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The role of human resources
management in the modern
organization
Graham Little
PhD AFNZIM
Redesigning the organization volume 4
Staff behavior is a strategic factor in the profit and loss, so why is
HR not the driver of organizational results?
The OPD-model and system of organizational design was born
from the question ‘why?’ beginning with the background science,
developing improved social science tools and then applying those
tools to the question of the exact causal link between organization
strategy and staff behavior.
The result was the OPD-SHRM system of organization design and
management within which HR emerges as a key driver of results.
Published by
Self Help Guides Limited
PO Box 36656
Northcote
North Shore
Auckland City
New Zealand
A reaching for infinity book
Copyright © 2011 Graham Little
ISBN 978-1-877341-06-9
Graham Little asserts the moral right to be identified as the author of this
work.
All rights reserved. Except for purpose of fair reviewing, no part of this
publication may be reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopying, recording, or any
information storage or retrieval system, now known or hereafter invented,
without permission in writing from the publisher.
A catalogue record for this book is available from the National Library of
New Zealand
Contents
The strengthened role of HR.......................................................7
Definition of strategic human resource management...............10
The aim of the HR ....................................................................14
The payback from improving human performance ..................15
Improved human performance is defined as improved definition
and/or delivery of ideal actions.................................................17
100% human performance........................................................17
Estimating the gain in human performance..............................17
The OPD profit profile link OPDPPL ......................................17
The potential of untapped human performance can often double
profits from the same revenues.................................................18
Essential to have coordinated policy and practice....................20
Measuring the ROI of HR ........................................................21
Background terms.....................................................................22
Behavioral structure and behavioral balance............................22
Defining the partnership between team leaders and HR ..........25
OPD-SHRM gives annual structure to HR department SHRM
activities....................................................................................27
Two aspects to modern HR is SHRM and compliance ............31
Satisfaction from getting it right not satisfaction and hoping
they get it right..........................................................................31
Depth of psychology in OPD-SHRM that must be managed...32
Psychological factors in OPD-SHRM ......................................33
Roles in HR follow from the OPD-model................................34
HR applies in all sized companies............................................35
Company culture and community culture.................................35
The OPD-model is universally applicable................................36
The professional company culture............................................37
Living the real values................................................................39
The governance sets the broader social frame of reference......40
Technical details of cultural audits...........................................40
The greater the cultural audit score the higher the performance
..................................................................................................41
The basis of talent is being able to guide a team......................42
Development of talent is developing the intellect ....................42
Human capital value .................................................................42
The SHRMIS system captures the standing value of the human
capital........................................................................................43
OPD-SHRMIS KPIs.................................................................44
The OPD-SHRMIS KPIs..........................................................46
Function and roles in the HR department.................................47
Common interest is integral to the OPD-model .......................49
Organization need both SHRMIS and HRIS............................52
Understanding business improvement and change...................53
Team leaders support and make use of HR when it helps them54
Recruiting is about the desire to be successful .........................55
Effective HR will enhance all organizations ............................55
Appendix: HR Department draft role structure ........................57
Graham Little............................................................................58
Academic background ..............................................................59
Introduction to the redesign of the organization book series....60
The strengthened role of HR
The UCLA student sat in the VP HR office, though she had noted
on the door he was now the HR Director. He placed the coffee on
the coffee table in front of her and settled into the settee opposite.
The data projector sat in front of him directed at the wall to her left,
and a whiteboard stood patiently to his right, markers stacked neatly
along the bottom, magnetized duster top right.
“It would seem,” she said, “congratulations are in order.” He
beamed.
“Very observant,” he said. “Yes, I now sit on the Board; they
decided that this whole issue of human performance as a driver of
results was a critical aspect of the business, and needed to be seen to
be so from the Board down. It is now accepted that the
organizational design is a governance decision, and although
belatedly, it needed to be seen to be so.” He sipped his coffee,
blowing on it a little to cool. “It is good progress, and the battles we
had a year or two ago are all over, mainly due to the fact the numbers
confirm all we were saying. There is no philanthropy, although the
conservatism really did take a long time to break through.”
“The pre-existing ideas and perceptions…takes a long time to
shift them and to get into place in people’s minds this new model and
system,” she said. He nodded.
“Which brings us,” she continued, “to the point of this meeting.”
“Yes”, he said, “we are delighted to help the Prof; I understand he
wants you to do a series of lectures to his HR Masters class on the
question of what HR managers need to do to get to the top table and
stay there. And he wants you to use us and our SHRM system, well
the OPD-SHRM system, but we see ourselves as ‘owning’ it now, it
is how we strategically manage human performance in relation to our
profit and loss… He wants you to use us as the case study of the
overall role of HR in the modern organization, and the structure of
HR that emerges and is consistent with the OPD-model.” She
nodded.
“So, the about the background briefing today, we know you
understand a lot, but this is from a particular point of view that you
have not necessarily considered. But first, how did you find the time
budgeting workshops?”
“Just great” was her enthusiastic reply. “Really learned a lot and
it consolidated my insights into what happens and how it works.”
“Good,” he said. “Yes, the workshops went very well, we are
getting sharp at them. And it does lay a very secure foundation
giving people practical tools to turn their desire to succeed into
success. And” he paused looking directly into her eyes, “they win -
we win.” She nodded, thinking of the conviction from the boss with
the same comment.
“We are tight for time, so if you don’t mind we just press on.”
She nodded agreement with a smile. “I have a bunch of notes for
you.” She had not noticed the folder of notes on the table to his
right, which he now pushed across to her. “Usual story, we will walk
through it then these notes are for at home, and reminders, and
background etc. If … when you begin to put your lectures together,
and if there’s anything you do not understand, well …” he spread his
hands outward, “you have my phone number’, he said, nodding and
smiling. He switched on the data projector.
“You know this OPD-model and system of organizational design
was a result of developing better social science tools and then
applying those tools to the question of the exact causal link between
organization strategy and staff behavior.” She nodded, and he
continued. “The practical result was the OPD-SHRM system of
organization design and management within which HR emerges as a
natural partner to team leaders, each with a clear and defined role in
guiding human performance to improve profits.”
Strategy
Teamstructure,
rolesinteams.
Idealactionstoachievegoals
Goals,KPIs
OPD-SHRMIS
Monitoringteam
leader
implementationof
OPD-SHRM
processes
Psychologicaltargets
Leadershipactions1
Setuparchitecture
Leadershipactions2
Buildperformanceculture
Leadershipactions3
Maintainsuperiorperformance
Engagement
Clarityofgoals,KPIs.
Visualizationofideal
actions.
Commitment
Personalchoice.
Professionalism.
Teamleadersupport.
Buildownframeof
professionalmind.
Buildframeofreference
forwork.
Managecommunity
frameofreference.
TheOPD-modelof
strategichumanresource
management
She nodded again; she was familiar now with this intellectual
background and understood the depth of it, including an analysis of
causality … goal<->action, ultimate and immediate effects…defining
of theory creation tools, general theories of knowledge and
psychology. Initially she had been drawn into this
intellectual/academic background. She appreciated the depth, but
also how it was applied to a very practical and highly commercial
purpose. She was impressed and committed to securely standing on
the depth of intellectual understanding to use social science tools to
resolve real issues in the real world. How the depth gave people in
society, not academics, but people doing actual things, practical
things… how the depth gave them confidence, and when it worked,
they knew they needed no other frame or idea. There were also now
emerging books on this, books written for practical people. She
thought of the Prof, and how excited he was at a depth of social
science having a practical impact in the real world.
He had paused. “Well …” he smiled, “I was speaking for a minute
before I realized you had left the room.” She blushed. “I was
thinking of the background, the depth, and how we could stand on
this depth knowing we are secure intellectually, and there are real
practical tools, models and consequences. Nothing more useful than
a good theory, when for years in these areas there has been theory
after theory.”
“Yes,” he nodded, “It does feel good to have a secure intellectual
position that while it might be refined, is not going to be replaced by
the next flavor of the month.” He sipped his coffee, each reflective.
“Shall we get on?” She blushed again.
“Sorry,” she said.
“Not at all,” he replied, “you be as reflective as you choose, we
know only good comes of your thinking and refining of your
insights.” She smiled shyly mouthing ‘thank you’.
Definition of strategic human resource management
“A crucial consequence of the OPD-model is a revised definition
of strategic human resource management”… he rose and wrote
‘SHRM’ on the white board. “I know you know much of this, but
best, I think, to go through the structure of how we end up with the
HR department that we do. The definition arises directly from the
model and is very different. Typically SHRM was relating human
resources to business strategy; SHRM was then a function of finding
and defining the links, effectively the place of HR within the
strategic mix, which in turn tended to define the place of HR and the
VP HR at the executive top table.” He paused and finished his
coffee.
“This approach was called strategic human resources, but it was
not really; it was really finding the link between human resources
and strategy. There were some underlying motivations in that many
of the thinkers about HR wanted HR to be part of strategy. Now
perhaps it is, occasionally, but the reality is HR comes to account in
strategy only as a cost, like many other costs. There is nothing
usually to place the VP HR in the team defining strategy, unless the
person themselves was a solid visionary sort of person. There was
no real HR reason to have them present.”
“There is reason with the OPD-SHRM approach?” She asked. He
shook his head.
“Actually no,” he replied. “HR is seen as something done after
the strategic decision. Like, if for example, there is a real chance
skills could be short and so hamper the strategic roll out then HR is
likely to be consulted. Outside circumstances that are unusual, HR
issues arise after the strategic decision, the first HR decision being
the governance decision of the organization design paradigm. If it is
based on the model,” he pointed to the screen, “then that determines
a very different definition of SHRM”… he paused.
“Frankly”, he continued, “we don’t think there is a choice, this
OPD-Model is just so superior, intellectually and practically, the
alternative, namely the current collection of views and ideas, does
not really amount to a scientific paradigm at all, and as you well
know, it seriously lacks depth or integration into the serious issues of
social science…such as cause, a coherent general theory of
psychology, and effective social science conceptualization tools.
The current global view is just a mish mash of poorly integrated
ideas with no real link back into social science at all.” He reflected
on his comment.
“Let’s then not discus current stuff any more. I think you have a
clear idea on its limitations, and the steps behind this OPD-model to
correct those limitations. The thing about OPD-model is it came
from applying the tools, so in that way is not someone’s opinion….”
He stopped, she nodded her agreement.
“So HR is after the strategic decision,” she said.
“Once the strategic decision is made then the OPD-SHRM
processes are immediately in play with the questions: What goals are
implicated in the decision? How will these goals be grouped to form
roles? Remember, a role is defined by the grouping of like goals
with like…” she nodded, he continued, “How will roles be grouped
to form teams and teams formed into divisions. Again like with like
is the guiding rule, the reason being to avoid asking someone to have
a behavioral reach too large to be realistic, like asking someone to
be CFO, and VP Sales; the knowledge required and the types of
action are just inconsistent. Now this is an extreme example to make
the point, not extreme is where we place customer service; part of
sales or part of operations.” Again she nodded, she understood these
issues.
“From this set of preliminary questions, there emerges the
organizational structure of divisions, teams, and roles in teams.” He
paused, reflective. “One small point of terminology, the decision as
to the organization design specification determines the ‘form’ of the
organization, or ‘organizational template’: The manner in which the
organization is to be formed. Applying the template then builds the
structure of the organization, the organization chart we all know and
love …” they both chuckled.
“But to go on”, he said, “Roles are defined by goals and KPIs
derived from strategy. Then in each role, the KPIs define ideal
actions…”
She broke in…“…Those actions that if delivered to standard
ensure greatest success defined in terms of achieving the greatest
result….” They both laughed.
“All of this builds the architecture that is the divisions, team’s,
roles in teams, KPIs and ideal actions in roles derived from KPIs.
The architecture is independent of people…now this is very
important, and needs to be fully understood. The architecture does
not depend on people. Does not consider people. The architecture
does consider skills needed to act out ideal actions, and therefore
availability of those skills. And again, if there is any suggestion that
there may be a restrictive shortage of skills then HR is directly
involved in strategy, otherwise all this is after the strategic event.”
“SHRM is the actual strategic aspect of HR, so HR has its own
strategic focus, independent of the strategic focus of the business.”
She said.
“Exactly.” was his reply.
She continued. “So the decision is first at governance level on the
organization template to be applied in the roll out of strategy. ”
“You are doing great, keep going…” He said. “… Forget the
alternative; it is not a paradigm, merely a loose collection of ideas
based on no fundamental rationale.”
She nodded then continued. “So the directors choose to apply the
OPD-model as the template for their organization. This decision
then locks in all leadership to act in a particular manner, especially
the CEO and VP HR.”
“Perfect,” he said, “just perfect. So now from strategy we have
evolved and derived the full architecture, division, teams, roles, and
with KPIs delegated into every role, and ideal actions identified that
when enacted enable greatest delivery of results” he rose and wrote
on the white board.
1. Corporate KPIs/strategy
2. Division, teams, roles in team, goals cascade
3. Ideal actions in each role derived from the KPIs in the role.
4. Effectively the corporate wide set of ideal actions that underlie
the strategy.
He sat and watched her as she took in the diagram.
“There you have it” he said, “you can ignore the middle step as
just the process for identifying the set of corporate ideal actions
derived from strategy so that if everyone acts out the ideal actions
assigned to them then the strategy is achieved”…he paused…. “Done
like this it looks simple, but in reality there is a depth of intellectual
stuff that had to be resolved merely to deduce this diagram. But that
done, practical people like me can just get on and do it… as per this
diagram. The intellectuals have done their bit in delivering a
solution to a serious global social issue and done so with enormous
depth, much of which I do not really understand, but we end up here,
which is just great.” She sat listening…
“This in the notes?” she asked. He nodded firmly.
‘Now,” he said, “definition of SHRM: The alignment of staff
behavior with strategy.” He sat back.
She paused, reflective. “Let’s see if I understand, so SHRM will
involve two steps, first the identification of what it is people need to
do for the organization to succeed…as in achieve its strategy…then
second, guiding people to act out the ideal actions as needed.” He
nodded conclusively.
“You got it exactly.” he said. “So to put it together, SHRM is the
alignment of staff behavior with strategy. It places HR at the top
table immediately after strategy is agreed, and HR remains at the top
table, since it is possible in principle to achieve 100 % alignment of
staff behavior with strategy; the reality is that it is an ongoing
wrestle, hence the HR orientation to the issue is always in demand.”
The aim of the HR
He paused. “I will discuss this in more detail shortly, but it is
useful to introduce it now, while all this is in focus. The SHRM
definition derived from the OPD-SHRM model leads to the delegated
role of the HR department, namely ...” he paused, taking on a far
away look, clearly remembering the words … “In partnership with
all team leaders to achieve 100 % alignment of staff behavior with
the profit and loss. There are more details, but I think you get the
thrust of it, in fact it is the team leader role to get alignment, it is our
role to ensure they have the tools and skills, and receive regular
monitoring of how they are doing.” He got up and poured another
coffee, she declined.
“The sort of statement is the defined aim of the senior HR person,
in my case Global Director of HR. Notice that the priority is on
alignment of action with that needed to get best results. It is not
about ‘people’, and it is not about ‘compliance’ but about results.”
“This has been tightened and consolidated, and as we discussed,
the Board now fully see their role of governance in managing HR. It
goes beyond mere HR policy, the formal decision to adopt a definite
paradigm for building the organization, which has very clear and
precise consequences defining the role of HR, and defining in no
small part the role of the CEO which is to guide development and
clarity of the ideal actions underlying strategy, the behavioral
structure of the organization and then oversee delivery of the ideal
actions to strategy is realized.”
The payback from improving human performance
He sat for a moment in silence. He shuffled his notes.
“Right.” He said. “I think the next topic is ‘why?’ Why go to these
lengths. What is the point? It is of course about money, profits.
SHRM is about results, and acting out the agreed ideal actions is
about staff success. If a person successfully acts out their ideal
actions, they succeed, and all our policy is aimed at rewarding that
success. Then, when they succeed, if the leadership has selected the
right ideal actions relative to the strategy then the organization
succeeds: Win-win.”
“Let’s go back to basics.” He said. “If you identify the actions
that achieve a goal and you do those actions more, or more
effectively, or more intensely, you would expect a better result.
Right…?” She nodded agreement.
“And this is causal, and has nothing to do with the person, and
everything to do with their commitment to be successful. For any
and all goals if you do more of the actions derived from the goal
more effectively or just more of the things that deliver the result then
you would expect a better result.” She nodded again.
He went on. “There are always exceptions, but overall there is
scope to improve first clarity of ideal actions in business, certainly in
our business and then delivery of those ideal actions.” He bought up
a slide while talking, “the fact that if you do ideal actions better, you
get better result, means there is a link between the ideal actions
derived from a goal and the achievement of that goal.”
“The causality of goal-action is in this next slide, but now we are
beginning to make the links between human behavior and the profit
and loss.” He paused. “And remember, these links are goal-action,
therefore they are causal as defined within the philosophy within
which these models are developed, that is where it gets deep stuff,
but we do not need explore that, it has been done for us.”
She had seen the slide before, but allowed him to cover these
essentials of payback from improved human performance.
Actual behavior
Ideal actions
Goals/KPIs/results
Leadership judgment (A):
Team leader works with the
team member to build clearer
more effective personal game
plan coordinated with the
team game plan, ideal actions
derived from goals. So goal-
action is causally engaged in
the organization.
Leadership effectiveness
(B): Team leader then guides
& support delivery of the
personal game plan. Team
leaders spend 20 minutes per
month per role in one-on-one
discussions.
(1) Input to move
actual behavior
closer to ideal
actions. Typical is
8-16%
improvement.
(2) Typical for each
1% gain in
performance sales
increase 0.3%-0.4%,
direct costs decrease
0.2%-0.3%,
overheads decrease
0.1%-0.2%.
Figure 8: Causal link to results (OPDPPL) via each mind
Gain in results is 1x2 = OPDPIF
A
B
Ideal actions
KPIs
Improved human performance is defined as improved
definition and/or delivery of ideal actions
“Improved delivery of ideal actions is estimated by the executive,
it can also be assessed in the OPD-SHRM cultural audits, but more
on that later. These links do not need miracles, and that is important,
just a few %age point increases in delivery of ideal actions can often
have a very large gain in profits, this is because profit is usually the
small difference between two much larger numbers.” He went on.
100% human performance
“100% human performance is defined as perfect selected ideal
actions, so that when perfectly delivered to standard needed, a
perfect result of 100% is achieved. We can clearly identify the
target, and have systems that can assess how close to target we are.
We also, now, have learned how much gain in ideal actions we can
get in any one year, and it is less than one might think. So we know
we have a long and ongoing task to get as close to human
performance perfection as we can and then keep it there.” He
referred back to the slide, and continued.
