ibm business case leadership success through dynamic ... · running head: success through...
TRANSCRIPT
Running head: SUCCESS THROUGH ENGAGEMENT 1
IBM BUSINESS CASE
Leadership Success through Dynamic Engagement
Gigi Ramadan
GMU
April 28, 2015
SUCCESS THROUGH ENGAGEMENT 2
TABLE OF CONTENTS
TABLE OF CONTENTS ................................................................................................................ 2
EXECUTIVE SUMMARY ............................................................................................................ 3
PROBLEM DEFINITION .............................................................................................................. 4
OPPORTUNITIES FOR IMPROVEMENT ............................................................................................ 5
CAUSE ANALYSIS......................................................................................................................... 5
RECOMMENDED SOLUTION .................................................................................................... 6
PROJECT DESCRIPTION ................................................................................................................. 7
GOALS AND OBJECTIVES FOR STEP .............................................................................................. 7
MEASURES OF SUCCESS ............................................................................................................... 7
IMPLEMENTATION OF STEP ......................................................................................................... 8
JUSTIFICATION ........................................................................................................................... 10
PROJECT PLANNING ................................................................................................................ 11
ORGANIZATIONAL IMPACT ......................................................................................................... 11
PROJECT ASSUMPTIONS ............................................................................................................. 12
PROJECT CONSTRAINTS/RISKS ................................................................................................... 13
MAJOR PROJECT MILESTONES ................................................................................................... 13
STRATEGIC ALIGNMENT ........................................................................................................ 13
COST BENEFIT ANALISIS ........................................................................................................ 14
COSTS ........................................................................................................................................ 14
CONCLUSIONS AND RECOMMENDATIONS ....................................................................... 15
SCENARIOS ................................................................................................................................ 15
ALTERNATIVES ANALYSIS ......................................................................................................... 16
ALTERNATIVE 1/DOING NOTHING - ........................................................................................... 16
REFERENCES ............................................................................................................................. 18
SUCCESS THROUGH ENGAGEMENT 3
EXECUTIVE SUMMARY
SUCCESS THROUGH ENGAGEMENT PROJECT (STEP) - An initiative for employee morale, increased
engagement of IBMers and company growth through a hybrid of integrated existing leadership
initiatives training intervention, Social Business model and Smarter Workforce Analytics to
enable and empower all employees as leaders.
ISSUE - IBM faces challenges to the engagement of our workforce due to constant changes. Top
tier leadership initiatives have become inadequate to engage the majority of IBMers across the
world. This inadequacy is manifested in lower productivity, lower revenue, increased employee
attrition and higher costs.
RECOMMENDATION - We propose that IBM should launch and implement an integrated initiative
(STEP) available to all IBMers. Various options and alternatives were analyzed to determine the
best way to leverage leadership best practices to improve the business processes and reduce
the overhead costs within IBM. The approach described herein expands on and aligns with our
core values. Existing initiatives will be reviewed, optimized and rolled out to all IBMers. The
recommended STEP platform is compatible with all other current IT systems.
ANTICIPATED OUTCOMES - We predict employee sentiment will improve by at least 15%,
productivity by 10% and revenue by 5% in year 1. Utilizing a multi-media platform will enable
IBM to integrate existing, tweaked leadership initiatives rolled out to all employees in a
seamless and consolidated manner. Technological affordances will reduce overhead costs
associated with training. The company will also benefit from timely and accurate analytics.
This real time access reduces errors in language barriers, improves communication and trust
across all levels of IBM, and is readily available to all users.
JUSTIFICATION - IBM cannot afford to have dissatisfied employees, and this approach was selected
over others because it applies proven leadership initiatives to all IBMers. Through STEP we
believe all IBMers can be enabled to think, communicate, act, optimize and feel like leaders.
SUCCESS THROUGH ENGAGEMENT 4
Background
IBM once has had a history of innovative leadership development and successful
transformation. However, with the current challenges directed at IBM revenue and employee
morale, it has become apparent that once again a transformative intervention is required.
IBM has numerous leadership development initiatives that fall under the Leadership
Development Framework Vision. Almost every two years we launch a new initiative that
focuses on the top 1% of the IBM workforce. However, for success to be sustained there has to
be systemic and systematics evaluations of those initiatives and questioning the relationships
between them. These relationships between leadership initiatives should evolve with customer
needs, competition’s advancement and commitment to a healthy organizational environment.
