Awash in data, firms struggle to develop and leverage insights—but getting them right can have tremendous upside
By Mark Masson and Sean Williams
Data is everywhere. Insights? Not so much.
Looking for deep intel on customer or client needs? To target new markets? Understand performance? Any firm or company today pursuing profitable growth may ignore, at its own peril, the role of data in this strategy. If business transformation is the key to your growth model for tomorrow, leveraging your existing data for insights into key drivers should be a mandate.
The availability of data is set to increase at lightning pace. The volume of data created annually is expected to reach 44 trillion gigabytes by 2020, an increase of nearly ten times just since 2013. And yet only a fraction of that data is actually helpful—37% of that 44 trillion gigabytes is expected to be useful, and only after it is analyzed (1). Inundated by seemingly useless data, you may be wondering whether investing in your organization’s analytical capabilities was worth it.
And you wouldn’t be alone. The majority of big data and analytics-building efforts fail or are never completed. Just because the capabilities are built doesn’t mean they truly add value. One recent study (2) found that three-quarters of businesses extract little to no advantage from their data, including many that have invested heavily in building analytics capabilities.
The problem for most organizations and leadership teams is that simply having more data—or software or even data analysts—doesn’t directly lead to answers. The good news is that our experience shows that nearly any level of investment in analytics can generate surprisingly large value. Realizing that value often requires understanding what barriers leaders are encountering, and then addressing the (sometimes surprising) root causes.
Assessing Your Unique Challenges
Leaders understandably focus on dealing with the most obvious causes—bad data, bad analytics, or even bad analysts—but while these are the most obvious, they are not necessarily the most likely to be the real problem. You should also make sure the business processes that touch analytics are not getting in the way, that you manage the cultural challenges to acting on analytics, and that you align on what is needed, from the C-suite down to the analytics teams.
To fully realize the value from analytics, leaders must understand and activate all of the elements that support a data-driven firm.
- Alignment : Aligning leadership (Senior Team and key leaders) on the most critical decisions to be made, and analysts on the knowledge and data required to make them; sizing the gaps between the current level of insights and information provided and the strategic needs
- Means : Evaluating the adequacy of means (processes, technology and data-related interactions) that lead to decisions
- People : Assessing the current type and level of analytic and decision-making capability within the firm
- Processes : Measuring whether current business processes enable decision-making from insight or get in the way
- Culture : Highlighting and removing cultural weaknesses around or barriers to data-enabled decision-making
Finding Value in Your Data
Unsurprisingly, we find that each organization has strengths and weaknesses among these elements, but few are capable of objectively identifying them or knowing what levers to pull to change the situation. Successful ones, however, do not become data-driven by throwing more data at the problem. Rather, they work to first understand their gaps related to these elements and find solutions to close them, leveraging the natural strengths of the organization.
Complacency around your data will ultimately impede business transformation. But eliminating company barriers, aligning critical elements and making investments in analytics is an assured route to future growth. Every organization today, regardless of size, has potentially game-changing insights sitting right in its very own data, and the value is significant. Understanding and delivering on client or customer needs you’re missing or that other organizations can’t “see” makes getting this equation right worth full percentage points to your firm’s bottom line, competitive advantage and continued livelihood.
(1) EMC Digital Universe Study, 2014
(2) Seizing the Information Advantage, 2015
Mark Masson advises senior leaders of major law, accounting, and consulting firms. He specializes in firm and client growth strategies and effective execution by aligning and engaging leadership teams, boards, and partnerships on strategic growth priorities. His work blends the nuance and experience of professional service firm leadership with cutting-edge business analytics.
