Influence and Impact Building a Business Case for HR Initiatives Human Resource Executive Webinar - March 2016

Transcription

1 Influence and Impact Building a Business Case for HR Initiatives Human Resource Executive Webinar - March 2016 Eva Sage-Gavin Vice Chair, Skills for America s Future, Aspen Institute Senior Advisor, Boston Consulting Group and G100

2 Agenda Building the Business Case The What: Think and Act like a CEO The How: Influence and Impact Outcomes: Stories of Transformation

3 What keeps CEOs up at night: 1. Human Capital 2. Customer Relationships 3. Innovation 4. Operational Excellence 5. Corporate Brand and Reputation Source: The Conference Board CEO Challenge Report 2014

4 The business case Boston Consulting Group Creating People Advantage Report 3,507 respondents from 101 countries participated, representing industries including industrial goods, consumer goods, and the public sector. In addition, we interviewed 64 HR and non-hr executives at leading companies around the world (12/2014) HR capabilities correlate with economic performance Analytics and key performance indicators (KPIs) give HR a seat at the table KPIs should link to strategic actions Globally, the leadership and talent management topics are the ones in the most urgent need of action 101 OVER 3500 COUNTRIES RESPONDENTS

5 "People" companies outperform the market average Cumulative growth rate of share price (%) People companies outperform the market average in eight out of ten years Companies that made Fortune's "100 Best Companies to Work For" list at least three times in the past ten years percentage points S&P Based on end-of-year closing prices 2. Average growth rate of companies' share prices in percent (weighted by 2001 share prices), dependent on sample composition for each particular year Source: 2012 BCG/WFPMA proprietary web survey and analysis

6 Economic influence is most critical in top six areas Topic in which most capable and least capable companies were compared The impact that the most capable companies achieve over the least capable companies in revenue growth profit margin 1 Delivering on recruiting 3.5 x On-boarding and retaining new hires Managing talent Improving employer branding Improving performance management Improving leadership development x 1.9 x 2.1 x 1.8 x 2.0 x 1.8 Note: Revenue growth and profit margin are defined as categories in the survey. For analysis, categories are transformed into category means; extreme categories are transformed into -20% or +20%. For each topic, we compared average revenue growth and average profit margin of respondents who chose "5" (high capability) against those who chose "1" (low capability) Source: 2012 BCG/WFPMA proprietary web survey and analysis

7 Leadership execution is the key to creating value. Making a company more valuable comes down to leaders who know how to mobilize. Leaders who know how to create a sense of purpose, engage their people, allocate their best leadership talent and provide sufficient resources and energy to the few initiatives that will set them apart from their competitors always moving with a sense of urgency and at a pace that leaves others in the dust.

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9 Increase Influence & Add Value Scout SCOUT Global Trends Future trends Scan SCAN Thought Leader Groups Impact Steer STEER Implement Outcomes

10 Key Roles for HR Leaders: Today External Business Leadership Ambassador of your employer brand Counsel for the Board of Directors Leader of Governance for People- Related Policies & Practices Thought leader for the HR profession Employee & Worker Advocate Steward and champion for employees Internal Business Leadership Business Partnership Company Strategy Talent & People Strategy Culture Team Leader Leader Architect Coach & Mentor

11 CHRO Capabilities Report Card Analytics and experimentation Strong consultative skills Business acumen How to partner and engage senior leaders Workforce management Risk management Execute the business strategy Talent management for the new world organization Transformation/change leadership Organization/culture shaping and mobilization Leadership architecting Source: CHReate Taskforce (chreate.net)

12 Chief Executive Officer view of the Role of HR HR is like the COO but focused on culture vs. operations. HR Leaders need to drive transformation changes in people processes that drive business strategy. HR s role is major in all aspects doesn t need to evolve it is there. Holds the people strategy that delivers business strategy. Helps the CEO with Board, Executive Team and Leadership Development Source: CHReate Taskforce (chreate.net)

