Tag Archives: CEOs

CEOs and Talent: Only a Risk

data point tuesday_500Wait. What?

I’m looking at a survey analysis/report from KPMG, Setting the course for growth: CEO perspectives. Unlike every other CEO survey I’ve looked at, people, talent and culture are barely addressed in the survey results at all, but rather in sidebars by the good consultants at KPMG. The only places talent shows up are in the first and last areas of key findings: “confident on economic outlook, hiring,” and “risk management not regularly discussed.”

According to the report, the areas that 400 surveyed U.S. CEOs are most concerned about are:

  • Confident on economic outlook, hiring (55%)
  • Optimistic about business prospects (62%)
  • Strong focus on growth (72%)
  • Product relevance as a top concern (72%)
  • Surge in Operating Model Transformations (76%)
  • Adapting to government regulation a high priority (34%)
  • Risk management not regularly discussed (27%)

Contrasted with the pwc CEO survey I wrote about earlier, talent issues don’t seem to be top of mind for the CEOs in KPMG’s survey pool. I think this is pretty interesting.

Of course, surveys are all about the questions asked and the answer choices provided. If talent, people and culture aren’t part of the answer or topic choices, then they won’t show up in the results. If KPMG didn’t put them in and pwc did. I think that’s pretty interesting, too.

Back to the KPMG report, headcount growth projections are significant from the surveyed CEOs, but a concern about any skills or talent shortage that would provide headwind to this growth isn’t mentioned. Even though 216 of 400 CEOs say that they expect to grow their headcount 6% or more during the next three years. Interesting.

Aug 18 2015 KPMG

Here’s where people do show up in the survey: as one of 5 “top concerns about my company:”

  • Financial performance
  • Risk management concerns
  • Workforce issues
  • Operational issues
  • Ability to innovate

These “workforce issues” show up in the risk management section, but there is no description of what those issues are and how they show up as risks. Or how to mitigate them. Interesting.

Based on the survey analysis, the report’s conclusion gives these final recommendations to CEOs:

  • Transform or wither
  • Stay relevant
  • Become an information-driven organization
  • View everything through the lens of efficient growth

Not what I expected based on almost every other CEO survey report I’ve seen this year. But if I step back a minute and forget that this report is focused on the CEO, wouldn’t these four recommendations work just as well for the CHRO and the HR Department as a whole? Yes. Yes they would.

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Filed under CEOs, China Gorman, Data Point Tuesday, KPMG

CEOs Get It. Do HR Leaders?

data point tuesday_500Here’s another survey analysis and report that should be required reading for all HR professionals: pwc’s 18th 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:

pwc CEO Survey June 30 2015CEOs 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:

pwc CEO Survey 2 June 30 2015The 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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Filed under CEOs pwc, China Gorman, Data Point Tuesday, Diversity, HR, Strategy, Talent Acquisition, Talent development

How About a Seat at the Spreadsheet?

data point tuesday_500

HR professionals worry a lot about whether their CEO thinks they are strategic business leaders. Turns out it isn’t the CEO that HR professionals need to worry about. It’s the CFO.

This is according to global survey data collected from three Oracle/IBM sponsored research reports produced by the Economist Intelligence Unit in April and May 2012. CEOs made up 57% and CFOs made up 43% of the 235 respondents.

The resulting infographic is one of the more readable and useful ones of its type that I’ve seen. Among the data points:

  • 80% of CEOs and CFOs want the head of HR to be key in their company’s strategy planning
  • Only 38% of those CEOs and CFOS say that is currently the case
  • Only 10% say the head of HR is “extremely” key in strategic planning right now
  • Only 37% of CEOs and CFOs say their relationship with the head of HR is “close and trustful”
  • Just 28% of CEOs and CFOs say their relationship with the head of HR is among their “most valued” professional relationships

But here are the real zingers:

Oracle Driving HR Forward Infographic March 2013

Ouch!

But here’s the real irony:  CFOs are more confident about HR’s understanding the needs of the business than they are about the business of HR! Low confidence by CFOs that HR can lead the HR function, can evaluate employee performance or can identify and recruit key talent.

That’s not good news – especially since CFOs spend significantly more time with CEOs than CHROs do. I wonder what the CFO and CEO are talking about with regard to HR? Is the CFO supporting the CHRO? Given this survey data, I wonder.

Maybe CEOs aren’t HR’s biggest challenge after all. Maybe CFOs are the ones toward whom HR professionals should be aiming their strategic attention. Maybe instead of pining after furniture HR should be pining after spreadsheets!

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Filed under C-suite, CEOs, China Gorman, CHROs, Data Point Tuesday, IBM, Oracle

Is Talentism the New Capitalism?

data point tuesday_500

“Is talentism the new capitalism?”

