CREATING VALUE AND RESULTS THROUGH PEOPLE

Human Resources Strategic Framework

Jim LyndeMarch, 2015

(recommend viewing as Slide Show presentation)

KEY PRINCIPLES

1. People are the only true performance variable. Investing in the right

people is the greatest potential ROI

2. Achievement = Business Vision + Aligned Design and Execution

3. Stakeholders are core (Customers, Workforce and Investors).

Improve results (with balance) for all stakeholders to create greatest

long term financial return

Market Value is created through people who:

1) CAN execute the Vision, Strategy and Tactics

2) Deeply WANT to achieve Vision/Strategy

3) DO perform and achieve Measured Results

BUILDING VALUE THROUGH PEOPLE

CANCapability

WANTCommitment

DOExecution/Performance

Recruit and

continually grow

talented people who

can execute

strategies to achieve

business vision

Inspire cult-like

commitment to

extraordinary execution

of vision, strategies and

tactics

Drive performance and

accountability to

achieve expected

measured results

BUSINESS BUILT TO GROW AND WINStakeholder: Leadership Workforce Customers Investors

= Profit

X

X

- Value Execution Model

Leadership Work

Force Can Want

Do

Customer

Loyalty

Cost

Management Can Want

Do

Aligned Foundation

Ingredients

Vision Purpose/Competitive

Advantage Values Strategy to Achieve

Employee Brand Identity/Promise Team Member

Processes

Customer Brand Identity/Promise Operating and

Marketing Processes

Business Model Financial Processes

Key Diagnostic/ Predictive

Measures

Key Result Measures

360 Feedback (create Can, Want & Do)

Employee Surveys (commitment, pride)

Customer Satisfaction/Net Promoter (intent to, refer,return, value, overall satisfaction)

Customer/Market Insights

Trend Analysis Forecast

Turnover All Other Financial,

Customer and Workforce Measures

Productivity Turnover/Retention Talent Depth to Grow

Sales Repeat Business Market Share Market Growth

Margins Variance to

Standards/Competition ROI

HR Focus

ALIGNED PEOPLE FRAMEWORK

COMPANY VISIONCompany Values/Desired Behaviors

Includes Purpose/Competitive Advantage

COMPANY STRATEGIES

RECRUIT

SELECT

ONBOARD

TRAIN

WORK ENVIRONMENT

PERFORMANCE

DEVELOP

REWARD

ALIGNED PEOPLE FRAMEWORK(EXAMPLE ONLY—NOT SPECIFIC RECOMMENDATION)

COMPANY VISION Company Values/Desired Behaviors

Includes Purpose/Competitive Advantage

COMPANY STRATEGIES

Recruit

Create

compelling

brand with

strong

values that

attract the

right people

Candidate

quality and

feedback

Select

Effective,

efficient

and

rigorously

executed

process to

choose the

right people

Turnover of

new hires,

360

reviews

Onboard

Pervasive

and strong

sense of

vision and

brand to

create cult-

like pride

Turnover of

new hires,

productivity,

internal

references

Train

“A” level

skills

across

functions,

units, and

levels with

managerial

focus on

teaching

Speed to

productivity,

certification

metrics

Work

Environment

• Ongoing

transparent

exchange of

ideas and

performance

• Network of

caring, goal-

setting and

coaching

Employee

Surveys, 360

feedback,

Turnover

Performance

• Defined and

achievable

measurement

• Direct

feedback

• Ranking and

identification

• Action to

improve

Productivity,

Performance

Differentiation,

Planned

Turnover

Develop

• Talent to

achieve

vision and

grow

• Continuous

upgrade

• Quality and

# ready

when

needed

Bench depth,

Readiness

Reward

• Incentives and

Recognition

based on

strategic focus

• 75th percentile

pay for 75th

percentile

EBITDA

• Competitive

benefits

Retention of

successful

performers and

key talent

Alig

nm

ent

Ele

ments

Metric

s

STRATEGIC ALIGNMENT EXAMPLE A:OPERATIONAL EXCELLENCEHighly Reliable Execution at Low Cost Recruit/

Select

Onboard Train Work

Environment

Performance

Metric Focus

Develop Rewards &

Recognition

Screen

(interview

and test) for

talent that

loves to

follow

process and

hates

deviation

and defects

Immerse

in tribal

stories

about

consistent

execution

to

customers

and cost

reduction

with equal

or better

quality.

