PowerPoint Presentation

DANCING WITH THE BUSINESSHow HR Creates Value

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NORM SMALLWOODNorm is a recognized authority in developing businesses and their leaders to deliver results and increase value. His current work relates to increasing business value by building organization, leadership, and people capabilities that measurably impact market value.nsmallwood@rbl.net

www.rbl.net

Ashly DelGrosso: Dancing with the Stars

I really liked the theme of this conference- dancing with the business and took the conference sponsors literally about this metaphor. Who has heard of the TV show, Dancing with the Stars? The premise of the show is that celebrities who dont know how to dance are paired with good dancers to try to win a dance competition. Every week judges eliminate a pair of dancers until there is a winner. I have two connections to this show. First is that Donny Osmond won the show a couple of years ago and Donny is a neighbor.

The second is more relevant to what we are talking about today. I have a daughter named Ashley who loved to dance and took dancing lessons at a studio called the Dance Company in Orem, Utah. My Ashley became very good friends with another Ashley- Ashly DelGrosso whose mother owns the Dance Company. Ashley delGrosso has gone on to become one of the professional dancer who teaches the celebrity how to dance on Dancing with the Stars.. Ahsley has been very successful. The way Ashley dances with the stars teaches us a lot about how we can dance well with the business. She has to start with their challenges- its not about her expertise, its about how they can work together to do something neither could do aloneShe has to give them tough feedback and she has to be willing to receive tough feedback from them about what they can do to perform betterShe has developed a roadmap with principles about how to dance well together with people who have different needs and challengesFinally she has to invest in herself- to keep herself tuned up as a great dancer that can help make them look good.Lets shift now to learn how to dance with the business as HR professionals by applying what Ashley does with the stars. 3GOALS FOR THIS WORKSHOPTHINK: About how HR dances with business (contributes to business value and the HR competencies required to do that)

BEHAVE: Be able to do things that make a difference

HAVE FUN: Enjoy the experience together by learning together

4Im sure Ashly tells her celebrity clients that if they practice hard and have fun, things will be high performing. Lets do that today. As I go through the slides today, Id like you to apply the ideas to your client in the business. If you are trying to apply the ideas they will be a lot more interesting. So dont just sit there passively, dance with me and apply the ideas. HR value is achieved by starting from theNot from the Inside-Out.

Who has been married the longest? What gift give?Value is not in the eyes of the provider of the gift but in the eyes of the receiver. 5Value is in eyes of the receiver of the gift, not the provider of the gift. HR value is not from within HR but in eyes of our stakeholders

Show the tape. This is what inside out thinking gets you. If you dont follow our roadmap and are too internally focused on what HR wants to do, you will be like this girl dancing and singing in the Australian commercial. You will wish for something that is not what is desired by your stakeholders and the consequences may be dire.

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Ok, its clear that the value of the gift lies in the eyes of the receiver of the gift. But what is the gift of HR? how can I dance with the business in a way that my actions create real value in the eyes of the business? To do that, I need to start with the business, not with HR. 7

(Employees)HR Actions

(outside)(inside)

Benefits

Training &Development

Compensation

Org. Design &Development(External Stakeholders)Business Environment

CustomersCommunityInvestorsAnalystsShow both sides. If I want to improve, I can start from the inside and work out or I can start from the outside and work in.what if we start with HR and ask, what can HR do to improve? This question starts form an inside point of view and looks at how can HR improve the way it does benefits, provides better training and development, improve compensation and design the organization for better efficiency and effectiveness. The intent is to do better what we already do. .Or I could start from the outside and understand what the business stakeholders need- investors, analysts, customers, community. If I start here, I open up the possibility that improving what we do today may not be as relevant to what these stakeholders want in the future. Investors want reinvest able profits for strategic growth, analysts want to know what you plan to do in the next quarter, customers want to get great products and have great service. The community wants you to be a socially responsible firm with good jobs that pay well. By starting from the outside-in, HR opens up entirely new ways to add value to the business.If the value of the gift is in the eyes of the receiver not the giver, its clear that if I want to dance with the business, I heed to start with what challenges the business faces not with what I can do better that I am already doing. But this is easier said than done. I need a roadmap to get from stakeholder needs to HR actions.8

(Customers & Investors)BusinessEnvironment

HR Actions

In order for HR to be Outside-In,we need a roadmap to fill in the gap

Our outside in roadmap identifies what HR actions the business would really find valuable. This does not mean that the HR actions we have today are not useful. Its that we need to configure them in a way that adds the most value to the business.Go through the roadmap. Note that capabilities are the filter between what the business needs and what HR should do. 9Strategy answers the question:Why do our customers buy from us instead of our competitors?

