As great companies and great managers know, human capital is likely their organization’s primary source of competitive advantage. Moreover, it is generally understood that in order to maximize that competitive advantage, employees have to be fully “CALLED” --- another one of my favorite acronyms invented during a bout of insomnia:
- Cost-optimized … invest more in employees when business-justified
- Aligned … employee goals/priorities/behaviors with company goals/priorities/culture
- Leveraged … with respect to competencies, skills, ideas and creativity
- Listened to … for the next great idea or product, knowledge of key customer issues, etc.
- Engaged … committed and motivated employees stay longer and perform better
- Deployment-optimized … right people with the right skills in the right jobs at right time
While a tad more controversial than the above, many great companies and great managers also know that more time, attention and resources should be devoted to the top 20 percent of your employees, i.e., your top performers. This is because you can usually increase company revenue by millions of dollars by improving retention rates on that top 20 percent. Intuitively, this means utilizing the right -- often personalized -- mix of total rewards, recognition and retention vehicles for those exceptional performers.
That gets back to the first “L” in the “CALLED” acronym, because you can only get that right mix by listening. A related point is that key employees who are retention risks should generally get the most immediate attention.
Important note ---- HR organizations that are able to develop and then validate a practical model for predicting or identifying Key Employee Retention Risks (or “KERR”) demonstrate to their internal clients that they can dial-up more ‘science’ in their ‘art and science’ professional HR repertoire.
Feel free to contact me if you wish to know more about one such model that I developed -- sbgconsultingllc@gmail.com.
Sunday, March 21, 2010
Sunday, March 7, 2010
Ensuring your HCM solution gets you to the "plateau of productivity"
Astute observers of the HR Software industry, including thousands of customer organizations that have made material investments, are now experiencing some measure of déjà-vu … as Talent Management Suites are perhaps going through the same “technology hype cycle” (aptly named by Gartner) that characterized HR-ERP’s.
Following the “peak of inflated expectations” and “trough of disillusionment,” companies are still quite focused on learning the best ways to leverage these technology assets as they embark on the “slope of enlightenment” and ultimately the “plateau of productivity.”
In the spirit of reaching the “slope of enlightenment” (and beyond!) more quickly as it relates to Talent Management Suites, I have identified what I believe to be 5 critical considerations for customer organizations that want to avoid wallowing in the “trough of disillusionment” for any appreciable period of time. These 5 key considerations are:
1. Develop and establish a clear and business-sustaining Talent Management Strategy (short and longer-term) as it relates to all “people assets” -- before determining the best way to technology-enable that strategy. The enterprise Talent Management Strategy should ideally incorporate both the "what" and the "how" ... i.e., WHAT your organization needs to do to fully leverage its workforce for competitive advantage; and HOW it will do that -- including the optimal mix of HR service delivery models.
2. Recognize that Employee Engagement, while not viewed as a core HR business process like Recruiting or Performance Management, is as critical as any pillar within the Talent Management functional footprint. It is the horizontal 'results area' that permeates all HR business processes.
3. Do not blend “business processes” with “business problems” … in other words, segment business pains and business opportunities by those related to fixing/optimizing HR or workforce-related business processes, and those which require more non-linear or holistic thinking (e.g., why are we losing many of our best people to our competitors, or why does it take us so long to integrate a new business, or is there an opportunity to expand our services at this time).
4. Leverage a practical Business Intelligence (“BI”) toolset that provides insights into improving the people side of the business -- without muddying the waters further. BI tools and their outputs should be introduced incrementally as new terms and new ways to use workforce information are adopted -- and fully understood. Bottom line: If you forget that effective change management is critical here, you might as well forget the new BI toolset.
5. Look at HR/HCM solutions and potential investments from the employee perspective … e.g., the “what’s in it for the employee?” lens. If the conclusion is “I’m not sure” --- you are probably looking at another investment in an HCM solution platform or tool that manages information about employees, and manages core HR business processes, but likely does not materially improve employee engagement, retention or productivity – my new “ERP” acronym for the new decade.
Following the “peak of inflated expectations” and “trough of disillusionment,” companies are still quite focused on learning the best ways to leverage these technology assets as they embark on the “slope of enlightenment” and ultimately the “plateau of productivity.”
