A recent article in the Wall Street Journal described how many CEOs had strategic epiphanies during the Great Recession:  strategic plans don’t do diddly for companies during economic downturns.

During the recession, as business forecasts based on seemingly plausible swings in sales smacked up against reality, executives discovered that strategic planning doesn't always work.

Some business leaders came away convinced that the new priority was to be able to shift course on the fly… started to factor more extreme scenarios into their thinking... A few even set up "situation rooms,'' where staffers glued to computer screens monitored developments affecting sales and finances.

Walt Shill, head of the North American management consulting practice for Accenture Ltd., is even more blunt: "Strategy, as we knew it, is dead,'' he contends. "Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future."

What's new—and a switch from the distant calendars and rigid forecasts of the past—is the heavy dose of opportunism. Office Depot stuck with its three-year planning process after the recession hit, largely to make sure employees had a common plan to rally around, Mr. Odland says. But the CEO decided to review the budget every month rather than quarterly so the office-supply chain could react faster to changes in customers' needs...

Tying decision making closely to evolving facts helped a major U.S. producer of industrial goods avoid switching gears too soon. Battered by the downturn last spring, the McKinsey client (which Mr. Bryan wouldn't name) considered closing a large plant. Officials carefully assessed the pluses and minuses of shutting it sooner rather than later, Mr. Bryan recalls.

They agreed instead to keep the plant open unless orders fell to a predetermined "trigger point," he says. The trigger was never tripped, so the plant stayed open, and the company was ready when orders recovered rapidly last fall.

Aren’t these exact scenarios the reasons we hear business leaders give for needing more just-in-time information about their human capital?  To enable increased flexibility and decision-making for situations like needing to close a plant in one location and effectively redeploy people elsewhere?  To know what KSAs and experiences will be needed to ensure the organization exits the economic downturn well-positioned to accelerate growth by meeting customer’s needs?

Maybe the new strategic planning isn’t about how a company is going to grow, achieve greater market share, innovate new products & services, etc.  Maybe, just maybe, new strategic planning is going to be about how companies increase their capabilities to be more flexible, more nimble, more opportunistic.  The implications for talent management are pretty fantastic to think about, huh?  Not to mention, pretty darn exciting.

This week started for me at SuccessFactors' SuccessConnect event in Chicago, and it was a great way to start a week.  SuccessFactors is releasing some interesting new talent management functionality (crossing into the social colloaboration space, finally), there was a great group of current and potential SuccessFactors customers, and the sessions were informative.  The most welcome part of the conference, for me, was finally hearing Lars Dalgaard and other SuccessFactors executives talk about helping customers with their strategies around the technology, and how to think about talent management more holistically, rather than just focusing on the technology and feature functionality.

What, or who, was missing?  Those most likely to develop and champion talent and talent management strategies were missing.  The majority of the attendees were HR specialists in performance management, compensation, succession, etc., who are responsible for executing a strategy, not organizational leaders (HR or otherwise) responsible for developing those strategies.  Sessions on talent management strategy, including a session presented by Knowledge Infusion, were well attended and received (the most common comment I heard was "great presentation - you gave me a lot to think about"), I departed the conference wondering whether the messages about talent management strategy left participants truly inspired or just wondering how on earth they would ever be able to engage a strategic conversation with their organizations.

And this worries me, primarily because talent management efforts are not living up to executive expectations.  A study conducted by Business Intelligence and summarized by Personnel Today explains "Despite the lip service given to the talent imperative, corporate practice looks way off the mark", and lack of strategy is one of the key reasons why.

"First, more than two-thirds of companies do not have a talent strategy. This is a major obstacle. Until a company has assessed the talent implications of its business plans, it will be operating in the dark. In many cases, the default strategy is to take care of senior management succession. While meeting this goal is certainly important, it is not an answer to the big questions."

One of the reasons organizations lack talent strategies is that responsibility for and ownership of said talent strategies is still unclear.

"The answer is that it has to be a collaborative responsibility, although the ultimate owners must be operational managers because they are answerable for performance. Senior managers need to be actively involved in specifying the competencies and capabilities needed for key roles, as well as assessing performance, supporting talent development and creating the operational environment that enables talent to flourish.