IBM spends roughly USD$750 million every year on developing and training our employees, so
obviously a high level commitment exists but is it feasible? This business case addresses that
feasibility by examining the gaps that exist between where we want to be and where we are. As
IBM faces challenges to its goals set for 2015 and 2020 Roadmap, we would like to approach a
specific tool for success, Success Though Engagement Project to incorporate leadership
competencies (identified in the Leadership Development Framework) for all IBMers, not just
executives and top tier management. With this mindset, as employees feel empowered to
make positive differences they will become committed to do so. This intervention aims to
optimize organizational culture which will contribute to quality and revenue increases.
GOAL: In reintroducing the principle of IBM leadership development model with some
transformative elements incorporated to broaden its target audience to include all employees
subsequently, all IBMers will feel like leaders and take action like leaders and lead IBM right
to higher success.
PROBLEM DEFINITION
ISSUE - IBM faces challenges to the engagement of our workforce due to constant changes. Top
tier leadership initiatives have become inadequate to engage the majority of IBMers across
the world. This inadequacy is manifested in lower productivity, lower revenue, increased
employee attrition (in 2011 we reported to BusinessWeek.com that was 92%, in 2014 Forbes
estimates that number is around 84%) and higher costs. We propose that IBM should launch
and implement an integrated initiative (STEP) available to all IBMers.
SUCCESS THROUGH ENGAGEMENT 5
OPPORTUNITIES FOR IMPROVEMENT
Statement of Gap –There are numerous leadership initiatives that currently exist within IBM,
however, very few of them are integrated in a holistic manner. Additionally, within 50,000
leadership positions, only the top tier (less than 10%) benefits from the application of IBM’s
Leadership Development Framework. That translates to only 5300 out of 400,000 employees
who benefit from great leadership principles and training under our Leadership Development
Model. Rather than creating partnerships and alliances to the alignment of IBM values they are
independent entities that focus on top tier management and disregard the remainder of
employees. The current environment at IBM is challenged with the following issues that need
to be addressed:
Low employee morale due to massive amounts of layoffs (employee attrition and productivity)
Low employee morale due to shifting jobs to lower-skilled employees in lower salary markets (employee attrition and productivity)
Lower customer satisfaction with lower quality (less revenue) Employee engagement correlates to productivity, we are not at optimal (less revenue) Need to hire and train employees to replace those that leave for better situations (high
costs)
CAUSE ANALYSIS
Lower than optimal employee engagement has been caused by several dynamic forces:
Layoffs are a central part of our current business model, and as witnessed all over our forum and social media, employees are dissatified and vocal about it. In 2013 and 2014 IBM has spent a reported $2 billion on layoffs. Analysts had estimated that the $2 billion added up to about 26,000 people. (http://www.businessinsider.com/ibm-layoffs-are-coming-but-nowhere-close-to-100000-2015-1#ixzz3Y50UcJ1S). Employees that have been cut have been discussing their experience on the website of Alliance@IBM, a union that represents IBM workers. http://www.businessinsider.com/ibm-employees-say-that-layoffs-have-begun-2015-1#ixzz3Y55ibaJz.
Global expansion: a shift of technical expertise from high-paid US staff to lower-salaried staff in India, while cutting back on staff in the US. Its Indian operations grew from 3,000 to well over 100,000 employees.
13 layers of management seen as viewed as very bureaucratic Reliance on financial incentives, which does not relate to our commitment of employee
well-being and social responsibility. When incentives are purely financial, motivation suffers.
Low employee morale has resulted in lower customer satisfaction. http://www-03.ibm.com/press/us/en/pressrelease/46330.wss
SUCCESS THROUGH ENGAGEMENT 6
Our reputation is suffering, our employees are concerned and dissatisfied and investors are
very wary. Of course, it does not help that on April 20, 2015 we reported our 12th quarter of
decline. “Because the conduct of employees is crucial to customer satisfaction--both in product
and service--a company cannot cast away the loyalty of its employees without suffering serious
repercussions,” (http://www.businessweek.com/chapter/mills.htm).
