Managing Human Capital in Changing Times Edward B. Yost Ph.D., SPHR August, 2013 Ohio University

1. Managing Human Capital in Changing Times Edward B. Yost Ph.D., SPHR August, 2013 Ohio University Ohio University College of Business Executive Education

2. BEM VINDO A OHIO UNIVERSITY Ohio University College of Business Executive Education

3. Our Task Today – Three Levels of Analysis and Human Capital • #1 MACRO: Sustainability, Strategy, and the Business Model – Competent managers understand how value is created • #2 MESO: Talent Management, maximizing returns through human capital architectures – Talent pools, pivotal positions, differentiated human capital architecture that adds value • #3 MICRO: Employee Engagement – Crafting and leading for individual performance Ohio University College of Business Executive Education

4. Level 1 MACRO: Sustainability, Strategy, and the Business Model Ohio University College of Business Executive Education

5. What is Strategic Success? • Delivering high value results to significant stakeholders Financial Success Operational Success Customer Success Workforce (People) Success Ohio University College of Business Executive Education

6. Strategic Success Hierarchy Ohio University College of Business Executive Education

7. Strategic Success Chain Strategy Execution Competitive Advantage Sustainability Executive Education College of Business Ohio Universaity

8. Defining the Business Strategy Strategy is: The central, integrated, externally oriented concept of how we will achieve our objectives. (Hambrick & Fredrickson) Ohio University College of Business Executive Education

9. Sharing our Experiences What is your organization’s “STRATEGY”? Ohio University College of Business Executive Education

10. Strategic Success Hierarchy Ohio University College of Business Executive Education

11. Strategic Success Hierarchy Ohio University College of Business Executive Education

12. Strategic Success Chain Strategy Execution Competitive Advantage Sustainability Executive Education College of Business Ohio Universaity

13. What is “Strategic Competitive Advantage?” Enacted or Utilized Distinctive Competency that: • Allows the organization to differentiate itself from competitors • Cannot be readily duplicated or imitated • Provides a positive economic benefit(s) – KPIs Executive Education College of Business Ohio Universaity

14. 3 Roads to Strategy Execution & Competitive Advantage Managers can select a path to follow • Betting on the incompetence of competitors – blind ambition • Acquiring and utilizing the competencies of others – merger, acquisition • Using existing resources & competencies efficiently, effectively and differently – resource based Ohio University College of Business Executive Education

15. The Secret Revealed! What is the SECRET of obtaining a Strategic Competitive Advantage? Not just having a strategy and competencies but executing the strategy. Ohio University College of Business Executive Education

16. Strategic Success Chain Strategy Execution Competitive Advantage Sustainability Executive Education College of Business Ohio Universaity

17. Sustainability • Pursuit of LONG TERM business success focusing on a triple bottom line: • Economics - Profits • Social - People • Environmental - Planet Ohio University College of Business Executive Education

18. Sustainability Defined “The commitment by an organization to balance financial performance with contributions to the quality of life of their employees, the society at large and environmentally sensitive initiatives” SHRM Ohio University College of Business Executive Education

19. Top 5 positive ($) outcomes from sustainability initiatives for stakeholders • Improved employee morale, 2) More efficient business processes, 3) Stronger public image, 4) Increased employee loyalty, 5) Increased brand recognition. Source: Advancing Sustainability: HR’s Role (SHRM, 2011) Ohio University College of Business Executive Education

20. Developing Human Capital in Changing Times What IS Human Capital? Ohio University College of Business Executive Education

21. Human Capital Defined The collective sum of the attributes, life experience, knowledge, inventiveness, energy, and enthusiasm that people choose to invest in their work. Weatherly 2003 Ohio University College of Business Executive Education

22. Human Capital Defined The collective sum multiplicative product of the attributes, life experience, knowledge, inventiveness, energy, and enthusiasm that people choose to invest in their work. Weatherly 2003 with a little help from Ed Ohio University College of Business Executive Education

23. Attributes of Human Capital Markets • Various levels of value • Appreciates and depreciates • Traded in markets and regulated • Individually owned but collectively realized Ohio University College of Business Executive Education

24. Human Capital: The Invisible Resource • It is vested in the human resources often in the form of intellectual and social capital. • It is acquired, developed, utilized, and sustained through the management practices. • Being invisible it is harder to duplicate. Ohio University College of Business Executive Education

25. Human Capital Value inherent in the form of individuals collectively interacting in the context of formal and informal systems • Individuals are the repository for human capital • Systems, process, culture and context extract the value of individuals Ohio University College of Business Executive Education

26. Human Capital Has Value “People are our most valuable asset” PROVE IT! Must be demonstrated by management practices and actions that compose the Human Capital Architecture Ohio University College of Business Executive Education

27. Sharing our Experiences What do organizations you know value? Ohio University College of Business Executive Education

