Human Capital Management 20/20

HCM Metrics - what is really important?

I have been spending a lot of time lately researching and thinking about what human capital metrics are really important for organizations.  There is no shortage of opinions (and books) on this matter, and many of these opinions are completely situational.  The answer to this question has several variables that impact the decision about your organization's metrics.  On one hand this question totally depends on the type of organization you have (large company, small business, government agency, association/non-profit, etc.).  Another factor would be the organization's philosophy about its people.  Yet a third would be the importance that your people have to your product(s)/service(s).  Being a human capital specialist, I think people are incredibly important, and most executives will tell you the same thing.  "Our people are our first priority", etc. etc. etc.  But what I find interesting is not what a leader "says" about its people, but the actions and activities the organization's leadership "takes" in regards to its people  AND what the everyday workers say about the organization's commitment to its people.

Some of these obvious action items are included in HR policies and procedures.  But just because the policies are in place doesn't mean they are implemented equitably.  It also doesn't imply that the culture truly supports them. There are issues that play a much more significant role to your organization's HCM strategy, yet all of them point to getting real about your people.  Here are just a few metrics to consider.  Each organization needs to pick the ones that make the most sense based on their organization's context.

1. Organizational Culture. The perceived versus stated culture of an organization.  If people on the ground could be completely free to speak their minds, how would they describe the organization's culture?  How does your leadership "describe" the culture?  What are the gaps? How are you measuring this? 
2. Right People, Right Job.  Do individuals love their work and know they are valued for their contributions and efforts?  Can you easily identify teams that are less productive than others?  Does your organization easily know about each employee's strengths so they can be leveraged across the organization?  (This isn't just job satisfaction) [We use the Kolbe Wisdom for this.]
3. Turnover rates. Capture both voluntary and involuntary turnover and the context around those numbers.  Why are people leaving your organization?  Are you conducting effective exit interviews with unbiased third party individuals?  And an even better question, why are your people staying with your company?
4. Succession Planning. How many people are eligible to retire from your organization this year and what is the game plan to succeed them?  How do those retiring individuals truly impact the knowledge capital of your organization?  How are you measuring that, if at all?  (and you can btw)
5. Cost to hire one employee.  Are the trend costs going down?  With the brilliance of social media, they should.  If your hiring costs are going up, there should be a really good reason why, especially in this market.
   
6. Cost of losing one employee.  What is the cost to the organization for one employee leaving?  What is the impact to productivity for the teams they may be on?  What knowledge goes out the door with them?  What does it cost the organization?
7. Professional development investment costs.  How much are you investing in each individual's professional development?  Does your organization have solid professional development plans (PDP) in place for every individual?  Are performance-based bonuses impacted by successfully executing a PDP?  What is your organization getting out of that investment?
8. Employee Evaluation Process.  How often do your employees receive meaningful feedback on their performance?  Is this feedback comprehensive, objective, measurable? 

Each of these 8 metrics are important for every organization.  But not all organizations seem to understand that capturing this information, discussing it, and taking action to adjust issues as necessary, are a critical part to retaining the best and brightest employees.  HCM is not only a science but an art.  It is all about keeping the ongoing pulse of the organization, trending that, and making adjustments as necessary.

If you don't take a really good look at these numbers, once the economy picks back up, you may find your best talent finds a place that truly values their contribution.

Leveraging Kolbe Wisdom for Innovation

Today is the first day that my peers and I are sitting down (independently) to create and develop new concepts for the company.  This "Innovation Day" as it's been titled, was suggested by our CEO based on her reading of Daniel Pink's book, "Drive".  In full disclosure I haven't gotten to the part of the book that discusses the innovation day concept, but I'll get there soon.  The concept is pretty simple, give employees time to disconnect from daily work to explore the new ideas, activities, topics, etc. that excite them and then report out on the efforts of the day.

So as a QuickStart/FactFinder (according to the Kolbe Wisdom) exploring concepts and taking risk are right up my alley.  So I'm really enjoying the day and exploring some concepts that I simply haven't had time to explore in the last nine months.  But for all of those peers of mine who are Kolbe Certified Consultants, we know that some people simply don't want to do this for a whole host of reasons.  For those unfamiliar with the Kolbe concept, it is a tool used to identify people's unique abilities and strengths.  In particular, it identifies how people will naturally take action when left to their own devices.  

What I am finding so interesting is how people with a range of Kolbe strengths approach the day, or don't.  In particular, as a QuickStart/FactFinder I have no problem generating a ton of ideas.  Just please don't ask me to go into micro detail as to how the idea would be implemented.  I'll leave that to my stellar team of FactFinder/FollowThroughs :)   But what happens when you ask a FollowThrough (who has a need to categorize and define processes) to create new ideas?  Or a FactFinder (who needs to get into the research and details)?  Or the Implementor (who needs to see it in tangible form)?  What part of the process of innovation do each get bogged down in? 

It's fun to watch, not only from a QS innovator perspective, but to watch my peers and how they simply approach the day.  What is also going to be fascinating is when my peers (mostly FactFinder/FollowThroughs) have to dive into the vetting process.  How quickly will they want to pull the plug on ideas before concepts are even fully explored?  Or will they so fully explore something that needs to be canned that they get into information overload?  Or will their inquisitive fact finding and categorizing actually get us to quicker go/no-go decisions?

