People Power: Human Capital in the Modern Association

People Power: Human Capital

in the Modern Association

Tom Morley, President, Snowflake LLC

www.highroadsolution.com www.snowflakellc.com

Founder and President

Snowflake LLC

www.snowflakellc.com

Tel.: +1.540.797.4932

[email protected]

www.facebook.com/snowflakellc

@snowflakellc

www.linkedin.com/company/snowflake-llc

Tom Morley

http://www.snowflakellc.com/

mailto:[email protected]

http://www.facebook.com/snowflakellc

http://www.linkedin.com/company/snowflake-llc


Our Time Today

This afternoon, you’ll find out that…

• Human capital keeps us awake

• You won’t find answers on LinkedIn

• Human capital doesn’t walk alone

• There are many options to point it in the right direction

• If you understand it, human capital can change your life*

*Or, at least, your organization’s ability to deliver on your mission, affordably and sustainably

Human Capital in Context and

its Effects on the Business


What’s Your Situation?

It’s easy to see “Bad Human Capital” at work

• Staff is disgruntled and unmotivated

• Skills are outdated or mismatched

• The best don’t stay long, and the worst stay forever

• Managers can’t manage their way out of a paper bag

• The workforce isn’t getting any younger

• You can’t hire the people we need

• There are few incentives to be great

• Culture is best defined as “None of the Above”

Some problems are a nuisance. Others affect results.


Problem Solved!

It’s all there in neat little “Five Ways to…” packages…

• “Invest in employees”

• “Reward your people”

• “Give creative space”

• “Break down barriers”

• “Staff need to be engaged”

• “Create the burning platform”

• “Establish a culture of trust”

• “Walk the talk, don’t talk the walk”

…so maybe our work here is done!


Not so Fast…

…human capital is part of a life cycle with “∞ Ways to…”

Use a sound business

model and structure

Know where

you are going

Set aligned business

and market strategies

Know what

you need

Know who

you need

Retain top performers with

key skills and experience

Find, attract, and secure

the right resources

Equip and

prepare

Motivate and

manage

Keep organizational

knowledge current

Deliver results

at affordable,

sustainable

aggregate cost


This Isn’t a Simple Challenge…

…and your best solutions may not be where you’d look

Use a sound business

model and structure

Know where

you are going

Set aligned business

and market strategies

Strategic Business Planning

Performance Measurement

Strategic Business Planning

Market Strategies

Branding and Marketing

User Experience Architecture

Customer Relationship Management

Organization and Governance Strategies

Business Process Design

IT and Automation Strategies

Facilities and Space Utilization


Know what

you need

Know who

you need

Find, attract, and secure

the right resources

Equip and

prepare

Motivate and

manage

It’s Actually Quite Complex…

…with multi-disciplinary requirements and options

Job Design

Workforce Planning

Competency Management

User Experience Architecture

Compensation and Benefits

Labor Market Analysis

Strategic Sourcing and Acquisition


Marketing and Branding

Recruiting and Hiring

On-boarding

Professional Development

Leadership Development

Performance Management


Keep organizational

knowledge current

Retain top performers with

key skills and experience

You Can’t Just Address the Symptoms…

…and understanding “root causes” requires a broad view

Workforce Planning

Competency Management

Professional Development

Knowledge Management

Workforce Planning

Labor Market Analysis

Compensation and Benefits

IT Strategies


Culture Engineering

And these are only examples!

Of course, every change requires organizational change management!


Everything is Integrated…

…defining the workforce isn’t even a simple equation

Accessible

talent pool

Organization

culture and

resources

Labor

market value

proposition

Required

skills and

experience

Organization

of functions

into roles

Business

model and

structure

Business

strategies

Technologies

and facilities

Desirable

individual

attributes

Objectives

and core

functions


Integration Raises Lots of Questions…

…and a wide range of options to consider, e.g.:

Design jobs to match what you can attract now

OR

Invest in changes that will allow you to attract a different pool?

Resource for the optimal business strategies

OR

Alter your business strategies based on the resources you have?

Rely on aging approaches and technologies familiar to your staff

OR

Upgrade and find affordable ways to adapt?


