The dire need for talent differentiation has led to the curse of high employee expectations. The demand for excellence has allowed talent the audacity to demand an ‘out of the box’ EVP. This has led to the increasing importance of the value of innovation & creativity in HR.
A Red Ocean represents an existing market that is well defined as well as heavily populated by the competition. So, a red ocean is more like the situation of perfect competition wherein the same product/EVP is offered to the buyer/employee at the same price. So, he has little incentive to buy you and you alone. There is zero security in your investment as an employer. Hence, in this ‘War for Talent’, a red ocean strategy would only be a futile attempt.
A strategically inclined HR would hence move towards application & creation of a Blue Ocean Strategies. As defined, the aim of a Blue Ocean Strategy is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant. Blue Ocean Strategy is the simultaneous pursuit of differentiation and low cost.
HR needs to achieve such heightened levels of innovation excellence and hence be able to produce Quality Classics for an EVP that cannot be replicated.
Some Diving Blue observations in HR:
1) Use of mobile devices for a LMS
2) Virtual Learning environments
3) Informal Learning
4) Stay Interviews as a means of facilitating an effective retention action plan
5) Social Networking Arenas as a means of effective recruitment
6) Development of Unique Organizational Capabilities
7) Unique Branding
8) Unified Recruitment+ Performance Management
9) Application of Appreciative Inquiry
10) Tempting Job profiles
11) Fancy Job titles
Michael Porter: “Innovation is the central issue in economic prosperity”.
Friday, October 9, 2009
Wednesday, September 9, 2009
HR's Unexpected Encounter: The Black Swan
Taleb defines Black Swan Events as the High Impact, Hard to Predict & Rare Events that are beyond the realm of normal expectations. He substantiates by stating that almost all consequential events in history came from the unexpected.
In our land of business, the irony of the organizational lives lies in the fact that despite having a high degree of impossibility, these bombs (events) do explode and the sound of the detonation is far & wide. The coverage is huge enough to injure even those that were securely packed in the cosiness of their houses.
Owing to the uncertainty & unexpectedness of such shocks, most population may adopt the ‘If we can’t predict, we can’t resolve’ attitude. However, the need of the hour is to shun traditional statistical probability predictions & be prepared nonetheless. You can’t expect the enemy to announce its arrival & wait for you to graciously accept the invitation of the disaster planned out for you.
Proponents have suggested that the business strategy should be agile enough to take on new unpredictable challenges anytime. The business strategy should undergo enough tests & hence be certified shock proof.
HR having claimed a strategic role, the position of a business partner, and the responsibility of change management processes across organizations owes a major role to the situation analysis and hence assistance in providing a solution for the same. The Human Capital Management Processes need to be redefined and structured in such fashion that they make the system bullet proof.
The organizational capabilities should be defined to promote a culture that supports the cause of change management, risk management & encourages a forward outlook to problem solving, a culture that would be analogous to innovation management. The anchor competencies that support the existence of the organizational capabilities should also be particular such cause.
Manpower Planning should be in tandem with the business plans & expected/unexpected uncertainties.
During the recruitment & selection process, an organization could look at effectively using tools like the Competency Based Interviewing to ensure that the pool of talent that they bring into the organization already possesses this mindset & skills that they are intending to advertise and adopt.
In their attempt to ensure diversity is well managed they should look at picking diverse mindsets to encourage an atmosphere which would bring in diverse ideas and approaches to tackle an impossible occurrence.
The Performance Management System needs to agile enough to enjoy the possibility of alteration due to the uncertain nature of business. So in case of a hiccup, the objectives can be tailored as required instead of having people run after targets which may have become meaningless at that point in time. Metrics require to be accordingly aligned as well.
As BF Skinner has propagated, behaviours/ actions which help our cause should be rewarded such that the occurrence is oft repeated.
The Learning & Development team could look at aiding the existing talent base to acquire the necessary skill sets by providing them with the requisite platforms. This could include behavioural workshops, cross functional workshops, structured mentoring, and ongoing pupation of technical skills.
The knowledge management system should be so rock solid that it acts as a protection shield against the uncertain enemy.
Signing off with: “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.”-John Allen Paulos
In our land of business, the irony of the organizational lives lies in the fact that despite having a high degree of impossibility, these bombs (events) do explode and the sound of the detonation is far & wide. The coverage is huge enough to injure even those that were securely packed in the cosiness of their houses.