Estimating the gain in human performance
“So the question is how much closer can we get actual behavior to
match the ideal actions? We reckon today, in any year, we can get
say around 10%, this comes from tightening our definition of the
ideal actions, from our leaders guiding their delivery better, from
people learning how to do it better, and from the consolidation and
acceptance of our broader ethical policy and standards, such as
having for example a hundred times multiplier on salaries, so people
know the gap, and in general they accept it.” He paused, “this is
getting the community background frame of reference in line with
the other frames we guide people to select and use to think of their
place and the place of the organization in the community and in their
lives.”
The OPD profit profile link OPDPPL
He continued. “Now the numerical links.” He paused. “Called the
OPD profit profile link (OPDPPL). We agree and understand from
goal-action, improved actions and their delivery get improved goal
achievement.” She nodded again. “So there must be a link between
improving delivery of ideal actions and the results” he paused, before
continuing, “the initial research shows that this OPDPPL is different
for sales than for operations or overheads, in fact it reduces from
sales, which is largely all behavior, through operations, which is
behavior plus machines usually, and is lowest in overheads, it
appears that overheads are least amenable to improving ideal actions,
so companies are either tight on overhead now, and got it well
refined, or use lot of technology to keep labor down.” He used his
laser pointer to point to the left hand side of the slide.
“This is in here where the OPDPPL is normalized to a 1% gain in
human performance. The initial generic results are as follows.
1. 1% improvement in sales ideal actions will increase revenues
by 0.3% to 0.4%.
2. 1% improvement in operations ideal actions will decrease
direct cost by 0.2% to 0.3%.
3. 1% increase in overhead ideal actions will decrease overhead
costs by 0.1% to 0.2%.”
The potential of untapped human performance can often
double profits from the same revenues
“Now,” he went on, “very likely this generic type of result will
vary from industry to industry, and each business has to put in some
work to get a definite idea of what these links are for them. We have
an idea, and I will show that in a minute, but this sort of relationships
is a very good place for a Board of Directors to start to get some
sense of the potential of improving human performance.”
“If you now put together the normalized link between gains in
human performance (OPDPPL) with the potential increase in human
performance then you get the profit improvement factor, or OPDPIF.
This is for each line in the profit profile, so sales, operations and
overheads all have their own OPDPIF based on the different profit
profile link.” She thought about this.
“Not losing you?” he asked, “this sort of stuff is not what HR is
usually about, but under this model, this is the essence of HR, all
about getting better ideal actions better delivered by people, with
people enjoying greater personal success, and the business banking
greater profits.”
She shook her head. “Just getting my mind about it.”
He nodded, and pushed on. “The comparison is with some data
done in Sears” he continued, “they used statistical links, and claimed
a 1% gain in staff attitude, improved revenues by 0.1% through
better customer satisfaction. Now our data makes links three or four
times larger, but then we would expect that given that they played
with statistical linkage, while we go direct via the goal-action
principle.”
“OPD-system works since people’s personal success is fully
congruent with company success, and in fact we aim to make people
successful in all our policy and leader training, since if they are
successful, the team is successful, if all teams are successful then the
division is successful, and if all divisions are successful then the
company is successful.”
“If we put this together we get the sort of spread sheet below.
This simply uses all the figures we have discussed. The sales,
operations and overhead links are in the ranges proposed, with gain
in human performance from 10%. In most organizations this is not
huge and not excessive. Now look at how it impacts results.”
“These figures are in millions, and do not exactly reflect out current
state, but close enough to show the impact. We have been at this for
four years,” he said, “and learned while it works, it takes time, and
the executive and directors have to learn it as much as the staff. So
we try to be realistic on our expectations of increases in human
performance, the links, and then the profit increase arising from the
first factors. Even so, the gains are potentially huge.” He pointed to
the bottom lines, “An EBIT increase of $68 million, and profit to
sales ratio going from 9% to over 11%.”
Results in millions
OPDPPL Sales 0.3 Ops 0.2 OH 0.1 Perf incr 10%
Year 1 Before After
OPD % OPDPIF OPD %
Revenues 2,500$ 100.00% 3.00% 2,575$ 100.00%
Direct costs 1,550$ 62.00% -2.00% 1,565$ 60.76%
Gross profit 950$ 38.00% 1,010$ 39.24%
Overheads 725$ 29.00% -1.00% 718$ 27.87%
EBIT 225$ 9.00% 293$ 11.37%
EBIT $ Incr. due SHRM 68$
EBIT % incr. 30%
Profit to sales 9.00% to 11.37%
Essential to have coordinated policy and practice
“What we really found was we were ethically out of step with
where the people were at. We found they were really skeptical and
cynical about our intentions. We also found some of our team leaders
agreed with people, and not the company. We found you cannot take
liberties with people, not today, they are very well informed. People
have experienced every manipulation imaginable. We found that if
you really wanted them to commit you needed to be seen to be
committed back. We have been working on this insight for couple of
years; the boss I think told you of some our work. He sensed this
first, and began nudging us to think about it. As a company we had
to decide if we were going to commit to being part of the
community, and not be seen as merely using the community, and
when it suited us we would move on, or desert, etc.” He paused,
thoughtful.
“There is a lot of learning here about how to really engender
respect and commitment. Get it from the people you want to deliver
fully on your assembly line, not respect from the commentators, and
others who might be mentioned in some communications policy
brief. It is simpler and more difficult than that. But start by
identifying opportunities and get some gains. Nothing convinces a
Board of Directors like increased profits, especially when revenues
drop a bit and the economy tightens a bit and every one else is
talking profit downgrades.”
Measuring the ROI of HR
He stopped and checked his notes.
“One final point before we break for lunch. Let’s say we think
that operations delivery of ideal actions could be sharpened. We
plan a program to do that with extra team leader training, extra
surveys and extra effort into sharpening the ideal actions. We can
then use our spread sheets to assess the impact of that on the results
from that team; usually we can drive into a direct estimate of the
reduction in direct costs, and then given levels of productivity, we
can translate that into reduction in direct product costs, and then into
pricing reductions. Then we are really drilling into the ROI of HR,
and really turning HR into a serious driver of profits in partnership
with team leaders.”
“Part of our experience was we were having problems with
warranty and recall in one of our plants. So I convinced the boss to
allow us to go in and fix it. He was skeptical, but said ok, and gave
HR six months to show some gains. Well, we went in, drafted new
time budgets and took team leaders through the time budget work
shop you went on. I think it was first time we ran it. We worked
hard at ensuring the necessary actions that reduce warranty problems
were clear in every time budget and that effective warranty control
process were melded across the necessary time budget for every role
involved. It was very intense. But in six months, we had achieved a
60 % reduction in the problem. The boss really saw the relationship
between P&L issues and actual conduct of people on the job. That
was four years ago.” He paused.
“This all in the notes?” She asked.
“Yes,” he said.
“Good, there is a lot here to think about.” She said, “Are we off
to lunch now, I need the break.” He smiled, and they rose to go to
the café. She was looking forward to it, anticipating meeting lots of
people she now knew quite well.
Key definitions
1. Architecture: KPIs, roles, ideal actions. Created from strategy.
Independent of people.
2. Leadership judgment: Determining the architecture.
3. Role: A unique set of actions and usually thought processes.
There is often more than one role in a job.
4. Time budget: the practical tool guiding delivery of the ideal
actions in each role.
5. Behavioral balance: the distribution of time across first roles
in a job, and second ideal actions in the role.
6. Leadership effectiveness: Extent leadership guides delivery of
ideal actions.
Background terms
They settled back onto the settees in the HR Director’s office.
She had found lunch lively and fun, with lots of people coming over
to say ‘hello’, including the boss who was entertaining some
Japanese guests.
“Okay,” said the HR director. “Before getting in further, let’s
quickly recap some terms and background definitions, I think you
will know this, but again let’s be sure we are all on the same page
here.” She nodded agreement as he switched on the data projector
and flipped through the slides.
They read through the items, briefly discussing each. She was
very familiar with the terms and their definition within the OPD-
model.
“I thought perhaps,” she observed “that talent management and
human capital value would be included.” He nodded.
“Both very important, and both defined differently within the
model as you are obviously aware. Both are sufficiently significant
to be discussed later as specific items. He waved toward the slide
projected onto the wall. “These are key aspects of the core
implementation, SHRM as the process of alignment of actual staff
behavior with the ideal actions judged consistent with corporate
success.”
Behavioral structure and behavioral balance
“Some other key terms, although again I know you have seen and
understand but are important,” he said, “are the ‘behavioral
structure’ referring to the set of ideal actions, so can apply to role,
team, division, or organization. Distribution of time across the ideal
actions is the ‘behavioral balance’ in the behavioral role.
Distribution of time between roles is the behavioral balance in the
job with more than one role. ‘Behavioral best practice’ is the set of
ideal actions with the appropriate distribution of effort both in a role,
and/or between roles. The same model applies to teams, divisions,
and organizations.”
He continued. “Then of course:
Leadership judgment: The judgment of each team leader as to the
set of ideal actions (team behavioral structure) that needs to be
delivered to achieve the KPIs assigned to the team.
Alignment: The extent to which actual staff behavior reflects the
ideal actions judged needed to achieve greatest result relative to
strategy.
Leadership effectiveness: The extent the team leaders achieve
committed alignment.”
She nodded she understood as he changed the slide.
“Now,” he said, “a very quick recap on the operations of OPD-
SHRM as arising from the model.”
OPD system implementation
Web system components: Captures leadership best judgment.
1. Architecture – teams, roles in teams, goals/KPIs, ideal actions
2. Cultural audits
3. Customer audits
4. Internal customer audits
5. Leader monitoring (HR-KPIs)
6. Training needs identification
7. Training and coaching materials
8. Learning firm
9. Performance assessment
10. Performance management
11. Strategic leadership planning
Consulting support: Builds leadership effectiveness.
1. Comprehensive team leader coaching
2. Ongoing consulting to support effective delivery of the system
3. Development of internal HR staff
4. Email and telephone help desk
5. Ongoing tactical and strategic reviews
6. Ongoing back up for internal staff
7. Ongoing audits to support sustainability
“First the components and terms, which are all different, so for
example, cultural audits are not about ‘staff satisfaction’; rather they
monitor how well the team leader has guided development of the
professional frame of mind in his or her team….” She cut in on
him…
“… yes we covered the professional frame of mind very fully in
time budgeting, it is a very effective idea and very practical.”
“Yes, it is…” he paused then went on…“the key thing about
audits, for example is that they are expected to be used by team
leaders to select the improvements they will target in their team. So
all of these processes, while they may sound the same, they are all
derived from the OPD-model, so there is always just that subtle and
sometimes not so subtle difference and shift in emphasis. Then
second is the consulting support, which in larger organizations
focuses on building the internal resources then on supporting the
internal resources and maintaining the standards of the internal
resources. This is very much the stage we are at, having been
involved now for several years.” He stopped. “Now,” he said, “the
key difference.”
Defining the partnership between team leaders and HR
“All of those processes are to be applied by team leaders. They
are not applied by HR. It really did take our department, including
me some while to get our minds around that. Audits, assessments,
architecture, etc, are what a team leader does. It is the role of the
team leader to judge the aptness of KPIs derived from strategy, or
ideal actions to ensure greatest chance of greatest success. It is not
the role of HR to do”, he emphasized ‘do’. He stopped. “It is the
clear aim of HR,” he emphasized the ‘is’, “to ensure every team
leader has the skills to implement the SHRM processes and
components to a standard that will achieve delivery of the idea
actions to the standard needed by each team member.” He sat back
waiting.
“How have team leaders accepted that?” She asked.
“Good question.” He said. “I took a while to sort out the
relationship, and HR and team leaders tripped over one another for a
year or so, before we sat down and re-conceptualized the structure of
the HR Department as it arises from the OPPD-model. This of
course is the point of this discussion.”
“Okay”, she said, “team leaders do it; HR ensures they are able to
do it.”
“Yes”, he said, “with a couple of bits tossed in, we act as
sounding boards and guides for say, redrafting performance
specifications in a role, in that example, we are the internal
consultant. But, the team leader, or manager, has the final say, it is
much easier for people to redraft a draft than to sit with a blank piece
of paper and try to create something from scratch.”
He paused then continued when he could see she was following
him, “Second, we monitor the effectiveness of team leaders in
delivery of the OPD-SHRM processes through the SHRM KPIs, the
dashboard, as they call it. It monitors the extent the team leader is
applying the system in their team. It does not monitor the
effectiveness with which the system is implemented; we assess that
by audit scores, and the level of results being achieved, so none of
this monitoring is in isolation.”
“It is all meant to be linked with it all focused firmly on better
delivery in every team of the agreed ideal actions, and when that
done, the boss is happy, and that is in all our interests.” They both
laughed.
“So to summarize, The HR Department delivers the following,”
he ticked off the points:
1. “trains team leaders in the OPD-SHRM processes of team
leadership,
2. acts as the internal consultant for team leaders in implementing
the team leadership processes,
3. monitors the effectiveness with which team leaders are
implementing the OPD-SHRM processes.”
“What happens” she asked, “if team leaders are not implementing
it properly?”
“We provide information, we do not discipline. If we uncover
shortfalls in implementation then the first thing we do is go to the
team leader to discuss check training and skills, etc. We then usually
advise the team leaders team leader, who is expected to chat to the
team leader and ensure they understand that implementation is not
optional. We then report monthly or so on our monitoring and
findings to the Executive Team, when the boss becomes involved.
And he always expects shortfall reports to have been acted upon and
the Executive concerned to be able to report on a plan in place with
ideally some progress evident.”
“You have seen the commitment of the boss; he is very clear on
the benefits of this system and focus. For the first time in his career
he will tell you, he can see real direction and processes in relation to
roll out and achievement of strategy.” She nodded, thinking of the
bosses style and comments in time budgeting.
“And if the results are not there …?” She asked.
“Rather much the same process, although we will not be the first
to know if results are short. But, we will be consulted to ensure the
processes are being or have been applied. Also, we again get into a
consulting role; we know more and do it more, so we get involved in
discussion about the aptness of ideal actions, checking ideal actions
were not wide of the mark. The team leader’s skill set gets
examined, and from the discussions a plan emerges to improve
results. Again, it’s reported to the Executive Team.”
OPD-SHRM gives annual structure to HR department SHRM
activities
“Let’s look at the team leader role”, he said as he shuffled in his
notes then handed her a piece of paper. She glanced at it, she had
seen it before, in time budgeting. “Yes,” he continued “I knew you
had seen it before, but this time I want you to see it from an
organizational point of view. You can see the actions of team leaders
doing those various steps and tasks. Now, think across 350 team
leaders, think across coordination of the cultural audits for example
then you see the annual structure of how HR guides overall delivery
of the steps undertaken by the team leaders.” She looked at the
document with new eyes, and saw how for example the team cultural
audit was in quarter two then quarter four. She could now picture
from the HR point of view, a corporate wide administration structure
consisting of these exact steps.” He watched her mind get rapidly
around what he was discussing.
“So,” he said, “we do not drive it, but we do coordinate it, we
nudge it along, we have found it useful to have team leaders able to
discuss doing performance assessments in the lunch room for
example, and where teams serve each other internally, to be able to
chat over the results and how and where team A would appreciate
better service from team B.”
“I did not see that in time budgeting,” she said, “but now I see it
was clearly there; we were focused on what individual team leaders
needed to do, and not on the organizational implications and
management.”
“You see it now, and see it as role for HR.”
“Absolutely,” she replied.
Position title/Job
title
Team Leader (Team leader)
Team members
name
Team Leader
Position level 3 - Team leader or first level manager.
Hours/month
available
15 hrs
Plan able time 90% (13.5 hrs/month)
Aim:
To retain and develop delivery of the agreed behavioral best
practice (ideal actions) in the team to ensure greatest team result.
KPI's: No red in SHRM-KPIs. All strategic HR processes in the team to
the agreed standard.
Ideal behavior hrs/mth
Daily (25%):
Management by walking around (MBWA) ensuring staff
behavior consistent with agreed ideal actions
Impromptu discussions on ideal actions, and verbal audits of
whether they clear and being followed through.
3.4 hrs
Ongoing performance assessment (25%):
Every two weeks with each team member, one-on-one review
of professional mind and delivery of ideal actions. Use agendas
provided and team development folders to track progress and
maintain records.
3.4 hrs
Quarter 1(10%):
Establish new business development project goals in each role
for coming three months.
Performance report on team members in talent management
pool.
1.4 hrs
Quarter 2 (10%):
Complete team cultural audit. Review audit data.
Set team development goals/plan for next six months.
Set team training plan training for next six months to develop
skills at delivery of ideal actions.
1.4 hrs
Quarter 3 (15%):
Review business processes in team and that the team is
effectively serving the internal teams it needs serve for smooth
and efficient operation.
Working on the business: Review ideal actions, KPIs, and roles
with team report to own manager on changes to achieve a better
result.
Review goals set in quarter 1. Establish new project current
goals for coming three months.
2.1 hrs
Quarter 4 (15%):
Complete cultural audit. Review audit data.
Review progress on team development and training plans set in
quarter 2.
Set team new development goals/plan for next six months.
Set new team training plan training for next six months to
develop skills at delivery of ideal actions.
2.1 hrs
Two aspects to modern HR is SHRM and compliance
“You can see clearly two very distinct aspects to HR role in a
modern corporation.”
1. Strategic human resource management
2. Compliance
“Strategic human resource management is focused on aligning
actual staff behavior with ideal actions. This is the part of HR that
drives a better bottom line, and more specifically it drives better
results in each team, with more satisfied team members. So this
aspect of HR is embraced thoroughly by team leaders. It is our
experience that when team leaders get to really ‘see’ it, they are
never reluctant to discuss how to build better ideal actions and how
to guide better delivery of those actions, when that happens every
one wins, and everyone is enjoying it more.”
She sat reflective, getting her mind about the summary: SHRM,
and compliance.
“In some ways”, she said tentatively, “as the SHRM processes
bite, and are done better then compliance needs are reduced.”
“Exactly,” he said. “Compliance is frequently about protecting
people from the big bad corporation. Mind you, we fully embrace
some aspects of compliance, for example health and safety, although
we think it is not balanced enough, with too much of ‘protecting
people’ and not enough of ‘let’s be fair all round’. But overall we
are quite comfortable. We typically exceed demands of compliance,
much of which is embodied in our drive to achieve greatest delivery
of ideal actions which builds our profits. There is no conflict, so it is
not compliance at all, but HR best practice to drive our bottom line
and drive satisfaction for people from success at delivery of ideal
actions, is not satisfaction that drives our bottom line it is delivery of
ideal actions, which when delivered gives satisfaction to the people.”