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, thinks so and said as much as he opened this year’s event in Davos.

Mercer chose this quote to open the executive summary of its new report, Talent Rising:  High-impact Accelerators to Global Growth. It includes some great survey data from more than 1,250 HR and talent management executives in 65 countries around the world. It includes important and useful data about how organizations are or are not expanding their definition of capital to include talent.

Forever, it seems, organizations’ primary sources of value and competitive advantage have been financial in nature:  money, lands, buildings and machines – all the values carried on the balance sheet. Mercer’s observation that with human capital being the main determinant of success today, it is troubling that so many organizations leave the development of their talent “largely to external systems and forces, with resulting gaps in their talent portfolios.”

(One could also position that if, indeed, human capital is the main determinant of organization success today, then there should be an entry on the balance sheet to capture its importance. But that’s for another day.)

This report is a huge call to action – not just for HR, but for the entire C-suite. And it is a great roadmap for HR to initiate the discussion of talent as capital.

Central to this discussion is the definition of strategic workforce planning. We hear about this all the time in HR. And BCG, funded by the World Federation of Personnel Management Associations together with SHRM, has observed that there is low current capability worldwide in strategic workforce planning. Perhaps that’s because we know it when we see it, but we can’t really define it.

Mercer’s done a great job of defining strategic workforce planning and published a great infographic along with the Talent Rising executive summary.

Mercer Strategic Workforce Planning Infographic

This 7 step virtuous circle seems simple enough, but I think we all know that sometimes the most simple things are the hardest to achieve. And that certainly would be true for strategic workforce planning. Identifying accelerators on which to focus might help organizations begin to break the process down into manageable chunks.  Just knowing where to begin will undoubtedly help some make progress.

“Talentism is the new capitalism.” Well, maybe in 5-10 years. When HR is seen as a business function and not an overhead function.  And human capital is valued on the balance sheet.

We can dream, can’t we?

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Filed under Boston Consulting Group, C-suite, CEOs, China Gorman, Connecting Dots, HR Credibility, Human Capital, Mercer, SHRM, Strategic Workforce Planning, Talentism, World Economic Forum

CHROs: the Sally Field* of the C-suite

data point tuesday_500

The report of a global CEO survey by the Economist Intelligence Unit sponsored by IBM and Oracle (an interesting pairing) just crossed my desk.  The CEO Perspectives Economist Intelligence Unitreport, CEO perspectives: How HR can take a on a bigger role in driving growth, is not very encouraging.  Either CEOs are talking out of both sides of their mouths (HR’s choice, I’m sure) or global CHROs are in bigger trouble than we thought.

The survey – conducted in May 2012 – included 235 C-level executives, 134 of whom are CEOs.  A total of 38 countries were represented from North America (47%), Western Europe (40%), Eastern Europe (8%) and the Middle East (4%).  A range of industries were included and half of the companies had $500 million or more in annual revenues.  Additionally, 6 in-depth interviews were conducted with 4 CEOs and 2 respected academics.

While the Economist Intelligence Unit authors tried to spin the results in a positive way, there’s just no getting around the conclusion that even big company CHROs are having a hard time getting access to the strategic business discussions at the top of their organizations. While 76% of the surveyed CEOs say their relationship with the head of HR is close and trustful, only 55% report that the head of HR is a key player in strategic planning.

CHRO at the table EIU

What I found really interesting was the perception by the authors that the way to greater inclusion in strategic decision making is to become “a confidante and informal executive coach” to the CEO.  “If the CEO has repeatedly relied on the head of HR for certain important matters, and they still see eye to eye, he or she is more likely to invite the HR head to participate in other areas as a matter of course.”  So, developing a personal, “therapeutic” relationship with the CEO is the first best practice the report’s authors recommend.  But you’re doomed, I guess, if you don’t see eye to eye.

Becoming liked and trusted by the CEO is the way forward to weighing in on strategic business decisions.  This, despite the finding that 50% of the surveyed CEOs spend 5 hours or less a month – in either one-on-one or group settings – with their head of HR. I wonder how you figure out if you even see eye-to-eye in less than 5 hours a month.

CEO CHRO monthly time spent Economist Intelligence Unit

The report has lots of interesting – and depressing – data, and you should probably take a look.  But I think this gets filed under: Duh!

The Economist Intelligence Unit’s bottom line appears to be that CHROs whose CEOs like them get more involvement in the business. I hope IBM and Oracle didn’t spend big bucks on this research.

*Here’s Sally Field’s famous Oscar acceptance speech:

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Filed under C-suite, CEOs, China Gorman, CHROs, Connecting Dots, Economist Intelliegence Unit, IBM, Oracle

ROI of People Focused Organizations

data point tuesday_500

The holy grail in HR is providing hard, compelling data-based evidence for the ROI of investing in people.  With this data, HR is in the strategic driver’s seat of the budgeting process.  Without this data, HR is resigned to the furniture conversation.

