The Simplification of Work: What can HR and business leaders do to make work more simple, enjoyable, and productive?

Copyright © 2015 Deloitte Development LLC. All rights reserved.1 The Simplification of Work Copyright © 2015 Deloitte Development LLC. All rights reserved. 2015 Global Human Capital Trends The Simplification of work Josh Bersin Principal and Founder Bersin by Deloitte July 2015

Copyright © 2015 Deloitte Development LLC. All rights reserved.2 The Simplification of Work 3,300+ Business and HR leaders 106countries One of the largest-ever longitudinal global talent studies Unless otherwise cited, all data referenced in this presentation is from the Global Human Capital Trends 2015 survey. Global Human Capital Trends 2015

Copyright © 2015 Deloitte Development LLC. All rights reserved.3 The Simplification of Work Global Human Capital Trends 2015 LEADERSHIP Why a perennial issue? LEARNING AND DEVELOPMENT Into the spotlight CULTURE AND ENGAGEMENT The naked organization PERFORMANCE MANAGEMENT The secret ingredient WORKFORCE ON DEMAND Are you ready? SIMPLIFICATION OF WORK The coming revolution REINVENTING HR An extreme makeover HR AND PEOPLE ANALYTICS Stuck in neutral PEOPLE DATA EVERYWHERE Bringing the outside in MACHINES AS TALENT Collaboration, not competition

Copyright © 2015 Deloitte Development LLC. All rights reserved.4 The Simplification of Work Culture and engagement Leadership gaps Learning and development HR Skills and capability 87% 86% 86% 80% % VERY IMPORTANT 50% 51% 40% 39% 35% 34% 29% 26% 20% 14% Importance of Trends to Business Percent Rating Trend Important Workforce capability Performance management HR and people analytics Simplifying work Machines as talent People data everywhere 71% 57% 52% 80% 75% 75%

Copyright © 2015 Deloitte Development LLC. All rights reserved.5 The Simplification of Work SIMPLIFICATION OF WORK The coming revolution see need to simplify work; 25% say need is very important 75% Redesign work to focus on what matters Technology and globalization creating overwhelmed employees 2014: “The Overwhelmed Employee” 2015: “The Simplification of Work”

Copyright © 2015 Deloitte Development LLC. All rights reserved.7 The Simplification of Work The Overwhelmed Employee Overload is Everywhere The average mobile phone user checks their device 150 times a day. 40% of the US population believes it is impossible to succeed at work and have a balanced family life. The “average” US worker works 47 hours and 49% work 50 hours or more per week, with 20% at 60+ hours per week The “average” US worker now spends 25% of their day reading or answering emails More than 70% of all companies rate their business “highly complex” or “complex” for employees. Fewer than 16% of companies have a program to “simplify work” or help employees deal with stress. Sources: Deloitte Human Capital Trends 2014 and 2015

Copyright © 2015 Deloitte Development LLC. All rights reserved.8 The Simplification of Work Productivity is Suffering – Is Technology Helping? US Productivity Last Ten Years 1 billion Smartphones i-Phone Launched 100 Million Twitter users

Copyright © 2015 Deloitte Development LLC. All rights reserved.9 The Simplification of Work How did we get here? What Causes Complexity? Complexity Structural Mitosis Management Behavior Product Service Proliferation Process Evolution From: “Simply Effective”, by Ron Ashkenas

Copyright © 2015 Deloitte Development LLC. All rights reserved.10 The Simplification of Work The Overwhelmed Employee Complexity Hurts – Cognitive Overload Wasted Time Knowledge Workers spend 41% of their time on discretionary activities that offer little personal satisfaction because they make us feel busy and we can get them done. Harvard Business Review, 12/24/2013. A Change in Ethos US Has entered “middle age:” The “psychological center of gravity” for society as a whole shifted into midlife and beyond. This silent passage marked a gradual but significant transformation of the zeitgeist toward midlife values such as caring and compassion, a greater desire for meaning and purpose, and concern. Mackey, John; Sisodia, Rajendra (2012-12-25). Conscious Capitalism: Liberating the Heroic Spirit of Business Lost Energy 74% of employees are experiencing a personal energy crisis. Need to define “high engagement” to “sustainable engagement” Google has trained 6,900 people in “people energy” “The Energy Project” Tony Schwartz. Stress and Health Issues In Germany 40% of workers say their stress levels have gone up in the last two years. In China the number is 75%. Thrive, by Arianna Huffington

