Professional Documents
Culture Documents
COPIES AND COPYRIGHT As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center at +1-866-913-6447 for any help we may provide. The pages herein are the property of The Corporate Executive Board Company. Beyond the membership, no copyrighted materials of The Corporate Executive Board Company may be reproduced without prior approval. LEGAL CAVEAT CLC Human Resources has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and CLC Human Resources cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, CLC Human Resources is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by CLC Human Resources or its sources, or b) reliance upon any recommendation made by CLC Human Resources.
Organizations are facing significant pressure to maintain tight cost controls while aggressively growing revenues.
Although 76% of executives expect revenue growth, growth predictions are modest.
76%
68%
10% 14%
Revenue
n = 467.
22%
10%
Cost Pressure
Source: Finance and Strategy Practice, Business Barometer Quarterly Report, Rosslyn, Va. The Corporate Executive Board, 2010.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Most organizations experienced a redesign in 2009, and many still anticipate major change in 2010.
Organizations typically redesigned to reduce costs; improving efficiency and quality were also common reasons for undertaking a redesign.
19% Not Undergoing Major Redesign Initiative 81% Undergoing Major Redesign Initiative 56% Anticipating Major Redesign Initiative
Growth in Current Market Merger or Acquisition Expansion into New Market Improve Customer Alignment
A redesign initiative refers to significant changes to reporting relationships, operations, job design, ownership, or other structures of the organization, business unit, or function.
Source: CLC HR Organization Redesign Survey; CLC HR Employment Value Proposition Survey.
More than 80% of HR functions have either recently experienced or will soon experience a restructuring.
Many HR functions have had severe budget cutbacks during the year, most frequently affecting Learning and Development teams.
Which HR Sub-Function Has Experienced the Most Severe Budget Cuts in 2010?
Percentage of Organizations, September 2010
17% No Plans
17% Restructuring Within the Next 12 Months 32% Already Restructured in the Past 12 Months
30% Learning and Development Function 15% Organizational Development Function 12% Recruiting Function
23% No Function Experienced Severe Cuts 4% Labor Relations Function 6% HR IT Function 10% Compensation and Benefits Function
n = 368.
n = 155.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Since the downturn, HR restructurings and budget reprioritizations have failed to generate consistent, high-quality services.
While few business leaders rate HR as outright ineffective, the number of neutral responses indicate that the majority of HR functions have significant room for improvement.
8% Ineffective
42% Neutral
48% Neutral
n = 11,670.
Learn more about the CLC Human Resources Business Alignment Tool, which allows you to receive detailed feedback from the line on your HR functions effectiveness.
Source: CLC HR Business Alignment Tool 2.0.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Two root causes behind business leaders lack of confidence in the HR function are inadequate HR capabilities and the inflexibility in HR structure.
CLC Human Resources studies, HRLine Partnerships and Building Talent Champions, provide best practice guidance on building HR capabilities. This study focuses on improving HR functional structures to support the business better.
Root Cause #1: HR Lacks the Capabilities Required by the Business Key Questions Answered by CLC Human Resources
Root Cause #2: HR Functional Structure Limits Business Responsiveness Key Questions Answered in This Study How can the different parts of my HR function work better together? How can I make sure my HR function supports the business while still executing on HR functional activities? How do I decide where to globalize/ localize different HR processes and activities? How do I minimize the cost and maximize the productivity of my HR shared service center?
What areas of HR should we focus on improving first? What is the profile of the best-in-class strategic HR business partner?
What HR function-wide changes enable improvement across all HR business partner staff?
HR Leadership Academy
There are four key challenges HR faces in being agile enough to support changing business priorities.
CLC HR gathered the perspectives of 119 member organizations on these four challenges through member polls and interviews.
Challenge 1: Strained Working Relationships Within the HR Function My HRBPs and specialists just cant seem to get on the same page.
Challenge 2: Inability to Balance Recurring HR Activities and Project Work for Business Units I would love to help the business with this big change initiative, but all my HR people already have their agendas built for the quarter
Challenge 3: Poor Coordination Between Global and Local Talent Management Stakeholders I found out that my local HR team in China created this whole new process. I thought we owned that activity
Challenge 4: Inability to Grow HR Shared Services Capabilities Beyond Transaction Processing When forced to cut costs, I look to my HR shared service center, but I feel like I have done all I can do without sacrificing quality
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Challenge #1 Strained Working Relationships Within The HR Function HR Imperative #1 Create Strategic Partnerships within HR Supporting Resources
Challenge #2 Inability to Balance Recurring HR Activities and Project Work for Business Units HR Imperative #2 Prioritize Business Needs over HR Functional Silos Supporting Resources
Challenge #3 Poor Coordination Between Global and Local Talent Management Stakeholders HR Imperative #3 Integrate Key Connections Between Talent Processes Supporting Resources
Challenge #4 Inability to Grow HR Shared Service Capabilities Beyond Transaction Processing HR Imperative #4 Grow Shared Service Solution Delivery Capability Supporting Resources
Nestle Business-Aligned Service Delivery Map of Key Opportunities to Build Strategic HR Team Relationships
Dow Cornings Building Talent Management Connectivity Guidelines for Centralizing HR Processes and Activities
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Strained HR Working Relationships Between HR Business Partners, Centers of Expertise, and Shared Service Centers
Client Ownership Conflict over when and how different staff within HR should interact with the line
Transactional Requests The persistent existence of necessary but low-strategic impact work within all areas of the function
Ambiguous Hierarchies Multitude of reporting relationships creates confusion as to whom HR staff report
Corporate HR and business unit HR can have competing agendas. We need to figure out the right way for HR to plan and negotiate around these issues from the start to achieve the right balance. Simply stating who does what isnt the solution.
