Culture TrendWatchers

Inclusion Measurement - Tracking the Intangible

Wed, 14 Jul 2010 12:49:00 GMT

Diversity and inclusion are, in some ways, like peanut butter and jelly. They're not the same but are often combined, making up a whole that's more than the sum of its parts. So when i4cp - on behalf of its members-only Diversity Accelerator group - decided to look at inclusion metrics, we first had to carefully define, identify, and separate the two concepts.

In our Inclusion Measurement Survey, we started by finding out whether or not companies had inclusion initiatives and if initiatives were considered separately or in combination with diversity. Two-thirds of study participants reported inclusion as part of their people-management strategy, either in combination with diversity (47%) or as a separate talent-management initiative (19%). These numbers crept up only slightly among higher market performers. With this established, we asked them to focus specifically on inclusion, the more difficult to measure of the two.

Diversity is about variations and differences and, more often than not, refers to traits that are measurable. Sometimes diversity refers to a traditional compliance point-of-view that looks primarily at EEOC protected classes. Other times, it incorporates a broader definition that accounts for factors such as diverse experience, education and backgrounds. Either way, seeing how one individual differs from another and tracking those differences is, while challenging in practice, intellectually clear cut. Inclusion, however, is a much more amorphous affair.

Inclusion is what ties varied individuals together into a cohesive and productive whole. By far the most commonly cited definition for inclusion among our study participants was from the 2002 Frederick Miller and Judith Katz book, The Inclusion Breakthrough. This definition - "Inclusion is about creating an environment in which employees share a sense of belonging, mutual respect, being valued for who they are, and supportive energy and commitment from others so that they can do their best work" - was selected from among six possibilities by over half of our study group.

But does anything about that definition lend itself to measurement? Can one say that a company produced 5% more "supportive energy" this year than last? While other definitions had more concrete wording, such as "avoiding tokenism," organizations seem inclined toward a definition that is more aspirational and values-based. This kind of definition may explain why only a fifth of respondents say their organizations attempt to quantify the effects of inclusion strategies to a high or very high extent.

Corporate Practices

Through a series of interviews tied to our Diversity Accelerator, we investigated how some organizations incorporate inclusion as a key value. These companies are both more successful at inclusion and more capable at measuring the success of their efforts. The key factors that make this possible are a definition that includes measurables and driving goals that are strategically aligned and quantifiable.

With inclusion ingrained as a core corporate value, organizations can measure success in this area through several channels, including indirect routes such as quality assurance reports that provide a view of inclusion from the customer perspective. These organizations can also directly tap their employees for guidance to provide feedback and ensure that they are truly living their corporate values.

Other practices that boost inclusion proficiency include inclusion-specific competencies as part of the managerial review process. Linking those competencies to both salary and promotability further emphasize the company's commitment to inclusion as a core value. It's an important step for inclusion to be seen as a competency that is closely tied to success in those managerial positions.

One top company we talked with, WellPoint Inc. - the largest health plan company in the Blue Cross and Blue Shield Association - uses their definition of inclusion to help define the metrics they track to determine success.

"Our definition of inclusion is really all about engagement, be it associate (employee) engagement or member (customer) engagement," said Linda Jimenez, Chief Diversity Officer and Staff VP - Diversity & Inclusion for WellPoint. "Inclusion is the important component that weaves that thread of diversity throughout our organization. One level of inclusion is how individuals feel connected, respected, valued, but - most importantly - engaged in working alongside one another."

WellPoint's use of annual employee engagement surveys to track inclusion is therefore a clear, if indirect, metric. In fact, employee engagement surveys were the most utilized measurement method cited in our inclusion study (47%), followed by analysis of new hire data (36%) and promotion/movement data (33%). WellPoint also closely tracks diversity representation metrics and movement among varied groups at multiple tiers of the organization. Inclusive of about a quarter of our survey respondents, WellPoint includes diversity-specific questions in its engagement surveys.

In addition, WellPoint looks at manager evaluations, which have questions specifically geared toward inclusion competencies, and they participate in various third-party evaluations from employer-of-choice awards that provide an external standard to measure progress. Such awards were a less frequently used metric overall (used by about a fifth of i4cp respondent organizations) but, along with productivity data, were the metrics with the largest usage gap between high and low performers.

WellPoint was included on The DiversityInc 2010 Top 50 List, and also participate in a select group of other employer-of-choice recognition awards. According to Jimenez, "There's a wealth of information in terms of benchmarking that we've received and the opportunity to listen to and share best practices with similar organizations that are considered leaders in diversity management. They're definitely an internal motivation and I think it's a great metric for us to be able to see where we stand against ourselves and where we stand against our peers."

In a similar vein, through our Diversity Accelerator program, i4cp has found that group discussions - in which practitioners are able to describe challenges, share best practices, and brainstorm on future-looking strategies - are useful ways of improving performance in the areas of diversity and inclusion.

The Bottom Line

Inclusion is, as we've shown, a hard nut to crack from a metrics perspective. It's simply easier for an organization to tell if diversity representation has increased at certain tiers of the organization, if the employee base has reached parity with the customer base, or if complaints against management have gone down. These metrics don't tell you how inclusive the culture of the organization is, but, much like gravity shifts indicating the presence of otherwise imperceptible astronomical objects, they do show the presence of something and give us an indication of size and movement.

Our study shows that these indirect measurements - paired with accountability, top-down support for inclusion-related values and employee surveys - are how many organizations are gauging inclusion success.

i4cp's 4-Part Recommendation:

Review your organization's definition of inclusion, if it has one, to determine if it lends itself to measurement. A definition that is more utilitarian - that is more prescriptive rather than aspirational - is more useful in guiding measurement and goal setting. Debate the content of your definition. A definition that lacks debatable content probably lacks the significance or concreteness that will make it measurable.
Ensure a common understanding of what inclusion means to your organization and make certain it aligns to the organization's mission. A good definition will go beyond employees to include suppliers, customers and the community at large. To form a common understanding of what inclusion means, consider what is driving your organization toward this goal. The i4cp study found that high-performing organizations are more likely to be driven by factors such as talent acquisition, retention, employment brand, and increased productivity and engagement.
To measure inclusion, start by identifying the business area where you expect to see movement. For WellPoint, that metric is engagement. For other organizations, it may be profit per store, better customer ratings, reduction in shrinkage (theft), improved company reputation or brand, etc. Again, the measurement should align with the organization mission.
Create accountability at the executive, manager and employee level. Creating an inclusive work environment starts at the top of the organization, but it must be practiced at every level to permeate a culture. Accountability at the employee level means articulating expected behavior and rewarding employees that exemplify that conduct. It also means working to change behaviors of employees who do not. At the manager level, accountability should be part of the performance management process and is most effective when linked to performance appraisal competencies and promotional opportunities.

Sharpening Customer Focus: The Power of a Market-Oriented Culture

Wed, 07 Apr 2010 11:37:00 GMT

What's the key to creating a customer-focused organization? Here's one of the answers from the trenches of a high-performance company: "A culture of accountability makes a good organization great and a great organization unstoppable."

That nugget of wisdom is part of i4cp's new major study on customer focus, conducted in partnership with the American Management Association. We found that accountability that starts at the top is critical to customer focus. Sixty-seven percent of respondents from high- market-performing companies that are good at focusing on customers say their organizations hold at least one corporate officer responsible for the customer experience. By contrast, a tiny 3% of lower-market-performing firms that are poor in this area hold an officer accountable.

Companies that excel in overall performance do something else about customer focus differently, too. They make sure that a commitment to customer service doesn't stop with senior leaders - or even with customer-facing employees. Leaders of top-notch firms create customer-focused cultures that suffuse their organizations, reaching from sales professionals with daily customer contact to production-line employees who may never have a conversation with a consumer but whose efforts are just as vital to company success. Nearly seven out of 10 high-performing organizations say they work to build such a power culture. Lower performers? Fewer than half.

"Alignment of the corporate mission, vision and goals with customer satisfaction" is viewed as a critical practice, according to one study participant from a high-performing company. "Bringing these concepts to the employee level and creating secondary visions that align their actions with the overall vision has increased [our] focus on exceeding customer expectations."

Four out of five respondents from high-performing companies say that financial growth is the key driving force behind their focus on customers. Certainly, i4cp research has shown that market focus - which revolves around a focus on customers - is one of the five core attributes of high market performance. So it makes sense that a corporate culture centered on customers is likely to yield positive bottom-line results. But how does an organization seeking better performance bring about that kind of culture shift?

Along with accountability, communication and training are among the most vital components in culture-building approaches, the study found. "We are more actively sharing competitive data with lower levels of the organization," one business leader revealed. In addition, the company is "instilling a culture of innovation and customer obsession to drive behavior focused on the customer."

Multiple respondents from high-performing companies described their firms' educational efforts. Customer-focused training "is part of our onboarding and new employee orientation," said one. Another cited "continuous training on customer care practices" and a third explained, "We run training on a different customer service topic every month."

