Global CEO Studies...A Broken Record

Greetings,

At the Davos World Economic Forum, PricewaterhouseCoopers unveiled the findings from their 2012 Global CEO Study.

I really like to look through these kinds of studies to get a sense of what CEOs and other C-Suite leaders are thinking. I am always particularly interested in what they see as talent and leadership challenges or priorities they want to address.

The PwC study is no different in that respect.

When asked "Have talent constraints impacted your company’s growth and profitability over the past 12 months in the following ways?" 1,258 CEOs responded with the following:

43% - Our talent-related expenses rose more than expected
31% - We weren’t able to innovate effectively
29% - We were unable to pursue a market opportunity
24% - We cancelled or delayed a key strategic initiative
24% - We couldn’t achieve growth forecasts in overseas markets
24% - We couldn’t achieve growth forecasts in the country where we are based
21% - Our production and/or service delivery quality standards fell

CEOs planned to attack these challenges primarily by three areas...

- We plan to move experienced employees from our home market to newer markets to circumvent skills shortages
- We plan to develop and promote most of our talent from within the company
- We plan to primarily recruit local talent wherever we have market needs

Additionally, not surprisingly, CEOs are looking for better information...this section of the report gives great insight that CEOs are looking for the right information to make informed decisions about their people/talent investments.

"CEOs are seeking a better understanding of the scale and effectiveness of their investments in talent. Productivity and labour costs remain important measurements; these are the tools investors, lenders and businesses use to benchmark progress (or lack of it). They are largely standardised in many industries, and thus easy to implement.

Yet for many CEOs, those tools aren’t enough. They’re very good at telling a CEO how the business is performing today relative to its peers, but not at indicating whether the organisation is investing enough in employees to generate future growth. Such measurements cannot isolate skills gaps, and struggle to identify the pivotal jobs that drive exponential value; they do not measure employee engagement or team performance, both of which are so critical for investments to foster innovation to bear fruit. These measurements are much harder to make, which is one reason why they’ve been neglected and why today, so many CEOs are frustrated with the issue of talent."

As my last post discussed...the people and talent challenges that many organizations face are very similar. That point continues to be driven home in CEO studies like this one from PwC. Year in and year out we see the same CEO perspectives...

If we were doing our jobs...would we continue to see these challenges over and over? Is the world we are in going to always be like this where our profession makes little progress in solving the problems that our leadership continues to see?

I recently had a discussion with HR professionals in an organization and the discussion turned towards business strategy. One person shared they didn't know or understand the business strategy in their organization...so let me be frank...if you don't understand your business strategy and how strategic people and talent capabilities support its success...you shouldn't be surprised to find the same things coming up over and over again...

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Google+, Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Google+: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the SAIC.

Creating Talent Champions...

Greetings,

I had a very interesting conversation this past week with a Senior Vice President of Talent at a Fortune 500 company. The intent of the conversation was to get a good understanding of how their organization developed talent and integrated it into the overall strategy of the organization. We focused on leadership development specifically during our conversation, but it was obvious that this organization's culture had the concept of talent and development embedded in its DNA.

As I reflected on that conversation this weekend, it became apparent that this organization didn't get to this point overnight. It is unlikely that it started with Talent Champions, but over time has created them and ingrained it into their culture.

The key for organizations in this new talent war is to create Talent Champions. In this new war for talent it is not just a Human Resources (HR)/Human Capital Management (HCM) or a line responsibility. It is a shared responsibility

Why is this important? Corporate Leadership Council research titled "Creating Talent Champions" explains...

"While few business leaders are Talent Champions, most business leaders have the skills necessary to become Talent Champions. HR’s role is not to develop a new set of skills in business leaders but instead to help business leaders apply their existing business skills to talent management. When accomplished, HR can improve business unit revenue by as much as 14%."

Additionally, CLC indicates that the HR/HCM-Line partnership accounts for 68% of talent management program effectiveness.