Sean Williams helps clients craft insight-based and data-driven solutions to their business problems, with experience in analytics and predictive modelling in a variety of industries, including financial services, hospitality, and manufacturing. He works with clients to build their analytical capabilities and to ensure they closely support strategy, and to help clients overcome their cultural and organizational barriers to realizing the value of their analytics. Learn More
By Aneysha Pearce
The commonly-held sentiment that the more things change, the more they remain the same, certainly applies to some recent, high-profile and quite surprising leadership missteps we have seen play out publicly with Wells Fargo. The well-documented reputation crisis includes the termination of 5,300 lower-level bank employees who had opened over 2 million customer accounts to meet aggressive cross-sell targets set by Wells Fargo leadership. While such brand-tarnishing stories are not uncommon, it is truly perplexing to see them occur within a company placing high strategic importance on reputational efforts, and one that until recently had been the darling of Wall Street. In today’s social media spinning world, a breach of customer trust of this magnitude is all too easy and can rapidly compromise even the most highly regarded corporate reputations.
Not surprisingly, corporate reputation strength is based on the anchors of trust, admiration, respect, and the good feeling stakeholders have for a company. These drivers don’t change all that much, yet reputational performance does change—and quite dramatically— based on specific events and the relative alignment of the firm’s strategy, organizational model and talent.
The misalignment between management and staff can also be striking and may not be apparent until it is too late. For example, Wells Fargo’s now former CEO, John Stumpf, claimed that the bank’s situation was a result of “wrongful sales practice behavior” and that it “(went) against everything regarding our core principals, our ethics, and our culture.” But one only need to ask Stumpf’s front-line sales associates to hear a different story—one of a sales culture so intense that some workers (even in their San Francisco headquarters and branches) felt pressured into employing deceptive sales practices to make the lofty cross-sell goals. Such an atmosphere, said the associate, “Completely contradicts what (Stumpf) is saying.” The employee described a sales push called “Jump into January,” where associates were expected to sell 20 products a day. “We were all miserable, and it was soul-crushing to walk in every day,” said the associate. It seems obvious that the pressure to achieve such targets created an intense environment.
What can other firms learn from the decline of Wells Fargo’s reputation? A useful way to answer that question holistically is through the lens of Axiom’s “Reputation Management Framework.” Our model begins with the end in mind and is based on years of experience leading this type of work for global clients in highly-regulated industries such as energy, healthcare, financial services and automotive, to name a few.
The model is intuitive, with reputation heavily influenced by the importance of company performance measured against the following dimensions: innovation, products/services, citizenship, governance, workplace, leadership, and financial performance.
Wells Fargo’s decision to put unrealistic pressure on its retail banking team had a cascading effect on the entire organization. To add some dimension to the gravity of the situation, we fielded a study with 500 U.S. general consumers about their perceptions of Wells Fargo’s (and nine other companies’) reputation given the events of late.
From a reputational performance standpoint, Wells Fargo’s current reputation is at the “poor” level with a score of 58 (out of 100). Compared to its retail banking peers, JP Morgan and Bank of America are in the “leading” to “average” range with scores of 76 and 70. respectively. Further, key drivers of Wells Fargo’s reputation from the recent events are putting downward pressure on its overall reputation – with Leadership (49), Products and Services (55), and Corporate Citizenship (52) all either at or well below the “failing” performance threshold.
Recovering from this crisis will require more than a band-aid. It will take a reexamination of the entire organizational model including roles and accountabilities, decision authority, performance measures, work processes and information flows. We often recommend that companies take a step back and analyze their organizational model for reputational vulnerabilities and create an organization design to support behavior that builds reputation, not tears it down.
It will take time for Wells Fargo to unwind the damage done and, most recently, it appears to be taking the right steps to correct its actions—including leadership changes at the top, a new public campaign taking responsibility for wrong-doings, a roadshow to internally communicate the work to be done and, importantly, the realization that it is a long road ahead to rebuild trust with its customers AND employees.
Aneysha Pearce is a Partner at Axiom Consulting Partners, a strategy consulting firm focused on helping clients transform their businesses through a deep and thoughtful understanding of strategy, organization, and talent. Aneysha has over 20 years of experience supporting clients with their growth strategy efforts having partnered with many of the F500 clients in a wide-array of industries including energy, financial services, retail, consumer packaged goods, technology, and healthcare. Aneysha is a frequent media resource, commenting on business, brand, and reputation topics for publications such as Fortune, MediaPost, and 24/7 Wall Street, and has been interviewed by San Francisco KGO Radio. Learn More
The Vizient Research Institute and Axiom Consulting Partners collaborated on a breakthrough research report, the Vizient Chronic Disease Medical Home Playbook. In a guest blog on Vizient’s website, Garrett Sheridan, Axiom’s president, outlines the six foundational elements that are essential in reducing costs and improving patient outcomes for the chronically ill.
