Tag Archives: Business Strategy

People Are Fuel

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A couple of weeks ago I wrote about the astonishing shift in corporate valuations (here) – from overwhelmingly reliant on tangible assets to overwhelmingly reliant on intangible assets. I wasn’t alone in noticing this research. Aon Hewitt did as well. And mentioned it in an interesting executive brief, People Fuel Growth, The Role of Human Capital in Maximizing Growth.

What’s noteworthy about this brief, that reports findings from their recent study, is its organizational growth model that makes organizational strategy less of a focus than the people strategy. In other words, “people (culture) eat strategy for breakfast.”

Take a look at their simple growth model:

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Two of the external environment challenges noted in the brief are worth mentioning:

  • 70% of FORTUNE 1000 companies have disappeared in the last 70 years
  • Corporate profits peaked in 2015 and appear to be trending downward

These, together, with the results of pretty dramatic demographic shifts mean that as people are the driving force of corporate value, they are becoming themselves more valuable and more important to business growth. It’s pretty inescapable that people do, in fact, drive growth – and not through execution alone.

I look forward to seeing the complete study analysis that will expand on the conclusions in this brief.

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Filed under Aon Hewitt, business strategy, China Gorman, Corporate Valuation, Data Point Tuesday

Supply Chain Management: Closing the Skills Gap

Data Point TuesdayIt’s an issue that organizations seem consistently faced with today: a lack of skilled workers that can further their growth, success, and ability to compete with competitors. This “skills gap” is explained by the U.S Chamber of Commerce Foundation | Center for Education and Workforce’s new report, as a result of education and workforce systems in the U.S that are failing to keep pace with the changing needs of the economy. So how do we remedy this talent shortage and close the skills gap? This is a hot topic among organization leaders and management, and USCCF’s report offers an interesting strategy that, while different, may be an actionable way for organizations and institutions to start remedying this challenge. The strategy proposes to apply a supply chain management approach to talent, leveraging lessons learned from innovations in supply chain management and engaging employers to expand leadership roles, acting as “end-use customers” of education and workforce systems. USCCF’s approach, dubbed talent pipeline management, is expected to provide more effective transitions for students into the workforce and improved career advancement for current workers. Talent pipeline management foresees a demand-drive approach to closing the skills gap. This approach is intended to create and share value among all partners in the talent supply chain.

USCCF’s report states that 92% of executives believe there is a serious gap in workforce skills, and nearly 50% are struggling to fill jobs. If left unaddressed, they hypothesize that the skills gap could cause more than 5 million positions to go unfilled by 2020, an issue likely to be exacerbated by increasing retirements and a shrinking workforce. Employers, however, have substantial resources they can leverage to engage this demand driven system. Employers invest upwards of $486 billion each year on training that is almost exclusively focused on upgrading the skills of their current employees.Investment in Workforce Education and Training

USCCF points to a supply chain management approach to talent recruitment and development to help organizations stay competitive in today’s economy, explaining that, “The conditions driving that perspective—such as growing business uncertainty and longer lead times to fill positions—are similar to the challenges that led to innovations in supply chain management”.

Three key foundational principles are identified as forming the basis of a demand-driven system, and provide the framework for the “talent management pipeline”:

  1. Employers Drive Value Creation—Employers play a new leadership role as the end-customer in closing the skills gap for those jobs most critical to their competitiveness.
  1. Employers Organize and Manage Scalable Network Partnerships—Employers organize and manage flexible and responsive talent pipelines in partnership with their preferred education and workforce providers.
  1. Employer Measures and Incentives Drive Performance—Employers work collaboratively with their partners to develop measures and incentives designed to reinforce and improve performance across all partners.

For employers to be successful in this strategy for talent acquisition and development, they must link their talent strategy to their business strategy:Identifying Core Capabilities

Each capability may require a different sourcing method, and USCCF’s report urges organizations to move away from talent acquisition strategies of the past like “spot marketing” through job posting and screening:Talent Pipeline Strategies

Once organizations have developed talent pipeline strategies, they should decide what can be done in-house and what should be done through external partners:Simple vs. Extended Value Chains

Once a talent pipeline network and demand planning system is in place, organizations must measure performance the of this system based on whether they are meeting the needs of the end-customer and creating value across the full network of partners, looking at factors such as time, cost, and quality across all internal units as well as education and workforce partners. Organizations can additionally support their leading providers through incentives (such as work-based learning opportunities, performance-based funding, and equipment) as well as through continuous improvement strategies.