It is not about creating talent management programs for the sake of having talent management programs. They need to be connected to business strategy and positioned where line managers can leverage the programs to successfully meet their business needs. In many organizations, the partnership piece is missing. To get to that partnership requires healthy HR/HCM engagement. Leading and educating line managers that also helps build a climate and culture that creates talent that flourishes.

Our organization's success depends on it.

Cheers,
Keith

J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the Department of Defense or the Defense Intelligence Agency.

Asking the Right Questions About Talent

Greetings,

I follow Scott Anthony, a Managing Director at Innosight Ventures, a venture capital and equity firm. Scott is a consistent contributor to the Harvard Business Review blogs focused on innovation and recently discussed his engagement with a company. The gist of the blog post "The Power of the Right Question" was just that reframing or asking a different question can lead to breakthrough innovation. He realizes though that it is not easy...

"Coming up with the right question isn't easy. There may be an "a ha" moment in the shower, but many times the right question comes from conducting substantial market research, combing analogous industries for inspiration, holding structured discussions with experts, and having thoughtful discussions about a company's real strategic constraints and objectives. Sometimes these efforts feel frustratingly disconnected with the charge of creating an innovative growth business, but the right framing can make the right answer self evident."

The same perspective that Scott discusses is extremely applicable to our work as Human Capital Management (HCM) leaders. If we don' ask the right questions...how can we possibly know what talent we have, what the talent is doing and not doing, and what the talent should be doing...

We historically ask questions that we are able to answer because we don't want to appear that we don't know what we are doing in HCM activities. The kinds of questions that we usually ask are things like the following:

- How many people have been trained?
- How many new hires have been made?
- What is our attrition rate?

In many respects, these are good questions that deserve an answer, but do they get to some of the previous questions about talent? Yes...a loaded question that the answer is a resounding NO! We need to ask the really informative and hard questions like Dr. Bradley Hall's questions from his book "The New Human Capital Strategy."

- Are our executive teams more effective this year than last year?
- Are those in key positions outperforming their peers in competitor organizations?
- Has workforce performance improved since last year?
- Are we managing our human capital more effectively than last year?

These type of questions generate a whole different perspective on the organization and talent. These kinds of questions generate a different approach to what we do. These kinds of questions drive a different set of metrics to focus upon...not the easy metrics, but the ones that really determine the impact that our collective efforts have in our organizations.

Asking the easy questions is just that...easy. If you aren't asking the questions that get to the impact of human capital initiatives on talent and the business strategy of the organization...then we aren't doing our job. We are doing what is easy...

Nuff Said!

Cheers,
Keith

Twitter: JKeithDunbar
LinkedIn: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/

The opinions or views expressed here are mine alone and do not represent the views of the Department of Defense or the Defense Intelligence Agency.

In My Business...This is an Indicator! A Talent Indicator...

Greetings,

The United States Intelligence Community has suffered through a number of surprises. The Japanese attack on Pearl Harbor created the Intelligence Community and other world events like the the North Korean attack on South Korea and the 1973 Yom Kippur War helped precipitate the modern Indications & Warning system used to help limit strategic surprise. The goal? Identifying a set of critical indicators to prevent or negate strategic surprise.

Indicators are important...really important. Indicators allow us to try and see patterns in the events that are occurring around us and that may have a significant impact on our organizations ability to execute business strategy. Indicator is defined in this document from the then Joint Military Intelligence College titled "Indications Warning Terminology."

"Indicator: A generalized, theoretical statement of a course of action or decision that is expected to be taken in preparation for an aggressive act and that can be used to guide intelligence collection resources."

