Strategy Focused Business Solutions Inc. [email protected] (416) 722-1367 Shining the Light on the Real Value of HR via the Human Resources

Strategy Focused Business Solutions [email protected]

(416) 722-1367

Shining the Light on the Real Value of HR via the Human Resources Scorecard

November 17, 2010


(416) 722-1367

Presentation Objectives

◙ Introduce you to the strategy map - THE alignment tool you must use to link your value-creating HR strategy with business strategy

◙ Review the key steps in building an HR scorecard that is aligned with corporate objectives and metrics

◙ The key attributes of best in class HR balanced scorecard metrics


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The KEYS to demonstrating the value of HR to business success are:

● Showing what HR activities/interventions have the biggest business impact

● Measuring the performance of contributing HR activities and interventions

● Demonstrating their impact and its value ($$/ROI)


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How can HR do ALL this?● Showing what HR activities/interventions have the biggest business impact

● Measuring the performance of contributing HR activities/interventions

● Demonstrating their impact and its value ($$/ROI)

By leveraging the Human Resources Scorecard


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What is the (balanced) scorecard?

The Balanced Scorecard is a method and a tool that facilitates the implementation of a strategic management system. It includes:

◙ A strategy map where a focused set of strategic objectives are placed over four perspectives in order to clarify the strategy and the cause and effect relationships that exists among them,

◙ A set of measures/indicators (usually 16 – 36 max) that directly reflect or represent the strategy/strategic objectives. Their prime purpose is to measure that the desired change or development defined by the strategic objectives actually takes place. In short, strategic indicators allow you to measure and manage strategy execution and achievement progress,

◙ The core processes and strategic initiatives that will drive or support the actual change required by the strategic objectives.


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Scorecard Objectives Enable a focus on the “vital

few”

Achieve alignment and focus on strategy and achievement of our mission

Balance short-term, operational decisions with long-term strategic decisions more effectively

Unlock organizational capacity by enabling employees to clearly see where their actions fit into the bigger picture

An organizational alignment & performance management tool/process

A communication tool

A tool for ongoing learning and refinement of strategy

The scorecard is not just a set of indicators …


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A true balanced scorecard:

◙ Demonstrates alignment with corporate strategy/objectives (departments & BU’s),

◙ Contains a limited set of strategic objectives and indicators,

◙ Is focused on indicator quality rather than quantity (focused on measuring what matters strategically),


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A true balanced scorecard:

◙ Is primarily focused on scoring the success of strategy execution (rather than simply monitoring metrics or key performance indicators),

◙ Helps people learn – about how the parts of your business interact to produce results, about the progress of your strategy and your challenges, the

validity of your strategy, and the value it produces in the organization, and

◙ Creates a strategy-focused organization rather than a metrics-focused organization.


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The HR Scorecard Development Process

3. Create ExistingIndicator List

11. Define HR BSCImplementation Plan

6. Detail HR BSC Indicators

9. HR BSC Indicator Review Workshop

10. HR BSC IndicatorsFINALIZED

8. Define HR BSCGovernance Model

Project Planning/Launch

7. Document HR BSCHierarchy

1. Cascade Corporate Strategy

2. Create HR Strategy Map

5. HR BSC Development Workshop

4. Define HR BSC Philosophy


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You CANNOT have an HR BSC indicator set without an

HR Strategy Map!

MISSIONMISSION

Strategy Map


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What is a Strategy Map?

It uses the same framework as the balanced scorecard

It’s a one page document that describes how your organization “creates value” and contributes at an actionable/operational level to the achievement of the overall strategy

It provides a “picture” of your strategy

It provides a uniform & consistent way of describing your strategy

A visual representation of the cause & effect relationships between the components of your strategy (your “theory” of how everything/everyone works together to achieve results – the story of your strategy)


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The Strategy Map – Key Elements

Mission: Vision :Private Sector Strategy Map

Format

CORE VALUES:

Financial

Customer

Internal Process

OrganizationalCapabilities


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Filling the Strategy Map with Value-Creating Strategic Objectives

Mission: Vision :Private Sector Strategy Map

Format

CORE VALUES:

Financial

Customer

Internal Process

OrganizationalCapabilities

To deliver the results our shareholders demand and achieve our mission and vision, how must we perform financially?