RECOMMENDED SOLUTION
We propose that IBM should launch and implement an integrated leadership training initiative
Success through Engagement Project (STEP) to be available to all IBMers. This is the optimal
way to leverage leadership best practices to engage all employees, improve the business
processes, increase revenue and reduce the overhead costs within IBM. The approach
described herein expands on and aligns with our core values. Existing initiatives will be
reviewed, optimized and rolled out to all IBMers. The recommended STEP platform is
compatible with all other current IT systems.
Our argument is, maximize the existing leadership program investment within The Leadership
Development Framework by:
I. Rolling it out to all IBMers. Feasibility would identify areas in need of improvement,
and which components can be applied to training and therefore empowering all IBMers.
We acknowledge that some elements of existing leadership initiatives may not be viable
for roll out.
II. Leadership Succession planning and the current leadership pipeline training and
mentoring will be expanded to include all managers and identified potential managers
(all 50,000 not only 5300). Executives and managers should not be negatively affected,
if anything we anticipate only positive outcomes.
Various options and alternatives were analyzed to determine the best way to leverage
technology to improve the business processes and reduce the overhead costs within IBM. The
approach described herein allows us to meet our corporate objectives of continuously
improving efficiency, reducing costs, and capitalizing on technology. We recommend
integrating existing multi-media functions in order extend a Leadership Development
Framework to preserve data integrity and minimize time to train all employees and managers
on their responsibilities and respective functions. The platform is compatible with all other
current IT systems and will improve the efficiency and accuracy of analytics the company.
SUCCESS THROUGH ENGAGEMENT 7
PROJECT DESCRIPTION
What is STEP: A hybrid of integrated existing leadership initiatives training intervention, Social
Business model (for the fifth consecutive year, IDC ranked IBM number one in worldwide
market share for enterprise social software) and Smarter Workforce analytics to enable and
empower all employees as leaders.
GOALS AND OBJECTIVES FOR STEP
STEP directly supports IBM objective in alignment with core values and mission. The following
table lists the business goals and objectives that STEP supports and how it supports them:
Business Goal/Objective Description
Improve Employee
Engagement
Steps to overcome physical isolation, provide training
and opportunities enable employees to visualize their
strengths, role validation and importance to team
Reduce employee attrition Greater autonomy and flexibility will address employee
concerns
Reduce overhead costs Fewer staff required will reduce the company’s
overhead
Improve Analytics real-time and accurate reporting of all engagement
metrics
Increase Revenue STEP productivity and STEP quality results in Customer
satisfaction
MEASURES OF SUCCESS
All managers (5300 employees) that are currently impacted by the Leadership Development
Framework program get rated on all the leadership competencies as measures of success one
time annually. Nine leadership competencies are categorized by three abilities they include:
IBMers who are culturally adaptable, Able to leverage wide capabilities, and Can execute strategy in times of uncertainty.
The Leadership competencies currently (2014) are: embrace challenge, partner for clients’
success, collaborate globally, act with a systemic perspective, build mutual trust, influence
SUCCESS THROUGH ENGAGEMENT 8
through expertise, continuously transform, communicate for impact, and help IBM succeed.
These competencies align with IBM Core Values.
IMPLEMENTATION OF STEP
STEP will review and analyze existing leadership and social interaction initiatives (BasicBlue,
BBNL, LEADing@IBM, GM LDP, AccEL, Thinking Accelerator,Cornerstone for GBS, Whole Brain,
Jam, Social Business, Smarter Workforce….), and recommend how they can be integrated and if
any components need to be modified and how to meet employee engagement objectives. This
will be done by determining and selecting an integrated intervention that will be applied to all
employees alongside the existing systems will focus on top tier and managerial staff. Once
approved, the STEP will take a phased implementation approach.
ACTION 1 of STEP Our first recommendation is to add one more core value. If IBMers are
expected to be committed to IBM, then the organization has to be committed to its
workforce in a holistic grounded fashion.
EXISTING CORE VALUES
Dedication to every client's success. Innovation that matters, for our company and for the world. Trust and personal responsibility in all relationships.
ADD Commitment to employee empowerment.
ACTION 2 of STEP Broaden the IBM taxonomy to enable all IBMers to be identified as
leaders to introduce a culture of taking ownership at every level for the success of IBM. We
propose that the fastest, easiest and most efficient way to do this is through social learning.