HR and talent specialists must ensure that the optimum processes and practices are in place. They invariably have a leading part to play in facilitating steering groups involved in defining the talent agenda and identifying the ways in which competencies can be reliably assessed and developed. Further down the line, they need to be part of the regular talent review process."

The need for talent and talent management strategies is something that Knowledge Infusion has been saying since the firm's inception, and identifying who has responsibility for developing those strategies is something we work through in every single Knowledge Infusion talent management strategy engagement.  It was very exciting to hear a talent management software vendor CEO talk about strategy in the same keynote as technology.  Now, if only those responsible for developing talent and talent management strategies - business leaders and senior HR executives - would attend these conferences so they can hear, learn and share as well.

I was recently working with a client to select a Talent Management suite.  One of their main business drivers was that they wanted to standardize their Succession Planning process.  It was imperative that the solution they selected have robust 9-box (performance/potential) functionality.  This got me thinking about whether the 9-box was really a best practice for Succession Planning, or whether the talent management vendors were simply offering functionality that had been done by HR professionals for years in spreadsheets.

To my knowledge, the 9-box has only been used for Succession Planning since the 90's, but there is an interesting history behind this mainstay of the HR toolkit.

I learned long ago in business school that McKinsey originally developed the 9-box diagram along with GE in the 1970's to help GE evaluate their decentralized subsidiaries, business units, and product lines in order to determine where best to invest their cash.  It was loosely based on Boston Consulting's "Growth-Share Matrix" which was a 4-box matrix that classified business units into stars, question marks, cash cows, or dogs.

Over the years, the 9-box diagram has been adapted for many uses and somewhere along the line, an enterprising HR professional or consultant adapted the 9-box to evaluate human beings.

It is a convenient way to display data about people - particularly if you're using a spreadsheet.  But I wonder whether - untethered from spreadsheets and given all the technology available today  - there might be a better way to display this data about human beings?

Question for the group: Is the 9-box matrix still a Succession Planning best practice or are we just using it out of habit?  In what other innovative ways are you analyzing this data today?  All comments welcome!

Last week’s HR Technology Conference & Expo was a departure from previous years in many ways – seriously cool new technologies, higher levels of innovation, slicker UI’s, some of the best of commercial applications incorporated into HR applications, and mobile device integration to name a few.  But there was one overriding difference that jumped out at me in every session I attended, every conversation that I had and even in the product demos that I saw - and that was a new focus on the BUSINESS.  Yes, that word I kept hearing was “BUSINESS.” 

In fact, I would venture to say that for every 10 times I heard someone say “HR” at the conference, I would hear “BUSINESS” one time.  While 10:1 is not as good as it can get, it’s a far cry from a year ago when as an industry we were at roughly a 40:1 ratio.

The conversation at HR Technology had two new threads to it that were not there in 2007:

1. HR technology as business solutions, not HR systems
2. HR technology as means to connect, share and co-create across the business

The myopic view of HR is slowly changing and the walls between it and the business are slowly disintegrating.  Here are some snippets from 2 of the best attended sessions that give proof to this changed conversation:

From the 11th Annual Industy Analyst Panel:

• General consensus amongst the analysts that HR needs to respond to the financial crisis by getting crystal clear on what will make the biggest impact on the business.  There was more attention given to aligning HR activities with business strategy than to cost containment and risk mitigation (the traditional HR and IT response to a downturn in the economy)
• Focus on “critical roles” based on business strategy; be targeted in the way you approach talent
• Discussion of HR technology as “productivity tools”

From The Industry's First Talent Management Shootout:

• “Business people are the users of talent management suites”
• Focus on the employee: recommended jobs based on strengths and desires; interest lists (ala Amazon)
• Focus on the business user: mobile device integration, and action-oriented functionality
• The C-suite view of talent

So congratulations to ALL who have played a role in pushing the B-word – BUSINESS – into the HR technology conversation. 