He paused.
Satisfaction from getting it right not satisfaction and hoping
they get it right
“This distinction is sufficiently important and is a major break
from the old global thinking as to be worth stressing.” He paused
then continued, “The old global thinking had HR aiming to build
staff satisfaction on the basis that more satisfied staff performed
better. Now the idea had some merit. But this OPD-model, and
OPD-SHRM system is just so much more powerful. We drive to
identify the actions, the ideal actions as they are called, to offer
greatest opportunity of success. People are guided to adopt success
in their work life as a personal choice then deliver ideal actions
which they have agreed are ideal actions. This is defined as their
success. So when they do the ideal actions we can say, fantastic,
thanks, well done. They are successful. We bank the result. That
also enables us to come along and say, here is a bonus; we had a
great month, or year, etc.” He reflected on his comments and
continued. “Actually we structure performance pay into the wages
and salaries mix a little more systematically than that, but that
discussion is for another day.”
Depth of psychology in OPD-SHRM that must be managed
“Which reminds me,” he said, shuffling through his papers.
“There is a tremendous depth of psychology in the OPD-SHRM
system. But it does not depend on just one thing, but a set of
reinforcing ideas that few people can really contest.” He handed her
the note. “Here is list of the core ideas that we coach team leaders in
how to review and discuss in teams, we expect team leaders to be
verbal ready with any of this stuff, and it is this stuff, managed at the
lowest organizational level that gives our leadership bench such
depth and resilience.”
She read over the list, she was familiar with it all. And in various
discussions had encountered it all, but had never seen it in such a list.
Psychological factors in OPD-SHRM
1. Personal choice to be successful.
2. Acceptance that success begins in the mind.
3. That only the person has access to their mind. Therefore,
one’s own success begins with one’s personal choices.
4. To get it clear in the mind it needs be clear on paper first.
5. Acceptance that the mind can be ‘portioned’, if one chooses.
6. Build specific frames of mind to do specific tasks.
7. Success will enabled by developing the ‘professional mind’.
8. Willingness to accept coaching; that is, work with the team
leader to assist developing the professional mind.
9. Separation of the ’self’ from the thoughts in the ‘professional
mind’.
10. Willingness to adopt critical, objective self-assessment of
extent self is a ‘professional’ (defined in terms of these
psychological processes).
11. Willingness to maintain the attitudes consistent with a
professional mind (emotional intelligence, including
moderate and manage self-talk).
12. Commitment to personal training, develop skills at delivery
of ideal actions.
13. Understand how professional mind can hold several
professional roles and develop skill at role transition.
14. Clarity of what is in each role and the any tensions inherent or
between roles.
15. Willingness to ‘own’ fully one’s personal professional mind
and tension inherent in the roles.
16. Willingness to pay attention to ensure delivery of ideal
actions until they emerge as habit.
17. Link psychology within the organization to the social
structure beyond the organization
18. “If someone thought according to that list, what do you think
they would be like as employees…?” He asked.
“It is all about them choosing their future and their values.”
She said. “I have experienced it in time budgeting, people accept
it. They will deliver ideal actions, but, there are also broader
issues the company must get right to really get the buy in, like the
company ethics as regard the community, if the company gets
that right, and people come to believe it, and accept it then most
people are going to buy into this.”
“Yes, indeed.” He said. “That is thinking of the company
within a much broader social framework, and many aspects need
to be bought into better alignment.” He stopped, “We agree and
understand, but there is not time to go into that today. Anyway, I
would not want to delve in there without the boss, who has done
a lot more thinking and work on that than any of us.”
“What about a coffee break?”
“Yes please”, she replied. He rose to fill cups from the coffee
urn. He spoke as he filled the cups.
Roles in HR follow from the OPD-model
“We have couple of hours left. I want to go over three issues, first
talent management, second the link between results and team culture,
discussing different social cultures as well, because we have several.
Finally, human capital value.” He placed the cup in front of her, and
sat back down.
“Then, we will go over the roles and structure of our HR
Department as it has emerged from all this learning and thinking. He
sipped his coffee. “I suspect I will just give you the notes to go over,
it is all very logical once you grasp all this stuff, and grasp how the
focus and nature of HR shifts as the priority aim of identification and
delivery of ideal actions becomes clearer.” He paused.
“Once you have got this background clear then the structure of
HR becomes rather obvious.’ He smiled at her. They both sat back
and relaxed for a few minutes.
HR applies in all sized companies
“It is dawning on me,” she said causally, “that this new idea of
HR is applicable to any sized company.”
“Yes, it is”, he said. “Start with one person, that’s not a company
at all. Now if they took the time to clarify aims, ideal actions etc,
and then systematically built a professional frame of mind, would
that help them perform better?’
“That is rather what a golfer does with help of a coach, so we
know it helps get better results.” She paused. “So, with say fifteen
staff then the full system is almost applicable, including the annual
SHRM admin structure when certain things are implemented
company wide. And the same sort of results are achieved; people
being more successful, and the company making better profits.” He
raised his eyebrows at her. She continued. “With a small company,
the role might only need a few hours each quarter, so it is not a lot of
time, not once it’s all set up. As the staff numbers increase so the
time needed in each role increases until they become full time jobs.”
Now she raised her eyebrows, as the insight sunk in. “There is no
organization that does not need these HR roles, and I used to think
that only large companies had or needed HR Managers.” He raised
his finger.
“Correction,” he said, “only large companies need an HR
Manager,” he stressed ‘manager’, “What all companies need is the
roles fulfilled, and that will not necessarily need full time people.”
“Yes, of course”, she replied. “Interesting, and the roles will
payback, it is not merely compliance, and it is not reactive.”
“Okay”, he said, “…next…. Yes cultural issues.” He wrote on the
white board.
Communication must be about the ideal actions but must take
account of cultural and social issues.
Company culture and community culture
“Two topics, first understanding company culture, what is it, how
do we measure it, how do we build it. Second is the social cultural
issue, so we build a plant in Thailand, or Mexico, or Slovenia…there
are community differences, real cultural differences, not merely
company cultural differences. How do we bring that to account?”
He sat back. She waited.
“Okay”, let’s do the second one first, get it out of the way, frankly
there are issues, but all are able to be easily understood and
managed.”
The OPD-model is universally applicable
“On the left is the architecture development. The simple version
of the full model we had earlier.” He used the laser pointer to run
down the left side of the slide.
“This model is always applicable…” he paused, “…the nature of
ideal actions may change, so closing a sale in Bangkok maybe
different from how it is done in New York. But there will be a best
way, which are the ideal actions. Choice of strategy may vary from
culture to culture, but there will be a goal cascade, and hence KPIs in
every role, and ideal actions in every role. It did take a lot of people
quite a while to grasp this; they were mixing up people and their
mores, with the structure of the organization which is independent of
people.” He checked to ensure she was following, she nodded.
“The key is the communication, and as needed, the exact
description of the ideal actions. So when we discuss ideal actions
there is a need be careful of not treading all over some sensitive
issue. We have not had the experience, but recognize it could
happen.”
He collected his thoughts… “then as well, there is exactly how
team leaders can treat people who for example do not deliver ideal
actions. We have had an example in Asia, where with the
importance of ‘face’, and ‘respect’, and belonging in the group, and
the formality around such issues, team leaders have been able to use
shame to bring team members into line. We discourage it, but it is a
cultural difference, though not strictly surrounding OPD-SHRM. We
encourage the regular psychological issues we have already
considered, and while we understand differences, we also think
people are remarkably rational and insightful in very similar ways…
and universally everyone understand when they are being treated
fairly, in a transparent manner, and with respect”.
“Overall” he concluded, “we do not see culture as a big HR issue
at all; it is a variation on the OPD theme. But you do need do your
home work, be sure you understand any pre-existing social or tribal
authority structures for example, and initially fit in with them. The
need to fit in is because some people do not have the conceptual
frameworks of say people in Australia; they do not separate a team
leader at work from community leader, and they have problems with
accepting what they see as a low cast person in society as being a
team leader at work.” He looked to her, she nodded she understood.
He continued. “In time we can and do educate people about the
difference between work and society, and that effective companies
are needed in the economy if the community is to build and maintain
a base of ongoing wealth to ensure community health. When the
professional frame of mind settles into place, as we build their
professionalism, and we use a lot of sports examples to help people
‘see’ what we mean by professionalism, TV has got just about
everyone to understand sports professionalism then we have another
organization ticking over in the way we now understand very clearly
and very fully with everybody winning, every day.”
He continued. “We think that the extent it is an issue is due to the
poor models and process being applied, and arrogant ethics, like
expecting people in some less developed countries to be compliant
when a company goes into that community simply to cut its labor
costs. We do not think that is respectful of those people at all, it is
looking to take advantage of them. And the world is rapidly moving
to a global insight into that.”
“It seems to me more and more,” she said, “that you have worked
out that the organization cannot do without the community and the
community cannot do without the successful organization.” He
smiled and nodded, saying ‘exactly’ as he shuffled through his notes.
He looked up.
The professional company culture
“Okay,” he said, “The next topic I think is company culture.
There are slides I want to review, but first a summary. You know
time budgeting…” she nodded, “so if everyone in the organization
every day moved themselves thoroughly into their professional frame
of mind, focused on their ideal actions, and succeeded in finding
flow for themselves, what sort of organization do you think we
would have.”
“A very rich one I would think”, they both laughed, and she went
on, “I get the point, a culture not specified in this or that, not
specified in so-called values, a culture not self obsessed trying to
define itself, just a lot of successful professional ‘golfers,’” she
signaled the inverted commas with her fingers, “getting on playing
the best golf they can.”
“Exactly.” He said. He looked down saying quietly, “Exactly.”
He was again reminded she was sharp. He smiled at her. “We think
it best called a ‘professional’ culture. One in which people are
encouraged to find their flow, in their ideal actions, and enjoy each
day, and find satisfaction in each day, and the more they do that, the
more they succeed and the more the company succeeds and the more
the company can get to be generous.…”
“And we dismiss the whole ‘mission and values’ thing. We did
that years ago, and it just does not work, just lot of hot air, especially
compared to a direct drive at identifying and living ideal actions in a
committed and professional manner.” He paused before continuing.
“People do have some difficulty in separating personal life from
work life, of understanding the need to separate a professional frame
of mind from their personal mind. They agree to it, but have more
trouble living it than they think they will. As they learn so the
professionalism goes up then they learn it is useful in lots of places,
for example, the first hour when they get home and get bombarded
by three young kids clamoring for attention…they learn that is
almost like another part of their ‘professional mind’ and they need to
stay focused for that bit, before letting the disciplines go and fully
relaxing with their partner.”
She looked at him, sensing he was really talking about himself,
but she remained tactful, seeing that it was a good idea, thinking it is
even something she could introduce into her life with her partner.
Living the real values
“But,” he went on, “there are values implicated, but of a very real
type, for example, the idea of the organization being committed to its
community…this is not some theoretical value, but something the
organization needs to exhibit in its actions, which means the senior
executives and directors need to exhibit it in their actions and policy
decisions. If we press for commitment from people and give none
back …” he paused. Spread his hands wide and shrugged his
shoulders.
He went on “It is not different from being friends with someone
and having them let you down all the time…in fact it is exactly the
same, and we all understand that very well; we do not need to have
workshops on how to treat people with respect and compassion and
integrity. Frankly, if we do not think people have those sorts of
values we do not employ them in the first place.”
“We have people who have been in this organization for thirty
years.” He paused, “The organization is as much part of their life as
their friends and even their family…the directors now think that
financial ownership does not justify removing something significant
from someone’s life, especially if they have given decades of
dedicated service. Commercial organizations are part of the social
fabric; it is at this boundary where western liberal democracy meets
free market economics. And it has been managed up to now in favor
of the organization and has not taken account of the people, which is
why most governments have HR compliance legislation aimed at
taking care of people. These are real corporate values, not shallow
manipulated values aimed at making people more compliant by
pretending to exhibit depth and integrity.” He stopped. She could
see he was quite passionate about these issues.
“It is really the boss,” he said, “that has driven this stuff over the
last few years, and he was right, people have progressively become
more professional and bought in as we exhibited… I mean we, as a
set of executive and directors…not some abstract ‘company’, we are
the living embodiment of the company…real concern to
communities and the people in them. And it has paid off; it has not
been a cost, people do understand the need for successful companies
as the core of the community wealth. They do understand economy
is not some abstract thing, but is them, doing a good job, delivery of
ideal actions. It is exactly this that determines community wealth
and therefore health to a substantial degree. But it has been a long
hard sell…” His voice tailed off.
“You get the big links” he said, “this thing called company
culture, can’t be naively isolated to just the company. Well, it can,
but we have learned that it is just not that simple if you seek real buy
in. And getting the buy-in and application to ideal actions delivers
results for us.”
The governance sets the broader social frame of reference
She sat reflective; she could see the ‘big picture’, involving
society, organizations and community wealth. She nodded slowly.
Then spoke.
“Okay” she said, “I see that. The big picture forms the backdrop,
it is the environment within which people ‘see’ themselves, it is the
broader frame of reference for them, using the time budgeting
terminology.” He smiled, nodding appreciatively. “And”, she went
on, “building the broader frame of reference for people is not
something the staff does in values workshops, but something the
governance do in their policy decisions.” She paused then continued.
“So having sorted that, what about the actual internal details, what
happens how is it translated in practice, I know you do ‘cultural
audits’ so what is it you do?”
Technical details of cultural audits
“Cultural audits measure the extent the team leaders have guided
development of the professional frame of mind in the minds of team
members. Full stop: It is that simple. The details arising in the
OPD-SHRM system are:
1. Focus, are people clear on goals/KPIs.
2. Accuracy, are people clear on the ideal actions to get those
KPIs.
3. Commitment, are people inclined to do it.
4. Team leader support, do people feel their team leader is
providing the support and guidance for them to achieve.
5. Business processes, do people think the business processes
assist them do a good job.”
He paused.
“Each audit factor rated on 1-10 scale, 10 the highest. The team
leader is then expected to target one of the factors to improve before
next audit. Audits are usually every four months.” He stopped.
“Okay”, she said, “I’ve got enough; you don’t need to go into
details of operations I’ve got the principle.”
The greater the cultural audit score the higher the
performance
“One last point,” he said, “As the audit effectively monitors
development of the professional frame of mind in the team and the
better the development of the professional mind the better the team
performance then the higher audit score the higher the results.” He
paused, she nodded that she was following.
He continued. “And the relationship is not linear, at least not as
far as we can see. For example, let’s say with an audit score of 8, the
team achieves it targets. Now moving the audit score to say 8.8, a 10
% increase, will improve results by more than 10 %, in one team, it
effectively doubled the result. This is again due the multiplier effect,
with the result often being a small difference between to much large
numbers. But we do not stress the results; rather we tend to stress
flow, satisfaction, self-esteem, all getting people into better
managing their mind to build greater satisfaction and success in their
life. The numbers go up as a consequence. We do set standards for
team leaders, so that they are expected to achieve and maintain set
standards for their teams, and the boss follows through on this quite
firmly. He sees it very clearly and does not let up on it.”
“There is a ‘but’, here, in that getting to say 8 is one thing, getting
then from 8 to 9 can almost be as hard as getting to 8 in the first
place, so we are working at it all the time. As one gets better then
little things have greater impact, as the audit score goes up, for
instance, the overall framework gets increasingly significant. And
little things can get hard to manage, because they are little things.”
They poured coffee, and sat and chatted for a few minutes.
The basis of talent is being able to guide a team
“Just a couple of things left, first is talent,” he said. “We have
discussed it, so I will not dwell on it. It starts with definite success at
guiding performance in a team. That is achieving high audit scores,
and the team getting the numbers. One is related to other, but we
want to see both.
“From exhibiting skills at leading a team it is then about intellect.
Higher organizational roles generally involve greater complexity
requiring greater intellectual capacity.” He paused.
“Now”, he continued, “Assessing intellect is not easy and
assessing intellectual growth harder again. IQ does not do it, even
having a degree does not guarantee anything, in fact it can block
creativity and getting outside the square to find the solutions to the
more difficult problems we encounter.”
Development of talent is developing the intellect
“We have developed our own check list,” he said, “involving
some tests we have found correlate reasonably well, but these just
give us a guide, along with getting results in a team, so we have
people on our talent list with that background; namely they get
results and show potential for intellectual growth. We then get them
in close to key executives, so if it is an operational person, they are
bought into projects in operations, etc. Then they essentially get
tested and assessed, although we do not make that specific.”
“There is obviously detail; we do not use these propriety talent
soft ware systems, we track people within our performance appraisal
and have them noted as exceptional then we find ways to stretch their
intellectual capacity to see how deep and far it can go. It all fits quite
comfortably into the OPD-SHRM system.”
Human capital value
“The last detailed point is on human capital value. As we have
discussed, slavery is abolished. Therefore a company cannot own
people. So we need to define quite carefully what we mean by
human capital and human capital value. The model gives us two
very definite sorts of human capital value. The first is derived from
leadership judgment, the selection of strategy, role structure, goal
cascade and KPIs in each role, and then the ideal actions related to
each KPI. This is called the ‘standing human capital value’. It is
capturing the best judgment of the ideal actions needed by the
organization.” He paused then continued.
“The second is leadership effectiveness; it is the assessment of the
skills of people in guiding delivery of the ideal actions. It is called
the dynamic human capital value.”
He flicked through data slides until he found the ones he wanted.
A satisfactory SHRMIS system should carry at least the
following functionality
1. Capture behavioral best practice in each role.
2. Integrate the various elements in SHRM: cultural audits,
customer audits, internal customer audits, performance
assessment, talent management, role performance
specifications, team improvement planning, and bottom-up
team based profit improvement planning.
3. Provide reports, guides and reminders to team leaders on
what exactly to do when to achieve the greatest result in their
team.
4. Capture if team leaders are applying psychological processes
in their teams (capture current leadership effectiveness).
5. Talent management: Identify team leaders with best team
performance, and guide their development.
6. Live reporting on extent team leader implements the
processes.
7. Enable viewing the report from a distance, so Auckland
knows if the team leader in Melbourne, Edinburgh,
Vancouver, or Mexico is implementing the processes to
standard.
8. Coordinate the efforts of HR with the line management
The SHRMIS system captures the standing value of the
human capital
“This idea of strategic human resource management information
(SHRMIS) system is derived directly from the OPD-model, and is
embodied in the OPD-SHRM system. It is a new innovation for HR,
quite unrelated to HRIS which is nothing more than administration of
HR, not its delivery and certainly not the capture of the behavioral
best practice or behavioral structure to drive the results.”
He changed the slide.
Strategic human resource management information system
SHRMIS: The IT system is which is captured the standing
human capital value encapsulating behavioral best
practice and the core of the standing value of human
capital...