By using the Social Business platform a learning revolution can evolve. At IBM, Scott
Edwards is a champion of the 70:20:10 learning model, Employee learning is 70 percent
self-directed, 20 percent mentoring and coaching and 10 percent formal training. Following
this, formal training efforts built around employee empowerment will provide employees
with the tools and critical thinking skills necessary for employees to seek answers on their
own. (IBM 2015). We also have to redefine the roles of our HR department to include
business consultancy with a keen eye on Social Business as a tool.
ACTION 3 of STEP Linking employee engagement to performance by encompassing all
IBMers into a modified Leadership Development Framework. This would begin by analyzing
data from IBM employee engagement surveys, as pre-assessment baseline for STEP and
utilizing the same metrics for post-assessment. “Kenexa integrates our measures of
engagement and enablement into a larger and more powerful concept called the Kenexa
SUCCESS THROUGH ENGAGEMENT 9
High Performance Engagement Model (HPEM),” (IBM 2014). Our acquiring Kenexa in has
put us at the forefront of measuring what we need to know; now we just have to use it.
The technology is fully web-hosted and accessible. Also for measuring engagement pre-and
post-STEP we will using rapid pulse surveys and social analytics dashboard. The 10
benchmark areas we will focus on are: Teamwork, Manager Effectiveness, Trust in Senior
Leaders, Trust with Coworkers, Retention, Alignment with Goals, Feeling Valued, Individual
Contribution, Job Satisfaction and Benefits (http://www.quantumworkplace.com, 2013).
Once the data is analyzed it should be mapped to performance metrics from performance
reviews, actual performance numbers (if applicable) and other employees..
Existing Framework For Leadership Development Framework
Proposed STEP Framework For Leadership Development Framework
ACTION 4 of STEP Once viable components of existing leadership development
initiatives (ones that meet STEP outcomes) have been identified, integrate them in a
singular multimedia function that serves as learning platform, a Social Business platform
and analytic repository. IBM's Social Business initiative and creating a Smarter Workforce,
connects all employees. “You can monitor the discussion of your brand or employee
SUCCESS THROUGH ENGAGEMENT 10
sentiment and spot trends early by mining data from blogs, wikis, tweets and more.
Employees should also feel trusted by management and not like something that needs to be
monitored and controlled,” (IBM, 2011).
ACTION 5 - The existing 3 part process of the Leadership Development; Planning,
Identification and Development, and Placement will be followed by Evaluation to continue
the leadership succession planning methodology. The intervention will evaluate all leaders
progressively along the continuum. With Feedback from analytics (Smarter Workforce),
surveys, reviews the STEP team will also identifies key measures to determine the success
of this new leadership skills approach in the coming months and years:
Assess skill development to measure improvements in relevant competencies over time.
Measure improvements in employee satisfaction based on employee feedback (we
stopped measuring and reporting employee satisfaction rates in 2011, through STEP
analytics we need to extract data and be accountable for these numbers once more)
Expect better availability of critical skills to meet business needs.
BENEFITS OF STEP/ANTICIPATED OUTCOMES
We predict Employee moral may improve by at least 15%, productivity will increase by at least
10% and revenue to increase by 5%. Utilizing a multi-media platform will enable IBM to
integrate existing, tweaked leadership initiatives rolled out to all employees in a seamless and
consolidated manner. Technological affordances will reduce overhead costs associated with
training. By integrating Training and Social Business mechanisms the company will also benefit
from more timely and accurate analytics (to grow understandings from those connections, and
using those insights to advance business processes). This real time access reduces errors in
language barriers, improves communication and trust across all levels of IBM, and is readily
available to all users. Not only do we expect no increase in overhead costs, we expect savings,
due to offering accessibility to existing multi-media training (virtual classrooms, online labs,
webinars, mobile apps, etc.) that is relevant to all employees. Additionally, social business
affordances reduce the need for typical middle management tasks .Finally, we expect 10%
decrease in employee attrition (by dissatisfied employees) in the first 12 months.