Health care spending in the U.S. exceeds $3 trillion per year and 10 percent of the population – the chronically ill – accounts for approximately 60 percent of that cost. Those patients are distinguished by their complex medical conditions that often require costly interventions. As noted in a previous Vizient, more than two-thirds of Medicare beneficiaries have multiple chronic diseases and a staggering 93 percent of total Medicare spending goes toward beneficiaries with multiple chronic conditions.
The complexity facing these patients is overwhelming. Too many care plans, too many uncoordinated appointments, too many prescriptions to manage and no quarterback or advocate to help. Health care organizations have done well at managing diseases, but not so well at managing the complexity of the patient’s life.
Health system leaders I’ve recently spoken with will candidly admit that past disease management approaches, while well intentioned, have fallen short. But we’re seeing the emergence of a different approach, one with the potential to increase the quality of care, engage patients in their own care plan, and minimize costly, preventable emergency room visits and admissions. It’s a multidisciplinary, patient-centered approach for transforming care for the chronically ill.
In a recent collaborative effort with the Vizient Research Institute™, we looked at several organizations that are leading the way in caring for the chronically ill and concluded that six foundational elements are essential in reducing costs and improving patient outcomes. They include:
- Segmented patient population. Organizations that successfully manage the health of populations understand that the strategy is not about managing one population – it is about segmenting the population and understanding that each segment requires different approaches, resources and care models. It is important to identify the drivers of needs, e.g., number of diagnoses, acuity of conditions, demographic data; differences in needs, e.g., payer affiliation, mental health and/or substance abuse issues; and utilization behaviors, e.g., frequency and intensity, primary avenue of utilization.
- Defined clinic infrastructure. It’s unrealistic for many chronically ill patients to comply with their multiple care plans when it’s difficult to find transportation and keep track of multiple appointments in different locations. As a result, proximity and convenience must be considered in any complex care design. However, models for how to best support a particular provider organization will vary and each facility will have to find an approach that’s right for them.
- Team-based care model. A team-based approach to care works best. High-performing teams have clearly defined responsibilities that are understood by both patients and care providers. Clarifying the boundaries between roles eliminates duplicative effort, closes gaps in care and helps patients avoid being overwhelmed.
- Integrated communications matrix. Knowing when, how and with whom information is shared among the care team, patient and health system ensures that all stakeholders are able to make informed decisions. Information silos give way to a fact-based understanding of how to achieve shared goals. A communications matrix that illustrates the interactions — both giving and receiving information — that needs to take place creates a positive patient experience.
- Appropriate workforce structure. Getting the right number and type of team members working together in a complex care design can feel like a juggling act. There are multiple variables, including the fact that chronically ill patients will visit more often and their visits will be more resource-intensive. The composition of the patient population is another important variable. For example, if it has higher-than-average psychosocial needs, the right number of mental health providers must be available.
- Clear systems and processes. Electronic medical records, patient/provider compacts, interdisciplinary patient rounds and educational tools that engage patients all have potential to reduce complexity. Balancing the specific requirements of the care model with institutional infrastructure and cost concerns is an important consideration and a potential implementation challenge.
We are not suggesting that any institution should copy a defined model. Each of these foundational elements is essential, but it’s just as important to remember that one size does not fit all. The key is to start thinking in practical terms about providing your chronically ill patients with access to better coordinated care, fewer missed visits, higher medication adherence and ultimately, better quality of life.
To learn more, click here to read an executive summary of “A Breakthrough Approach to Managing Care for the Chronically Ill Population.”
About the author and Axiom Consulting Partners. Garrett Sheridan is the president of Axiom Consulting Partners, a management consulting firm providing strategy, organization and talent-related services to help transform academic medical centers and other health care institutions.