10
Enabling strategic impact within the business requires transforming internal HR partnerships.
Robust internal HR relationships are required to execute and deliver on strategic solutions first developed with the line.
HR Business Partners 1. Quality ControlCarefully weigh business unit requests against degree of business impact, enterprise priorities, and the potential value-add centralized support can provide. 2. Proactive Broker of InformationEffectively explain requirements including rationale, timelines, and strategic impact. The relationship between COEs and generalists can be tense and troubling, and you need to have and use the right tools and templates to build better collaboration.
HR Executive Airline Company
Source: Davis, Edward, The Uneasy Relationship Between HR Generalists and Staffing, ERE.net, 2009.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
HR Specialists/Centers of Expertise/Shared Service Centers 1. Portfolio ManagementAggressively monitor requests from the line and proactively reach out to all business units to stay informed of potential upcoming requests. 2. Stakeholder ManagementDevelop a collaborative and consistent approach to both resource allocation and prioritization.
11
Nestl UKs HR Shared Services resourceallocation process is driven by business unit needs, but simultaneously ensures execution of enterprisewide priorities.
Nestls process helps heads of HR allocate finite resources to meet business needs.
Root Cause #2 Shared Services Fails to Prioritize Requests for Resources Effectively
Root Cause #4 Business Unit Priorities and Needed Investment Levels Change Over Time
Step #1 Enable the HR Business Partner as the Filter of HR Shared Services Requests
Step #4 Communicate Shared Services Role in Business Unit Strategy and Enable Updates as Needed
12
Integrating business unit and enterprise priorities, the HRBP filters requests by degree of business impact and advantaged execution from the center.
Business Unit A: HR Shared Services Requests Activity to Address Business Priority Building Sales Capability Shared Services Support Request Learning and Development
Business Context Increase sales capability through excellence in coaching, dynamic leadership development, and best in-class functional skills There is already considerable work being undertaken to improve marketing capability, and this will continue through 2007
Review marketing recruitment material Development centers as required Marketing capability databasequarterly Marketing directors meeting
Jan. Oct.
The HRBP fills the role of the account executive, managing HR requests and services for line leaders.
13
HRBPs meet with each Shared Service function to communicate proposed HR business plans, and each Shared Service leader convenes with the head of HR to evaluate requests and create their preliminary HR plans.
1. Scalability: Similarity to requests from other business units 2. Organizational Culture Fit: Fit with Nestl UK and Ireland organizational culture 3. Alignment with Business Priorities: HR activities resulting from corporate or business unitdictated changes 4. Alignment with Shared Services Skill Base: Fit with Shared Services current skill base or already developed products
Recruiting SS Requests
Compensation SS Requests
Compensation
Compensation Shared Services Requests Business Unit Alpha Key Activities for Coming Year Review benchmark compensation rates for Ireland managers and adjust salaries. Evaluate and determine changes to benefit packages.
Recruiting
Talent Management
GO
About 75% of business unit HR requests meet all Shared Services funding considerations.
Activity Requests to Review Restructure management incentive program. Business Unit Beta Key Activities for Coming Year
Head of HR
Compensation
About 25% of requests may not fit some Shared Services funding considerations STOP and are flagged for further review.
14
HRBPs and Shared Services heads assemble to review each Shared Services proposed HR plan and to consider HRBPs business cases for initiatives still under review.
Negotiation Meeting Output 1. Funded Shared Services requests 2. Requests for consideration in the next planning cycle 85% of all Requests 15% of all Requests
Improved Quality of HR Business PlansAs HRBPs have developed a better understanding of how to prioritize requests on their HR business plans, the percentage of requests denied pending further consideration has decreased from 30% to 15% across the past three years.
Shared Services heads present their HR plans to the entire HR leadership team. HRBPs present business cases for HR requests under review. Head of Team HR makes final decisions on HR investments.
15
The head of HR cascades the corporate HR plan to key stakeholders to ensure clarity on Shared Services support and conducts pulse checks to inform a monthly planrefinement meeting.
Senior Leadership Committee Purpose: The head of HR presents the corporate HR plan to the senior leadership committee to obtain commitment to execution support.
Would you please, in two pages or less, answer the following questions: 1. How are you doing YTD against your HR business plans or personal objectives? 2. Now that the planning process has come to a close, how would you rate the process? Ideas for improvement? 3. Is Team HR getting better or worsefor you personally? And as a whole? 4. What is your biggest HR challenge for the next six months? 5. How could the HR leadership team help your with question 4? 6. How can I personally help you with question 4?
Monthly statistics on key HR metrics Potential HR risks and areas of exposure Proposed action plans to mitigate risks
HR Leadership Team By taking the time to regularly review each business partners HR plan, our Shared Services are kept closer to the business reality, and it keeps them focused on what will add value. There is also a lot of great sharing, which leads to various informal conversations and coalitions between the business partners.
Gareth Fendick HR Business Partner, Food and Beverage Division Nestl UK and Ireland
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Purpose: The head of HR finalizes the corporate HR plan with HR leaders to ensure the HR function is aligned around the top HR priorities.
Head of HR Business Unit Leaders Purpose: HRBPs share the plan with their GMs to clarify where HR Shared Services will be supporting their agenda. HRBPs
16
HR Partnership
1. Collaborate to translate business priorities into HR capabilities. Relationship Opportunities 2. Enable HR business partners to assess and improve their own effectiveness. 3. HR leadership team consults with business partners to develop meaningful metrics and achievable targets for the function.