Companies that achieve high levels of performance in today's volatile marketplace demonstrate not only a dedication to customer service but also a commitment to anticipating customer needs and being proactive in meeting those needs. This type of forward-thinking mindset is one of the hallmarks of a culture that is truly customer focused.

i4cp's 4-Part Recommendation:

Include accountability for customer service and satisfaction in performance reviews for managers and employees alike. Forty percent of i4cp respondents say they hold their entire executive teams responsible for customer focus. Reinforce accountability by aligning rewards and recognition with customer-focus goals.
Build a powerful corporate culture that supports an organization-wide commitment to customer service. One study participant explains how: "We developed a new, customer-focused mission statement and had a bottom-up planning session to gain buy-in and establish critical success factors and SMART objectives. We will align our HR, organizational, management and communication practices to align with these objectives."
Retool internal communications to ensure support for a customer-focused culture. Share customer stories, feedback and insights with all employees. Involve senior leaders in modeling customer-focused behavior and in communicating the company's customer-centric values and mission.
Make customer-service training an ongoing commitment. Begin during employee onboarding and follow through with more training on a continuing basis. One company participating in the study demonstrates how to make the process enjoyable by offering a "Lunch'n Learn Customer Appreciation Program."

Achieving High Performance with Leader Athletes

Fri, 12 Mar 2010 11:55:00 GMT

Today's elite athletes are performing at levels few can hope to achieve, yet with each race, each competition, they consistently demonstrate the capacity to push themselves and reach heights once thought unobtainable. In the business world, it should be the goal of every leader to emulate world-class athletes. This is a reachable objective and we see examples of exceptional adaptability and agility as chief among common traits shared by leaders of high performing organizations.

Outstanding leaders have traditionally been associated with coaches rather than athletes. They guide, teach, motivate and inspire. But they are not usually thought of as demonstrating the dynamic, heroic effort of sports figures in the course of leading companies. But that's changing quickly.

The ability to recognize and anticipate the next challenge is the hallmark of many great athletes. And there's a certain attitude that goes with agile athletes. They thrive on change because that's where they excel. "Agile leaders aren't afraid of change - they embrace it rather than try to manage it and they encourage those around them to do the same," states i4cp's CEO Kevin Oakes. "It really is about being fearless, and some leaders are better at this than others."

i4cp's research indicates that the agile athlete is an apt metaphor for what it takes to execute strategy that results in success. In partnership with Prof. Bill Joiner, co-author of the book Leadership Agility, i4cp conducted the Organizational and Leadership Agility survey in February 2010, finding that the agility of leaders seems to be strongly linked to organizational performance.

In his recent i4cp webinar, Joiner notes, "Accelerating change and growing inter-dependence are continually raising the bar for the level of agility needed for sustained competitive advantage." And yet, fewer than a third of respondents in the study ranked their company as being largely proactive in anticipating and initiating changes needed for sustained high performance. Nearly half of companies that have already achieved a level of high performance say the same, however.

Respondents from these high-performance organizations are about twice as likely as those from low-performance companies to report that their top executives set clear expectations for agile executive leadership behavior to a high or very high extent. The same pattern holds true for the statement, "Our top executives model agile leadership behavior" (36% vs. 18%).

The performance disparity is even greater when looking at leadership selection. Study participants from high-performing organizations were nearly three times as likely to say their selection and/or promotion criteria include leadership agility to a high or very high extent. Similarly, those from high performing organizations were over three times as likely to report that their reward systems include leadership agility measures.

In short, high-performance organizations are considerably more likely to model, clarify, select for and reward agile leadership behaviors among executives. Yet, a scant 40% of respondents said their organizations are adept at recognizing and responding to strategic challenges in a timely manner, and just 32% said they are proactive in anticipating and initiating the changes needed for sustained high performance beyond their immediate strategic challenges.

Another driving factor behind the need for leadership agility and ability is the increasingly interconnected nature of the business world. We asked participants about the extent to which their corporate success depends on the collective ability of their executives to work effectively with customers, suppliers, business partners and other stakeholder groups. Four out of five respondents said it was important to a high or very high extent.

To work effectively in a dynamic and interconnected business environment, organizations are trying to develop the equivalent of executive athletes, people who are - organizationally speaking - nimble, strong, quick and smart. These people should be able to cope in a complex work environment filled with many different players, and they should be able to recognize and respond to strategic challenges, largely because of their ability to see patterns and anticipate changes and equip others to do the same.

"Leadership in this new era of rapid change is about empowering others to decide for their selves and empowering others to reach their full potential. Leaders can no longer view strategy and execution as abstract concepts, but must realize that both elements are ultimately about people (transformational leadership)," says Col. Dann Pettit, Director of Operations at the Oklahoma Air National Guard.

Being agile is also about getting the best out of team members, knowing when to "pass the ball," set the tone and provide good direction. In fact, our study shows that participants from high-performing organizations are over three times more likely to say that they "create highly participative, accountable teams where candid dialog and creative problem solving is the norm."

i4cp's 4-Part Recommendation:

Ensure that your executives set clear expectations for agile leadership behavior. Such behaviors should be clearly communicated and woven into the leadership development process. Organizations should also require executives to model such leadership behaviors, and this should be part of the performance assessment process.
Select and promote based on leadership agility criteria. That is, promotion and succession planning decisions should be based, at least in part, on candidates' display of leadership agility behaviors.
Ensure that your executives do not send mixed messages about the desirability of candid conversation and feedback. Our study finds that such "mixed messages" are the single most widely cited barrier to a leadership agility culture.
Use benchmarking and networking practices to discover what other high-performance organizations are doing to lead change in today's complex environment. For those practices that mesh with your organization's business plan, inquire about executive development programs. Ask questions such as:
- What are your most effective tactics for developing agile leaders?
- How do you implement those tactics?
- How do you encourage and reward agile behaviors?
- What are the most important lessons you've learned in term of acquiring and developing agile leaders?

Serious About Sustainability in 2010

Fri, 26 Feb 2010 12:03:00 GMT

A funny thing happened on the way to 2010. Amid blistering debates over health care, arguments over how to deal with double digit unemployment, and a general sense of conflict and gridlock on many other socioeconomic issues, one area of virtual consensus has emerged in the business world: the rise of "green" initiatives.

That's one finding from i4cp's 2010 Major Issues Study conducted in December 2009. Over three quarters (78%) of 515 responding business professionals projected there would be more "green" business initiatives in companies this year. Among many future-looking statements about what would happen in 2010, this one showed the greatest amount of agreement.

Okay, so this probably isn't a surprise to anyone who watches even a modicum of television these days. Commercial after commercial plays up the environmentally friendly missions and programs at many of today's major corporations. No company wants to be tarred with the ugly brush of environmental irresponsibility.

But just how serious are companies about this? Is it mostly public relations or is there something truly significant going on?

Every organization is different, of course, and there's definitely a PR angle to "going green," but the data suggests that many business professionals view this issue as vital to business success. Our forecast study shows, for example, that 70% of respondents said that sustainability (that is, social and environmental responsibility) would be of high or very high importance to their organizations in 2010.

Karen B. Paul, Ph.D., who is the Head of HR Measurement at 3M, an i4cp member company, notes that 3M has a long history of what are today called sustainability practices. She notes that Dr. Joseph Ling, 3M's former Staff Vice President, Environmental Engineering and Pollution Control, was a pioneer in the field of environmental and air quality management and is today recognized as the father of pollution prevention.

Dr. Paul states, "At 3M, sustainability is now embedded in the culture." She believes that there are strong interconnections among sustainability, employee engagement and innovation. "Sustainability is a wonderful lever to really challenge and engage employees in the areas of innovation." In one example, 3M offers its Pollution Prevention Pays (3P) award to employees on an annual basis. The 3P program has been around for 35 years and has prevented more than 2.9 billion pounds of pollutants and saved nearly $1.2 billion since the first year of the program. It's become a key element in moving toward sustainability for 3M. Dr. Paul states, "People all over the world at 3M compete for the award."

In addition to providing this award, 3M communicates about sustainability on a regular basis, includes sustainability-related questions in its climate survey (such as, "3M makes business choices that support the environment such as waste reduction & disposal, energy conservation and vendor selection") and reports out many metrics related to sustainability.

Still, just because 70% of respondents said that sustainability would be important this year doesn't mean that most companies are especially good at implementing sustainability practices. Another large study, which i4cp did in partnership with the Institute for Sustainable Enterprise at Fairleigh Dickinson University (FDU), specifically looked at trends related to sustainability and puts the details into better perspective.

That study confirms that sustainability is an important issue but one that most employers are still just learning to manage well. Taken as a whole, only a little over a quarter of respondents said their organizations are implementing a sustainability strategy to a great or very great extent.

More specific questions reveal the same pattern. For instance, these business professionals were asked about the extent to which they agreed that their organizations have made sustainability central to their business strategies. It turns out that nearly two-thirds of participants either somewhat or strongly agreed with this. That sounds like sustainability has become very influential, but if we break it down, only 24% strongly agreed with this statement.

What's more, a mere 15% strongly agreed with the statement their companies have an "effective means to coordinate and integrate various functions working in the areas of environmental and/or social responsibility."

Of course, things could be worse in this area and, by some measures, they indeed were just a few years ago. When i4cp conducted a similar study in partnership with the American Management Association back in 2007, the average score for the "centrality to business strategy" question was considerably lower. What makes that finding especially interesting is that the score rose despite the fact that the original i4cp/AMA survey included more responses from European organizations, which tend to score higher on sustainability issues.

The good news for sustainability advocates is that 41% of respondents from higher market performing companies say they believe (to a great or very great extent) that their companies implement a sustainability strategy, but the same can be said for only 18% of lower market performing companies.