(Target Customers)BusinessEnvironment

SpeedPriceQualityInnovationService

The first stop on the roadmap was the stakeholder to our business. The second stop in our roadmap to dance with the business is business strategy. Part of any business strategy is knowing why our customers buy from us rather than our competitors. Remember what is I challenged you to do- apply this to your situation. As I review each stop on the roadmap, you must apply the framework to your situation. So why do your customers buy from your organization? There are 5 options.10Match the business to its dominant customer value proposition. SpeedPriceQualityInnovation

ServiceAll organizations have all of these value proposition. However, high performing companies are better at one of them than the others. They stand out. Customers have a reason to buy from them. Id like you to shout out the answers as I show these.I just flew in to HK on Cathay Pacific, what is their value propositon? Why do customers fly to HK on Cathay pacific and not Delta? ( I Have 5 million miles on Delta).

11Firm Brand Identity:The identity of our firm in the eyes of our target customers.

HR Actions(Customers & Investors)BusinessEnvironmentQuick ReviewStrategy:Why our customers buy from us instead of our competitors.Lets do a quick review of our roadmap. We started with the outside stakeholders, then we looked at business strategy and answered the question, why do our customers buy from us rather than from our competitors. Now that we know why customers buy from us, we want to understand what is our brand identity in the customers eyes? What do we want our customers to say about us?121.2.3.SpeedPriceQualityInnovationService

Customers & InvestorsBusinessEnvironment

Firm Brand Identity describes the identity of our firm in the eyes of our target customers. What are three words we want these target customers to say about us?

One of the three words is the customer value proposition, then add two words or phrases to describe the desired customer experience.CHEAPFUNON-TIME

PriceTo make it easier for you to do your application, Im going to use an example from a US airline that you may have heard of. Im using an airline example because most of us have experience as travelers on airplanes and have opinions about what we like. Southwest has done a lot of things right over the years and they are not a client. This example is based on my observations of this company for illustrative purposes.13Sales and marketing efforts promote the firm brand identity to customers. A high performing culture exists when this identity is made real to customers through employee actions. CHEAPFUNON-TIMEMake identity real toCustomersEmployeesServiceServiceHIGH PERFORMANCE CULTUREEmployeeactionsCustomerexperienceMake sure you do the application as I am talking. What are 3 words that you want your customers to say about your company?

firm brand identity is a very powerful way to build your culture. Rather than thinking about culture form the inside- as a set of values or the way we do things, conceive of culture as the way our customers experience our company through our employees. As a customer, we go to a restaurant or a hotel or a government agency. WE want something that is based on the customer value proposition and the firm brand identity. To what extent is what we want that experience to be, what the customer acutally experiences.A high performing culture is one that resonates with target customers. 14Firm Brand Identity:The identity of our firm in the eyes of our target customers.Capabilities:Now we need strong technical and organizational capabilities to deliver the promised customer experience.

HR Actions(Customers & Investors)BusinessEnvironmentA Quick ReviewStrategy:Why our customers buy from us instead of our competitors.Now we get to the best part. Capabilities link what the business needs with what HR should deliver. Organization capabiities are the deliverables of HR that dances with the business. 15InnovationQuality MindsetCustomerConnectivitySpeedEfficiencyThere are 12 common organization capabilities. These capabilities are the bridge between what the business needs and HR actions. HR collaborates with business leaders to target and build capabilities with highest impact on business success. TalentLeadershipSocial ResponsibilityStrategic AlignmentLearningCollaborationAccountabilityPeople CapabilitiesIntegrating CapabilitiesCustomer CapabilitiesNeeded by all businesses1616People capabilities are a give to any business. HRs job is to build talent and leadership with the business. Lets talk about leadership and talent for a few mintues

Leadership brand is outside-in. It increases customer and investor confidence in future results. It moves the stock price.

LeaderLeadershipInsideOutsideLeadership BrandCelebrity LeaderCompetent LeadersLeadership SystemsWe see two trends in leadership. The individual leader and the organization capability of leadership.Leader and leadership issues inside the organization and leader and leadership issues outside the organizationlGo through each quadrant.17Leadership Brand capability makes the firm brand identity real to customers. Leaders at every level ensure that customers receive the desired brand identity experience because of employees who live the high performance culture. CHEAPFUNON-TIMEMake Identity real toServiceServiceHIGH PERFORMANCE CULTUREEmployeeactionsCustomerexperienceLeadershipBrandLets do the application to South west Airlines. Read header: leadership brand makes the firm brand identityLeadership brand for SWA is about how to ensure a high performance culture around cheap, fun and on time. What leader behaviors and actions ensure that employees deliver a fun experience on every flight for SWA passengers. These leader behaviors are unique to SWA and based on the customer experience they want. 18HR must also build talent capability throughout entire organization.TalentCOMPETENCE

The right person, in the right place, at the right time, with the right skillsBuyBuildBounceBorrowBoostBIndCOMMITMENT

Enact an employee value propositionWhat do I get?What do I give?