Owing to the uncertainty & unexpectedness of such shocks, most population may adopt the ‘If we can’t predict, we can’t resolve’ attitude. However, the need of the hour is to shun traditional statistical probability predictions & be prepared nonetheless. You can’t expect the enemy to announce its arrival & wait for you to graciously accept the invitation of the disaster planned out for you.
Proponents have suggested that the business strategy should be agile enough to take on new unpredictable challenges anytime. The business strategy should undergo enough tests & hence be certified shock proof.
HR having claimed a strategic role, the position of a business partner, and the responsibility of change management processes across organizations owes a major role to the situation analysis and hence assistance in providing a solution for the same. The Human Capital Management Processes need to be redefined and structured in such fashion that they make the system bullet proof.
The organizational capabilities should be defined to promote a culture that supports the cause of change management, risk management & encourages a forward outlook to problem solving, a culture that would be analogous to innovation management. The anchor competencies that support the existence of the organizational capabilities should also be particular such cause.
Manpower Planning should be in tandem with the business plans & expected/unexpected uncertainties.
During the recruitment & selection process, an organization could look at effectively using tools like the Competency Based Interviewing to ensure that the pool of talent that they bring into the organization already possesses this mindset & skills that they are intending to advertise and adopt.
In their attempt to ensure diversity is well managed they should look at picking diverse mindsets to encourage an atmosphere which would bring in diverse ideas and approaches to tackle an impossible occurrence.
The Performance Management System needs to agile enough to enjoy the possibility of alteration due to the uncertain nature of business. So in case of a hiccup, the objectives can be tailored as required instead of having people run after targets which may have become meaningless at that point in time. Metrics require to be accordingly aligned as well.
As BF Skinner has propagated, behaviours/ actions which help our cause should be rewarded such that the occurrence is oft repeated.
The Learning & Development team could look at aiding the existing talent base to acquire the necessary skill sets by providing them with the requisite platforms. This could include behavioural workshops, cross functional workshops, structured mentoring, and ongoing pupation of technical skills.
The knowledge management system should be so rock solid that it acts as a protection shield against the uncertain enemy.
Signing off with: “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.”-John Allen Paulos
Monday, August 31, 2009
Recruit+Onomics
Recruitment is process of identifying the target market-pool of candidates for the organization’s product-Employee Value Proposition undertaken by the marketer/recruiter.
Selection is the filtering of the target market into sub groups such that we have the primary and secondary target audience is well defined thereby giving us the suitable/unsuitable candidate pool.
Demand Theory of recruitment would define the relationship between the recruiter’s desire to pay the price of EVP and the availability of goods-the talent. So if the talent is available in abundance then the price that he willing to pay, being the EVP, would automatically fall hence displaying the inverse relationship. Similarly, for the candidate if there are jobs available in abundance then the demand for a certain job would be low and hence the price demanded i.e. EVP would be high.
The Supply theory would come into play as the importance of filling the position/price of talent=EVP/opportunity cost of talent=Competitive Advantage increases, the recruiter increases the talent as that fetches him a higher overall return. Hence, the logic of giving priority to those goods which make more money over those which do not make as much, applies here.
Elasticity of recruitment = %change in demand for talent/% change in business environment
So the elaticity of recruitment is the responsiveness of the demand for talent to the chnages in the business environment.
Applying the funda of innovation economics here, the central goal of the economic policy (in this case recruitment strategy) should be to spur higher productivity and greater innovation. This when applied to recruitment would mean meeting the recruitment metrics effectively and have better and more innovative ways of achieving the same. Secondly, this form of economics also says that markets (organizations/recruiters) relying on price signals, in this case salary, alone will not be as effective. Hence, the EVP has to be packaged as a bundle of offerings and not just salary alone. The recruitment/marketing strategy (Employee Value Proposition) would then be created based on the need identification of the end customer which would be needs of the prospective employee. The Marketing Strategy would attempt to ensure that there are no gaps in the customer’s demand and the product’s (job) promise (EVP=Employee Demands). Hence, making the product i.e. the EVP attractive enough to convert the sale leading to the acceptance of the offer. Being the first point of contact between the customer (candidate) and the product (EVP), it is the recruiter’s responsibility to effectively utilize pull & push strategies to create the magic and convert the sale.
