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Dr Max Blumberg: Harnessing the power of human capital for the digital age


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The IPA hosted its Talent Adaptathon at Altitude in London on 7th October 2014 in association with Daniel Marks London. Dr Max Blumberg (CEO Blumberg Partnership, Goldsmiths Research Fellow & CIPD Consultant) talked about harnessing the power of human capital for the digital age. Get involved by visiting the ADAPT Hub and on Twitter #ipadapt.

Published in: Recruiting & HR
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Dr Max Blumberg: Harnessing the power of human capital for the digital age

  1. 1. Mastering Complexity Max Blumberg, PhD All content remains the property of Blumberg Partnership Ltd and may only be used with prior written consent M - +44 (0) 7768 455345 T - +44 (0) 1252 628552
  2. 2. Personal Introduction 2  Musician  Computer scientist  Accenture consultant  Technology start-up  PhD & Research Fellow at Goldsmiths  Consult globally: HR Analytics, Organizational & Sales force performance, CIPD people strategy
  3. 3. The changing value of organizations 3 95% 5% 1978 Book value Other value 28% 72% 2002 Book value Other value
  4. 4. The enterprise capital framework 4
  5. 5. Asset/capital value 5 Resource Competitive differentiator? Tangible assets e.g. technology; relatively easy to replicate Financial capital Available to most organisations with a good plan Intellectual capital Customer capital Not really: most organisations have access to the same markets Structural capital Yes but replicable in medium term Human capital Yes: very difficult to imitate
  6. 6. Driving value creation and shareholder return 6 Total Return to shareholders (TRS) Spread Return on Invested Capital (ROIC) Minus Weighted Average Cost of Capital (WACC) Growth Organic Growth Growth through M&A Operating Margin Capital Efficiency Components of Value Creation and competitive advantage: Spread: Competitive advantage derived from operational and capital efficiency and pricing strategy Growth: Value from new products/services through innovation, M&A, market share, etc. Ratio between them is a matter of competitive strategy Quality Innovation Productivity Customers Human Capital
  7. 7. How much do we invest in people? 7 TMT 37% Heavy manufacturing 25% Light manufacturing 32% Pharmaceuticals /Prof services 45% Financial services 43% CFO Research Services
  8. 8. Should we invest in people? 8
  9. 9. Generational conflict: The generations 9 Born Age Silent generation <1945 70+ Baby boomers 1946 - 1960 54 – 68 Gen X 1961 - 1977 37 – 53 Gen Y 1978 - 1995 19 - 36
  10. 10. How do we invest in human capital (versus HR)? 10 £X programme Competencies (Knowledge) Employee performance (Behaviour) Contribution to organisational objectives Programme? Recruitment Development Retention/engagement Diversity Compensation Etc.
  11. 11. Valuing your Talent Valuing your Talent Objectives 1. Develop a broad framework of HR Metrics for measuring human capital. 2. Showcase current practice. 3. Develop a tool / methodology. Members of the steering group: Findings 1. People and investment in them should be at the heart of the business model. 2. A new language for business is needed. 3. HR should lead greater data integration across the business. 4. Value = People
  12. 12. Valuing your Talent - VyT 12
  13. 13. Human capital 2014 13  From capital to people (judging by company valuations)  Generational conflict because attitudes to work are changing faster than the organisational structures and processes used to manage them  Skills shortage which means employer branding is crucial  Transparency (data, technology) complicates everything  Recognising difference – career paths for e.g. “techies” and “leaders”
  14. 14. Intergenerational conflict: The generations Generation Born Age Values at work Silent/traditional <1945 70+ Delayed gratification, loyalty, discipline, 14 authority & hierarchy Baby boomers 1946 - 1960 54 – 68 Teamwork, live to work, hierarchies, annual feedback Gen X (latch-key kids) 1961 - 1977 37 – 53 Grew-up alone, esteem issues, independence (hate reviews), dislike hierarchy, value personal lives, pioneered flexibility Gen Y 1978 - 1995 19 - 36 Highly nurtured, high self-esteem (believe they’re important), used to frequent recognition regardless of performance, always on peer-communication
  15. 15. Intergenerational conflict  Baby boomers are not retiring Retirement age is rising (Gallup = rising to 62 years old) 15  Baby boomers and Gen X must manage Gen Y with very different values  Gen Y wants to be where the action is rather than loyalty = Leaders must plan to manage 3 or 4 generations, each with their own values (but difference can be an advantage)
  16. 16. 16 Oldie’s jokes about Gen Y...
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  18. 18. Intergenerational conflict: Actions 18  Culture: Promote flexible work/life balance, challenging work, openness, informal, entrepreneurial  Younger generations need the “why” before the “what”  Younger generations, frequent feedback – peer-based  Post recognition instantly & widely – use social media if possible
  19. 19. Employer brand: The Picture 19 Glass door: “The advances made seem a bit superficial. They offered flex time, but it was always subject to approval. They assured reviews and raises, but they were tepid at best.”
  20. 20. Employer brand and transparency: The issues 20 Social media has made your brand transparent  Engagement is the new employer brand  Gallup (2014): 13% of employees are engaged  Glassdoor: – 51% of employees experience buyer’s remorse – 54% of employees would recommend their employer – 83% leave their employer in the first year
  21. 21. Employer brand: Actions 21
  22. 22. Developing skills and career paths 22  Technical skills are not enough  New organisational structures make it attractive to go solo  Career paths for everyone