The document summarizes a presentation by Paul Kearns on how HR professionals can add significant value to organizations in the 21st century. Kearns discusses several key questions about why some companies consistently outperform competitors in areas like market capitalization, innovation, and avoiding disasters. He argues that HR has not provided convincing answers to these questions due to a lack of evidence-based practices and data-driven problem diagnosis. Kearns then outlines a six-stage model of HR maturity where organizations transition from seeing employees as costs to a whole system view of human capital as a valuable asset.
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High value HR slides Paul Kearns/IHRM keynote 11 jun14
1. HR Business Event – Copenhagen
11th June 2014
‘“Creating High Value HR: How the 21st
Century HR professional can add significant
value to any organization“
Paul Kearns
Chair
IHRM
www.hrmaturity.com
7. • Why is Toyota’s market capitalization c.3 x the size of GM?
• Why can’t all banks produce value per head like Goldman Sachs?
• Why have Pharma firms largely failed to fix R&D pipelines?
• Why are BP & other oil majors still at risk of large scale disaster?
• How did mis-selling arise at Lloyd’s after PPI & 5 years post GFC?
• How does Costco stock consistently trade at a premium to Walmart?
• How can Ryanair make more profit and be a ‘nice’ company too?
• How is a 40 year old clothing firm more interested in saving the planet
making so much money?
Key Human Capital Questions need convincing answers
8. “Some years ago a senior executive in charge of talent
management ….called me to request my help as she
set about, at the request of her CEO, to design a
program for the bank’s “high potential” people.
‘Why did she need a program?’ I asked. Was there
evidence that the bank was losing more talented
people than in the past, or more than its competitors -
in other words, was there any evidence of a problem?
That’s the state of play in human resources today -
mindless imitation of what others are doing, little to no
systematic evaluation of the effectiveness of
management practices and programs, infrequent data-
driven diagnoses of the problems HR is expected to
address - in short, little of the professionalism now
almost taken for granted in medicine, to take just one
example.” Foreword by Professor Jeffrey Pfeffer
Evidence-Based HR/Management
9. HR’s value is determined by the level of organizational maturity
15. Ask questions
Do background research
Construct hypothesis
Test with experiment
Analyse results:
draw conclusion
Report results
Think!
Try again
Hypothesis is true
Hypothesis is false
or partially true
HR must adopt a
Scientific Method
17. “VW is targeting a margin
of more than 6 percent for
the mass-market car
brand… That compares
with auto division margins
of 8.8 percent at Toyota
and 9 percent at Hyundai
last year.
http://www.reuters.com/article/2014/04/25/us-vw-results-outlook-idUSBREA3O0X720140425
18.
19. So where is Human Capital Value today?
“Incorporating ESG and human
capital into company analysis and
valuation”
www.omratings.com
Stage 6 = AAA
20. Stage 2
Good
Professional
Practice
Stage 3
Effective
Management
Stage 4
Human Capital
becomes integral
to business
operations
Stage 5
Transition:
operational
to strategic
focus
Stage 1
Personnel
Administration
Board & Executives
resistant/unaware of people &
human capital value up to this
point
Stage 6
Organisation
becomes a
whole system
Stage 0
No Conscious
People
Management
Maturity spectrum:
OMR ‘AAA’ Scales
LONG TERM - STABILITYSHORT TERM - UNSTABLE
A+to
AA-
AAA
BBBto
A
BBB-
BB+
BB
C
B
OMR
ARC