Why should you care about this in relation to your organization's talent? A recent query for the term "Talent Acquisition" on LinkedIn "indicates" an interesting dynamic taking place...there are a lot of companies gearing up for a new War for Talent. Looking for these types of "Talent Indicators" is important to track. This one for "Talent Acquisition" would tell me my competition is preparing for "an aggressive act" like the definition indicates. If you were preparing to start hiring...seems a critical indicator would be hiring Talent Acquisition positions in preparation for it. This would not only tell you who is hiring, but also lead you to what talent segments an organization is targeting. This can help you focus retention efforts within the organization if they are critical to your organization's success.

This concept of Talent Indicators is not all that strange. The concept of metrics and dashboards are intended to do the same thing...provide you the ability to make proactive, strategic decisions before they turn into strategic surprise...the new War for Talent that is upon us will demand it.

Cheers,
Keith

Twitter: JKeithDunbar
LinkedIn: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/

The opinions or views expressed here are mine alone and do not represent the views of the Department of Defense or the Defense Intelligence Agency.

Playing Talent Mad Scientist...

Greetings,

I recently came across a very cool game called Phylo. It was part of an article in Wired Magazine titled "Computer Games Makes You a Genetic Scientist." The intent of the online game is to take advantage of the prowess of the human mind's pattern recognition capabilities. As the article states:

"Phylo players move colored squares representing the four nucleotides of DNA to find the best alignment between snippets of DNA from two different species. These particular sections of DNA, called promoter regions, determine which parts of the genome end up as traits in the organism, whether it be blue eyes or heart disease."

The connection of this game to our role as Human Capital Management (HCM) and Talent Development leaders is interesting...Just as Phylo is leveraging the human ability to see pattern's, we should be doing the same. Looking for patterns in the volatile, uncertain, complex and ambiguous (VUCA) environment is difficult, especially when it is focused on talent that drives our organizational success. Driving to success in this type of VUCA environment, while difficult, is not impossible.

Dr. Charles Dwyer of the University of Pennsylvania and the Aresty Institute's Leading and Managing People Academic Director at the Wharton Business School stated recently at a session I attended, that leaders need to think strategically and systematically. This is no more apparent than it is now in relation to acquiring, developing and retaining talent to drive business and mission results. Effective HCM leaders are able to identify strategic capabilities needed to fuel innovation, agility and competitive advantage. They are able to understand and see patterns in their current workforce capacity in respect to the identified capabilities. With this knowledge, they are able to make informed engagement with organization leadership to recommend the right approaches in enabling Buy, Build, Rent and Partner decisions.

When I visualize this activity...I see a Talent Mad Scientist...identifying the basic talent DNA building blocks for organizational success. Attempting to find the right pattern that will make an evolutionary leap in capabilities for the organization...

When you think of the Talent Mad Scientist...what do you see?

Cheers,
Keith

Twitter: JKeithDunbar
LinkedIn: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/

Importance versus Effectiveness Gap...Closing...Slowly

I attended and presented at the Human Resource Management Institute 25-27 July. It was a great opportunity to engage with senior HR executives representing the areas of talent, diversity, learning and compensation.
It also presented the chance to validate of key findings from the IBM 2009 study I have referenced in previous blog posts.

I asked the group, using Turning Technologies audience response system (great tool to engage the audience and collect data), to rank the nine human capital challenges from the study by voting for their top three challenges.

The voting came out this way...

#1 - Defining skills, knowlegde and capabilities to execute business strategy.
#2 - Developing succession plans and career paths
#3 - Sourcing and recruiting individuals.
#3 - Retaining valued talent within the organization.

I then asked the group to rate their organizations on a 1-5 scale regarding importance and effectiveness....

1. Defining knowledge, skills and capability requirements for executing business strategy is an important need for my organization.

2. My organization is effective at defining knowledge, skills and capability requirements to execute business strategy.

Importance rated a score of 92 out of 100 and effectiveness rated 51 out of 100. This provided an Importance vs. Effectiveness gap of 41%. This compared favorably to the IBM study gap of 48%, but still a pretty big gap.