13 Board view of the Role of HR Need to significantly expand the role and impact of CHRO with the Board. The ability to maintain the balance of supporting both the Board and the CEO is a unique but important skill for the successful CHRO. The CHRO needs to be more involved in the Governance activities of the Board key things can go wrong that affect the companies reputation and viability. Boards need Innovation & Technology Committee where the real work happens. The integration of talent happens there. Board should have a Change Committee which oversees all things worthy of Board discussion. Since most Boards are made up of people from a single society, CHRO must play role of global citizen to help them understand. Source: CHReate Taskforce (chreate.net)

14 The Road to the Board You need to understand the implications of the financials because money is the language of business. Financial understanding is crucial to knowing the context in which you are making decisions. If you have not done your homework and made it your business to understand the financials, you won t be able to offer relevant input at the table. - Dennis Zeleny, owner of Zeleny Consulting and speaker for the New York Stock Exchange s Executive Compensation Boot Camp. Everyone I talk with describes their company as going through transformation. The time for HR executives is just beginning. To change a company run it and change it fast you need new skills, new leaders, and new ways to mobilize and energize people. You need excellent human capital leaders, both in the C-Suite and the boardroom. Sandy Ogg, founder of CEO.works, a former operating partner for the Blackstone Group, and a current INSEAD board member. You have walked in the shoes of the management team. You can accelerate the organization s growth and solve problems if you have been a successful leader. The best directors have maturity and perspective; they can serve as mentors and also handle fiduciary responsibilities who better than a CHRO? We re providing that influence and guidance with internal and external decision makers. We have the ability to see the big picture and look at new, creative solutions. We are also experts at resolving conflict and oftentimes are trained negotiators. Those additional skills can be highly effective in the boardroom. Eva Sage-Gavin Source: Human Resource Executive Magazine; March 2016

15 2025:Capabilities to Enable a Winning Workforce We believe that in all of these Future State Scenarios, organizations will need a set of core Business Capabilities that enable their workforce to win. Regardless of where or how these capabilities are delivered, we believe Five Forces of Change have profound implications for the future and require organizations to think about these capabilities in a modern way Consistent with today s demand to Plan, Attract, Align and Engage the workforce, this new perspective meets organization where they are today AND gives them a runway to evolve their practices to win in the future. 4 3 Source: CHReate Taskforce (chreate.net)

16 How Business Practices May Shift From Today to 2025 FROM TO FROM TO Business Acumen Data Analysis & Decision Making Strategic Business Leadership Sense Making Sourcing & Recruiting Your workforce Talent Relationship Building Communities of Talent Change Management Agile Leadership Linear, fixed, hierarchical jobs Diverse Array of Personal Experiences FROM Employment Brand TO Employee Experience FROM Rewards Management TO Rewards Personalization Organization Development Employee Engagement Team Collaboration Corporate Social Responsibility Culture Orchestration Community Engagement Community Collaboration Providing Purpose & Meaning in Work Managing Performance Position & Org. Mgmt. Learning & Development Dialogue that Aligns & Drives Performance Work-Driven Network Management Community Development & Boundaryless Careers FROM TO FROM TO Fiduciary Governance Fiduciary Leadership Employee Relations Employee Matters & Legal Compliance HR Technology Management Employee Technology Experience Contact Center Employee Services Source: CHReate Taskforce (chreate.net)

17 New roles for HR Expert in new ways of working Facilitator of virtual team effectiveness Developer of all types of leadership Expert at talent transitions Talent & community engager Corporate social responsibility leader Talent scout & talent matcher Talent developer Talent platform manager Talent contract manager Life coach Forecaster of skills, driven by technology Effective adoption of productivity technology Talent data/analytics modeler, & decisionmaking Culture advocate & brand builder Connector of employee purpose to company purpose Source: CHReate Taskforce (chreate.net)

18 Transformation stories

19 Transforming Culture: Social Capital Do more than sell clothes

20 Transformation impacted Gap Inc. bottom line Transformation Launched $1.88 $2.33 Earnings per share $0.93 $1.05 $1.34 $1.58 $1.56 Employee engagement Turnover

21 Gap Inc. Industry Accolades

22 Closing thoughts Spend time on external trends and potential disruptors Scout, Scan and Steer to add business value Solve unsolvable problems: No problem without a solution Good ideas from everywhere Develop your Personal Board of Directors Bring others with you