In the spirit of reaching the “slope of enlightenment” (and beyond!) more quickly as it relates to Talent Management Suites, I have identified what I believe to be 5 critical considerations for customer organizations that want to avoid wallowing in the “trough of disillusionment” for any appreciable period of time. These 5 key considerations are:
1. Develop and establish a clear and business-sustaining Talent Management Strategy (short and longer-term) as it relates to all “people assets” -- before determining the best way to technology-enable that strategy. The enterprise Talent Management Strategy should ideally incorporate both the "what" and the "how" ... i.e., WHAT your organization needs to do to fully leverage its workforce for competitive advantage; and HOW it will do that -- including the optimal mix of HR service delivery models.
2. Recognize that Employee Engagement, while not viewed as a core HR business process like Recruiting or Performance Management, is as critical as any pillar within the Talent Management functional footprint. It is the horizontal 'results area' that permeates all HR business processes.
3. Do not blend “business processes” with “business problems” … in other words, segment business pains and business opportunities by those related to fixing/optimizing HR or workforce-related business processes, and those which require more non-linear or holistic thinking (e.g., why are we losing many of our best people to our competitors, or why does it take us so long to integrate a new business, or is there an opportunity to expand our services at this time).
4. Leverage a practical Business Intelligence (“BI”) toolset that provides insights into improving the people side of the business -- without muddying the waters further. BI tools and their outputs should be introduced incrementally as new terms and new ways to use workforce information are adopted -- and fully understood. Bottom line: If you forget that effective change management is critical here, you might as well forget the new BI toolset.
5. Look at HR/HCM solutions and potential investments from the employee perspective … e.g., the “what’s in it for the employee?” lens. If the conclusion is “I’m not sure” --- you are probably looking at another investment in an HCM solution platform or tool that manages information about employees, and manages core HR business processes, but likely does not materially improve employee engagement, retention or productivity – my new “ERP” acronym for the new decade.
Friday, February 19, 2010
Back by popular demand --- "5 New HCM Concepts that Could Have Legs in 2010"
Since a few folks have asked me to re-post this one ----
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5 HCM concepts I've been noodling on for some time:
1. Employee Value Indicators … various dimensions, numerically scored, that complement a Performance Rating or revenue-generation metric – thereby presenting a broader picture of the employee’s value to the organization. These dimensions might include latent competencies, trajectory of an employee’s engagement level, and trajectory of the value of an employee’s particular competencies (i.e., will become more or less business-critical).
2. Latent Competencies … competencies that employees possess that might be invisible to the organization, and therefore not leveraged, because they are not relevant to their current job function. Various HCM systems only track competencies at the position level.
3. Total Realized Value (or “TRV”) on HCM Solutions … is the degree to which the broad potential value that an HCM Solution can deliver gets marginally (or even significantly) reduced due to such factors as system underutilization, improper utilization, ineffective change management (causing lower system adoption), data model compatibility issues, on-going system integration issues, the need to alter well-conceived business processes to accommodate system idiosyncrasies, or the need to develop and maintain elaborate competency models.
4. Job Milieux … as implied by this French word for environment or setting … Job Milieux factors might include a direct boss’ management style, whether work is team or individual-based, whether the culture at work is formal or informal, whether the organization is in rapid change mode or more steady-state, etc. The importance of Job Milieux is that these factors could all potentially influence job performance, but influence performance or productivity differently for different employees.
5. Total Rewards Optimization … Related to the notion of Personalizing rewards, but also factoring-in both cost as well as value perceived by the individual, employers will likely be putting forth more effort toward maintaining an “optimal rewards and engagement/retention plan” for every key employee. The objective is to generate the biggest bang (perceived value = better retention and engagement impact) for the buck. Inherent in this exercise is the fact that (a) non-financial types of rewards (like an opportunity to be exposed to different parts of the business) can have the biggest impact in some individual situations, and (b) individual situations are not static very long so these plans must be updated as needed.
--------------------
5 HCM concepts I've been noodling on for some time:
1. Employee Value Indicators … various dimensions, numerically scored, that complement a Performance Rating or revenue-generation metric – thereby presenting a broader picture of the employee’s value to the organization. These dimensions might include latent competencies, trajectory of an employee’s engagement level, and trajectory of the value of an employee’s particular competencies (i.e., will become more or less business-critical).
2. Latent Competencies … competencies that employees possess that might be invisible to the organization, and therefore not leveraged, because they are not relevant to their current job function. Various HCM systems only track competencies at the position level.
