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 ----
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.

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.

Monday, February 1, 2010

HR Practices that should be Practiced More Often

Starting off in the world of Compensation … I will defer to Ann Bares and her Compforce blog for this first HR Practice, as I don’t think anyone could have said it any better. Regarding the best way for HR/Comp Managers to handle line manager requests for job upgrades, salary adjustments and/or incentive awards …

“Are there days you feel as though your entire professional legacy is built around saying "no"? Rather than see our role as beginning and ending with the act of guarding the pay dollar coffers as though our lives depend on it, we should commit to understanding the root issues underlying these pay requests in order to help managers see and solve the real attraction, retention and motivation issues."

According to Bares ... "These issues often have little to do with cash compensation, including (but not limited to): poor management, communication problems, lack of growth/development opportunities, trust issues and systemic and/or organizational obstacles to performance. In my experience, managers pursue cash solutions to non-cash problems for a host of different reasons. Sometimes they just don't clearly understand the real nature of the problem. Sometimes they are merely following an unspoken protocol that employee issues are always addressed with compensation. Rather than just putting up a wall and issuing the standard "no" in response to a manager's compensation request, join them in an effort to understand and find an optimal solution (for all parties) to the real problem at hand.”

In the world of HRIS … Based on my (often trial-and-error) experience heading-up Global HRIS functions for 4 investment banks in the 80’s and 90’s … before various best practices were being widely shared -- formally or informally, I determined there were some essential business (vs. technology) practices for HR Systems groups to be successful. In my view, these HRIS business practices include:

- developing business cases that are compelling, data-driven and realistic
- using decision-factor matrices to prioritize potential HRIS initiatives
- proactive HRIS marketing … to build support for and increase adoption / proper usage of the new HR/HCM system
- determining the best way to influence/align with HCM solution vendor product roadmaps
- influencing HCM solution vendors to operate with SLA’s (Service Level Agreements) on aspects of the relationship they control
- addressing the non-technology aspects of business process optimization (in conjunction with the technology aspects)

And within the HR profession overall … I offer the following suggestion: “Don’t over-conceptualize the profession.” In an effort to make HR more about science than art (which is generally a good thing as it increases the predictability of outcomes), we should not wipe out the art component altogether. There are times when standard models get in the way of clear, rational thinking dictated by the situation at hand. An example I’ll cite is a prominent HR consulting firm’s application of a model which distinguished Attraction Drivers from Retention Drivers from Engagement Drivers.

According to their conceptual model, Attraction Drivers included a flexible work schedule and a reasonable workload; Retention Drivers included a good relationship with my supervisor and ability to input to departmental decisions; and Engagement Drivers included the sense that Leadership was interested in my well being and the organization encourages innovative thinking.

The downside of applying this very professional-looking conceptual model, as I see it, is that it reduces human behavior to very simple and universal ‘cause and effect’ principles; and human behavior (in the context of the workplace or anywhere else) is neither simple, nor universal. It also took far too many years for the right amount of HR and Corporate attention to be focused on employee attraction, engagement and retention; so let's not "split hairs" between these 3 very intermingled HCM areas for the sake of adding another interesting paradigm to the annals of HR theory.