1. Enable the HRBP as the filter of business requests for Center of Expertise (COE) support. 2. Establish process to prioritize COE requests. 3. Define COEs role in business unit strategy development and execution to improve talent management solutions.
1. Entrust Shared Service Centers (SSCs) with identifying service delivery issues and recommending improvements. 2. Have Centers of Expertise teach SSCs how to solve complex issues instead of providing scripting. 3. Develop mutual accountability to ensure employees have a consistent, one HR experience.
1. Develop an analytical partnership to improve identification of service issues across the function. 2. Embed change management within SSC processes to provide real-time support for organization change initiatives. 3. Leverage HR SSC staff relationships with other functional SSCs to drive cross-functional collaboration.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
17
KEY TAKEAWAYS
Create Strategic Partnerships Within HR 1. Assign ownership and develop criteria for filtering HR requests from the line. Designate who in HR will work with line leaders to submit requests for support and establish a common set of principles to effectively scope these requests. 2. Facilitate internal HR conversations to identify the right HR bets. Gather HR stakeholders together for open conversations to identify and prioritize scalable requests that align with both organization and HR strategy and are scalable; hold negotiation meetings periodically to preserve resource flexibility in light of evolving business needs. 3. Identify nonobvious opportunities to grow HR partnerships. Have HR staff critically reexamine their daily interactions with peers to find one or two ways they can transform them into more valuable peer discussions that drive HR strategy.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
18
Challenge #1 Strained Working Relationships Within The HR Function HR Imperative #1 Create Strategic Partnerships within HR Supporting Resources
Challenge #2 Inability to Balance Recurring HR Activities and Project Work for Business Units HR Imperative #2 Prioritize Business Needs over HR Functional Silos Supporting Resources
Challenge #3 Poor Coordination Between Global and Local Talent Management Stakeholders HR Imperative #3 Integrate Key Connections Between Talent Processes Supporting Resources
Challenge #4 Inability to Grow HR Shared Service Capabilities Beyond Transaction Processing HR Imperative #4 Grow Shared Service Solution Delivery Capability Supporting Resources
Nestle Business-Aligned Service Delivery Map of Key Opportunities to Build Strategic HR Team Relationships
Dow Cornings Building Talent Management Connectivity Guidelines for Centralizing HR Processes and Activities
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
19
HR is structured around recurring activities, limiting its ability to address unique and complex business problems.
Current HR structures frequently have teams of highly specialized staff, which are best positioned to respond to focused organizational issues. Most business leaders have much larger, more ambiguous requests than HR expects, and these require intense crossHR collaboration.
Request from Business Unit 1. Business Unit Alpha needs a revised executive compensation plan.
2. Business Unit Beta needs a leadership program for emerging market executives. 3. Business Unit Gamma needs help attracting and recruiting engineers.
HR Sub-Functions Providing Critical Support By Project To move from incremental to transformational progress, HR needs to look at new ways of working. Business managers dont really care how HR or other support functions are organized if they can get things done.
Vice President of HR Telecommunications
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Request from Business Unit 1. Business Unit Alpha needs help reorganizing its global sales team.
Recruiting
Organization Effectiveness
HR Analytics
Engagement
x x x x
x x
x x x
2. Business Unit Beta needs help increasing workforce productivity. 3. Business Unit Gamma needs help increasing workforce diversity.
20
Prior to the transformation, Nokias HR centers ofexpertise and HR generalists were structured in a traditional line hierarchy, which limited HRs agility to respond to changes in business priorities.
Nokia was undergoing a larger business transformation that required significant and ongoing HR support. Nokia recognized that at this point in time their HR process and policies did not require significant updates, allowing subject matter experts to more flexibly support a fast-changing business.
HR Function
Unit HR HR staff responsible for translating business strategy into strategic people agendas and providing support to senior leaders locally.
HR Centers of Expertise Individual centers focusing on HR activities in the following areas: Organizational Development/ Change HR Strategic Planning HR Development and Resourcing Compensation and Benefits HR Information Systems
HR Country Operations HR staff that provide on-theground support for employment issues and implementation of HR policies and practices. There are also some emerging, independent service centers.
In the old setup, many in our HR function were pulled into handling immediate day-to-dayqueries rather than walking the talk and being physically visible. We often talk about being one HR and in some countries, HR United! And this is what it is!
Trisha Robinson Head of HR, Global HR Operations
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
SITUATION
OVERVIEW
PROJECT-BASED STAFFING
HR COMMUNITIES OF PRACTICE
HR COACHING MODEL
RESULTS
21
Nokia restructured its global and country-based centers of expertise into a Global Practices team that supports the business through projects.
Nokias HR projectbased teams develop and implement solutions to support the business transformation, while communities of practice provide opportunities for all HR staff to broaden their expertise. Nokias HR coaching model supports project-based work by creating a flat organization where coaches help HR employees manage their career instead of assigning them activities.
HR Function
Generalist HR Unit/Country HR generalists who provide HR support to senior leaders, translate business strategy into strategic people agenda, design and deliver development/ change programs, and build Nokias Competitive Employee Brand
Global Practices HR functional consultants and project managers aligned primarily to HR projects, with accountability for Nokia HR philosophies, processes, and policies.
HR Services Centralized global HR data processing, deployment of HR tools and key process initiatives, and manager/employee service center provides consultancy for employment issues
Work Together Through HR Projects and Communities of Practice Any member of the entire HR community can join one or more communities of practice, which revolve around building functional skills and working on HR activities.
Within Nokia we were having a dialogue as part of our people strategy to look at new ways of working. We were not necessarily looking to change the HR structure but to utilize different ways of working collectively.