To achieve the financial returns we desire, what must we deliver to our customers so they will reward us with their business & loyalty?

To give our customers what they expect, what business processes must we focus on and excel at?

To execute our businesses processes at the required level, what skills and capabilities, culture, and tools and technologies must we have in place?


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Mission:Bringing Protection to Life.

Vision 2015:Be a world class financial services provider, delivering exceptional

customer value through the excellence and integrity of our people.

Group Life & Health Insurer

CORE VALUES

Financial

Customer

Internal Process

Organizational

Capabilities

Partnership

Entrepreneurship ContinuousLearning

A Factual Approach to Decision Making

CommunityCitizenship

Develop Competenciesin Key Strategic Roles

Foster a ConstructiveCulture

Implement One System,One Overall Process

Focus on Process Improvement

Become a Long-Term Disability Industry

Leader

Develop Non-AdvisorDistribution Channels

Be Easy to Do BusinessWith

Focus on Drivers of Customer Satisfaction

Optimize AdvisorDistribution Channels

Achieve Sustained Profitable Growth

Improve Cost Structures

Maintain Existing Profitable Group Insurance Business

Acquire New ProfitableGroup Insurance

Business


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Strategy CascadingThe key to building an HR balanced scorecard

that is aligned with corporate strategy


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Cascading Corporate Strategy

The Objective: To build an aligned HR strategic plan and strategy map using the same

framework as the corporate strategy


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Cascading Corporate Strategy -The HR Strategy Alignment Process

Corporate Mission, Core Values, Strategy & Strategic Objectives

Operating Departments -Mission, Core Values,

Strategy & Strategic Objectives

HR Department -Mission, Core Values,

Strategy & Strategic Objectives

MISSIONMISSION

HR Strategy Map

The HRBalancedScorecard

FINANCIAL/RESOURCES

CUSTOMER INTERNAL

ORGANIZATIONALCAPABILITIES

Strategy-Focused Human Capital Plan


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Cascading Corporate Strategy

Remember:

◙ Not every strategic objective from the level above you will cascade into your strategy – it depends on what applies to your team/your contribution to the achievement of organizational strategy

◙ You might have new/unique strategic objectives to add to your strategy based on the unique needs of your business - the needs/expectations of your stakeholders, your operating environment, etc.


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Strategy Cascading - An Example


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Mission: Developing the World’s Next Leaders.

Vision 2018:We are recognized as one of the top 50

universities in the world.

Metro CityUniversity

CORE VALUES

Stakeholder

Internal Process

Organizational

Capabilities

Financial/Resource

Management

Enable the Best Student Experience

Build a Strong, Sustainable Reputation

Achieve an Influential Research

Profile

Promote Excellence in Research &

Graduate Education

Aggressively Pursue the Best Students

Enable Knowledge Generation

Promote & Support Intentional & Informal

Learning

Build Relationships & Partnerships with

Alumni & Stakeholders

Curiosity & Innovation

Continually Upgrade & Modernize Campus

Facilities & Infrastructure

Meaningful Contribution

Collaboration & Partnership

A Devotion to Excellence

Maintain Affordable Tuition & Fees

Aggressively Maximize Financial Support & Research

Funding

Demonstrate Strong Fiscal Management

Attract & Retain High Quality Staff

& Leading Academics

Leverage Advanced Technology & Tools for Teaching, Research, & Program

Management

Nurture a Diverse Campus Culture &

Environment

Enhance Student Learning, Development,

& Academic Performance

Increase Our Use of Multiple Delivery

Options for Programs & Services

Balance Program & Service Quality &

Quantity

Enable World Class Scholarship


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CORE VALUES

Stakeholder

Internal Process

Organizational

Capabilities

Financial/Resource

Management




Profile


Graduate Education




Learning











Funding



& Leading Academics


Management


Environment






Quantity



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CORE VALUES

Stakeholder

Internal Process

Organizational

Capabilities

Financial/Resource

Management




Profile


Graduate Education




Learning











Funding



& Leading Academics


Management


Environment






Quantity



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Mission: Providing HR Leadership and Partnering with our Stakeholders to develop the World’s Next

Leaders.

Vision 2018:We are recognized as one of the top 50 universities in the world to work for.


