Strategy TrendWatchers

Social Media Goes to Work

Wed, 11 Aug 2010 14:07:00 GMT

With Facebook, Twitter, YouTube and other social media technologies virtually omnipresent lately, it's not surprising that many managers are wondering how to leverage these tools. Sales and marketing were the first to exploit these technologies, which present new ways of reaching customers. But the real trick is finding ways to improve productivity, collaboration, communication and learning within organizations using tools that increasingly look like mainstays rather than fads.

It turns out that not many companies have figured out this trick yet. According to The Rise of Social Media, a report that the American Society for Training & Development commissioned from i4cp, less than 20% of employees are using social networks, wikis, blogs, podcasts or shared media for work-related learning often or all the time. Fewer than 10% are using micro-blogs (Twitter, Yammer, etc.), virtual worlds or augmented realities to the same extent.

Okay, so most people aren't using social media for learning often or all the time. So what? Why should an organization be interested in any of this in the first place? A big reason is the influx of the Millennial generation (those born after 1981) into the workforce. This is a generation that would rather send a text to someone down the hall rather than speak in person, or even by phone for that matter. They cut their teeth on MySpace and soon graduated to Facebook, and if there isn't video of something available one YouTube, they're not convinced it actually happened.

The technology-aided social interactions these workers have grown up with represent a type of informal learning - one they are going to expect to find at their place of work. More than 80% of the Millenials in the study have used Facebook in their personal lives, and close to 60% have used YouTube. About 45% of Millenials said they interact with social media for learning at work for anywhere from 30 minutes to more than an hour per day. Only about a third of Baby Boomers said the same thing. Employees of all generations know these tools are going to become more important, as 83% percent of respondents say social media use for learning will increase over the next three years.

Another reason organizations should consider adopting these tools more widely is that it appears they work. The study showed that higher performing organizations are more likely to encourage the use of these tools than lower performers. Workers who use these tools for work use them for specific reasons, and many of these uses are correlated with higher market performance, including:

Finding resources more easily
Improving knowledge sharing
Fostering learning
Improving communications
Increasing participation in learning

While employers may not yet see the value in these tools for learning, employees do. More than three-quarters of employees said they found podcasts at least somewhat valuable for work-related learning and slightly fewer said the same about wikis. Blogs, shared media and social networks were considered valuable by around two-thirds of employees.

Understandably, though, many organizations don't wish to jump in to the social media fray without serious consideration. Besides not wanting to get caught up in a fad that may become obsolete, there are security concerns as well. More than two-thirds of study participants said they believe social media tools have the potential to create security or privacy issues at work. There are also concerns that user-generated content will not be accurate and may actually impair the learning process.

According to Elliott Masie, CEO of the Masie Center, "Companies still have some fear around social media, but employees know better. They know the ‘wisdom of the crowd' will quickly correct any misinformation. The company-employee disconnect on adoption happens with every new technology, and social media is following this same predictable pattern."

Others agree that the time has come to more fully exploit these new technologies. According to Tony Bingham, CEO of ASTD and co-author of the book The New Social Learning: A Guide to Transforming Organizations Through Social Media, "Historically, the learning community has stayed away from informal learning and social learning, and that is where the majority of learning is taking place. We now have the tools, and the catalyst, to engage them with that kind of learning."

i4cp's 4-Part Recommendation:

Implement a formal policy governing social media use. A well developed and executed social media policy can go a long way to mitigating many of the risks associated with social media technologies. Only 44% of Study participants have a formal policy in place. The policy should define the goals and purposes of using social media in the organization's day-to-day business.
Market the concepts to employees to boost adoption. According to Justin Mass, senior learning technologist for Adobe Systems, an i4cp member company, "finding early adopters who can showcase the benefits of these tools to other in the organization helps immensely with adoption." However, adoption cannot be achieved from the bottom up alone. There needs to be buy-in from senior leadership, as well as role modeling. Many executives are currently having success communicating with employees via blogs and podcasts.
Start from the beginning. Expose employees to social media tools from the get-go. Some companies use social networks as part of the on-boarding process. This way they are able to provide information about the company and give new employees a feel for the culture even before they set foot in the door on their first day. It also sets the expectation for the use of these tools throughout the employee life cycle.
Run pilot projects. Arguably the best way to foster use of social media technologies is to simply start using them. Find small targeted projects that can benefit from these tools, and use these experiences as success stories to gain both buy-in from leadership and adoption from employees.