3. Total Realized Value (or “TRV”) on HCM Solutions … is the degree to which the broad potential value that an HCM Solution can deliver gets marginally (or even significantly) reduced due to such factors as system underutilization, improper utilization, ineffective change management (causing lower system adoption), data model compatibility issues, on-going system integration issues, the need to alter well-conceived business processes to accommodate system idiosyncrasies, or the need to develop and maintain elaborate competency models.
4. Job Milieux … as implied by this French word for environment or setting … Job Milieux factors might include a direct boss’ management style, whether work is team or individual-based, whether the culture at work is formal or informal, whether the organization is in rapid change mode or more steady-state, etc. The importance of Job Milieux is that these factors could all potentially influence job performance, but influence performance or productivity differently for different employees.
5. Total Rewards Optimization … Related to the notion of Personalizing rewards, but also factoring-in both cost as well as value perceived by the individual, employers will likely be putting forth more effort toward maintaining an “optimal rewards and engagement/retention plan” for every key employee. The objective is to generate the biggest bang (perceived value = better retention and engagement impact) for the buck. Inherent in this exercise is the fact that (a) non-financial types of rewards (like an opportunity to be exposed to different parts of the business) can have the biggest impact in some individual situations, and (b) individual situations are not static very long so these plans must be updated as needed.
Tuesday, February 16, 2010
Two (dare I say "transformational") Opportunities for HCM Solution Vendors
While HCM solution vendors have made great strides in thinking more holistically and strategically about Talent Management from the customer perspective, there are still some important areas for moving the ball forward -- if not considerably downfield. Many HCM vendors are now trying to figure out if they want to tackle these challenges head-on, or “stick to their knitting” – i.e., do what they do best.
Two such areas garnering more attention from HCM vendors these days, including understanding the ROI proposition and other implications for their business, are (1) productizing “what-if” modeling and analysis capabilities … and (2) demonstrating that their solutions are transformational.
As covered a bit in previous blog posts, an area ripe with both challenge and opportunity for HCM solution vendors is productizing “what-if” modeling and analysis capabilities, given that the HCM processes they are focused on are not defined in a generally standard way. Compensation Planning and Workforce Planning, for example, are not like Recruiting, which perhaps has 70-80% commonality across organizations. Add-in the fact that these capabilities generally lack finite boundaries, and you have a situation where vendors need to figure out how to provide enough capability (vs. specific functionality) to be very valuable / actionable -- without frustrating customers with too much complexity and confusion about when to stop modeling and analyzing!
Another interesting question facing many HCM vendors is how to take the notion of ROI one (or two) steps further and actually seek to demonstrate that their solutions are either directly transforming businesses, or “allowing customers the space” to focus on transforming themselves through other means. In shorthand, we’re talking about changing the nature of a customer’s business --- not just “how” customers do things (e.g., to save money), but “what” they do to enhance the value they deliver to their own customers and the markets they serve --- and in-turn, dramatically grow their business.
When IBM many years ago decided to undergo one of the biggest enterprise transformations in history (going from largest computer hardware provider to even larger professional services provider), one would think they relied to some extent on the HR function (and their tools) to determine the feasibility, optimal timing/pace and tactics, and all likely people costs to achieve that.
Two such areas garnering more attention from HCM vendors these days, including understanding the ROI proposition and other implications for their business, are (1) productizing “what-if” modeling and analysis capabilities … and (2) demonstrating that their solutions are transformational.
As covered a bit in previous blog posts, an area ripe with both challenge and opportunity for HCM solution vendors is productizing “what-if” modeling and analysis capabilities, given that the HCM processes they are focused on are not defined in a generally standard way. Compensation Planning and Workforce Planning, for example, are not like Recruiting, which perhaps has 70-80% commonality across organizations. Add-in the fact that these capabilities generally lack finite boundaries, and you have a situation where vendors need to figure out how to provide enough capability (vs. specific functionality) to be very valuable / actionable -- without frustrating customers with too much complexity and confusion about when to stop modeling and analyzing!
Another interesting question facing many HCM vendors is how to take the notion of ROI one (or two) steps further and actually seek to demonstrate that their solutions are either directly transforming businesses, or “allowing customers the space” to focus on transforming themselves through other means. In shorthand, we’re talking about changing the nature of a customer’s business --- not just “how” customers do things (e.g., to save money), but “what” they do to enhance the value they deliver to their own customers and the markets they serve --- and in-turn, dramatically grow their business.
When IBM many years ago decided to undergo one of the biggest enterprise transformations in history (going from largest computer hardware provider to even larger professional services provider), one would think they relied to some extent on the HR function (and their tools) to determine the feasibility, optimal timing/pace and tactics, and all likely people costs to achieve that.