HR

CORE VALUES

Stakeholder

HR Organizational Capabilities

Financial/Resource

Management






Attract & Retain High Quality Staff & Leading Academics

Understand the Needs and Strategic Priorities of the

Business & Our Stakeholders

Implement Efficient & Effective HR Programs & Processes

Provide Pro-activeOrganizational HR

Leadership

Develop & Implement a Strategy-Focused Human Capital Plan

Deliver Timely, Reliable, & Quality HR Programs & Services

Enhance the Employee Experience & Satisfaction

Enhance University Financial Performance

Demonstrate High Corporate HR ROI

Enhance Employee

Productivity

Build the Human Resources Team

Develop Internal Human Resources Skills &

Capabilities

Implement & Leverage Advanced HR Tools and

Technologies

HR Internal Process


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Why focus on organizational alignment?

◙ Organizations that include organizational alignment as a key strategic management component experience dramatic performance benefits

Organizational Alignment = Effective and efficient strategy execution


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HR BSC Indicator Selection Guidelines


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Strategic Indicators

◙ Strategic indicators are indicative of a strategic objective (i.e. results are representative of the state of a strategic objective’s “health”)

◙ Underperformance of a strategic indicator prompts further detailed data review and root cause analysis

(usually using operational measures/KPI’s)

◙ Underperformance of a strategic indicator prompts you to look at & take action on issues related to the strategic objective rather than focusing on

fixing the performance of the indicator

(let’s look at an example)


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The Indicator Identification Process

1.Identify

KEY Macro Processes

Aligned with the SO

2.Identify PossibleProcess Inputs,

In-Process Measures, &

Outputs/Outcomes

3.Review

Existing & BestPractice

Indicators

4.Select SMART

Preliminary Indicator(s)

5.Make “Final”

Indicator Recommendations


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SMART criteria

S = specific & simple (the indicator relates closely to the definition of the strategic objective; the indicator isn’t complex, making it easier to

understand and take action on)

M = measurable (the measure currently exists - results for the indicator are currently available or could be available quickly with a little work)

A = available (performance results are available shortly after the conclusion of the measurement period – e.g. ideally 3 – 5 days after the end of the

month/quarter)

R = reliable (the indicator/data is reliable and sensitive enough to show changes in performance)

T = timely (results for the indicator are available, ideally, on a monthly basis or, at minimum, a quarterly basis – no annual indicators should be considered)


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Important indicator information required BEFORE you can “go live” with your indicator set

◙ Word definition and/or calculation formula◙ Performance target(s)◙ Performance tolerance ranges (red-yellow-green coding scheme)◙ Data collection frequency (monthly or quarterly)◙ Data sources◙ Data collection processes (manual or automated)◙ Data Owner◙ Results Commentary Owner◙ Contributing measures for root cause analysis purposes


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Were you hoping for a list of HR BSC indicatorstonight that you could just implement in

your organization?

Let’s talk about why I haven’t done this …


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We will build individual and collective capacity through professional development and education in areas that support departmental

priorities and individual goals and objectives. Doing this will make the critical care department the preferred workplace for the best health

care professionals.

Attract, Retain, & Develop our Health Care Professionals

But, let’s walk through an example…Strategic Objective: Attract, Retain, and Develop our Health Care Professionals


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1.Identify

KEY Macro Processes

Aligned with the SO

2.Identify PossibleProcess Inputs,

In-Process Measures, &

Outputs/Outcomes

3.Review

Existing & BestPractice

Indicators

4.Select SMART

Preliminary Indicator(s)

5.Make “Final”

Indicator Recommendations


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◙ The roll out of the HR Scorecard indicator set must be a component of the overall communication plan for the HR strategy and HR Scorecard.

◙ Be clear on the objectives of the roll out and design a roll out that supports these objectives.

◙ Your roll out sets the tone and expectations for the HR scorecard – make sure that its scope is appropriate to the expectations you wish to set

HR BSC Implementation – The HR BSC Roll Out


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An Important Resource for You to Know About


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Please contact me at:[email protected]

Website:www.sfo-consulting.com

Blog:http://sfo-blog.typepad.com/sfo-blog/#tp

http://www.sfo-consulting.com/

http://sfo-blog.typepad.com/sfo-blog/#tp


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Questions?

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Strategy Focused Business Solutions Inc. [email protected] (416) 722-1367 Shining the Light on the Real Value of HR via the Human Resources