The groundbreaking work at the Vizient Research Institute drives exceptional member value using a systematic, integrated approach. The investigations quickly uncover practical, tested results that lead to measurable improvement in clinical and economic performance. Learn More
Dave Wedding, Chairman, Partnership Board and Managing Partner, Mid-South Market Territory at Grant Thornton LLP, and Mark Masson, a Principal, Axiom Consulting Partners, co-authored this whitepaper that explains why and how boards and management teams at professional service firms can work better together to sustain momentum and drive profitable growth.
“Too often boards and management teams at firms see each other as hurdles to be cleared. Power politics and a long list of initiatives get in the way and hold down results. Here’s how the board and management team can work together better to sustain growth:
• Determine and then live by who makes what decisions, why and in what time frame.
• Engage the broader partnership.
• Develop a shared view of the most critical strategic priorities for both the board and management.
• Leverage strengths and set clear expectations (of each other).
• Speak and act with one voice.”
Dave and Mark conclude: “Governance takes more than what is on the surface to successfully lead and sustain a firm’s momentum. Even the most gifted leaders often find the challenge of driving change difficult. Tuning the hard code and soft code of governance to get, and keep, the board and management team working together effectively for the partnership pays real business dividends.”
Accounting Today (8/30/16) features a high-level article on governance by Dave and Mark that summarizes many of the points in the whitepaper:
“Nobody likes a back-seat driver, and nobody feels safe when the two people in the front seat are arguing about every element of a road trip. The same is true in a partnership. When management and the board disagree on direction, managing growth or any other key decision, the entire organization is at risk. Partners feel unsafe…This is particularly true in accounting firms and other partnerships. Power struggles abound. Managers and directors sometimes view each other as hurdles to be cleared —and they keep information from each other. Issues of pricing, client acquisition or talent management get ignored, and ultimately, overall growth suffers. Learn More
Annual Salary Reviews: Is the Juice Worth the Squeeze?
In this video produced by WorldatWork, Juan Pablo Gonzalez, Partner, Axiom Consulting Partners, and Bruce O’Neel, Vice President – Human Resources, CSG International, question whether the time invested to create, review and negotiate performance ratings and manage merit matrices and forced ratings distributions generates any real value. They then provide alternatives to pay for results and growth in ways that yield a higher return on rewards investments, and advice on moving away from traditional 12-month salary increase cycles.
For a deeper look into the issue read the workspan magazine article, “Annual Salary Increases: Is the Juice Worth the Squeeze?” Axiom Partner Juan Pablo Gonzalez makes the case that “the annual salary or merit increase process is becoming an anachronism…Instead, pay for results and capability growth by eliminating the traditional merit increase process and by keeping performance management, compensation budgets and simple variable pay programs.”
The benefits include:
- More effective communication about the nature of performance expectations.
- Better allocation of compensation investments by aligning type of pay with type of performance.
- Increase in meaningfulness of rewards.
- More productive use of manager, employee and human resources time in managing, rewarding and increasing performance.
By Don Ruse and Aaron Sorensen
Strategic workforce planning (SWP) has taken a long and winding road over the past 15 years and the final destination appears (for most) to be dusty binders and another opportunity lost for the HR function to deliver strategic business value. What happened? How did a process with such promise fail to live up to the hype and under-deliver in so many cases? How can it be salvaged and made valuable again?
SWP brings to mind the Vasa, a powerful warship ship that sank on its maiden voyage in 1628 just minutes after leaving the Stockholm harbor because of poor design and planning, requirements creep, and excessive innovation, including overloaded features and ornamentation. The ship was salvaged in the 1960’s and resides today in Scandinavia’s most visited museum.
SWP offered HR a foray into strategy—a ticket to “sit at the table” and partner with the business to truly connect people decisions to the strategy. It was to be the holy grail of all things strategic in HR and held the promise of being able to ensure the right people, in the right roles, at the right time and cost to successfully execute strategy. Within some companies, this promise has been fulfilled and tangible business value realized. Unfortunately, this is more the exception than the rule. Why? Because of familiar reasons that often characterize failed HR initiatives.
