Achieving HR Excellence: A Global and Evidence-Based View. Powerpoint Deck from from May 30 Presentation with John Boudreau highlighting findings from his (and Ed Lawler\'s) forthcoming book.

1. Dr. John Boudreau
Research Director, Center for Effective Organizations
Professor, Marshall School of Business
University of Southern California
213-740-9814
John.boudreau@usc.edu
http://ceo.usc.edu/
© 2012 University of Southern California (1)

2. © 2012 University of Southern California JB_W (2)

3. What’s Changed in 24 Years?
• Skinner, Wickham. (1981).
Big Hat, No Cattle: Managing Human Resources.”
Harvard Business Review.
• Stewart, Thomas. (1996). “Taking on the Last
Bureaucracy.” Fortune Magazine.
 Why not blow the sucker up? Improvement’s for
wimps. I mean abolish it. Deep-six it.
• Hammond, Keith. (2005). “Why we Hate HR.” Fast
Company
© 2012 University of Southern California (3)

4. How HR Spends Its Time Now and Recalling Years Ago
(Lawler & Boudreau, “Achieving Strategic Excellence” 2012)
5–7
Means Current
Years Ago
Maintaining Records
Collect, track, and maintain data on 23.2 13.6
employees
Auditing/Controlling
Ensure compliance to internal operations,
regulations, and legal and union
15.2 12.5
requirements
Human Resources Service Provider
Assist with implementation and 33.0 30.4
administration of HR practices
Development of HR Systems and
Practices 13.5 16.7
Develop new HR systems and practices
Strategic Business Partner
Member of the management team.
Involved with strategic HR planning,
12.1 26.8
organizational design, and strategic change
© 2012 University of Southern California

5. HR’s Actual Progress Since 1995
(Lawler & Boudreau, “Achieving Strategic Excellence” 2012)
Percentage of Time
1995 2001 2007 2010
Spent in the Role
Maintaining Employee Records 15.4 14.9 15.8 13.6
Auditing and Controlling,
Ensuring Compliance
12.2 11.4 11.6 12.5
Providing HR Services and
Implementing Programs
31.3 31.3 27.8 30.4
Developing HR Systems and
Practices
18.6 19.3 19.2 16.7
Strategic Business Partner 21.9 23.2 25.6 26.8
© 2012 University of Southern California

6. Time Spent Matters!
(Lawler & Boudreau, “Effective HR Management” 2012)
Correlation with
Correlation with Correlation
Reported
HR Role in with HR
Organization
Strategy Effectiveness
Performance
Maintaining Records
Collect, track, and maintain data on -.18* -.42*** -.12
employees
Auditing/Controlling
Ensure compliance to internal operations,
regulations, and legal and union
-.17* -0.30*** -.13
requirements
Human Resources Service Provider
Assist with implementation and -.18* -0.24** -.23*
administration of HR practices
Development of HR Systems and
Practices .05 .12 .16
Develop new HR systems and practices
Strategic Business Partner
Member of the management team.
Involved with strategic HR planning,
.31*** .54*** .27**
organizational design, and strategic change
© 2012 University of Southern California

7. Finance Spends Less Time on Strategic Partnership
(Boudreau, CFO Magazine online, 2012)
CFO’s HR
400 in 2012 100 in 2010
Maintaining Records
Collect, track, and maintain data
24.9 13.6
Auditing/Controlling
Ensure compliance to internal operations, 16.2 12.5
regulations, and legal requirements
Human Resources Service Provider
Assist with implementation and 34.1 30.4
administration of practices
Development of HR Systems and
Practices 12.5 16.7
Develop new systems and practices
Strategic Business Partner
Member of the management team.
Involved with strategic HR planning,
12.3 26.8
organizational design, and strategic change
© 2012 University of Southern California

8. Why Might Finance Spend Less Time?
• Finance is actually a less frequent strategic
partner
• Finance since 2008 is under such pressure to
report and audit that it has dropped its time
on strategic partnership
• Finance achieves “strategic” influence
through its other activities
• Finance “counts” differently when you ask
about strategic partnership
© 2012 University of Southern California

9. • Shared Services Have Increased and Relate Positively to HR’s Role in
Strategy and to Organizational Performance
• Varying HR Practices Across Business Units has Decreased, and Relates
Negatively to HR’s Role in Strategy
• Shifting Transactional HR to Self-Service Has Slightly Increased and
Relates Positively to HR’s Role in Strategy
• HR Talent Rotation (from and to other functions and within HR) is Not
Common Yet Relates Strongly to HR’s Strategic Role and to Organization
Performance
• HR Activity Areas Continue at Stable Levels, but Increases Relate to HR’s
Strategic Role and Organization Performance in all Areas Except HRIS,
Metrics and Union Relations
• HR Skills in Technical Areas, Interpersonal, Business Partner and Metrics
Rated Higher by Non-HR and HR Leaders, and Relate to HR’s Strategic
Role and Organizational Performance
© 2012 University of Southern California JB_W (9)