Who knows? Maybe next year we’ll be at a 2:1 ratio. Here’s to change…

In a Consultant Corner post last month (see HR: Importance vs. Influence), my top-flight colleague, Suzanne Rumsey leveraged a recent survey from McKinsey & Co to demonstrate HR’s perceived lack of alignment with the businesses they support.  She highlights that line managers who participated in the study, much more than HR participants, agree that:

1.       HR lacks capability to develop talent strategies aligned with business objectives

2.       That HR is not held accountable for success or failure of talent management initiatives, and

3.       That talent management is viewed solely as HR's responsibility.

When I hear about alignment and ownership from HR clients of ours, I propose they use service level agreements (SLAs) to address them.  SLAs serve as anchors to the performance consulting models HR and T&D groups must employ to better support the needs of the business.  The purpose of these agreements is to require HR to work with its business customers to define their desired business and workforce outcomes and then what programs and services will be delivered to achieve them. 

To write an effective SLA and ensure it’s used to perpetuate alignment, I recommend combining it with your intelligence strategy.  Specifically, I recommend using SLAs to facilitate the 3 types of measurement needed not only to establish alignment and accountability, but to drive ongoing adjustments and improvements to the programs and services in-scope.

Use measurement to drive focus and accountability.  The SLA has an integral role to play in 3 types of measurement.  The first is predictive measurement, which is meant to drive alignment between HR / T&D investments and the needs of the business expressed, where possible, to KPIs important to line managers.  The KPIs documented on the SLA should establish the causal chain between the services being provided and workforce performance as well as establish service quality and accountability goals for both HR and line managers to meet.  In the case of talent management, these KPIs are typically tied to effectiveness in the form of workforce productivity, competencies, bench strength, retention, mobility, etc.  They may also include measures of HR service quality (e.g., our staffing group produces high-quality candidates) and efficiency (e.g., time-to-fill).

The second type is in-process measurement. Its purpose is to validate that a program or service is believed to be achieving its desired business results as measured through the KPIs identified on the SLA. In-process measurement may combine a mix of transactional data collected through HR systems (e.g., time-to-fill, participation in new product training) and survey instruments to assess whether or not HR services and programs are making the desired impact on the target audience, and in turn, the organization.  HR should use in-process measurement to make periodic/continual improvements to their services and programs.

The third and final type of measurement that leverages an SLA is retrospective measurement, which is meant to assess desired business impact.  This may or may not include calculation of ROI.  The assumption here is that enough time has passed and/or enough employees have been touched by the program or resource.  Retrospective measurement builds on data captured through predictive and in-process measurement by integrating data captured through other systems (e.g., point-of-sales, IT help ticket system, CRM) to demonstrate causality and ROI.  With sufficient data and analysis, the outcomes of retrospective measurement can be used to feed predictive measurement through scenario planning and analytics. 

My advice to those considering performance consulting models that leverage SLAs - start small and keep the language simple.  I also recommend engaging the right stakeholders.

My request to those who read this post - please share your thoughts…

I was having an interesting conversation with an HR friend of mine last night over a nice glass of wine…  She had recently led her business leaders through a Talent Review process and had a noteworthy realization after reviewing all of the top leaders within the team.  It seems that every female leader was given developmental feedback that related back to a lack of confidence.  That said, there were no male leaders who were given similar feedback.  And, as much as she hated to agree with what appeared on the surface to be gender-biased feedback, she followed their line of logic and felt compelled to agree…

In general, there was more of a tendency for women to outwardly question or react – positively and negatively – to their actions after an event, meeting, etc.  This appeared to baffle their male counterparts and was noted as lack of confidence by both males and females as they considered the performance of these women.  This lack of confidence was a key factor taken into consideration in assessing these women’s future potential.  And, my friend and I recognized – not surprisingly - that this phenomenon did not appear to be limited to the top business leaders within my friend’s team.