In regard to sustainability tactics, some areas need more work than others. While most business professionals said their organizations are good at ensuring the health and safety of their employees, relatively few said their employers do well in terms of improving energy efficiency and reducing waste or using cross-functional teams and/or other groups to coordinate sustainability activities.

The study also inquired about the role of HR professionals in sustainability efforts. It turns out that many HR pros understand the potential impact of environmental and social responsibility on their corporate brand and their ability to attract, retain and engage talent. But they aren't very likely to be strong advocates for making sustainability issues central to their organizations' business strategy or for helping non-HR leaders see the connection between sustainability and talent management.

That's a shame, according to Jeana Wirtenberg, Senior Advisor at the Institute for Sustainable Enterprise and co-author (with FDU Professors Joel Harmon and Kent Fairfield) of an article on this sustainability data in an upcoming Special Issue of People & Strategy Journal on "Transitioning to the Green Economy." She notes, "Sustainability represents a huge opportunity for HR to play a more strategic role in their organizations, something HR has been aiming at for years. In many ways, it falls right into HR's sweet spot. Under the right circumstances, HR professionals can help infuse sustainability into talent management systems in their organizations, but they have to build up their own competencies in this area."

i4cp's 4-Part Recommendation:

Create a steering committee or cross-functional team to evaluate current sustainability trends and determine what, if any, sustainability programs need to be implemented in your organization. This group should track best practices, as things are quickly evolving in this area as new initiatives are developed, implemented and then evaluated.
Conduct sustainability scenario planning. There are many unknowns on the horizon. Among the uncertain factors that will influence sustainability in the future are regulations, pollution levels, climate change research, availability and costs of natural resources, health trends, new technologies, and others. Through scenario planning, organizations can consider the potential ramifications of these factors and how they might influence their businesses in the future.
Encourage the leadership team to study sustainability from a strategic orientation, asking whether it makes sense to take actions such as tying sustainability into core business strategies, aligning performance standards with it, and integrating various functions around the concept.
If sustainability is a priority, ensure that managers and HR professionals have the necessary competencies in this area. They can potentially take advantage of such skills by adopting a variety of actions, such as:
- designing and delivering training programs to support sustainability;
- articulating which leadership knowledge and behaviors align with sustainability;
- facilitating organizational change management programs that take sustainability into consideration;
- formulating and implementing measures and rewards to support sustainability;
- designing sustainability criteria for recruitment and promotion.

Are You Wasting Time and Money on the Wrong Retention Strategies?

Fri, 29 Jan 2010 10:28:00 GMT

Here's a late-breaking bulletin: employees leave their jobs because they're dissatisfied with their compensation. Are you shocked? We weren't either. But when results of i4cp's latest survey on Retention Strategy and Execution confirmed the top reason workers bail, we decided to take a closer look. Mean responses from all participants found non-work-related events/issues (spouse relocation, health, etc.) in second place, with poor work/life balance ranking third among departure drivers across all company sizes and industries.

Because i4cp's mission is to empower organizations to become high performers, we dissect our research results with great care, digging deep to find the strategies and behaviors that separate top firms from the also-rans. And we do this across the five domains that influence organizational performance: strategy, leadership, talent, culture and market. This recent survey points out that key retention questions for leaders within the talent domain are these: Do people leave high-performing and lower-performing organizations for different reasons? Do companies wait until it's too late to ask why workers abandon ship? Are companies' retention strategies accurately targeting the turnover drivers at work in their particular situations?

When it comes to the number-one turnover motivator in high-performing firms, our results revealed that unhappiness with compensation also was the primary culprit. However, respondents indicated that workers depart lower-performing companies because they have poor relationships with their managers: Two very different situations requiring diverse interventions.

If you regularly use i4cp research, you know that we look to our members and other top firms for real-world strategies that enable leaders to act on the issues that challenge their organizations. In the case of retention, we learned that both high market performers and their lower-performing counterparts list learning opportunities as their top strategy for retaining talent. Base salary increases and training in retention skills for managers - strategies that seem more likely to address the turnover drivers we identified - ranked much lower in respondents' arsenals. Does that mean that companies are investing in the activities that are most likely to help them effectively improve retention? Maybe not. The struggling economy has helped keep turnover levels down ... for now. But business leaders can't afford to let retention slip off the radar. Or to invest tight budget dollars unwisely.

Perhaps the best advice on retention strategies comes from the employee resources director of a leading high-tech firm that participated in the i4cp study. He points out that it doesn't cost a lot to "maintain vigilance and awareness," adding that "time and attention should be a day-in and day-out management responsibility." Yet the majority of respondents confirmed that exit interviews are their tool of choice for identifying issues that drive turnover. This is a decidedly late and re-active approach. Moreover, fewer than 20% say they act on the information they discover about the causes of turnover.

Clearly, identifying not only the factors that cause employees to grow dissatisfied and leave but also the elements of a workplace that engage and retain talent provides the kind of accurate information companies need to pro-actively address the real issues that shape their workplaces. Internal surveys provide an ideal means of assessing such issues. Indeed, pinpointing such critical insights, a large utility firm told us, will enable their organization to "come up with an action plan to increase/improve retention and help in our goal of being a great place to work."

i4cp's 4-Part Recommendation:

Build a better understanding of retention, engagement and other crucial, rapidly changing talent issues affecting today's organizations. i4cp members will find a wide range of strategic resources and relevant survey results by accessing the Talent Domain section of the website.
Leverage the power of opinion-sampling tools to gain a true picture of the elements that influence your workforce. i4cp, for example, partners with companies to conduct customized climate surveys designed to reveal the factors affecting employees' work experiences before valuable talent is ready to walk out the door.
Ensure that the strategies your organization chooses to support retention are in alignment with the realities of your workplace. If employees tell you that they're leaving because their compensation isn't satisfactory, it may not be realistic to expect that offering more training opportunities for workers will solve the problem.
When employees provide insights into the reasons they leave, use that information. Taking the time to find out what issues exist and then failing to take action to remedy problems is counterproductive. It wastes the time and money spent to survey or interview employees. Worse, it tells workers you don't care. Soon, they'll simply stop providing feedback altogether. Seize your opportunities to be proactive.

Ten Critical Performance Issues for 2010

Fri, 22 Jan 2010 11:52:00 GMT

Are we really three weeks into the new year already? Time flies when you've got too many things to do and not enough time to do them. That's why both organizations and individuals need to prioritize. Not only can setting priorities make organizations less frenzied, they can make them more effective - assuming, of course, they're focusing on the issues that really improve performance.

Last week, our CEO Kevin Oakes wrote about the five domains of high performance. This week, we're going to break things down to highlight some of the most critical subcomponents of each domain, based on i4cp's new study of the major issues of 2010.

We asked study participants to look ahead and identify the issues that would be most important to their organizations in the coming year. We also asked them to rate their organizations' effectiveness in addressing those issues. Why? Because being highly important doesn't mean something is critical. It's critical only if two things are true: it's important AND the organization is not effective enough in managing it.

Think about it this way. It's a hot day and you're stranded on a boat where there's plenty of drinkable water but no shade. Both water and shade are important, of course, but which is most critical? In that moment, it's the shade. You've already got water. What you need to figure out is a way to protect yourself from the blazing sun. That's your priority.

The same is true in management, and our study helped us pick out the most critical organizational performance issues in each of the five high-performance domains: leadership, talent, strategy, market focus and culture.

Jay Jamrog, i4cp's Senior VP of Research, has been conducting interviews on the findings of this study with our member companies. He notes that, in these conversations, there's a difference from previous years when we've run iterations of this survey. "There's a heightened sense of focus," he says. "I think the recession had a major impact. The people I'm speaking with are taking these issues much more seriously. They know that executing on their most critical issues will give them a competitive advantage that they really need to succeed, but failing on these issues could be a fatal misstep."

Develop better, more agile leadership

Let's start with leadership. It turns out that the two most important issues in this area are managing change and leadership development. But are they the most critical? As it happens, the answer is yes. Whereas about three quarters of respondents rates these two issues as important to a high or very high extent, only about a quarter said their organizations were effective in these areas to that same extent.

So, these are critically important issues for which few companies have excellent management responses. We'll save the whys and the wherefores for a future TrendWatcher. For now, however, let's just say that in 2010, companies will have their hands full trying to develop exceptional leaders who can help their firms deal with change. Such folks are in scarce supply. If you'd like to answer some questions - and get an early preview of responses, as we reward survey takers with preliminary results - that examine both of these issues, please check out our new survey on Organizational and Leadership Agility from Bill Joiner, Ed.D., coauthor of the book Leadership Agility.

Improve talent management and increase performance

Talent management is both an important AND a critical issue for 2010. This has been corroborated by two other major i4cp studies in the last three years. Relatively few organizations think they manage talent well, and we have plenty of data to show why. For one thing, most talent management systems are not very well integrated. The parts of the system often don't fit together well, like machines cobbled together from spare parts. For another thing, one of the vital components of talent management - performance management - is itself a critical issue. Fully 76% of our study's respondents said performance management is very important this year, but a meager 30% said their companies are very effective at actually doing it.

Bottom line: This year, organizations have their work cut out for them when it comes to making sure their talented folks are working up to their performance potential.

