First, I want to wish everyone a Happy Memorial Day...please take time to remember why we get these opportunities in the United States.
Last week I discussed what I considered a "hidden message" in the IBM 2010 Global CEO Study - "Capitalizing on Complexity" because of the precipitous drop in CEO's view of the impact of People Skills as an external force which will have the biggest impact on their organizations. This week, I go deeper in to the study and the implications of CEO's thoughts and perspectives on strategic Human Capital Management (HCM).
While the thoughts of CEO's on the idea of creative leadership to deal with the complexity and ambiguity in their organizations got all the air play after the release of the study on 18 May, there are other parts of the study that provide a wealth of information on what your CEO is thinking that can help us shape approaches to HCM. One particular section is in the chapter discussing the reinvention of customer relationships. In the survey, IBM asked CEO's what was the most important dimension to realize their strategy in the next five years. What came out number one at 88% was "getting closer to customer." Makes sense...if you want to execute a strategy you will need to be closer to the customer to understand what is driving their most pressing challenges so you can develop solutions that help them overcome those challenges.
What came in second though is the important piece for me. With 81% of CEOs stating that People Skills are an important dimension to executing their strategy. So it presents a little dichotomy in that CEOs saw reduced importance as an external force having the biggest impact on their organizations, but they consider it the second most important to executing their strategies.
So the key opportunity for HCM leaders is having the ability to translate CEO strategy into clearly defined people knowledge and skills...something that is apparently not easy for our profession. In IBM's 2009 report titled "Getting Smart About Your Workforce: Why Analytics Matter," it surveyed Human Resource (HR) professionals. One of the key findings was the following:
"Defining the requisite knowledge, skills, and capability requirements needed for the execution of business strategy. Organizations must have a firm understanding of what skills and capabilities they have in-house, where gaps exist, and the best ways to fill those gaps through external hires or internal mobility."
The interesting piece from this study as evidenced by the graphic is HCM leaders understand the importance of identifying knowledge, skills, and capability requirements to execute business strategy...we are just not effective at it as represented by the 48% gap in importance vs. effectiveness. So when we compare data from these two studies...we find ourselves in a conundrum...
CEOs understand the importance of people skills to executing strategy as do we...but if we can't figure out a means to do it effectively we will become just another perceived resource drain on the organization.
All is not lost though. A number of organizations are really effective at defining necessary people skills to execute business strategy and develop the right sets of integrated human capital solutions. HP, Cisco, and IBM come to mind for me, as well as my own organization, the Defense Intelligence Agency (DIA). So we have organizations we can learn from and continue to show our own profession's skill in enabling business success.
In my next blog...we will go in to a Human Capital Development (HCD) model that can really start to shape your HCM ability to be effective in defining the necessary knowledge, skills and capability requirements to execute business strategy. Our profession depends on it!
I really look forward to IBM's bi-annual Global Chief Executive Officer (CEO) and Chief Human Capital Officer (CHCO) studies. This year's study titled "Capitalizing on Complexity" was like having to wait for the World Cup or Olympics since the 2008 Global CEO study,titled "Enterprise of the Future." During the time between the 2008 and 2010 studies the landscape in the private and public sector has changed significantly. Additionally, the studies have historically provided some great insights and perspectives in the thinking of two key groups that I am interested in understanding...CEOs and CHROs/CHCOs.
So first...hats off to IBM for another quality study and kick-off even where the results were streamed live over 24 hours. You can get to the recordings here.
This week there were a number of organizations that picked up and focused on the main message of the 2010 study and that was creative leadership. Austin Carr at Fast Company wrote a great article earlier this week highlighting the study results ("The Most Important Leadership Quality for CEOs? Creativity") as well as a Harvard Business Review (HBR) blog by Prasad Kaipa, Navi Radjou, Jaideep Prabhu, Simone Ahuja titled "How To Ignite Creative Leadership In Your Organization." Because of this immediate focus this week on the 2010 study...I think we can count on seeing a number of books and new vendor training that will tell and show us how to create armies of creative leaders. But for today's blog...I am going to focus somewhere else and the more subtle or hidden messages that global CEOs may have been communicating that we need to understand as strategic Human Capital Managers.
My interest is on the overall trends in external forces with the greatest impact on their organizations. Since 2004, when the first study was conducted, one of these factors considered by CEOs was People Skills. It was in a strong second place and had increased in importance, while maintaining its second place status from 42% to 48% between 2004 to 2008. In the 2010 study however, People Skills goes from 48% to 37% and fourth place on the list (Please see attached chart). Now rated above People Skills are Market Factors, Technological Factors and Macroeconomic Factors. The only significant hole in the study in my opinion is no discussion on why this has occurred. So we are left to hypothesize for now...
Trying to understand why this may have occurred, let's look at what has happened in last two years. Mass layoffs, whole companies disappearing, recession, and slow growth. Part of the surprise for CEOs is that massive cuts still left a workforce able to do more with less. This of course has led to trust issues in many organizations because of how this all transpired. This HBR Blog post by Tammy Erickson titles "Restore Trust with Employees? Forget About It" details challenges organizations will face.