28. Expectativas de TodosquePossuemInteresseDiretoouIndiretonaOrganização • Acionistas(proprietários) desejam um retornoqueconsideramjusto no investimentofeito. • Clientesdesejam um alto valor agregadoaoprodutoouserviçoqueconsomem, e umamanutenção(garantia) quemantenhaseu valor. • Empregadosdesejamumarelação de empregoqueforneçacompensaçõesintrínsicas e extrínsicasemcontrapartidaàscontribuiçoesquefazem.   • Publicoesperaque a organizaçãotenharesponsabilidade social e se preocupetambém com o bemestar dos cidadãos (cidadania corporative) Ohio University College of Business Executive Education

29. Escolher as partesinteressadasemcada par que a suaorganizaçãoiriaconsiderarcomo a maisimportanteemtermos de tempo e outrasatribuições de recursos. • 1. Cliente___ Proprietário(acionista) ____ • 2. Empregado___ Cliente___ • 3. Empregado___ Publico___ • 4. Proprietário(Acionista) ___ Empregado___ • 5. Cliente___ Publico___ • 6. Proprietário(Acionista) ___ Publico___ Ohio University College of Business Executive Education

30. Instruções para o preenchimento das questões Pense em uma organização com a qual você está familiarizado. Talvez a organização que você trabalha agora. Para cada par de partes interessadas selecionar o que você sente é mais importante para a organização que você escolheu. Pense sobre os recursos dedicados ou as políticas que afetam o grupo de partes interessadas. Quando você completar você irá gravar o número de vezes que você selecionou o grupo de partes interessadas e escrever o número no espaço fornecido. Ohio University College of Business Executive Education

31. Stakeholder Importance Vamos Compartilhar - Qual dos 4 stakeholders​​ (clientes, proprietários, público e empregados) a sua organização seria mais provável em atender:Em primeiro lugar?Última? Ohio University College of Business Executive Education

32. Importância das partesinteressadas Ohio University College of Business Executive Education

33. Knowing – Doing Gap How Big is the Gap? “Only 1 in 10 of the 88,000 respondents in our Global Workforce Study agreed that their organization’s senior leaders treat employees as vital corporate assets. A larger percentage reported that their leaders act as if employees don’t matter.” Gebauer ad Lowman, 2008 Ohio University College of Business Executive Education

34. Level 2 #2 MESO: Talent management, maximizing returns through human capital architectures Ohio University College of Business Executive Education

35. Developing Human Capital in Changing Times Managing Talent for Strategic Success Ohio University College of Business Executive Education

36. The Challenge for Managers Human Capital IMPACTSthe Bottom Line To create value through Human Capital requires a fundamental change in how it is recognized and managed in most organizations. Ohio University College of Business Executive Education

37. What is Strategy Execution? • Value Creation – Enables the Value Proposition for all stakeholders • The aggregated combination of the firm’s resources applied by the strategic business units • Results from managerial decisions for resource allocations and tradeoffs Ohio University College of Business Executive Education

38. Application: Focus on a Strategic Business Unit -Primary Pharmaceutical Industry Strategy Execution Enables the Value Proposition for Stakeholders Production Research & Development Marketing Human Resources Ohio University College of Business Executive Education

39. Strategic Success Hierarchy Ohio University College of Business Executive Education

40. Critical Outcomes for Strategy Execution Research & Development Group in Primary Pharmaceuticals 1. New Product Applications 2. Reduce Time to Market Ohio University College of Business Executive Education

41. Talent Management • Talentship requires a redefinition of the traditional service role of HR managers in organizations. • This involves a managerial focus on the process of "talent segmentation" and the need to focus managerial attention on "pivotal talent pools". Ohio University College of Business Executive Education

42. Human Capital (Pivotal Talent Pools) Strategy Execution Competitive Advantage Sustainability Ohio University College of Business Executive Education

43. Talent Segmentation • Talent segmentation is as vital to strategic success as customer segmentation. • Talent segmentation involves identifying pivotal talent pools where human capital makes the biggest difference to strategy execution Ohio University College of Business Executive Education

44. Sharing our Experiences How do organizations you know use segmentation? Ohio University College of Business Executive Education

45. Customer Segmentation • Does your organization segment customers? • What are these customer segments? • How are they treated differently? Ohio University College of Business Executive Education

46. Talent Segmentation • Does your organization identify specific talent pools? • What are these talent pools? • How are the management practices different for these talent pools? Ohio University College of Business Executive Education

47. Drilling Down in Human Capital Pivotal Talent Pools Pivotal Positions Determine the Pivotal Positions to Deliver Strategy Execution Executive Education College of Business Ohio Universaity

48. Cast Members at Disney Ohio University College of Business Executive Education

49. Sharing our Experiences Which position, Characters or Sweepers are most pivotal? Ohio University College of Business Executive Education

50. Finding the Pivotal Position Yield Curve - understanding where differences in quality or quantity of talent and organization have the greatest impact on strategy execution (steepness, elasticity, D, slope) Ohio University College of Business Executive Education