For more detailed information on the implications of the talent management pipeline on key stakeholders such as education and workforce providers, students and workers, and policymakers, make sure to check out the U.S Chamber of Commerce Foundation’s full report.

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Filed under business strategy, China Gorman, Data Point Tuesday, Talent pipeline, Workplace Studies

It’s all About: Trust, Honesty, and Transparency

Data Point TuesdayCompany cultures, the good, the bad, and – well in the interest of being nice we’ll leave it at that – have been the focus at Great Place to Work® for the last 25 years, since Robert Levering and Milton Moskowitz researched their book The 100 Best Workplaces in America. What their research revealed is that the key to creating a great workplace revolves not around the building of a certain set of benefits and practices, but through the building of high-quality relationships in the workplace, relationships characterized by trust, pride, and camaraderie. What we call a great company culture. As Erin Osterhaus, researcher for HR technology reviewer Software Advice, points out in her blog about a recent survey, the term “company culture” has seen an astronomical rise in use since 1980, due in part to publications like The 100 Best Workplaces in America, as well as companies’ recognition that culture has a direct impact on how happy, and healthy employees are– and, how well they perform. With the rise in attention to the topic of company culture, enter the adoption of roles created specifically to focus on company culture. As Osterhaus points out, Google, #1 on the FORTUNE 100 Best Companies to Work For List for the last three years, was one of the first companies to adopt such a position (Chief Culture Officer) in 2006.

company culture over timeConsidering all the research and data that surround the term “company culture” today, Software Advice surveyed 886 U.S. adults to learn how they define company culture, and to better understand what culture means to the group it impacts the most: employees and job seekers. What did they discover? Most survey takers described “company culture” as a value, belief, or habit of employees that worked at an organization, or the overall feeling of the environment at that company. The majority of respondents listed their ideal company culture as “casual or relaxed” followed by “family oriented,” “fun,” “friendly,” and “honest and transparent.” However, when asked which of these five attributes would most likely convince them to apply at company, respondents stated that “honesty and transparency” would be the biggest influencer.

So while “casual/relaxed” and “fun” ranked over honesty as the most common definition of an ideal company culture, the fact that “honesty and transparency” are the bigger influencers on whether a prospective candidate actually applies at a company highlights what we’ve known about company cultures all along… that trust and values matter most.

ideal company cultureSoftware Advice’s data prove once again that it is fostering trust and building honesty and transparency that ultimately create a sense of camaraderie amongst employees and the fun, family feel environments that respondents report as their “ideal company culture.” As Leslie Caccamese and Katie Popp state in Great Place to Work’s recent whitepaper, Five Lessons for Leaders as they Build a Great Workplace, “What people often think makes a great workplace isn’t actually what makes it so.” While great amenities like workout facilities, foosball tables, and 4 star catered meals may initially come to mind when people think “great company culture,” it’s ultimately evidence of trust-based interactions between leaders and their employees that Great Place to Work looks for when evaluating companies for our Best Companies to Work For lists in nearly 50 countries around the world.

I’ll leave you with another quote from our recent whitepaper: “…by all means, install slides and fi­reman poles; scatter about lava lamps and bean bag chairs. Bring in the manicurist and the barista, and cater to people’s pets. Just make sure these things aren’t happening in lieu of deeper, more substantial practices like involving employees in workplace decisions, keeping them informed of important issues, tending to their ongoing professional development, and sharing profi­ts fairly. These types of practices will go much further in helping employees feel that theirs is a great workplace.”

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Filed under 100 Best Companies to Work For, Business Success, China Gorman, Culture, Data Point Tuesday, Great Place to Work, Great Place to Work Institute, Great Rated!, Relationships, Trust