Category Archives: HR

May 2, 2017 · 4:00 am

Culture and Compensation

PayScale has produced its 8^th annual in-depth report on compensation best practices: Comp is Culture. If you have anything to do with paying people – so, that’s virtually every manager, everywhere – reading this report will be well worth your time. Even though I’m not an HR professional, much less a compensation professional, I found it fascinating. Especially the impact that compensation practices have on organization culture.

The report is based on responses gathered in November and December, 2016 from 7,700 respondents, of which 5,136 were in the U.S. and 641 in Canada (as well as respondents in Australia, India, South Africa, the United Kingdom, and others);12% were Enterprise organizations’ (5,000+) employees, 13% Large organizations’ (750-4,999) employees, 29% Mid-sized organizations’ (100 – 749) employees, and 46% Small organizations’(1-99) employees.

Not surprisingly, the report identifies the following ass the biggest talent- and culture-related challenges in 2017:

Finding and growing great talent
Employee retention/engagement – large number of retirements anticipated in 2017 as well as continued millennial job-hopping
Competition from younger stage tech startups
Hiring and retaining the right employees in the face of high growth
The fierce talent competition shifting the balance of power to candidates
Improving company culture and fighting attrition for newly trained employees

The picture here is clear: the war for talent hasn’t abated. In fact, in may just be beginning in earnest.

As it relates to pay practices and culture, the PayScale research found the following:

When it comes to pay, only 20 percent of employees said they were paid fairly, whereas 44 percent of employers said that their employees were fairly paid.
In a similar vein, employers were significantly more inclined to say their employees were appreciated at work (64 percent), whereas only 45 percent of employees said they felt appreciated at work.
A question around pay transparency revealed more of the same – 31 percent of employers said their company had a transparent pay policy, whereas only 23 percent of employees agreed.

There are a number of discussions and supporting graphs to keep even the most nerdy among us engaged, but these discussions and graphs are also easily understood and the information flows simply and logically. There’s a lot here, and it’s all good.

Being focused on all things relating to organization culture and leadership’s impact on it, I found the following chart very interesting:

There are two points here that are worth pondering if you think the data might apply to your organization:

The percentage of respondents in both the employees and employers categories who agree or strongly agree on all five statements is higher than might be expected, with the exception of the final statement.
Only one statement has a higher percentage of agreement from employees than from employers – and it’s the statement about the state of the employer/employee relationship. Employees report that their relationship with their manager is stronger than the managers report. With rising turnover and many organizations struggling to increase retention, who saw that coming?

This report covers the waterfront in terms of compensation practices, their impact on culture, and employees’ perception of many of the aspects of their pay. There are a number of surprising nuggets of information that could impact your organization’s compenation practices. It’s not an easy read, but it’s a good read. I recommend you spend some time with it.

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December 20, 2016 · 4:00 am

Whatever Happened to Succession Planning?

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Here’s an interesting and quick read by Ben Eubanks and Trish McFarlane for Ultimate Software: The New Realities of Work. Ben and Trish are seasoned HR leaders turned analysts within the HR technology space and this quick read reflects the depth of their in-the-trenches HR experience as well as their knowledge of the HR tech space.

This quick hit has 5 topics:

Strengths-based Talent Practices
Social Influence
Collaborative Innovation
Tools Promoting Partnership
Blending Approaches for Better Outcomes

The first category, Strengths-based Talent Practices has a configuration I hadn’t seen before:

Talent acquisition
Learning
Performance
Succession

Talent acquisition, learning and performance management are the usual suspects in these conversations; but I don’t see succession included in these broader discussions any more and I appreciated seeing it here. The concepts of succession and succession planning have given way to the almost singular focus on talent retention and the necessity of doing a better job at managing the various generations in our workforces. Giving succession planning short shrift through the organization has given rise to higher turnover and inadequate preparation of talent to assume higher levels of responsibility. In short, a major part of retaining talent is preparing it for ever greater roles and responsibilities. I may be totally out to lunch here, but I think our focus on retaining talent has made us laggards in educating and preparing our talent for greater responsibilities. We’re taking a very short term view, which, in my opinion, exacerbates the talent retention challenge.