Copyright © 2015 Deloitte Development LLC. All rights reserved.11 The Simplification of Work Work-Life Balance Some Workers Have Given Up 40% of workers now believe that… “…in today's economy, it's not possible for most people to succeed at work, make a good living, and have enough time to contribute to their family and their community” Allstate National Worker Poll, Heartland Monitor, 960 respondents in white collar and blue collar positions, 10/2014

Copyright © 2015 Deloitte Development LLC. All rights reserved.12 The Simplification of Work Glassdoor ratings of employer recommendations — 200,000+ Engagement a global challenge Average 3.1 What are these companies doing??

Copyright © 2015 Deloitte Development LLC. All rights reserved.14 The Simplification of Work • “Free” file sharing and “Free” collaboration software that is very easy to use – Over 200 million users now (Dropbox) – 260,000 new users per month (Slack) • No training required • Free, mobile enabled from day 1 • Elegant simple user interface • Companies hit over $1 Billion in valuation in 3-5 years Slack, Dropbox, Snapchat “Simple” Apps Are the Most Ueful

Copyright © 2015 Deloitte Development LLC. All rights reserved.15 The Simplification of Work The Simply Irresistible Organization® What we have learned: an integrated approach is key Meaningful work Great management Fantastic environment Growth opportunity Trust in leadership Autonomy Agile goal setting (i.e. OKR) Flexible, humane work environment Facilitated talent mobility Mission and purpose Selection to fit Coaching and feedback Recognition rich culture Career growth in many paths Investment in people, trust Small teams Leadership development Open flexible work spaces Self and formal development Transparency and communication Time for slack Modernized performance management Inclusive, diverse culture High impact learning culture Inspiration

Copyright © 2015 Deloitte Development LLC. All rights reserved.17 The Simplification of Work Are We Addressing It? Not yet. Do you have a program to reduce complexity in your organization? 26% 40% 21% 10% 2% Excellent multi-year effort 2% Good Progress being made 26% Fair Some success, not moving fast enough 40% Poor No progress 21% Nothing at all 10%

Copyright © 2015 Deloitte Development LLC. All rights reserved.18 The Simplification of Work What is HR’s Role? 1. Organization Design and Small Teams 2. Rationalize and simplify content and programs 3. Implement Design Thinking and User Focus 4. Redesign HR and L&D for Scale and Efficiency 5. Make Work Easier: Culture of Flexibility, Freedom, and Trust Five Things We’ve Learned So Far

Copyright © 2015 Deloitte Development LLC. All rights reserved.19 The Simplification of Work Organization Design Organizational • Prune layers, increase spans of control • Differentiate between “Core” and “Context” (Geoffrey Moore) • Consolidate common services Team Centric • Give Employees Broader Roles • Facilitate Coordination, not Structure • Open Communication and Teamwork • Design around Strategy, not People 1. Organizational Design for Agility

Copyright © 2015 Deloitte Development LLC. All rights reserved.20 The Simplification of Work Rationalize Programs and Content 2. Do Regular Portfolio Analysis Run the Business WIN in the Market Custom To You Off the Shelf IT Training Desktop Skills General Management Skills Project Management Sales Techniques Customer Service Techniques ERP Rollout Call Center Application Training Product Introduction Your Secret Sauce Business Critical Skills, Competencies, And processes for Your company 40% 10% 20% 30% Focus Here Outsource Training Investment Model® “The Blended Learning Book,” by Josh Bersin

Copyright © 2015 Deloitte Development LLC. All rights reserved.21 The Simplification of Work People Cannot Absorb All We Give Them Typical Learning Portfolio: Lots of Waste 80% of utilization use 1% of the learning programs The “Long Tail” of Content Usage in Training