The Opportunity Cost of foregoing talent acquisition would be the competitive advantage that he would gain from that acquisition. Talent being the constant source of differentiation amongst competitors would have too high a return on investment to forego.
Cost Benefit Analysis of recruitment can be done on the following basis:
1) Recruiting Cost Ratio = (Total Recruitment Costs/ Total Compensation recruited)*100
2) Recruiting Efficiency = 1-RCR
3) New Hire Performance (based on the grading systems)
4) Manager Satisfaction Feedback Score
5) Time Taken to fill the position
6) New Employee Loss Ratio
7) Turnover Index
8) Source Value Index = (%New Hires fro Source/% Recruitment Budget Allocation) {Booz Allen's Recruiting Survey}
9) Competency Opportunity Cost: On the loss of an experienced and more efficient employee and replacement with a less experienced and efficient employee that comes with new hire costs (fixed costs+ variable costs)
(For calculations refer: http://www.staffing.org/)
Selection is the filtering of the target market into sub groups such that we have the primary and secondary target audience is well defined thereby giving us the suitable/unsuitable candidate pool.
Demand Theory of recruitment would define the relationship between the recruiter’s desire to pay the price of EVP and the availability of goods-the talent. So if the talent is available in abundance then the price that he willing to pay, being the EVP, would automatically fall hence displaying the inverse relationship. Similarly, for the candidate if there are jobs available in abundance then the demand for a certain job would be low and hence the price demanded i.e. EVP would be high.
The Supply theory would come into play as the importance of filling the position/price of talent=EVP/opportunity cost of talent=Competitive Advantage increases, the recruiter increases the talent as that fetches him a higher overall return. Hence, the logic of giving priority to those goods which make more money over those which do not make as much, applies here.
Elasticity of recruitment = %change in demand for talent/% change in business environment
So the elaticity of recruitment is the responsiveness of the demand for talent to the chnages in the business environment.
Applying the funda of innovation economics here, the central goal of the economic policy (in this case recruitment strategy) should be to spur higher productivity and greater innovation. This when applied to recruitment would mean meeting the recruitment metrics effectively and have better and more innovative ways of achieving the same. Secondly, this form of economics also says that markets (organizations/recruiters) relying on price signals, in this case salary, alone will not be as effective. Hence, the EVP has to be packaged as a bundle of offerings and not just salary alone. The recruitment/marketing strategy (Employee Value Proposition) would then be created based on the need identification of the end customer which would be needs of the prospective employee. The Marketing Strategy would attempt to ensure that there are no gaps in the customer’s demand and the product’s (job) promise (EVP=Employee Demands). Hence, making the product i.e. the EVP attractive enough to convert the sale leading to the acceptance of the offer. Being the first point of contact between the customer (candidate) and the product (EVP), it is the recruiter’s responsibility to effectively utilize pull & push strategies to create the magic and convert the sale.
The Opportunity Cost of foregoing talent acquisition would be the competitive advantage that he would gain from that acquisition. Talent being the constant source of differentiation amongst competitors would have too high a return on investment to forego.
Cost Benefit Analysis of recruitment can be done on the following basis:
1) Recruiting Cost Ratio = (Total Recruitment Costs/ Total Compensation recruited)*100
2) Recruiting Efficiency = 1-RCR
3) New Hire Performance (based on the grading systems)
4) Manager Satisfaction Feedback Score
5) Time Taken to fill the position
6) New Employee Loss Ratio
7) Turnover Index
8) Source Value Index = (%New Hires fro Source/% Recruitment Budget Allocation) {Booz Allen's Recruiting Survey}
9) Competency Opportunity Cost: On the loss of an experienced and more efficient employee and replacement with a less experienced and efficient employee that comes with new hire costs (fixed costs+ variable costs)
(For calculations refer: http://www.staffing.org/)
Friday, August 14, 2009
Recipe for Employee Engagement: What are the Ingredients??
Yesterday, I attended a workshop on Employee Engagement. Often faced with the challenge of accurately defining the engagement process, post the workshop I thought of making an attempt at it. I walked out with the following thoughts on the same.
Engagement is a religion where you convert the employees to the organization’s cult. I would personally define it as a heightened level of devotion wherein the employee is unable to identify any gaps in the religion’s offering i.e. The Value Proposition.
