hr focus: strategic leadership harris consulting keith sinclair president & ceo
TRANSCRIPT
HR Focus: Strategic LeadershipHR Focus: Strategic Leadership
Harris ConsultingHarris Consulting
Keith SinclairPresident & CEO
• HR as a Strategic Player – Retrospect
• New Challenges, New Role
• Strategic Thinking
• Critical HR Leadership Competencies
• The Way Forward
AgendaAgenda
• 1900-1980’s – from administrator to behaviouralist
• 1980-2000’s – “at the table” …with mixed results
• 2000-2010 – outsourcing and downsizing…
• 2010-2025 – strategic leader (or more do-more-with-less?)
HR: An Historical PerspectiveHR: An Historical Perspective
Notwithstanding the argument that HR deserves to be at the executive table:
• Less than 2% of top B-school grads specialize in HR
• We are perennially the lowest paid role in the C-suite
• Too many of us still report to finance…
Have We Really Stalled?Have We Really Stalled?
Kenexa White Paper:
“While most HR functions would suggest that they are enacting change, the key is whether the benefits are being delivered and …make a difference in the organization’s eyes.
HR needs to revamp everything it does. It doesn’t just need a facelift, the whole process needs a drastic overhaul.”
Have we Really Stalled?Have we Really Stalled?
M. D. Breitfelder, Harvard MBA, in HBR 2008:
“HR today sits smack-dab in the middle of the most compelling battle in business, where companies deploy and fight over the most valuable resources – workforce talent.
Talent management is now a make-or-break corporate competency, and HR has become – once and for all – a truly strategic function.”
What’s the Opportunity?What’s the Opportunity?
Value is in the eye of the receiver:
“Influence with impact occurs when human resource professionals start with the beliefs and goals of the receivers.”
David Ulrich & Wayne Brockbank, The HR Value Proposition
What is the Disconnect?What is the Disconnect?
The Evolving Focus of Strategy** Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan
The Evolving Focus of Strategy** Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan
COMPETING COMPETING FOR:FOR:
MARKETS/MARKETS/PRODUCT SPRODUCT S
RESOURCES/RESOURCES/COMPETENCIES COMPETENCIES
TALENT/TALENT/DREAM SDREAM S
STRATEGIC STRATEGIC OBJECTIVEOBJECTIVE
Defensible product-market positions
Sustainable competi-tive advantage
Continuous self-renewal
MAJOR MAJOR TOOLSTOOLS
• Industry/competitor analysis• Market segmentation/ positioning•Strategic planning
• Core competencies• Resource-based strategy• Network organization
• Vision and values• Flexibility and innovation• Front-line innovation
STRATEGIC STRATEGIC RESOURCERESOURCE
Financial capital Organizational capacity
Human and intellectual capital
Management of Management of Firm Firm
InfrastructureInfrastructure
Management ofManagement ofEmployee Employee
ContributionContribution
Management ofManagement ofTransformationTransformation
and Changeand Change
Management ofManagement ofStrategicStrategic
Human ResourcesHuman Resources
*David Ulrich, “Human Resource Champions”
FUTURE/STRATEGIC FOCUS
DAY-TO-DAY OPERATIONAL FOCUS
PR
OC
ES
SE
S PE
OP
LE
HR Roles*HR Roles*
Knowing External
Business Realities
Building HR Resources
Serving External and Internal
Stakeholders
Ensuring HR
Professionalism
Crafting HR Practices
HR Value Proposition
Source: The HR Value Proposition, Dave Ulrich and Wayne Brockbank
HR Value PropositionHR Value Proposition
1. HR work doesn’t begin with HR – it begins with business!
2. The ultimate receivers of business reside in the marketplace
3. HR contributions are a source of competitive advantage
4. HR must align practices with internal and external stakeholder needs
5. HR professionals must acquire the capabilities necessary to provide stakeholder value
6. HR must offer a unique and powerful perspective that adds real organizational value
HR Value Proposition Premise– Ulrich & Brockbank
HR Value Proposition Premise– Ulrich & Brockbank
The HR Executive RoleThe HR Executive Role
“Even in the best of companies, a so called top team seldom functions as a real team.” Jon R. Katzenbach
• Remember, executives are not “teams” – they are boss-led work groups
• Executive roles require executive leaders
• Teamwork is secondary to alignment
The HR Leader’s RoleThe HR Leader’s Role
“The Plight of the Navigator*…” *John O. Burdett, Orxestra
• 6 key executive roles: Visionary, Explorer, Pioneer, Warrior, Maverick & Navigator
• Navigator role defined: Know the destination Understand business, markets, people & processes Map out an optimal course Orient enterprise towards its intended destination Key Skills: mastery of leadership and human dynamics
HR Leader as NavigatorHR Leader as Navigator
• Mastery of human dynamics
• Change management skills
• Strategic vision
• A shift from value appropriation to value creation!