JUSTIFICATION
The purpose of this business case is to stress the necessity of developing a leadership mindset
across all employees, especially those that have become disillusioned, frustrated and lack
confidence in their job status. As employee morale is declining along with customer
satisfaction and revenue, the ideals that led IBM to success should once again be reinstated
throughout the company, not just the highest managerial tiers. “We believe leadership
matters…we believe leadership behavior drives organizational climate, and engagement, and
SUCCESS THROUGH ENGAGEMENT 11
that that in turn, drives business results…we truly believe that it is a causal chain…and that’s
why we invest in leadership development. It’s really behind everything we do” (Lombardo,
2011). There is not a problem with this statement, there is an opportunity to redefine
“leadership” and to whom that applies.
Leadership training currently a work-enabled learning program or an online self-learning
program, that would continue, it has proven to work. Using a blended approach of e-learning,
electronic community, coaching, and simulation, IBM was able to not only reduce costs by
moving training to the Web, but take advantage of the flexibility of the electronic medium to
provide a richer learning environment for students. This model will offer substantial cost
savings. The content and the audience need to be addressed for transformation and the
evaluation methods need to support the objectives of a dynamic learning model. The focus is
create leadership training combines with Social Business that fosters employee engagement.
“Social technologies provide networks, transparency, agility and democratization
of the workplace, which can flatten the hierarchies of yesterday, (Jamming on Social Business,
IBM 2011).
Implementation of STEP will result in greater efficiency with regards to company resources and
business processes. STEP is also aligned with corporate strategy and objectives since it uses
technology to improve the way we do business. While other alternatives and the status quo
were analyzed, STEP was selected for proposal in this business case because it provides the best
opportunity to realize benefits in an expedited manner while also allowing for the greatest
improvement in efficiency and cost reduction. Other alternatives assumed greater risk,
provided less benefits, were too difficult to define, or were not suitably aligned with current
corporate strategy and/or objectives.
PROJECT PLANNING ORGANIZATIONAL IMPACT
Having STEP be organic and internally developed will create a necessity of reshuffling some roles,
expanded responsibility and time pressures. However, we do not see this as an elongated process, and
the efficiency that is achieved will more than make up for it.
STEP will impact IBM in several ways. The following provides an explanation of how the
organization, tools, processes, and roles and responsibilities will be affected as a result of the
implementation:
Tools: the existing leadership initiatives for all managerial staff will continue alongside STEP
implementation. This will require minimal training to non-managerial employees since current
SUCCESS THROUGH ENGAGEMENT 12
training systems would be expanded with STEP content. Technology would include Cloud, IBM
Verse, video, and our intranet, IBM Connections.
Processes: with STEP comes more efficient and streamlined analytics and feedback processes.
This improved efficiency will lessen the burden on managers, increase communication
capabilities with support staff and provide autonomy to employees in empowering them to
take actions that make a difference. In order to effectively integrate phased approach has
been developed which will result in minimal/no disruption to day to day operations,
administration, activities. The following is a synopsis of the phased method:
Phase I: Definitions, teams and outcomes agreed on
Phase II: Planning – Evaluating current leadership training for feasibility of rolling out
to all employees, identifying necessary modifications and rolling out to US employees
Phase III: Imbedding leadership competencies in training will be accessible to all
employees
Phase IV: All employees will receive training on the revised platform.
Phase V: The platform will go live
Roles and Responsibilities: STEP will require collaboration of all departments as it will affect all
employees. We anticipate its outcomes in efficiency and increased productivity reflect in our
bottom line and provide an immediate return on our investment. The new platform will be led
by the STEP team and managed by the existing Global Executive and Organization Capability
(GEOC) department, consists of approximately 50 organizational and leadership-capability
consultants and succession-planning professionals and the existing IT group - we do not
anticipate any changes to staffing requirements. As for managers and executives, the senior
executives, and line managers would be fully engaged in recognizing promising talent and
making sure high potentials are identified in a variety of meetings and venues to ensure
sustainable leadership succession.
PROJECT ASSUMPTIONS
The following assumptions apply to the STEP. As the intervention starts and more assumptions
are distinguished, they will be included.
That innovation, quality, good service and employees still matter
All staff and employees will be trained accordingly on the new system
Funding is available for training and modification to existing training
All department heads will provide necessary support for successful project
implementation, accountability and consistent evaluation.
Project has executive-level support and backing
SUCCESS THROUGH ENGAGEMENT 13
PROJECT CONSTRAINTS/RISKS
The following constraints apply to STEP. As the intervention starts and more constraints are
distinguished, they will be included.
