Creating Sustainable Change through Organizational Alignment and Managing an Increasingly Diverse Workforce, Peter Cheese, Accenture

Slide 1: 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 Copyright © 2008 Accenture All Rights Reserved.

Slide 2: Global market forces are leading to talent management and workforce challenges • Growth of emerging market economies and multinationals Economic – economic power is • Growth of multi-nationals in emerging markets becoming more dispersed • New generational norms • A billion new customers will enter the global marketplace Social – dramatic social change • 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 Technology – technological labor is employees no longer the preserve of developed • Governments of emerging economies are aggressively pursuing economies policies to move up the value chain • Emergence of technology clusters and the global supply chain • Aging workforce Demographic challenges • Increasing female participation • The rise of the knowledge economy • A middle management gap Skills crunch • Importance of skilled workforce from emerging economies Retaining and motivating the • Increase in occupational mobility and work-life integration workforce all rights reserved • Growing polarization of workers 2 © 2007 Accenture

Slide 3: 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. Entry into Workforce Retirement Silent Gen1 (1925 – 1942) Baby Boomers1 (1943 – 1960) Generation X1 (1961 – 1981) Generation Y Net Generation2 (1982 – 1998) Tenure Source: 1 Howe, Neil; Life Course Associates, 2007. 2 New Paradigm – Net Generation Strategic Investigation; 3 © 2007 Accenture all rights reserved 2007; co-sponsored by Accenture

Slide 4: 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 4 © 2007 Accenture all rights reserved

Slide 5: Engagement and alignment – what are the issues? Considerable Majority1 of Employees Understand Their Contribution to Strategic Execution Agree 6% Declining loyalty and job satisfaction 17% • Falling employee loyalty and engagement, 5th year of decline (FT Nov 04) Disagree 83% • Key factors for people leaving work - lack of opportunity (37%), lack of incentives (28%), dissatisfaction with the corporate culture (28%), Considerable Majority1 of Employees and lack of recognition or praise (25%) – Martiz Poll, World at Work Understand Strategic Priorities Nov 06 Agree Increasing lack of alignment 12% • As little as 5% of employees understand the corporate strategy Disagree (Kaplan and Norton 2004) 88% • 88% don’t believe most employees understand their firms strategic Accenture HPWF Study 2006 priorities (HPWF Study 2004) A Gallup survey of 3 million Different Values of Generation Y employees… • Different value sets – life of jobs vs jobs for life, balance of life, Actively corporate citizen values Disengaged Engaged 16% 29% • Higher expectations on integrity, feedback, opportunity Not Engaged 55% 5 © 2007 Accenture all rights reserved

Slide 6: 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 6 © 2007 Accenture all rights reserved

Slide 7: 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 7 © 2007 Accenture all rights reserved

Slide 8: 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 8 © 2007 Accenture all rights reserved

Slide 9: Aligning the dimensions Strategy Customers, value proposition, key priorities Ali ion Leadership gn ut Personal effectiveness of leaders, me ec leadership teams/groups, and governance nt Ex processes Technology and Culture and Talent Business Organisation Understanding of talent needs Processes Integrated talent management Business infrastructure & Informal aspects of how and with capabilities mission critical whom work gets done, top down driven talent processes/systems foundational values, norms, mindset and culture assumptions Results 9 © 2007 Accenture all rights reserved

Slide 10: Leadership Development • Experience is the best teacher of leadership • Organizations can leverage experience and practice to grow more leaders, faster [coal] • Leadership capability, particularly in managing people and diversity must be developed at all levels • These behaviours and practices [diamond] must be measured and rewarded 10 © 2007 Accenture all rights reserved

Slide 11: Understanding what actions to take that will give the best chance of success High Performance Accountability On Track Engaged teams Unsustainable Commitment Clear by leaders Off Track direction Insight + Action = Successful change © 2007 Accenture all rights reserved

Slide 12: 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 12 © 2007 Accenture all rights reserved

Slide 13: Need for an integrated and holistic approach • Strategic context and • Integrated talent understanding of current and Talent Mindset management capabilities future talent needs • Applied by different segments of workforce as Discover Your sources of talent needed • Sustained by top down driven talent mindset and culture Business Talent Define Metrics and Develop Strategy Strategy Your talent Analytics Your talent needs potential Deploy Your talent at the right place at the right time Talent Culture Foundation of efficient and integrated HR operations and support 13 © 2007 Accenture all rights reserved

Slide 14: 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 14 © 2007 Accenture all rights reserved