Focus on strategy execution

It isn't enough to formulate great plans. You've got to execute on them, and that requires getting everyone on the same page. Sounds easy, but most managers know it's tough to do well. Four out of five respondents said strategy execution and alignment are important, but less than a third said their firms are very effective at it. That's disturbing, and companies need to get a lot better in 2010 if they want to prosper.

Another critical concern is that less than a quarter of respondents think their firms are good at knowledge retention. If the economy truly recovers in 2010, they'd better buckle their seatbelts because lots of employees that have been constrained by a lousy job market in recent years will be keeping an eye out for new opportunities. Employers don't necessarily have to retain all of their talent, but they at least need to retain a good chunk of their expertise via cross-training, knowledge-management systems, etc. Otherwise, a lot of that intangible capital could, quite tangibly, walk out the door.

Emphasize innovation

Next, let's look at market issues. As we expected, based on our long history of research in these areas, the most important issue in this domain was customer focus. This is a perennial favorite and one of the top four most important issues for the last 20 years. What's interesting, however, is that it's not among the top two most critical issues in this domain today. That's because, although highly important, many companies actually think they're already pretty effective in this area.

Where they're not so effective, however, is in the area of creativity and innovation. Although 72% of study participants said the issue is important to a high or very high extent, just a third said their organizations were very effective in this area. We also found that innovation is the number one most critical issue among all domains for large, high-performing companies. Therefore, even some of the paragon companies in the world view innovation as their single most critical issue, and even companies that are viewed as innovative continue to focus resources in this area in order to maintain their edge.

There are two other critical issues in this domain that our index shows are in a statistical dead heat: emerging markets and sustainability. Not every company thinks emerging markets are important, but there's a clear lack of effectiveness in this up-and-coming global issue. 2010 will be a time to think hard about how to go global. Meanwhile, a surprisingly high percentage of organizations consider sustainability to be highly important, but, as with emerging markets, they don't feel they've got a good grip on the issue yet.

Get some culture in 2010

We're only going to mention one issue in the culture domain because it's so all-encompassing: that is, managing corporate culture. Just 27% of participants said their companies are effective at managing culture to a high or very high extent. But, as a recent report that i4cp partnered on with the American Management Association shows, there are, in fact, various levers organizations can pull to create higher-performance corporate cultures.

i4cp's 4-Part Recommendation:

Combine your efforts in the areas of leadership development and managing change if these are both critical issues in your company. That is, gauge how agile your leaders are and then take steps to improve change-management skills where warranted.
Assess where the barriers to innovation are in your company to make it more innovation-friendly in 2010. For more on this subject, see The Quest for Innovation: A Global Study of Innovation Management.
Work at integrating and aligning the various components of talent management in 2010, with a special focus on performance management. For example, employees are often cynical about performance management, and i4cp research has found that one of the nine keys to success in this area is to ensure that appraisal information has some objective components and isn't strictly limited to the judgment of supervisors.
Create a culture that makes it easier to implement new strategies. That is, the culture needs to be change-friendly, performance-driven and not entangled by conflicting subcultures that compete against one another and slow down strategy execution.

The Five Domains of High Performance

Fri, 15 Jan 2010 12:13:00 GMT

Pick a leader - any successful leader. Then search Amazon and see how many books and other publications come up on that person. Abraham Lincoln? 83,642. Gandhi? 61,923. Even Barack Obama, who was widely introduced to the world just five years ago, has 8,670. People love studying successful people.

In the same way that many people have an insatiable appetite to study successful leaders, we in the business world tend to be fascinated with high-performance organizations. What are they like? What do they do differently? Is there a secret recipe that allows them to outperform their competition?

Of course, many books have been dedicated to this subject. From Tom Peters's and Bob Waterman's early 80's best seller In Search of Excellence to Jim Collins' Built to Last and Good to Great, there has been a succession of books that leaders and managers across the globe have devoured. Programs such as GE's Six Sigma have trained countless people in how to achieve top performance and consultants have built entire practices around elements of high-performing companies.

While business professionals want to learn more about high-performance organizations in the hopes that they can apply some of the secret sauce to their own organization, many of the companies profiled within the pages of the aforementioned books were unable to sustain high performance. In fact, the number is about half. While much has been written on the subject, the truth is that the ingredients to high performance remain something of a mystery.

Part of the reason is the definition - what exactly do we mean by high performance? Is there a difference between simply surviving (which was the fate of some of the companies profiled in Built to Last, for example) and performing well over a long period? Do we mean companies which outperform others in their own industry or across industries? Over how long a time period does an organization need to perform exceptionally well in order to be considered a "high performer"? And which measures, financial or otherwise, are the best ones to use?

Over the last three decades, i4cp researchers have looked at various ways to define high performance and the traits that separate the consistently top organizations from the rest. Through that time, we have come to recognize high-performing organizations as ones that consistently outperform most of their competitors in four primary areas:

Revenue growth
Market share
Profitability
Customer satisfaction

And, over the years, our research team has examined well over 100 different core human capital areas and tried to determine the differences between high-performing and low-performing organizations. The research has clearly shown that no single ingredient guarantees organizational success. Rather, high performance is like a delicate entrée - based on a staple of core ingredients any one of which, if left out or of inferior quality, will ruin the entire item.

The Five Domains of High Performance

Our research has shown that there are five basic ingredients which separate higher performers from their lower-performing counterparts:

Their strategies are more consistent, clearly communicated and well thought out. They are more likely than other companies to say that their philosophies are consistent with their strategies and their performance measurements mirror their strategies.
Leadership is clear, fair and talent-oriented. Those leaders are more likely to promote the best people for the job, to make sure performance expectations are well known and consistent with the strategy, and to be committed to developing their people.
There is a commitment to the right talent within the organization, and while employees are treated as unique individuals, the organization takes a holistic approach to managing and making decisions based on data-driven information. This begins with a strategic approach to workforce planning. It entails looking at the organization from an outside-in perspective that identifies the business model components and areas that drive value and then determines what the organization needs.
The culture is strong in all the right ways, and employees are more likely to think the organization is a good place to work. Employees not only adapt well to change, they embrace it. High performers also emphasize a readiness to meet new challenges and are committed to innovation.
They are more likely to have a strong market focus and go above and beyond for their customers. They are organized internally around what's best for the customer, they think hard about customers' future and long-term needs, and their strategy is based on customer data. And they are more likely to see customer information as the most important factor for developing new products and services.

While these five domains - Strategy, Leadership, Talent, Culture and Market - may seem a bit broad or even obvious, the separation our research has shown between high and low performers in these domains is startling. For example, in a just-released study on high performance by i4cp, the following graph depicts this separation:

These findings, along with previous studies, have convinced us to target our research on discovering the best ways for companies to boost their performance in these five domains and the numerous sub-domains within. We're convinced that companies that focus on excelling in these areas are cooking up a surefire recipe for long-term success.

i4cp's 4-Part Recommendation:

Take stock to determine where your organization stands in these five areas, and be honest - even the best performing companies aren't always superb in each area. To get an objective view, survey the workforce on these domains as well as use other assessment tools.
Once you've determined your areas of strength and weakness, make sure senior management is involved in improving on the weak areas while not taking the eye off of the strengths; in tough economies it can be easy to stop focusing on core areas that the company has excelled in. Don't forget to investigate the practices of other organizations that are excelling in your areas of weakness; it's amazing how some very simple and inexpensive ideas can make a huge difference in closing the gap.
Although companies should focus on the specific tactics for boosting their performance in each of these five areas, it's important to align the five areas as a whole. Each domain feeds off the others, and ignoring one is like leaving a key ingredient out of a culinary masterpiece.
Although these efforts should continue indefinitely to sustain performance over time, organizations should also do regular reevaluations of their progress so they can make course corrections as needed.

View a recording of Thursday's webinar, The Five Domains of High-Performance Organizations.

It's 2010. Where's My Jetpack?

Fri, 08 Jan 2010 11:43:00 GMT

As we leave the "aughts" (rhymes with "naughts") and enter the (what should we call this next decade, the "tens"? The "teens"?), it is clear that a large part of the population is disappointed. Not just because the last decade was the worst in history for stock market performance, but because the world has not innovated as we all imagined it would many moons ago.

A new Zogby/ScoopDaily poll reveals that nearly a third (32%) of Americans say they believed there would be greater technological advances by 2010. I'll admit I'm one of those optimists. I grew up watching the Jetsons fly around in jetpacks, the technology for which seemingly has been around my entire lifetime (watch "The Rocketeer" on cable sometime). I'm no closer to my jetpack today than I was when I used to watch cartoons in footy pajamas.

Beliefs on technological innovation are squarely generational. The poll shows that those aged 18-30 are much less likely (13%) than those in older generations to say the technological advancements up until now have exceeded their expectations. Those 70 and older (34%) are the group most likely to say we are more advanced than they thought we would be by 2010. Most disappointed? It's the 35- to 54-year-olds (36%, or the Jetson-watching generation), who are more likely to say they thought there would have been greater tech advances by 2010.