Kirsty Russell Head of Global Practices
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
SITUATION
OVERVIEW
PROJECT-BASED STAFFING
HR COMMUNITIES OF PRACTICE
HR COACHING MODEL
RESULTS
22
Nokia first staffs HR employees against projects supporting the business instead of against specialist agendas.
The HR project portfolio is created based on business priorities and available resources. The resourcing manager maintains primary responsibility for project staffing.
HR portfolio manager collects projects from across the global HR team and business leadership. The Unit HR heads, the County Operations head, and the Global Practices head pre-check the projects coming from their units. The final HR project portfolio is drafted based on the projects signed off by theHR leadership team.
HR resourcing manager uses talent profiles to select staff based on interests and past experience and also reaches out to coaches to recommend staff. HR resourcing manager publishes theproject portfolio on an online portal to allow employees within the global practices group to express interest.
Project teams are ad hoc and disintegrated once a project is complete, allowing HR employees to work on different types of projects across the year.
Global Practices Team Working in the project mode enables us to have the best resource dedicated to a project, based on the project need and competence match. This also provides projectbased employees with much broader alternatives/more diverse projects than they had in a line organization.
Katariina Kravi Head of HR, Markets
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Of approximately 240 people, 100 are full-time project consultants, and the others are recruiters, global HR service center employees, and occupational health andsafety staff. Spread across the globe, the project consultants report into the Head of Global Practices. Allocated to projects, typically for a time span of 1218 months
Continually Monitor Success of Projects and Overall Portfolio The HR leadership team assesses each project on a monthly basis against the time being spent on it, the quality of project execution, and its impact on thebusiness. The team meets biannually to review and update the project portfolio based on business needs.
SITUATION
OVERVIEW
PROJECT-BASED STAFFING
HR COMMUNITIES OF PRACTICE
HR COACHING MODEL
RESULTS
23
Communities of Practice enable HR employees to build content expertise and have the opportunity to work on functional HR activities.
Communities of Practice support employee development by offering platforms for knowledge sharing and skill building. Each community leader defines functional activities and can let the resourcing manager know the required project participation time. All members of the global HR team can join any number of the communities of practice.
Groups built around HR functional areas, made up ofHR staff interested in building functional expertise or learning more about the area Group positions include executive sponsor, community leader, community facilitator, and contributors.
Compensation andBenefits
The Employee Perspective on Communities of Practice You are exposed to a whole new element in the HR communities that you may not have been. Provides a different opinion and a fresh set of eyes. The HR Community Way of Working provides visibility into different projects and opportunities to join different projects based on time and interest.
Allow HR staff to build functional expertise through knowledge sharing and networking. Allow HR staff across the globe to join one or more communities of their choice. Community leaders suggest potential HR project or activity ideas to the portfolio manager, based on ideas shared by community members.
By linking different HR professionals who have experience in certain areas with other employees, every HR professional is able to learn things outside of their own job area, link to people in other teams, and also innovate and explore new ideas.
Tiina Takala Head of HR, Mobile Solutions and OD & Change Community Sponsor
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
Informal, interest-based networks provide support for addressing work-related challenges and knowledge gaps. Opportunity to work on functional tasks within areas of development/interest to grow in the functional expert career path Exchange and capture of HR knowledge through the use of online discussion forums, teleconferences, and webinars Community leaders hold the functional development budget for the community on an annual basis.
SITUATION
OVERVIEW
PROJECT-BASED STAFFING
HR COMMUNITIES OF PRACTICE
HR COACHING MODEL
RESULTS
24
Nokia uses coaches instead of traditional line managers for projectbased HR employees to guide performance and career discussions, which better supports the HR way of working.
Coaches are responsible for helping employees interpret, and act on, feedback from project managers and community leaders. The coaching model empowers employees to be in charge of their own development instead of relying on their line managers. Employees acting as coach spend 1020% of their working time on this role.
Coaches can be selected from across the HR team, including different areas, units, andgeography. Coaches do not delegate work to employees, ensuring that HR employees time can be tracked and resourced against the highest-priority work. Coaches maintain a longer relationship with the coachee, which drives better performance management and development over time.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
SITUATION
OVERVIEW
PROJECT-BASED STAFFING
HR COMMUNITIES OF PRACTICE
HR COACHING MODEL
RESULTS
25
Nokias project-based Global Practices team and supporting communities of practice positively impact the business and HR.
The new structure improved HR staff engagement levels in Global Practices and improved HR support to the business. Nokia is working on defining HR career growth in this new structure, improving coachcoachee matching, and refining the process to prioritize projects for the HR portfolio.
5%
Global Practices
Global Practices
All the key drivers of engagement improved between 622% year-over-year for the Global Practices team.
20%
10%
HR Functional Activities Business Projects HR Functional Activities
Business Projects
SITUATION
OVERVIEW
PROJECT-BASED STAFFING
HR COMMUNITIES OF PRACTICE
HR COACHING MODEL
RESULTS
26
KEY TAKEAWAYS
Prioritize Business Needs Over HR Functional Silos 1. Determine HR staffing assignments according to business needs, not functional expertise. Focus HR on implementing solutions and staffing projects teams with individuals across traditional HR functional areas that increase collaboration, creativity, and the functions responsiveness to the business. 2. Drive project performance by creating opportunities for HR staff to build their expertise and professional networks. Establish meaningful professional networking opportunities to share knowledge, promote informal collaboration on functional tasks, and provide access to networks of HR experts across the organization. 3. Create a culture of informal feedback within HR. Adopt a coaching model within HR to increase the frequency and quality of feedback necessary to improve capabilities needed by the business and for a career within the function.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
27
Challenge #1 Strained Working Relationships Within The HR Function HR Imperative #1 Create Strategic Partnerships within HR Supporting Resources
Challenge #2 Inability to Balance Recurring HR Activities and Project Work for Business Units HR Imperative #2 Prioritize Business Needs over HR Functional Silos Supporting Resources
Challenge #3 Poor Coordination Between Global and Local Talent Management Stakeholders HR Imperative #3 Integrate Key Connections Between Talent Processes Supporting Resources
Challenge #4 Inability to Grow HR Shared Service Capabilities Beyond Transaction Processing HR Imperative #4 Grow Shared Service Solution Delivery Capability Supporting Resources
Nestle Business-Aligned Service Delivery Map of Key Opportunities to Build Strategic HR Team Relationships
Dow Cornings Building Talent Management Connectivity Guidelines for Centralizing HR Processes and Activities
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
28
Redundancy, inconsistent employee experiences, and quality issues all appear when HR lacks effective governance.