We will soon find out.  The first debrief for today's activities is on Monday.  

Prepping New Generations or Retraining Managers/Leaders for Workplace of the Future?

The Social Media Club offers up a great question this week which has me really thinking about how we "prepare" future generations for the workplace of the future.  Here is a link to their original blog post: SMCQ11: How do we educate the younger generation to prepare for the modern workforce?

A great question indeed.

One of the most interesting things happened to me between 1995 when I finished undergrad and 2001 when I started my first serious company.  In 1995 the field of eLearning (as we know it today) didn't truly exist.  Yet in 2001 I founded a consulting firm to focus on strategic eLearning for associations and non-profits.  My undergraduate program didn't necessarily prepare me for my chosen profession.  So the question that Deborah Crooks poses on the SMC blog is a really good one indeed.

I think there are two sides to this question. One side is how can our education system teach students abstract concepts like change management, creative problem solving, and critical thinking or other important concepts around collaboration (in the broadest sense), teamwork, etc.  And at what age is learning about these concepts appropriate in child development?  I leave this to the experts in the education world who have to tackle the major institutional obstacles that keep our public education system stuck in the industrial age.  As a parent of a pre-K and Kindergartner I see this first hand every day and honor parents that home school because of it.

The other side of this coin is how can we teach managers and organizational leaders to become "guides on the side" instead of the "sage on the stage"?  Meaning, when can we get leaders to truly transform management styles so that we embrace and welcome learning from younger members in a professional population.  When will companies get the idea that sometimes true leadership comes from following, learning, and listening (servant leadership)?   When coaching and mentoring is led by the younger of the pair or group, not by the older?

In the human capital world there is a constant message that leaders and managers attempt to get Millennials to conform to the current way of doing things.  Policies are created to limit the use of social media in the workplace.  If someone is "caught" in IMs or surfing the Net it's assumed they are "slacking".

Perhaps what leaders and managers need to do is give up the Industrial Age leadership and management practices for those of the Knowledge Economy.  Create new styles of leadership that acknowledge and embrace collaboration through the Internet, embrace teamwork and knowledge gathering using all means possible.  Back on the flip side, educational systems need to be completely revamped to address the fact that many children today will be working jobs in the future that haven't even been created yet.

5 Take Aways from AFEI's Change Management Conference

I recently attended the AFEI Change Management Conference in Washington, DC (April 30 - May 1).  There are some interesting things that happened while I was there which I thought relevant to share in this blog.

1. If you are on Twitter, check out the hash tag #AFEICM09 for notes and commentary from a broader range of folks at the conference.  I highly recommend checking it out as colleagues have posted great thoughts and links there related to speakers and content.
   
2. A new change management association is forming called, "Association of Change Management Professionals"  ACMP, which Stephen Wehrenberg is helping to form.  The group is focusing on a certification body of knowledge for the profession. 
   
   My commentary: we will wait and see what happens.  I always get a little weary of individuals self anointing to pull together the creation of an association.  In this day and age I'd always suggest utilizing social media tools to do just that.  The wisdom of the crowd is always better than the individuals.
   
3. At the AFEI conference I was struck by how many people are trying to "structure" the process of change management (CM). Yet there were multiple individuals who consistently stated that there is no one-size-fits-all process or methodology for CM.  Why, you ask?  Because change happens at the individual level, and people are hard to put into a methodology or process.
   
   My commentary: Stop focusing on the process of CM and focus on the people that are impacted by it.  See #5 below.
   
4. Making Change Work, a report by IBM, studied CEOs and organizations and their proclivity to change.  "Over a two-year period, the percentage of CEOs expecting substantial
   change climbed from 65 percent in 2006 to 83 percent in 2008,"
   
   My commentary: The stat above prompted my Twitter post on 5/1, "If 83% of CEOs think significant change is coming to orgs, then doesn't that make "change" the norm and not the exception?"   The report is a great resource for anyone looking for stats on CM.
   
   
5. Victoria Grady, an Assistant Professor at GWU closed out the conference with a fantastic session on her research and work on the Loss of Effectiveness which results from change initiatives within organizations.  She's created a fascinating qualitative index that measures the impact of change on individuals.
   
   My commentary: Grady gets it.  It is about the people going through the change, not the process itself.  Pay attention to, and take care of the people who are being impacted by the change and the affects will be less dramatic and smoother for all involved.

HR is just one part of HCM

One of the things I like to be very clear on early in conversations about human capital management, is that HCM is not simply HR.  It's not a fancy new term for a revised definition of human resources.  It is a much, much broader concept  of which HR is just one part.  All of the following buzz words fall under the umbrella of HCM:

Human Capital Management Components

• Talent Management
• Human Resources (HRM, HR, etc.)
• Training
• Professional Development
• Certification/Designations
• Leadership/Management Training
• Onboarding
• Recruitment & Retention
• Compensation & Benefits
• Workforce Productivity
• Workforce Planning & Deployment
• Workforce Analytics & Trends
• Generational Trends
• Change Management
• Organizational Mission, Philosophy & Culture
• Strategic Alignment
• Knowledge Management & Thought Leadership

HCM Strategy, focuses on how all of these buzz words work together to generate a high performing organization with happy, productive employees.

We have taken these buzz words and formulated a new approach to HCM around four key areas.  Watch the blog for more on the HCM2020 Vision in the coming days.