So what are these reasons and what can HR do to refocus its thinking and approach to SWP to finally deliver real business value before it becomes another failed HR promise? We offer the following for your consideration.
Think and act like business person, not a technical professional
Good business strategy is anchored on the fundamental understanding of a company’s marketplace, the forces that shape it, and what it takes to win within it. A good strategic workforce plan requires HR to understand these fundamentals as well as the leaders who run their business and develop its strategy.
We still find that the lack of business acumen hinders most SWP efforts. HR’s view of and approach to SWP is too often shaped and managed by people who, through formal education and/or experience, possess deep technical expertise in HR, Organization Development, or I/O Psychology. While valuable in their areas of technical expertise, they often do not possess a level of business acumen that enables them to understand and analyze a business’s competitive landscape, decipher market, financial and operational forces, understand organizational dynamics and economic constraints, and consider these factors in determining future workforce requirements. Companies that recognize business acumen as a key to successful SWP rely on line leaders, heads of strategy and in some cases experienced generalists with “field” experience to drive the process while tapping into technical professionals for analytic support.
Focus strategic workforce planning on conversation, not the analytics and tools
Developing sound business strategy begins with knowing what questions to ask about the business and competitive forces and guiding the conversations necessary to answer them. SWP is no different yet we continue to find poor quality conversations and an obsessive focus on tools and analytics that provide interesting data, but often irrelevant insights. HR, using its business understanding and business acumen, needs to identify the critical questions that help connect business strategy to workforce strategy and drive the critical thinking and constructive discourse required to answer them. It’s the conversation (and not the tool or analyses) that results in business leaders making informed decisions regarding future workforce requirements and investments.
Unfortunately, HR has become enamored with software-as-a-service tools that promise to provide insights with the push of a button. It’s as if a new segment within the software industry was born almost overnight. (A Google search of the term “workforce planning tools” yields over 4 million results.)
The plethora of SWP certifications and training have only reinforced this myopic focus on analytics and tools, resulting in many organizations getting stuck in the weeds. As the SWP movement took hold it quickly captured the attention of firms who saw a market opportunity to deliver services that promised to transform HR pros into workforce planners. While this was a boon for the organizations offering these services, it did little more than add another set of templates and tools to the HR toolbox. It is apparent now that training in frameworks, tools, and models can’t replace the critical thinking and business acumen that are truly foundational to relevant and actionable strategic workforce plans.
Keep strategic workforce planning focused on strategy, not tactics
Keep SWP strategic. Strategic workforce planning is a process that translates business strategy into workforce strategy. In doing so, it should inform HR strategies and processes to execute the plan just as business strategies inform downstream operational strategies and processes focused on inventing, making, and selling a company’s products or services. Learn More
We often find HR has dropped the “S” from SWP and designed workforce planning processes that are glorified annual headcount planning exercises tied to operational budgeting activities. Why? Because of the absence of business thinking and the focus on data visualization and irrelevant analytics that frequently result in leadership losing interest and confidence in SWP. They fall back on relying on HR to do what they have done well over many years—headcount planning focused on affordability—versus differentiation and optimization to achieve business strategy.
We also find that HR tends to design SWP as a be-all and end-all for workforce management—the catch-all for all things strategic in HR. SWP becomes the latest program for downstream workforce management processes such as talent review and succession planning. This reinforces leadership’s frustration with HR and further populates the HR graveyard of failed attempts to be strategically relevant.
So, is strategic workforce planning another lost opportunity for HR to deliver real business value? We believe the answer is “Not yet.” However, we also believe that it will be if HR continues down the current path of making SWP yet “another HR program” vs. a strategic business process that helps leadership ask and answer the critical questions needed to ensure they have the right people, in the right roles, at the right time and cost to execute the business strategy.
Employee engagement webinar hosted by Talent Quarterly features Rutgers University’s Dick Beatty, Axiom Consulting Partners’ Aaron Sorensen and Hogan’s Derek Lusk.
Sorensen’s comments begin at the 21:50 mark. Among his insights and recommendations, he cites four tactics to improve employee engagement:
- Conduct an audit to understand if you have an intrinsic motivation challenge.