The SHRMIS is the core of the learning firm, capturing the
insight and learning of successive leaders.
In effect the SHRMIS is a model of how the population needs
to conduct themselves in order to realize the strategy.
“I am not going through all this, it is technical detail and not
important for this overview, but it is important when you come to
actually setup the HR department. So your lecture needs to refer to
it, but does not need to try teaching them how to do it.”
OPD-SHRMIS KPIs
He then gave her a set of notes.
“Here is the set of SHRMIS-KPIs monitoring whether or not a
team leader is in fact implementing the agreed SHRM processes in
his or her team. This is live in the system, so I can tell if a team
leader in our most far flung plant is in fact doing the key SHRM
processes needed. It does not tell the quality, but just knowing it is
being done is the first step. It is part of our monitoring so part of our
role.” He reflected for a moment then continued.
“We also have the role of keeping the leadership judgment, the
standing human capital value up to date, so if changes occur in the
organization then we will ensure it is captured. We are always
prodding managers that when they get a new idea and some new and
better ideal actions, to ensure they are noted in the system, that way
they do not get away, and if those people happen to leave the
company then the company has a record of what they did that made
them so successful.”
She nodded; she understood fully what he was driving at.
“I am not going to go over all this,” He alluded to her notes on
SHRMIS KPIs, “again it is implementation detail not needed in an
operational overview summary.”
OPD-SHRMIS KPIs
HR-KPIs measure extent team leaders apply the SHRM processes based
on the model so that the team has the greatest chance of greatest success.
SHRM policy for each team, ‘no red’. OPD-SHRM HR-KPIs leading
indicators of potential trouble with business KPIs and with tactical HR-
KPIs (absenteeism, turnover health and safety.
The OPD-SHRMIS KPIs
1. 1.HR-architecture. (Performance specs).
a. % current performance specifications. (Current < 12
months.)
b. % sign off of performance specifications. (Current < 12
months.)
2. 2.HR-cultural development. (Team development).
a. % acceptance of the performance agreement. (Current < 12
months.)
b. % time budget accepted. (Current < 6 months.)
c. % completed individual performance contract. (Current <
12 months.)
d. % average current CA score. (Current < 12 months.)
3. 3.HR-mentoring/training. (Guide downloads.)
a. % people with current PDP. (Current < 6 months. Every
person undertakes training annually.)
b. % people "Able, but not reviewed for some time, apply
refresher" or better. (100% is all people with all ideals
above standard.)
4. 4.HR-performance management. (Performance management &
guide downloads)
a. % people with current performance report. (Current < 6
months.)
b. % Team implementation potential.
5. 5.HR-results proactive. (PIP/SLP & Learning firm)
a. At least 1 current item in learning firm. (Current < 12
months.)
b. At least 1 successfully completed project in Strategic
Leadership Planning (SLP) in past six months.
c. At least 1 successfully completed project in Profit
Improvement Planning (PIP) in past six months.
6. 6.HR-customer satisfaction. (Customer Satisfaction & Internal
Team Performance Audits)
a. % average current CSA. (Current < 12 months.)
b. % average current ITPA. (Current < 12 months.)
Function and roles in the HR department
“Okay,” he said, “we come to the practical result. To deliver
against this model what does the HR Department look like. What do
people do to deliver on this OPD-model.” He paused. They shuffled
through slides and projected the simplified model.
“Here is the working model, the concept that leaders are expected
to retain on a frame and guide their actions. You should be able to
look at that frame and ‘see’ the detail of what it means, this is NOT,”
he stressed the ‘not’, “a high level concept, it is a memory tool to
bring to mind all the detail needed to run a team as effectively as a
team can be run. The team leader uses this to make the initial
overview judgments of what he or she can or could do to improve
team performance then drills into the detail to draw out the
actions…the diagram is ‘packed’, or at least the memory behind the
diagram is packed.” he paused, looking across to her expectantly.
Strategy
Monitor
SHRM
processes
done and
done to
standard
Guide
people to
do it
Goal/KPI
cascade
Ideal actions
The OPD-SHRM paradigm
She nodded slowly while she ran her mind over all the discussions
over what was now well over a year. She knew her memory was
certainly ‘packed’ in relation to team performance and this diagram.
Using the diagram she could move around various aspects of the
model and know and understand the action needed to implement in a
team, in that sense as a team leader, she was ready.
“Yes,” she said, “my mind is packed… I see it very clearly and
see how to use the diagram to access those parts of team leader’s
actions that would implement the model in a team.” He smiled.
“Perhaps we should recruit as a team leader…you are certainly
well trained.” They both laughed.
“Two crucial points.” He said. He wrote them on a flip chart.
Team leaders are responsible for everything in their teams NOT
HR.
The HR Department can only PARTNER team leaders to increase
the value of human capital in each team.
He looked at her. She was nodding.
“This is where the rubber meets the road as they say.” She said.
“Where the reality of policy is in fact implemented and where
science meets practical organizational structure.”
He nodded then continued. “So now we see clearly two of the
crucial roles of HR in implementing the model across the
organization.” He wrote them on the white board.
HR guides and supports the team leader to define and refine the
architecture.
HR delivers the training that helps people ‘pack’ their minds so
they can fully deliver their time budgets.
“This clear to you?” He asked. She reflected, nodded.
“Yes, I understand those statements.” She said.
“Good,” he said, “because really they define two key roles in HR,
in any larger organization those are quite specialized roles, on
involving getting time budgets clear on paper, refining delivery of
business processes across time budgets, helping teams via the team
leader sharpen their time budget, going in and helping a team leader
review time budgets where, for example, warranty rework is higher
than target…and training people in how do deliver their time
budgets.” She nodded and he continued, “In larger organizations I
said, these are specialized roles, and we have people out there…” he
waved his hand indicating beyond his office, “and we need people
out there with them ensuring the special roles of HR are being
effectively applied where it counts.” He went to the white board and
wrote.
HR provides a ‘partnership’ direct link with every team leader.
“Think of this role,” he said, “as rather like an account manager,
the account manager just ensures the account is getting the service
needed when needed. The people ‘on the ground’, and we have a lot
of them, are responsible for the relationship with the team leader
acting as the link between the team leader and the HR services, with
a single common aim, to identify and capture the best set of ideal
actions relative to strategy and guide delivery of those ideal actions.
When that happens, everyone wins.”
“Every team leader then,” she said, “has a nominated HR partner
as their internal HR account manager.”
“Yes, exactly,” he said. “And we have a senior partnering
manager ensuring the on-the-ground people are fully doing their
jobs. Leadership, on leadership, with the result being tight and really
effective ideal actions fully delivered, with everyone supporting
everyone else to get it right and do it right.” He continued.
Common interest is integral to the OPD-model
“The common interest is not forced, it is not some philosophy
inserted after the event so to speak. It is not something that needs to
be exhorted; it is just there as soon as people ‘see’ the model and
what it all means.” He ticked off the steps.
“The boss wants his corporate KPIs because it keeps the board
and shareholders happy. Every divisional manager wants the
divisional KPIs derived from that because it keeps the boss happy.
Every team leader in every division wants the team KPIs, because it
keeps the divisional boss happy. And every person wants to deliver
their ideal actions because it keeps their team leader happy; it means
they are fully successful in their role, and helps them go home every
day with a smile, and that keeps their partner and kids happy.”
“Bit simplistic but I am sure you get the point.” He stopped.
“And HR?” she asked.
“Properly packed professional minds,” he said, “make everyone
successful. It is what the boss tells me all the time … how we’re
flowing today…” He stood on tip toe, “and don’t tell me you got
problems, just get out-a here and fix them.” He sat, they laughed,
she could see the boss making even more graphic use of the analogy,
but always, always in the privacy of his office with people he knew
and trusted. She felt somehow she had been invited a little deeper
into the inner circle, offered that little more trust. She smiled and he
returned the smile; it seemed he understood exactly. He continued.
“One more very important role that we have bought fully under
HR, since we care about it a little more than IT or admin.” He wrote
the fourth item on the white board.
Maintain the strategic human resource management information
system (SHRMIS) in line with current time budgets.
“This is admin,” he said, “but it is maintenance of the one aspect
of human capital value we can own, the standing value of human
capital. This does seem a little abstract…but if anything happened.”
“Part of your disaster management,” she cut in.
“Exactly.” he said, “It is exactly disaster management, another
group of people could walk in knowing nothing about the
organization, pick up the time budgets assigned them and get the
organization operating again in short order.”
They sat and looked at the list. He rose and added notes. He had
left spaces, so again she impressed with the forward thinking in a lot
of detail. Later she would see it was in his notes.
1. HR guides and supports team leader to define and refine the
architecture.
1.1. Team structure, roles structure in teams, goal cascade, ideal
actions, time budgets. This is all a conceptual analysis, key
rule design time budgets so they match the cognitive
structure that most helps people to do the job. Begins with
strategy. This is properly organizational development (OD),
has nothing to do with people has to do solely with
identifying ideal actions needed across the organization to
ensure corporate KPIs are achieved. Identifying ideal actions
does not involve the people. So under OPD-model OD is
about the organization, not people. Current global HR is
confused on OD because of the lack of an adequate
paradigm. To avoid confusion, we call this role SHRM-OD.
2. HR delivers the training that helps people ‘pack’ their minds
so they can fully deliver their time budgets.
2.1. Training in delivery of ideal actions, team leadership skills,
and intellectual development of talent. This is a straight
forward L&D function.
3. HR provides a ‘partnership’ direct link with every team
leader.
3.1. The ‘account manager’ role. Every team leader must know
who to talk to if they need HR support. This role is also
where things like recruiting and compliance guidelines are
provided. The key to this role is the proactive component.
Meeting regularly with team leaders and being the accepted
sounding board on where and how ideal actions can be
refined and processes improved to results improve.
4. Maintain the SHRMIS system.
4.1. Administrative, can be combined with HRIS.
He looked at his handy work.
“You can see I hope how all this ties exactly in with the model.”
She nodded, she could see it clearly. He continued.
“There are a few items that come out very differently, for example
the organization development (OD) function is very different.
Learning and Development (L&D) is still L&D, but focused much
more tightly. Partnering is a crucial role, especially the pro-active
aspects, where we are ‘prodding’ team leaders to get more proactive
about improving results from their teams; that has taken a lot of
careful work and nurturing. Also, the admin function, especially
taking over the SHRMIT; HRIS we already knew about, and did.”
He stopped, sombre then continued.
“We had an incident about fifteen months ago; a bus load of
people were on a trip, and the bus crashed, many died, many were
maimed, everyone traumatized. It was a social trip they organized,
not a company sanctioned trip. Thankfully we had just done an
exercise on the time budgets in that business unit; we moved some
skills in, issued time budgets, spent two weeks going over them with
people and were up and running in a month, a bit less actually.” He
paused, “Never want to experience anything like that again in my
career,” he said, “but it sure taught us about disaster management and
SHRMIS as standing human capital value. We figured we could
have lost or struggled for months without it; could have cost us
millions more than it did. It is now accepted at governance level as a
key aspect of our insurance package. Part of our plan that begins…if
this goes down in an earthquake what will we do…” she laughed, she
knew he was making light of a serious topic.
Organization need both SHRMIS and HRIS
“SHRMIS does not replace HRIS?” She asked.
“No,’ he replied, “you need both. One is maintaining details of
what the business needs to achieve the results. The other is
administration of current HR, wages, leave, sick leve, etcetera. They
are different with very different purposes and information
structures.” He paused. “But the priority has to be SHRMIS, this is a
driver of results, managing and developing the human capital value
throughout the business.”
“We can make it all sound clear and clean.” He said. “Now! But
it has taken several years. At first we tried to tweak roles, and adjust,
but found it did not work. It was not long before you arrived on
scene, the boss agreed to allow me to do a complete realignment of
HR with the model. It is working very much better, roles are clearer
and people are clearer on how roles fit together.”
Understanding business improvement and change
“I know there is lot made of ‘change management’” she said,
“How exactly does it emerge here?”
“Good question. It is embodied in two fundamentals. First the
design of the architecture, get the concept right. Do it on paper first.
Then review it, carefully. Check integration into current processes,
check integration into current roles, and the manner these changed
roles will relate to roles in other teams, all in refining the time
budgets and the impact of changing those time budgets.” She
nodded she was following. She remembered this from her first round
of discussions.
“Then signed off by the team leaders, usually the boss likes the
OD Manager signed off on it as well. He gets very good at ‘seeing’
clearly on paper, and the boss likes having the concept right before
we try rolling it out. As an aside, we also use the OD Manager’s role
as a talent development step, it is all intellectual, and blending
intellectual work with practical creative stuff on how to improve
results from a team. Also, the person comes into contact with many
senior executives, so their talent and intellectual capacities get
assessed as well as their ability to relate to senior people… “He
paused, “who are not always the easiest…” they laughed, and again
she felt part of that inner circle.
“Signed off and agreed then L&D move in with the workshops to
‘pack’ minds and get the change rolled out. Remember we have
already done a lot of work on the core cultural issues, and people
understand a great deal about their own personal changes and what it
means, and all such change involves their professional frame of
mind, so now, resistance is very limited, usually just around agreeing
that what is proposed is the best in their role. Major stuff like
redundancies, are always an issue… we had some a few months
back, but we were well received in how we handled it, and we did
stay in the community; just had to reduce staff since we invested in
technology.”
“It is a very clear structure and process for change,” she
commented.
“Yes, it is, very smooth, very clear on who is to do what, broadly
accepted given the overall culture of professional frames of minds. It
took a while, but we are getting there.” He said.
“So in practice, we have active roles in HR, like OD, L&D…and
information roles, like recruiting, and compliance. The latter are
sources of information, and used by team leaders usually via the HR
business unit partnering managers. So a team leader has a recruiting
task; they will talk to their HR Partner, who will get any info needed
from HR central offices, and then support the recruiting exercise on
the ground. Similarly with compliance issues, since it differs from
region to region, the business unit partners are the source of
information. We send them on courses and seminars, and then
capture the summary in the centre as policy on their return. They
stay close and are expected to ensure team leaders are compliant with
all HR type legislation and regulation.”
Team leaders support and make use of HR when it helps them
“The active roles OD, L&D operate also through business unit
partners, and drive improvement of ideal actions, and alignment of
actual behavior with the ideal actions. This is now widely accepted,
so team leaders do come looking for help and advice, they do see HR
as playing a very positive role in driving results in their teams.”
They sat back while she reflected on the notes on the white board,
and on the lecture series she was to deliver in three weeks.
“Yes,” she spoke softly, “yes, it will be interesting, what the Prof
wants, stir thinking up. And it is all very different, although at a
superficial reading it can sound the same.”
“Yes,” he said, “it can fool you and did us for a year or so, until
we really begun to ‘see’ it, not the least of which was ‘seeing’ the
role for conceptual frameworks, frames and their role in mind as
memory tools. That really began to shift our L&D effort into helping
people pack their minds around the tool so they ‘see’ it back on the
job when they need it.”
“Help people …?” She said.
“Yes”, he said, “People have access to their own mind and theirs
alone. We finally accepted that, which then shifted much greater
effort into core choices and permissions and agreements, because if
we have all that then people have already agreed to work with us to
pack their mind with the stuff they need to be successful …”
“And it all has to do with work success, not with people and their
personality… it is not personal. No more personal than practicing
one’s golf swing, or tennis shot to be a better golfer, or tennis player,
is personal.”
Recruiting is about the desire to be successful
“Which raises a point I forgot, but it is very important. Although
from the OPD-model it is clear and very simple. The first thing we
look for in final selection of people is the desire to be successful, and
some evidence in their life that they have strived to follow through
with that desire. If we recruit that then we can show them how to do
everything else. But the desire to be successful for oneself is a
spiritual/value choice that we do not think we can teach people. And
we do not intend to try.”
Effective HR will enhance all organizations
He handed out notes on the day, part of which was a draft role
structure for applying HR in organizations. He reminded her that HR
applied in all organizations in exactly the same way; just the time
needed to fulfill the roles in a small organization was less, but the
need for the role was exactly the same.
They chatted; the boss poked his head in the door to check she
was pleased with the day.
She climbed in the car for the drive home, her mind was soggy,
could not hold another piece of information, she knew she had
learned much, and knew her mind would get on top of it. She was
keen to get home to her partner, and wondered if his day had been as
worthwhile as hers had been.
Appendix: HR Department draft role structure
Overall measurement of HR Department performance is the
internal team performance audit (ITPA) measuring the extent the HR
Department achieves its aim with its internal customers.
A related measure is the extent team leaders guide delivery of
ideal action.
Overall KPI: ITPA score, overall standard excellent, 9.3 out of 10,
with no factor below good, 8.5 out of 10.
HR Department roles to achieve and maintain the targets
1. Senior HR Executive: HR standards and performance, policy
formulation, trend analysis and prediction.
2. OD: Leadership judgment, quality and accuracy of SHRMIS
system; Standing aspects of human capital value and
capitalization of that value; Change and continuous
improvement.
3. L&D: Leadership effectiveness; Staff skills at delivery of
ideal actions; Development of ‘professional mind’; Dynamic
aspects of human capital value.
4. HR Partnership: Relationship with divisional team leaders,
coordination of HR services within the body of the
organization to the service benefit of team leaders via better
team performance; Overview of talent identification and
management; Compliance; Recruiting.
5. Operations: Administration (HRIS and SHRMIS),
compliance, and core operational advice.
Further details of each role, aims, KPIs and ideal actions available
on request and discussion.
Graham Little
Graham Little is a thinker and social science theorist. He has
researched social science for thirty years, combining his intellectual
interests with counseling, corporate training and consulting. His
ideas on theoretical social science can be found at
www.grlphilosophy.co.nz.
His aim is to achieve superior thinking in social science and apply
that thinking to practical social issues.
The OPD-model and strategic human resource system derived
from it is the first such practical issue, namely how to build better
economic organizations integrating those organizations into the
community to the benefit of both.
Dr Little is the founder of OPD International offering improved
strategic human resource management to organizations that improves
profits. The OPD-SHRM system is based on the OPD-model. OPD
International has Regional Directors in Asia Pacific, United
Kingdom, North America, and South
Africa.
Graham Little has two adult children is a keen trout and salt water
fly fisherman, and lives in Auckland, New Zealand.
OPD International can be contacted through info@opdcoach.com.
Academic background
Dr Pieter Nel, Professor and Head of Human Resources at Unitec
in Auckland, is the global academic spokesman for OPD-model and
leads co-authoring the academic publications the first of which were
published in early 2010.