Creating a clear HR governance strategy is challenging because of constant organizational change, local demands, decentralized HR staff and budgets, and a lack of transparency into the overarching HR strategy.
Outcome 2: Redundancy
Different parts of HR are doing the same things, resulting in higher costs and leaving less time to do other activities.
Different parts of HR customize the same activity to varying degrees of quality, missing the opportunity to leverage best practice approaches.
29
Most traditional talent management integration efforts fail to achieve their objectives around improvement and efficiency.
Most organizations attempt to restructure their entire talent management functions in an effort to create integration across activities. Dow Corning focuses on identifying the critical connections across talent management activities to improve collaboration, efficiency, and effectiveness of key talent management processes.
Succession Planning
Workforce Planning
Talent Development
Talent Acquisition
Performance Management
Compensation
Failure Points Multiyear process Heavy cost requirements Difficult to manage stakeholder involvement
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
30
Dow Corning identified and prioritized talent management interactions to capture the benefits of connectivity awareness.
Step 1: HR stakeholders are engaged in identifying key interactions between talent management activities. Step 2: Dow Corning applies a set of prioritization lenses to identify the most talent-critical management connections. Step 3: HR prioritizes greater coordination and awareness across connections to capture benefits for the organization. Allow at least five days to complete step one. Mapping Talent Acquisition interactions takes two days, Talent Development one day, andthe other areas half aday each.
SUCCESSION MANAGEMENT
Input
Process
Output
Succession plan gaps Key roles Success profiles
Succession Planning
10 Critical Connections
Identify key Highpositions potential compensation Assess successor data candidates Key role identification Assess highpotential Talent market development analysis needs
50 Core Connections
Stakeholders
Stakeholders
Stakeholders
Director of Talent Management Manager of each talent management process Time Required: 5 days
Director of Talent Management Manager of each talent management process Time Required: 1/2 day to determine next steps
Note: Dow Corning partnered with The Newman Group to facilitate this process.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
31
Each process owner documents inputs, activities, and outputs for their talent management processes to identify key interconnections.
Each process owner is given five key questions to help surface the key objectives, inputs, outputs, and activities for their talent management process. The Director of Talent Management shares early drafts of each talent management process map with the other talent process owners. This ensures the surfacing of all critical information needs and objectives and drives early awareness and collaboration across the talent management team.
SUCCESSION PLANNING
Objectives
Inputs
Activities
Outputs
The most critical positions have top talent incumbents. True high-potential employees are identified, developed, and retained.
Identify key positions. Assess successor candidates for key positions. Assess high-potential development needs.
Applying the SIPOC Process1 Dow Corning based its talent management integration process on the SIPOC model, which is commonly used in engineering and process improvement projects, such as Six Sigma.
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
1
Key Questions for Talent Management Process Owners to Surface Connections What are the data inputs required to meet the objectives of your talent management process? What are the objectives and activities of your talent management process? What are the key assumptions required to meet the objectives process? What are the data outputs produced from your activities? Which talent management processes might be consumers of your output data?
Refer to the appendix for more information on the SIPOC process.
32
Dow Cornings Director of Talent Management aggregates process inputs, activities, and outputs to identify connections.
The Talent Management Connection Map allows Dow Corning to obtain a complete overview of inputs and outputs needed to effectively run the six core talent management processes. Dow Corning identified 230 input/output connections between the six core talent management processes.
Job Evaluations
PERFORMANCE MANAGEMENT Objectives Manage the process to objectively measure, calibrate, and provide feedback to employees Enable managers to make employment decisions based on performance Activities Develop goal-setting process to align with business needs Providing periodic employee feedback Manage process for evaluation of employee performance to goals and competencies
From CLC HUMAN RESOURCES www.clc.executiveboard.com 2011 The Corporate Executive Board Company. All Rights Reserved.CLC7222310PRO
WORKFORCE PLANNING Objectives Align human capital to the strategies and objectives of the business. Participate in the business planning process to identify talent strategies and issues. Activities Develop role segmentation based on relative criticality to business strategy. Provide supply/demand analysis to identify talent gaps. Risk Analysis of Critical Skills
SUCCESSION PLANNING Objectives The most critical positions have top talent incumbents and a strong multigenerational bench. True high-potential employees are identified, developed, engaged, and retained. Activities Identify high-potentials, including new hires. Assess successor candidates for key positions. Assess high-potential development needs.
COMPENSATION Objectives Pay competitiveness. Recognize exceptional performance. Accrue and budget all compensation programs. Activities Set job levels and salary ranges. Determine salary increase budget. Calculate incentive awards.
33
Dow Cornings Director of Talent Management and VP of HR apply a set of prioritization criteria to identify the few critical connections on which to focus.