This quick treatment doesn’t shed a ton of light on this issue, but rather includes it in the a broad (and quick) discussion of the new realities of work and calls it out as an area of best practice. Check it out. Trish and Ben have done a nice job.

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September 13, 2016 · 4:00 am

Is Your Organization An ACE?

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I rarely do book reviews here at Data Point Tuesday. When I do, it’s because the book is written specifically for my readers, HR professionals in the trenches, and because I know and respect the author. Today I’d like to recommend just such a book.

Fulfilled! Critical Choices: Work, Home, Life, written by William A. Schiemann, will be available on October 1. Lucky me, I got an advance copy and loved it! If you’re active in SHRM, then you have probably heard Bill speak at the Annual conference or at one of many state conferences where he continuously supports the HR profession. I saw Bill two weeks ago at the KYSHRM conference where we both keynoted. He’s a Ph.D. researcher, writer and consultant bringing evidence-based research into practical and useful focus for organizations of all types and sizes.

Fulfilled! Is a guidebook as well as a workbook – it helps you organize and chart the steps to find meaning in your life and your work, as well as supporting your organization in creating a culture where every employee can find that meaning. It’s full of true individual examples of people achieving real meaning as well as examples of people who missed the waypoints along the way and never achieved true fulfillment.

From an organizational perspective the organizing concept is ACE: alignment, capability and engagement, which Bill calls “People Equity.” Bill’s consulting firm, Metrus Group, has found that organizations with high People Equity have:

Higher profits or reach their goals more effectively
More loyal customers who buy more
High employee retention
Higher quality output

“The organizations that achieve high People Equity (high alignment, capabilities, and engagement) have a distinct advantage over their competitors. And the individuals who apply this concept to their live also win…”

I really appreciated both the individual and organizational discussions about alignment, capabilities and engagement. They are simple and easily understood – and so impactful. This is one “How-To” book that ought to be on every HR leader’s bookshelf.

I don’t want to give away the good stuff – the book is available on Amazon on October 1 and you should get it. But here’s a final view at the final chapters of the book, Life Lessons:

Lesson 1: Keep the end in mind

Lesson 2: Nurture your body

Lesson 3: Build a social network (but have at least one fantastic friend)

Lesson 4: Always seek things you are passionate about

Lesson 5: Take reasonable risks

Lesson 6: Never stop learning – never!

Lesson 7: Stick to your values and spirituality

Lesson 8: Resilience – find the silver lining

Lesson 9: Give and get

Lesson 10: Check in with yourself regularly – force it!

You may think to yourself, I’ve read this book before. But I assure you, you haven’t. Bill brings to life real people who made good decisions as well as mistakes; who risked it all and who played it safe; who learned and who never learned. And the organizing principle of People Equity is truly a new view backed by years of research and real life practice.

And after you’ve read Fullfilled!, take it with you to your next HR conference. Chances are good that Bill will be keynoting and you can get him to autograph it for you!

HR Journey: Talent Management in Singapore and Viet Nam

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Gerry Crispin and I are back at it! We’re joining forces once again to lead a delegation of senior HR leaders on an international recon trip. Last year it was Cuba. (Links to blog posts from the Cuba trip are here, here, here and here.) This year it is Viet Nam and Singapore! These two economies are growing targets of U.S. investment and leaders in both countries are dealing with unique talent challenges. Come along with us as we meet with leaders from business, academia and government to get an up-close and personal introduction to each country. We’re partnering with Nanda Journeys to deliver an extraordinary professional and cultural development experience.

Singapore 1

The experience starts from LAX and is 9 days and 7 nights (crossing the international date line is confusing…) The first stop is Singapore and the second is Ho Chi Minh City (Saigon). Both locations include meetings with HR professionals and the SHRM equivalent there. Next up will be interactions with appropriate government officials and local businesses. Of course cultural activities will be built in so that we’ll feel like we know both the business context and the cultural framework of these southeast Asia business hubs. Click here for the day-by-day agenda.

These HR delegations deliver far more than professional development and cultural learning. You’ll meet and travel with some of the most interesting and accomplished HR leaders around. There’s nothing like traveling internationally with a group of like-minded professionals to expand your own sense of self and profession. You’ll make life-long friends with whom you’ll want to travel again.

