HR Focus: Strategic Leadership

1. HR Focus: Strategic Leadership Keith Sinclair President & CEO Harris Consulting

2. Agenda • HR as a Strategic Player – Retrospect • New Challenges, New Role • Strategic Thinking • Critical HR Leadership Competencies • The Way Forward

3. HR: An Historical Perspective • 1900-1980’s – from administrator to behaviouralist • 1980-2000’s – “at the table” …with mixed results • 2000-2010 – outsourcing and downsizing… • 2010-2025 – strategic leader (or more do-more-with-less?)

4. Have We Really Stalled? • Notwithstanding the argument that HR deserves to be at the executive table: • Less than 2% of top B-school grads specialize in HR • We are perennially the lowest paid role in the C-suite • Too many of us still report to finance…

5. Have we Really Stalled? • Kenexa White Paper: • “While most HR functions would suggest that they are enacting change, the key is whether the benefits are being delivered and …make a difference in the organization’s eyes. • HR needs to revamp everything it does. It doesn’t just need a facelift, the whole process needs a drastic overhaul.”

6. What’s the Opportunity? • M. D. Breitfelder, Harvard MBA, in HBR 2008: • “HR today sits smack-dab in the middle of the most compelling battle in business, where companies deploy and fight over the most valuable resources – workforce talent. • Talent management is now a make-or-break corporate competency, and HR has become – once and for all – a truly strategic function.”

7. What is the Disconnect? • Value is in the eye of the receiver: • “Influence with impact occurs when human resource professionals start with the beliefs and goals of the receivers.” • David Ulrich & Wayne Brockbank, The HR Value Proposition

8. The Evolving Focus of Strategy* * Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan

9. HR Roles* *David Ulrich, “Human Resource Champions” FUTURE/STRATEGIC FOCUS Management of Transformation and Change Management of Strategic Human Resources PEOPLE PROCESSES Management of Firm Infrastructure Management of Employee Contribution DAY-TO-DAY OPERATIONAL FOCUS

10. HR Value Proposition Knowing External Business Realities Ensuring HR Professionalism Serving External and Internal Stakeholders HR Value Proposition Building HR Resources Crafting HR Practices Source: The HR Value Proposition, Dave Ulrich and Wayne Brockbank

11. HR Value Proposition Premise – Ulrich & Brockbank HR work doesn’t begin with HR – it begins with business! The ultimate receivers of business reside in the marketplace HR contributions are a source of competitive advantage HR must align practices with internal and external stakeholder needs HR professionals must acquire the capabilities necessary to provide stakeholder value HR must offer a unique and powerful perspective that adds real organizational value

12. The HR Executive Role

13. The HR Leader’s Role • “Even in the best of companies, a so called top team seldom functions as a real team.” Jon R. Katzenbach • Remember, executives are not “teams” – they are boss-led work groups • Executive roles require executive leaders • Teamwork is secondary to alignment

14. HR Leader as Navigator • “The Plight of the Navigator*…”*John O. Burdett, Orxestra • 6 key executive roles: Visionary, Explorer, Pioneer, Warrior, Maverick & Navigator • Navigator role defined: • Know the destination • Understand business, markets, people & processes • Map out an optimal course • Orient enterprise towards its intended destination • Key Skills: mastery of leadership and human dynamics

15. Transformational Leadership • Mastery of human dynamics • Change management skills • Strategic vision • A shift from value appropriation to value creation!

16. Rethinking the Top HR Role • Shift from deciding strategic content to framing strategic context • Create a sense of purpose for group & individual efforts • Foster a fertile environment: • Articulate organizational values • Define and establish community • Develop relevant organizational processes • Inspire empowerment, ownership and commitment

17. Establishing the HR Mandate • Know the business as well as everyone • Credentials include line roles/other functions • Think and act strategically • Earn exceptional credibility via your actions • Understand and practice power through influence

18. Establishing the HR Mandate • Cultivate strong networks and relationships • Deliver competitive advantage through the integrated application of people and process • Distinguish yourself via mastery and advancement of leadership • Grow organizational capacity by acquiring, retaining, motivating and developing talent

19. Start with Yourself • Know thyself! • Excel at critical tasks – professional and business • Learn continuously – take risks – be a sponge • Develop your own perspective: • Be a critical thinker • Have the courage of your convictions • Refuse to choose between profits and people!