A Real-life Example

“Two faces” of a cost control imperative

Less experience

Lower skills

“Processors”

Forces business

model changes

Transactional

Less independent

More direct oversight

Managers = supervise

Less technical focus

Limited external

Impacts

outcomes

More mistakes = risk

Greater cycle times

Few realized economies

$500k lower base

labor cost (five years)

However…

Greater mission risk

> $250k overtime

Higher turnover

Lower performance

$1.5m operating savings

Primary Strategy

Reduce salary

ranges across

the board

Alters

accessible

labor market

Requires

changes in

other roles

Perspective:

Cost Reduction

Net Effects

• $350k/yr savings

• Degraded performance


Higher salary ranges

Expanded recruiting

Focus on retention

Allows changes

in other roles

A Real-life Example (cont’d)

“Two faces” of a cost control imperative

More collaboration

Analytical skills

Sound judgment

Enables

business model

changes

Professionalized

Distributed authority

Self-directed

Impacts

outcomes

Few errors = less risk

Less downstream work

Lower operating costs

$150k higher base

labor cost (five years)

However…

Reduced mission risk

< $100k overtime

$750k loss recoup

Better performance

$25m operating savings

Primary Strategy

“Clean sheet’

for business

requirements

Processes, skills

ensure delivery

and reduce risk

Requires an

upgraded

workforce

Managers = experts

More technical focus

Extensive external

Perspective:

Cost-effectiveness

Net Effects

• $5.2m/yr. savings

• Improved performance


What This All Means

Human capital can do a lot for you, if you realize…

• It touches every aspect of the organization, and everything touches it

If you make operational changes, they will probably have human capital implications.

Similarly, if you undertake a human capital initiative, it will impact other parts of the

business. Embrace this…use it to your advantage!

• There are almost always multiple alternatives

This is why those “lists of five things…” are usually so simplistic—they have to be kept

at a level that applies to everyone. Practically, they’re basically useless. But, you can

do a lot if you know yourself and what’s out there.

• It supports creative solutions

With many factors and many options comes the opportunity to be creative. You just

have to think through the impacts, and accurately evaluate feasibility, costs, benefits,

and risks. Understanding integration will avoid unintended consequences.


What This All Means (cont’d)

Human capital can do a lot for you, if you realize…

• It’s a means to an end

Don’t forget the “capital” in human capital. You’re dealing with people, but you have

them because you need them to accomplish business goals. Human capital actions

should conform to your organizational values, and be cost-effective.

• It’s an investment that needs to deliver returns

Along those lines, remember that people aren’t a costly inconvenience, but a key driver

of business results. You should make smart investments based on the attributes that

will help deliver and sustain organizational performance.

• You should optimize its contributions

Never lose sight of the “total business”—the aggregate costs and benefits of change

initiatives. This means that the right human capital solutions for you might cost more

than you spend now, if they contribute to a more cost-effective organization.

Making Human Capital Work

for You, in Practical Terms


Finding the Keys to the Lock

People aren’t the problem, they’re causes and solutions

Starting Points

• Nature of the challenge – Value, Reach, Service, Cost, etc.

• Urgency of the situation – Caution, Warning, Existential

• Causal chain – What’s causing the problems?


Finding the Keys to the Lock (cont’d)

Context and conditions influence human capital choices

Solution Factors

• Your resources – Human, Financial, Physical, Intangible

• Organizational values – “Staff as family” vs. “Strictly business”

• External conditions – Economy, Labor Market, etc.


Assessing the Situation

Correctly identifying the problem and causes is critical

Problem Statement

We’re not

getting new

members

Haven’t

realized market

changes

Subject matter

knowledge isn’t

current

Outdated

delivery

technologies

Not meeting

people “where

they are”We’re not

reaching the

market

Products don’t

match how

data is used

Membership is

considered too

expensive

Messages

received are

being ignored

Not adapting

to younger

consumers

Dues are

driven by our

operating costs

Outdated

marketing and

media skills


Assessing the Situation (cont’d)

Need to understand and prioritize root causes

We’re not

getting new

members

Haven’t

realized market

changes

Subject matter

knowledge isn’t

current

Outdated

delivery

technologies

Outdated

marketing and

media skills

Need skills that

are scarce and

expensive

Long-tenured

staff no longer

connected

No dedicated

people research

the market

Aren’t aware of

technology

environment

Few incentives

to learn or

innovate

Management

not open to

new ideas

Related areas

do not

collaborate


You have to thoroughly comprehend the need

Understanding the Details

Need skills that

are scarce and

expensive

What does

the market

look like?