Many business professionals fit into that most-disappointed demographic, of course, and maybe this helps explain the findings of a new i4cp study, which we'll be publishing and presenting later this month. It inquired about the major issues companies will be facing in 2010, asking about both the importance of those issues and organizations' effectiveness in dealing with them. Although we'll save most of the findings for later, I can tell you that one of the items that intrigued us was "creativity and innovation." Out of 53 issues, it was ranked third in importanceoverall and, even more telling, was the single most critical issue among high market-performing companies with 10,000 or more employees. That is, despite their market success, such large organizations generally recognize that they've not yet mastered the all-important art of innovation, making it a crucial issue for 2010.

For such companies, any failures to innovate are more than just an emotional letdown over childhood fantasies; they're a sign that their bottom lines will be eroded in the near future. i4cp research shows that innovation is a key component to market performance, and it's one that is ultimately the responsibility of senior leaders. A previous study i4cp did on this subject summed it up quite well: "Executives at all levels have a responsibility to lead and stimulate innovative thinking across the entire enterprise. Stockholders, employees and customers count on executives to create a healthy, innovative work environment."

So, the crucial question becomes, "How do today's leaders continue to create that healthy, innovative work environment?"

More and more leaders are recognizing that the human capital function (that is, "HR") can play an important role in helping them create an innovative culture. Much can be learned from the example of i4cp-member company Qualcomm, which is one of the most successful startups in U.S. history. "The CEO can't be the only one responsible for innovation, particularly when a company has grown as rapidly as we have," said Tamar Elkeles, vice president of Qualcomm's Learning Center, at last year's i4cp Annual Member Conference. Giving an impassioned speech about how to keep an innovative culture alive and thriving, she stated, "We have focused many of our efforts on ‘intrapreneurship,' or, in other words, growing our own entrepreneurs internally and keeping them - and their ideas - at Qualcomm. It's safe to say we have seen significant business benefits from these initiatives."

Elkeles' presentation, titled "Fostering Intrapreneurship in Challenging Times," outlined several initiatives that she and her team have created or manage:

A yearlong email campaign as part of the new-employee onboarding experience - titled "52 Weeks" - which provides a weekly story to new employees about Qualcomm's innovative culture.
An annual employee trade show, which showcases projects, technologies and products across the organization and is designed to educate employees about innovations from different parts of the company. This is both a physical trade show on the San Diego campus and a virtual trade show for remote employees.
A technology forum, called "QTech," which provides a platform for engineers to share new ideas and technical projects with all of Qualcomm, particularly the senior R&D team. The QTech Forum is a multiday event showcasing 30 new ideas, out of approximately 100 submissions each year, which are presented live to employees around the globe.
The Qualcomm Innovation Network (QIN), which is a way to post new ideas, get feedback on them, and fund the best ones. Two rounds of judging involving senior executives eventually produce winning ideas, which get further developed within the company. To date over 1,800 ideas have been submitted on QIN, with dozens of internally funded "startups" created as a result.

So, despite the lack of jetpacks in 2010, business leaders should not be pessimistic. Emulating the likes of great companies such as Qualcomm, they can harness "intrapreneurship," partnering with human capital professionals and other workforce managers to create a healthy, innovative work environment. That's an effort that should at least make the CEO's spirits - if not yet the body - soar to new heights.

i4cp's 4-Part Recommendation:

The Talk. Leaders can emphasize the importance of innovation by maintaining regular employee communication and by taking part in visible internal initiatives such as employee trade shows and idea programs. Internal communication specialists can play a big role here. Leaders can also promote feedback that comes from outside the company, such as customer input or the results of new product trials.
The Walk. Leaders can demonstrate their commitment to new ideas by setting a clear course for innovation and facilitating and rewarding idea generation through internal programs. The human capital function can create and spearhead these efforts. Without visible evidence from the top that employee innovation is, in fact, critical to business results and embraced internally, workers are unlikely to reach that conclusion on their own and are likely to take their good ideas elsewhere.
The Work. Leaders must acknowledge employees' need for challenging work by assigning tasks that fit well with their skills and their individual preferences. Leaders must also encourage employees to question how things are done and not punish people for making mistakes. Forced time away from their regular job to focus on new ideas sends a clear signal about what is important.
The Perks. Rewarding ideas developed internally, both in recognition and monetarily, also sends a clear signal about what is valued in the company. Intrapreneurship shouldn't be an exception - it should be adopted as a cultural norm if a company wants to grow and innovate at the same time.

P.S. If you want more innovative ideas for your company, members are invited to hear thought-provoking presentations such as Dr. Elkeles' at our Annual Membership Conference, which is less than a month away. Please join us! It's looking as though we will have a record turnout this year. If you can't make it, Tamar and I will be giving additional presentations on innovation this year at various conferences, such as the Training 2010 Conference & Expo.

Thou Shalt Not Poach Competitors' Talent ... or Maybe Thou Shalt!

Fri, 18 Dec 2009 16:20:00 GMT

Are corporate recruiters re-inventing the rules that govern their work when it comes to sourcing talent? Internal recruiting functions may be headed in that direction, suggest results of i4cp's new study on competitive recruiting practices. The figures show some companies are putting aggressive sourcing methods to work.

Traditionally, internal corporate recruiters have abided by what used to be called a "gentlemen's agreement." Actively seeking to poach top talent from competitors just wasn't done. At least it wasn't done overtly or regularly in most industries. But respondents to our study might be signaling the arrival of a new day in the quest for the best candidates and a new stage in the war for talent.

Such aggressive approaches could be the result of mediocre success among many internal recruiters. Our study shows that the largest percentage of respondents (53%) rated their firms only about average in recruitment effectiveness. A third claimed better-than-average results, but just 5% called their recruiting effectiveness "excellent."

Respondents who rely on their own internal recruiting functions to source talent agree that applying the kinds of assertive techniques that external search firms, or headhunters, sometimes use could help them improve their results. Nearly three-quarters say that, to a high or very high extent, headhunting methods increase recruitment effectiveness in certain areas. Almost as many respondents credit the techniques with helping target strategic talent. Other potential benefits include cost savings, faster recruiting results and even the ability to "send a signal" to competitors.

Doing what the headhunters do

One in four study respondents said that, to a high or very high extent, they advertise in local markets or regions of competitors. Also to a high or very high extent, 20% acknowledge that they actively source competitors' employees in key and/or skilled positions, and 10% say they contact competitors' employees directly.

Some organizations say that direct contact of competitors' staff is their means of seeking out passive candidates - individuals currently employed but who might be open to a job switch if an offer came their way. Jaime Elving, Project Manager of Executive Recruiting & Onboarding for i4cp member company PNC Financial Services, confirms her organization's use of personal contacts with employees of other firms. "Passive candidates are some of the people we're most interested in talking with," she says. "Even if the person our recruiters speak with isn't an actual candidate, he or she may be able to give us names of colleagues or friends who are interested." PNC also advertises extensively in local markets, achieving the dual goals of reinforcing its employment brand while also communicating its business brand.

Cindy Akins, Vice President of Human Resources for marketing research firm Millward Brown, observes that the economic downturn has made some employees particularly amenable to contact from competitors. "Companies have downsized, but they've held onto their best people. However, I think there's a feeling that those employees aren't necessarily that happy. So if you can reach in and get a couple of good people from your competitor, the industry knowledge is already there, and you may be getting someone who has client relationships and other attractive attributes. I think the feeling of dissatisfaction that a lot of employees have right now makes them more inclined to jump if they're contacted." She adds that "unfortunately that happens with our employees as well. We haven't lost many people, but we're worried about the situation in 2010." In fact, another recent i4cp study found many employers are already taking action to prevent increases in employee departures as the economy gains traction.

Things may get even more aggressive in the future as the economy turns around. "We plan to use these techniques much more," said 16% of respondents to i4cp's study. Twenty percent said they intend trying the approach either for limited regions or positions. Another 22% said they were discussing it, while 20% said they didn't know. That left fewer than a quarter of participants denying they'd use headhunting methods more in the future.

Some respondents express reservations about assertive recruiting tactics, fearing that they might trigger a bidding war for talent or incite competitors to "drop the gloves" and target their talent. Few expressed concern about the use of such techniques being seen as "bad form" for internal recruiters, although our research suggests that in Europe - at least in Germany - the question of ethics keeps some firms from taking action. The former head of recruitment for the Europe/Middle East/Africa region of a major business software firm noted that the "gentlemen's agreement" sensibility is still strong there. "We don't do outreach to our competitors' employees," he says, "but we do accept applications from them."

Making the most of methods used

While the study primarily concerned itself with the activities of internal recruitment functions, it also asked about external search firms and the use of social media for applicant sourcing. About two-thirds of respondents said they used outside recruiters "once in a while for certain key positions." Most often, companies turned to headhunters for help finding talent to fill senior leadership positions. And larger companies were more likely to take that route than were smaller firms. Gruppo Campari, a leader in the branded beverage industry, uses headhunters to help locate talent for specific roles across their Italian operations. "Usually high-level management or other specialized positions," explains Valérie Nizard, HR Global Product Supply Chain & Group Functions, who coordinates outside search-firm usage. She ensures optimal results for Gruppo Campari by performing a quick analysis when a requisition is made. "We do a quick assessment of a number of things," Nizard says. "Obviously, how much it would cost to use an outside firm, but also how easy we think it's going to be to fill it by doing the search ourselves. Based on that assessment, we decide which method will be preferable."