CONTRIBUTION

Create meaning at workIdentityPurpose RelationshipsWork environmentWork itselfLearning/resilienceCivilityCompetenceCommitmentContributionTalent is the second people capability that HR must help to build to dance with the business.We see three parts to talent- Competence (right skills, commitment (invest discretionary effort) and contribution (Finding meaning in the work)Review each.Whats important here is that we need all 3 of these to have great talent. For example, if we have high competence and low commitment/meaning we have smart emjployees who dont care and if we have the reverse we have dumb ones that do.

19InnovationQuality MindsetCustomerConnectivitySpeedEfficiencyTalentLeadershipSocial ResponsibilityStrategic AlignmentLearningCollaborationAccountabilityPeople CapabilitiesIntegrating CapabilitiesCustomer Capabilities1IntegratingCapability1CustomerCapabilityHigh performing HR goes beyond talent and leadership to build two additional organization capabilities aimed at building a unique culture targeted to the business. 2020Many if not most HR organizations stop at building leadership and talent. The HR field is enamored with talent in particular. high-performing organization, you will pick two more, a customer and an integrating capability. To do this you msut dance with your line leaders and determine two more- an integrating and a customer capability. Which of these capabilities does SWA need in order to deliver their strategy and firm brand experience of fun, on time and cheap?

TalentLeadershipSocial ResponsibilityStrategic AlignmentLearningCollaborationAccountabilityPeople CapabilitiesIntegrating CapabilitiesInnovationQuality MindsetCustomerConnectivitySpeedEfficiencyCustomer CapabilitiesSpeedQualityInnovationServicePriceCustomer Value Proposition (why our customers buy from us)Target and build the customer capability that corresponds to your customer value proposition.First:CustomerValue PropositionPriceEfficiency

1CustomerCapability2121Lets look at SWA and see how they could pick. First, start with the easy one, SWA has chosen price or cheap as their value proposition. Which organization capability goes with low price? Efficiency!If their value proposition was innovation, what would the customer capability be? Duh, innovation. TalentLeadershipPeople CapabilitiesInnovationQuality MindsetCustomerConnectivitySpeedEfficiencyCustomer CapabilitiesSocial ResponsibilityStrategic AlignmentLearningCollaborationAccountabilityIntegrating Capabilities1IntegratingCapabilityChoose an organization capability from the Integrating Capabilities. Second:Collaboration

2222Now we need to pick an integrating capability. Keep in mind SWAs firm brand identity.. So how might the customer experience this low price value proposition? The low price or cheap fares are experienced by the customer as fun and ontime. Southwest organization capabilities that deliver fun and ontime is collaboration. This collaboration capability is collaboration within SWA with how employees work with each other to ensure ontime takeoff and landing AND with how employees collaborate with customers to deliver a fun experience.InnovationQuality MindsetCustomerConnectivitySpeedEfficiencyTalentLeadershipSocial ResponsibilityStrategic AlignmentLearningCollaborationAccountabilityOneIntegratingCapabilityOneCustomerCapabilityHypothetical Example: Southwest Airlines Both People CapabilitiesSpeedQualityInnovationServicePrice

2323Talent and leadership are a given. If you are a high-performing organization, you will pick two more, a customer and an integrating.What are the capabilities required to drive low price value proposition that has a customer value proposition around fun and ontime? Collaboration. This collaboration is internal among pilots, flight crews and mechanics that drives on-time as well as collaboration with passengers around telling jokes, songs and music.

AccountabilityQuality MindsetCustomerConnectivitySpeedInnovationSocial ResponsibilityStrategic AlignmentLearningSpeedQualityServiceInnovationTalentLeadershipOneIntegratingCapabilityOneCustomerCapability Both People CapabilitiesHypothetical Example: Southwest AirlinesCustomer Value PropositionSouthwest Airlines: Build a high-performing culture of efficiency and collaboration supported by strong talent and leadership. CollaborationEfficiencyPrice

2424So at SWA has capabilities of efficiency and collaboration as well as talent and leadership My experience of collaboration which was fun and ontime occurred when I landed in Las Vegas one time during a SWA celebration. I opened my baggage compartment to put my bag inside and a flight attendant was hiding inside and said BOO. I was not expecting that.Then an office person came in to announce in something about the celebration and before he was finished the flight attendants and one of the pilots carried him off the plane while he was still talking. The crew is bonused for ontime takeoff. Let me show you a youtube video of a real flight attendant at SWA announcing the insttuctions before takeoff. Clearly SWA is not for every flier but for those who like it, its wonderful. Cheap, fun and ontime.