For many more i4cp insights on implementing and managing social media in the workplace, look to our Internal Communication, Workforce Technology and Training and Development Knowledge Centers.

Beyond Efficiency: The Keys to Future HR Success

Wed, 30 Jun 2010 11:27:00 GMT

Maybe you're proud of the sheer productivity of your HR department. Your ratio of HR pros to employees is lower than the industry average, most transactional HR activities are delivered via self-service, and you have a finely tuned shared-services center. Generally speaking, your HR function is a lean, mean efficiency machine.

Good for you. There's just one problem. By itself, it's not nearly enough.

This is one of the findings from the Future of HR study conducted by i4cp in partnership with the Center for Effective Organizations (CEO) at USC's Marshall School of Business. We found, for example, that having a low HR-to-employee ratio is not in itself a great predictor of market performance, though that story changes for very large, commercial entities. So, while it's smart to benchmark such ratios to gauge efficiency, they seem a lot less critical than some other HR characteristics, at least for organizations with 1,000 or more employees.

"Efficiency is a given in today's world," says Jay Jamrog, i4cp's Senior VP of Research. "Maybe it gets you a seat at the table, like table stakes in a poker game. But your HR department had better have some other qualities in addition to that if you want to become a real player at that table."

Like what? Think about what your organization needs most from its leaders. One of those critical competencies, as another recent i4cp study shows, is the ability to manage change well. Our new study suggests HR should be able to support leadership in this area.

Here's one piece of evidence: Respondents from high-market performing organizations were about 30% more likely than their counterparts from lower-performing companies to report that HR "drives change management" to a great or very great extent. We also found a significant positive correlation between corporate market performance and HR's role in this area.

But the ability to drive change is just part of the equation. HR must also provide the kind of HR data required to support change management.

"There's often a lot of attention to measurement in HR that's about getting the data, running the right analysis and producing the right reports. But if you want to effect strategic change, you also need to have the right logic and the right processes. Not only do we want to tell a well-analyzed and well-measured story, but it needs to be a story that matters and it needs to be logically connected to the mission of the organization. No matter how good you are at this measurement stuff, if there isn't a connection to moving the organization, you run the risk of nothing happening," said CEO's Prof. John Boudreau, who co-presented an i4cp webinar on the subject.

A third characteristic of HR functions in high-performance organizations is that they tend to formulate a human capital strategy that's well integrated with the larger business strategy. This may seem like a no-brainer but the study shows that only a quarter of all respondents said this is true to a great or very great extent in their organizations.

"You want to perform better in HR?" asks Jamrog. "You need to get integrated and aligned. When we look at respondents who say HR is full partner in strategy development and implement, over half say such integration is strong in their companies. They bring a lot to the table."

Actually setting up the table rather than merely being present should be the ultimate goal for HR, says CEO's Prof. Ed Lawler. He describes this as coming in with ideas and input that shape strategy rather than being the reactive implementer. This is particularly true of organizations with a management style that relies on human capital for competitive advantage, Lawler says.

HR metrics are another key to success. Jamrog notes that there aren't significant differences between high and low-market performers in terms of the financial efficiency of HR operations, but high performers are considerably more likely to measure the business impact of HR programs and processes.