Want some new people investment ROI data from a source that even your CEO would pay attention to?  How about The Boston Consulting Group (BCG)?  They’re a big time global business strategy consulting firm that your CEO respects.

For the third time since 2008, BCG has partnered with the World Federation of People Management Associations (WFPMA) to publish its Creating People Advantage report.  The most current, published in October, is Creating People Advantage 2012: Mastering HR Challenges in a Two-Speed World.

The findings are the result of BCG’s analysis of responses to an online survey that polled 4,288 executives from companies throughout  a number of industries, 102 countries, and six major global regions.  Additionally, 63 HR and other executives from high profile companies all around the world were interviewed.  The survey and interviews covered 22 HR topics and the report includes interesting case studies from companies like L’Oreal, Samsung, and Daimler Trucks.

It’s a fascinating – and very readable – report and the findings won’t surprise you.  In fact, the top three critical topics for HR leaders around the world remained the same as in BCG’s 2010 global survey:

  • Managing talent
  • Improving leadership development
  • Strategic workforce planning

The data are compelling and the comparisons between countries and regions of the world really are interesting.

The big bonus, though, is the report that is appended at the conclusion, From Capability to Profitability: Realizing the Value of People Management. It’s loaded with economic data that compares the HR practices of high-performing companies against those of lower-performing ones in critical areas, including talent management, leadership development, and performance management and rewards.

The bottom line is that companies that demonstrated proficiency in the 22 key HR areas experienced revenue growth that was up to 3.5 times higher and profit margins that were 2.1 times higher than those of less capable companies.  And guess what those increases did to their share prices?

BCG 2012 People Companies Outperform the Market Average

Think your CEO and CFO are interested in higher revenue and profit growth rates?  Think the board might be interested in higher share price growth rates?  Think they might be willing to invest in practices that would accomplish those outcomes?  Yep, me too.

The budget season has long passed, and you’re locked in to the 2013 operating plan.  But take a look at the 22 key HR practices in your organization that this report covers and start a file that will hold the data to build the people investment plan for 2014. It takes some time to gather the foundational data to build your investment business cases.

Start now.  Start tracking the data.  Start setting the benchmarks. Start thinking in business cases.

And quit talking about furniture.

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Filed under Boston Consulting Group, Business Case, CEOs, China Gorman, Connecting Dots, HR, HR Data, Human Capital ROI, ROI, WFPMA

A Funny Thing Happened on the Way to the C-Suite…

The Career Engagement Group from New Zealand recently conducted  an online survey of over 1,000 employed people ages 18-65.  The focus of the survey was to understand the career aspirations, agility and drivers of the current workforce across key demographics such as gender, age and career stage.

Maybe because the survey originated in New Zealand, some different questions were asked than the usual employee engagement surveys we see so routinely today.  It’s always good to get a different take on what’s important.

One of the subjects covered that seemed out of the ordinary was Leadership Aspiration.  Now that I think about it, I’m not sure I’ve ever been asked – in the many engagement and career development surveys I’ve taken – if I wanted to lead at the most senior level in an organization.  It’s a great question.  And the answers surprised me.  How about you?

Leadership Aspirations & Gender & Generations

  • Only 11% of all respondents want to lead at the most senior level in an organization.
  • Women report lower leadership aspirations than men – 15% of all males aspire to senior leadership positions, while only 9% of all females had similar aspirations.
  • Younger people have higher leadership aspirations overall.

Hmmm.  Only 11% of all respondents want to lead at the most senior level in an organization!  That surprises me.  A lot.  I would have loved to have seen the breakdown in responses by age group as well as gender.  Because I might have thought that the younger generations might be less interested in the stress and costs of leadership at the top than their older colleagues, but the results say otherwise according to the Career Engagement Group.

And women being less interested in leadership at the top than men?  That’s kind of a show stopper, don’t you think?  With more and more women entering the workforce around the world, this finding should be concerning.  Many industry-leading organizations are working hard to keep women in their organizations – maybe they should also be more encouraging about the value and rewards of life at the top.  According to this survey, there aren’t a lot of people — male or female –dreaming about being the CEO and making plans to get to the top.

When the demographics are already working against us (see my posts here and here) and the C-Suite is justifiably concerned about where the next generation of leaders is coming from, perhaps what’s needed is a marketing campaign to encourage workers to reach for the top.

What do you think?

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Filed under C-suite, Career Development, Career Planning, CEOs, China Gorman, Connecting Dots, Demographics, Engagement, HR Data, Leadership Aspiration, Talent development, Talent pipeline