High performance culture at SWA: collaborating with customers to ensure fun experience around firm brand identity

RoadmapBusiness Environment:Business traveler is dominant logicHigh competitionLow marginRegulated

Strategy:Customer Value Proposition:Low PriceCHEAPFUNON-TIMEFirm Brand Identity:ServiceServiceCapabilities:LeadershipBrandHIGH PERFORMANCE CULTURETalentCollaborationEfficiencyWhat HR actions are needed to build these capabilities? WEve only got two stops left on our roadmap. Some of you have been waiting for this moment- what HR actions do we do? The answer is simple- the hr actions that build the targeted capabilities we have chosen.26From: HR ActivitiesTo: Organization Capabilities (Deliverables)HR actions must shift from internally focused HR activities to building and implementing targeted organization capabilities.RecruitingPerformanceManagementCompensationTraining & DevelopmentODBenefitsLeadershipTalentEfficiencyCollaborationInternally Focused HR ActivitiesTargetedOrganizationCapabilities27So what implications does all of this have for HR?The reason we need the roadmap is to identify these organization capabilities. We have to shift from internally focused HR activities to building capabilties that the business wants.Use SWA as case again. What hr actions are needed to build leadership, talent, efficiency and Collaboration?Go through each activity. If we wanted to be world class around collaborating with customers so that they had fun on our airline, how would we do recruiting differently? Performance management, compensation, and so on. Repeat for each capabilityHow can HR use this logic to become better strategic business partners?The targeted capabilities are the deliverables of strategic HR. First, HR must shift from doables to deliverables.HR uses the language of activities: Recruiting, Compensation, Training- the activities on the left side.HR must shift to business language to get us talking about the columns- the organization capabilities. These organization capabilities are the new deliverables for HR. These organization capabilities are the source of sustainable competitive advantage for your business. In the past, HR has talked a lot about one of them (talent) and not enough about the others.

This will be a continuation of the Samsung example. Needs a big Samsung logo (animated?) and the capabilities color coded.RecruitingPerformanceManagementCompensationTraining & DevelopmentODBenefitsTo: Organization Capabilities (Deliverables)From: HR ActivitiesLeadershipTalentEfficiencyCollaborationHR ActionsHR ActionsHR ActionsHR ActionsGive the most frequent flyers a coupon to give out to employees when experience a great flight.Have flight crew candidates tell a joke, sing a song, demonstrate their ability to lead a fun experience with others.Semi-annual workout sessions to identify ways to increase simplicity and take out costs.Pay on-time takeoff bonus to flight crew and mechanics team.With a clear view to targeted capabilities, HR must redefine each HR activity and then integrate them to build each targeted organization capability28So what implications does all of this have for HR?Use SWA as case again. What hr actions are needed to Go through each activity. If we wanted to be world class around collaborating with customers so that they had fun on our airline, how would we do recruiting differently? Performance management, compensation, and so on. Repeat for each capabilityHow can HR use this logic to become better strategic business partners?The targeted capabilities are the deliverables of strategic HR. First, HR must shift from doables to deliverables.HR uses the language of activities: Recruiting, Compensation, Training- the activities on the left side.HR must shift to business language to get us talking about the columns- the organization capabilities. These organization capabilities are the new deliverables for HR. These organization capabilities are the source of sustainable competitive advantage for your business. In the past, HR has talked a lot about one of them (talent) and not enough about the others.

This will be a continuation of the Samsung example. Needs a big Samsung logo (animated?) and the capabilities color coded.High-performing HR is more than talent and leadership. HR Action Challenge: Three 3s for each of the 12 capabilities.3 hours: 3 months: 3 outcomes: What are three specific outcomes we will deliver in 3 months?What specific things will we accomplish in 3 months (who will do what, when, where)?What can I help my management team do in 3 hours to make progress?TalentLeadershipInnovationQuality MindsetCustomerConnectivitySpeedEfficiencySocial ResponsibilityStrategic AlignmentLearningCollaborationAccountabilityMy challenge to the HR people here today is what we call the 3, 3s. You cannot be a high performing global HR professional and know only about talent and leadership. The game has expanded. You need to know how to build all of these capabilities. So heres the challenge, for each capability, am I able to run a 3 hour workshop with my leadership team on any of these capabilites that results in a 3 month action plan with 3 outcomes. Which ones can you do now? Could you meet the 3, 3s around accountability? Around efficiency? Innovation? Etc. Are there any line executives that dont want you to be able to do this? Put up your hand if you are a line leader and youd like your HR person to be able to deliver the 3 3s on these capabilities. Thats your new challenge for HR actions to dance with the business and build high performing organizations.