"Maybe you're never going to have perfect information on the business impact," says Jamrog. "It's impossible to be certain of cause and effect in a dynamic business system. But I think just making a serious effort to make these connections is a best practice."

i4cp's 4-Part Recommendation:

Collect the kind of data needed to manage change well. Much of this data should be regularly collected as a normal part of workforce planning. Another recent i4cp analysis found that - for strategic workforce planning - companies need more than just data on headcount, budgets, hires, terminations, retirements, etc. They should conduct SWOT (strengths, weaknesses, opportunities, and threats) analyses, determine key roles, and make headcount growth assumptions. They should also create a profile of the agility and resilience of their employees, their teams and their organization as a whole. This means having gauges of characteristics such as openness to change, persistence, ability to function under pressure, optimism, and technological skills.
Then help manage change. Where the data shows deficits, help build strengths. Johnson & Johnson, for example, has a change-management framework that includes creating a compelling vision, building stakeholder and leadership alignment, delivering communication, establishing measures of success, aligning systems to reinforce change, and enabling employees to learning new skills that they can apply at work.
Integrate HR strategies with larger business strategies. HR needs to have a firm grasp of the organization's principle business strategies and ensure that HR strategies complement them. If, for example, a major business strategy is to move into more global markets, then HR should have a strategic initiative for helping leaders develop a set of competencies to operate successfully at a global level. Likewise, they have a clear understanding of best practices in the areas of global staffing, global training, and global information systems.
Measure the business impact of HR programs and processes. It's fine to track data such as the efficiency of your recruitment function, gaining an idea of how many interviews it takes to make a hire, etc. But, ultimately, this type of metric isn't establishing a strong linkage to business success. It's more important to measure factors such as the ability to retain the key personnel who add to the bottom line or the degree of alignment between key business strategies and key HR strategies.

Managing Tomorrow Today

Wed, 19 May 2010 11:43:00 GMT

"The future ain't what it used to be," Yogi Berra once said.

This was the first line of one of our earliest TrendWatchers, published in 2000, on the role of futurism in the development of business strategy. As we publish our 500th TrendWatcher today and reflect on the past decade, many of us probably agree that Yogi's quip remains prophetic. Time indeed flies, and thanks to ever-evolving technologies, innovative business plans, mergers, etc., the future seems to hurtle toward us at increasing speed, bringing change almost overnight.

In the inaugural TrendWatcher, we observed:

Most HR departments are already in the midst of transforming themselves…HR is striving to become faster, smarter, and more forward thinking…Being fast also means becoming smart and creative enough to anticipate what's around the corner…By being able to analyze and anticipate trends; HR also becomes a better strategic partner.

Ten years and five hundred TrendWatchers later, we can say - without too much bragging - that the track record of i4cp's most widely read publication is pretty solid in terms of identifying and forecasting important human capital trends. In 2000, for example, we examined the controversial trend toward employee investment freedom. This was over a year before the Enron implosion wiped out employee retirement savings and a decade before employees in every sector saw their 401(k) s become "201(k)"s. We also looked at where the rising costs of healthcare might lead, noted that obesity was an emerging issue, examined the meaning of "digital capital," made observations on the virtualization of education, and predicted that the concept of corporate social responsibility would become more mainstream.

Building on that foundation, we're forging ahead with ever more rigorous and empirical identification of trends and strategies that will boost corporate performance into the future, with a specific focus on human capital.

So, how has HR matured over the years? That depends on perspective. From one point of view, there's been some real progress. As we reported in our last TrendWatcher, 63% of the respondents to a recent study say that their organization has a strategic business partner (SBP) role. That number increases to 91% in large (10,000+ employees), high-performing organizations (compared with 70% of their lower-performing counterparts).

But relatively few HR professionals in general - and SBPs in particular - are able to effectively "anticipate trends," as we phrased it back in 2000. That could, however, change over the next ten years. Dr. Jac Fitz-enz, founder of The Saratoga Institute and, many would say, the father of HR measurement, believes the HR profession is getting closer to realizing this ideal.

In his upcoming book, The New HR Analytics: Predicting the Economic Value of Your Company's Human Capital Investments, Fitz-enz lays out a four-step model to guide organizations in creating an environment where the HR function can truly drive business success.

"We don't manage the future well," Fitz-Enz explained in a recent interview. Managing the future well will become an even higher priority now that strategic business partners have moved from the realm of theory into practice. The ability to anticipate the future and take steps today to shape that future is a source of competitive advantage. "You can't change the past," Fitz-Enz says, "and given the time it takes to analyze the present, it is already too late to effectively change because the environment has already changed." Therefore, Fitz-Enz advocates for organizations to purposefully dedicate resources to "manage tomorrow today."