This, of course, got us thinking…  We first considered our own experiences and both immediately recalled examples when we walked out of meetings and verbally engaged in the “I wish I had…” dialogue (As for my own example, I can even recall the look on my male counterpart’s face, who seemed confused and felt compelled to give me positive feedback – to try to ‘pump me up’.  Although I wasn’t excited about the reaction, in truth, I’m not sure what alternative reaction I expected from him…)

Now, in this world of information, we all know that there have been many studies of male / female differences, many of which focus on this topic of confidence.  And, my point is not to turn this into a research paper (I did lots – maybe too much – of that in graduate school).  Rather, my point is to offer up some questions for consideration…
1.  Is there a reality to the idea that lack of confidence is a characteristic to which women are more prone in the leadership ranks?
2.  What are the implications from a developmental perspective?  Is this an example of ‘perception is reality’ and the solution is primarily educational in nature?
3.  How does the idea of emotional maturity factor into this conversation?  It is interesting to note that realism and self-analysis are characteristics of emotional maturity, whereas denial and avoidance indicate emotional immaturity.  Are these two ideas in conflict?  Where is the balance?

I’m curious what others think and have experienced on this topic…  Thoughts?

The August 2008 edition of The McKinsey Quarterly Chart Focus Newsletter highlights a dichotomy in business today, namely that while executives' stress levels are rising over the availability of talent in their markets and related issues (talent attraction, management and retention), there is a corresponding decline in HR's ability to influence business strategy.   The chart below (from the McKinsey study) indicates that HR and line managers are far apart on their views of HR today.  Line managers, much more than HR, agree that HR lacks capability to develop talent strategies aligned with business objectives, that HR is not held accountable for success or failure of talent management initiatives, and that talent management is viewed solely as HR's responsibility.

As Knowledge Infusion works with clients on their Talent Management strategies, we repeat (sometimes ad nauseam, I'm sure) these very principles.  HR must align talent strategies with business objectives (one reason why we stress the need to integrate the business leaders' view into Talent Management strategy development.  HR should be held accountable for talent management initiatives - after all, HR is the function that designs, develops, and implements talent management strategy and programs.  The extent to which the programs are successful is highly dependent on 1) the degree to which they are aligned with the business, and 2) the extent to which HR effectively deploys them.  IF talent management strategies and programs are aligned with the business AND if HR is held accountable for the success or failure of initiatives (in addition to the other key considerations in the chart below), THEN responsibility for talent management can be diffused throughout the organization, no longer to rest solely on HR's shoulders.  For that to happen, however, HR must make the case that it knows what it is doing in the talent management arena.

What do you think of the McKinsey study results?  Agree, disagree?

Great article by Peter Capelli in today's HR Executive that discusses the relationship between HR policies and stock performance.  It summarizes the findings, entitled, "Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices ,"  published by his Wharton colleague, Alex Edmans.  The study implies that investments in intangibles that lead to employee satisfaction drive long-term stock performance.  He bases much of this stance on an analysis of the long-term stock performance of companies on "Fortune Magazine's 100 Best Places to Work For."  For the 7 years between 1998 and 2005, the stock prices of companies on the list generated an average annual rate of return of 14%, which is more than double the 6% average return of the S&P 500 index during that time.

As I read both the article and summary of the study's findings, I couldn' help but think of some of the clients with whom we have worked to develop business cases for investing in talent management strategies that call for a shift in the way organizations manage their people. 

For some, the business case to invest in new HR organizational structures, processes, policies and technologies that enable such a shift is made simply by selling value and the promise of talent management to their executive commitees with the support of studies such as this.  Others go a step further by focusing on how the competition is investing in their talent management infrastructure [since they are presumably going after the same talent].  Still others use metrics related to business issues such as engagement, retirement, turnover, headcount forecasts, and bench strength to make their case.  And for the very cost-conscious, we've helped some focus on cost savings through automation and Web enablement (e.g., digital delivery of performance forms, self-service, online courses, etc.).

My advice is to focus on VALUE citing specific areas of the business where talent management investments in job roles critical to executing on business plans intuitively will drive performance.  For example, on-boarding programs for bank tellers to ramp up their productivity and and engagement, which will lead to greater engagement and customer satisfaction while driving down turnover costs.  Most HR organizations we work with have sufficient insights into their various lines of business to make sensible value statements like this.

I'm curious to hear how others who have successfully made their case.  I'd also love to hear from those who are currently leading the charge on a talent management business case at their organization. Are you focused on value?  Would data from studies such as this one published by Wharton resonate with the people who hold the purse strings in your organization.