20. Leadership Courage • Courage is rarely a matter of “grand heroic acts” • It is determined by “defining moments” where we stand for our values or principles when it may be more expedient to do otherwise • Effective leaders know that acts of courage may end in failure…

21. Wisdom “Wisdom comes from experience, and experience is acquired through failure.” Confucius

22. Courage and Wisdom… • Strong leaders have the courage to fail and encourage others to learn the same way! • Effective leaders cultivate other leaders

23. Leadership & Lifelong Learning • Be willing to move beyond your comfort zone • Practice humble and honest self-reflection • Vigorously solicit others’ opinions • Challenge assumptions • Listen and observe carefully and completely • Always be open to new and different ideas

24. Strategic Thinking

25. Strategic Thinking • Is a dynamic process • Is an integrated and dynamic way of viewing the world • Is guided by a framework • Enables taking advantage of opportunities as they arise!

26. Strategic Thinking • For Operational Planning you ask “HOW” • For Strategic Planning you ask “WHAT” • For Strategic Thinking you ask “WHY”

27. Strategic Focus

28. Strategic Planning v Thinking

29. Scanning the Landscape

30. Strategic Horizons Horizon 3 Seed options for future growth businesses Horizon 2 Drive growth in emerging/new businesses Horizon 1 Defend and extend current businesses Profit Time Source: Robust Adaptive Strategies, Eric D Beinhocker, Sloan Management Review, Spring 1999

31. Considerations • Apply a parallel set of strategies to ensure ongoing success: • Innovation requires experimentation, but experimenting involves risk • What works/fits today will become obsolete • Parallelism breeds innovation without “betting the farm”

32. Navigating Varied Terrain Short jumps only Long jumps only Mix short and long jumps Business strategy requires a mix of short and long term jumps (i.e. balances short, medium and long term priorities) Source: Robust Adaptive Strategies, Eric D Beinhocker, Sloan Management Review, Spring 1999

33. You often hear “Be bold. Take a leap!” Sometimes you should. Other times, there’s a better idea. “Take a step.” Harry Beckwith

34. Blue Ocean Strategy: Create Your Own Market Space

35. Overview of BOS • A Blue Ocean Strategy is a “value innovation” strategy where: • Efforts provide a favorable cost structure while delivering high customer value

36. Value Innovation The Simultaneous Pursuit of Differentiation & Low Cost Costs Value Innovation Blue Ocean Buyer Value

37. Red versus Blue Ocean

38. Strategy Canvas (yellow tail) US Wine Industry – Late ‘90’s High Premium Wines Budget Wines yellow tail Low Price Above-line Marketing Wine Range Ease of Selection Vineyard Prestige Easy Drinking Wine Complexity Enological Terminology Aging Quality Fun & Adventure

39. Four Organizational Hurdles Cognitive Hurdle Political Hurdle Resource Hurdle Motivational Hurdle

40. Conventional versus “Tipping Point” Transformation • Theory of organization change rests on transforming the mass: • So change efforts are usually focused on moving the mass • Conversely, by identifying bright spots or tipping points: • One can achieve a strategic shift fast at low cost

41. The Impact of Metrics • “What gets measured, gets done!” • Jack Welch, GE • People do what they’re rewarded for doing…

42. Balanced Scorecard • To have impact and credibility with boards and executives: • HR leaders and professionals must be effective at measuring, monitoring and managing performance • Applying a Balanced Scorecard enables the effective integration of: • Qualitative with quantitative measures • “Soft and hard” elements

43. Balanced Scorecard People Perspective Systems & Processes Perspective Vision, Mission, Values & Strategic Drivers Financial Perspective Customer Perspective

44. Performance Measures • Measures must: • Reinforce the vision, values and strategy • Drive the right behaviours – “how you play the game” • Measure results, not just projects/activities • Be SMART

45. Performance Measures • SMART defined: • Specific • Measurable • Achievable • Relevant • Time-based

46. Balancing Performance Measures Internal/External Dynamics Business Units/Divisions • Perspectives • Customer • Financial • Process • People Strategies Internal/External Dynamics Horizon: Short, Medium, Long Term

47. Applying Strategic Thinking • Inspiration without implementation is merely provocation • Implementation without inspiration is simply administration • Effective leadership requires both!

48. HR’s Role in Leading Strategy With access to capital, people and organizational capacity become the critical limiting factors to economic success Let’s review an earlier slide and discuss how HR can lead the way

49. The Evolving Focus of Strategy* * Source: CA Bartlett, S Ghoshal - Building Competitive Advantage Through People, MIT Sloan

50. HR Value Proposition* *Dave Ulrich and Wayne Brockbank • HR Processes that Add Value: • Flow of people • Flow of performance management • Flow of information • Flow of work