How is HR doing in terms of using data to help shape human capital strategies? Results of i4cp's recent Predictive Human Capital Analytics Survey show that organizations that focus on metrics tend to perform better and that all companies, high and low performing alike, believe they should do better at using predictive metrics to guide decision making. Only a quarter (24%) of all respondents report that their organizations make human capital decisions based on data to high or very high extent. That number breaks out to 29% of higher-performing organizations, compared to 14% of lower-performing organizations. Survey responses also show consistent gaps in terms of the extent to which organizations generate predictive analytics that shed light on human capital issues compared to the extent to which they think their organizations should do so.

What are the primary obstacles that prevent organizations from delivering predictive analytics? The survey found a three-way tie of intertwined issues that hinder organizations: Data is in disparate systems and it is a challenge to integrate, it takes too much time given other priorities, and many organizations do not fund this effort. What was not cited as an obstacle was trust in the data.

While it's clear that HR has made significant progress in the past 10 years, focus must now turn to predictive metrics in order to ensure that, in the future, HR's reality is the fruition of the effective SBP dream.

i4cp's 4-Part Recommendation:

Document your organization's hypothesis. The key to starting any predictive measurement strategy is to understand the organization's beliefs and expectations. Through documenting decision maker's beliefs you can develop hypothesis to test and verify with data. There are three key sources to obtaining organizational beliefs and expectations: business strategy documents, performance management plans, and asking management directly.
Be deliberate. Given the amount of effort to produce predictive measurements and the potential value to decision makers, it's wise to start small with one or two issues. Starting with your organization's hypotheses, determine the key issues that would assist management in their decision making process.
Tell a story. "Data without a story is just numbers," Jay Jamrog, i4cp SVP of Research says. Jamrog contends that HR professionals need to get better at telling the organizational story that is supported by data and not to just expect a series of graphs and charts will make an impact. This is even truer when you are considering the future and trying to look around corners. "The story needs to capture the executives' imagination and be compelling to cause action," Jamrog instructs.
Dedicate resources. Many organizations have the raw materials to produce predictive measurements but lack the will to do it. In the future, organizations that create a strategy and dedicate resources to predictive measurement will achieve a competitive advantage over rivals who are merely wishing for insight.

Real-world Application of the Strategic Business Partner Role

Wed, 05 May 2010 13:32:00 GMT

Fourteen years after the publication of Dave Ulrich's ground-breaking book HR Champions, organizations are still grappling with how to implement his recommended model for organizing HR to deliver optimum value. A key to that model is becoming a strategic partner, or what has come to be known as the creation of a strategic business partner (SBP) role. According to a recent i4cp study on the subject, Ulrich's proposal that organizations create a strategic business partner position has turned out to be challenging to both conceptualize and staff.

At the request of an i4cp member organization, we recently conducted a study to determine how the role of strategic business partner functions in high-performing organizations. For the purposes of the study, a SBP was defined as being "responsible for ensuring that the business or global function they support has the organizational capabilities, leadership and talent that are needed and to ensure that employees in those areas are engaged, motivated and rewarded to achieve both long- and short-term business objectives."

In essence, the effective SBP delivers value to the business through the work that they do. This is accomplished by providing strategic and operational advice, consultation and coaching. SBPs are expected to influence the senior leadership on critical organization and people-related issues and to help them achieve business priorities and objectives for which the business leaders are ultimately accountable.

Overall, 63% of study respondents reported that their organization has a SBP role. When looked at by organizational size and market performance, however, we found that 91% of large (10,000+ employees) high-performing organizations use a SBP role, compared with just 70% of their lower-performing counterparts.

But it turns out that most organizations are not placing all of the responsibility of the SBP function on one individual. Three-fifths of all the respondents reported that the SBP responsibilities were shared among multiple roles, and two-thirds of high-performing organizations reported distributing the duties among multiple roles.