Copyright © 2015 Deloitte Development LLC. All rights reserved.23 The Simplification of Work Organization Design Onboarding and Transition Management DETERMINE DISCOVER DESIGN & TEST DELIVER The 4Ds methodology frames the way design is done at Telstra. It’s inspired by the best design methodologies from leading institutions around the world, such as Stanford’s d.school, IDEO, and the UK Design Council. We clarify the question to make sure that we are tackling the right problem so we an create an action plan. We build empathy for the people we are designing for and draw inspiration. We synthesis what we learn to prepare for generating new ideas. We implement design and recommendations and monitor performance to find opportunities for improvement. We brainstorm ideas to think ‘big’ without constraints. We build prototypes to bring ideas so we can learn how to improve and refine our concepts.

Copyright © 2015 Deloitte Development LLC. All rights reserved.24 The Simplification of Work Prepare & Kick-off • Prepare for kick-off workshop • Conduct 1 day workshop to frame the problem • Align HR strategy and business problem • NB: placeholder invitations to Determine workshop to be sent 2 weeks prior 1 2 3 4 5 6 7 9 Stage Week Key milestones Key activities People and Teams Determining workshop Ideation workshop Final showcase Synthesis • Affinity diagramming • Current state journey mapping • Insight generation • Identification of pain points Idea Generation • Brainstorming • How might we? • Concept development • Assumption testing • What should the future state employee experience look like? • Create draft aspirational journeys DETERMINE: CLARIFY THE QUESTION EXPLORE: BUILD EMPATHY FOR OUR KEY CONSTITUENTS SYNTHESISE: UNCOVER MEANING CREATE: EXPLORE OPPORTUNITIES & ITERATE OUR VISION DETERMINE DISCOVER DESIGN & TEST HR SME Design vendor Design Practice Team structure that invites co-design Create a blended team of consultants, Telstra Design Practice, platform vendors and peripheral stakeholders. Research prep • Recruit participants • Prepare research tools and guides • Conduct desktop research (e.g., Bersin & leading practice) • Design survey to capture current state for new employees • Create Yammer ‘focus group’ (across borders, teams and levels) to help with research, design & testing Conduct research • 10 x ‘Ride along’ session with new employees • 20 1-on-1 interviews with employees • 2 x HR workshops • 2 x Manager workshops • 3 x focus group sessions with overseas offices • Review existing data (e.g., employee satisfaction, exit interviews) Recommendations, Prioritisation & Testing • Refine end state employee experience blueprint • Document findings & prioritised recommendations • 5 x employee validation sessions • 5 x Manager validation sessions • Script and produce 2-3 min video Testing prep • Recruit participants 13+ Socialisation and implementation • Socialisation and rollout of recommendations [post this project] • Continued refinement of the employee experience vision [post this project] • Rerun new employee sentiment survey in FY15 Deliverables & outcomes • Agreed problem statement (FQ) • Alignment across stakeholder group • Research plan • Desktop research findings summary • Employee survey • Yammer group • Raw research findings • Current-state journey maps • Pain points identified • Design & experience hypotheses to test • Multiple options • Draft aspirational journeys • Employee experience blueprint • Findings and recommendations (prioritised) • Short video Benefits • Stakeholder buy in • Framed question to ensure we are addressing the right problem • Effective planning for research • Baseline current state • Deep understanding of the people we are designing for • Better understanding of the current challenges • Identification of ‘opportunities to delight’ and to drive advocacy • Exploration of new ways to meet employee needs 8 10 11APR 7 12 X n X n X n X n Project scope checkpoint

Copyright © 2015 Deloitte Development LLC. All rights reserved.25 The Simplification of Work Design Thinking Simplifying Performance Management Coaching for Development Talent Decisions Performance Improvement Legal Documents Employee Motivation Compensation Performance Feedback PERFORMANCE MANAGEMENT Coaching for Development Talent Decisions Performance Improvement Legal Documents Employee Motivation Compensation Performance Feedback PERFORMANCE MANAGEMENT Kelly Services Source: “Getting Away from the Score: Creating Better Ongoing Performance Feedback,” Bersin & Associates, 2012. Adobe: “New PM process has reduced attrition by 30% year over year and by over 50% during high turnover period. It has also doubled involuntary turnover – people are opting out.”