It is the ability to foresee and meet the stated and the unstated needs in such fashion that you create a state of mind where the employee is so addicted (the state of being enslaved to a habit or practice) that he chooses to go beyond the contract. So in short employee engagement is analogous to addiction. It is the organization’s ability to make the employees dance to its own form of music i.e. move them towards value creation and achieving heightened levels of excellence. The employee exists to own the success & failure of the organization and intervenes to improve business results.
As Marcus Buckingham & Curt Coffman have put it in their book, First Break All the Rules, these needs have to be met in a set hierarchy. They say that the act is analogous to climbing a mountain where you get acclimatized to a certain type of atmosphere and then move further up and if at all you try to skip a level it will lead to mountain sickness.
So, I guess we could say that we need to meet the vanilla requirements before we add the chocolate sauce.
The inability of the above or inefficiency at it would lead to haunting of the ghosts of disengagement. Disenchantment at work may result in the draconian threat of attrition. And if at all, the disengaged stay back then they will turn into parasites working towards converting the religion of the engaged employees (to that of disengagement).
A colleague rightly put it; Engagement can be compared to a marriage wherein you are marrying the employee to the organization. Like in every relationship, the employee will fall for the charisma of the brand, then there will be the initial commitment phobia from the employee’s end, he may get cold feet and hence there would be domestic issues but it is the organization’s job to create that chemistry i.e. an Occupational Intimacy which will make the employee Say, Stay and Strive (the 3 behaviors of an engaged employee as defined by Hewitt Research) i.e. become a talent magnet. If, however, the brand is mishandled then the dynamics of the r0elationship will get eroded and the reactive approach of wheedling with fresh promises, exit interview approach in this case, doesn’t help too often. Oprah Winfrey spoke similarly about marriage, it’s about Am I in it today? It’s not about will I be in it tomorrow, or should I have been in it yesterday, it’s about being committed to it today.
However, having said that the Engagement process is not a story of mush and romance alone. It has a strong business case. Research has shown a positive correlation between engagement and business performance.
Hewitt Research on the subject suggests that successful employee engagement leads to:
· Increased Shareholder return
· More Market Value/Employee
· More Sales/Employee
· More Profit
· More Revenue
· Greater Customer Retention
· Higher Profitability
· Reduction in turnover cost
Gallup research Statistics say that successfully engaged organizations are:
· 18% more productive
· 12% more profitable
· 12% better at engaging customers
· 51% less likely to leave
· 27% less likely to indulge in absenteeism
Now of course there is always a debate on who owns the onus of creating that magic. It is obvious that it is the line manager who is the driver of the experience of the brand, for any employee. He is the first face of the employer for any employee. HR being a default engagement champion will act as a catalyst to provide a successful & supportive macro environment (providing the processes, methodologies, platforms etc) but it will be the line manager who has to act as an anchor and give direction to the employee.
Would like to sign off with a recently heard quote by Henry Ford: “Why is it every time I ask for a pair of hands, they come with a brain attached?”
Engagement is a religion where you convert the employees to the organization’s cult. I would personally define it as a heightened level of devotion wherein the employee is unable to identify any gaps in the religion’s offering i.e. The Value Proposition.
It is the ability to foresee and meet the stated and the unstated needs in such fashion that you create a state of mind where the employee is so addicted (the state of being enslaved to a habit or practice) that he chooses to go beyond the contract. So in short employee engagement is analogous to addiction. It is the organization’s ability to make the employees dance to its own form of music i.e. move them towards value creation and achieving heightened levels of excellence. The employee exists to own the success & failure of the organization and intervenes to improve business results.
As Marcus Buckingham & Curt Coffman have put it in their book, First Break All the Rules, these needs have to be met in a set hierarchy. They say that the act is analogous to climbing a mountain where you get acclimatized to a certain type of atmosphere and then move further up and if at all you try to skip a level it will lead to mountain sickness.
So, I guess we could say that we need to meet the vanilla requirements before we add the chocolate sauce.
The inability of the above or inefficiency at it would lead to haunting of the ghosts of disengagement. Disenchantment at work may result in the draconian threat of attrition. And if at all, the disengaged stay back then they will turn into parasites working towards converting the religion of the engaged employees (to that of disengagement).