* Nel and Little An Integrated Strategic Human Resources Model
to Achieve Organizational Objectives
http://www.usq.edu.au/~/media/USQ/Business/Journals/NelLittle
%20Paper%201.ashx
* Nel and Little, Sustainable leadership: The fundamental
solution to lasting superior staff performance
http://www.uunz.ac.nz/pdf/journal/edition1/Journal_part4.pdf.
Introduction to the redesign of the organization book series
The books present the OPD theory from different points of view,
and work through applying the theory from the point of view of
CEO, team leader, manager and of HR. Volume 6, Building
community wealth and health examines the OPD theory from point
of view of the link between organizational success, economic success
and the wealth and health of our communities.
Books one and two are the suggested beginning, Rollout is the
overview of the intellectual base of OPD theory. After that, then
select the books to read that best match your interests/position.
1. Executive pocket guidebook: Summary of state of art ideas in
making organizations more successful (Redesigning the
organization volume 7). A short and easily read link between what
has been traditional and typical of global HR thinking and the new,
improved ideas in the OPD theory and the technology derived from
it. Book 7 in the series, but the one best read first as the easiest
introduction linking current global received wisdom on
organizations to the new wisdom from the OPD theory.
2. Time budgeting: Getting the best result in the time available.
(Redesigning the organization volume 2). Managing one’s
mind to enabling greatest chance of greatest success.
Application of the ideas on improved performance at the
lowest level, first on oneself.
3. Rollout: Improving rollout of business strategy (Redesigning
the organization foundation book). The crucial intellectual
foundation of the new way of leading in organizations. This is
the most intellectually challenging book of the series but all
other books are derived from the platform outlined in Rollout.
Reading Rollout can be delayed to the last book if you are
more comfortable.
4. The last leadership book you will ever need to read: The
guide to achieving results and satisfaction in a business.
(Redesigning the organization volume 1). An easily read
overview from the point of view of senior executives in the
organizations. The last leadership book presents an overview
of the key ideas from the perspective of different executive
The role of human resources in the modern organisation Wheelers PDF

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The role of human resources in the modern organisation Wheelers PDF

  • 1.
  • 2. The role of human resources management in the modern organization Graham Little PhD AFNZIM Redesigning the organization volume 4
  • 3. Staff behavior is a strategic factor in the profit and loss, so why is HR not the driver of organizational results? The OPD-model and system of organizational design was born from the question ‘why?’ beginning with the background science, developing improved social science tools and then applying those tools to the question of the exact causal link between organization strategy and staff behavior. The result was the OPD-SHRM system of organization design and management within which HR emerges as a key driver of results.
  • 4. Published by Self Help Guides Limited PO Box 36656 Northcote North Shore Auckland City New Zealand A reaching for infinity book Copyright © 2011 Graham Little ISBN 978-1-877341-06-9 Graham Little asserts the moral right to be identified as the author of this work. All rights reserved. Except for purpose of fair reviewing, no part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, now known or hereafter invented, without permission in writing from the publisher. A catalogue record for this book is available from the National Library of New Zealand
  • 5. Contents The strengthened role of HR.......................................................7 Definition of strategic human resource management...............10 The aim of the HR ....................................................................14 The payback from improving human performance ..................15 Improved human performance is defined as improved definition and/or delivery of ideal actions.................................................17 100% human performance........................................................17 Estimating the gain in human performance..............................17 The OPD profit profile link OPDPPL ......................................17 The potential of untapped human performance can often double profits from the same revenues.................................................18 Essential to have coordinated policy and practice....................20 Measuring the ROI of HR ........................................................21 Background terms.....................................................................22 Behavioral structure and behavioral balance............................22 Defining the partnership between team leaders and HR ..........25 OPD-SHRM gives annual structure to HR department SHRM activities....................................................................................27 Two aspects to modern HR is SHRM and compliance ............31 Satisfaction from getting it right not satisfaction and hoping they get it right..........................................................................31 Depth of psychology in OPD-SHRM that must be managed...32 Psychological factors in OPD-SHRM ......................................33 Roles in HR follow from the OPD-model................................34 HR applies in all sized companies............................................35 Company culture and community culture.................................35 The OPD-model is universally applicable................................36 The professional company culture............................................37 Living the real values................................................................39 The governance sets the broader social frame of reference......40 Technical details of cultural audits...........................................40 The greater the cultural audit score the higher the performance ..................................................................................................41 The basis of talent is being able to guide a team......................42 Development of talent is developing the intellect ....................42
  • 6. Human capital value .................................................................42 The SHRMIS system captures the standing value of the human capital........................................................................................43 OPD-SHRMIS KPIs.................................................................44 The OPD-SHRMIS KPIs..........................................................46 Function and roles in the HR department.................................47 Common interest is integral to the OPD-model .......................49 Organization need both SHRMIS and HRIS............................52 Understanding business improvement and change...................53 Team leaders support and make use of HR when it helps them54 Recruiting is about the desire to be successful .........................55 Effective HR will enhance all organizations ............................55 Appendix: HR Department draft role structure ........................57 Graham Little............................................................................58 Academic background ..............................................................59 Introduction to the redesign of the organization book series....60
  • 7. The strengthened role of HR The UCLA student sat in the VP HR office, though she had noted on the door he was now the HR Director. He placed the coffee on the coffee table in front of her and settled into the settee opposite. The data projector sat in front of him directed at the wall to her left, and a whiteboard stood patiently to his right, markers stacked neatly along the bottom, magnetized duster top right. “It would seem,” she said, “congratulations are in order.” He beamed. “Very observant,” he said. “Yes, I now sit on the Board; they decided that this whole issue of human performance as a driver of results was a critical aspect of the business, and needed to be seen to be so from the Board down. It is now accepted that the organizational design is a governance decision, and although belatedly, it needed to be seen to be so.” He sipped his coffee, blowing on it a little to cool. “It is good progress, and the battles we had a year or two ago are all over, mainly due to the fact the numbers confirm all we were saying. There is no philanthropy, although the conservatism really did take a long time to break through.” “The pre-existing ideas and perceptions…takes a long time to shift them and to get into place in people’s minds this new model and system,” she said. He nodded. “Which brings us,” she continued, “to the point of this meeting.” “Yes”, he said, “we are delighted to help the Prof; I understand he wants you to do a series of lectures to his HR Masters class on the question of what HR managers need to do to get to the top table and stay there. And he wants you to use us and our SHRM system, well the OPD-SHRM system, but we see ourselves as ‘owning’ it now, it is how we strategically manage human performance in relation to our profit and loss… He wants you to use us as the case study of the overall role of HR in the modern organization, and the structure of HR that emerges and is consistent with the OPD-model.” She nodded. “So, the about the background briefing today, we know you understand a lot, but this is from a particular point of view that you
  • 8. have not necessarily considered. But first, how did you find the time budgeting workshops?” “Just great” was her enthusiastic reply. “Really learned a lot and it consolidated my insights into what happens and how it works.” “Good,” he said. “Yes, the workshops went very well, we are getting sharp at them. And it does lay a very secure foundation giving people practical tools to turn their desire to succeed into success. And” he paused looking directly into her eyes, “they win - we win.” She nodded, thinking of the conviction from the boss with the same comment. “We are tight for time, so if you don’t mind we just press on.” She nodded agreement with a smile. “I have a bunch of notes for you.” She had not noticed the folder of notes on the table to his right, which he now pushed across to her. “Usual story, we will walk through it then these notes are for at home, and reminders, and background etc. If … when you begin to put your lectures together, and if there’s anything you do not understand, well …” he spread his hands outward, “you have my phone number’, he said, nodding and smiling. He switched on the data projector. “You know this OPD-model and system of organizational design was a result of developing better social science tools and then applying those tools to the question of the exact causal link between organization strategy and staff behavior.” She nodded, and he continued. “The practical result was the OPD-SHRM system of organization design and management within which HR emerges as a natural partner to team leaders, each with a clear and defined role in guiding human performance to improve profits.”
  • 10. She nodded again; she was familiar now with this intellectual background and understood the depth of it, including an analysis of causality … goal<->action, ultimate and immediate effects…defining of theory creation tools, general theories of knowledge and psychology. Initially she had been drawn into this intellectual/academic background. She appreciated the depth, but also how it was applied to a very practical and highly commercial purpose. She was impressed and committed to securely standing on the depth of intellectual understanding to use social science tools to resolve real issues in the real world. How the depth gave people in society, not academics, but people doing actual things, practical things… how the depth gave them confidence, and when it worked, they knew they needed no other frame or idea. There were also now emerging books on this, books written for practical people. She thought of the Prof, and how excited he was at a depth of social science having a practical impact in the real world. He had paused. “Well …” he smiled, “I was speaking for a minute before I realized you had left the room.” She blushed. “I was thinking of the background, the depth, and how we could stand on this depth knowing we are secure intellectually, and there are real practical tools, models and consequences. Nothing more useful than a good theory, when for years in these areas there has been theory after theory.” “Yes,” he nodded, “It does feel good to have a secure intellectual position that while it might be refined, is not going to be replaced by the next flavor of the month.” He sipped his coffee, each reflective. “Shall we get on?” She blushed again. “Sorry,” she said. “Not at all,” he replied, “you be as reflective as you choose, we know only good comes of your thinking and refining of your insights.” She smiled shyly mouthing ‘thank you’. Definition of strategic human resource management “A crucial consequence of the OPD-model is a revised definition of strategic human resource management”… he rose and wrote ‘SHRM’ on the white board. “I know you know much of this, but best, I think, to go through the structure of how we end up with the
  • 11. HR department that we do. The definition arises directly from the model and is very different. Typically SHRM was relating human resources to business strategy; SHRM was then a function of finding and defining the links, effectively the place of HR within the strategic mix, which in turn tended to define the place of HR and the VP HR at the executive top table.” He paused and finished his coffee. “This approach was called strategic human resources, but it was not really; it was really finding the link between human resources and strategy. There were some underlying motivations in that many of the thinkers about HR wanted HR to be part of strategy. Now perhaps it is, occasionally, but the reality is HR comes to account in strategy only as a cost, like many other costs. There is nothing usually to place the VP HR in the team defining strategy, unless the person themselves was a solid visionary sort of person. There was no real HR reason to have them present.” “There is reason with the OPD-SHRM approach?” She asked. He shook his head. “Actually no,” he replied. “HR is seen as something done after the strategic decision. Like, if for example, there is a real chance skills could be short and so hamper the strategic roll out then HR is likely to be consulted. Outside circumstances that are unusual, HR issues arise after the strategic decision, the first HR decision being the governance decision of the organization design paradigm. If it is based on the model,” he pointed to the screen, “then that determines a very different definition of SHRM”… he paused. “Frankly”, he continued, “we don’t think there is a choice, this OPD-Model is just so superior, intellectually and practically, the alternative, namely the current collection of views and ideas, does not really amount to a scientific paradigm at all, and as you well know, it seriously lacks depth or integration into the serious issues of social science…such as cause, a coherent general theory of psychology, and effective social science conceptualization tools. The current global view is just a mish mash of poorly integrated ideas with no real link back into social science at all.” He reflected on his comment.
  • 12. “Let’s then not discus current stuff any more. I think you have a clear idea on its limitations, and the steps behind this OPD-model to correct those limitations. The thing about OPD-model is it came from applying the tools, so in that way is not someone’s opinion….” He stopped, she nodded her agreement. “So HR is after the strategic decision,” she said. “Once the strategic decision is made then the OPD-SHRM processes are immediately in play with the questions: What goals are implicated in the decision? How will these goals be grouped to form roles? Remember, a role is defined by the grouping of like goals with like…” she nodded, he continued, “How will roles be grouped to form teams and teams formed into divisions. Again like with like is the guiding rule, the reason being to avoid asking someone to have a behavioral reach too large to be realistic, like asking someone to be CFO, and VP Sales; the knowledge required and the types of action are just inconsistent. Now this is an extreme example to make the point, not extreme is where we place customer service; part of sales or part of operations.” Again she nodded, she understood these issues. “From this set of preliminary questions, there emerges the organizational structure of divisions, teams, and roles in teams.” He paused, reflective. “One small point of terminology, the decision as to the organization design specification determines the ‘form’ of the organization, or ‘organizational template’: The manner in which the organization is to be formed. Applying the template then builds the structure of the organization, the organization chart we all know and love …” they both chuckled. “But to go on”, he said, “Roles are defined by goals and KPIs derived from strategy. Then in each role, the KPIs define ideal actions…” She broke in…“…Those actions that if delivered to standard ensure greatest success defined in terms of achieving the greatest result….” They both laughed. “All of this builds the architecture that is the divisions, team’s, roles in teams, KPIs and ideal actions in roles derived from KPIs. The architecture is independent of people…now this is very
  • 13. important, and needs to be fully understood. The architecture does not depend on people. Does not consider people. The architecture does consider skills needed to act out ideal actions, and therefore availability of those skills. And again, if there is any suggestion that there may be a restrictive shortage of skills then HR is directly involved in strategy, otherwise all this is after the strategic event.” “SHRM is the actual strategic aspect of HR, so HR has its own strategic focus, independent of the strategic focus of the business.” She said. “Exactly.” was his reply. She continued. “So the decision is first at governance level on the organization template to be applied in the roll out of strategy. ” “You are doing great, keep going…” He said. “… Forget the alternative; it is not a paradigm, merely a loose collection of ideas based on no fundamental rationale.” She nodded then continued. “So the directors choose to apply the OPD-model as the template for their organization. This decision then locks in all leadership to act in a particular manner, especially the CEO and VP HR.” “Perfect,” he said, “just perfect. So now from strategy we have evolved and derived the full architecture, division, teams, roles, and with KPIs delegated into every role, and ideal actions identified that when enacted enable greatest delivery of results” he rose and wrote on the white board. 1. Corporate KPIs/strategy 2. Division, teams, roles in team, goals cascade 3. Ideal actions in each role derived from the KPIs in the role. 4. Effectively the corporate wide set of ideal actions that underlie the strategy. He sat and watched her as she took in the diagram. “There you have it” he said, “you can ignore the middle step as just the process for identifying the set of corporate ideal actions derived from strategy so that if everyone acts out the ideal actions assigned to them then the strategy is achieved”…he paused…. “Done like this it looks simple, but in reality there is a depth of intellectual
  • 14. stuff that had to be resolved merely to deduce this diagram. But that done, practical people like me can just get on and do it… as per this diagram. The intellectuals have done their bit in delivering a solution to a serious global social issue and done so with enormous depth, much of which I do not really understand, but we end up here, which is just great.” She sat listening… “This in the notes?” she asked. He nodded firmly. ‘Now,” he said, “definition of SHRM: The alignment of staff behavior with strategy.” He sat back. She paused, reflective. “Let’s see if I understand, so SHRM will involve two steps, first the identification of what it is people need to do for the organization to succeed…as in achieve its strategy…then second, guiding people to act out the ideal actions as needed.” He nodded conclusively. “You got it exactly.” he said. “So to put it together, SHRM is the alignment of staff behavior with strategy. It places HR at the top table immediately after strategy is agreed, and HR remains at the top table, since it is possible in principle to achieve 100 % alignment of staff behavior with strategy; the reality is that it is an ongoing wrestle, hence the HR orientation to the issue is always in demand.” The aim of the HR He paused. “I will discuss this in more detail shortly, but it is useful to introduce it now, while all this is in focus. The SHRM definition derived from the OPD-SHRM model leads to the delegated role of the HR department, namely ...” he paused, taking on a far away look, clearly remembering the words … “In partnership with all team leaders to achieve 100 % alignment of staff behavior with the profit and loss. There are more details, but I think you get the thrust of it, in fact it is the team leader role to get alignment, it is our role to ensure they have the tools and skills, and receive regular monitoring of how they are doing.” He got up and poured another coffee, she declined. “The sort of statement is the defined aim of the senior HR person, in my case Global Director of HR. Notice that the priority is on
  • 15. alignment of action with that needed to get best results. It is not about ‘people’, and it is not about ‘compliance’ but about results.” “This has been tightened and consolidated, and as we discussed, the Board now fully see their role of governance in managing HR. It goes beyond mere HR policy, the formal decision to adopt a definite paradigm for building the organization, which has very clear and precise consequences defining the role of HR, and defining in no small part the role of the CEO which is to guide development and clarity of the ideal actions underlying strategy, the behavioral structure of the organization and then oversee delivery of the ideal actions to strategy is realized.” The payback from improving human performance He sat for a moment in silence. He shuffled his notes. “Right.” He said. “I think the next topic is ‘why?’ Why go to these lengths. What is the point? It is of course about money, profits. SHRM is about results, and acting out the agreed ideal actions is about staff success. If a person successfully acts out their ideal actions, they succeed, and all our policy is aimed at rewarding that success. Then, when they succeed, if the leadership has selected the right ideal actions relative to the strategy then the organization succeeds: Win-win.” “Let’s go back to basics.” He said. “If you identify the actions that achieve a goal and you do those actions more, or more effectively, or more intensely, you would expect a better result. Right…?” She nodded agreement. “And this is causal, and has nothing to do with the person, and everything to do with their commitment to be successful. For any and all goals if you do more of the actions derived from the goal more effectively or just more of the things that deliver the result then you would expect a better result.” She nodded again. He went on. “There are always exceptions, but overall there is scope to improve first clarity of ideal actions in business, certainly in our business and then delivery of those ideal actions.” He bought up a slide while talking, “the fact that if you do ideal actions better, you
  • 16. get better result, means there is a link between the ideal actions derived from a goal and the achievement of that goal.” “The causality of goal-action is in this next slide, but now we are beginning to make the links between human behavior and the profit and loss.” He paused. “And remember, these links are goal-action, therefore they are causal as defined within the philosophy within which these models are developed, that is where it gets deep stuff, but we do not need explore that, it has been done for us.” She had seen the slide before, but allowed him to cover these essentials of payback from improved human performance. Actual behavior Ideal actions Goals/KPIs/results Leadership judgment (A): Team leader works with the team member to build clearer more effective personal game plan coordinated with the team game plan, ideal actions derived from goals. So goal- action is causally engaged in the organization. Leadership effectiveness (B): Team leader then guides & support delivery of the personal game plan. Team leaders spend 20 minutes per month per role in one-on-one discussions. (1) Input to move actual behavior closer to ideal actions. Typical is 8-16% improvement. (2) Typical for each 1% gain in performance sales increase 0.3%-0.4%, direct costs decrease 0.2%-0.3%, overheads decrease 0.1%-0.2%. Figure 8: Causal link to results (OPDPPL) via each mind Gain in results is 1x2 = OPDPIF A B Ideal actions KPIs
  • 17. Improved human performance is defined as improved definition and/or delivery of ideal actions “Improved delivery of ideal actions is estimated by the executive, it can also be assessed in the OPD-SHRM cultural audits, but more on that later. These links do not need miracles, and that is important, just a few %age point increases in delivery of ideal actions can often have a very large gain in profits, this is because profit is usually the small difference between two much larger numbers.” He went on. 100% human performance “100% human performance is defined as perfect selected ideal actions, so that when perfectly delivered to standard needed, a perfect result of 100% is achieved. We can clearly identify the target, and have systems that can assess how close to target we are. We also, now, have learned how much gain in ideal actions we can get in any one year, and it is less than one might think. So we know we have a long and ongoing task to get as close to human performance perfection as we can and then keep it there.” He referred back to the slide, and continued. Estimating the gain in human performance “So the question is how much closer can we get actual behavior to match the ideal actions? We reckon today, in any year, we can get say around 10%, this comes from tightening our definition of the ideal actions, from our leaders guiding their delivery better, from people learning how to do it better, and from the consolidation and acceptance of our broader ethical policy and standards, such as having for example a hundred times multiplier on salaries, so people know the gap, and in general they accept it.” He paused, “this is getting the community background frame of reference in line with the other frames we guide people to select and use to think of their place and the place of the organization in the community and in their lives.” The OPD profit profile link OPDPPL He continued. “Now the numerical links.” He paused. “Called the OPD profit profile link (OPDPPL). We agree and understand from goal-action, improved actions and their delivery get improved goal
  • 18. achievement.” She nodded again. “So there must be a link between improving delivery of ideal actions and the results” he paused, before continuing, “the initial research shows that this OPDPPL is different for sales than for operations or overheads, in fact it reduces from sales, which is largely all behavior, through operations, which is behavior plus machines usually, and is lowest in overheads, it appears that overheads are least amenable to improving ideal actions, so companies are either tight on overhead now, and got it well refined, or use lot of technology to keep labor down.” He used his laser pointer to point to the left hand side of the slide. “This is in here where the OPDPPL is normalized to a 1% gain in human performance. The initial generic results are as follows. 1. 1% improvement in sales ideal actions will increase revenues by 0.3% to 0.4%. 2. 1% improvement in operations ideal actions will decrease direct cost by 0.2% to 0.3%. 3. 1% increase in overhead ideal actions will decrease overhead costs by 0.1% to 0.2%.” The potential of untapped human performance can often double profits from the same revenues “Now,” he went on, “very likely this generic type of result will vary from industry to industry, and each business has to put in some work to get a definite idea of what these links are for them. We have an idea, and I will show that in a minute, but this sort of relationships is a very good place for a Board of Directors to start to get some sense of the potential of improving human performance.” “If you now put together the normalized link between gains in human performance (OPDPPL) with the potential increase in human performance then you get the profit improvement factor, or OPDPIF. This is for each line in the profit profile, so sales, operations and overheads all have their own OPDPIF based on the different profit profile link.” She thought about this. “Not losing you?” he asked, “this sort of stuff is not what HR is usually about, but under this model, this is the essence of HR, all
  • 19. about getting better ideal actions better delivered by people, with people enjoying greater personal success, and the business banking greater profits.” She shook her head. “Just getting my mind about it.” He nodded, and pushed on. “The comparison is with some data done in Sears” he continued, “they used statistical links, and claimed a 1% gain in staff attitude, improved revenues by 0.1% through better customer satisfaction. Now our data makes links three or four times larger, but then we would expect that given that they played with statistical linkage, while we go direct via the goal-action principle.” “OPD-system works since people’s personal success is fully congruent with company success, and in fact we aim to make people successful in all our policy and leader training, since if they are successful, the team is successful, if all teams are successful then the division is successful, and if all divisions are successful then the company is successful.” “If we put this together we get the sort of spread sheet below. This simply uses all the figures we have discussed. The sales, operations and overhead links are in the ranges proposed, with gain in human performance from 10%. In most organizations this is not huge and not excessive. Now look at how it impacts results.” “These figures are in millions, and do not exactly reflect out current state, but close enough to show the impact. We have been at this for four years,” he said, “and learned while it works, it takes time, and the executive and directors have to learn it as much as the staff. So we try to be realistic on our expectations of increases in human performance, the links, and then the profit increase arising from the first factors. Even so, the gains are potentially huge.” He pointed to the bottom lines, “An EBIT increase of $68 million, and profit to sales ratio going from 9% to over 11%.”
