This keynote presentation is from my keynote at the 2015 Bersin by Deloitte IMPACT conference. It describes the imperatives for HR leaders and professionals for the years ahead, and explains how innovation and creativity is needed to build business value in HR.
Thank you Andrew.
Hello everyone and welcome to IMPACT 2015, our 8th annual research conference. This year, as you know, the theme of our conference is Bold HR ā and I think for the first time in my 15 years as an analyst, the HR function we know and love is at a crossroads.
The economy has been improving, unemployment is low, and the U.S. stock market is at record highs. Yet companies tell us their talent challenges are tougher than ever. What seems to have happened is that the world of work has shifted from under our feet, and the discipline of HR is struggling to catch up.
Several months ago Ram Charan, one of the most respected business leaders in the world, wrote a controversial article in Harvard Business Review that recommended breaking up HR and giving half of the function to the CFO. While I disagreed with his premise at the time, now it really makes me think.
Why are business leaders frustrated with HRās progress? Why are one-third of all new CHROs coming from business positions ? Why does HR rate itself a C- in business alignment and ability to understand and manage the workforce? And why do business leaders give us a D?
The problem is not that we aren't smart enough. Itās not that we donāt work hard enough. And itās not that we arenāt committed to our jobs.
The problem is that we are not being bold -- and that is the focus of my talk.
If we want to succeed in todaysā environment we have to be more creative, innovative, and assertive with our solutions.
Now is the time for āBold HR.ā
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Mark Bertolini, the CEO of Aetna, was just quoted in the New York Times talking about why he decided to raise the minimum wage of all the companyās call center workers, improve benefits, and add yoga and mindfulness training for every employee.
His motivator was originally the inequality in his own organization. What he found is that retention skyrocketed, employee engagement more than doubled, and company profitability has gone up by almost 4 percent.
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First, theyāre willing to jump around. More than 2/3 of them want to work for themselves and they are used to finding new jobs on the internet and moving around in the early stages of their career. So if you want to keep them you have to give them a highly dynamic career environment. One company told me they are considering making āhalf levelsā in their job model so young people could get promoted more quickly.
Second, they thrive on feedback. They want to receive it and they want to give it. Witness the huge explosion of real-time engagement and feedback tools (many of the most exciting companies in HR are with us today.) Young people expect to have a āGlassdoor-likeā ability to tell you everything they want you to hear, and they expect managers to give them the same kind of āevery day feedbackā about how theyāre doing. This of course has stressed our performance management and leadership strategies in many ways.
Third, they want to be creative and relate highly to their team. Sure they want to work for a company with a great brand, but they really want a team they can feel a part of ā and one which lets them build something early in their career. This all probably came from the ātribalā mentality young people developed on the internet and their incredible facility with technology ā but believe me if you cant give high powered young people creativew ork, theyāll find it elsewhere.
And fourth, Millennials believe in purpose. 73% believe business should have a positive impact on society, and more than 60% select an employer based on that companyās āsense of purpose.ā So as I discussed last year, if your company is not a āfirm of endearmentā youāll feel the pinch when young people apply for work
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Which brings me to the theme of our conference: Bold HR.
We have to make a change. It is time for each and every one of us to think outside the box, reinvent what we do, and show bold leadership in the world of talent.
Last month I met with Jack Zenger and Joe Folkman, two pioneers in the study of leadership. They shared some amazing research with me. After assessing more than 200,000 leaders around the world, they compared the competencies of āgood judgmentā vs. āboldnessā in their 18 level model for extraordinary leaders.
What they found is that individuals who are āboldā are 11 TIMES MORE LIKELY to be extraordinary leaders than those who practice āgood judgment.ā
So there you have it. If we arenāt pushing the envelope, weāre not leading ā and that means our business counterparts are probably not happy.
Over the last six months Iāve discovered many bold HR leaders, and many of them are with us today.
Ben Bratt runs talent for T-Mobile, in one of the most competitive industries I can think of. Ben told me that when their deal with AT&T fell through and employees were disenchanted they had an offsite and simply said āletās start overā ā what would we do if we rebuilt HR from scratch.They radically simplified everything: the way they recruit, the way they manage performance, and the way they assess and develop leaders. Today, T-Mobile is the employer of choice in telecommunications; their Glassdoor ratings are almost 20% higher than their main competitor.