Ed Lawler, Professor of Business at the University of Southern California Marshall School of Business and author of Talent: Making People Your Competitive Advantage, was not surprised by the i4cp study results. As he explained in a recent interview, there are distinctions between the "strategic partner" and "business partner" roles. The strategic partner role often resides with the head of HR and carries with it responsibility for providing "human capital information that will influence organizational decisions." The business partner function is more of an implementation role, and is responsible for "understanding the business needs to execute the human capital strategy." In large organizations it makes sense to distribute such responsibilities.

Our study indicates that a slight majority of large, high-performing organizations structure the SBP as a director role that reports to the SVP of HR (52%) and apparently acts as an HR leader for their business units. But, as we noted, there's no single standard on how to conceptualize or staff this position. Based on interviews with study participants, there are other models being used to implement a SBP role, and each has unique advantages.

For example, an SBP can be an HR professional who reports to line management with a dotted-line reporting relationship to HR. Our study shows that only 8% of organizations use this model, but Alliance One International, Inc., an i4cp member organization, is among them.

"If you want to assure alignment with the business, change the reporting relationship," says Mike McDaniel, SVP of HR for Alliance. The advantage of this model is that the SBP is part of the business unit management team that is directly responsible for the business outcomes.

In another model, a Center of Excellence (COE) develops the business-driven human capital strategy decisions and is advised by SBPs from individual business units. The advantage of setting up the role this way is that the COE gets direct feedback from the business unit when designing enterprise-wide initiatives. This creates a greater sense of camaraderie and forges an HR function that is more closely aligned with front-line situations.

While two-thirds of large high-performing companies have a job description and/or competency model describing the SBP role, many companies have yet to create one. In such cases, how do organizations select a candidate to take on the SBP role?

Part of the selection decision should be based on the traits of potential SBPs and how those traits fit the needs of the culture. A SBP should have "a real curiosity and interest in how the business makes money and [have] shown that they are open to change and able to learn," says Susan Layman, VP of HR at FT Services. Susan has successfully lead HR transformations in multiple organizations and says that these are the characteristics she looks for when filling SBP roles.

Our study indicates that, although there is no one-size-fits-all model for how the SBP role should look or be structured, the presence of a SBP does indeed provide real advantages for organizations. We recommend looking first at how successful organizations with similar needs have designed and implemented the role before deciding what structure will work best in your organization.

i4cp's 4-Part Recommendation:

Be committed to the SBP role and staff it wisely. Not every HR professional is cut out to be an effective SBP, so organizations should make a careful and thoughtful selection based on skill and business acumen. Organizations that give HR professionals the title of Strategic Business Partner without restructuring the work, communicating expectations, and providing the necessary tools are setting their SBP up for failure.
Balance and cooperation between the SBP and other HR professionals should be designed into the role. While the SBP may be at the "top of the food chain," as one executive described, they cannot be successful without the support of the operations staff. The performance of the SBP role should be evaluated by how well s/he utilizes the expertise of other HR functions and vice versa.
Create a succession plan for the SBP role. For many organizations, introducing the SBP role is part of an overall HR transformation; the selection and training is set up as a one-time event that may not be repeatable. Organizations should develop a career path for the SBP, including competency lists detailing the types of experiences and behaviors required to be successful.
Align rewards for the SBP that reinforce expectations of the new role. i4cp's SVP of Research, Jay Jamrog, believes that firms should use metrics that are tied to how the whole organization is doing in the marketplace, not just traditional HR metrics. Metrics should be "more outside-in than inside-out," he states. The key is to identify the human capital measurements that support the business and demonstrate impact, then reward the strategic contributions rather than the tactical or administrative efforts.

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.

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.

Soft Skills by Any Other Name

Fri, 20 Nov 2009 17:19:00 GMT

Many businesspeople don't like the term "soft skills." It seems too touchy-feely and fuzzy to have a hard and measurable business impact, and they worry that this phrase diminishes a critical set of business skills.

But they needn't be so concerned. By any other name, soft skills are just as crucial to organizational performance as any other skills brought to the table, according to new research by i4cp.

In our Identifying and Developing Soft Skills Survey, we found that three-quarters of participants in this study have identified a set of such skills - such as listening skills, persuasion, teamwork - that lead to successful performance, and the proportion climbs to 85% among high-performing companies.