Unlike the Cuba trip last year, there will be a Guest Program running side by side with the professional program, so spouses, partners, and other guests are welcome to join you on this grand adventure. The focus of the Guest Program is national history and culture.

Take a look at the itinerary and details. Gerry and I would love to have you join the people who have already signed up. You might want to make your reservation now, because the spots are filling up — and let us know if you have questions.

Does Your CEO Have a Higher Purpose?

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Each year I look forward to the pwc CEO survey findings. And they’re just out. You can see their top ten findings here.

If you’re in HR you need to know what your CEO is thinking about. What she’s worried about. What keeps him up at night. What she’s planning to tackle in the next several years. And if you don’t have access to your CEO, this survey can help you make sure you’re preparing for what may be coming down the pike. These survey results could help you be brilliant for your organization – and for your CEO.

The top ten issues for 2016 identified by U.S. CEOs in the survey are fascinating. They cover regulation, cyber security, tax reform, doing deals, paying attention to customers, investors, employees – and understanding the organization’s higher purpose. A virtual smorgasbord for HR!

Top issues CEOs are expecting to confront in 2016 include:

U.S. market prospects will outshine the low-growth world
Over-regulation will continue to pose a threat to business growth
Regionalization in trade and divergence in economic models and regulatory frameworks, with threats to open Internet
Customers and other stakeholders will expect business to demonstrate a higher purpose over the coming years
Prospects will improve for laying the groundwork for U.S. tax reform

And, in 2016, U.S. CEOs will plan to:

Strengthen the technology foundation to set their business apart
Do more deals, especially domestically
Hold fast in China, while recognizing the bumps along the way
Anticipate the needs of future customers and other stakeholders
Prepare the Millennials for leadership roles

I’m fascinated that 3 of the top ten land squarely in HR’s court: demonstrating a higher purpose (that’s culture), anticipating the needs of…stakeholders (that’s talent), and preparing Millennials for leadership roles (that’s talent development). If you ever wondered whether or not your CEO thinks about HR, the answer is a resounding YES in 2016.

I’m particularly intrigued with the higher purpose issue. It’s no secret that bringing humanity into the workplace is a topic on the minds of many business leaders. Having CEOs concerned that customers, investors, employees, strategic partners all want in on the higher purpose is pretty darned interesting. What are you doing to help the organization understand and communicate its higher purpose this year?

pwc CEO survey 2016 1

Anticipating the needs of customers and employees is another thought provoking issue. Addressing employee needs like wellness – physical and financial, parental leave, career development, and providing opportunities to contribute to society are clearly articulated needs of today’s U.S. employees. Are you helping your CEO provide options to meet these needs?

And preparing Millennials for leadership roles is front and center, isn’t it? Investing in their development brings a number of benefits to the organization in addition to deepening your leadership bench. Millennials frequently report that learning and skills development are as – or more – important than compensation growth. Many report that they leave their employers in search of learning and growth opportunities. Investment in their leadership development undoubtedly impacts retention in a positive way. Are you beefing up your succession plan and its supporting programs?

pwc CEO survey 2016 2

My guess is that most HR practitioners and leaders are currently thinking about these 3 priorities, among a long list of others. Isn’t it nice to know that your CEO may just be ready to help you tackle these issues?

The bigger question may be, are you ready for your CEO to start asking “what’s the plan?”

HR Is NOT a 47 Year Old White Woman!

This was originally published in October of 2012. I think it’s still relevant. And I’m on vacation.

Last year the folks at HRxAnalysts published a fascinating psychometric report about HR. Who works in HR; what’s the education level of HR professionals; do they get certifications; do they go to industry trade shows; what industry publications do they read; do they like to be wined and dined. It is a fascinating read. The title of the report is What HR Thinks and Feels: The 2011 HRxAnalysts Psychographic Survey of HR Professionals; The Demographics, Behaviors, Attitudes and Beliefs of HR Professionals.

Without being overly simplistic, the bottoms line is that the average HR professional is a 47 year old white woman with a college degree, two kids, pretty middle-of-the-road politically who isn’t into team sports and likes music.

It’s good and useful information – especially if you want to sell stuff to HR.

However, based on a new survey published in Human Resource Executive, the title really should have been HR is a 47 Year Old White Woman – Unless They’re the CHRO of a Major Employer.

In the September 16, 2012 edition of the magazine, on line here, the editors published the yearly list of HR’s Elite: the 50 highest paid HR executives “culled from a universe of about 227 former and current HR executives at Russell 3000 companies who were among the five most highly compensated officers in their companies and were, therefore, included in those organizations’ filings.”

Ten of the 50 top compensated CHROs were women. Ten. That’s 20%. And that’s down from 43% in 2011. Now I’m not assuming that only 20% of all large employers have female CHROs – HRE says its 43% of the nation’s 100 largest employers – but that’s not as high as the 67% as the HRxAnalyst research highlights. Not even close. And I’m pretty sure that the reason more female CHROs don’t show up in the top 50 highest paid HR executives is the still prevalent truth that in general men still make more than women.

The concern to me is that if it is true, as HRxAnalysts published, that 67% of all HR professionals are women, then why aren’t more of them moving into the top job? The hard question is that if 55% of HR Managers are female, and 64% of HR Directors are female, and 69% of HR Vice Presidents are female, then why, practically speaking, are we not seeing those percentages hold true in the top HR jobs?

I get it: HR is a 47 year old white woman. Unless we’re talking the CHRO job. Then, HR is a guy. Interesting, huh?

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June 30, 2015 · 4:00 am

CEOs Get It. Do HR Leaders?

Here’s another survey analysis and report that should be required reading for all HR professionals: pwc’s 18^th Annual Global CEO Survey. The survey looks at how business leaders are finding new ways to compete in “an era of unprecedented digital change.” I know, it sounds like another consulting firm’s move to make the complicated even more complicated and gin up their sales. But I didn’t find this analysis to be that. Instead, I found it useful to put context around some of our biggest challenges and opportunities. 1,322 CEOs in 77 countries were interviewed: 125 in Central and Eastern Europe; 459 in Asia Pacific, 94 in the Middle East and Africa; 330 in Western Europe; 167 in Latin America and 147 in North America. This was truly a global survey.

The survey findings are grouped into 5 themes:

Growth
Competition
Technology
Partnering
Diversity

The first four themes are fairly predictable – and they all have some impact on talent strategies and HR functions – but the fifth, Diversity, might be a surprise to you. Think about it. More than 1,300 CEOs around the world were interviewed for this survey. Would you have predicted that Diversity was among the 5 most critical themes to emerge? You might have hoped for it, but would you have predicted it?

This survey analysis report is a roadmap for HR to anticipate what’s coming in terms of focus and strategy from the CEO. The report is not long. You could read it in an hour. And come away with some critical new business perspectives that will make your HR strategies and plans align with the real world – as your CEO sees it – and support your business’s growth plans.

I’ll share just two graphics that I found interesting. The first shows the range of risks that CEOs are beginning to be concerned about:

CEOs were asked how concerned they were about a list of potential economic, policy, social and business threats to their organization’s growth prospects. You can see the list above. Do you see that the threat of not having access to necessary skills is a greater threat then cyber security? Than the speed of technological change? Than Geopolitical uncertainty? Do you see that of the list they could choose from, CEOs chose the threat of not having access to necessary skills as the second most concerning threat to their organization’s growth processes?

That seems big to me. So, are your talent acquisition, development and retention strategies and programs developing fast enough to address this concern?

The second chart I will share shows just how all-pervasive and consistent the lack of talent concern is for CEOs:

The question posed to these CEOs was “what one capability do you think will be most critical for tomorrow’s CEO’s to cultivate?” The choices were:

Innovation
Leadership
Strategic Thinking
Customer Focus
Collaboration
Digital Astuteness
Personal Qualities (e.g. honesty, integrity)
Adaptability
Knowledge and Skills
Talent Acquisition and Management

It wasn’t surprising to me that out of that list of 10 critical future CEO capabilities that Strategic Thinking would be first on the list of necessary capabilities. And it’s first by a mile. But look at what is in second place: Talent Acquisition and Management! I’ll bet you wouldn’t have predicted that.

This suggests to me that CEOs see lack of skills as such a big concern that they are going to involved personally with reducing that threat. Are you ready for your CEO to be actively involved in setting and executing your talent acquisition and development strategy? I’m not thinking that their involvement would be a bad thing. Quite the contrary. But I’m not sure the average HR department is ready to add their CEO to the team.

In my mind, these two graphs, and the subtext of the survey report, show that talent is becoming one of the most critical competitive advantages for business growth worldwide. And CEOs know it. The lack of talent/skills is clearly being evaluated by CEOs all over the world – in every sector and in every size of business – as their Achilles Heel. So CEOs get it. The big question is, does HR get it?

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March 17, 2015 · 4:30 am

Deloitte’s HR Wake Up Call

Deloitte recently released its 2015 Global Human Capital Trends report, their annual comprehensive study of HR, leadership, and talent challenges compiled using data from surveys and interviews taken by 3,300+ HR and business leaders in 106 countries around the world. The report identifies 10 major trends that emerged from the most current research, and cites the capability gap (measuring the distance between the importance of an issue and organizations’ readiness to address it) associated with each, as well as practical ideas for how to help organizations combat theses challenges. Ranked by importance, the top ten talent challenges reported for 2015 are: culture and engagement, leadership, learning and development, reinventing HR, workforce on demand, performance management, HR and people analytics, simplification of work, machines as talent, and people data everywhere.

Deloitte’s data highlight considerable gaps in capability among all 10 trends, with the majority of capability gaps getting larger compared to last year. Let’s take a look at the top five talent issues for 2015: Culture and Engagement ranked as the #1 issue overall for 2015 (not a surprise to us at Great Place to Work®), barely edging out leadership, which ranked as the #1 issue in 2014. This highlights organizations’ recognition that understanding their culture and focusing on building great cultures is a critical need in the face of a potential retention and engagement crisis. Building Leadership ranks as the #2 talent issue for 2015, with close to 9 out of 10 respondents citing the issue as “important” or “very important.” Despite this, Deloitte’s data show that organizations have made very little progress towards meeting this challenge since last year. Learning and Development jumped to the #3 talent challenge in 2015, up from the #8 spot last year. And while the number of companies rating learning and development as important has tripled since 2014, the readiness to address it has actually gone down (!?). Reskilling HR came in as the 4^th most important talent issue for the year, with business leaders rating HR’s performance 20% lower than HR leaders’ ranking (and that is with both HR and business leaders ranking HR performance as low on average). Workforce on Demand was the #5 talent challenge for 2015, with 8 out of 10 respondents citing workforce capability as “important” or “very important” in the year ahead.

Through data analysis and extensive conversations with organizations around the world about these challenges, Deloitte arrived at six key findings that give us a bird’s eye view of how organizations are approaching talent and work:

“ ‘Softer’ areas such as culture and engagement, leadership, and development have become urgent priorities.”

“Leadership and learning have dramatically increased in importance, but the capability gap is widening.”

“HR organizations and HR skills are not keeping up with business needs.”

“HR technology systems are a growing market, but their promise may be largely unfulfilled.”

“Talent and people analytics are a high priority and a tremendous opportunity, but progress is slow.”

“Simplification is an emerging theme; HR is part of the problem.”

Each chapter in Deloitte’s report takes a deep dive view into the 10 talent trends they uncovered through their research with some interested findings. For example (in looking at the #4 trend, reskilling HR) Deloitte notes that nearly 40% of new CHRO’s now come from business, not from HR. Why are CEOs bringing in non-HR professionals to fill the role of CHRO? The answer may lie in their sinking belief in HR’s capabilities and abilities to provide solutions to people-related business problems.

Deloitte puts it bluntly: right now HR is just not keeping up with the pace of business, and a reskilling of HR professionals while reinventing the role of HR is becoming critical. This need however, also creates an unprecedented opportunity for HR to play a big role at the highest levels of business strategy. But where do organizations start? Deloitte offers the following advice:

“Redesign HR with a focus on consulting and service delivery, not just efficiency of administration. HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues.”

“Rather than locating HR specialists in central teams, embed them into the business—but coordinate them by building a strong network of expertise. Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented.”

“Make HR a talent and leadership magnet… Create rigorous assessments for top HR staff and rotate high performers from the business into HR to create a magnet for strong leaders.”

