Are CEOs and CHROs Aligned on Leadership?

Greetings,

So an interesting question that I pose. On the outside it seems a no brainer. CEOs have a business strategy and they know that the need leaders to enable the strategy in the organization. CHROs know that they need to deliver leaders through recruiting and development that can execute the business strategy. Yet here we are in 2010 and we find the appearance of misalignment...so let's review the bidding.

In 2008, IBM's CEO Study titled "Enterprise of the Future" laid out five key areas for consideration that organizations needed to be successful. These areas included Hungry for Change, Innovative Beyond Customer Imagination, Globally Integrated, Disruptive by Nature, and Genuine, Not Just Generous. There was a realization in this study that organizations needed a new breed of leaders. This was made explicit in the 2010 study. In May, IBM's Global CEO Study was released titled "Capitalizing on Complexity." In the study, CEOs identified "creative leadership" as a core need of their organizations in the future. This quote from the study shares some of the implicit thinking behind creative leadership...

"Creativity is often defined as the ability to bring into existence something new or different, but CEOs elaborated. Creativity is the basis for “disruptive innovation and continuous re-invention,” a Professional Services CEO in the United States told us. And this requires bold, breakthrough thinking. Leaders, they said, must be ready to upset the status quo even if it is successful. They must be comfortable with and committed to ongoing experimentation."

Then in October 2010 comes IBM's Global Chief Human Resource Officer (CHRO) study titled "Working Beyond Borders." In it, CHROs continued to indicate the importance of developing leaders in the organization as captured in this piece from the study...

"Building an organization with flexibility and dexterity requires leadership with the creativity to adapt to a constantly changing environment. These leaders must be able to negotiate through a maze of differing cultures, complex inter-generational dynamics and varied communication styles...Creative leaders share a set of common characteristics that help them innovatively lead their organizations. They challenge every element of the business model to realize untapped opportunities and improve operational efficiency. Leaders grow their businesses through the exploration, selection and execution of diverse, even unconventional, ideas about the potential of new markets. They leverage new communication styles to motivate talent and reinvent relationships, both internally and across the supply chain, to create collaborative productivity. They focus on the bigger picture — the global marketplace — and how to lithely optimize the collective skills of their organizations."

So there appears to be alignment in the need for creative leaders or at least that CHROs read the CEO study. But then 2 of every 3 CHROs admit their organizations are ineffective at developing future leaders (See the attached graphic from the IBM Global CHRO Study). That is surprising (IBM thought so as well)...

So taking a different perspective based upon the CHRO study is important, because admitting that we are ineffective at leadership development has ramifications. First we are saying that the estimated $9.5B per year we are spending on leadership development is being wasted. Second we are saying that what is most important to CEOs we are not good at doing for them. Are these the messages we want to communicate to our bosses and organizations? Kind of doubt it, but that is how it came out...

Are CHROs and their teams ineffective at building leaders? Probably not...In an earlier post here titled "Leadership and Organizational Performance...Lack of Linkage" I raised the aspect that academic research had problems, for a variety of reasons, in linking leadership to organizational performance and by default leadership development programs have the same challenge.

So how do we adjust and meet expectations? For starters, as Human Capital Management (HCM) leaders we have to get serious about defining leadership capabilities needed to execute the business strategy and workforce analytics needed to measure whether we are being successful. In fact, the effort put towards measuring the impact leadership development should equal the effort we put into leadership development itself. Without the key metrics, we are unable to determine impact or make adjustments in leadership development programs...this is critical to changing the perspective we have set for the organizations we serve.

Nuff said...

Cheers,
Keith

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Human Capital Dominance...That is the Goal!