"It's the soft skills that help you meet your people's needs so that they can feel good about going forward and meeting the business metrics," said Jamie Lothian, human resource manager - training and development with i4cp member SaskTel. "Soft skills are critical in leveraging the company forward in meeting your goals, objectives and core strategies."

Of course, such skills might be easier to sell internally if they go by some other name. When i4cp asked respondents by what label such skills are known, the most common answer was "competencies" (58%), followed by "skills" (22%) and "values" (11%).

Any way you name such skills, however, most organizations simply can't do without them. Among organizations that offer training or experiences in soft skills, most (73%) refer to them as "critical skills required for business success," and 81% of respondents in higher-performing companies say this. The better companies tend to teach more of these skills and are less likely to cut them when times are tough, our study indicates.

"When the economy started taking a turn for the worse, our president said, 'Do not cut the training budgets. We want you to make sure that you continue to develop our people,'" said Lothian. "Our executive is big on the development of people and has a strong belief in developing our management team."

So, exactly which soft skills are most commonly addressed via training or work experiences? At the top of the list are teamwork and the role of leaders, both of which are offered by 64% of respondents. Those are followed by coaching (60%) and time management skills (53%). Other top skills include listening, verbal and written communication, and project management. Just based on this list, it's clear these are the kinds of competencies that allow organizations to run well and help employees develop the social acumen it takes to succeed. Soft skills facilitate team effectiveness, leadership development, communication and the wise use of time and resources.

Soft skills are also an important part of any change initiative. According to Dennis Dahl, director of human resources for PCL Construction Enterprises, Inc., "If you don't know how to communicate a change initiative or gain buy-in with the use of soft skills, you're not going to be effective in anything you do."

Lothian agrees. "If you're the owner of a change initiative, you need to make sure that you're communicating the change often. The soft skill learning and development we provide really emphasizes the need for that communication."

And soft skills will likely become even more important in boosting the performance levels of younger employees just entering the workforce - that is, the Millennials. According to Dahl, soft skill training around performance feedback has become particularly important to his organization. PCL is an employee-owned company, meaning that managers are supervising their shareholders.

"Before, the rap on our supervisors was that if they aren't yelling at me I must be doing a good job," said Dahl. "That isn't a satisfier for our younger employees. They want feedback, they want it now and they want it to be very specific. They'll leave if they don't receive it."

PCL goes a step farther than most, not only measuring the need for soft skill training of managers and the impact of such training but also putting its money where its mouth is by tying managerial bonus compensation to improvements in those measures. "If someone is not behaving acceptably," said Dahl, "it's going to hit them in the bottom line. That tells them that we're very serious. I think you have to tie it to compensation."

The results of that commitment have paid dividends for PCL, not only in the gratitude of their employee shareholders but also in their employee-of-choice brand. This includes a jump from #77 to #28 on this year's Fortune 100 "Best Places to Work" list.

i4cp's 4-Part Recommendation:

Define the soft skills that are of greatest value to your organization. Look at highly effective employees and see what makes them good at what they do. Label such skills as "professional development training" or "communication skills training" if you want to avoid the soft skill stigma.
Establish an internal champion at the executive level. Since measurement can be elusive, it's best to have somebody who recognizes the innate value of the skills without the need to "prove" value.
But measure what you can; 360° feedback can help zero in on individual needs, and climate surveys may help an organization get a feeling for communication effectiveness, management competency and teamwork. Metrics can be tied to the compensation of managers.
Focus on the competencies most critical to your organization's or department's success. In some cases, teamwork will be key. In other cases, time management or written communication will be more important. Look at your performance needs and then prioritize accordingly.

Workforce Planning Is the "Missing Link" for HR

Fri, 13 Nov 2009 17:19:00 GMT

If your bead on the future is looking blurry these days, you're not alone. The global recession has thrown off a lot of organizations' expectations and predictions. So, it's little wonder that many are now striving to do a much better job of strategic planning for the future, especially in the area of talent.

Workforce planning, or WFP, is not a new process, but it is an increasingly critical and fast-evolving one. It's come a long way since 40 years ago, when it tended to go by the name of "manpower planning," but there's still a long trek before it reaches its potential.