SAP, a 43-year-old company known for developing highly complex software, is now practicing Bold HR. This week we have Jenny Dearborn, the CLO of SAP, with us and she is going to tell us how they have boldly re-invented learning and leadership at SAP, consolidating 62 learning organizations. . Today engagement at SAP is on a major upswing and so is their business.
These companies are not making āiterative improvements.ā They are throwing away what doesnāt work and starting over.
This is what Ram Charan was talking about in that Harvard article ā we have to step up, take the lead, and reinvent HR in this new world of work.
Now let me share the four major principles of bold HR.
The first is Build an irresistible organization.
Everything we do in HR has an impact on employee engagement. New research by Quantum Workplace shows that engagement is lower now than in the last 8 years. If our performance management process is poor, onboarding is weak, or we arenāt recruiting people with the right fit ā we are part of the problem.
The second is Own the leadership agenda.
For years our research shows that the most important way HR can impact business results is through our ability to coach, develop, and support our leaders. We have to boldly re-invigorate our focus on leadership and reinvent the way we develop leaders.
The third element is Leverage learning everywhere.
I shared the data. Learning and development is one of the most important drivers of employee engagement and productivity.
And the fourth is Demand data.
We are the stewards of perhaps the largest untapped source of data in business: information about our people. We are now under the gun to build analytics capabilities, develop competency with data, and bring people data to the table to help make business decisions..
First letās talk about engagement: how do you build the irresistible organization?
First, let me make this clear: Engagement should be the goal of every HR program you build.
And engagement is not an HR program, itās a business strategy.
Let me share some data.
Fortuneās 100 Best Companies to Work For have outperformed the S&P 500 in 8 of the last 10 years and generated three times the stock market return of the Russell 3000 over the last 30 years.
Is it easy to become Irresistible? The answer is no. Itās hard and it takes time, effort, and an integrated approach.
The simply irresistible model describes five critical elements: meaningful work and job fit; strong coaching-based management; a flexible and humane work environment; ample opportunities for growth, and transparent and inspirational leadership.
And by the way, thereās no āone size fits all.ā You have to be creative.
Salesforce lets employees bring their dogs to work; Wegmans pays for high school kids to go to college and come back as managers; Marriott gives tenured employees free hotel rooms for life: and Zappos lets call center workers bid for working times so everyone can work when they want.
Second, we have to measure more: capture feedback in a continuous way.
Letās face it: the annual satisfaction survey is becoming out of date. We need to monitor and measure engagement and feedback in real time, and provide that feedback directly to line managers.
Pulse surveys, real-time engagement tools, and employee sentiment analysis are becoming the āFitbitā of corporations around the world -- and your job as a bold HR leader is to embrace and adopt these new approaches.
If we can measure the sentiment of our customers, we can certainly measure the sentiment of our employees!
HubSpot, one of the fastest growing software companies in Boston, measures the engagement of its 800 employees every week. (So does Adobe.) Their CMO told me itās the most important measure he has. HubSpotās Glassdoor ratings are almost 30% higher than their two biggest competitors.
Brenda Rigney and Mo Jesse from Earlās Foods used a pulse survey tool to discover an amazing finding about what was hurting engagement in their restaurants. Iāll let them share that with you in their session. Even Deloitte is now embracing pulse surveys in our new performance management process.
Which brings me to my third point. We need to assign ācultureā a role within HR.
Culture is the New Black. The word was rated by Merriam Websters as the āword of the yearā for 2014, so if you arenāt starting to document, monitor, and manage your culture youāre falling behind.
Pluralsight, a billion dollar valued ten year old company, has a chief culture officer . Many companies now have this role. Their Glassdoor rating is a 100% complete 5.0, everyone loves the place.
Melissa Davis, the head of workplace design and culture at Quicken Loans (who I am excited to say is with us today), worked with Dan Gilbert the CEO to create the 12th best place to work in the US. Their amazing book of cultural āISMSā is one of the most compelling manifestoā I have ever read.
Fourth, we must boldly hire for fit.
You canāt build an irresistible organization if you donāt hire the right people.
And great recruiting is hard: you have to build a great brand, assess for skills, and hire for fit.
This is an area were being bold REALLY pays off. Our newest talent acquisition research, just launched last week, shows that level 4 recruitment companies have 40% lower first year turnover than average, and they take 20% less time to fill jobs.
How do you do it? Try new ideas.
Dell has radically redesigned its employment brand and built brand ambassadors to find the right people.
Southwest Airlines asks candidates to tell a joke, so they can see if they have a sense of humor.