10. • HR Is Less A Full Partner and More An Implementer Over Time
• Less than 1/3 Report Full Partnership
• Non-HR Sees Less Implementer and More Implementer and Full Partner
Over Time
• Non-HR and HR Perceptions Are Similar
• China Sees No Role or Implementer Role More Than Developed Regions
• HR Involved in Organization Diagnosis and Change Rather Than Strategic
Direction (Mergers, New Business, Options and Choices)
• HR Strategy Activity Relates More to HR’s Strategic Role and Not Strongly
with Organizational Performance
• China Rated Lower on All Strategy Activities than Developed Nations
© 2012 University of Southern California JB_W (10)

11. • Advanced Strategy Activities Include
• There is a human capital strategy that is integrated with business strategy
• Provides HR data to support change management
• (HR) Drives change management
• Data-based talent strategy
• Provides analytic support for business decision-making
• Makes rigorous data based decisions about human capital management
• All are at Only a Moderate Levels, and Even Lower for Data, Analytics,
and Decision Rigor
• All Relate to Both HR Strategic Role and Organizational Performance
• China Rates Lower Than Many Industrialized Regions
• Your Organization Matters : Bureaucratic and Low-Cost Operation
Negatively Related to Advanced Strategy … but High-Involvement,
Global Competitor and Sustainable are all Positively Related
© 2012 University of Southern California JB_W (11)

12. • Decision Science Sophistication Relates Significantly to HR’s Strategic
Role and Organizational Performance
• Non-HR Leaders Believe They are Somewhat Better at Human Capital
Decisions than HR Believes They are
• All Decision Science Items are at Only Moderate Levels, with “Educating
Business Leaders” Particularly Low-Rated
• Business Leaders Who Report Greater Sophistication Also Report a
Strong HR Strategic Role
© 2012 University of Southern California JB_W (12)

13. Style of Organizational Engagement
Decisions
HR systems that
Services achieve goals by
HR implements “teaching” participants
Control changes by and providing the tools
“encouraging” to improve decisions
HR systems that
achieve goals by Talentship
“requiring” participants
Human
to do what they must Resources
do
Personnel
© 2012 University of Southern California

14. • All Three Rated at Moderate Levels
• Non-HR Leaders Rate Decision Science Somewhat Higher Than HR
• Non-HR Leaders Rate “Adding Value Through Compliance” Significantly
Higher than HR
• All Three Relate Strongly to HR’s Strategic Role and to Organizational
Performance
• Your Organization Matters : Bureaucratic and Low-Cost Operation
Negatively Related to Advanced Decision Science … but High-
Involvement and Sustainable are Positively Related
© 2012 University of Southern California JB_W (14)

15. • System Integration and Automation Increase Over Time
• Integration and Automation Show Slight Positive Relationship to HR’s
Role in Strategy and Organization Performance
• China Significantly More Likely to Report “No Information Technology”
than Industrialized Regions
• Functional HRIS Outcomes (Efficiency, Cost/Headcount-Reduction,
Employee Satisfaction, Speed) Are More Extensive … But Not Often
Related to HR’s Strategic Role and Organization Performance
• Strategic HRIS Outcomes (Improving Decisions, Creating
Social/Knowledge Networks, Strategic Information, Measure HR Impact)
Are Less Extensive … But Often Related to HR’s Strategic Role and
Organization Performance
© 2012 University of Southern California JB_W (15)

16. Three Anchors in Decision Analysis
Anchor
Points
Impact
Effectiveness
Efficiency
© 2012 University of Southern California

17. • Most Commonly Efficiency, Rather Than Effectiveness or Impact
• Slow Increases in Effectiveness and Impact But Still Relatively Rare
• Particularly Rare on Tracking Leader Decision Quality and Pivotal Role
Differences
• Measuring Efficiency and Effectiveness Relate to HR’s Strategic Role,
• But Only Measuring Effectiveness and Impact Relates to Organization
Performance
• Measuring the HR Function, HR Operations and Strategy Contributions
All Relate to HR’s Strategic Role
• But Only Measuring HR Strategy Contributions Relates to Organization
Performance
© 2012 University of Southern California JB_W (17)

18. Why are you searching under the streetlight?
Because that’s where the light is.
Beyond Data: The “LAMP” of evidence-based change
What’s in the evidence?
(Information, Design, Statistics)
“The Right Analytics”
What is the Talent-
Strategy Connection? HR Metrics and What are the Numbers?
(Competitive Advantage, (Timely, Reliable,
Analytics That Motivate
Pivot Points) Available)
Strategic Change
“The Right Logic” “The Right Measures”
What’s the Persuasive Story?
(Values, Culture, Influence)
“The Right Process”
© 2011 John W. Boudreau. All rights reserved

19. • All LAMP Elements Rated Less Than “Somewhat Effective”
• Yet All Relate to Both HR’s Strategic Role and Organizational
Performance
© 2011 John W. Boudreau. All rights reserved (19)

20. Extending the Paradigm
Decisions
Improve organizational
decisions
Services
Provide effective
services
Control Talentship
Maintain compliance
and control Human
Resources
Personnel
© 2011 John W. Boudreau. All rights reserved.