measured and rewarded [coal] [diamond] Leadership Development

Experience is the best teacher of leadership

Organizations can leverage experience and practice to grow more leaders, faster

Leadership capability, particularly in managing people and diversity must be developed at all levels

These behaviours and practices must be measured and rewarded

Understanding what actions to take that will give the best chance of success Clear direction Commitment by leaders Accountability Engaged teams Insight + Action = Successful change High Performance On Track Unsustainable Off Track

New capabilities A strategic and holistic view of talent management clearly linked to business strategy and need Expand the talent management agenda to a broad and strategic focus on highly integrated systems and talent management capabilities New dimensions of talent management (examples) New, more diverse talent supply chains EVPs and talent management support tailored to talent segments Technology enabled learning and job support, collaboration tools to support knowledge sharing and innovation Redesign of workflows to make best use of available talent

A strategic and holistic view of talent management

clearly linked to business strategy and need

Expand the talent management agenda

to a broad and strategic focus on highly integrated systems and talent management capabilities

New dimensions of talent management (examples)

New, more diverse talent supply chains

EVPs and talent management support tailored to talent segments

Technology enabled learning and job support, collaboration tools to support knowledge sharing and innovation

Redesign of workflows to make best use of available talent

Need for an integrated and holistic approach Foundation of efficient and integrated HR operations and support Discover Your sources of talent Deploy Your talent at the right place at the right time Define Your talent needs Develop Your talent potential Metrics and Analytics Talent Mindset Talent Culture Business Strategy Talent Strategy Strategic context and understanding of current and future talent needs Integrated talent management capabilities Applied by different segments of workforce as needed Sustained by top down driven talent mindset and culture

Strategic context and understanding of current and future talent needs

Integrated talent management capabilities

Applied by different segments of workforce as needed

Sustained by top down driven talent mindset and culture

The key imperatives - summary Challenges are strategic and need a strategic response Measurement and insight to drive actions and behaviours Aligning culture and values, operating model, talent management, and leadership Make leaders and line managers really accountable Apply robust value and outcome measures to understand progress