Over the past six months, i4cp has conducted nearly two dozen workshops and webinars for member organizations, has interviewed over a dozen members of our WFP advisory board and has completed a comprehensive survey. All were designed to uncover what is driving the revival and evolution of WFP and what high-performing organizations are doing differently in this area.

While there are many reasons for doing WFP today (talent shortages, productivity needs, demographic changes, leadership development, engagement concerns, etc.), the prevailing reason for the renewed interest in WFP was expressed by one of i4cp's WFP advisory board members: "The downturn got the attention of management and the broader HR community. We found ourselves lacking in our ability to understand our strategic talent needs."

The good news is that WFP is trending upward. About 70% of the respondents to our survey said that they are doing some form of workforce planning in their organizations today, and 43% of those who are not doing WFP now plan on implementing this process in the future.

But that doesn't mean that most companies are doing it well. There are three types of workforce planning: operational, tactical and strategic. While most organizations with WFP are highly engaged in short-term operational workforce planning - which includes actions such as headcount forecasting and staffing requisitions - relatively few are highly engaged in long-term strategic workforce planning, which includes actions such as business planning, needs assessments and scenario creation.

But, of course, in today's tough markets, excellent strategy development and implementation is the name of the game. HR must play its role, and workforce planning is the critical link between the business strategy and HR strategy. That is, excellent WFP starts with a thorough understanding of the business strategy. Fully 97% of survey respondents who have highly or very highly effective WFP processes said that the main benefit of WFP is that it supports the strategy and business planning process. And over three-quarters (78%) of high market performing organizations responded the same way.

One member of our advisory board noted, "We work within the context of the strategic plan. We're interested in two components: identifying role segments and talents that need to be either acquired or downsized to be successful and gain a competitive advantage."

Indeed, our research shows that talent and strategy go hand in hand. Executing your strategy without the right players in the right positions is nearly impossible. Eighty-six percent of respondents whose organizations have very effective workforce planning processes cited critical talent as a key benefit of such planning.

But, unlike many other talent-related initiatives, WFP does not focus on individuals. Rather, it concentrates on groups, roles, regions, business units and, yes, trends. Organizations use WFP to find out which significant issues emerge when they're analyzed by various groupings. Planners want to know, "Is there a trend or pattern that is significant enough to warrant a specific workforce strategy?"

Of course, organizations are going to analyze by whichever grouping makes most sense given their business strategy. "We segment our population into four categories: strategic, core, requisite and non-core roles," noted one advisory board member. "We're trying to ensure that we have the right number and quality of people in our strategic and core roles. At the same time, we're looking for ways to deliver the expected outcomes of the non-core and requisite roles."

Based on such critical roles, planners use WFP to examine both the internal and external environments to determine the supply and demand for talent. Then they can develop a gap analysis that helps drive the HR strategy and talent management. In some cases, our research shows, HR operating plans grow out of these planning efforts, meaning that WFP actually drives what HR delivers. As one board member said, "It is an integral component to the annual HR offering, informing it in a major way." As such, WFP has the potential to serve as the "missing link" between major HR initiatives and top-level strategic decision-making in organizations.

Unfortunately, the wise and effective use of WFP continues to be the exception rather than the rule. Only about one in five participants in our major survey said their WFP processes are either highly or very highly effective. So what's holding them back?

One of the biggest challenges is that too many people outside the HR function see WFP as an HR activity being done by HR and for HR. To increase its chances of success, WFP needs a champion at the senior management level. And WFP itself needs to become the responsibility of others aside from HR professionals. After all, it is other managers who will actually implement the plans, and it is the whole organization that will derive the performance benefit.

i4cp's 4-Part Recommendation:

If your organization doesn't have a formal workforce planning process, then it should evaluate whether its long-term performance could be improved by one.
If your organization has or adopts a WFP process, determine how to make it strategic rather than just operational.
Make sure there's a champion for it at the senior management level, someone who understands its importance to long-term organizational success.
HR should provide the necessary support and data for WFP, but it must have the business partners necessary to ensure that plans turn into realities, the kinds that support strategic business goals.

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.