- Identify, understand, and model the exemplars.
- Emphasize strategies that focus on intrinsic motivators and leader-follower trust but don’t ignore rewards.
- Select for and develop skills in leaders to reinforce autonomy, competence and relatedness in their teams.
Axiom’s work in supporting the strategic planning process at First Interstate Bank is featured in the Bank Administration Institute’s Banking Strategies. Patricia Smith, Senior Vice President of Segment Management at Billings, Montana-based First Interstate BancSystem, Inc., writes:
“Our strategic planning process explored new terrain and definitely shook things up. At first, senior members of the management team were reluctant to admit the need for improving customer relationships. After all, we enjoyed dominant market share in our territories and our lenders, tellers and service representatives knew many customers personally as neighbors and friends. However, a fuller analysis of existing relationships and market penetration revealed vulnerabilities and opportunities, which led us to initiate the strategic planning process.”
As the Strategy Design Team and the rest of senior management became comfortable with the idea that improvements were needed, Axiom’s Susanna Mlot introduced a framework to help guide the execution of a more customer-intimate strategy. The “Customer Centricity Spectrum” (above) shows the range of ways that a company can be oriented to its customers, as well as how business strategy, organizational design, and go-to-market approach reflect that orientation.
- Customer friendly. Companies in this category emphasize personal customer connections. They rely on after-the-fact evaluations of their efforts to meet customer needs, principally by gathering informal customer satisfaction data. Marketing is not segmented; products and services are presented as a broad array of offerings.
- Customer focused. Business strategy hinges on proactively meeting customer requirements, relative to the competition. To maintain that focus, these companies gather formal and informal customer satisfaction data. Customer intelligence is leveraged primarily to inform one-off tactical decisions.
- Customer Centric. At the customer-centric company, customer requirements are at the core of the business model. Aligning products and services with those requirements is of paramount strategic importance. Capturing customer intelligence about current customers (as opposed to the broader market) is a formal, ongoing process and the customer insights gleaned from that research help drive the work processes and how the company is organized. Customer segmentation is an important factor in the go-to-market approach of customer centric companies, but the foundation of segmentation is basic demographic data.
- Customer Intimate. This fourth stage represents the deliberate alignment of strategies and objectives with customer requirements. Customer-intimate companies capture a host of intelligence about current customers, but also seek to understand the needs of potential and defector customers, as well. That intelligence enables greater market segmentation. Information about profitability, loyalty, demographics, and other factors help customer-intimate companies market with greater precision, resulting in higher profitability.
The Strategy Design Team used the Customer Centricity Spectrum and its dimensions as criteria to assess the extent to which First Interstate was customer intimate. The Spectrum brought to life the differences among the levels. The team discovered the bank was somewhere between the first two stages on the Spectrum, and a far cry from the desired end state of “customer intimate” that would truly differentiate First Interstate from other financial service providers.
First Interstate Bank’s Smith reports:
“Now, five years later, implementation of the strategic plan is driving major progress along the Customer Centricity Spectrum. Delivery on service commitments across the bank is now regularly and carefully scrutinized through third-party assessments at the branch level. Net Promoter Score research is constantly uncovering opportunities to improve customer loyalty. The one-size-fits-all market mentality has given way to a strategy of serving distinct customer segments in ways that fit those customers’ needs and process efficiencies have been found along the way.
- Loan processing for small business customers, for example, is more streamlined.
- The timeframe to establish new wealth management accounts has been halved.
- There is now a greater focus on understanding the needs of realtors and accelerating the mortgage loan fulfillment process.
- Our digital initiative aims to satisfy the requirements of current customers as well as anticipate needs of the next generation.
Furthermore, the bank has implemented a customer engagement process that spans the first 15 months of a new customer’s relationship with the bank. The focus is on building more consultative, long-term relationships, not pushing products. In short, First Interstate is creating profitable customer relationships by going beyond “customer friendly” and progressing well toward “customer intimate.” By improving each customer’s experience, we are in turn able to measurably improve the company’s financial results by increasing the lifetime value of customers, reducing customer attrition and improving efficiencies, thereby increasing the value of the brand and enhancing customer acquisition in terms of volume and cost.”
