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

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.

Agility and Adaptablility...

Organizations are under constant pressure to succeed in a global business environment that is fraught with uncertainty, complexity and dynamic change. Companies that are successful in this environment are able to do so because of developing strategic human capital capabilities that create agility and adaptability in the workforce.

In IBM's 2008 survey of senior HR executives, captured in the study "The DNA of the Adaptable Workforce," asked to rate their workforce's ability to adapt to change in the business environment. IBM found the following:

"While 53 percent of companies state their workforces are generally capable of adapting to change, only 14 percent say they are very capable."

Of those 14% that stated they were "very capable," these companies were top financial performers based upon available public information. So the correlation is extremely relevant in today's business environment. The capabilities to move quickly to existing or new markets with the right products or services (agility) and adjust to the speed of change in the business environment (adaptability) are key differentiators and can provide a significant competitive advantage. Instead of reacting to the business environment, organizations that are able to develop these two strategic human capital capabilities lead the business environment.

Key to enabling development of these capabilities in the workforce is a clear linkage to the business strategy, understanding of the current and future business environment, and being able to define the knowledge and skills necessary for the workforce to develop and refine the agility and adaptability capabilities.