  • 20. Results in millions OPDPPL Sales 0.3 Ops 0.2 OH 0.1 Perf incr 10% Year 1 Before After OPD % OPDPIF OPD % Revenues 2,500$ 100.00% 3.00% 2,575$ 100.00% Direct costs 1,550$ 62.00% -2.00% 1,565$ 60.76% Gross profit 950$ 38.00% 1,010$ 39.24% Overheads 725$ 29.00% -1.00% 718$ 27.87% EBIT 225$ 9.00% 293$ 11.37% EBIT $ Incr. due SHRM 68$ EBIT % incr. 30% Profit to sales 9.00% to 11.37% Essential to have coordinated policy and practice “What we really found was we were ethically out of step with where the people were at. We found they were really skeptical and cynical about our intentions. We also found some of our team leaders agreed with people, and not the company. We found you cannot take liberties with people, not today, they are very well informed. People have experienced every manipulation imaginable. We found that if you really wanted them to commit you needed to be seen to be committed back. We have been working on this insight for couple of years; the boss I think told you of some our work. He sensed this first, and began nudging us to think about it. As a company we had to decide if we were going to commit to being part of the community, and not be seen as merely using the community, and when it suited us we would move on, or desert, etc.” He paused, thoughtful. “There is a lot of learning here about how to really engender respect and commitment. Get it from the people you want to deliver fully on your assembly line, not respect from the commentators, and others who might be mentioned in some communications policy brief. It is simpler and more difficult than that. But start by identifying opportunities and get some gains. Nothing convinces a Board of Directors like increased profits, especially when revenues drop a bit and the economy tightens a bit and every one else is talking profit downgrades.”
  • 21. Measuring the ROI of HR He stopped and checked his notes. “One final point before we break for lunch. Let’s say we think that operations delivery of ideal actions could be sharpened. We plan a program to do that with extra team leader training, extra surveys and extra effort into sharpening the ideal actions. We can then use our spread sheets to assess the impact of that on the results from that team; usually we can drive into a direct estimate of the reduction in direct costs, and then given levels of productivity, we can translate that into reduction in direct product costs, and then into pricing reductions. Then we are really drilling into the ROI of HR, and really turning HR into a serious driver of profits in partnership with team leaders.” “Part of our experience was we were having problems with warranty and recall in one of our plants. So I convinced the boss to allow us to go in and fix it. He was skeptical, but said ok, and gave HR six months to show some gains. Well, we went in, drafted new time budgets and took team leaders through the time budget work shop you went on. I think it was first time we ran it. We worked hard at ensuring the necessary actions that reduce warranty problems were clear in every time budget and that effective warranty control process were melded across the necessary time budget for every role involved. It was very intense. But in six months, we had achieved a 60 % reduction in the problem. The boss really saw the relationship between P&L issues and actual conduct of people on the job. That was four years ago.” He paused. “This all in the notes?” She asked. “Yes,” he said. “Good, there is a lot here to think about.” She said, “Are we off to lunch now, I need the break.” He smiled, and they rose to go to the café. She was looking forward to it, anticipating meeting lots of people she now knew quite well. Key definitions 1. Architecture: KPIs, roles, ideal actions. Created from strategy. Independent of people.
  • 22. 2. Leadership judgment: Determining the architecture. 3. Role: A unique set of actions and usually thought processes. There is often more than one role in a job. 4. Time budget: the practical tool guiding delivery of the ideal actions in each role. 5. Behavioral balance: the distribution of time across first roles in a job, and second ideal actions in the role. 6. Leadership effectiveness: Extent leadership guides delivery of ideal actions. Background terms They settled back onto the settees in the HR Director’s office. She had found lunch lively and fun, with lots of people coming over to say ‘hello’, including the boss who was entertaining some Japanese guests. “Okay,” said the HR director. “Before getting in further, let’s quickly recap some terms and background definitions, I think you will know this, but again let’s be sure we are all on the same page here.” She nodded agreement as he switched on the data projector and flipped through the slides. They read through the items, briefly discussing each. She was very familiar with the terms and their definition within the OPD- model. “I thought perhaps,” she observed “that talent management and human capital value would be included.” He nodded. “Both very important, and both defined differently within the model as you are obviously aware. Both are sufficiently significant to be discussed later as specific items. He waved toward the slide projected onto the wall. “These are key aspects of the core implementation, SHRM as the process of alignment of actual staff behavior with the ideal actions judged consistent with corporate success.” Behavioral structure and behavioral balance “Some other key terms, although again I know you have seen and understand but are important,” he said, “are the ‘behavioral structure’ referring to the set of ideal actions, so can apply to role,
  • 23. team, division, or organization. Distribution of time across the ideal actions is the ‘behavioral balance’ in the behavioral role. Distribution of time between roles is the behavioral balance in the job with more than one role. ‘Behavioral best practice’ is the set of ideal actions with the appropriate distribution of effort both in a role, and/or between roles. The same model applies to teams, divisions, and organizations.” He continued. “Then of course: Leadership judgment: The judgment of each team leader as to the set of ideal actions (team behavioral structure) that needs to be delivered to achieve the KPIs assigned to the team. Alignment: The extent to which actual staff behavior reflects the ideal actions judged needed to achieve greatest result relative to strategy. Leadership effectiveness: The extent the team leaders achieve committed alignment.” She nodded she understood as he changed the slide. “Now,” he said, “a very quick recap on the operations of OPD- SHRM as arising from the model.”
  • 24. OPD system implementation Web system components: Captures leadership best judgment. 1. Architecture – teams, roles in teams, goals/KPIs, ideal actions 2. Cultural audits 3. Customer audits 4. Internal customer audits 5. Leader monitoring (HR-KPIs) 6. Training needs identification 7. Training and coaching materials 8. Learning firm 9. Performance assessment 10. Performance management 11. Strategic leadership planning Consulting support: Builds leadership effectiveness. 1. Comprehensive team leader coaching 2. Ongoing consulting to support effective delivery of the system 3. Development of internal HR staff 4. Email and telephone help desk 5. Ongoing tactical and strategic reviews 6. Ongoing back up for internal staff 7. Ongoing audits to support sustainability
  • 25. “First the components and terms, which are all different, so for example, cultural audits are not about ‘staff satisfaction’; rather they monitor how well the team leader has guided development of the professional frame of mind in his or her team….” She cut in on him… “… yes we covered the professional frame of mind very fully in time budgeting, it is a very effective idea and very practical.” “Yes, it is…” he paused then went on…“the key thing about audits, for example is that they are expected to be used by team leaders to select the improvements they will target in their team. So all of these processes, while they may sound the same, they are all derived from the OPD-model, so there is always just that subtle and sometimes not so subtle difference and shift in emphasis. Then second is the consulting support, which in larger organizations focuses on building the internal resources then on supporting the internal resources and maintaining the standards of the internal resources. This is very much the stage we are at, having been involved now for several years.” He stopped. “Now,” he said, “the key difference.” Defining the partnership between team leaders and HR “All of those processes are to be applied by team leaders. They are not applied by HR. It really did take our department, including me some while to get our minds around that. Audits, assessments, architecture, etc, are what a team leader does. It is the role of the team leader to judge the aptness of KPIs derived from strategy, or ideal actions to ensure greatest chance of greatest success. It is not the role of HR to do”, he emphasized ‘do’. He stopped. “It is the clear aim of HR,” he emphasized the ‘is’, “to ensure every team leader has the skills to implement the SHRM processes and components to a standard that will achieve delivery of the idea actions to the standard needed by each team member.” He sat back waiting. “How have team leaders accepted that?” She asked. “Good question.” He said. “I took a while to sort out the relationship, and HR and team leaders tripped over one another for a year or so, before we sat down and re-conceptualized the structure of
  • 26. the HR Department as it arises from the OPPD-model. This of course is the point of this discussion.” “Okay”, she said, “team leaders do it; HR ensures they are able to do it.” “Yes”, he said, “with a couple of bits tossed in, we act as sounding boards and guides for say, redrafting performance specifications in a role, in that example, we are the internal consultant. But, the team leader, or manager, has the final say, it is much easier for people to redraft a draft than to sit with a blank piece of paper and try to create something from scratch.” He paused then continued when he could see she was following him, “Second, we monitor the effectiveness of team leaders in delivery of the OPD-SHRM processes through the SHRM KPIs, the dashboard, as they call it. It monitors the extent the team leader is applying the system in their team. It does not monitor the effectiveness with which the system is implemented; we assess that by audit scores, and the level of results being achieved, so none of this monitoring is in isolation.” “It is all meant to be linked with it all focused firmly on better delivery in every team of the agreed ideal actions, and when that done, the boss is happy, and that is in all our interests.” They both laughed. “So to summarize, The HR Department delivers the following,” he ticked off the points: 1. “trains team leaders in the OPD-SHRM processes of team leadership, 2. acts as the internal consultant for team leaders in implementing the team leadership processes, 3. monitors the effectiveness with which team leaders are implementing the OPD-SHRM processes.” “What happens” she asked, “if team leaders are not implementing it properly?” “We provide information, we do not discipline. If we uncover shortfalls in implementation then the first thing we do is go to the team leader to discuss check training and skills, etc. We then usually
  • 27. advise the team leaders team leader, who is expected to chat to the team leader and ensure they understand that implementation is not optional. We then report monthly or so on our monitoring and findings to the Executive Team, when the boss becomes involved. And he always expects shortfall reports to have been acted upon and the Executive concerned to be able to report on a plan in place with ideally some progress evident.” “You have seen the commitment of the boss; he is very clear on the benefits of this system and focus. For the first time in his career he will tell you, he can see real direction and processes in relation to roll out and achievement of strategy.” She nodded, thinking of the bosses style and comments in time budgeting. “And if the results are not there …?” She asked. “Rather much the same process, although we will not be the first to know if results are short. But, we will be consulted to ensure the processes are being or have been applied. Also, we again get into a consulting role; we know more and do it more, so we get involved in discussion about the aptness of ideal actions, checking ideal actions were not wide of the mark. The team leader’s skill set gets examined, and from the discussions a plan emerges to improve results. Again, it’s reported to the Executive Team.” OPD-SHRM gives annual structure to HR department SHRM activities “Let’s look at the team leader role”, he said as he shuffled in his notes then handed her a piece of paper. She glanced at it, she had seen it before, in time budgeting. “Yes,” he continued “I knew you had seen it before, but this time I want you to see it from an organizational point of view. You can see the actions of team leaders doing those various steps and tasks. Now, think across 350 team leaders, think across coordination of the cultural audits for example then you see the annual structure of how HR guides overall delivery of the steps undertaken by the team leaders.” She looked at the document with new eyes, and saw how for example the team cultural audit was in quarter two then quarter four. She could now picture from the HR point of view, a corporate wide administration structure
  • 28. consisting of these exact steps.” He watched her mind get rapidly around what he was discussing. “So,” he said, “we do not drive it, but we do coordinate it, we nudge it along, we have found it useful to have team leaders able to discuss doing performance assessments in the lunch room for example, and where teams serve each other internally, to be able to chat over the results and how and where team A would appreciate better service from team B.” “I did not see that in time budgeting,” she said, “but now I see it was clearly there; we were focused on what individual team leaders needed to do, and not on the organizational implications and management.” “You see it now, and see it as role for HR.” “Absolutely,” she replied.
  • 29. Position title/Job title Team Leader (Team leader) Team members name Team Leader Position level 3 - Team leader or first level manager. Hours/month available 15 hrs Plan able time 90% (13.5 hrs/month) Aim: To retain and develop delivery of the agreed behavioral best practice (ideal actions) in the team to ensure greatest team result. KPI's: No red in SHRM-KPIs. All strategic HR processes in the team to the agreed standard. Ideal behavior hrs/mth Daily (25%): Management by walking around (MBWA) ensuring staff behavior consistent with agreed ideal actions Impromptu discussions on ideal actions, and verbal audits of whether they clear and being followed through. 3.4 hrs Ongoing performance assessment (25%): Every two weeks with each team member, one-on-one review of professional mind and delivery of ideal actions. Use agendas provided and team development folders to track progress and maintain records. 3.4 hrs Quarter 1(10%): Establish new business development project goals in each role for coming three months. Performance report on team members in talent management pool. 1.4 hrs
  • 30. Quarter 2 (10%): Complete team cultural audit. Review audit data. Set team development goals/plan for next six months. Set team training plan training for next six months to develop skills at delivery of ideal actions. 1.4 hrs Quarter 3 (15%): Review business processes in team and that the team is effectively serving the internal teams it needs serve for smooth and efficient operation. Working on the business: Review ideal actions, KPIs, and roles with team report to own manager on changes to achieve a better result. Review goals set in quarter 1. Establish new project current goals for coming three months. 2.1 hrs Quarter 4 (15%): Complete cultural audit. Review audit data. Review progress on team development and training plans set in quarter 2. Set team new development goals/plan for next six months. Set new team training plan training for next six months to develop skills at delivery of ideal actions. 2.1 hrs
  • 31. Two aspects to modern HR is SHRM and compliance “You can see clearly two very distinct aspects to HR role in a modern corporation.” 1. Strategic human resource management 2. Compliance “Strategic human resource management is focused on aligning actual staff behavior with ideal actions. This is the part of HR that drives a better bottom line, and more specifically it drives better results in each team, with more satisfied team members. So this aspect of HR is embraced thoroughly by team leaders. It is our experience that when team leaders get to really ‘see’ it, they are never reluctant to discuss how to build better ideal actions and how to guide better delivery of those actions, when that happens every one wins, and everyone is enjoying it more.” She sat reflective, getting her mind about the summary: SHRM, and compliance. “In some ways”, she said tentatively, “as the SHRM processes bite, and are done better then compliance needs are reduced.” “Exactly,” he said. “Compliance is frequently about protecting people from the big bad corporation. Mind you, we fully embrace some aspects of compliance, for example health and safety, although we think it is not balanced enough, with too much of ‘protecting people’ and not enough of ‘let’s be fair all round’. But overall we are quite comfortable. We typically exceed demands of compliance, much of which is embodied in our drive to achieve greatest delivery of ideal actions which builds our profits. There is no conflict, so it is not compliance at all, but HR best practice to drive our bottom line and drive satisfaction for people from success at delivery of ideal actions, is not satisfaction that drives our bottom line it is delivery of ideal actions, which when delivered gives satisfaction to the people.” He paused. Satisfaction from getting it right not satisfaction and hoping they get it right “This distinction is sufficiently important and is a major break from the old global thinking as to be worth stressing.” He paused
  • 32. then continued, “The old global thinking had HR aiming to build staff satisfaction on the basis that more satisfied staff performed better. Now the idea had some merit. But this OPD-model, and OPD-SHRM system is just so much more powerful. We drive to identify the actions, the ideal actions as they are called, to offer greatest opportunity of success. People are guided to adopt success in their work life as a personal choice then deliver ideal actions which they have agreed are ideal actions. This is defined as their success. So when they do the ideal actions we can say, fantastic, thanks, well done. They are successful. We bank the result. That also enables us to come along and say, here is a bonus; we had a great month, or year, etc.” He reflected on his comments and continued. “Actually we structure performance pay into the wages and salaries mix a little more systematically than that, but that discussion is for another day.” Depth of psychology in OPD-SHRM that must be managed “Which reminds me,” he said, shuffling through his papers. “There is a tremendous depth of psychology in the OPD-SHRM system. But it does not depend on just one thing, but a set of reinforcing ideas that few people can really contest.” He handed her the note. “Here is list of the core ideas that we coach team leaders in how to review and discuss in teams, we expect team leaders to be verbal ready with any of this stuff, and it is this stuff, managed at the lowest organizational level that gives our leadership bench such depth and resilience.” She read over the list, she was familiar with it all. And in various discussions had encountered it all, but had never seen it in such a list.