My Department of Defense experience has provided me depth and breadth in a number of areas over the past 25 years. One of those is the concept of Information Dominance and application to our work as Human Capital Management (HCM) Leaders. The formal definition for Information Dominance is captured in this issue paper and is located below:

"Information Dominance" - the degree of information superiority that allows the possessor to use information systems and capabilities to achieve an operational advantage in a conflict or to control the situation in operations other than war while denying those capabilities to the adversary. (Current - FM 100-6, Information Operations)

When we think to what we are trying to achieve for our organizations...strategy execution, competitive advantage, long-term growth, etc...this is applicable to our activities in HCM. What a similar definition of Human Capital Dominance would look like is below:

Human Capital Dominance - the degree of HCM and workforce analytics superiority that allows the organization leadership to use human capital capabilities to achieve an strategic or operational advantage in a competitive market or industry sector while denying those human capital capabilities to the competition.

As HCM Leaders...this is what our goal should be. Providing our companies Human Capital Dominance and Superiority. A number of challenges impact our ability to achieve this ultimate goal in positioning our organizations for future success. We discussed one last week in the defining of knowledge, skills and capability requirements to execute business strategy. Others from the study included the following:

1. Determining headcount and FTE capacity requirements by job assignments and location.
2. Sourcing and recruiting individuals.
3. Developing training strategies.
4. Retaining valued talent within the organization.
5. Evaluating workforce performance.
6. Determining strategies for reduction in force, redeployment and retraining.
7. Understand collaboration and knowledge sharing.
8. Developing succession plans and career paths.

Recent articles and studies indicate challenges are on the horizon that will impact Human Capital Dominance at our organizations.

A recent i4cp survey of senior executives indicates "Nearly 50% of business executives say that the pace of change is becoming hard or impossible to predict...and it appears many companies will suffer as change inevitably happens: almost 20 percent characterize themselves as poor or very poor at handling such initiatives."

This has a direct impact on at least three of the human capital challenges addressed above. Particularly collaboration and knowledge sharing. The most agile and adaptable organizations now and in the future know that one person like the CEO must depend of a collaborative network of leaders to embrace and execute in the complex world we exist in now. This then impacts retention of valued talent and succession planning to provide organizational leadership the right human capital capabilities to succeed.

A recent survey by Execunet also identifies items for consideration. In its annual 2010 Executive Job Market Intelligence Report identified the following trends among senior executives.

• 45% of corporate leaders considered or prepared to voluntarily leave their organizations in 2009
• 80% of HR executives are concerned about retaining executive talent in the coming year
• 46% of CEOs claim their résumés are ready to send to a recruiter right now


What these informative surveys tell us is that Human Capital Dominance, while the goal, is a challenge to achieve. Those organizations that can negate their importance vs. effectiveness gaps at executing these key human capital challenges and can establish strong workforce analytics capabilities (human capital information superiority) will have a greater opportunity to achieve Human Capital Dominance. These organizations will enjoy greater alignment of HC to strategy, greater agility and adaptability in executing strategy, and a greater competitive advantage...no matter what market or sector the organization decides to engage.

A storm is brewing...as the economy improves, HCM Leaders will get opportunities to really show what our profession's contribution is to the organizations we serve. Doing our best to provide Human Capital Dominance will speak volumes!

Cheers,
Keith

Talent Blinking...

So can we enable better informed talent decisions? That is the question...

George Anders in his Harvard Business Review blog this week, titled "Today's Biggest Talent-Management Challenges," shared his perspective after attending a Conference Board conference focused on talent management. During his attendance he came away with some relevant insights we have to consider...

1. We aren't sure what we're looking for.
2. Talent development is just a slogan, not a way of life.
3. We don't know how to get better.

The information and perspectives he shares would lead you to believe that we are unable to create simplified processes that enable talent decisions within our organizations. Talent decisions are so complex that we need complex processes to make them work.

Marc Effron of the New Talent Management Network thinks otherwise. Marc Effron's new HBR book "One Page Talent Management: Eliminating Complexity, Adding Value" will come out later this year. His premise is we add layers of complexity that slows the process down. And in today's hyper-competitive global economy where competitive advantage can last for seconds or minutes...as Human Capital Management (HCM) leaders we have to enable fast talent decisions.

So now you are thinking (I assume...because I did), how do we speed up talent decisions for the business. Let's take a page from Malcolm Gladwell.