So what does it mean? For starters, I was pleasantly surprised at what was #1. While the other eight human capital challenges in the study are important, organizations will have a difficult time negating these challenges without knowing what human capital capabilities are required now and in the future.

My concerns continue that there is such a wide gap between importance and effectiveness. There could be some good reasons for it. There has been such volatility and uncertainty since the financial meltdown starting in 2008, that attempting to identify skills, knowledge and capabilities was a bridge too far. Many organizations were making strategic decisions on a week-to-week and month-to-month basis and couldn't focus much more strategic than that. That kind of environment is not good for anything other than reacting.

The message for Human Capital Management (HCM) leaders...now is the time to position your organizations for future success. A number of HCM leaders of prominent organizations are successful at defining the workforce capabilities needed for their future strategy...IBM, Cisco, and Google are a few. If you don't spend time with your customers understanding where they want to drive the business and culture, you have a difficult road ahead. If, on the other hand, you have a sound approach in place to work with organizational leadership to define current and future needs...you are ready to play an important role for your organization and our profession.

Cheers,
Keith

Twitter: JKeithDunbar
Linkedin: http://www.linkedin.com/in/jkeithdunbar
DNA of Human Capital: http://dna-of-humancapital.blogspot.com/

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

CFO = Value Integrator...CHCO = ?

IBM released their 2010 Global CFO Study last week. Another quality product that points to some interesting things that CHCOs, CHROs, CTOs, and CLOs should know and understand in working across organizations specific to Financial Capital and Human Capital. My perspective is this...we need to understand explicitly what is happening in the broader organizational enterprise to continue to support it and enable decision advantage in respect to human capital investment decisions.

The first thing that jumped out at me is this statement in the CFO study:

"Our research, however, also points to a bright spot – one group of Finance organizations with a particular combination of capabilities stands out from its peers. These organizations – which we call Value Integrators – are more effective in every area assessed, with significant advantages in managing enterprise risk, measuring and monitoring business performance and driving insight from information integrated across their companies and governments."

As HCM leaders, we should play a role in understanding enterprise risk in respect to human capital decisions across the global enterprise. The human capital investments required to identify, acquire, build and retain human capital pertaining to business decisions to enter new growth markets or expand mission capabilities involve human capital management (HCM) risks. For example, can we develop the human capital capabilities required to move into that area (global or functional)? We also play a role in measuring and monitoring business performance based upon the human capital investments we ask the organization to make...we should be able to make those value-add linkages. Finally driving insight from information integration is a domain for us. How do we take the myriad of human capital information and data available to provide decision advantage to our organizations in making HCM decisions?

So with CFOs as "Value Integrators," I see a similar role and opportunity for HCM leaders. To continue to learn as a profession, we need to read these type of studies and understand them and their implications to our profession. How can we learn from this to position our HCM leaders in these same organizations as a similar "Value Integrator?"

Larger Role for CFOs

The study also indicates that CFOs are playing a larger role as an advisor and decision-maker in the organization not only in their traditional areas, but also influencing other enterprise-wide decisions. If you look at the embedded graph in more detail...it lays out a number of areas where the CFO is playing this role to include:

- Enterprise Cost Reduction Management
- Selection of Key Performance Indicators
- Capital Asset Manager
- Risk Management
- Prioritization of Resource Management
- Strategic Revenue Planning
- Business Model Innovation
- Information Management Strategy

I think our profession can be the trusted advisor on HCM aspects of these areas in enabling decision advantage. While we play a direct role in some of these areas, we likely have our own HCM areas to influence enterprise-wide decisions. Some of these areas might include the following;

- Human Capital Reduction Strategy - Provide decision advantage so the right talent is maintained at the organization in high risk environments.
- Merger & Acquisition HCM Assessment - What Human Capital capability and capacity does the M&A bring?