Copyright © 2015 Deloitte Development LLC. All rights reserved.27 The Simplification of Work Small to Mid Sized Organization BusinessReachandImpactEvolution of HR Structure 4. Centralize and Rationalize HR and L&D Rationalized HR Service Delivery Centralized HR “Anarchy” Uncoordinated HR staffs, tools, vendors, consultants Large Global Organization Optimized Business- Integrated HR “Rationalized” Efficient Standard platforms Roles defined Service delivery optimized Focus: Platforms, efficiency, service delivery, role clarity “Business Optimized” Federated: Coordinated Intelligent at the end nodes Highly trained and empowered HR partners External intelligence and networks of expertise Focus: Talent, Leadership, Management, Global Localization Best Practices Identification Here

Copyright © 2015 Deloitte Development LLC. All rights reserved.28 The Simplification of Work Simplifying HR and L&D Framework for Simplification Locally Specific Globally Consistent Transactional Consultative “Business Partners” housed in or close to the business Centers of Expertise, for example, change management methods, facilitators, training, best practices, etc. Examples include reports processing, data entry, records Shared Services, for example, surveys, analytics services

Copyright © 2015 Deloitte Development LLC. All rights reserved.29 The Simplification of Work Standards and Frameworks Standardize Programs, Tools, Vendors • Stop proliferation of tools, vendors, and program designs • Create a “methods and tools” group that does research internally and externally for best practices • Lock down spending on local platforms, vendors, and tools wherever possible

Copyright © 2015 Deloitte Development LLC. All rights reserved.30 The Simplification of Work Rationalization of Learning We Often Simplify L&D Organization Curriculum TechnologyVendors  Number of L&D FTEs  Payroll and benefits  Roles, responsibilities  Activity allocation  Organization structure  Business alignment  Budget and financial management  Reporting  Governance  Processes  LMS curricula  Curriculum types  Number of courses  Active/inactive status  Course hours  Course enrollments  Course topics  Delivery methods  Courses not in LMS  LMS platforms  Design and development tools  Content management systems  Evaluation software  Technology vendors  Technology spend  Usage  Administration  Maintenance  Number of vendors  Types of vendors  Services provided  Vendor spend  Use of preferred vendors  Vendor selection processes  Vendor management processes Scale, structure, associated revenue and resources used for learning activity Funding model, charging model (internal and to owners) and assessment of value Learning technology effectiveness and delivery channel effectiveness Learning effectiveness & impact (both tangible and perception) Expectations of learning across Franchise/Managed/Corporate groups including owners

Copyright © 2015 Deloitte Development LLC. All rights reserved.31 The Simplification of Work COE or Service Centers Centralize and Offload Repetitive Work The Problem: Repetitive tasks we all have to do, can these be “insourced” to a service center or shared service? Solution: • Graphic design • Statistics • Data cleanup Key to Success: • Consulting mindset • Design thinking • Audience analysis • Design around strategy, not people

Copyright © 2015 Deloitte Development LLC. All rights reserved.32 The Simplification of Work Major Transportation Company • Shift from legacy HR system to new SAP SuccessFactors platform • CEO-driven program, stakeholders include all major business leaders • Business change leader and head of HR Services ran the project • 100+ Page “Manifesto” on what we will and will not change • No process or systems changes without review Simplifying Technology Implementation