Saturday, February 6, 2010
Workforce Planning & Modeling Solutions --- approaching “white hot”
As someone who has waited a long time for HCM solution vendors to collaborate with customers around developing standard workforce planning models and process definitions … since not having those meant solutions couldn’t be somewhat commoditized/sold profitably … I think Workforce Planning & Modeling Solutions as an HCM market category now shows signs of approaching “white hot.”
In just the last 30 days, you have Human Concepts bringing in former PeopleSoft and SAP product strategy exec Hanif Ismail as Chief Strategy and Products Officer; and then this week’s announcement of Success Factors acquiring Inform. In bringing in Hanif, Human Concepts gets a proven leader and innovator in the HCM solutions space, someone who will galvanize a team and company around “winning ideas” – and someone I also worked quite closely with at both PeopleSoft and Swiss Bank Corp … so I think I’m in a good position to offer those comments.
Human Concepts is now clearly poised to break out way beyond their org charting heritage, and indications of that began with their acquisition of Optimize (including Transition Manager) from Taleo, a suite of workforce modeling capabilities originally built by People Business Network.
In acquiring Inform, Success Factors gets a top player in HCM analytics, workforce planning and predictive modeling, with solutions built on a solid foundation of research-driven benchmarks. I don’t know the players at Inform very well at this juncture, but we all know that Lars and his team at SF have an intense, Michael Jordan-like desire to win … a clear sign that Inform brings solid assets and capabilities.
It is also gratifying to see some of the HCM predictive modeling ideas I’ve been playing with over the years starting to get formalized -- and more importantly – productized. Capabilities like predicting key employees who are “retention risks”, or optimizing the pace and magnitude of a workforce reduction without incurring significant business risks, or determining who stays/who goes in a staff redundancy based on a broad set of appropriate data points.
A few suggestions I would offer to solution providers now productizing this exciting but still largely Greenfield area within HCM ..... Don’t stop at a snapshot of employee engagement/retention/ productivity trends (my new “ERP” acronym), show me what factors (singularly or collectively) influence employee “ERP” … in what order … for what job and employee profiles … given what situational or environmental factors or events (i.e., frame scenario-based or event-based analyses).
Moreover, when looking at who stays/who goes in a staff redundancy scenario, consider how the business may be changing (e.g., expanding or contracting certain products or services), and the related implications for which competencies (overt and/or latent) are becoming more or less important over time.
In just the last 30 days, you have Human Concepts bringing in former PeopleSoft and SAP product strategy exec Hanif Ismail as Chief Strategy and Products Officer; and then this week’s announcement of Success Factors acquiring Inform. In bringing in Hanif, Human Concepts gets a proven leader and innovator in the HCM solutions space, someone who will galvanize a team and company around “winning ideas” – and someone I also worked quite closely with at both PeopleSoft and Swiss Bank Corp … so I think I’m in a good position to offer those comments.
Human Concepts is now clearly poised to break out way beyond their org charting heritage, and indications of that began with their acquisition of Optimize (including Transition Manager) from Taleo, a suite of workforce modeling capabilities originally built by People Business Network.
In acquiring Inform, Success Factors gets a top player in HCM analytics, workforce planning and predictive modeling, with solutions built on a solid foundation of research-driven benchmarks. I don’t know the players at Inform very well at this juncture, but we all know that Lars and his team at SF have an intense, Michael Jordan-like desire to win … a clear sign that Inform brings solid assets and capabilities.
It is also gratifying to see some of the HCM predictive modeling ideas I’ve been playing with over the years starting to get formalized -- and more importantly – productized. Capabilities like predicting key employees who are “retention risks”, or optimizing the pace and magnitude of a workforce reduction without incurring significant business risks, or determining who stays/who goes in a staff redundancy based on a broad set of appropriate data points.
A few suggestions I would offer to solution providers now productizing this exciting but still largely Greenfield area within HCM ..... Don’t stop at a snapshot of employee engagement/retention/ productivity trends (my new “ERP” acronym), show me what factors (singularly or collectively) influence employee “ERP” … in what order … for what job and employee profiles … given what situational or environmental factors or events (i.e., frame scenario-based or event-based analyses).
Moreover, when looking at who stays/who goes in a staff redundancy scenario, consider how the business may be changing (e.g., expanding or contracting certain products or services), and the related implications for which competencies (overt and/or latent) are becoming more or less important over time.
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