A colleague rightly put it; Engagement can be compared to a marriage wherein you are marrying the employee to the organization. Like in every relationship, the employee will fall for the charisma of the brand, then there will be the initial commitment phobia from the employee’s end, he may get cold feet and hence there would be domestic issues but it is the organization’s job to create that chemistry i.e. an Occupational Intimacy which will make the employee Say, Stay and Strive (the 3 behaviors of an engaged employee as defined by Hewitt Research) i.e. become a talent magnet. If, however, the brand is mishandled then the dynamics of the r0elationship will get eroded and the reactive approach of wheedling with fresh promises, exit interview approach in this case, doesn’t help too often. Oprah Winfrey spoke similarly about marriage, it’s about Am I in it today? It’s not about will I be in it tomorrow, or should I have been in it yesterday, it’s about being committed to it today.
However, having said that the Engagement process is not a story of mush and romance alone. It has a strong business case. Research has shown a positive correlation between engagement and business performance.
Hewitt Research on the subject suggests that successful employee engagement leads to:
· Increased Shareholder return
· More Market Value/Employee
· More Sales/Employee
· More Profit
· More Revenue
· Greater Customer Retention
· Higher Profitability
· Reduction in turnover cost
Gallup research Statistics say that successfully engaged organizations are:
· 18% more productive
· 12% more profitable
· 12% better at engaging customers
· 51% less likely to leave
· 27% less likely to indulge in absenteeism
Now of course there is always a debate on who owns the onus of creating that magic. It is obvious that it is the line manager who is the driver of the experience of the brand, for any employee. He is the first face of the employer for any employee. HR being a default engagement champion will act as a catalyst to provide a successful & supportive macro environment (providing the processes, methodologies, platforms etc) but it will be the line manager who has to act as an anchor and give direction to the employee.
Would like to sign off with a recently heard quote by Henry Ford: “Why is it every time I ask for a pair of hands, they come with a brain attached?”
Tuesday, August 4, 2009
HR in the Battleground..!!
There is a growing realization that people are the most important asset that an organization possesses. Human talent has become the differentiating factor among competitors across all industries. The competitive advantage that arises from the talent has a greater impact than from the other resources which are getting largely commoditized, as in they are easily replicable.
Change has allowed HR’s value proposition to move from being an administrative function to being a business partner. The function is now moving focus from just do-ables to deliverables.
With due respect to the challenges faced by other functions, I would like to draw a comparison with a few of them, in order to negate the impression of HR as a cost function.
Like in marketing they sell products to the external customers of the brand, in HR today we sell the company to both the external (the talent/employee pool) and internal customers i.e the employees through employer branding phenomenon.
In the world of finance, we have equity leading to asset productivity which in turn leads to profit, similarly in HR, we have investments in Talent management leading to talent development which in turn leads to an organization’s strategic success.
As in Supply Chain Management, in HR too you make and buy to manage risk, adapt to uncertainty in demand, aim at an improved ROI in developing employees, preserve the investment by balancing
employee-employer relationships as talent development is a perishable commodity.
Selection today is the most important purchase decision that a company makes. Investment in talent development is the most strategic investment of any organization.
Hence, this strategic function, namely HR, now provides us with the opportunity to face one of the toughest challenges in the economy, increasingly being recognized as The Talentship Challenge. This is not about developing people and creating succession plans. It is about meeting the objectives of the company which in business terms amounts to making money for the company, a common goal we all strive towards.
Change has allowed HR’s value proposition to move from being an administrative function to being a business partner. The function is now moving focus from just do-ables to deliverables.
With due respect to the challenges faced by other functions, I would like to draw a comparison with a few of them, in order to negate the impression of HR as a cost function.
Like in marketing they sell products to the external customers of the brand, in HR today we sell the company to both the external (the talent/employee pool) and internal customers i.e the employees through employer branding phenomenon.
In the world of finance, we have equity leading to asset productivity which in turn leads to profit, similarly in HR, we have investments in Talent management leading to talent development which in turn leads to an organization’s strategic success.
As in Supply Chain Management, in HR too you make and buy to manage risk, adapt to uncertainty in demand, aim at an improved ROI in developing employees, preserve the investment by balancing
employee-employer relationships as talent development is a perishable commodity.
Selection today is the most important purchase decision that a company makes. Investment in talent development is the most strategic investment of any organization.
Hence, this strategic function, namely HR, now provides us with the opportunity to face one of the toughest challenges in the economy, increasingly being recognized as The Talentship Challenge. This is not about developing people and creating succession plans. It is about meeting the objectives of the company which in business terms amounts to making money for the company, a common goal we all strive towards.
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