Retooling HR: John Boudreau

“Retooling HR”
_________

Presentation Slides

Vlerick 8th HR Day
Vlerick Leuven Gent Management School
8 June, 2011
Professor John Boudreau
Marshall School of Business and
Center for Effective Organizations (CEO)
University of Southern California
John.boudreau@usc.edu
213-740-9814
<john.boudreau@usc.edu>

Note: The materials contained here are original copyrighted works of John Boudreau. This
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contains trade secret and other proprietary information of John W. Boudreau. This copy has
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Version GENT060811• 8 June 2011
Copyright © 2011 John W. Boudreau
All Rights Reserved.

Retooling HR
Vlerick HR Day John Boudreau

If People Were Valued Assets …
Retooling HR

Vlerick 8th HR Day
Vlerick Leuven Gent Management School
8 June, 2011

Professor John W. Boudreau, Ph.D.
Center for Effective Organizations
Marshall School of Business
University of Southern California
john.boudreau@usc.edu

© 2011 John Boudreau 1

Managing the Right Asset?

• Manufacturing or technology company
• High‐growth potential in the long term
– Strong market demand
• Constrained resource:
– Project engineers to customize the products to
the needs of the clients


8 June, 2011 pg. 1
Copyright © 2011John Boudreau. All rights reserved. john.boudreau@usc.edu

Retooling HR
Typical Budgeting Objectives

Goals:
• Complete certain projects
• Add six new project engineers

Actual:
Completed projects
Only added three new engineers

Typical Performance Evaluation

• Completed all objectives
•EExpenses under budget
d b d t
Most systems would reward budget goal

But, the expenses saved are minimal
B t th d i i l
They are in a weaker position –
compared with if they had staffed as planned


8 June, 2011 pg. 2

Retooling HR
People = Precious Resource?

In a mining company, would you rather be a mine
truck or a mine engineer?
In a petrochemical company, would you rather be a
drilling rig or a petroleum engineer?
In the U.S. Navy, is the supply chain for talent or
for rivets more sophisticated?
At a “brand” company, would you rather be a
consumer segment or an employee segment?


ReTooling HR

• Applying Proven Business Tools to Talent
• Using Logical Frameworks that Stakeholders
Already Trust and Understand
• Knowing The Business MODELS, Not Just
Knowing the Business
• Stakeholders Must Ask the Tough Questions
g
• Making Stakeholders As Accountable and
Adept at Talent as Other Resources


8 June, 2011 pg. 3

Retooling HR
“R * I * S * K”
A 4-Letter Word In Talent Management?

• What Level of Work Performance Will We See?
• Will Talent Capacity Fit Future Conditions?
• How Variable is the Quantity and Quality of Talent in
Our Pipeline?


The Logic of “Critical” Talent
• What do HR stakeholders define as “critical” talent?
• If you asked 15 stakeholders “where would improving
gg
talent 10% make the biggest difference to our
strategy” What would they say?

• What do stakeholders define as “critical” supply‐chain
or manufacturing processes?
• If you asked 15 stakeholders “where would improving
If you asked 15 stakeholders where would improving
process capacity make the biggest difference to
process outcomes?” What would they say?


8 June, 2011 pg. 4

Retooling HR
“Kano” Analysis

Delights

Wants

Needs


“Return on Improved Performance”

Best Mickey Mouse
tegic Value

Worst
Mickey Mouse Best
Sweeper

There is more value in
There is more value in
Strat

improving Sweepers than
Worst Mickey Mouse.
Sweeper

Performance

8 June, 2011 pg. 5

Retooling HR
“Pivotal” Innovation: Park Ride Engineers

Disney Engineers Cedar Point Engineers
• Imagineering • G-Forces
• Himalayas • Shuttle
• Songs • Blogs

Physiology
Ph i l Story
St


“Selective” Risk in Airline Talent


8 June, 2011 pg. 6

Retooling HR
“ROIP and Airline Service”

Flight Attendant
tegic Value

Pilot
Strat

Legally Required Airline Minimum Discretionary Employee
to Operate Expectation Behaviors/Effort
Performance

Portfolio Risk and Leadership Planning
• How do your strategy scenarios connect to your
strategic workforce planning?
p p , y
• Faced with multiple possible futures, how do you
prepare your talent portfolio?

• How do strategy scenarios connect to planning for
manufacturing facilities, R&D, product development,
etc.?
• Faced with multiple possible futures, how do you
prepare your financial portfolio?


8 June, 2011 pg. 7

Retooling HR
Should You “Hedge” Leadership Risk?

Ontario Power Generation's blue-chip directors could have
been voted "least likely to screw up" .... And yet, they did.

The original 1999 cost estimate of $1.1-billion <to refurbish the
Pickering A Nuclear Plant> is now $3-billion to $4-billion. From
1999, the board approved 11 cost overruns and 13 delays,

Most of the utility’s recent directors were recruited
in the 1990s to help p
p privatize OPG, with
solid financing experience for the IPO, which never occurred.
None had nuclear expertise.

Janet McFarland, “OPG Directors Had Talent, Sadly the Wrong Kind,” December 17,
2003. Globe and Mail. Toronto, ON, Canada.


Talent Sourcing and “Supply Chain”
• What do HR stakeholders consider the “right” amount
of time to fill open requisitions for talent?
g p y p
• What is the “right” level of employee surpluses?
• What is the “right” level of employee shortages?
What do HR stakeholders consider the “right” amount of
time to fill open orders for products or materials?
What is the “right” level of raw materials or unfinished
goods or work‐in‐process surpluses?
What is the “right” level of raw materials or unfinished
goods or work-in-process shortages?


8 June, 2011 pg. 8

Retooling HR
Applying the Supply-Chain Concept
• IBM’s Global Workforce Initiative
– Demand signals must be clear through the chain
– Get the language of the work down to 100 roles. HR “owns”
the work dictionary
– Make the project demand signals transparent to managers,
employees, contractors, recruiters and vendors
• Valero Oil
– Measure all talent sources on cost, quantity and quality
– Embed supply‐chain logic in the measurement system
– Automate decisions by routing requisitions to the sources
that have been the best performers
– Combine multiple quality measures to find inflection points


Inventory Logic Retools Talent Management
Inventory Optimization Question Talent Management Question
How many orders should we place in a How many times should we initiate a
time period? talent‐building cycle (hire, train,
develop)?
What is the optimal shortage to allow, if What is the optimal employee vacancy
we can back‐order replacements? level to allow if we can hire after the
vacancy appears?
What is the optimal order quantity and What is the optimal talent‐building
cycle considering lead‐time? quantity and cycle (hire, train, develop)
considering how long it takes from start to
finish?
If our ordering costs were lower, how
If our ordering costs were lower how If the costs of building or acquiring talent
If the costs of building or acquiring talent
much more frequently should we place were lower, how much more frequently
orders, and what is the new optimal would we initiate a cycle? How much
inventory level? more surplus or shortage would we
tolerate?


8 June, 2011 pg. 9

Retooling HR
Retooling HR … Getting Started
Expect HR to learn the business logic
Manage people using your logic frameworks
Seek out the risks and inconsistencies
S k t th i k di it i
Focus on the pivot‐points and inflections
Logic first, numbers after
Rapid‐prototype


Further Information

http://www.marshall.usc.edu/CEO
p // /

How to contact John Boudreau at CEO:
Office: 213‐740‐9814
john.boudreau@usc.edu

Retooling HR. Harvard Business Publishing, 2010


8 June, 2011 pg. 10

Retooling HR: John Boudreau

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