Transformational LeadershipTransformational Leadership
• Shift from deciding strategic content to framing strategic context
• Create a sense of purpose for group & individual efforts
• Foster a fertile environment:
• Articulate organizational values
• Define and establish community
• Develop relevant organizational processes
• Inspire empowerment, ownership and commitment
Rethinking the Top HR RoleRethinking the Top HR Role
• Know the business as well as everyone
Credentials include line roles/other functions
• Think and act strategically
• Earn exceptional credibility via your actions
• Understand and practice power through influence
Establishing the HR MandateEstablishing the HR Mandate
• Cultivate strong networks and relationships
• Deliver competitive advantage through the integrated application of people and process
• Distinguish yourself via mastery and advancement of leadership
• Grow organizational capacity by acquiring, retaining, motivating and developing talent
Establishing the HR MandateEstablishing the HR Mandate
• Know thyself!
• Excel at critical tasks – professional and business
• Learn continuously – take risks – be a sponge
• Develop your own perspective:
• Be a critical thinker
• Have the courage of your convictions
• Refuse to choose between profits and people!
Start with YourselfStart with Yourself
• Courage is rarely a matter of “grand heroic acts”
• It is determined by “defining moments” where we stand for our values or principles when it may be more expedient to do otherwise
• Effective leaders know that acts of courage may end in failure…
Leadership CourageLeadership Courage
WisdomWisdom
“Wisdom comes from experience, and experience is acquired through failure.”
Confucius
• Strong leaders have the courage to fail and encourage others to learn the same way!
• Effective leaders cultivate other leaders
Courage and Wisdom… Courage and Wisdom…
• Be willing to move beyond your comfort zone
• Practice humble and honest self-reflection
• Vigorously solicit others’ opinions
• Challenge assumptions
• Listen and observe carefully and completely
• Always be open to new and different ideas
Leadership & Lifelong Learning Leadership & Lifelong Learning
Strategic ThinkingStrategic Thinking
• Is a dynamic process
• Is an integrated and dynamic way of viewing the world
• Is guided by a framework
• Enables taking advantage of opportunities as they arise!
Strategic ThinkingStrategic Thinking
• For Operational Planning you ask “HOW”
• For Strategic Planning you ask “WHAT”
• For Strategic Thinking you ask “WHY”
Strategic ThinkingStrategic Thinking
Strategic FocusStrategic Focus
OPERATIONALOPERATIONAL STRATEGICSTRATEGIC
Focus on current/near term Focus on future
Confirmation and refinement of ideas
Idea generation
Reach for closure/goal achievement
Open new discussions
Attaining/protecting market share Expanding/new markets
Reach a decision Keep learning, exploring, creating
Strategic Planning v ThinkingStrategic Planning v Thinking
STRATEGIC PLANNINGSTRATEGIC PLANNING STRATEGIC THINKINGSTRATEGIC THINKING
VISION OF THE FUTUREVISION OF THE FUTURE Predictable, specified assumptions
Only shape can be predicated
IMPLEMENTATIONIMPLEMENTATION Distinct allocated processes Interactive, dynamic processes
MANAGERIAL ROLEMANAGERIAL ROLE Senior managers drive and own the process
Strategic involvement is shared and distributed
CONTROLCONTROL Through measurement and monitoring systems
Self-reference – guides daily thoughts, actions
STRATEGY CREATIONSTRATEGY CREATION Primarily an analytic, rational decision process
Holistic approach –generation of options
Scanning the LandscapeScanning the Landscape
Pro
fit
Time
Horizon 1Defend and extend current businesses
Horizon 2Drive growth inemerging/newbusinesses
Horizon 3Seed options for future growthbusinesses
Strategic HorizonsStrategic Horizons
Source: Robust Adaptive Strategies, Eric D Beinhocker, Sloan Management Review, Spring 1999
Apply a parallel set of strategies to ensure ongoing success:
• Innovation requires experimentation, but experimenting involves risk
• What works/fits today will become obsolete
• Parallelism breeds innovation without “betting the farm”
ConsiderationsConsiderations
Source: Robust Adaptive Strategies, Eric D Beinhocker, Sloan Management Review, Spring 1999
Short jumps only Long jumps only Mix short and long jumps
Business strategy requires a mix of short and long term jumps (i.e. balances short, medium and long term priorities)
Navigating Varied TerrainNavigating Varied Terrain
You often hear “Be bold. Take a leap!” Sometimes you should. Other times, there’s a better idea. “Take a step.”