Dow Corning assessed each connection by impact on talent outcomes, process efficiency gains, and implementation cost. Ten connections were shown to have most impact and potential efficiency gain and implementation cost. Dow Corning identifies key connections involving talent acquisition due to the current level of high growth.
230
What talent management inputs/ outputs have the greatest number of connections? Which talent management inputs/ outputs have the greatest impact on the effectiveness of other talent management processes? Which talent management inputs/ outputs matter most to functional process effectiveness outside of HR?
10
Connections Surfaced
Connections Prioritized
Are there cost-/time-efficiency savings from improving coordination of input/ output connections? Would greater connectivity positively impact corporate HR, local HR, and the line?
Key Question Addressed What are the few critical talent management connections that would have the biggest impact on talent outcomes and HR operational efficiency?
Critical Connections 1. Past Work History (Talent Acquisition to Talent Development/Succession Planning)
2. Performance Feedback of New Hires (Performance Management to Talent Acquisition) 3. Competency Gap Analysis (Talent Acquisition to Talent Development) 4. Talent Forecast (Workforce Planning to Talent Acquisition) 5. Headcount Forecast (Workforce Planning to Talent Acquisition) 6. Competency-Based Job Descriptions (Talent Acquisition to Talent Development) 7. Succession Planning Gaps (Succession Planning to Talent Acquisition) 8. Key Roles Identified (Workforce Planning to Succession Planning) 9. Assessment Results (Talent Acquisition to Talent Development) 10. Successful Profiles (Succession Planning to Talent Development)
What processes need to change to make a connection a reality? How many stakeholders need to be involved to change those processes? How long would it take to make needed process changes?
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Dow Cornings Talent Management team agrees on coordination improvements around the connections that matter most to talent outcomes.
The Talent Management team focuses on awareness and transparency of key talent management input/ output, as opposed to longer-term process improvements. Dow Corning finds that increased awareness and coordination alone across the critical connections improves talent management effectiveness and efficiency. Having identified the key talent management interactions to be integrated, Dow Corning is planning, developing, and implementing integration of its talent management activities.
Immediate Actions to Improve Talent Management Through Better Coordination and Awareness
10 Critical Connections Example: Key Role Identification
1. Increase Alignment Awareness and Collaboration Agree on rules of thumb with talent management leaders for ongoing sharing of data and information between their different areas. Identify stakeholders outside of talent management that would benefit from receiving key output information. Determine how the evolution of connections will be managed over time. 2. Improve Talent Management Processes Identify quick wins for improving individual talent management processes. Target process improvements that have greatest impact across talent management. Agree with leaders on next steps to close gaps in processes. 3. Focus Systems Integration Activities Determine the touch points that should be fully integrated versus just raising awareness. Identify where compromises can be made between tight integration versus best of breed for individual talent management areas. Determine the must-have connectivity requirements to inform IT integration analysis and vendor search.
50 Core Connections
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Globalized
Localized
The process does not have a large impact on business strategy or goals.
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Shell establishes clear local and global ownership rules to create focus on the leadership activities where global alignment is critical.
Shell mandates that most leadership activities have to be consistent across the organization, but communicates clear criteria where local exceptions are allowed.
Is there a high impact on behavior? Is the activity important to global business results? Is the activity important to the overall development experience of leaders? Does the activity have a large impact on global operations? Does the activity have a large impact on equity?
Is the activity governed by regulatory issues? Would changes to the activity fall under trade union/works councils regulations or agreements? Is the activity important to maintaining local competitive advantage? Does the activity play a big role regarding local leadership reputation and perceptions (leadership brand)?
Leadership assessment criteria Performance appraisal High-potential assessment Annual performance increases (rewards principles, LTI) Talent acquisition screening Development (e.g., executive coaching) Internal mobility Expatriate compensation policy framework
Bonus payments (particularly applicable to the trading organization) Attraction of local leaders Talent needs planning
Source: Shell.
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BU HR Director
Talent Director
HR Specialist
Talent Director
Talent Director
A direct reporting line to the head of talent management enforces accountability for global mandates. Key Roles and Responsibilities of Embedded Talent Director
Board and Executive Committee are consulted on, and accountable for, all talent decisions for Shells top 200 senior leaders, and sign off on succession candidates and nominations for mid- and top-level leadership programs. Business Leaders are accountable for the main talent decisions for the next level of leaders (heads of functions and business units) with a clear impact on business results. Heads of Business Units own the talent decisions for their units together with local HR.
Advises and supports local leadership decisions and issues Escalates local leadership risks to global talent management leaders Monitors local leaders and HR staffs compliance with ownership governance mandates Benchmarks performance against global talent management goals
Facilitated by Global Talent Management NetworkTalent management directors facilitate application of talent management tools to specific local leadership needs. Mandated Use of Central Toolkit Global talent management team requires all business units to use the same toolkits and frameworks. Maintains Consistency Over Time Talent management directors ensure that local business units resist temptation to frequently change tools and frameworks.
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Source: Shell.
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Set recruiting strategy. Administer and coordinate recruiting efforts. Set compensation strategy. Establish compensation guidelines that will be consistent across the organization (long-term incentives, short-term incentives, and expatriate compensation). Set the training strategy. Develop the training infrastructure and design the training content. Measure training results.
Interview and hire individual candidates who fit the job description.
Compensation
Accommodate regional compensation differences by collecting market data, performing pay calibration, and ensuring compliance with local laws.
Training
Deliver training locally. Advise corporate HR on training content specific to the business unit.
Employee Relations
Set employee relations policy. Assess ER trends across the organization. Set corporate HR policies and ensure they align with the organizational values. Periodically review and update policies to ensure they comply with legal norms and are not redundant.
