Human Resources As A Competitive Advantage

“The organization can NEVER be

something the people are not.”

- Price Prichett

The question I have for you at this point of our journey together is, “What is your genius?”

What is Strategy?

❑ “Strategos” in Greek, the act of the Army general

❑ Strategy is the deployment of one’s “limited” resources in a

manner that is most likely to defeat the enemy.

Michael Porter (Harvard Professor):

❑ Creation of a unique & valuable position → Distinctive Competence

❑ Choosing what not to do

❑ Aligning activities to act in concert

What is Strategy?

Ray Peters

Strategy = Focus + Uniqueness

What is Strategy?

❑ An organization can outperform rivals only if it can

establish a difference it can preserve.

What is Strategy?

❑ The essence of strategy is choosing to perform activities

differently than rivals do.

❑ The greatest challenge to implementing strategy is execution.

What is the essence of HR Strategy?

❑ Having the right people, in the right place at the right

time, with the KSA to effectively execute the

organizations strategic objectives.

Today’s Challenge → How many of you believe that

competent & committed talent is a scarce resource?

3 Integrated HR Strategies that drive Business Performance

1. Investing in Future Leaders

2. Diverse Teams (Broadly Defined)

3. Employee Health & Well-Being

HR People + Strategy Blog

Today’s Focus → Talent Optimization

Employee Health & Wellness

In the Beginning → Define the destination of your journey.

❑ What is your vision of the future?

❑ Your job as a leader is to see what’s around the corner

BTW, you can’t lead from

behind your desk.

Question:How many of you have wasted $ on

employee training & development?

Distinguish between training & development

❑ Training = Skill (Current)

❑ Development = Overall Employee Growth (Future)

When you spend money, what are you wanting to

achieve? How will it be measured?

Kirkpatrick’s Levels of Evaluation:

❑ Level 1 - Reaction

❑ Level 2 – Learning

❑ Level 3 – Behavior

❑ Level 4 – Results

Program Evaluation

▪ Level 3 – How participants change their behavior on the job.

▪ Level 4 – How the activities/program affect the organizational goals.

Longer-Term Focus

Program Evaluation

Return on Expectations:

❑ Meeting Long-Term Leadership Strategy

❑ Organizational Evolution

❑ Global Acumen

❑ Multicultural Competency

❑ Operational Excellence (OEE)

❑ Operational Flexibility & Nimbleness

❑ Talent Retention

❑ Sustaining a Safe, Productive & Engaged Workforce

Talent Optimization (Part 1)

❑ Royal DSM N.V. is a Dutch multinational active in the fields of health,

nutrition & materials. Headquartered in Heerlen, the Netherlands, DSM

employees employs ≃ 21,000 people in 50 countries.

Company Overview:

DSM Corporate Management Development –

“MD comprises attracting, placing, & developing

managers, in such a way that DSM’s short-term & long-

term interests are optimally served.”

Corporate Management Development Committees:

❑ Marketing & Sales

❑ Production & Maintenance

❑ Finance & Economics

❑ Research

Finance & Economics → Develop career paths and related developmental

experiences for individuals exhibiting potential to advance to divisional-

level Accounting leadership roles.

Ray’s Assignment:

Development Formula:

❑ Educational Foundation

❑ Two Business Units

❑ Two Geographics

❑ +1 Outside Discipline Assignment

Strategic Multiyear Plan (SMP)

• 3 years

• 5 years

• 10 years

Strategic Challenge – Closing the ∆ between current supply

vs. projected future needs

Process:

Demand Forecasting (Succession Planning)

Picture of Developmental Needs

Develop Talent Strategies

Skills Inventory

Example: Developmental Progression

assistant business controller

product controller

business controller marketing manager

general manager

marketing manager

DSM Video

Outcome:

Talent Optimization (Part 2)

❑ RoyOMartin is a 95 year-old, privately held, professionally

managed forest products company, headquartered in Alexandria

,LA. It’s the largest private landowner in LA.

Company Overview:

Pay for Knowledge & Skill→ Employees “advance” as they acquire

additional operating knowledge & can demonstrate proficiency

(skill) at applying that knowledge.

Benefits of Pay for Knowledge & Skill:

❑ Wide Distribution of Knowledge

❑ Improved Problem Solving

❑ Increased Labor Flexibility

❑ Labor Efficiency → Learning Curve

Traditional Progression:

SR Operator

Operator

Assistant Operator

General Production Worker

Utility Pool

PKS: Cohesive Organism where all individuals within an

operating system can seamlessly & effectively traverse

between production elements within that system.

PKS:

Functions

Operating System

Learn the System

Desired Outcome:

❑ Increased Operating Knowledge → Problem Solving

❑ Flexibility & Nimbleness

❑ Minimize Operating Downtime

❑ Improved Overall Equipment Effectiveness

❑ Improved COGS (Operating & Labor)

Important Takeaway → “Labor costs are not the same thing as

labor rates – Higher paid people who produce proportionately

more can actually reduce labor costs.”

-Jeffrey Pfeffer

Outcome:

Net Gain for 2018

Area of Improvement Gains

Decreased turn over $722,800

Increased productivity $1,467,319

Decreased downfall $1,787,233

Total gain $3,977,352

Less labor cost $1,396,456

Net gain $2,580,896

Employee Health & Well-Being

❑ Doesn’t it seem logical that a healthy employee is a

more productive employee?

❑ Would you agree, a healthy workforce is a more

competitive workforce?

❑ Furthermore, A healthy family minimizes employee

distractions & absences from work.

Strategic View→ Organizations need to offer employees benefit

programming that promotes employee engagement. Why? You

want to retain those healthy employees.

Business Case → Effectively managing the cost of goods

sold (cost of sales).

COGS = Raw Material Cost

Production/ Process Cost

Labor Cost

Employee Attendance & Engagement impacts COGS in several ways:

❑ Overall Equipment Efficiency

- Availability

- Performance

- Quality

❑ Labor Cost

- Training Cost

- Overtime

- Absenteeism

- Safety

- Replacement Cost

❑ Employee health care & wellness cost are important elements

in the cost of doing business & optimizing organization

performance.

Question:How do organizations ensure they are getting the

best value for their health care $?

Best Value = Access to quality care that’s efficiently

managed, and at the right price.

Louisiana Health Care Quality Forum

(Post Katrina)

RoyOMartin’s Journey:

LHCQF

Patient-Centered Primary Care Collaborative

Employer Partners: RoyOMartin

Gilchrist Construction

AFCO Industries

❑ Important Point: Employees and dependents were not

required to use the clinic.

❑ The promise: Access to quality care is the ticket.

Proof: During annual enrollment, > 80% of the

employee population indicated Legacy

as their primary provider.

Further Proof: In 2018, when I retired, health cost were

running at a negative annual trend.

Even Further Proof: When employees were asked,

what’s their most valued benefit?

They answer: Legacy Health & Wellness

Let’s Review → (1) Effectively developing lenders prepares

organizations for evolutionary growth.

(2) The greater an employee’s KSA, yields greater

operating & labor efficiency.

(3) A healthy employee is a more productive

employee, minimizing absenteeism, and fostering

higher levels of employee engagement.

All 3 of these strategic activities/processes were initiated & lead by H.R.

In closing…

“Capital & Machinery make it possible – People make it happen.”

- Dave Spence

Bosie Casende

Final Thought: