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Excerpt--Investing in What Matters

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Investing in What Matters: Linking Employees to Business Outcomes

By Scott P. Mondore and Shane S. Douthitt
2009, 160 pages, Paperback
ISBN: 978-1-586-44137-1
SHRMStore Item #61.16513

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From Chapter 1

The State of Organizations Today

While organizations have evolved substantially in how they view Human Resources and how they acknowledge a workforce’s inherent value to the organization, some significant gaps still remain. Measurement in the HR department has improved, but the inability to quantify the people-drivers of business outcomes continues to plague many organizations. This chapter acknowledges this issue and identifies existing shortcomings. Most importantly, this chapter points organizations towards the next phase of this evolution, using the framework and process described in these pages. Organizations consist of different stakeholder groups with different perspectives and needs. When we talk about taking a systemic view, we are describing an overall organizational perspective typically seen through the eyes of senior executives. This perspective is essential because it sees the organization holistically, without a bias from a single perspective. Thus, when decisions are made regarding the organization, they are in the best interest of the entire organization. Further, applying and aligning people-related initiatives at the systemic level creates a culture working in unison on broad organizational issues.

The approach described in this book provides a powerful diagnostic tool for organizations — a way to find systemic solutions for systemic issues and become true business partners. Specifically, HR practitioners will be able to use our process to (1) gain senior leadership buy-in, (2) pull together the key employee and business outcome data from across numerous functions, (3) analyze the data to discover exactly what aspects of the work environment drive business results, (4) create and execute systemic, data-driven initiatives, (5) properly calculate the expected ROI, and (6) re-measure to refine future initiatives.

Putting the Business Partner RoadMapTM to Work: A Case Study

The Business Partner RoadMap™ is outlined step-by-step in an organization focusing on a key business outcome that is costing them millions of dollars in losses. We get into the details of gaining buy-in and putting the data together to show impact. Initiatives and programs that are put into place because of what the analyses reveal are discussed to give you an opportunity to see how analysis is turned into action.

Increasing Sales Revenue

This chapter reviews how HR has traditionally partnered with the sales organizations to support their efforts. We also introduce an initiative for involving employees in the lead generation process to grow sales revenue. Finally, we briefly bring in academic research that has shown the impact of employees working beyond their job descriptions to help their organization.

Increasing Sales Revenue: A Case Study

An application of our process is to use employee attitudes to understand the key drivers of sales in a Fortune 500 organization. This chapter explores the causal relationship between aspects of the work environment and sales (in order to increase revenues through employees). The organization we examine in the case study discovers some invisible levers to pull that increase revenue by expanding their scope to incorporate investments in specific employee attitudes identified as critical to increasing sales.

Driving the Balanced Scorecard/Productivity

The link between employee attitudes and productivity is the most popular and commonly assumed linkage. But, as we will explain, simply knowing that there is a connection between attitudes and productivity is useless from the systemic perspective, as well as from the front-line manager’s perspective.

Powering Productivity: A Case Study

Uncovering the specific invisible levers that cause employees to work harder and be more customer-focused is explored with another large company. Again, in order to take our methods from concept to practical application to quantifiable results, a real-life example is investigated. We discover the causal drivers of productivity, implement initiatives to drive actions and demonstrate the ROI of the organization’s investments.

Decreasing Turnover

A third application that we explore is the cause-effect relationship between employee data and turnover/ retention. Organizations commonly assume that satisfied employees won’t leave. This assumption always leads to bewildered managers, who cannot believe that their best performers just gave their two-weeks notice. We review typical approaches to discovering the reasons for turnover, from exit interviews and employee surveys, and why they don’t work. Also, we briefly summarize academic literature that has created frameworks for understanding turnover.

Finding Root Causes and Solving Turnover: A Case Study

We apply the Business Partner RoadMap™ process in an organization struggling with employee turnover due to the lack of understanding of the critical drivers that compel people to stay with the organization. As usual, organizations that fail to understand the causal drivers of turnover make the wrong investments in people — and the cost of losing quality employees gets higher every day. We will show you how we applied our process to drive significant reductions in employee turnover in another Fortune 500 company.

Driving Results: A Case Study for Small-to-Medium-Sized Organizations

The Business Partner RoadMap™ can also easily be applied in small organizations. The approach to using and analyzing data is slightly different, but the overall process and, more importantly, the impact, is just as profound as when applied to larger organizations. This case study takes you through an organization with less than 1,000 employees and is focused on service outcomes that were previously believed to be impossible to quantify.