Read the full article: From Customer Friendly to Customer Intimate. Learn More
Predictive analytics are helping DLA Piper understand the actions they could take to improve profitability by keeping clients from defecting.
“Currently, predictive analysis is not widely used to support law firm business development. Yet, one major law firm, DLA Piper, and its partner Axiom Consulting Partners, analyzed the firm’s big data from various sources to develop a proprietary predictive analytics model to identify and retain vulnerable or at-risk clients. The project started when the firm’s chief marketing officer wanted to understand the value of the firm’s marketing spending. As her team started reviewing the data, they realized the data could support an early warning system for vulnerable clients and a way to address the situation before it was too late. With Axiom, DLA Piper built a predictive analytics model that identifies the behaviors that signal when a client may be vulnerable, as well as what can be done to keep at-risk clients from taking their business elsewhere.”
The article, written by Julie Savarino, also examines law firm trends in the areas of artificial intelligence, CRM systems, content production and distribution, emarketing and marketing intelligence, among others. Learn More
Axiom’s Juan Pablo Gonzalez and Dane Tyson challenge HR leaders to replace disconnected initiatives with an integrated and compelling HR strategic plan that drives business results. Read the full article here.
An HR strategic plan is the best way of identifying and leveraging opportunities for the HR function to deliver real and tangible business value, according to Axiom Consulting Partners’ Juan Pablo Gonzalez and Dane Tyson in the May 2016 Workspan cover story.
The schematic below illustrates a planning approach Axiom has used successfully in helping many HR organizations to build effective HR Strategic Plans.
The left side of the schematic articulates a set of Enterprise Strategic Imperatives identified by management as critical to the long-term success of the organization. It also spells out the HR Value Proposition—the specific ways in which HR will support the enterprise in addressing those strategic imperatives. The value proposition clarifies how HR will allocate its resources, where it will focus its time, effort, and investment, and how this focus will create value for the enterprise. The keys to a compelling HR value proposition are to maintain a focus on the strategic imperatives for the business, to explicitly craft the value proposition around those imperatives, and to resist the temptation to introduce extraneous elements into the mix.
The right side of the schematic focuses on HR’s Value Building Blocks—bundles of organizational capability that HR must marshal in order to deliver on its value proposition. The four building blocks illustrated in the schematic are common to most HR organizations:
- Domain Expertise: Maintaining, building, and delivering subject matter knowledge and competence in all core areas of the HR discipline;
- Strategic Partnering: Utilizing a deep understanding of the enterprise’s objectives, needs, challenges and opportunities to serve as trusted advisor and deliver effective HR solutions;
- Process Delivery: Continuously improving the efficiency and effectiveness of HR programs and processes; and
- Insight: Combining analytical capabilities and talent-related data to develop fresh insights and identify potential opportunities for building strategic advantage.
While these core building blocks will be common to most HR organizations, the balance of emphasis among them, as well as among the underlying Strategic Capabilities, will differ based on:
- The relative importance of capabilities required to effectively deliver on the HR Value Proposition and address the enterprise’s Strategic Imperatives, and
- The current effectiveness of the HR organization with respect to those capabilities.
Ultimately, the HR Strategic Plan needs to spell out both how the function will deploy current resources as well as how it will build and/or supplement those resources for the future. It must put forward a balanced set of initiatives—some designed to meet current recognized requirements of the enterprise, others that address new needs likely to emerge in the future, and still others intended to build strategic HR capabilities that will allow the function to continuously deliver more and higher-value services over time.
In conclusion, most enterprises today agree that talent is among their most important assets, and they are prepared to invest significantly in acquiring, deploying, developing, engaging and retaining that talent. CHROs should respond accordingly by developing an HR Strategic Plan that sets priorities aligned with the broader enterprise imperatives and establishes the foundation for focused and successful execution—replacing vague and disconnected HR initiatives with an integrated and compelling HR Strategic Plan that drives results. Learn More