  • 33. Psychological factors in OPD-SHRM 1. Personal choice to be successful. 2. Acceptance that success begins in the mind. 3. That only the person has access to their mind. Therefore, one’s own success begins with one’s personal choices. 4. To get it clear in the mind it needs be clear on paper first. 5. Acceptance that the mind can be ‘portioned’, if one chooses. 6. Build specific frames of mind to do specific tasks. 7. Success will enabled by developing the ‘professional mind’. 8. Willingness to accept coaching; that is, work with the team leader to assist developing the professional mind. 9. Separation of the ’self’ from the thoughts in the ‘professional mind’. 10. Willingness to adopt critical, objective self-assessment of extent self is a ‘professional’ (defined in terms of these psychological processes). 11. Willingness to maintain the attitudes consistent with a professional mind (emotional intelligence, including moderate and manage self-talk). 12. Commitment to personal training, develop skills at delivery of ideal actions. 13. Understand how professional mind can hold several professional roles and develop skill at role transition. 14. Clarity of what is in each role and the any tensions inherent or between roles. 15. Willingness to ‘own’ fully one’s personal professional mind and tension inherent in the roles. 16. Willingness to pay attention to ensure delivery of ideal actions until they emerge as habit.
  • 34. 17. Link psychology within the organization to the social structure beyond the organization 18. “If someone thought according to that list, what do you think they would be like as employees…?” He asked. “It is all about them choosing their future and their values.” She said. “I have experienced it in time budgeting, people accept it. They will deliver ideal actions, but, there are also broader issues the company must get right to really get the buy in, like the company ethics as regard the community, if the company gets that right, and people come to believe it, and accept it then most people are going to buy into this.” “Yes, indeed.” He said. “That is thinking of the company within a much broader social framework, and many aspects need to be bought into better alignment.” He stopped, “We agree and understand, but there is not time to go into that today. Anyway, I would not want to delve in there without the boss, who has done a lot more thinking and work on that than any of us.” “What about a coffee break?” “Yes please”, she replied. He rose to fill cups from the coffee urn. He spoke as he filled the cups. Roles in HR follow from the OPD-model “We have couple of hours left. I want to go over three issues, first talent management, second the link between results and team culture, discussing different social cultures as well, because we have several. Finally, human capital value.” He placed the cup in front of her, and sat back down. “Then, we will go over the roles and structure of our HR Department as it has emerged from all this learning and thinking. He sipped his coffee. “I suspect I will just give you the notes to go over, it is all very logical once you grasp all this stuff, and grasp how the focus and nature of HR shifts as the priority aim of identification and delivery of ideal actions becomes clearer.” He paused. “Once you have got this background clear then the structure of HR becomes rather obvious.’ He smiled at her. They both sat back and relaxed for a few minutes.
  • 35. HR applies in all sized companies “It is dawning on me,” she said causally, “that this new idea of HR is applicable to any sized company.” “Yes, it is”, he said. “Start with one person, that’s not a company at all. Now if they took the time to clarify aims, ideal actions etc, and then systematically built a professional frame of mind, would that help them perform better?’ “That is rather what a golfer does with help of a coach, so we know it helps get better results.” She paused. “So, with say fifteen staff then the full system is almost applicable, including the annual SHRM admin structure when certain things are implemented company wide. And the same sort of results are achieved; people being more successful, and the company making better profits.” He raised his eyebrows at her. She continued. “With a small company, the role might only need a few hours each quarter, so it is not a lot of time, not once it’s all set up. As the staff numbers increase so the time needed in each role increases until they become full time jobs.” Now she raised her eyebrows, as the insight sunk in. “There is no organization that does not need these HR roles, and I used to think that only large companies had or needed HR Managers.” He raised his finger. “Correction,” he said, “only large companies need an HR Manager,” he stressed ‘manager’, “What all companies need is the roles fulfilled, and that will not necessarily need full time people.” “Yes, of course”, she replied. “Interesting, and the roles will payback, it is not merely compliance, and it is not reactive.” “Okay”, he said, “…next…. Yes cultural issues.” He wrote on the white board. Communication must be about the ideal actions but must take account of cultural and social issues. Company culture and community culture “Two topics, first understanding company culture, what is it, how do we measure it, how do we build it. Second is the social cultural issue, so we build a plant in Thailand, or Mexico, or Slovenia…there are community differences, real cultural differences, not merely
  • 36. company cultural differences. How do we bring that to account?” He sat back. She waited. “Okay”, let’s do the second one first, get it out of the way, frankly there are issues, but all are able to be easily understood and managed.” The OPD-model is universally applicable “On the left is the architecture development. The simple version of the full model we had earlier.” He used the laser pointer to run down the left side of the slide. “This model is always applicable…” he paused, “…the nature of ideal actions may change, so closing a sale in Bangkok maybe different from how it is done in New York. But there will be a best way, which are the ideal actions. Choice of strategy may vary from culture to culture, but there will be a goal cascade, and hence KPIs in every role, and ideal actions in every role. It did take a lot of people quite a while to grasp this; they were mixing up people and their mores, with the structure of the organization which is independent of people.” He checked to ensure she was following, she nodded. “The key is the communication, and as needed, the exact description of the ideal actions. So when we discuss ideal actions there is a need be careful of not treading all over some sensitive issue. We have not had the experience, but recognize it could happen.” He collected his thoughts… “then as well, there is exactly how team leaders can treat people who for example do not deliver ideal actions. We have had an example in Asia, where with the importance of ‘face’, and ‘respect’, and belonging in the group, and the formality around such issues, team leaders have been able to use shame to bring team members into line. We discourage it, but it is a cultural difference, though not strictly surrounding OPD-SHRM. We encourage the regular psychological issues we have already considered, and while we understand differences, we also think people are remarkably rational and insightful in very similar ways… and universally everyone understand when they are being treated fairly, in a transparent manner, and with respect”.
  • 37. “Overall” he concluded, “we do not see culture as a big HR issue at all; it is a variation on the OPD theme. But you do need do your home work, be sure you understand any pre-existing social or tribal authority structures for example, and initially fit in with them. The need to fit in is because some people do not have the conceptual frameworks of say people in Australia; they do not separate a team leader at work from community leader, and they have problems with accepting what they see as a low cast person in society as being a team leader at work.” He looked to her, she nodded she understood. He continued. “In time we can and do educate people about the difference between work and society, and that effective companies are needed in the economy if the community is to build and maintain a base of ongoing wealth to ensure community health. When the professional frame of mind settles into place, as we build their professionalism, and we use a lot of sports examples to help people ‘see’ what we mean by professionalism, TV has got just about everyone to understand sports professionalism then we have another organization ticking over in the way we now understand very clearly and very fully with everybody winning, every day.” He continued. “We think that the extent it is an issue is due to the poor models and process being applied, and arrogant ethics, like expecting people in some less developed countries to be compliant when a company goes into that community simply to cut its labor costs. We do not think that is respectful of those people at all, it is looking to take advantage of them. And the world is rapidly moving to a global insight into that.” “It seems to me more and more,” she said, “that you have worked out that the organization cannot do without the community and the community cannot do without the successful organization.” He smiled and nodded, saying ‘exactly’ as he shuffled through his notes. He looked up. The professional company culture “Okay,” he said, “The next topic I think is company culture. There are slides I want to review, but first a summary. You know time budgeting…” she nodded, “so if everyone in the organization every day moved themselves thoroughly into their professional frame
  • 38. of mind, focused on their ideal actions, and succeeded in finding flow for themselves, what sort of organization do you think we would have.” “A very rich one I would think”, they both laughed, and she went on, “I get the point, a culture not specified in this or that, not specified in so-called values, a culture not self obsessed trying to define itself, just a lot of successful professional ‘golfers,’” she signaled the inverted commas with her fingers, “getting on playing the best golf they can.” “Exactly.” He said. He looked down saying quietly, “Exactly.” He was again reminded she was sharp. He smiled at her. “We think it best called a ‘professional’ culture. One in which people are encouraged to find their flow, in their ideal actions, and enjoy each day, and find satisfaction in each day, and the more they do that, the more they succeed and the more the company succeeds and the more the company can get to be generous.…” “And we dismiss the whole ‘mission and values’ thing. We did that years ago, and it just does not work, just lot of hot air, especially compared to a direct drive at identifying and living ideal actions in a committed and professional manner.” He paused before continuing. “People do have some difficulty in separating personal life from work life, of understanding the need to separate a professional frame of mind from their personal mind. They agree to it, but have more trouble living it than they think they will. As they learn so the professionalism goes up then they learn it is useful in lots of places, for example, the first hour when they get home and get bombarded by three young kids clamoring for attention…they learn that is almost like another part of their ‘professional mind’ and they need to stay focused for that bit, before letting the disciplines go and fully relaxing with their partner.” She looked at him, sensing he was really talking about himself, but she remained tactful, seeing that it was a good idea, thinking it is even something she could introduce into her life with her partner.
  • 39. Living the real values “But,” he went on, “there are values implicated, but of a very real type, for example, the idea of the organization being committed to its community…this is not some theoretical value, but something the organization needs to exhibit in its actions, which means the senior executives and directors need to exhibit it in their actions and policy decisions. If we press for commitment from people and give none back …” he paused. Spread his hands wide and shrugged his shoulders. He went on “It is not different from being friends with someone and having them let you down all the time…in fact it is exactly the same, and we all understand that very well; we do not need to have workshops on how to treat people with respect and compassion and integrity. Frankly, if we do not think people have those sorts of values we do not employ them in the first place.” “We have people who have been in this organization for thirty years.” He paused, “The organization is as much part of their life as their friends and even their family…the directors now think that financial ownership does not justify removing something significant from someone’s life, especially if they have given decades of dedicated service. Commercial organizations are part of the social fabric; it is at this boundary where western liberal democracy meets free market economics. And it has been managed up to now in favor of the organization and has not taken account of the people, which is why most governments have HR compliance legislation aimed at taking care of people. These are real corporate values, not shallow manipulated values aimed at making people more compliant by pretending to exhibit depth and integrity.” He stopped. She could see he was quite passionate about these issues. “It is really the boss,” he said, “that has driven this stuff over the last few years, and he was right, people have progressively become more professional and bought in as we exhibited… I mean we, as a set of executive and directors…not some abstract ‘company’, we are the living embodiment of the company…real concern to communities and the people in them. And it has paid off; it has not been a cost, people do understand the need for successful companies
  • 40. as the core of the community wealth. They do understand economy is not some abstract thing, but is them, doing a good job, delivery of ideal actions. It is exactly this that determines community wealth and therefore health to a substantial degree. But it has been a long hard sell…” His voice tailed off. “You get the big links” he said, “this thing called company culture, can’t be naively isolated to just the company. Well, it can, but we have learned that it is just not that simple if you seek real buy in. And getting the buy-in and application to ideal actions delivers results for us.” The governance sets the broader social frame of reference She sat reflective; she could see the ‘big picture’, involving society, organizations and community wealth. She nodded slowly. Then spoke. “Okay” she said, “I see that. The big picture forms the backdrop, it is the environment within which people ‘see’ themselves, it is the broader frame of reference for them, using the time budgeting terminology.” He smiled, nodding appreciatively. “And”, she went on, “building the broader frame of reference for people is not something the staff does in values workshops, but something the governance do in their policy decisions.” She paused then continued. “So having sorted that, what about the actual internal details, what happens how is it translated in practice, I know you do ‘cultural audits’ so what is it you do?” Technical details of cultural audits “Cultural audits measure the extent the team leaders have guided development of the professional frame of mind in the minds of team members. Full stop: It is that simple. The details arising in the OPD-SHRM system are: 1. Focus, are people clear on goals/KPIs. 2. Accuracy, are people clear on the ideal actions to get those KPIs. 3. Commitment, are people inclined to do it. 4. Team leader support, do people feel their team leader is providing the support and guidance for them to achieve.
  • 41. 5. Business processes, do people think the business processes assist them do a good job.” He paused. “Each audit factor rated on 1-10 scale, 10 the highest. The team leader is then expected to target one of the factors to improve before next audit. Audits are usually every four months.” He stopped. “Okay”, she said, “I’ve got enough; you don’t need to go into details of operations I’ve got the principle.” The greater the cultural audit score the higher the performance “One last point,” he said, “As the audit effectively monitors development of the professional frame of mind in the team and the better the development of the professional mind the better the team performance then the higher audit score the higher the results.” He paused, she nodded that she was following. He continued. “And the relationship is not linear, at least not as far as we can see. For example, let’s say with an audit score of 8, the team achieves it targets. Now moving the audit score to say 8.8, a 10 % increase, will improve results by more than 10 %, in one team, it effectively doubled the result. This is again due the multiplier effect, with the result often being a small difference between to much large numbers. But we do not stress the results; rather we tend to stress flow, satisfaction, self-esteem, all getting people into better managing their mind to build greater satisfaction and success in their life. The numbers go up as a consequence. We do set standards for team leaders, so that they are expected to achieve and maintain set standards for their teams, and the boss follows through on this quite firmly. He sees it very clearly and does not let up on it.” “There is a ‘but’, here, in that getting to say 8 is one thing, getting then from 8 to 9 can almost be as hard as getting to 8 in the first place, so we are working at it all the time. As one gets better then little things have greater impact, as the audit score goes up, for instance, the overall framework gets increasingly significant. And little things can get hard to manage, because they are little things.” They poured coffee, and sat and chatted for a few minutes.
  • 42. The basis of talent is being able to guide a team “Just a couple of things left, first is talent,” he said. “We have discussed it, so I will not dwell on it. It starts with definite success at guiding performance in a team. That is achieving high audit scores, and the team getting the numbers. One is related to other, but we want to see both. “From exhibiting skills at leading a team it is then about intellect. Higher organizational roles generally involve greater complexity requiring greater intellectual capacity.” He paused. “Now”, he continued, “Assessing intellect is not easy and assessing intellectual growth harder again. IQ does not do it, even having a degree does not guarantee anything, in fact it can block creativity and getting outside the square to find the solutions to the more difficult problems we encounter.” Development of talent is developing the intellect “We have developed our own check list,” he said, “involving some tests we have found correlate reasonably well, but these just give us a guide, along with getting results in a team, so we have people on our talent list with that background; namely they get results and show potential for intellectual growth. We then get them in close to key executives, so if it is an operational person, they are bought into projects in operations, etc. Then they essentially get tested and assessed, although we do not make that specific.” “There is obviously detail; we do not use these propriety talent soft ware systems, we track people within our performance appraisal and have them noted as exceptional then we find ways to stretch their intellectual capacity to see how deep and far it can go. It all fits quite comfortably into the OPD-SHRM system.” Human capital value “The last detailed point is on human capital value. As we have discussed, slavery is abolished. Therefore a company cannot own people. So we need to define quite carefully what we mean by human capital and human capital value. The model gives us two very definite sorts of human capital value. The first is derived from leadership judgment, the selection of strategy, role structure, goal
  • 43. cascade and KPIs in each role, and then the ideal actions related to each KPI. This is called the ‘standing human capital value’. It is capturing the best judgment of the ideal actions needed by the organization.” He paused then continued. “The second is leadership effectiveness; it is the assessment of the skills of people in guiding delivery of the ideal actions. It is called the dynamic human capital value.” He flicked through data slides until he found the ones he wanted. A satisfactory SHRMIS system should carry at least the following functionality 1. Capture behavioral best practice in each role. 2. Integrate the various elements in SHRM: cultural audits, customer audits, internal customer audits, performance assessment, talent management, role performance specifications, team improvement planning, and bottom-up team based profit improvement planning. 3. Provide reports, guides and reminders to team leaders on what exactly to do when to achieve the greatest result in their team. 4. Capture if team leaders are applying psychological processes in their teams (capture current leadership effectiveness). 5. Talent management: Identify team leaders with best team performance, and guide their development. 6. Live reporting on extent team leader implements the processes. 7. Enable viewing the report from a distance, so Auckland knows if the team leader in Melbourne, Edinburgh, Vancouver, or Mexico is implementing the processes to standard. 8. Coordinate the efforts of HR with the line management The SHRMIS system captures the standing value of the human capital “This idea of strategic human resource management information (SHRMIS) system is derived directly from the OPD-model, and is embodied in the OPD-SHRM system. It is a new innovation for HR,
  • 44. quite unrelated to HRIS which is nothing more than administration of HR, not its delivery and certainly not the capture of the behavioral best practice or behavioral structure to drive the results.” He changed the slide. Strategic human resource management information system SHRMIS: The IT system is which is captured the standing human capital value encapsulating behavioral best practice and the core of the standing value of human capital... The SHRMIS is the core of the learning firm, capturing the insight and learning of successive leaders. In effect the SHRMIS is a model of how the population needs to conduct themselves in order to realize the strategy. “I am not going through all this, it is technical detail and not important for this overview, but it is important when you come to actually setup the HR department. So your lecture needs to refer to it, but does not need to try teaching them how to do it.” OPD-SHRMIS KPIs He then gave her a set of notes. “Here is the set of SHRMIS-KPIs monitoring whether or not a team leader is in fact implementing the agreed SHRM processes in his or her team. This is live in the system, so I can tell if a team leader in our most far flung plant is in fact doing the key SHRM processes needed. It does not tell the quality, but just knowing it is being done is the first step. It is part of our monitoring so part of our role.” He reflected for a moment then continued. “We also have the role of keeping the leadership judgment, the standing human capital value up to date, so if changes occur in the organization then we will ensure it is captured. We are always prodding managers that when they get a new idea and some new and better ideal actions, to ensure they are noted in the system, that way they do not get away, and if those people happen to leave the company then the company has a record of what they did that made them so successful.” She nodded; she understood fully what he was driving at.