“Invest in HR development and skills as if the business depended on it… Focus on capabilities such as business acumen, consulting and project management skills, organizational design and change, and HR analytical skills.”

There are very useful insights in this report – as there are every year. But this year the insights also serve as a warning to HR. A warning that it’s losing the confidence of CEOs and other C-Suite executives. That 40% of all CHROs are coming from functions other than HR should be sobering. That the top capability gaps are growing larger, not smaller, should be cause for concern. Without bringing furniture into the conversation, this report is a credible and important HR wake up call!

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January 20, 2015 · 4:30 am

Which Comes First, Economic Performance or Best in Class HR?

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The Boston Consulting Group recently released the eighth report in their Creating People Advantage series. This year’s survey report, “Creating People Advantage 2014-2015: How To Set Up Great HR Functions: Connect, Prioritize, Impact” included responses from 3,507 people in 101 countries across industries such as industrial goods, consumer goods, and the public sector. 64 HR and non-HR executives from leading companies across the world were also surveyed. The result was a report that explores key trends in people management by considering 10 broad HR topics and 27 subtopics. Key findings from the report included the following:

HR capabilities correlate with economic performance
Analytics and key performance indicators (KPI’s) give HR a seat at the table
KPI’s should link to strategic action
Globally, leadership and talent management topics are reported as in most need of urgent action
HR departments must be more consistent with investment decisions
HR needs to listen more to internal clients

An important central finding of BCG’s survey was the correlation between HR capabilities and financial performance. BCG isolated the top 100 and bottom 100 companies based on financial performance and found that organizations stronger in people management have respectively higher financial performance than those organizations without strong people management. Among these high performers no HR subtopic was reported as in need of urgent action, which directly contrasts with the organizations with the worst financial performance, which reported need for urgent action across nearly all 27 HR subtopics. BCG points out that this has been a consistent finding among their past reports as well as in publically available research, referencing the share prices over the last decade of publicly listed companies that have made the FORTUNE 100 Best Companies to Work For List, produced by Great Place to Work. The most successful people companies regularly outperform the market by nearly 100%. One offered explanation for the superior HR achievement of high performers is their strategic allocation of investment. BCG’s report found that high performers strategically allocate their efforts, making sure to accurately distinguish between high and low priorities and distributing resources accordingly. Low performing organizations had a more unreasoned approach to allocating importance and often-misaligned investments, with the level of importance not necessarily correlating to their biggest areas of investment. Organizations should make sure they have a process in place to clearly identify HR subtopics/people management practices that are most important to their organization.

HR leaders looking to have “a seat at the table” for strategic discussions within their organizations must demonstrate the business impact of HR, providing executive management with quantitative evidence of how HR supports business strategic decisions. BCG’s research finds that organizations using people-related Key Performance Indicators, or tools such as simulations and forecasts, have greater strategic roles in their organization than companies that don’t utilize such tools. Such tools allow HR functions to measure and analyze areas such as employee productivity and people costs.

Simply put, HR functions that do not use metrics and analytics cannot play a strategic role in their organization, and furthermore, perpetuate the stereotype that HR functions should, or are better suited to work with, softer aspects of human capital management.

BCG looked at responding organizations’ perceived importance of 27 HR subtopics by region and industry, using an urgency metric to better understand those with the most need for action. In the majority of countries leadership was ranked (by a wide margin) as the most urgent subtopic, followed by talent management. Beyond these two subtopics, importance varied considerably by region. In the U.S, behavior and culture, along with employee engagement, ranked as more urgent than in most other countries. When breaking subtopics down by industry importance, the results were similar, with leadership, talent management, and behavior and culture ranking as most urgent across the majority of industries.

Ultimately, BCG’s report highlights three hallmarks of a great HR function that prove as critical differentiators between high and low performing organizations:

Connect – clearly linking HR and people strategies with business strategy
Prioritize – identify most urgent priorities and invest resources accordingly
Impact – generate and report people-based KPI’s, providing data to formulate strategic actions

Organizations that can collectively institute all three ideas create HR functions that we can describe as “best in class.” The real question to be answered, though, is “which comes first, best in class HR or strong economic performance?” If you’re in HR, I know what I hope your answer is!

