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

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

Skunk Works...Innovating from the Outside-In...

My team went through a major change initiative starting in 2006 that involved merging with ten organizations with geographic and functional responsibilities. While each conducted the same mission by collecting, analyzing and disseminating information to support leadership decision advantage, in many respects...each felt it was unique and did their mission differently. Each had learning functions that ranged in size of 1 to over 40...so this was the environment and scene my team faced in building a global learning enterprise that leveraged my organization's learning capabilities, while integrating their capabilities.

What my team came to find out that in order to integrate effectively and efficiently...we would have to change from the "Outside-In." What this meant is that in many respects, while trying to integrate and align these various learning capabilities, changing how we conducted business at the Defense Intelligence Agency (DIA) would be possible by changing how we operated with our new customers. For example, within DIA's schoolhouses we used different course evaluations with some standard questions, but in large part no common standards. One of the first initiatives with our learning integration efforts was to develop and accept a common set of evaluation questions. This move precipitated a similar discussion internally.

We accomplished this and other key initiatives by treating our effort as a Skunk Works...Made famous at the height of the Cold War, Lockheed Martin created a group that revolutionized and transformed airborne reconnaissance.

Our internal Skunk Works supported change management during the integration and alignment period. By leveraging a world-class best practice in defining a common set of skills, knowledge and capabilities for all organizations...we were able to integrate learning and align existing solutions at a quicker pace. It allowed our new customers to see that while their organizations had different responsibilities, the challenges faced, the work they did and the type of human capital capabilities needed were very similar.

The lesson for Human Capital Management (HCM) leaders, creating a team within your HCM organization that has the green light to try creative and disruptive new approaches can enable change across the HCM organization. That can lead to new efficiencies and effectiveness in meeting customer needs and in our case...accelerating major change initiatives...from the Outside-In.

Cheers,
Keith

You Don't Know What You Don't Know...In This Case...We Do...

I'm a big fan of Cisco and their CEO John Chambers. In a recent Newsweek interview, he focused on "Knowing What You Don't Know" and impact on the future of leadership. His perspective, always refreshing to me, gets to heart of issue facing strategic Human Capital Management (HCM)...looking into the future at what is coming and its impact on HCM leaders to enable business and mission success.

We recently hosted an Enterprise Symposium at the Defense Intelligence Agency (DIA) focused on looking at areas of collaboration across the Defense Intelligence Enterprise. A very good friend and I were co-leads for a session titled "Developing the Workforce of the Future" where we sought to frame the 2020 workplace, challenges faced executing the mission in 2020 and attributes of both leaders and intelligence professionals needed in 2020. The session provided a great opportunity to engage participants and provide an update to the DIA Workforce of the Future white paper from 2003.

We were honored to have Karie Willyerd (Former Sun Microsystems CLO and now Future Workplace) share with the audience insights from her and Jeanne Meister's new book "The 2020 Workplace". While there were many key points and new knowledge taken away...several things stood out for me.

1. By 2020, the Generational mix at the workplace will be drastically different per the attached slide. The implications to leaders and leadership development are significant.

2. The understanding that to become an expert requires 10 years of dedication. However, knowledge is doubling every two years and in some areas every one year. Impact to you and I you ask? We can't possibly keep up with that much data. Hence our reliance on social networks will continue to grow and expand.

This gets to topic of this DNA of Human Capital blog today...The old phrase "You don't know what you don't know" is really not applicable to HCM leaders and the tsunami of the 2020 workplace, five generations in the workforce and the continued expansion of knowledge that will make expertise not nearly as important as your social network to get work done.

The task at hand for HCM leaders is to prepare their organizations for what the future is bringing. In today's challenging environment, it is difficult sometimes to look into the following week or quarter, much less at 2020. Yet, like the certainty of the tides...this new environment and workforce will inevitably come ashore like oil in the Gulf of Mexico. We will have to collectively look at this new future and determine how we position our human capital capabilities to ensure success in this environment.

For our own credibility, we will not be able to say we didn't know what we didn't know...because in this case...we did.

Cheers,
Keith

The Holy Grail...Human Capital Development Aligned to Strategy...

For a long time our profession seems to have had an identity crisis. We wanted to be strategic business partners but we couldn't get there. IBM's 2009 report titled "Getting Smart About Your Workforce: Why Analytics Matter," showed key strategic human capital (HC) challenges that Human Capital Management (HCM) leaders face and their perception of importance vs. effectiveness in overcoming them to impact business results. One of those areas with a significant gap in importance vs. effectiveness (48% in last weeks graphic) was the definition of "knowledge, skills and capability requirements to execute business strategy."

In my honest opinion, the HCM leader's capability to act on this particular human capital challenge is more important than other importance-effectiveness gaps the report identified. Why? Because as HCM leaders...if we can't define organizational capability requirements (That is really what our customers want...not HR speak like knowledge, skills and competencies...we can do that internally) to execute the business strategy...we are in essence lost. No "seat at the table" is forthcoming. So we have to execute on this one human capital challenge gap with the agility and adaptability the organization requires to function in the global complexity. And we have to do it...flawlessly.

At the Defense Intelligence Agency, we faced a similar challenge as DIA merged with ten worldwide Combatant Command Directorates of Intelligence. Treating the merger as a major change management project as Combatant Command civilian employees were integrated within DIA, the DIA learning team decided that for a successful merger, we needed a simple approach. The approach was to define the individual Combatant Command capabilities that would allow the team to look at common, core, and critical capability requirements across the Combatant Commands.

