talent supply chain
TRANSCRIPT
© 2009 Boudreau-Ramstad Partnership. All rights reserved.
John W. BoudreauCenter for Effective Organizations
Marshall School of Business University of Southern California
SIOP Annual MeetingNew Orleans, LA
April 2, 2009
Evidence-Based Management as a Decision Science:
Considering the Mental Models of Leaders
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IPO Investors Miss the HR Connection
Companies whose investor communications indicate people are important:At Time of IPO Priced lower
Five years later Valued higher Survival is
higherAverage HR value 70% survivalHigh HR value/rewards 92% survivalLow HR value/rewards 34% survival
Theresa Welbourne & Alice Andrews (1996)
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Manufacturing or technology company High-growth potential in the long term
Strong market demand
Constrained resource: Project engineers to customize the products to
the needs of the clients
Example: Managing the Right Asset?
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Complete certain projects Add six new project engineers
Goals:
Actual: Completed projects Only added three new engineers
Traditional Budgeting Objectives
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Completed all objectives Expenses under budgetMost systems would reward budget goal
But, the expenses saved are minimal They are in a weaker position –
compared with if they had staffed as planned
Typical Performance Appraisal
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Meet the operating budget for the region
Fill the vacant GM positions
Goals:
Actual: Met the operating budget Hired only GM’s who did not require
paying more than target salary
Actual Example from a Retail Organization
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HR At the Table But Traditional
HR Considered Very Important for its “Strategic Contribution” by 67% of Executives
Source: High Performance Workforce Study, Accenture, 2003
“Strategic Contribution” Is Defined Traditionally Tools for Attraction and Retention Succession Planning Consistency in rewards, training, etc.
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Leader Talent Sophistication(Lawler & Boudreau, “Achieving Strategic Excellence”
2008)To what extent are these statements true about your organization?(1= little or no extent; 2=some extent; 3=moderate extent; 4=great extent; 5=very great extent)
Average (HR sample)
Average (Non-HR sample)
Strategic Role
(HR sample)
Strategic Role
(Non-HR sample)
Business leaders understand and use sound principles when making decisions about:
Motivation 2.7 3.0 .31** .40*.16 in ’04
Development and Learning 2.8 3.0 .27** .48**.18 in ’04
Labor Markets 2.7 3.1* .18 .33*.28* in ’04
Culture 2.9 3.1 .21* .32*.07 in ’04
Organization Design 2.8 3.1 .32*** .60***.17 in ’04
Compare to more “traditional” management disciplinesBusiness Strategy 3.6 3.7 .22* .15
.15 in ’04Finance 4.0 4.1 .20 -.04Marketing 3.5 3.2 .22* .25Technology 3.3 3.3 .22* .25HR systems educate business leaders
about their talent decisions 2.5 2.6 .28** .69***
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Applying Supply-Chain Principles
To Retention
Are Turnover Rates Too Dangerous to Share with
Non-HR Leaders?
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Typical Turnover Analysis Logic
Spend months defining the right turnover rate Benchmark against industry competitors Report turnover rates and benchmark levels to non-
HR leaders Hold leaders accountable for bringing turnover
down Calculate the costs of separating and replacing
employees to show the millions of dollars saved
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A More Complete Turnover Logic
Starting Workforce ValueQuantity of employees
XQuality of Employees
Change in Workforce
Effect of AcquisitionsQuantity of employees added
XQuality of Employees added
Ending Workforce ValueQuantity of employees
XQuality of Employees
Effect of SeparationsQuantity of employees removed
XQuality of Employees removed
Minus the Transaction Cost of Processing the Separations and Acquisitions
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Talent Supply Chain: Sourcing and Screening
Building and Planning
Improve the number and quality of individuals that might become candidates
Potential Labor Pool
Labor Pool
Applicant Pool
Candidates for further evaluation
Offer Candidates New Hires Productive
Employees
Recruiting
Identify the number of qualified candidates that best suits your organization’s recruiting needs.
Screening
Screen for predictors of performance: Universal metrics as well as specific criteria by company.
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Talent Supply Chain: Selecting, Landing and Retaining
Selecting
Metrics that provide consistent predictors of performance and reduce human variability (error)
Offering and Closing
Objective is to close a high percentage of the highest potential candidates.
On-Boarding
Establish new person in their position and retain them. How long must employees stay to payout the recruiting costs?
Potential Labor Pool
Labor Pool
Applicant Pool
Candidates for further evaluation
Offer Candidates New Hires Productive
Employees
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Recurring Theme:
The Relationship Between Talent and Organization
Quality,
and Strategic Payoff
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Talentship Approach:“What is Pivotal?
Where would improvements in talent
quality or quantity make the biggest difference in the most pivotal processes for the Disney theme park
business?
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Sweepers • Stop sweeping and talk to
guests• Give accurate information• Create delightful
encounters• Fix problems before they
occur• Bring information to
product design teams
AlignedResponses
“What employee behaviors make the biggest
difference?”
Example: Sweeper at Disney
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Pivotal and Important Are DifferentSt
rate
gic
Valu
e
Performance
WorstMickey Mouse
WorstSweeper
There is more value in improving
Sweepers than Mickey Mouse.
Best Mickey Mouse
BestSweeper