Some questions that will need answering...
1. Did the shift in employee demographics after layoffs change CEO perspective on what is needed to be successful? 2. Did organizations during the layoffs actually layoff the right people...those without high performance and/or high potential allowing a more capable workforce to stay at the organization? 3. Did organizations have the proper alignment of people skills to strategic direction within organizations meaning that HCM had prepared organizations for the future events between 2008-2010?
What I hope is that the 2010 Global CHRO/CHCO Study will answer some of these questions...to me that is the hidden message to understand and learn.
So I am a huge believer in Strategic Human Capital Management (HCM). Taking a strategic approach allows for you and your team to play a more proactive and impactful role in positioning the organization for success. Yet I am the first to admit that in today's world of volatility, uncertainty, complexity and ambiguity (VUCA)...the ability to look strategically and plan for the Human Capital Capabilities (HCC) to execute the strategy is extremely challenging.
Because of VUCA pressures, the need for agility and adaptability are forcing time compressed strategy development and execution. During the recession, it appears strategy took a backseat to managing the organization's resources on a day-to-day basis. The external environmental factors were changing so quickly that survival was critical success factor...nit strategy.
You may have read one such proclamation in the Jan. 25 Wall Street Journal. "Strategy, as we knew it, is dead," argued Walt Shill, who leads Accenture's North American consulting practice. An article titled "Strategic Plans Lose Favor" goes on to quote him saying, "Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future."
So if HCM leaders buy in to this view...we should just sit and react. We can sit and wait for our customers to come and tell us what they want and how they want it and we can deliver on it. So if you believe that...you may be in the wrong profession.
Research by the Stanford Center on Longevity released in February that taking a strategic and "long-view" in HCM will be critical. The report titles "Population Age Shifts Will Reshape Global Workforce" indicates taking the long-view will be important based upon future workforce demographics. If we don't take a proactive stance to drive customers to think strategically about HCM and impact to future capabilities required to execute the strategy...then we are really not doing our job to support the organization's continued growth and mission accomplishment.
My virtual friend, Daniel John Roddy (HCM Leader for the Institute for Business Value (IBV) at IBM Global Business Services) stated it simply in a discussion on the One HCM Global Community on LinkedIn...
"But would you really want to recommend a major investment in building out your workforce in any country without understanding the social and economic implications of its urban development and demographic trends? I don’t think so.
And what if, in taking the long view, the emerging market workforce strategy itself could become a source of sustained competitive advantage? An input to strategy formulation, rather than only a work stream of the business execution plan?
In my view, firms hoping to differentiate on their emerging market workforce strategy will need to add three additional competencies to their current workforce analytics toolbox: population demographics, cross-cultural attributes analysis, and an understanding of, and vision for, what the United Nations has termed ‘Human Development’.
So actually, I don't think the quantification attempts in relation to human capital are the problem, more at issue is the typical reactive and short-term perspective we are bringing to the task.
Maybe I have been in China too long, but I have become a big believer in the importance in taking the long view of desired outcomes, in business and in life."
Taking the long-view is a critical competency for HCM leaders...one that we will need to continue to develop in order to lead our organizations in to the future.
Three weeks ago I was asked to lead the Defense Intelligence Agency's (DIA) Global Leadership Academy. I consider it an honor and validation for my efforts in the last three years to get this opportunity to shape the future leadership capability of DIA, the Defense Intelligence Enterprise and the Intelligence Community. But I also know that my new and exciting opportunity is because of the hard work of a team that I started to put together starting in May 2007. Today's blog post is to honor and thank them for being that "Once-in-a-Career" team.
As an unknown person once stated "A leader without true followers, is simply going on a walk." My current team, the Global Learning Solutions Group, exudes this statement. While I took "walks" from a mission and vision perspective over the last three years...this team took the walk with me and together we achieved amazing results. My team learned to depend on each other's strengths and when we needed to come together for big projects...we did so with the utmost professionalism and energy to ensure success.
The week of 26-30 April, we came together for possibly the last time for our annual professional development week where we continued to expand our knowledge and skills and determine the best ways to meet our customer's mission needs. That week we shared dinner and said our goodbyes...While we are a high performing team, we were also in many respects family. We looked out for each other and were always available to lend a hand when we needed to help each other whether at work or outside of it.
Scott Williams once said that "A great leader doesn't care about being the leader, but instead cares about the mission, the vision, and the people they are leading." While I make no pretenses of being a great leader...that is for my team to decide...I know that my interactions with each of them individually and collectively made me a better person and a better leader.
So I say thank you to a group of professionals that have not only enabled our customer's individual and mission success, but gave me the privilege to lead them on this journey and provide me this new opportunity. You will all have a special place with me as that "Once-in-a-Career" team...and family.
For those of you reading this today...I say cherish the time you have with your teams today...it could be a "Once-in-a-Career" team.