  • 45. “I am not going to go over all this,” He alluded to her notes on SHRMIS KPIs, “again it is implementation detail not needed in an operational overview summary.” OPD-SHRMIS KPIs HR-KPIs measure extent team leaders apply the SHRM processes based on the model so that the team has the greatest chance of greatest success. SHRM policy for each team, ‘no red’. OPD-SHRM HR-KPIs leading indicators of potential trouble with business KPIs and with tactical HR- KPIs (absenteeism, turnover health and safety.
  • 46. The OPD-SHRMIS KPIs 1. 1.HR-architecture. (Performance specs). a. % current performance specifications. (Current < 12 months.) b. % sign off of performance specifications. (Current < 12 months.) 2. 2.HR-cultural development. (Team development). a. % acceptance of the performance agreement. (Current < 12 months.) b. % time budget accepted. (Current < 6 months.) c. % completed individual performance contract. (Current < 12 months.) d. % average current CA score. (Current < 12 months.) 3. 3.HR-mentoring/training. (Guide downloads.) a. % people with current PDP. (Current < 6 months. Every person undertakes training annually.) b. % people "Able, but not reviewed for some time, apply refresher" or better. (100% is all people with all ideals above standard.) 4. 4.HR-performance management. (Performance management & guide downloads) a. % people with current performance report. (Current < 6 months.) b. % Team implementation potential. 5. 5.HR-results proactive. (PIP/SLP & Learning firm) a. At least 1 current item in learning firm. (Current < 12 months.) b. At least 1 successfully completed project in Strategic Leadership Planning (SLP) in past six months. c. At least 1 successfully completed project in Profit Improvement Planning (PIP) in past six months. 6. 6.HR-customer satisfaction. (Customer Satisfaction & Internal Team Performance Audits) a. % average current CSA. (Current < 12 months.) b. % average current ITPA. (Current < 12 months.)
  • 47. Function and roles in the HR department “Okay,” he said, “we come to the practical result. To deliver against this model what does the HR Department look like. What do people do to deliver on this OPD-model.” He paused. They shuffled through slides and projected the simplified model. “Here is the working model, the concept that leaders are expected to retain on a frame and guide their actions. You should be able to look at that frame and ‘see’ the detail of what it means, this is NOT,” he stressed the ‘not’, “a high level concept, it is a memory tool to bring to mind all the detail needed to run a team as effectively as a team can be run. The team leader uses this to make the initial overview judgments of what he or she can or could do to improve team performance then drills into the detail to draw out the actions…the diagram is ‘packed’, or at least the memory behind the diagram is packed.” he paused, looking across to her expectantly. Strategy Monitor SHRM processes done and done to standard Guide people to do it Goal/KPI cascade Ideal actions The OPD-SHRM paradigm
  • 48. She nodded slowly while she ran her mind over all the discussions over what was now well over a year. She knew her memory was certainly ‘packed’ in relation to team performance and this diagram. Using the diagram she could move around various aspects of the model and know and understand the action needed to implement in a team, in that sense as a team leader, she was ready. “Yes,” she said, “my mind is packed… I see it very clearly and see how to use the diagram to access those parts of team leader’s actions that would implement the model in a team.” He smiled. “Perhaps we should recruit as a team leader…you are certainly well trained.” They both laughed. “Two crucial points.” He said. He wrote them on a flip chart. Team leaders are responsible for everything in their teams NOT HR. The HR Department can only PARTNER team leaders to increase the value of human capital in each team. He looked at her. She was nodding. “This is where the rubber meets the road as they say.” She said. “Where the reality of policy is in fact implemented and where science meets practical organizational structure.” He nodded then continued. “So now we see clearly two of the crucial roles of HR in implementing the model across the organization.” He wrote them on the white board. HR guides and supports the team leader to define and refine the architecture. HR delivers the training that helps people ‘pack’ their minds so they can fully deliver their time budgets. “This clear to you?” He asked. She reflected, nodded. “Yes, I understand those statements.” She said. “Good,” he said, “because really they define two key roles in HR, in any larger organization those are quite specialized roles, on involving getting time budgets clear on paper, refining delivery of business processes across time budgets, helping teams via the team
  • 49. leader sharpen their time budget, going in and helping a team leader review time budgets where, for example, warranty rework is higher than target…and training people in how do deliver their time budgets.” She nodded and he continued, “In larger organizations I said, these are specialized roles, and we have people out there…” he waved his hand indicating beyond his office, “and we need people out there with them ensuring the special roles of HR are being effectively applied where it counts.” He went to the white board and wrote. HR provides a ‘partnership’ direct link with every team leader. “Think of this role,” he said, “as rather like an account manager, the account manager just ensures the account is getting the service needed when needed. The people ‘on the ground’, and we have a lot of them, are responsible for the relationship with the team leader acting as the link between the team leader and the HR services, with a single common aim, to identify and capture the best set of ideal actions relative to strategy and guide delivery of those ideal actions. When that happens, everyone wins.” “Every team leader then,” she said, “has a nominated HR partner as their internal HR account manager.” “Yes, exactly,” he said. “And we have a senior partnering manager ensuring the on-the-ground people are fully doing their jobs. Leadership, on leadership, with the result being tight and really effective ideal actions fully delivered, with everyone supporting everyone else to get it right and do it right.” He continued. Common interest is integral to the OPD-model “The common interest is not forced, it is not some philosophy inserted after the event so to speak. It is not something that needs to be exhorted; it is just there as soon as people ‘see’ the model and what it all means.” He ticked off the steps. “The boss wants his corporate KPIs because it keeps the board and shareholders happy. Every divisional manager wants the divisional KPIs derived from that because it keeps the boss happy. Every team leader in every division wants the team KPIs, because it keeps the divisional boss happy. And every person wants to deliver
  • 50. their ideal actions because it keeps their team leader happy; it means they are fully successful in their role, and helps them go home every day with a smile, and that keeps their partner and kids happy.” “Bit simplistic but I am sure you get the point.” He stopped. “And HR?” she asked. “Properly packed professional minds,” he said, “make everyone successful. It is what the boss tells me all the time … how we’re flowing today…” He stood on tip toe, “and don’t tell me you got problems, just get out-a here and fix them.” He sat, they laughed, she could see the boss making even more graphic use of the analogy, but always, always in the privacy of his office with people he knew and trusted. She felt somehow she had been invited a little deeper into the inner circle, offered that little more trust. She smiled and he returned the smile; it seemed he understood exactly. He continued. “One more very important role that we have bought fully under HR, since we care about it a little more than IT or admin.” He wrote the fourth item on the white board. Maintain the strategic human resource management information system (SHRMIS) in line with current time budgets. “This is admin,” he said, “but it is maintenance of the one aspect of human capital value we can own, the standing value of human capital. This does seem a little abstract…but if anything happened.” “Part of your disaster management,” she cut in. “Exactly.” he said, “It is exactly disaster management, another group of people could walk in knowing nothing about the organization, pick up the time budgets assigned them and get the organization operating again in short order.” They sat and looked at the list. He rose and added notes. He had left spaces, so again she impressed with the forward thinking in a lot of detail. Later she would see it was in his notes.
  • 51. 1. HR guides and supports team leader to define and refine the architecture. 1.1. Team structure, roles structure in teams, goal cascade, ideal actions, time budgets. This is all a conceptual analysis, key rule design time budgets so they match the cognitive structure that most helps people to do the job. Begins with strategy. This is properly organizational development (OD), has nothing to do with people has to do solely with identifying ideal actions needed across the organization to ensure corporate KPIs are achieved. Identifying ideal actions does not involve the people. So under OPD-model OD is about the organization, not people. Current global HR is confused on OD because of the lack of an adequate paradigm. To avoid confusion, we call this role SHRM-OD. 2. HR delivers the training that helps people ‘pack’ their minds so they can fully deliver their time budgets. 2.1. Training in delivery of ideal actions, team leadership skills, and intellectual development of talent. This is a straight forward L&D function. 3. HR provides a ‘partnership’ direct link with every team leader. 3.1. The ‘account manager’ role. Every team leader must know who to talk to if they need HR support. This role is also where things like recruiting and compliance guidelines are provided. The key to this role is the proactive component. Meeting regularly with team leaders and being the accepted sounding board on where and how ideal actions can be refined and processes improved to results improve. 4. Maintain the SHRMIS system. 4.1. Administrative, can be combined with HRIS.
  • 52. He looked at his handy work. “You can see I hope how all this ties exactly in with the model.” She nodded, she could see it clearly. He continued. “There are a few items that come out very differently, for example the organization development (OD) function is very different. Learning and Development (L&D) is still L&D, but focused much more tightly. Partnering is a crucial role, especially the pro-active aspects, where we are ‘prodding’ team leaders to get more proactive about improving results from their teams; that has taken a lot of careful work and nurturing. Also, the admin function, especially taking over the SHRMIT; HRIS we already knew about, and did.” He stopped, sombre then continued. “We had an incident about fifteen months ago; a bus load of people were on a trip, and the bus crashed, many died, many were maimed, everyone traumatized. It was a social trip they organized, not a company sanctioned trip. Thankfully we had just done an exercise on the time budgets in that business unit; we moved some skills in, issued time budgets, spent two weeks going over them with people and were up and running in a month, a bit less actually.” He paused, “Never want to experience anything like that again in my career,” he said, “but it sure taught us about disaster management and SHRMIS as standing human capital value. We figured we could have lost or struggled for months without it; could have cost us millions more than it did. It is now accepted at governance level as a key aspect of our insurance package. Part of our plan that begins…if this goes down in an earthquake what will we do…” she laughed, she knew he was making light of a serious topic. Organization need both SHRMIS and HRIS “SHRMIS does not replace HRIS?” She asked. “No,’ he replied, “you need both. One is maintaining details of what the business needs to achieve the results. The other is administration of current HR, wages, leave, sick leve, etcetera. They are different with very different purposes and information structures.” He paused. “But the priority has to be SHRMIS, this is a driver of results, managing and developing the human capital value throughout the business.”
  • 53. “We can make it all sound clear and clean.” He said. “Now! But it has taken several years. At first we tried to tweak roles, and adjust, but found it did not work. It was not long before you arrived on scene, the boss agreed to allow me to do a complete realignment of HR with the model. It is working very much better, roles are clearer and people are clearer on how roles fit together.” Understanding business improvement and change “I know there is lot made of ‘change management’” she said, “How exactly does it emerge here?” “Good question. It is embodied in two fundamentals. First the design of the architecture, get the concept right. Do it on paper first. Then review it, carefully. Check integration into current processes, check integration into current roles, and the manner these changed roles will relate to roles in other teams, all in refining the time budgets and the impact of changing those time budgets.” She nodded she was following. She remembered this from her first round of discussions. “Then signed off by the team leaders, usually the boss likes the OD Manager signed off on it as well. He gets very good at ‘seeing’ clearly on paper, and the boss likes having the concept right before we try rolling it out. As an aside, we also use the OD Manager’s role as a talent development step, it is all intellectual, and blending intellectual work with practical creative stuff on how to improve results from a team. Also, the person comes into contact with many senior executives, so their talent and intellectual capacities get assessed as well as their ability to relate to senior people… “He paused, “who are not always the easiest…” they laughed, and again she felt part of that inner circle. “Signed off and agreed then L&D move in with the workshops to ‘pack’ minds and get the change rolled out. Remember we have already done a lot of work on the core cultural issues, and people understand a great deal about their own personal changes and what it means, and all such change involves their professional frame of mind, so now, resistance is very limited, usually just around agreeing that what is proposed is the best in their role. Major stuff like redundancies, are always an issue… we had some a few months
  • 54. back, but we were well received in how we handled it, and we did stay in the community; just had to reduce staff since we invested in technology.” “It is a very clear structure and process for change,” she commented. “Yes, it is, very smooth, very clear on who is to do what, broadly accepted given the overall culture of professional frames of minds. It took a while, but we are getting there.” He said. “So in practice, we have active roles in HR, like OD, L&D…and information roles, like recruiting, and compliance. The latter are sources of information, and used by team leaders usually via the HR business unit partnering managers. So a team leader has a recruiting task; they will talk to their HR Partner, who will get any info needed from HR central offices, and then support the recruiting exercise on the ground. Similarly with compliance issues, since it differs from region to region, the business unit partners are the source of information. We send them on courses and seminars, and then capture the summary in the centre as policy on their return. They stay close and are expected to ensure team leaders are compliant with all HR type legislation and regulation.” Team leaders support and make use of HR when it helps them “The active roles OD, L&D operate also through business unit partners, and drive improvement of ideal actions, and alignment of actual behavior with the ideal actions. This is now widely accepted, so team leaders do come looking for help and advice, they do see HR as playing a very positive role in driving results in their teams.” They sat back while she reflected on the notes on the white board, and on the lecture series she was to deliver in three weeks. “Yes,” she spoke softly, “yes, it will be interesting, what the Prof wants, stir thinking up. And it is all very different, although at a superficial reading it can sound the same.” “Yes,” he said, “it can fool you and did us for a year or so, until we really begun to ‘see’ it, not the least of which was ‘seeing’ the role for conceptual frameworks, frames and their role in mind as memory tools. That really began to shift our L&D effort into helping
  • 55. people pack their minds around the tool so they ‘see’ it back on the job when they need it.” “Help people …?” She said. “Yes”, he said, “People have access to their own mind and theirs alone. We finally accepted that, which then shifted much greater effort into core choices and permissions and agreements, because if we have all that then people have already agreed to work with us to pack their mind with the stuff they need to be successful …” “And it all has to do with work success, not with people and their personality… it is not personal. No more personal than practicing one’s golf swing, or tennis shot to be a better golfer, or tennis player, is personal.” Recruiting is about the desire to be successful “Which raises a point I forgot, but it is very important. Although from the OPD-model it is clear and very simple. The first thing we look for in final selection of people is the desire to be successful, and some evidence in their life that they have strived to follow through with that desire. If we recruit that then we can show them how to do everything else. But the desire to be successful for oneself is a spiritual/value choice that we do not think we can teach people. And we do not intend to try.” Effective HR will enhance all organizations He handed out notes on the day, part of which was a draft role structure for applying HR in organizations. He reminded her that HR applied in all organizations in exactly the same way; just the time needed to fulfill the roles in a small organization was less, but the need for the role was exactly the same. They chatted; the boss poked his head in the door to check she was pleased with the day.
  • 56. She climbed in the car for the drive home, her mind was soggy, could not hold another piece of information, she knew she had learned much, and knew her mind would get on top of it. She was keen to get home to her partner, and wondered if his day had been as worthwhile as hers had been.
  • 57. Appendix: HR Department draft role structure Overall measurement of HR Department performance is the internal team performance audit (ITPA) measuring the extent the HR Department achieves its aim with its internal customers. A related measure is the extent team leaders guide delivery of ideal action. Overall KPI: ITPA score, overall standard excellent, 9.3 out of 10, with no factor below good, 8.5 out of 10. HR Department roles to achieve and maintain the targets 1. Senior HR Executive: HR standards and performance, policy formulation, trend analysis and prediction. 2. OD: Leadership judgment, quality and accuracy of SHRMIS system; Standing aspects of human capital value and capitalization of that value; Change and continuous improvement. 3. L&D: Leadership effectiveness; Staff skills at delivery of ideal actions; Development of ‘professional mind’; Dynamic aspects of human capital value. 4. HR Partnership: Relationship with divisional team leaders, coordination of HR services within the body of the organization to the service benefit of team leaders via better team performance; Overview of talent identification and management; Compliance; Recruiting. 5. Operations: Administration (HRIS and SHRMIS), compliance, and core operational advice. Further details of each role, aims, KPIs and ideal actions available on request and discussion.
  • 58. Graham Little Graham Little is a thinker and social science theorist. He has researched social science for thirty years, combining his intellectual interests with counseling, corporate training and consulting. His ideas on theoretical social science can be found at www.grlphilosophy.co.nz. His aim is to achieve superior thinking in social science and apply that thinking to practical social issues. The OPD-model and strategic human resource system derived from it is the first such practical issue, namely how to build better economic organizations integrating those organizations into the community to the benefit of both. Dr Little is the founder of OPD International offering improved strategic human resource management to organizations that improves profits. The OPD-SHRM system is based on the OPD-model. OPD International has Regional Directors in Asia Pacific, United Kingdom, North America, and South Africa. Graham Little has two adult children is a keen trout and salt water fly fisherman, and lives in Auckland, New Zealand. OPD International can be contacted through info@opdcoach.com.
  • 59. Academic background Dr Pieter Nel, Professor and Head of Human Resources at Unitec in Auckland, is the global academic spokesman for OPD-model and leads co-authoring the academic publications the first of which were published in early 2010. * Nel and Little An Integrated Strategic Human Resources Model to Achieve Organizational Objectives http://www.usq.edu.au/~/media/USQ/Business/Journals/NelLittle %20Paper%201.ashx * Nel and Little, Sustainable leadership: The fundamental solution to lasting superior staff performance http://www.uunz.ac.nz/pdf/journal/edition1/Journal_part4.pdf.
  • 60. Introduction to the redesign of the organization book series The books present the OPD theory from different points of view, and work through applying the theory from the point of view of CEO, team leader, manager and of HR. Volume 6, Building community wealth and health examines the OPD theory from point of view of the link between organizational success, economic success and the wealth and health of our communities. Books one and two are the suggested beginning, Rollout is the overview of the intellectual base of OPD theory. After that, then select the books to read that best match your interests/position. 1. Executive pocket guidebook: Summary of state of art ideas in making organizations more successful (Redesigning the organization volume 7). A short and easily read link between what has been traditional and typical of global HR thinking and the new, improved ideas in the OPD theory and the technology derived from it. Book 7 in the series, but the one best read first as the easiest introduction linking current global received wisdom on organizations to the new wisdom from the OPD theory. 2. Time budgeting: Getting the best result in the time available. (Redesigning the organization volume 2). Managing one’s mind to enabling greatest chance of greatest success. Application of the ideas on improved performance at the lowest level, first on oneself. 3. Rollout: Improving rollout of business strategy (Redesigning the organization foundation book). The crucial intellectual foundation of the new way of leading in organizations. This is the most intellectually challenging book of the series but all other books are derived from the platform outlined in Rollout. Reading Rollout can be delayed to the last book if you are more comfortable. 4. The last leadership book you will ever need to read: The guide to achieving results and satisfaction in a business. (Redesigning the organization volume 1). An easily read overview from the point of view of senior executives in the organizations. The last leadership book presents an overview of the key ideas from the perspective of different executive