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October 14, 2014 · 4:30 am

CEO Insights: The Bumpy Road to ALWAYS ON

PWC’s 17th annual global CEO report “Good to Grow: 2014 US CEO Survey”, provides a thorough snapshot of executive leadership perspectives and approaches at the current moment. PWC’s report includes perspectives from over 1,300 CEOs from 68 countries, including 162 CEOs with US-headquartered organizations. It’s clear from the responses that, globally, CEOs are making many changes within their organizations. For example, 86% of CEOs stated that advancing technologies are going to transform their businesses over the next five years. Positively, PWC’s data also suggests that CEOs are finding reasons to be more confident in many places (89% of US CEOs are fairly sure their companies will deliver revenue growth this year). In this period of rapid change though, what approaches are CEOs taking, and what insights can they offer?

The majority of CEO’s interviewed reported that “five great forces of transformation” are reshaping business as we know it:

Technology is making an impact across the whole enterprise.
CEOs are reinventing the operating model towards an “always on customer experience.”
CEOs are seeking new ways to work together in joint ventures and alliances to capture disruptive technologies faster.
In some cases, the business model is being innovated.
There are rising concerns about talent.

As organizations undeniably shift into a period of growth (62% expect to hire more people this year, the highest level of anticipated headcount expansion in the past five years for this survey), how do these five great forces of transformation come into play?

All CEOs seem to agree, that technology is what propels business, and will continue to do so. PWC states that, in part, “Technology” is a watchword for 2014 because CEOs use it when talking about both core innovation and information technology (IT). Technology has become an essential part of strategy in all areas – for organizations pursuing new business models, meeting new customer expectations, remaking their operating model, forging new alliances, or tackling talent challenges.

CEOs are reshaping business models though innovation. They are taking cues from the technology industry that has paved the way by creating value for customers in a multitude of new ways. Organizations are looking to create increased profit for what they offer beyond step-by-step product innovation, and they are stepping out of the box to innovate in ways such as turning a product into a service, or vice versa. New approaches to innovation and R&D are part of an increased strategy by many US CEOs in 2014. For example, some organizations report funding innovation incubators to foster rapid prototyping of new ideas, while others report wanting to join up with emerging market innovators who are developing low-cost products.

PWC’s survey also indicates that customer strategies will get a serious makeover in 2014, with 52% of CEOs reporting that they are planning to change their customer growth and retention strategies. As creating a positive and personal customer experience only continues to increase in value (and as a standard of expectation) more organizations will see CEOs leading them toward a strategy of customer interaction. This will move away from stand-alone transactions to a sustainable “always on” relationship with customers. While CEOs plan out such new strategies, they are also discovering that most current capabilities are “fair game for reinvention.” The vast majority of CEOs are already debuting a fair number of change initiatives with a focus on moving away from rigid structures towards more nimble, adaptable operations.

Business alliances and joint ventures also appear as a CEO noted trend for 2014 – within the U.S. and globally. 42% of CEOs surveyed report that they plan to enter a business alliance/joint venture this year while only 4% expect they’ll exit an existing relationship. CEOs are also looking at acquisitions, with 39% of US CEOs planning to complete a domestic acquisition in 2014 and 28% planning on a cross-border deal.

A last trend to note from this survey is in regards to talent. I’ve talked about the talent acquisition “crisis” or “war on talent” in past posts, and unfortunately, PWC’s CEO survey does nothing to dispel this issue. 70% of US business leaders report being concerned about the availability of key skills. This compares to 54% that said so in 2013.

Despite continued economic uncertainty both within the U.S and globally, PWC reports that the number of US CEOs who believe that global growth is returning has more than doubled since last year, perhaps indicating that organizations are successfully finding a path forward. It is also clear from the research though, that this is a time of intense transformation, which encompasses a wide range of organizational areas and strategies. The ability to navigate such transformational trends is vital for organizational success. So while the overall sentiment is positive for growth, the ride to get there is going to bumpy. Are you and your teams ready to be “always on?”

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Filed under 100 Best Companies to Work For, Business Success, China Gorman, Connecting Dots, Data Point Tuesday, Engagement, HR, HR Data, Information Technology, Talent pipeline

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