Process local grievance disputes. Train line managers on ER issues. Ensure that the ER policy complies with local employment laws. Ensure that HR policies comply with local laws and customs, and can be applied to all employees.
HR Policy Creation
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KEY TAKEAWAYS
Integrate Key Connections Between Talent Management Processes 1. Improve talent outcomes by targeting high-level, high-impact collaboration opportunities. Focus the HR leadership team on identifying and prioritizing the most critical connections between talent management processes to improve information sharing and decision making in these processes. 2. Align local talent management team accountability with global standards. Create alignment of accountability between local and global talent management teams to ensure that global talent management standards (e.g., criteria for identifying HIPOs) do not break down when implemented at the local level. 3. Build HR governance around key variables to clarify activity ownership. Reduce process redundancies and improve consistency by defining the key decision variables at your organization to evaluate when determining ownership of corporate HR and business unit HR responsibilities.
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Challenge #1 Strained Working Relationships Within The HR Function HR Imperative #1 Create Strategic Partnerships within HR Supporting Resources
Challenge #2 Inability to Balance Recurring HR Activities and Project Work for Business Units HR Imperative #2 Prioritize Business Needs over HR Functional Silos Supporting Resources
Challenge #3 Poor Coordination Between Global and Local Talent Management Stakeholders HR Imperative #3 Integrate Key Connections Between Talent Processes Supporting Resources
Challenge #4 Inability to Grow HR Shared Service Capabilities Beyond Transaction Processing HR Imperative #4 Grow Shared Service Solution Delivery Capability Supporting Resources
Nestle Business-Aligned Service Delivery Map of Key Opportunities to Build Strategic HR Team Relationships
Dow Cornings Building Talent Management Connectivity Guidelines for Centralizing HR Processes and Activities
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HR needs to continue to improve its services without increasing the size of the overall HR budget.
A majority of HR executives expect to have either flat smaller or shrinking budgets in 2011 compared to 2010.
CHALLENGE 4: HR COST PRESSURES PERSIST; DOING MORE WITH LESS IS INCREASINGLY DIFFICULT
Decline in HR Spend per Employee, 20092010 Majority of 2011 HR Budgets to Remain at or Below 2010 Levels
Increase No Change
$2,403
Decrease
= 7.4% $2,226
Percentage of HR Executives Anticipated Change
50%
25%
2009
2010
0%
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Source: To come.
The Challenge of Finding Further Cost Savings Within the HR Function In 2008 our costs of running HR declined by 40%, but you can only cut so many bodies from HR. The customers dont care. All they know is, I want to get what I need quickly, easily. And if theres a problem, I want it resolved quickly. In a place where theyve already cut costs to a minimal level, it takes a leap of faith to say you can keep on cutting.
HR VP of Shared Services Consumer Products
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Our central functions are running out of room to cut costs. The only way to get step-change efficiencies is to start merging them.
CIO and Head of Supply Chain European Chemical Company
Source: Shared Services Roundtable, Shared Services Across Functions: Is Integrated Business Services the End-State, Rosslyn, Va: The Corporate Executive Board, 2010; CLC HR Budget and Efficiency Benchmarking; CLC HR Barometer, Q3 2010; Grossman, Robert J., Saving Shared Services, HR Magazine, September 2010.
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Compared to standalone HR Shared Service Centers, Integrated Business Services can increase cost savings by more than 38%.
Integrated business services improve overall effectiveness through best practice sharing and agility in responding to business change, in addition to significant cost savings.
5060 4454
= 38%
3744
Decentralized Functions
Improved quality and consistency of service Process standardization and integration Best practice sharing Agility in responding to business change
Better cross-functional data integration and visibility Job enrichment opportunities and high-potential talent sharing Improved support for M&A integration
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Human Resources
Finance
Procurement
Human Resources
Procurement
Finance
Integrated Business Services is a holistic approach to the functional support you deliver to your internal customers combining shared service teams and identifying and exploiting synergies across functions.
Many organizations operate shared services for Finance, HR, IT and beyond, but not all as part of the same framework or organization. An increasing number of companies are discussing how to integrate these disparate operations, and are in different development stages in doing so. In the final state of Integrated Business Services, corporate center service delivery is organized not by traditional function (HR, IT, Finance) but by internal or external customer type.
IT
Supplier Helpdesk
Account Payable
Payroll
Service Example
Integrated Business Services Functions including most of IT are organized horizontally into end-to-end business shared services.
Hybrid of Business Services Provided Through a Functional Structure Functions collaborate to offer a business service (e.g., Supplier Services).
Human Resources
Finance
Procurement
Employee Services
Common interface with business units
Customer Services
IT
IT
Facilities Services
Supplier Services
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HR should pursue a smart growth strategy to mature its shared services before the move to integrated business services.
With 45% of organizations moving to integrated business services within three years, HR should act now to optimize its current shared service capabilities. The ownership of integrated business services is the result of organic growth of shared services capabilities within the organization.
Business Unit A1
Business Unit B1
Business Unit C1
CFO
HR and Communications
Supply Chain
General Counsel
The HR Opportunity Create targeted shared services expansion paths to mature HR shared service solution capabilities to lead future business services transition from a position of strength (and even manage the function).
Major business units are merchant gases, electronics and performance materials, and tonnage, gases, equipment, and energy. Strategic divisions are research laboratories, supply and manufacturing, global human health, consumer care, and animal health.