Relatively few companies say they're using social media to a large extent for recruiting purposes. But, among those that do, LinkedIn seems to be a tool of choice. "Once we've found people on LinkedIn who seem to be viable prospects, we contact them," says Millward Brown's Akins. "That enables us to avoid time-consuming cold calling." Although her company doesn't actively contact competitors' people, Gruppo Campari's Nizard says that her recruiters do call "when we want to seek applicants from another industry - the fast-moving consumer goods field, for example. In that case, we will check profiles on LinkedIn. If we find someone we're interested in, we will contact them directly to see if they're interested in pursuing anything further."

i4cp's 4-Part Recommendation:

Carefully weigh the benefits of using your internal recruiting function versus seeking talent through external search firms when vacancies arise. Gruppo Campari's use of a quick assessment to weigh costs and benefits drives strong decision-making about recruitment.
Consider using multiple methods of sourcing candidates in order to meet varied talent needs in your organization. "For a few select and very hard to find roles, we might still contact an outside firm," says Jaime Elving of PNC, "though as much as possible, we're relying on our own efforts now."
Evaluate social media, such as LinkedIn, as a support tool for more assertive types of outreach. Companies can look for likely candidates in such venues before they reach out, increasing their likelihood of finding candidates who not only possess the qualifications desired but who also are apt to fit well and succeed within the organizational culture.
Don't forget to measure your results, and make adjustments to your recruiting programs if needed. Go beyond metrics that simply reflect recruiting activity and look at the quality of the hires you're making. Are people fitting in? Becoming engaged, high-performers? Are they staying? If your answers are "yes," chances are that you're making good calls when it comes to your recruitment outreach.

Does Your HR Scorecard Help Your Organization Win?

Fri, 11 Dec 2009 17:56:00 GMT

The calendar has already turned to December and with it the promise of a new year. While in our personal lives a new year usually signals "New Year's Resolutions," our organizations practice another ritual: assessing the current year's accomplishments and setting goals for the coming year.

Although most Americans will abandon their personal resolutions before February 1st, organizations will toil, gnash teeth and soldier on to fulfill their "resolutions" because rewards are often tied to the results.

This helps explain why over the last two months there has been an uptick in two related trends: More i4cp member organizations have been seeking advice on how to best implement new reporting tools or how to maximize the value they get from existing tools. By "reporting tools," I'm referring to scorecards, dashboards, analytics reports and the like. Through assisting these members and from my own corporate experience, I have discovered some common stumbling blocks.

Stumbling Block One: Firms try to solve too many problems with a single tool

You've probably heard this one: "What is a platypus? It's a duck built by committee." Too often, reporting tools are also built by committee, resulting in instruments that lack focus and ease of use. Sometimes they're far too long. In fact, most are pages too long; one I saw was over 50 pages produced monthly!

Of course, the intentions of the committees are good. They want to ensure that there's a single place for managers to find the required data. But this causes other problems, including complexity and a confusion of information. In my experience, a typical HR-related reporting tool contains five distinct but interrelated types of data:

Employee-activity measures, such as termination or promotion rates.
Workforce demographic data, such as diversity representation.
HR functional metrics, such as the ratio of HR staff members to employees.
HR process metrics, such as "time to fill."
Qualitative metrics, such as employee engagement findings.

When a single tool has all of these different types of data rolled up into one place, it becomes confusing at best and, at worst, is disregarded by management as useless. I recommend that organizations use more reporting tools but ensure that each has a specific focus and purpose.

Stumbling Block Two: Firms can't measure what they want to, so they measure what they have

I sometimes say to people, "Tell me about this metric - how is it used?" Below are some common responses:

We really want to know X, but we don't have the data. But we can measure this tangentially related metric.
We use it because a specific stakeholder wants to see this measurement.
I'm not sure how it's used. We have always measured it this way.

Organizations should have good reasons for measuring and reporting what they do. Otherwise, they're wasting valuable time collecting low-impact information and they're diluting high-impact information.

Stumbling Block Three: Firms don't always know what kind of tool they need

I've used the term "reporting tool" to describe a range of different types of tools. These names for these tools are too often used interchangeably. This creates the kind of terminology confusion that drives organizations to create just one tool in an attempt to keep it simple. My experience is that it helps to clearly define and distinguish among terms such as "data," "metrics," "HR analytics," "scorecards," "dashboards," and the like. I'll be going into greater detail about these and other tools in an upcoming members-only webinar, but for now let's focus on scorecards and dashboards, two terms that are often confused.

Scorecards are management tools to measure performance, much like a baseball game scorecard. They typically use metrics from different functions to evaluate organization or work processes. They require a target or an objective standard against which scores can be measured. I think high-quality scorecards are limited to 3-7 measurements. The measurements are defined in the scorecard and state the purpose of the instrument.

A dashboard, on the other hand, is more like the speedometer and other gauges in your automobile. Dashboards are typically a source of business intelligence. A dashboard allows the firm to monitor trends and risks, and it may include "thresholds" for acceptable results. It should be limited to 8-12 measurements.

So, what's the major difference between scorecards and dashboards? If the scorecard goal is 10 and you have "scored" 15, you know you are "winning" - at least in regard to that measurement. On the other hand, if you are driving in your car and going 50 mph, is that good or bad? Dashboards have measures that, taken in context, tell a story but on their own are not immediately actionable.

I've found that these kinds of focused tools can be invaluable for helping organizations gauge and then improve their performance levels. As strange as it sounds, when you feel like the organization has become an insatiable data beast, this is a sign that you are on the path to success with your reporting tools!

i4cp's 4-Part Recommendation:

Conduct an assessment of your reporting tools. Is the purpose of all your tools clear? How effective is any given tool in terms of achieving its purpose?
Solicit feedback from the intended beneficiaries of the reporting tool via interviews or focus groups to ensure their needs are being addressed. Document their needs, concerns and hypotheses and review them on a regular basis (at least once a year).
Determine if your reporting tool is in sync with the tools of other organizational functions such as finance and marketing. Rather than compete with other staff functions for management's time and attention, partner to improve their reports by including employee-related data.
Identify a central coordinator for reporting tools. This resource should not be responsible for producing all of the reports but should be tasked with understanding the reports and implications, aggregating information, reviewing reports for consistency and distributing needed information.

The Evolution of Diversity: From 'The Right Thing' to Business Strategy

Fri, 06 Nov 2009 17:12:00 GMT

We love it when our interviews and our hard data support each other, and that's just what happened in our recent major study on diversity. If you haven't read it, I recommend my colleague Mary Ann Downey's TrendWatcher from early October, where she writes about the interviews she has done with various diversity practitioners.

Now the hard numbers are out, and they reinforce Downey's contention that diversity is evolving into a bottom-line business issue. Although we're still analyzing results, the initial data shows some fascinating trends.

Take, for instance, information about the business case for having a diverse workforce. Companies at all performance levels seem to agree that diversity is integral to their business strategy. But high-performing organizations are more likely to say diversity is also a way to "reflect customer base/community demographics" (26%) than are mid-range (12%) and lower performers (10%). And, in a kind of mirror image, high performers (6%) are less likely than mid-range (13%) and lower performers (18%) to say they concentrate on diversity because "it's the right thing to do."

Mary Ann Downey, who oversaw the survey for i4cp's Diversity Accelerator group, argues this is an indication of an evolution. Back in the latter part of the 20th century, companies were almost shamed into diversity by the emerging cultural movements that demanded women and African Americans be given equal rights. That percolated into the business world as "it's the right thing to do" to hire women and minorities.

As women and minorities gained more economic clout, the diversity driver changed for many organizations to the 1990s' mentality of trying to reflect customer demographics. As the first decade of the 21st century comes to a close, the driver has now morphed into diversity as part of the corporate business strategy that's becoming more embedded in corporate cultures and will eventually, Downey believes, become a major component of talent management - that is, a way to entice the best talent to come into the organization and to stay there.

Stan Smith, a recently retired partner of Deloitte and a member of the i4cp Diversity Accelerator group, describes the reasons behind this evolution from the right thing to the necessary business thing as an acknowledgment of reality. Organizations that are knowledge-based and high-performing "have had to face the fact that, whether they like the way the world is set up or not, they have to compete for people for whom [diversity] is a big issue," Smith says. "I think they say, 'Well, there's a business imperative here.'"

Demographic changes are here to stay. Women are in the workforce and aren't going to leave. People of all races, genders and beliefs are redefining success. To be successful at attracting talent, particularly those younger than 35, companies have to pay attention to these things as a way to discover what will motivate workers. That translates into a "compelling business need" to foster diversity "whatever individual managers think," Smith says.

That all sounds good, but the tricky part comes in embedding diversity into the organization's culture and fabric so it does become something more than merely "the right thing to do." The best strategy to create that link between diversity and the overall business goals of the organization, Smith says, is to educate senior management.

"That's what I tried to do at Deloitte and was pretty successful at it," Smith says. He suggests aiming at the highest-level person possible and converting that person so he or she is speaking up for diversity at all times. "You have to have believers in management," he says.

That can start with demographics - showing the shifting ethnic and gender makeup of the overall population. In other words, it helps to graphically illustrate to managers what the reality of global and U.S. trends is. The goal is to make senior management understand that "reality is not optional," Smith says. "Reality is reality and has to be dealt with."