CFO as Decision-making Hub

"Value Integrators – more than any other group – are equipped to advise at an enterprise level. They are positioned to evaluate business opportunities and risks in an end-to-end context and recommend difficult trade-offs among units, markets and business functions. A U.K. CFO explained the opportunity this way: “With the data we have and our deep understanding of the business, Finance can become the decision-making hub of the company.”

As this U.K. CFO states...the CFO should be the decision-making hub for finance decisions. Can we imply then that the CHCO should be the decision-making hub for HCM decisions? My position is YES! But to get there we have to develop sound strategic human capital business models and performance measures that allow us to tie our activities to the business.

CHCO = ?

If the CFO is the Value Integrator...what will the CHCO be to the organization? Talent Integrator? Business Enabler? I don't know...plenty of indications that a seat at the table is unlikely unless we change our HCM business model to reflect how we enable business strategy directly. This would support making the case for CHCOs to be the hub for human capital decision-making.

IBM's 2010 Global Human Capital Survey will hopefully answer that question this year. Whatever the answer though, we have to be ready to act as a profession and drive ourselves to get there.

Making the Globally Integrated Enterprise and the Human Network a Reality

So let me be upfront…I am a big fan of the companies I am about to write about this week. I think IBM and Cisco are world leaders in their respective industry sectors and we have much to learn from them, and if applied correctly within the context of your operational environment and culture can allow your human capital organization to “leapfrog” to a new level of partnership.

I think IBM and Cisco continue to do a fantastic job of looking at the external environment, understanding what is happening and looking into the future to see what the world will look like. Without this ability they cannot position themselves for future success and transition their business as necessary to meet changing market conditions. So the real question is what makes them so successful at it? Once they define a strategy…what makes it happen? Cash is always a good thing…can do a lot with that. Technology is super…it allows the connections to happen. But at the end of the day it takes human capital to execute, human capital that has the right knowledge, skills and attributes to execute the business strategy. Without it… doesn't matter how good your strategy is…you will not get from where the business is now to where it needs to be in the future.

So if this hypothesis is true…what makes IBM and Cisco better positioned to execute their business strategy? For starters, the Human Capital elements within IBM and Cisco are world-class organization themselves. I have seen Ted Hoff, VP for Learning at IBM, several times and the things they do are a testament to the position he has as a trusted advisor supporting IBM global operations. Both human capital organizations have an ability to understand what things are important in human capital development in enabling execution of business strategy and jettisoning transactional activities that while necessary, provide limited strategic value. By focusing on the business strategy and what human capital is necessary to execute, they are able to play a more proactive role as a partner to recommend various human capital courses of action, vice being ordered to create a five-day course (We have all been there…right?).

They are able to execute their role as strategic human capital developers because they have a process that identifies what organizational capabilities are needed to execute the business strategy, identify top performers overcoming these challenges daily in executing the business strategy and develop the necessary human capital development requirements down to the performance behaviors and knowledge, skill, attributes necessary for individuals. With human capital capabilities defined, IBM and Cisco are able to determine the current capacity of the workforce in these areas and make recommendations on where valuable and scare resources should be applied to develop the human capital capability. These recommendations can take the form of buying new talent, developing existing talent or outsourcing where talent is located.

The power this provides is amazing…As we have executed the same human capital development model within the context of my organizational environment; we have seen a compelling difference in our ability to engage our customers at a strategic level on what human capital capabilities they require to execute their mission strategies. Doing so has allowed the Defense Intelligence Agency Directorate for Human Capital to “leapfrog” 10 years of applied process in the private sector. While still early in our journey, it has started to pay dividends in having meaningful discussions with customers on their most important strategic human capital needs.

As Human Capital Leaders, we have spoken many times in the past about being strategic mission or business partners and showing the value of our efforts to the organization. Organizations like IBM and Cisco have achieved their success with a determined approach to human capital and talent development and its alignment to organizational strategy. My experience has shown that it can alter the customer relationship in a positive and meaningful way. As Human Capital Leaders...let's stop talking and start doing...it can make a difference.

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.