Harry Beckwith
Blue Ocean Strategy: Create Your Own Market SpaceBlue Ocean Strategy: Create Your Own Market Space
• A Blue Ocean Strategy is a “value innovation” strategy where:
• Efforts provide a favorable cost structure while delivering high customer value
Overview of BOSOverview of BOS
Costs
Buyer Value
ValueInnovation
The Simultaneous Pursuit of Differentiation & Low Cost
Value InnovationValue Innovation
Blue Ocean
RED OCEAN STRATEGYRED OCEAN STRATEGY BLUE OCEAN STRATEGYBLUE OCEAN STRATEGY
Compete in existing market space
Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost trade-off
Break the value-cost trade-off
Red versus Blue OceanRed versus Blue Ocean
High
Low
Premium Wines
Budget Wines
Price
Enological Terminology
Above-lineMarketing
Aging Quality
Vineyard Prestige
Wine Complexity
WineRange
EasyDrinking
Fun & Adventure
Ease of Selection
yellow tail
Strategy Canvas (yellow tail)Strategy Canvas (yellow tail)
US Wine Industry – Late ‘90’s US Wine Industry – Late ‘90’s
Cognitive Hurdle
Resource Hurdle
Motivational Hurdle
Political Hurdle
Four Organizational Hurdles Four Organizational Hurdles
Theory of organization change rests on transforming the mass:• So change efforts are usually focused on moving the mass
Conversely, by identifying bright spots or tipping points:• One can achieve a strategic shift fast at low cost
Conventional versus “Tipping Point” Transformation Conventional versus “Tipping Point” Transformation
“What gets measured, gets done!”
Jack Welch, GE
People do what they’re rewarded for doing…
The Impact of MetricsThe Impact of Metrics
To have impact and credibility with boards and executives:
• HR leaders and professionals must be effective at measuring, monitoring and managing performance
Applying a Balanced Scorecard enables the effective integration of:
• Qualitative with quantitative measures
• “Soft and hard” elements
Balanced ScorecardBalanced Scorecard
People PerspectivePeople Perspective
Vision, Vision, Mission, Values & Mission, Values & Strategic DriversStrategic Drivers
Financial PerspectiveFinancial PerspectiveSystems & ProcessesSystems & ProcessesPerspectivePerspective
Customer PerspectiveCustomer Perspective
Balanced ScorecardBalanced Scorecard
• Measures must:
• Reinforce the vision, values and strategy
• Drive the right behaviours – “how you play the game”
• Measure results, not just projects/activities
• Be SMART
Performance MeasuresPerformance Measures
SMART defined:
• Specific
• Measurable
• Achievable
• Relevant
• Time-based
Performance MeasuresPerformance Measures
Horizon: Short, Medium, Long Term
Str
ate
gie
s PerspectivesPerspectives• CustomerCustomer• FinancialFinancial• ProcessProcess• PeoplePeople
Busine
ss U
nits/D
ivisio
nsInternal/ExternalDynamics
Internal/ExternalDynamics
Balancing Performance MeasuresBalancing Performance Measures
• Inspiration without implementation is merely provocation
• Implementation without inspiration is simply administration
• Effective leadership requires both!