There are limited IT resources available to support STEP in addition to other initiatives.
Schedules and Budgets
Applying learning to work
Risks associated with STEP implementation include:
Fear of employee social engagement due to potential abuse of system
Fear of absolute transparency among employee base due to open communication
Criticism could further injure IBM’s reputation
Risk of project taking longer than anticipated and lose momentum
Value of this singular platform would not gain employee buy-in
Social business would be identified as optional
Employees may complain they are too busy to add more training
MAJOR PROJECT MILESTONES
The following are the major project milestones identified at this time. As the project starts
these can be adjusted, and finalized as for the actual timeline.
Milestones/Deliverables Target Date
Project Plan Review and Completion 07/01/2015
Project Kickoff 07/10/2015
Phase I Complete 07/15/2015
Phase II Complete 08/15/2015
Phase III Complete 09/15/2015
Phase IV Complete 12/15/2015
Phase V Complete 01/15/2016
Closeout/Project Completion 01/31/2016
STRATEGIC ALIGNMENT Step is in direct support of several of IBM Vision of Leadership Development. By directly
supporting these strategic plans, this project will improve our reputation internally and
externally and help the company grow.
SUCCESS THROUGH ENGAGEMENT 14
Core Values Goals/Objectives Relationship to Project
Trust and personal
responsibility in all
relationships.
Commitment to employee
empowerment.
Improve Employee
Engagement
Real-time communication, increased
trust, happier employees, increase
employee efficacy, increase productivity
Commitment to employee
empowerment.
Utilize Analytics
Leverage analytics for predictive
capabilities and consolidated repository
to measure employee sentiment
Innovation that matters,
for our company and for
the world.
Reduce overhead
costs
Eliminating problems, streamline
training, reduce attrition
Dedication to every client's success.
Innovation that matters,
for our company and for
the world.
Engage the
workforce for
customer
satisfaction
Engage employees broadly for
empowerment and revenue growth
COST BENEFIT ANALISIS COSTS
As we will be using existing programs and assets we expect costs to be minimized relative to a new program and technology. We anticipate low cost because there is no need to rewrite existing applications. With Social Business as a collborative platform STEP will cut training costs per learning hour.
Additional 16 learning hours per employee ($700 million/25 million learning hours = $28 avg per learning hour for 375,000 employees should equal $10.5 million but we are estimating that cost will be cut in half due to more efficient cloud technology. Projected cost $5.25 million
Create, modify the training and simulation modules estimated cost of $2 million IT support of operational analytics integrated with current programs. 1000 hours employees
IT support at Avg. $77 an hour (Forrester Consulting, 2013) $77,000. Systems maintenance and hardware $156,000 (Forrester Consulting, 2013).
Total 5,250,000 + 2,000,000 + 77,000 + 156,000 = $7,483,000
Cost/Benefit Analysis – We anticipate 5% increase in revenue as a result which would relate to $4.64 billion dollars a ROI of 619%.