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1 2
Source: CIO Executive Board, The Future of Corporate IT: IT Embedded in Business Services, Rosslyn, Va., The Corporate Executive Board, 2010; Shared Services Roundtable, Shared Services Across Functions: Is Integrated Business Services the End-State, Rosslyn, Va., The Corporate Executive Board, 2010.
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To ensure long-term shared service expansion, Vista1 segments opportunities into channels and evaluates their potential for growing the customer base or service portfolio.
Vista develops a growth plan for its shared services by identifying four distinct growth strategies.
High
Proactive Service Development Identification and development of capabilities to meet future strategic needs Expansion Potential: 510% during life cycle Example: HR analytics capability
Expansion of Service Offerings
Lead Customer Partnership Identification of strategic services for one major partner that can then be leveraged across all potential customers Expansion Potential: 2030% during life cycle Example: Pay communications training for managers
Organic Growth Growth increase driven solely through process improvements Candidates are selected through: Optimized current processes and services provided, and Tailored service provision to increase current customer base satisfaction. Expansion Potential: 510% per year
Low Low
Staged Customer Partnership Phased introduction of current service offerings to new customers Expansion Potential: 5060% of overall expansion across Shared Service Center lifecycle Example: Organizational redesign support
CLC Implementation Tip Use this matrix to brainstorm growth opportunities in all four channels to later prioritize resources based on ROI.
1
Pseudonym.
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Source: Vista.
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Vista1 creates a tailored expansion plan for each channel by identifying opportunities, evaluating these opportunities, and weighing key benefits and drawbacks.
Create a tailored expansion strategy for each growth channel through identification of shared service supporters within the client pool, identification of lead customers to drive product optimization, and quick realization of economies of scale or proactive product gap identification and closure.
Proactive Service Development Consider introduction of potential new service offerings based on: Technology or market trends; and Unmet current or future client needs.
Opportunity Identification
Consider potential new shared service clients based on: Openness to the idea of shared services; Initial evaluation of benefit to the client; and Initial evaluation of benefit to the shared service organization. In-depth analysis of business partner readiness, focused on: HRrelated questions; Business management; Service delivery; and Service support.
Opportunity Evaluation
Map current and potential customers to main current products to identify lead customer opportunities Identify major needs of key stakeholders and evaluate whether synergies can be attained through optimization around their needs Analysis whether optimized services can be rolled out to the organization at large Concerted effort to realize economies of scale with a product champion
Gap analysis between current and future required or desired state of technology Creation of a short list of potential candidates for proactive development based on strategic importance to Vista
Key Advantages
CLC Implementation Tip Evaluate where the organization is in its life cycle (e.g., expansion, contraction) to identify key advantages and disadvantages for each growth channel.
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Front-loading of risk identification and mitigation through early identification Inclusion of business partners who are bought into the concept of shared services Potentially growth-stifling if criteria are too stringent Depending on maturity of partner understanding of own cost and service structure, analysis might be misleading
Inclusion of innovative and strategically important projects in shared service planning and provision
Key Disadvantages
Cost-intensive projects with long lag for return on investment Occasional expansion
Source: Vista.
1
Pseudonym.
47
Vista1 combines multiple growth drivers to create customized growth lifecycles for each service.
Drive expansion through customized growth strategies that use different channels depending on the shared service organizations lifecycle, objectives, and environment.
Identify genuinely new opportunities or optimize around largest stakeholders for scale economics then aggressively expand services to larger clientle.
CLC Implementation Tip Use the growth channel forecast to anticipate peak and trough funding periods to better anticipate short- and long-term budget requirements.
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Pseudonym.
Simultaneously drive growth by providing existing services to a larger client base and developing new service opportunities through lead customer partnerships.
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KEY TAKEAWAYS
Grow Shared Service Solution Delivery Capability 1. Articulate a clear vision of the role HR will have in Integrated Business Services. Determine what should be HRs future role in an integrated, multifunctional shared service environment at your organization; do not wait for another corporate function to define it for you. 2. Build a robust HR shared service capability through segmented expansion plans. Drive HR shared service center maturity by separating different-in-kind expansion opportunities for a consistent, continuous shared service development strategy. 3. Leverage strategic partnerships with the line and lead customers to design growth plans. Create a tailored expansion strategy for different growth channels by identifying supporters and lead customers to drive product optimization.
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CLC Recruiting
CLC Compensation
CLC Benefits
HR Transformation Topic Center HR transformation is the process of responding to business strategy by creating an aligned HR strategy that focuses on delivering the right HR skills, structure, and priorities to achieve organizational objectives. HR Functional Design Center Use this interactive HR organizational chart to learn more about structuring, evaluating, or restructuring your HR function.
Structuring the L&D Function Understand the main ways L&D organizes the function. This report includes information on L&D organizational structures from a variety of companies around the globe.
Recruiting Structures Report This research piece details the benefits and challenges of various recruiting structures and provides examples of reporting relationships within recruiting functions.
Compensation Function Management Results This full-length benchmarking analysis provides detailed information on how compensation executives manage their functions to ensure they deliver value effectively and efficiently.
The State of the Benefits Function This research brief describes the trends in benefits function management and provides benchmarking data across different sizes of organizations and functions.
Benchmarking the Global L&D Functions of European-Based Organizations This research details the structure and effectiveness of global L&D functions at 16 European-based organizations.
Boosting Recruiting Process Effectiveness Increase the overall efficiency of your current recruiting process either through tools to help you make shorter-term, low-hanging fruit improvements or to aid with longer-term process reengineering efforts.
Global Compensation Administration Practices View data on who is responsible for global compensation and how resources are allocated to global compensation management.
Benefits Function Organizational Charts This document profiles benefits function organization charts from seven companies with approximately 10,000 employees.
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