Copyright © 2015 Deloitte Development LLC. All rights reserved.34 The Simplification of Work Work-Life Balance 5. Help Employees Cope Culture of Balance: At Boston Consulting Group, if you work more than 60 hours a week for 5 weeks, a "Red Zone Report" will be issued so that managers can make adjustments. Deloitte now has “PTO Etiquette” to encourage people to take time off and disconnect from work. Flexibility and Rest: At Etsy workers receive a stipend to use on their workstations, which are handmade, many in Etsy's woodshop. The company also has a "breathing room," which Vice President Matt Stinchcomb describes as "a digital device-free room with meditation cushions." (WSJ 11/2014) Health, Wellness Systems: Johnson & Johnson has a program called "Energy for Performance in Life," which teaches employees not just how to optimize their productivity at work, but also at home. Employee participation is up to 90 percent. Inc Magazine, 4/13/2014 Mindfulness Programs awake@intel Participants report a 20% decrease in experiencing stress and feeling overwhelmed, 30% increase in overall happiness and wellbeing, and 20% increase in new ideas and insights, mental clarity, creativity, the ability to focus, the quality of relationships at work and the level of engagement in meetings, projects and collaboration efforts Remote Work Options: “64% of small businesses said that providing remote work options helped them keep key employees” and these companies had 12% more satisfaction and 40% higher rates of innovation. 32% innovative vs. 40%, and 76% high performance vs. 71%. Inc. Entrepreneur Survey, 2/7/2014 Workplace Design: Gensler 2013 US workforce study 2,035 employees across 10 industries found that companies which grant employees a choice in how they work grew 4X faster and had 1/3 the turnover rate.

Copyright © 2015 Deloitte Development LLC. All rights reserved.35 The Simplification of Work Shift to Flexible: Open and Private • Balanced workplace design – Open easy collaboration – Privacy also available • Varies by culture – Germany – 320 sq ft – US – 190 sq ft – China, India – 50-70 sq ft. • Need for “stimulus control” and “managed privacy” at work • Office culture shapes design Workspace Design

Copyright © 2015 Deloitte Development LLC. All rights reserved.36 The Simplification of Work Make Work Simpler • Policies to reduce emails at nights and weekends • No email on vacation (“PTO Etiquette”) • Management and leadership set an example • Fair Labor Standards Act may raise overtime eligibility to $50,000 per year, which could make email an “overtime” activity Email Curfews

Copyright © 2015 Deloitte Development LLC. All rights reserved.37 The Simplification of Work Focus on Culture, not Process and Compliance Leadership and Culture trump process Danny Wegman of Wegmans: “Things get in the way of letting people be human. Quarterly reports and business schools. Let people do the right thing.” Inc. Magazine, 4/2014 Deloitte Australia research shows that financial services companies with fewer compliance programs but greater “culture” are 30-40% more efficient and compliant. Terri Kelly CEO of WL Gore “When there’s no trust you spend endless time in meetings. You have to build relationships – once you invest the time to get to know each other and understand their perspective, you save huge amounts of time. Inc. Magazine 4/2014 Nordstrom trusts people. You can’t teach a culture, you have to live it. Role modeling is what creates culture. Toyota: When you give people the andon cord they first pull it but later they just “fix the problem.” Empowerment creates pride.

Copyright © 2015 Deloitte Development LLC. All rights reserved.38 The Simplification of Work GE Simplification Strategy Top to Bottom Approach The problem: Innovation, complexity, productivity, and growth Solution: • Reduce spans and layers • Centralize shared services • Revamp performance management • Re-train and coach managers • Give employees freedom to “skip the meeting” and spend time with customers • “Lean Startup” principles for product design through all business functions

Copyright © 2015 Deloitte Development LLC. All rights reserved.39 The Simplification of Work SAP SAP Transformation of HR and L&D The problem: Highly decentralized structure, duplicative processes and training programs, innovation and cloud computing strategy needed Solution: • Board level approval for L&D and HR transformation • Rationalize and centralize HR function and programs • Create “federated model” for L&D, shared infrastructure and tools • Redefine roles of L&D and HR throughout

Copyright © 2015 Deloitte Development LLC. All rights reserved.41 The Simplification of Work Conclusion: HR Has Work to Do Take Ownership for this Issue 1. Organization design and small teams 2. Rationalize and simplify content and programs 3. Implement Design Thinking and User Focus 4. Redesign HR and L&D for Scale and Efficiency 5. Create Culture of Flexibility, Freedom, and Trust 6. … and remember, our job is to make work better, not harder!

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