The IPA hosted its Talent Adaptathon at Altitude in London on 7th October 2014 in association with Daniel Marks London. Dr Max Blumberg (CEO Blumberg Partnership, Goldsmiths Research Fellow & CIPD Consultant) talked about harnessing the power of human capital for the digital age. Get involved by visiting the ADAPT Hub www.ipa.co.uk/adapt/talent and on Twitter #ipadapt.

1. Mastering Complexity
Max Blumberg, PhD
All content remains the property of Blumberg Partnership Ltd
and may only be used with prior written consent
www.maxb.com
maxblumberg@blumbergpartnership.com
M - +44 (0) 7768 455345
T - +44 (0) 1252 628552

2. Personal Introduction
2
 Musician
 Computer scientist
 Accenture consultant
 Technology start-up
 PhD & Research Fellow at Goldsmiths
 Consult globally: HR Analytics, Organizational & Sales force performance, CIPD people
strategy

3. The changing value of organizations
3
95%
5%
1978
Book value
Other value
28%
72%
2002
Book value
Other value

4. The enterprise capital framework
4

5. Asset/capital value
5
Resource Competitive differentiator?
Tangible assets e.g. technology; relatively easy to replicate
Financial capital Available to most organisations with a good plan
Intellectual capital
Customer capital Not really: most organisations have access to the same markets
Structural capital Yes but replicable in medium term
Human capital Yes: very difficult to imitate

6. Driving value creation and shareholder return
6
Total Return to
shareholders
(TRS)
Spread
Return on
Invested Capital
(ROIC)
Minus
Weighted
Average Cost of
Capital (WACC)
Growth
Organic Growth
Growth through
M&A
Operating
Margin
Capital
Efficiency
Components of Value Creation and
competitive advantage:
Spread: Competitive advantage derived
from operational and capital efficiency
and pricing strategy
Growth: Value from new
products/services through innovation,
M&A, market share, etc.
Ratio between them is a matter of
competitive strategy
Quality
Innovation
Productivity
Customers
Human
Capital

7. How much do we invest in people?
7
TMT 37%
Heavy
manufacturing
25%
Light
manufacturing
32%
Pharmaceuticals
/Prof services
45%
Financial
services
43%
CFO Research Services

8. Should we invest in people?
8

9. Generational conflict: The generations
9
Born Age
Silent generation <1945 70+
Baby boomers 1946 - 1960 54 – 68
Gen X 1961 - 1977 37 – 53
Gen Y 1978 - 1995 19 - 36

10. How do we invest in human capital (versus HR)?
10
£X programme
Competencies
(Knowledge)
Employee
performance
(Behaviour)
Contribution to
organisational
objectives
Programme?
Recruitment
Development
Retention/engagement
Diversity
Compensation
Etc.

11. Valuing your Talent
Valuing your Talent
Objectives 1. Develop a broad framework of HR Metrics for measuring
human capital.
2. Showcase current practice.
3. Develop a tool / methodology.
Members of
the steering
group:
Findings 1. People and investment in them should be at the heart of
the business model.
2. A new language for business is needed.
3. HR should lead greater data integration across the
business.
4. Value = People
cipd.co.uk/valuingyourtalent

12. Valuing your Talent - VyT
12

13. Human capital 2014
13
 From capital to people (judging by company valuations)
 Generational conflict because attitudes to work are changing faster
than the organisational structures and processes used to manage
them
 Skills shortage which means employer branding is crucial
 Transparency (data, technology) complicates everything
 Recognising difference – career paths for e.g. “techies” and
“leaders”

14. Intergenerational conflict: The generations
Generation Born Age Values at work
Silent/traditional <1945 70+ Delayed gratification, loyalty, discipline,
14
authority & hierarchy
Baby boomers 1946 - 1960 54 – 68 Teamwork, live to work, hierarchies,
annual feedback
Gen X (latch-key
kids)
1961 - 1977 37 – 53 Grew-up alone, esteem issues,
independence (hate reviews), dislike
hierarchy, value personal lives,
pioneered flexibility
Gen Y 1978 - 1995 19 - 36 Highly nurtured, high self-esteem
(believe they’re important), used to
frequent recognition regardless of
performance, always on peer-communication

15. Intergenerational conflict
 Baby boomers are not retiring Retirement age is rising (Gallup
= rising to 62 years old)
15
 Baby boomers and Gen X must manage Gen Y with very
different values
 Gen Y wants to be where the action is rather than loyalty
= Leaders must plan to manage 3 or 4 generations, each with
their own values (but difference can be an advantage)

16. 16
Oldie’s jokes about Gen Y...

17. 17

18. Intergenerational conflict: Actions
18
 Culture: Promote flexible work/life balance, challenging work,
openness, informal, entrepreneurial
 Younger generations need the “why” before the “what”
 Younger generations, frequent feedback – peer-based
 Post recognition instantly & widely – use social media if
possible

19. Employer brand: The Picture
19
Glass door:
“The advances made seem a bit superficial. They offered flex
time, but it was always subject to approval. They assured
reviews and raises, but they were tepid at best.”

20. Employer brand and transparency: The issues
20
Social media has made your brand transparent

Engagement is the new employer brand
 Gallup (2014): 13% of employees are engaged
 Glassdoor:
– 51% of employees experience buyer’s remorse
– 54% of employees would recommend their employer
– 83% leave their employer in the first year

21. Employer brand: Actions
21

22. Developing skills and career paths
22
 Technical skills are not enough
 New organisational structures make it attractive to go solo
 Career paths for everyone