Malcolm Gladwell's book "Blink" advocates where rapid cognition enables quick decisions (There are examples where it didn't work well). That theory is that people are able to make decisions in critical situations based upon sometimes very limited information. Talent decisions are both complex and critical...so how can we do it better?

One place where "Talent Blinking" is happening came from my experience in the United States Navy. I participated and saw the Navy's version of talent management and how these decisions were made in seconds, but not more than minutes...

My experience came at the Navy Intelligence Commander Sea Screening board. At that time, there were a number of talented Commanders in Naval Intelligence, but only a few sea duty opportunities for them that would make them eligible for Captain. Hence a sea screening board to review the available talent and make selection decisions based upon each individuals cumulative performance. This board was determining who could be successful in Naval Intelligence in the future.

The week prior to the board a team of board reporters (including myself) would review the performance records and look for gaps in information. Any gaps found were passed to the individuals to get the necessary information (In the Navy, the individual is responsible for ensuring their performance and award documents are sent in for these boards...so individuals own a part of the process and that is a good thing).

The following week a group of senior Naval Intelligence officers would start reviewing these performance records of individuals. These seniors participated in the process because of several things.

1. They had a personal sense of duty to make sure the best talent was being developed.
2. They had a responsibility to the customer, in this case the operational Navy, to make sure the best talent was available to support mission execution.

Prior to the board commencing, the board chairman (in this case it was the senior Naval Intelligence officer...the Director of Naval Intelligence a two-star Admiral) gave guidance on what he thought the future looked like and what type of performance areas carried the greatest weight for people to be successful.

Once the guidance was provided, board members divided the records up and reviewed each in detail. They would make notes on records such as smiley faces, up and down arrows, etc. Once completed the board moved into "The Tank"...a decision support center to make talent decisions...

In The Tank are chairs with five buttons hidden from sight (Allowed for anonymity and no influence from other participants) that signify values of 0, 25, 50, 75, and 100. At the front of the room were three large screens where the cumulative information of an individuals performance record was flashed on the screen...for seconds. That's right seconds...talent decisions within this environment were made in "Blink" speed.

While this selection process was Naval Intelligence leadership selecting Naval Intelligence talent, the larger selection process for promotions through the U.S. Navy is the same system with Air, Surface and Submarine officers making these decisions at the same speed. This group makes decisions in many cases without knowing the individual being discussed or their background. They are able to make critical talent decisions because there is a simple, common process and analytics to back it up.

What makes this work are instantiated processes and sound analytics that allow decisions to be made quickly. For organizations to be successful and overcome the things that George Anders references as continued problems in talent management, the processes should be as simple as possible and the analytics have to be robust and understood so quick talent decisions can be made and executed.

The moral of this story are few but important...

1. Keep the talent processes simple - the process in this case was long standing. Everyone understood it and their role in executing it.
2. Definition of Talent is in each Person's Mind - the definition of talent and an individual's ability to recognize it is based upon their current and future environment, own experiences, and organization view. These things shape what we want to see in talent that is positioned for future success of organizations.
3. Create a Talent Management Culture - Easier said than done I admit, but a number of organizations are successful at this. Marc Effron's 2010 State of Talent Management study indicates that it is possible. We have to leverage where organizations have been successful and apply it to the environment at your organization.
3. Talent Blink - identifying talent and what it should do next for continued development and. Organizational success can be a relatively stable and quick process. Yes...there may need to be some lengthier discussions about some talent, but leadership can make these important decisions if properly prepared.

So food for thought...

Cheers,
Keith

Signs of Economic Heating...A New Talent War Looming?

This week there were new signs that the economy is moving in the right direction. Great news for individuals, companies and the nation.

Those signs included a rise in the short-term interest rate by the Fed, durable good orders showed an increase over the last reporting period and consumer prices continue to be flat. These signs together and statements from the Fed that growth is currently more important that inflationary issues continues to bode well for the U.S. economy.