NBC Universal asks candidates to submit auditions via video, to see their skills in digital media.
T-Mobile assesses fit by identifying how far a candidate lives from the store they apply to work at.
Iām excited that we have some amazing, bold, recruiting leaders here to share their stories.
Jennifer Jones Newbill from Dell, Marty Belle from W.W. Grainger, Stefanie Thornton from Blue Cross Blue Shield of Michigan, and Celia Harper-Guerera from Illumina will each share their stories about how they boldly redesigned recruiting to attract just the right people and make their organizations āsimply irresistible.ā
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The third principle of bold HR is to drive learning everywhere. As I discussed earlier, learning today is not only a way to drive performance, it is one of the most important drivers of employee engagement you have.
But here I believe we are at a crossroads. Only 14% of L&D leaders believe they are viewed as strategic business partners. Whatās going on?
Today the corporate learning industry is experiencing a renaissance as transformative as the introduction of e-learning that began in 2000.
Look at whatās available in the consumer learning market today: MOOCs, video learning content, learning marketplaces, and high-fidelity programs by experts are everywhere. Lynda.com (just acquired by LinkedIn for $1.5 billion, 10X revenues), Khanās academy, and Pluralsight, for example, now have millions of users and their content is rigorous, expert-driven, and produced with studio quality and fidelity. Can we say the same about our own internal programs? Probably not.
Let me challenge you to think about three things as you refocus and reinvigorate your corporate learning strategy.
First, start to consider learning and engagement part of the same continuum.
A great example of this is the work Stephane DeMeris is doing at Decker Shoe Company. Stephanie is responsible for employee learning, employee engagement, employee communication, and culture. Everything she does is designed to engage people- and she believes learning is at the core. They have one of the best employee engagement scores in their industry.
As Yash Mahadik, the CLO of Philips put it to me, we donāt need instructional designers, we need ālearning experience designersā now.
Second, think about your job in learning as āmaking the business better,ā not just āteaching people things.ā
Nick Shackleton, the head of learning innovation at BP, put it well to me the other day. As Nick put it, ālearning is going awayā ā people donāt want to be trained, they want tools and systems that prevent them having to learn. How hard was it to learn to use Uber? How much training do you go through to use Instagram? Nickās job is to embed learning throughout the fabric of BP ā so he has developed mobile apps and embedded systems that coach people in management, leadership, and supervision.
Third, itās time for you to reskill and retool your learning organization.
Dani Johnson and Deanna Cauley from Red Robin are going to share a new capability model for L&D and talk about how we need to boldly change our mindset of learning in the new world of work..
Janice Burns and Charles Silvestro of Mastercard, will how you how they āmeet learners where they areā through a combination of agile development, the use of MOOCs, and rigorous study of their learnerās needs.
And Susie Lee and Daniel Abdo from Bank of America will show you how to apply a āproduct centric approachā to learning and create a highly engaging experience in todayās āoverwhelmingā work environment.
Which brings me to the Fourth part of being Bold: We MUST get good at data.
Listen, we in HR are the last part of business that hasnāt totally gotten our data act together. Nobody would run finance or sales without good data, so now its time to do the same with HR.
This new area of People Analytics is far more serious than the āHR Analyticsā weāve done in the past. As one of our top HR leaders put it, we have to āspend time where the money is being madeā
We are being asked to directly advise on critical business questions:
Why are some sales teams outperforming others?
Why do we lose certain high performers?
Why do some nursing units or service teams deliver better outcomes?
And why do some parts of the organization suffer from higher fraud or errors than others?
The answer to all these questions lies in people analytics, and that is our bold new charter for the coming years.
AOL is using people analytics to recruit technical experts from competitors, using technology that lets them target engineers that are most likely to change companies.
JP Morgan Chase is not using data about their employeesā behavior to who is likely to cheat or commit fraud.
Hitachi measures employee work patterns to help identify the behaviors of the most innovative engineers.
Stories like this are everywhere: todayās people analytics drives business results.
This week we have Karen OāLeonard and Katherine Jones ready to show you some of the new technologies in the platform market, Akil Walton one of our pioneers in this market in the session about during ādata phobes into data philesā and Robert Lanning from Rackspace to tell us about how we can all become āDapifers.ā
People analytics is attracting some of the smartest mathematicians, statisticians, and engineers in business. If we want to be bold, we have to invest in analytics and being the journey toward making HR truly a data driven business function.