Rigorous

process

certification

Annual

recertification

Root Cause

analysis/

defect

elimination

Communications

focus on

execution

effectiveness,

consistent

execution,

execution relative

to competitors,

cost

effectiveness.

Model operations

excellence in all

employment

interactions, fast

and simple

Metrics focus

on consistent

execution/

low variance,

cost

effectiveness

and results

for all

stakeholders

(customers,

workforce,

investors)

Leadership

skills to

identify

variance and

improve

process,

analytical

talent,

customer,

quality, cost

focus.

Celebrate and

incent

consistency of

customer

execution, cost

effectiveness and

results.

Fixed pay at or

potentially below

market, variable

pay at or above

market.

Competitive total

comp.

STRATEGIC ALIGNMENT EXAMPLE B:CUSTOMER INTIMACYPremium Service for a Premium Price

Recruit/

Select

Onboard Train Work

Environment

Performance

Metric Focus

Develop Rewards &

Recognition

Screen for

pleasing

others and

for ability to

exercise

situational

judgment

when doing

so

Stories

about

delight and

service

recovery

Role play

service

moments

and

recovery

Principles/

outcomes of

service

Service

practice/

role plays

Ongoing

communication

about great service

and recovery,

service rankings

relative to

competitors, etc.

High touch

personalized

service to

workforce

Customer sat

measures,

customer

loyalty,

including

internal

customers

High touch,

build and

apply

emotional

intelligence

Customer

loyalty/

satisfaction,

repeat sales,

celebrate heroic

service acts

Above average

pay for service

delivery

STRATEGIC ALIGNMENT EXAMPLE C:PRODUCT LEADERSHIPBest “State of the Art” Products

Recruit/

Select

Onboard Train Work

Environment

Performance

Metric Focus

Develop Rewards &

Recognition

Screen for

ideation,

innovation,

curiosity in

key

functions

Stories

about

great new

products.

New

product

invention

exercise

Innovation

thinking

combined

with

analysis.

Common

innovation

process.

Communication

about product

introductions

and

performance,

market response,

awards for best

products from 3rd

parties.

Flashy/new

products to

support

workforce.

New product

performance

and market

response,

product

pipeline, new

product

introduction.

Innovation

skills and

analytical

rigor.

Innovation

process

management

New product

market

share/growth/

rank relative to

competitors.

Above market pay

for key product

functions

KEY BUSINESS DELIVERABLES

• Organization and jobs designed to execute strategy

• Talent strength at all levels

• Consistent “A” Grade knowledge

• Extraordinary commitment to vision and strategy across organization

• Execution

• Measured results and continuous improvement

KEY HR SUCCESS METRICS

Leading/Diagnostic Metrics

• Employee surveys (commitment, pride, values).

• 360 Leadership Feedback

• Post employment assessment of new hires

• Performance Results, Differentiation, Ranking

• % of Needs Improvement Performers improved/exited within defined time period

• And More

Outcome/Results Metrics

• Turnover/Retention of successful or better performers

• Productivity

• ROI on Workforce Strategies, Tactics and Initiatives

• Ready Talent Depth/Forecasted Needs

• Improvement in Customer metrics (Market Share, Loyalty, Brand)

• Improvement in Financial metrics (Sales, Profits, Returns)

• And More

WHAT WE GET AS A RESULT…

• Superior ROI on Labor relative to competition

• Alignment of Can, Want and Do to drive achievement of vision, brand

and strategy (Superior Execution)

• Superior Results for all stakeholders and greater total financial

return/value for shareholders