Monday, May 31, 2010

People Skills Key to Strategy Execution? CEOs Think So...

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!


1 comment:

  1. Hi Keith

    Cannot agree with you more. Alignment is the key word. Probably for me a more important word than engagement, but which gets much less press. Success = alignment of human capital + engagement. But most just think you can start or focus on engagement and the rest will somehow magically fall into place. Kind of like setting off and hoping you'll get there by keeping your head down and working hard. And most - I think wrongly - still see engagement on the individual level. Engagement works only at the group or team level. What CEO's need to know and HR needs the tools to prove is a link between goals and gaps, direction and culture. Look forward to your follow up. You mind if I open it up for discussion in the UK? We have a dedicated (though early state) human capital forum filling with some of the best and brightest HR folk?