While these events transpired this week in economic news, this blog post from the American Society for Training and Development (ASTD) shows what may be looming for companies not just in the U.S., but globally. In the blog is reference to a Halifax Chamber of Commerce brief by the Nova Scotia Labour Minister Marilyn More. During her discussion she states the labour force will shrink by 18,500 jobs in 2014 and over 40,000 Baby Boomers are expected to retire leading to a significant labour shortage in Nova Scotia.

While this is not news to the Human Capital realm, we have been expecting this for sometime now, it has just been postponed by the current economic conditions, Ms. More states:

"...38% of the current workforce is undereducated and lacks the skills to move forward in a knowledge-based economy."

What is occurring in Nova Scotia is a microcosm of the larger human capital condition across the globe and the important understanding that as the economy does turn around in the U.S. and globally that a new talent war is looming. As the economy heats up and organizations move to develop new human capital capabilities to execute the business strategy...they will need talented and skilled knowledge workers to enable their business strategy. What this report indicates is that the available labor force may not be prepared with the right knowledge, skills and experiences to support the organization's business strategy.

Understanding these dynamics now will lead to organizations being either successful Talent Keepers and Talent Acquirers or net Talent Losers. It may be too soon to say how this will pan out as job creation is slowly increasing. There is potentially pent-up frustration in the workforce in many companies. Those that would have left found fewer jobs available to move to and those that would have stayed may not be happy with how downsizing affected them directly. If those factors are in your workforce (Annual workforce engagement and climate surveys will shed light here), preparing for the implications of a new talent war now is critical.

Human Capital leaders are in a unique position. As discussed in my last blog post, there is immense cash liquidity in organizations because that allowed flexibility. Companies are poised to make key decisions on whether to buy new talent (hiring or M&A), develop talent, or rent talent. Human Capital leaders can make recommendations to support these critical decisions, but not without:

1. The requisite human capital analytics

2. Understanding of the business environment

3. Knowing the required human capital capabilities to execute the business strategy

Understanding these three critical components of the organization will allow for decision advantage when it comes to human capital. Human capital decision advantage will make you and your organization a Talent Keeper/Acquirer and not a Talent Loser as the economy continues to get on track.

Cheers,

Keith

The Future of Analytics in Defining Capabilities

This past week, SuccessFactors, a business execution software company, acquired Inform, a leader in HR, Talent Analytics, and Workforce Planning. In the same week, Accenture released a report (http://bit.ly/cfZmWZ) based upon a survey of senior managers at blue chip organizations that stated:

"Weak analytics capabilities - ranging from siloed data, outdated technology and lack of analytic talent - are preventing organizations from gaining valuable insight that could lead to better business results..."

The importance of analytics, especially to human capital and talent decision making, is increasing. Successful organizations that are able to react with agility and adaptability in the future work environment will be those that know the strategic human capital capabilities to execute business strategy and know the capacity of the workforce to execute that business strategy. Organizations that can do this require a model to help identify capabilities and capacity and a workforce analytics capability that can analyze and create decision advantage from workforce data. When these two are combined, they form a powerful means to provide competitive advantage in a complex and changing global environment.

While many organizations utilize analytics capabilities to improve decision making in finance, sales, marketing, supply chain and operations, utilization of analytics in human capital and talent continues to lag. The same Accenture survey indicated that HR analytics investment would increase by 16%...putting it dead last in the survey.

IBM's 2009 report titled "Getting Smart About Your Workforce: Why Analytics Matter" indicated three overarching themes:

1. In today's difficult economic environment, workforce analytics play an increasingly important role in addressing strategic human capital challenges.

2. Workforce analytics enable HR organizations to take a more proactive role in driving business strategy.

3. The implementation of workforce analytics continues to be hindered by both technical and skill related issues.

In a global environment where the one true competitive advantage is an engaged workforce that drives knowledge creation and innovation, a workforce analytics capability to enable strategic human capital capabilities and capacity identification. This enables making informed decisions on what capabilities to buy, build or rent and the necessary resources to enable organizational success.