Applying Strategic ThinkingApplying Strategic Thinking
With access to capital, people and organizational capacity become the critical limiting factors to economic success
Let’s review an earlier slide and discuss how HR can lead the way
HR’s Role in Leading StrategyHR’s Role in Leading Strategy
The Evolving Focus of Strategy** Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan
The Evolving Focus of Strategy** Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan
COMPETING COMPETING FOR:FOR:
MARKETS/MARKETS/PRODUCT SPRODUCT S
RESOURCES/RESOURCES/COMPETENCIES COMPETENCIES
TALENT/TALENT/DREAM SDREAM S
STRATEGIC STRATEGIC OBJECTIVEOBJECTIVE
Defensible product-market positions
Sustainable competi-tive advantage
Continuous self-renewal
MAJOR MAJOR TOOLSTOOLS
• Industry/competitor analysis• Market segmentation/ positioning•Strategic planning
• Core competencies• Resource-based strategy• Network organization
• Vision and values• Flexibility and innovation• Front-line innovation
STRATEGIC STRATEGIC RESOURCERESOURCE
Financial capital Organizational capacity
Human and intellectual capital
HR Processes that Add Value:
1. Flow of people
2. Flow of performance management
3. Flow of information
4. Flow of work
HR Value Proposition*HR Value Proposition**Dave Ulrich and Wayne Brockbank
HRVP* Competency ModelHRVP* Competency Model
Business Business KnowledgeKnowledgeBusiness Business
KnowledgeKnowledge
Strategic Strategic ContributionContribution
Strategic Strategic ContributionContribution
Personal Personal CredibilityCredibilityPersonal Personal
CredibilityCredibilityHR HR
DeliveryDeliveryHR HR
DeliveryDelivery
HRHRTechnologyTechnology
HRHRTechnologyTechnology
Source: The HR Value Proposition, Dave Ulrich and Wayne Brockbank
Architecture for delivering the HRVP:
• Keep your promises
• Imagine the future while investing in the present
• Put your money where your strategy is
• Build value through organization and people
• Add customer value
HR Value Proposition*HR Value Proposition**Dave Ulrich and Wayne Brockbank
• Develop customer literacy
• Think and act like a customer
• Track the firm’s share of targeted customers
• Align practices to the customer value proposition
• Engage customers in HR practices
Customer FocusCustomer Focus
• Organization is not structure – it is capability and capacity
• HR is carried out by line managers, not HR
• HR is based on a deep body of knowledge, not just common sense
• HR is an integrated set of outcomes, not a collection of activities
• HR is an ongoing process, not an isolated event
Resolve MisconceptionsResolve Misconceptions
“External realities and stakeholder interests determine why HR matters to an organization and why HR needs to focus on what it delivers more than on what it does”
D. Ulrich & W. Brockbank
HRVP* ImplicationsHRVP* Implications
The Way Forward…The Way Forward…
“We have a deep-seated desire to quantify the world around us so we can understand it and control it.
But the world isn’t behaving.
We must…consider the possibility that if we can’t measure something, it might be the very most important aspect of the problem.”
Roger Martin, Dean, Rotman School of Business (Blog post)
Making the Case…Making the Case…
HR leaders are uniquely positioned to lead and develop critical soft skills that define organizational performance
It’s time to act!
“Soft” versus “Hard” Skills“Soft” versus “Hard” Skills
CAs and CMAs are staking their claims to the appreciation and leadership of human and intellectual talent
Are we already too late?
“Soft” versus “Hard” Skills“Soft” versus “Hard” Skills
High Commitment and High Performance Leaders:
1. Earn trust through openness to the unvarnished truth
2. Actively engage people – business is personal
3. Motivate others via a focused agenda and a shared common purpose
4. Are collaborative rather than “lone-rangers”
“It’s not about me, but about all of us”
A Leadership Model for HR from:
“The Uncompromising Leader”, Eisenstadt, Beer, Foote, Fredberg, Norrgren
A Leadership Model for HR from:
“The Uncompromising Leader”, Eisenstadt, Beer, Foote, Fredberg, Norrgren
• Why haven’t we outgrown our hierarchical management system?
• If we believe in democracy, why aren’t businesses democratic?
• How adaptive are our organizations?
• Why do emerging companies have to adhere to old models?
• If viruses are effective at adapting:
• What if we organized and ran our companies that way?
Leadership FutureLeadership Future
How well are we harnessing technology to run our businesses?
Do management control structures slow down its potential impacts?
Leadership Future & TechnologyLeadership Future & Technology
Technology has the capacity to make decision-making peer-based and collaboration universal.
What kind of leadership and organizational networks/ structures do we NEED going forward?
Leadership Future & TechnologyLeadership Future & Technology
• Developing social networks is vital to the capture and transfer of organizational knowledge
• SN can drive innovation, “instant” responsiveness and flexibility
• Managing social networking requires understanding of organizational dynamics, process management, and trust-based culture
• It requires leadership from skilled HR professionals with a strong business acumen
• Technology is only the pipeline…
HR Future: Social NetworkingHR Future: Social Networking
While knowledge management is supported via a technical infrastructure, it is operated via a social network.
Who’s going to drive social networking:
• IT
• Regulators
• HR?
HR Future: Social NetworkingHR Future: Social Networking
For HR to earn its rightful place at the executive table, we must master the skills and capacity to:
• Think strategically
• Mobilize workforces
• Develop leaders
• Set direction
• Run businesses
Making the Case…Making the Case…
In the immortal words of Jean-Luc Picard, SS Enterprise…
Making the Case…Making the Case…
“Make it so!”
Making the Case…Making the Case…
Discussion / Q&ADiscussion / Q&A
Thank you/Merci!Thank you/Merci!
Harris ConsultingHarris ConsultingKeith Sinclair