SUCCESS THROUGH ENGAGEMENT 15
BENEFITS - TANGIBLE BENEFITS Savings Increase
5% to 10% productivity drag that better leadership practices could eliminate Dahl,
Less-than-optimal leadership practices cost 7% of their total annual sales. Dahl, Savings of employee attrition - Hiring and onboarding costs Social Business increases their productivity by 10%. Saving$70,000 annually team trained (IBM
2013) Thru Social Business, IBM reported that it was able to deliver five times the training at one-third
the cost with an estimated cost saving of $200 million (Article: eLearning Success- measuring the ROI, May 2013)
Replacement employee cost savings US $75,000 to $450,000. (IBM) SameTime@IBM (Social Business) We estimate savings of US $16.5 million per year in reduced
phone costs due to the use of instant messaging. IBM can avoid +/- $8M per month in travel costs Reduced product failure, less-frequent help desk calls, The regular staff attrition rate is around 12% pa Employees actively involved in leadership
programs 1% (IBM, Inshare, 2014) Revenue Increase
Gain of productivity Social Business increases productivity upto25% (IBM 2013) Individuals in an organization can still increase productivity by at least 30%. Dahl, Can achieve 5% reduction in customer defection increasing profits by up to 68% case study (IBM
2013) Organizations that excel in analytics often outperform those who are just beginning to adopt
analytics by a factor of three to one. (MIT Sloan,2013) Better leadership can generate a 3 to 4% improvement in customer satisfaction scores and a
corresponding 1.5% increase in revenue growth. Dahl,
BENEFITS INDIRECT/ INTANGIBLE- IBM reported Value of Training: 19% in staff satisfaction/engagement 17% in customer satisfaction 24% in ability to change procedures or products 12% reduction in time to competence 14% in increased productivity through learning interventions ( From: IBM Bridging the Gap: Integrating Learning and Work, Towards Maturity Benchmark Study, 2012-2013 ) Performance appraisal ratings over time Employee engagement survey scores Delivery quality Knowledge gain Improved customer service, compliance
CONCLUSIONS AND RECOMMENDATIONS
SCENARIOS
No Intervention scenario would only command further declines, both in morale, customer
satisfaction and ultimately revenue. An analysis of 200+ companies using The Ken Blanchard
Companies’ new Cost-of-Doing-Nothing Calculator shows that every year of delay is costs
organization an amount equal to 7% of their total annual sales. Less-than-optimal leadership
SUCCESS THROUGH ENGAGEMENT 16
practices cost companies millions of dollars each year by negatively impacting employee
retention, customer satisfaction, and overall employee productivity.
ALTERNATIVES ANALYSIS
The following alternative options have been considered to address the business problem.
These alternatives were not selected for a number of reasons which are also explained below.
Organizations must optimally develop and nurture their leaders to enhance employee
engagement, increase productivity and build the capabilities of their talent.
Revitalize the existing Leadership Development Framework to include planning, identifying,
development, placement and evaluating more than 5300 leaders in the 60,000 potential leader
pool. The benefits would be the savings of cost in using an existing, understood and
appreciated program that has already been “bought into” by senior stakeholders. The
consequences of utilizing a potential outdated program can be minimized by having the
program be dynamic, and adaptable. Justification for the Home grown vs. out-of-the-box
option is that the most valuable training incorporates the company’s own culture and values. In
2013, according to the American Society for Training and Development, companies spent on
average 62 percent of their learning and development budget on internally-produced training.
ALTERNATIVE 1/DOING NOTHING -
No Intervention, do nothing. Benefit is no immediate cost but ultimately this is the most
expensive alternative because revenue is declining, employee morale is low and IBM is
losing best, most profitable talent. IBM Training White Paper The value of training - The
high cost of doing nothing damages a company’s capabilities per year. By Year Three, an
organization has retained only 41% of its original capabilities, dwindling to 24% by Year
Six.
ALTERNATIVE 2-
Outsource leadership training program. If such a product existed, or could be custom
designed to IBM’s needs, is highly questionable. The pure size of IBM and factoring
60,000+ employees with the intricacies of a very specific corporate culture make this
intervention highly improbable. If such an option would be available, the costs involved
would be prohibitive.
ALTERNATIVE 3 –
Create a new leadership framework from scratch. Benefit would be measuring today’s
needs as they have changed over the year. The added benefit would also be addressing
SUCCESS THROUGH ENGAGEMENT 17
current and future predictive directions. New technology has emerged in training and
the IBM that existed in 2002 is very different from the IBM of today. The cost of this
intervention would be significantly higher than the initial investment for the current
leadership framework as it would factor in all the new surveys, interviews, research in
data collection and analysis and time invested from stakeholders.
No Project (Status Quo) Reasons For Not Selecting Alternative
Doing nothing Unnecessary expenditure of funds for
increased staffing levels
Continued occurrence low employee
morale
Continuous decline in revenue
Poor reputation of IBM
Alternative Option Reasons For Not Selecting Alternative
Outsource the implementation of a
leadership intervention that focuses on
increasing employee morale though
engagement
Ominously greater cost
Expertise already exists in IBM
Vendor’s lack of acquaintance of IBM
values
Alternative Option Reasons For Not Selecting Alternative
Internally initiate feasibility study, develop
new technology and, create all new
employee training through multi-
platforms
Lack of resources dedicated to new
project of this scope
Significant cost
Timeframe required is too long
SUCCESS THROUGH ENGAGEMENT 18
REFERENCES
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