Retooling HR: John Boudreau


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Presentation by Professor John Boudreau during the 8th editon of Vlerick HR-day 2011.

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Retooling HR: John Boudreau

  1. 1. “Retooling HR” _________ Presentation Slides Vlerick 8th HR Day Vlerick Leuven Gent Management School 8 June, 2011 Professor John Boudreau Marshall School of Business and Center for Effective Organizations (CEO) University of Southern California 213-740-9814 <>Note: The materials contained here are original copyrighted works of John Boudreau. Thisis intended as a discussion document. Comments are welcome and encouraged. However, itcontains trade secret and other proprietary information of John W. Boudreau. This copy hasbeen provided on the basis of strict confidentiality and the express understanding that it maynot be reproduced without express permission from the appropriate author, as indicated in thecopyright notice at the bottom of the slide. Please do not copy or distribute this informationwithout prior permission from the appropriate authors, and agreements for the use of licensedmaterial. Version GENT060811• 8 June 2011 Copyright © 2011 John W. Boudreau All Rights Reserved.
  2. 2. Retooling HR Vlerick HR Day John Boudreau If People Were Valued Assets … Retooling HR Vlerick 8th HR Day Vlerick Leuven Gent Management School 8 June, 2011 Professor John W. Boudreau, Ph.D. Center for Effective Organizations Marshall School of Business  University of Southern California © 2011 John Boudreau 1 Managing the Right Asset? • Manufacturing or technology company • High‐growth potential in the long term – Strong market demand • Constrained resource:  – Project engineers to customize the products to  the needs of the clients © 2011 John Boudreau 28 June, 2011 pg. 1Copyright © 2011John Boudreau. All rights reserved.
  3. 3. Retooling HR Vlerick HR Day John Boudreau Typical Budgeting Objectives Goals: • Complete certain projects • Add six new project engineers Actual: Completed projects Only added three new engineers © 2011 John Boudreau 3 Typical Performance Evaluation • Completed all objectives •EExpenses under budget d b d t Most systems would reward budget goal But, the expenses saved are minimal  B t th d i i l They are in a weaker position – compared with if they had staffed as planned © 2011 John Boudreau 48 June, 2011 pg. 2Copyright © 2011John Boudreau. All rights reserved.
  4. 4. Retooling HR Vlerick HR Day John Boudreau People = Precious Resource? In a mining company, would you rather be a mine  truck or a mine engineer? In a petrochemical company, would you rather be a  drilling rig or a petroleum engineer? In the U.S. Navy, is the supply chain for talent or  for rivets more sophisticated? At a “brand” company, would you rather be a  consumer segment or an employee segment? © 2011 John Boudreau 5 ReTooling HR • 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 g • Making Stakeholders As Accountable and  Adept at Talent as Other Resources © 2011 John Boudreau 68 June, 2011 pg. 3Copyright © 2011John Boudreau. All rights reserved.
  5. 5. Retooling HR Vlerick HR Day John Boudreau “R * I * S * K” A 4-Letter Word In Talent Management? • What Level of Work Performance Will We See? • Will Talent Capacity Fit Future Conditions? • How Variable is the Quantity and Quality of Talent in  Our Pipeline? © 2011 John Boudreau 7 The Logic of “Critical” Talent • What do HR stakeholders define as “critical” talent? • If you asked 15 stakeholders “where would improving  gg 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 If you asked 15 stakeholders  where would improving  process capacity make the biggest difference to  process outcomes?”  What would they say? © 2011 John Boudreau 88 June, 2011 pg. 4Copyright © 2011John Boudreau. All rights reserved.
  6. 6. Retooling HR Vlerick HR Day John Boudreau “Kano” Analysis Delights Wants Needs © 2011 John Boudreau 9 “Return on Improved Performance” Best Mickey Mouse tegic Value Worst Mickey Mouse Best Sweeper There is more value in  There is more value in Strat improving Sweepers than  Worst Mickey Mouse. Sweeper Performance © 2011 John Boudreau 108 June, 2011 pg. 5Copyright © 2011John Boudreau. All rights reserved.
  7. 7. Retooling HR Vlerick HR Day John Boudreau “Pivotal” Innovation: Park Ride Engineers Disney Engineers Cedar Point Engineers • Imagineering • G-Forces • Himalayas • Shuttle • Songs • Blogs Physiology Ph i l Story St © 2011 John Boudreau 11 “Selective” Risk in Airline Talent © 2011 John Boudreau 128 June, 2011 pg. 6Copyright © 2011John Boudreau. All rights reserved.