Breaking Down Data Silos to Drive Results

We have mentioned that the data used with our process already exists in most organizations. Organizations don’t make these types of linkages between the sets of data to which we have referred because of the inherent data silos that exist, creating barriers of application. Almost every consumer-oriented business measures customer satisfaction in some form or another. We know that most organizations measure employee satisfaction as well. If that is the case, why don’t organizations know exactly how (and what specific) employee attitudes drive customer satisfaction? The simple answer (and complicated problem) is because these data are collected, monitored, and analyzed for differing functions of the organization. We will describe how to systematically break down these data silos to uncover the critical linkages in your organization, which have been lying dormant for years. This book is not designed to contain all of the answers. Instead, it is designed to provide you with a process to find the answers in your organization. The business case we make for following our approach is only relevant if we can provide a step-by-step process for your organization to follow. This chapter will break down our approach into simple, easily executed steps to get you quickly on the road to finding the specific causal drivers of your business outcomes.

Bringing Data Together to Find Solutions

In this chapter, we describe how to use the analytics models from all of the cited case studies to prioritize interventions and investments. The fact is that organizations are complicated and typically don’t just have one desired outcome. They usually have numerous key outcomes that they focus on at any given time, plus all of the balanced scorecard metrics on which front-line managers are held accountable. The case studies demonstrate this notion, as one can easily assume these organizations were concurrently focused on increasing sales, reducing loss, and increasing productivity, while decreasing turnover. This chapter will describe how to interpret the information from four distinct outcomes in a simple, pragmatic fashion. Ultimately, the organizations can prioritize initiatives in a way that all four outcomes will be achieved without overwhelming the organization with numerous interventions.

Creating Metrics That Drive Results

The key to following through on your discovery of causal drivers of business outcomes is to create accountability for their execution throughout the organization. This chapter takes you through creating metrics to measure and hold leaders accountable for proper execution of the initiatives that you will build around the key causal drivers.

The Front-Line Manager’s View

The perspective of the front-line manager provides another critical stakeholder view. We will spend a substantial amount of time exploring this perspective as it relates to the application of employee data. The limited time that front-line managers have to focus on corporate initiatives makes it critical for HR leaders to use their data to demonstrate the impact that their initiatives have on business outcomes that truly matter to front-line management. While the application of our process focuses on systemic diagnosis and intervention, nothing in organizations happens without the input, acceptance, and adoption of front-line managers. This chapter will show you how to use our process to communicate your initiatives to front-line managers in a way that focuses on what is important to them — driving business outcomes.

Invisible Levers™ for External Business Challenges

Three key external business challenges are discussed: (1) Managing a global workforce; (2) the multi-generational and aging workforce; and (3) the increasing part-time workforce. All three challenges are put into context, and leaders are shown how the process of discovering and implementing invisible levers can help them deal with these challenges and turn them into potential competitive advantages.

Setting HR Strategy

This chapter discusses the transition that will be made in the HR strategy and planning process, when analytics drive HR decisions and planning is aligned with the direction of the overall business. A transition will also take place in which Human Resources will focus more on investments that need to be made to drive the business, rather than focusing solely on how to cut costs out of its functional budget.

HR’s Seat at the Table

HR executives are often thought of differently than the COO or line-of-business leaders. In part, this distinction is made because of the HR department’s inability to link their initiatives to the bottom line. We have created a roadmap for overcoming this shortfall. Being able to show the financial impact of key investments brings with it not only an increased level of importance, but also a large increase in accountability for those results. HR executives should be warned that a true seat at the senior-executive table will bring with it a level of accountability that they may have never experienced in the past.

Trusted Advisor Status

Profiles of HR practitioners that we have encountered are discussed with a focus on the positives and the negatives that they bring to the table. All profiles have important core skills that, if properly harnessed, can help us all reach the coveted “trusted advisor” status. The most important part is that all of these key competencies are needed, but their value must be connected to business outcomes — or else all of that work and talent will not be given the status it deserves within the organization.

Concluding Remarks

Our concluding chapter re-caps what our process can help organizations accomplish and highlights the possible limitations to our approach, if not applied properly. We thought it was important to be our own critics so that our readers would be encouraged to set realistic expectations and apply our process while understanding potential barriers and obstacles.

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