After education comes accountability. Accountability needs to be built into the business plan, Smith says. That can start out simply as collecting data and visiting managers whose metrics don't jibe with corporate goals. The attitude toward those managers shouldn't be condemnatory or "gotcha." It should be in a spirit of helping. If that doesn't work, companies can move to more elaborate methods of accountability, Smith suggests.

The i4cp survey suggests that many high-performing organizations are doing just as Smith recommends by placing more importance on CEO commitment than on any other driver of diversity program success. They also place great emphasis on "framing the issue to be business-relevant" and "creating accountability" as ways to drive successful diversity in their organizations.

Like any evolution, it sounds easy but can be filled with fits and starts, barriers and glitches. There's seldom a fast, direct line to success. The process, Smith says, is "gradual unless you have the good fortune of having a chairman who gets [it]." And Downey says it's simply hard to do unless you and your management team truly grasp what diversity can do for your company.

i4cp's 4-Part Recommendation:

Educate managers so they understand today's demographic and market realities.
Create the links between diversity and the overall business goals of the organization.
At some level, hold managers accountable for managing diversity well.
Make sure diversity initiatives are integrated into, and measured via, broader talent management initiative.

What High-Performing Companies Are Doing Now to Retain Talent Later

Fri, 23 Oct 2009 17:51:00 GMT

There's a change in the wind. Most employers believe the poor economy has been key to employee retention over the last year or so. But now they're gearing up for a time when only solid retention initiatives will make the difference between keeping and losing key talent.

i4cp found that over half (58%) of those responding to their recent Employee Turnover and Engagement Pulse Survey said their organizations are "taking action today to prevent an increase in turnover when the economy turns around." In larger firms, the percentage was even higher, and in companies designated as high performers (according to self-reported revenue growth, market share, profitability and customer satisfaction), the number rose to over three fifths.

Why this sense that it's time not just to think ahead but to take action? After all, this same study showed that nearly three quarters of respondents said that turnover had stayed the same or even decreased over the past 13 months. It seems organizations are starting to worry that pre-recession predictions of talent shortages and waves of retirement may indeed follow on the heels of an economic recovery.

Some companies even believe that the reduced turnover they've seen is tied to some factors other than a poor economy and a tight job market. "Careful hiring, employee development and a high level of engagement" are helping to hold down turnover, said one respondent. Others pointed to "additional focus on hiring the right people for our culture," "a better rewards system" and "more stability with incentive plans." Essentially, these respondents are suggesting that the improvements in retention lie in better talent management.

i4cp's study asked, at the request of one of our member companies, "What are you doing now to avoid turnover when the economy improves?" A whopping 81% of companies are increasing communication to their employees, and 77% say they're increasing their emphasis on talent management, a term that encompasses a wide range of people-centered strategies. Greater focus on succession planning, leadership training for line managers, rewards-system improvements, and elimination of "toxic" managers were also among the efforts organizations already have underway. Of course, all are elements of an integrated talent management program.

When it comes to planned actions for the year ahead, respondents shook up the order a bit, ranking greater focus on talent management first, followed by increased employee communication, leadership training for line managers and succession planning. Compensation increases trailed other options.

High-performing organizations, in particular, have ramped up communication: 91% say they're using it to help retain employees. Such an interactive approach is affirmed by Dick Rogers, senior vice president of HR at i4cp-member company ConnectiCare, a health-plan provider. "We're a very transparent organization, and we share a great deal of information," Rogers explains. The company's intranet - called CareNet - provides a strong vehicle for maintaining employee contact. "Our intranet is very business-focused, though it has some social aspects, too," he adds. "We wanted to be sure that each employee has access to the information they need in order to help us be a top-rated organization." Employee recognition is featured on CareNet, too, publicizing workers' achievements, while reinforcing the value of performance.

Another i4cp member, PNC Financial Services, also leverages the power of communication. Jaime Elving, project manager for executive recruiting and onboarding, describes her company's New Employee Experience Program, a series of 27 email messages that go out to new hires during their first year on the job. "Messages might be reminders of key dates for the employee - time to sign up for particular benefits or a notice that they're now eligible to make stock purchases," Elving notes. "We also use the program to reinforce some of the ideas we worked to get across during orientation - underscoring our employment brand, conveying company values, and reminding new hires how they can refer others they know who are interested in becoming PNC employees."

The approaches taken by ConnectiCare and PNC demonstrate the power of an integrated talent management effort. Rogers' HR team actively and regularly communicates - using technology to share information, to further the company's business objectives, to provide recognition and to maintain contact with the workforce. At PNC, electronically delivered messages emphasize company values, encourage recruitment and describe available programs, while also addressing issues that speak to workers' individual concerns and well-being. In both companies' cases, multiple aspects of talent management are coordinated and work together to support employee engagement and retention.

i4cp's "4-Performance" Retention Recommendations:

Don't wait. Take steps today to avoid unwanted turnover when the recovery arrives.
Model high-performing companies' practices by putting the 3Cs to work for your organization: communicate clearly, comprehensively and continuously.
Deliver leadership training to line managers and supervisors - arm them with the know-how they need to carry out your company's retention mission.
Invest in succession planning - a favored tool for retention in high-performing firms. Find insights into starting or improving your succession programs in i4cp's Succession Planning Knowledge Center.

Does Your Firm Know What It's Getting from Corporate Giving?

Fri, 16 Oct 2009 15:42:00 GMT

Most corporate leaders say they believe in the social and business value of employee volunteer programs (EVPs), but it'd be nice if there were some good evidence. After all, we're living in an increasingly bottom-line world, a time when boards want firms to cut every unnecessary cost and reap a return on every investment.

The good news is that a study commissioned by the Pioneers, a nonprofit volunteer network made up of telecommunications employees across the U.S. and Canada, indicates there's a genuine link between volunteerism programs and corporate performance.

The Impact of Corporate Volunteerism study, which analyzed responses from 450 survey participants, found that a significant correlation exists between high-performing companies and the presence and support of a formal employee volunteer program. Moreover, EVPs are more likely to be seen as an integral part of the internal culture of high-performing organizations, based on self-report data.

However, financial data that directly quantifies EVP activity on the corporate bottom line doesn't usually exist in companies because it's not being formally measured. And even when it is tracked, the data collection is usually done inconsistently and is not integrated into strategic decision-making. So even though organizations may say that volunteerism benefits the company, if EVP outcomes are not tracked, the ROI clearly cannot be demonstrated.

This is an issue that employers need to be concerned about because interest in corporate volunteerism is increasing, partly due to its growing significance to employees (46.1%) and support from senior management (28.4%). There are two areas where companies need to improve: Most don't have formal programs to support such initiatives - such as a volunteer coordinator - and those that do fail to allocate adequate resources to support the programs in most cases.

This isn't an awareness problem. Among organizations that don't track EVP activity or its outcomes, most say they are aware that they need to.

The study also found there's a great deal of change to employee volunteerism initiatives these days. Activities are moving away from the traditional internal fundraising campaigns or once-a-year big, splashy events that involve large teams going out into the community to work on a one-day project. Instead, more companies are aligning themselves with nonprofit groups, allowing employees to leverage their core competencies by offering ongoing mentoring and assistance to organizations that otherwise don't have the expertise or could not afford to contract for professional services in areas such as accounting or IT.

Employers say that these sorts of initiatives are good for the community and also good for employees. Volunteerism is often looked at as a leadership development tool as well as an opportunity to build morale, says Kevin Engholm of Citi, where the talent management function encourages high-potential leaders to become involved in volunteer opportunities such as board work early on.

"We've seen an erosion of a lot of what we can expect and was once taken for granted in terms of the idea of lifetime employment, or assured economic prosperity - I do think people are looking for more transcendence from the volunteer work than their day-to-day life gives them, and so the opportunity to be part of something meaningful is significant. Maybe we're no longer in the golden age of giving but moving into a golden age of volunteerism," said Engholm.

PCL Construction Enterprises is an example of an organization that has mastered the ability to demonstrate the actual value-added impact of volunteerism on an organization. Employees report and track their volunteer activities through an interactive software program. Moreover, PCL leadership promotes volunteerism, and the organization regularly conducts employee surveys to gauge the impact of volunteer initiatives internally as well as externally.

"We know that we've been awarded contracts in instances where we were not necessarily the lowest bidder, but we got the contract because the differentiator in our bid package was how proudly we spoke of our commitment to community service and support. We recently got a 100-plus million-dollar contract partly because of this - they said that was impressive and they felt it displayed to them the sort of integrity we had and that it matched their level of integrity, and that was an issue that came up in their deliberations, and that's part of why we got the job," said Denny Dahl, director of HR.

i4cp's 4-Part Recommendation:

Define the goals of your organization's EVP; determine if it is more social or business-focused and if it aligns with the overall strategy.
Define metrics that are meaningful for your organization and develop electronic tracking to capture the EVP metrics.
Once metrics are in place, establish baselines for benchmarking the impact of corporate employee volunteerism programs.
Support employee volunteerism by providing the necessary leadership and the proper allocation of resources.

A New Era of Diversity: From Compliance to Business Impact

Fri, 09 Oct 2009 16:05:00 GMT

The year 2009 has been a watershed year for diversity issues in the U.S. From the inauguration of President Barack Obama in January to the Supreme Court decision in Ricci v. DeStefano, diversity issues have consistently been top of mind for corporations this year.