  8. 8. Retooling HR Vlerick HR Day John Boudreau “ROIP and Airline Service” Flight Attendant tegic Value Pilot Strat Legally Required Airline Minimum Discretionary Employee to Operate Expectation Behaviors/Effort Performance © 2011 John Boudreau 13 Portfolio Risk and Leadership Planning • How do your strategy scenarios connect to your  strategic workforce planning? p p , y • 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 development,  etc.? • Faced with multiple possible futures, how do you  prepare your financial portfolio? © 2011 John Boudreau 148 June, 2011 pg. 7Copyright © 2011John Boudreau. All rights reserved.
  9. 9. Retooling HR Vlerick HR Day John Boudreau Should You “Hedge” Leadership Risk? Ontario Power Generations blue-chip directors could have been voted "least likely to screw up" .... And yet, they did. The original 1999 cost estimate of $1.1-billion <to refurbish the Pickering A Nuclear Plant> is now $3-billion to $4-billion. From 1999, the board approved 11 cost overruns and 13 delays, Most of the utility’s recent directors were recruited in the 1990s to help p p privatize OPG, with solid financing experience for the IPO, which never occurred. None had nuclear expertise. Janet McFarland, “OPG Directors Had Talent, Sadly the Wrong Kind,” December 17, 2003. Globe and Mail. Toronto, ON, Canada. © 2011 John Boudreau 15 Talent Sourcing and “Supply Chain” • What do HR stakeholders consider the “right” amount  of time to fill open requisitions for talent? g p y p • What is the “right” level of employee surpluses? • What is the “right” level of employee shortages? What do HR stakeholders consider the “right” amount of  time to fill open orders for products or materials? What is the “right” level of raw materials or unfinished  goods or work‐in‐process surpluses? What is the “right” level of raw materials or unfinished goods or work-in-process shortages? © 2011 John Boudreau 168 June, 2011 pg. 8Copyright © 2011John Boudreau. All rights reserved.
  10. 10. Retooling HR Vlerick HR Day John Boudreau Applying the Supply-Chain Concept • IBM’s Global Workforce Initiative – Demand signals must be clear through the chain – Get the language of the work down to 100 roles.  HR “owns”  the work dictionary – Make the project demand signals transparent to managers,  employees, contractors, recruiters and vendors • Valero Oil – Measure all talent sources on cost, quantity and quality – Embed supply‐chain logic in the measurement system – Automate decisions by routing requisitions to the sources  that have been the best performers – Combine multiple quality measures to find inflection points © 2011 John Boudreau 17 Inventory Logic Retools Talent Management Inventory Optimization Question Talent Management Question How many orders should we place in a  How many times should we initiate a  time period? talent‐building cycle (hire, train,  develop)? What is the optimal shortage to allow, if  What is the optimal employee vacancy  we can back‐order replacements? level to allow if we can hire after the  vacancy appears? What is the optimal order quantity and  What is the optimal talent‐building cycle considering lead‐time? quantity and cycle (hire, train, develop)  considering how long it takes from start to  finish? If our ordering costs were lower, how  If our ordering costs were lower how If the costs of building or acquiring talent  If the costs of building or acquiring talent much more frequently should we place  were lower, how much more frequently  orders, and what is the new optimal  would we initiate a cycle?  How much  inventory level? more surplus or shortage would we  tolerate? © 2011 John Boudreau 188 June, 2011 pg. 9Copyright © 2011John Boudreau. All rights reserved.
  11. 11. Retooling HR Vlerick HR Day John Boudreau Retooling HR … Getting Started Expect HR to learn the business logic Manage people using your logic frameworks Seek out the risks and inconsistencies S k t th i k di it i Focus on the pivot‐points and inflections Logic first, numbers after Rapid‐prototype © 2011 John Boudreau 19 Further Information p // / How to contact John Boudreau at CEO: Office:  213‐740‐9814 Retooling HR. Harvard Business Publishing, 2010  © 2011 John Boudreau 208 June, 2011 pg. 10Copyright © 2011John Boudreau. All rights reserved.