What are the

skills we need?

Where can a

person get

them?

What traits are

common to the

holders?

What traits will

succeed in our

organization?

Does an

affordable

pool exist?

Do we consider

organizational

changes?

What is needed

to motivate

and retain?

What can we afford, financially and time-wise?

Training? Education?

Experience?

If not, how

badly do we

need the skills?


Evaluating Potential Solutions

There may be many options to consider

Need skills that

are scarce and

expensive

Pay them and

recoup the

costs elsewhere

Hire the

essentials, train

on the rest

Outsource the

function

Hire for the

skills part-time

Partner with an

organization

that has them

Find other

incentives to

attract them

Change your

strategy so

there’s no need


Evaluating Potential Solutions (cont’d)

Every answer impacts other issues and strategies, too

Need skills that

are scarce and

expensive

Pay them and

recoup the

costs elsewhere

Will the new skills generate more revenue?

Is a person with the skills likely to fit the organization?

Will competition keep increasing the resource cost?

Can existing staff be refocused to cost savings activities?

Are we willing to separate people with outdated skills?



Need skills that

are scarce and

expensive

Hire the

essentials, train

on the rest

What does a candidate need walking in the door?

Is it feasible to “train up” on the rest in 90, 180, etc. days?

Will we be creating an asset that will walk out the door?

How long do we need to retain to make it worthwhile?

Can the person train others to develop those skills?




Need skills that

are scarce and

expensive

Outsource the

function

How does the cost of outsourcing compare with hiring?

Are there key functions an outsourced resource can’t do?

Are we likely to get the “complete package” or have gaps?

Is the contractor likely to “leave behind” knowledge?

Do we have the capability to manage the contract?




Need skills that

are scarce and

expensive

Hire for the

skills part-time

Are we going to find the skills in a part-time resource?

Can a part-time person pick up the “nuances”?

Are there a lot of “off-hours” or “urgent” demands?

Can our business model work with a part-time schedule?

Will someone likely to work part-time fit our culture?




Need skills that

are scarce and

expensive

Partner with an

organization

that has them

Is this a common problem in our business community?

Can the work be effectively performed remotely?

Can we work with a rigid schedule and competing priorities?

Is there important intellectual property at risk of exposure?

How would we manage oversight, payment, etc.?




Need skills that

are scarce and

expensive

Find other

incentives to

attract them

Do we have a compelling cause vs. “the money”?

Are we better as a “stepping stone” or “destination”?

Can we invest in branding to create the right image?

Do the “right” incentives also advance our objectives?

Can we deliver on the “intangible promise” once they join?




Need skills that

are scarce and

expensive

Are we pursuing what’s “practical”, or what’s “popular”?

Is there another approach that will deliver our objectives?

If those skills were “off the table”, what would we do?

We might generate less revenue, but what’s the net?

If we get a person and then lose them, what’s the plan?

Change your

strategy so

there’s no need



Making Human Capital Decisions

Remember, “aggregate cost-effectiveness” is key

• Clearly articulate the problem

• Understand and prioritize both the surface and root causes

• Recognize the integrated implications

• Use the entire tool kit to identify alternatives

• Model all of the impacts of the options

• Assess the viability of potential solutions

• Consider tangible and intangible costs, benefits, and risks

• Choose the total solution that is most cost-effective for your business


Summary

Hopefully, you’ll take away the following, at the least…

• Human capital is at the heart of many business performance challenges

• Don’t get snowed by “if you just get better, you’ll do better”

• Human capital is everywhere, all at once, in all things

• There are tons of ways in which human capital can improve your results…

• … as long as you see it in its proper context

• The obvious answer isn’t always the best… optimize for the system!

Be creative. Many solutions have yet to be found!

Presentations & Public Speaking

People Power: Human Capital in the Modern Association