Given the changing landscape and rising interest among i4cp member companies, we adopted a comprehensive strategy to investigate organizations' diversity approaches, one that includes benchmarking practices, extensive interviews and literature reviews.

In April of this year, a group of such companies met in Atlanta to form a Diversity Accelerator group. This group brainstormed the challenges their organizations were having in approaching diversity. Based on the discussion and interviews with these members, i4cp developed a survey instrument to further explore these issues.

i4cp also interviewed a number of non-member companies to get a better understanding of the state of organizational diversity issues. Overall, the community of diversity professionals has been extremely generous with its time and insight. As a preview of upcoming reports, here is a quick look at two of the highlights.

Non-HR professionals are leading more corporate diversity efforts

Based on interviews, having professionals from outside the HR function lead diversity initiatives is a growing trend. We spoke with professionals who started their careers in sales, communications, labor relations, and marketing as well as the more traditional HR, compliance and legal functions.

For the non-HR leaders, there were several common themes. For one thing, this work is much harder than they anticipated but also more rewarding. The challenge comes in two forms: pace and building a common understanding. Leaders who have spent the majority of their careers within the business find the pace of diversity progress painfully slow and frustrating. They clearly see the benefits of diversity initiatives and the value such initiatives can bring to their organization, but they have come to recognize that showing business results can be elusive and people metrics such as representation move slowly. The reward is playing an integral role in changing the culture, complexion and impact of the organization.

Another theme from this group is that they tend to recognize the importance of consistently and constantly framing diversity issues in a business-relevant context. They're convinced that this approach leads to credibility, which leads to adoption and action.

One executive relayed the following story and advice. She was interviewing for a head of diversity position at another firm. After three interviews over a 13-month period, she asked the decision-maker point blank, "Is there something about my experience or credentials that is making you hesitate in making a decision to extend an offer?" The decision-maker welcomed the frank question and assured the candidate it was not her experience or expertise that was at issue but a desire to make sure that the candidate understood the organization's values and history and would be a good fit for the organization.

With this new understanding, the candidate talked herself out of the job but offered the following advice to the would-be employer: If that is the issue, then you need to find an internal champion. It is easier to develop the diversity expertise than to understand the organizational nuances, she advised. "By selecting an internal candidate, you will find a ‘diversity convert' to be both credible and highly effective," she said. This advice is potentially applicable to all organizations as a mechanism to get traction and achieve diversity goals.

Employee Resource Groups, or affinity groups, have become more common and effective

Employee Resource Groups (ERGs) - also known as Employee Networks or affinity groups - are corporate-sponsored associations that are united by the fact that members tend to share a similar attribute or interest. While open to all employees, traditionally ERGs were created around racial/ethnic or gender characteristics. Unfortunately, they developed a reputation of being mostly social in nature, and in some organizations they became viewed as a negative influence. These have been difficult legacies to overcome.

Today, the trend in ERGs is to diversify. For example, there are now groups associated with working parents, people with disabilities, veterans, new employees, and people from the same generation. They join the more traditional ERGs centered on issues such as gender, ethnicity, and sexual orientation. Another trend is for these groups to become more focused on business and career issues rather than social issues. Many have been transformed into business-relevant, action-oriented networks.

At financial services firm ING, an i4cp member company, the dollars spent to support the ERGs are achieving some of the highest return on investment of any people program investments, according to Laurin Cathey, head of multicultural affairs. ING has been recognized in many arenas for its work with ERGs, even winning the Catalyst Award in 2007. At ING, ERGs are critical to employee and leadership development. Each of the five ERGs is a branded unit that supports the ING external brand and the internal employee value proposition. Every unit has an executive sponsor, by-laws, elected officials and succession plans.

ERG participants and leaders benefit in various ways, including:

getting exposure to the ING leadership team
building annual business plans and budgets for their organizations
getting a chance to develop leadership skills in relatively low-risk environments
having added opportunities to demonstrate their ambition and develop skills
supporting ING's external outreach and community development.

Toy-maker Mattel is another example of an organization leveraging the business value of ERGs. Mattel recently used its African-American ERG group to assist with the development of a new doll line - So in Style (S.I.S.). According to Graciela Meibar, vice president global sales training and global diversity, the group served as an internal focus group, helping to name the dolls and making suggestions on packaging and other key features to market to a specific customer segment. It is through this type of contribution that diversity initiatives can make a true impact on the success of the enterprise.

i4cp's 4-Part Recommendation:

Understand and articulate the business purposes for diversity. Although the legal and ethical reasons for diversity should not receive short shrift, it often helps to know how diversity can be leveraged in areas such as marketing, sales, innovation and strategy.
Audit business processes and communications to ensure alignment with diversity realities. Organizations can quickly get a reputation of merely providing lip service for diversity unless their actions support their rhetoric. It is important for diversity to be perceived as "how we do business" rather than "on top of everything else."
Seek out internal business advocates and recognize their efforts in supporting the overall diversity strategy. Also, recognize managers who attract, select and develop diverse staff.
Where and when it makes sense, tap into the talent available in ERGs. These networks can have a positive impact on the business as a whole.

M&A Bounces Back: What Have We Learned?

Fri, 02 Oct 2009 16:16:00 GMT

Picture a graph of worldwide merger and acquisition activity since the 2000s began. The graph has a sharp slope up and to the right - until 2008, that is. Then, the economic collapse had a huge effect on M&A trends, bringing deal volume down from record highs and pushing deal values down even further. The credit market dried up, and companies couldn't finance a pack of gum, let alone a multimillion-dollar acquisition. The private equity firms that had created insane bidding wars while pushing strategic buyers to the sidelines packed up their piggy banks and went home to wait out the storm.

But just like forsythia signaling the start of spring, analysts are seeing a new crop of mergers and acquisitions poke their head through the snow left behind by the worldwide economic crisis. The panic-induced deals that were done during the meltdown are giving way to more strategic deals as healthy organizations find themselves surrounded by a vast array of good but financially injured companies, ready for the taking.

The hope is that these new deals will be more successful than the M&As that were hindered by the economic turmoil of recent years. Success rates have been far from stellar lately. A recent i4cp study of mergers and acquisitions showed that only one-third of companies said that their most recent merger or acquisition achieved its goals to a large extent, and only 9% said the goals were met completely.

As companies are forced to take a harder look at the bottom line for any potential deal, the people challenges that have doomed so many deals in the past are far more likely to present themselves now. Timelines are tighter, and demands to achieve synergies are stronger. In the meantime, so-called soft issues get pushed to the back burner to be dealt with later. Unfortunately, while they're back there, they burn and ruin everything.

What are some of these issues? Various studies have found that, following a merger or acquisition, productivity falls precipitously, engagement declines and companies bleed leadership. Any one of these problems can undo the benefits a deal is supposed to create, so why are companies historically so bad at meeting these challenges?

i4cp member company Johnson & Johnson faced these issues when undergoing the recent $17 billion acquisition of Pfizer's consumer healthcare division, the largest in J&J's history. According to Dottie Brienza - VP of Change Management, Communications & Education with Johnson & Johnson - the key for its successful integration team was to "encourage leadership alignment and invite employee engagement to positively impact organizational performance. You can't force alignment and you can't command engagement."

To meet this challenge, Brienza's team focused on six critical strategies:

Create a compelling, shared vision.
Build stakeholder and leadership alignment.
Deliver communications and build engagement.
Provide measurement and evaluation, and enable improvement.
Provide organization and resource planning.
Deliver learning, training and performance support.

One example of how Johnson & Johnson engaged business leaders in the new organization is how they presented all of the products the new business unit now offered, lined up in chronological order as they would be used throughout the day. The leaders saw this as they entered the launch event, and it gave them a visible, tangible look at what it was they were now a part of.

The importance of such alignment, culture change and communication efforts is also supported by other i4cp research. One major study, conducted in partnership with the American Management Association, found that more than 40% of high market performers said their most recent merger was highly successful in creating a unified culture, while only 7.5% of low performers said the same. That same study found an exceptionally strong correlation between maintaining proactive communication in the M&A process and having a positive corporate culture.

During due diligence, companies pore over financials, revenue streams, supply chains and physical inventories. But when it comes to people and culture, due diligence is often forgotten. While 60% of high-performing organizations performed a cultural assessment of the firm they last acquired or merged with, less than two-fifths of low performers conducted such an assessment. Having this type of information on hand for both companies during the due diligence process allows the integration team to identify potential challenges and prepare to meet them prior to day one. Waiting until after the deal is completed is a recipe for failure.

i4cp's 4-Part Recommendation:

Get key leadership positions filled quickly in an M&A, focusing on those leaders who are champions of the new culture. Employees will look to leadership for behavior models; confusion and discord at the top will not just trickle down but will flood throughout the organization.
Develop a strong, proactive communication strategy that is very clear about the goals and objectives to be achieved, as well as the strategy behind the deal. Giving all employees a set of common goals to achieve and common challenges to overcome can help unite the two cultures.
Pay special attention to compensation and benefit plans. These are the things that affect workers the most directly, and any disruptions and/or mistakes will only sour the outlook on the deal. Incentive plans, retirement plans and health benefits can be difficult to integrate, and cross-border deals only complicate this issue.
Create a dedicated M&A team that draws on talent from across the organization. By making M&A a core competency of the company, each successive deal becomes easier and more successful as lessons are learned.