Pioneered by Dr. Reza Sisakhti of Productivity Dynamics and used by successful companies like IBM, Cisco, and HP, we were able to focus on three mission critical job roles at the Combatant Commands to drive our efforts...Intelligence Analysts, Collection Managers and Intelligence Planners.

The process involved two simple steps...

1. Engage strategic leaders and determine each Combatant Command's mission, strategy, strategic initiatives in place or planned, and the challenges faced in executing the strategy.
2. Identify top performers in the organization. These top performers are top performers because they are able to overcome challenges and achieve results. What behaviors make them successful at executing the strategy and overcoming challenges?

With this data, the team was able to start alignment of available learning at DIA and at the Combatant Commands in direct support of mission strategy execution. From a change management perspective, ten Combatant Commands with different functional and geographic responsibilities were able to see the knowledge and skills necessary to execute their mission strategies for the three identified roles were the same. The only difference was the application of these human capital capabilities in their respective environments.

The decision to take this simple, but proven approach in a massive change effort was risky. But the payoff was a group of global learning professionals at the Combatant Commands and DIA that are considered the vanguards of enterprise integration by senior leaders within the Defense Intelligence Enterprise. It has ushered in a new level of collaboration and innovation that led to the team's recognition in 2009 by Chief Learning Officer Magazine with a Learning-in-Practice Gold award in Division I for Global Learning.

So the message this week HCM leaders...focus on defining knowledge, skills and capability requirements to execute business strategy and take a risk...it could lead to a huge payoff for your organization and HCM.

Taking the Long View...Why "Strategic" Can't Mean One Year...

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.

A March 2010 Harvard Business Review blog titled "Strategy on the Morph" by Walter Keichel (Author of "The Lords of Strategy: The Secret Intellectual History of the New Corporate World") really provides insight in to what was happening in respect to strategy. In the blog, this quote really points to the perspective that strategy is wounded.

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.

Developing Organizational Capabilities - The McKinsey Global Survey...Same Old Song...

McKinsey is a quality company that does some great research in the way of human capital and talent management. You may remember they were the first to point to a War for Talent in 2001.

Their most recent global survey focuses on Developing Organizational Capabilities and the role that training plays in this. There are a number of key points it makes and implications to strategic human capital capabilities needed to execute business or mission strategy.

“Building organizational capabilities, such as leadership development or lean operations, is a top priority for most companies. However, many of them have not yet figured out how to do so effectively…”

This opening statement in McKinsey’s Global Survey: Building Organizational Capabilities speaks volumes and is absolutely horrible news if you are an HR professional or Human Capital Developer. On one hand the study says building organizational capabilities to enhance competitive advantage is a top priority to leadership. That is great news that people realize it is a priority. However, the second part of the opening statement says to me we don’t know what we are doing. What kind of confidence building and message does that say about our profession to a CEO, C-Suite, business unit or potential customer? And let’s be clear…the people you and I work for will read the report because they trust McKinsey.

In the report there are a number of other statements that drive me to one single conclusion…we have lost our way. While the report is explicit in a number of areas, what it implies is that we don’t know what organizational human capital capabilities need development and even if we knew…we are not good at developing the organizational human capital capabilities required to create a competitive advantage or how to measure we have developed the right organizational human capital capabilities.

As I have discussed in earlier blog posts, there are a lot of great organizations with great CHROs, Chief Talent Officers and Chief Learning Officers that get it. They are successful and extremely effective in developing organizational human capital capabilities that support their organization’s continued agility and adaptability leading to competitive advantage. These are the same people that graciously give their time and talk to us at conferences and symposiums about what they did and how they did it. This hasn’t been happening recently…these have been happening assuredly for the last 10 years, but longer. And yet here we are with another study that paints us as inept at doing our job. We can’t lament that we have no “seat at the table” or we want to become a “strategic business partner.” That time is past because in the eyes of the customer, we don’t hold up our end of the bargain. If that is not the case and just our customer’s perception…then all the worse because perceptions drive decision making in a vacuum when there is no data or metrics. So ultimately we are responsible or our own plight and have no one to blame but ourselves.

This blog post from Kevin Wheeler has a lot of valuable points that are still quite valid today...Chief Talent Officer 2020...We would do good to heed his advice...

My perspective is a simple one…we hold, and have held for some time, the power to change ourselves, how our profession conducts business and the perception that is held about it. The only thing stopping us is…well…us. To be successful, we ourselves need to understand how to think strategically, be as agile and adaptable as our customers, execute flawlessly, and measure.

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.

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.

Business Success - Structure or Capability?

In the book "Organization of the Future 2" (Edited by well known leadership developers Frances Hesselbein and Marshall Goldsmith), a chapter authored by Dave Ulrich and Norm Smallwood discusses whether organizations are about structure or capabilities. The authors claim that companies like GE, Disney, Google, and Apple are known for their capabilities and not their structures for conducting business. The authors state...


"Capabilities represent what the organization is known for, what it is good at doing, and how it patterns its activities to deliver value."

This has great application to fostering new thinking on human capital development. The business challenges that organizations face now and in the future, such as speed/context/scope of change, globalization, talent shifts in the workplace, and others, will drive development of key strategic human capital capabilities to overcome these challenges. While the normal inclination in challenging economic environments, like the recession faced in 2008-2009, has been to restructure and cut costs, forward thinking companies made a commitment to establish their organizations for future success coming out of the recession. They did this by focusing on what the environment would look like, opportunities that environment would present and how it would deliver value to its customers.

Organizations like GE, Google and Disney are driving strategies to develop and enhance their competitive positions within their markets. The capabilities required for their competitive advantage are varied, but should focus in a specific area...overcoming human capital challenges to enhancing their competitive positions.

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.