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HR ActionsHR Competencies:Its not enough to know that we should build targeted capabilities; HR must invest in itself to dance better with the business.

Now we come to the last stop. We need to invest in ourselves. One of the dilemmas of HR is that we invest in everyone but ourselves. I just gave you the 3 3s challenge. If you cant do them all, you need to invest in yourself. I dont think there are many here who would not benefit. So lets look at what HR competencies we need to know, be and do.30

National HRD India

51job ChinaIAE Latin America

ASHRM Middle East

HR Norway

AHRI Australia

IPM South AfricaEvery four years for the last 25 years, we have worked with regional HR associations across the world to identify what these competencies are.31

High-performing HR professionals must have proficiency in Six Competency Domains to dance with their business.32This model is organized to tell a story in two ways; first, it is organized to be consistent with the data that was collected and analyzed. Second, it is organized in a way to aid in professional development.

The left side of the model focuses on competencies needed to focus on people. Being a Credible Activist, particularly the credible part, Operational Executor, and Talent Manager / Organization Designer help HR professionals in serving people inside their organization and focus on areas such as human capital, workforce, talent, treating people well today, etc.

Credible Activist: has personal credibility with the business and initiates action.High-performing HR professionals must have proficiency in Six Competency Domains to dance with their business.

Strategic Positioner: knows the market context (customers, investors, community) and interprets to frame HR impact.

Capability Builder: collaborates with business to audit, target, and build organization capabilities.

Change Champion: knows how to manage and sustain individual, project, and enterprise change efforts.

HR Innovator & Integrator: takes a systemic approach to integrate and align HR practices.

Technology Proponent: utilizes technology to increase efficiency, build communities, and influence stakeholders.First competency is Credible Activist. To be seen as a good hR professional you need to have a point of view (think organization capabilities or the roadmap) and you need to take initiative with business leaders. Credible without acition is a bump on a log and activist wtihout credibility is a pain. Shake hands or point at someone you know in this room who is a great credible activist. Strategic positioner. A strategic positioner works with leaders a rainmaker for HR. This person understand and is able to facilitate A dialoge about the challenges the business faces with stakeholders and the implications for business strategy and firm brand identity. This person is a contributing member of the strategic team of the business and is also an HR professional.Cpability builder does the audit about what capabilites are needed with business leaders give tne strategy and the firm brand identity. Once the capabilities are identified, the capabiiltiy builder aligns HR actions with the targeted capabilities.The next 3 competencies are about implementation of HR actions. Now that we know what capabilities we need the change champion, the technology proponent and the Hr innovator and integrator competencies make it all happen.

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RoadmapBusiness Environment:Business traveler is dominant logic

Strategy:Low PriceCHEAPFUNON-TIMEFirm Brand Identity:ServiceServiceCapabilities:LeadershipBrandHIGH PERFORMANCE CULTURETalentCollaborationEfficiency

HR Actions:

HR Competencies:So lets look at our roadmap one last time and see how we can dance with the business using our airline case study.34For more information about any of the material covered in this session, please contact Norm Smallwood by email or visit the web:nsmallwood@rbl.net

www.rbl.net

35LEADERSHIPWeve talked to senior executives all over the world in a variety of industries and heard four themes about how to develop great leaders: Focus on your core business strategy.Ensure execution at every level. Strengthen your performance culture. Invest in and engage your workforce. These messages align with our work about what effective leaders must do in any marketfocus attention, deliver results, build capabilities for the future, and connect employees to customers to deliver the right experience. When leaders get these things done well, organizations will emerge stronger than competitors. The RBL Group has taken an outside-in, value-oriented business approach for over ten years about how leaders can deliver the right results the right way. STRATEGIC HRIn 1989, we asked the question, How does HR add value to the businesses they support? After twenty years of research, developing a global database of over 40,000 professionals, and practical implementation with companies from around the globe, weve identied, tried, and tested principles HR leaders should follow to adapt their organizations to deliver value in any economy. Our approach to transforming HR produces the following benets: Increased HR effectiveness AND decreased costs. Improved HR competence AND contribution. Delivery of strategic organizational capabilities AND leveraged talent.What We Do