How to Solve for Human Capital ROI
Guest post by Jim Villwock, Founder & CEO, Human Investment Advisory℠
A CEO’s number one challenge, according to The Conference Board, is human capital. Creating a culture that fosters inclusiveness, engagement, and talent development is done through identifying skill gaps and tackling them through investment and training – simple, right?
You’re not alone if this is something your organization is still struggling with. Though the concept may be simple, implementing the right programs to create a strong organizational culture that’s committed to executing your business plans is difficult. Where do you start? How do you approach the issue? And especially relevant today – how do you make sure emerging millennial leaders have the essential traits to take organizations into the future?
One problem I’ve identified is there are too many engagement models. How can you decipher which one will work best for your organization, and guarantee that the strategic plan you worked so hard on gets executed?
In my experience with clients, companies are still struggling to find the right model to follow – which is why I propose a new model. This Human Capital ROI employee engagement model is disruptive. However, it ensures greater buy-in and increased plan execution by driving employee alignment, engagement, agility, and innovation. My clients who have engaged in this model have experienced higher revenue and profit, and are able to operate with lower risk while helping further the careers of those who support the model.
Watch the webinar I did with AchieveIt on-demand to hear the deep dive into the ins and outs of how this revamped employee engagement model works. But, in case you don’t have 60 minutes to watch it all, here’s some background information about the state of organizations today and the end game of adapting our HR workflows to a new process that actually gets your plans executed.
Why is a New Model Needed?
70% of employees are still not engaged in their daily work. They don’t feel tied to overarching initiatives and are likely executing their directives at a passable level only.
Because of the acceptance of this preposterously high percentage of disengaged employees, the amount of dollars spent on training, programs, and consultants to bridge the gaps in the apathetic, or even disgruntled, workforce has gradually risen over time. Today, the statistic that sits at over one trillion dollars per year is wasted on these patch programs instead of working to solve the root problem – getting your people involved in your planning process from the beginning.
This trend cannot be addressed through “business as usual” or HR systems alone. This idea that fixing symptoms is acceptable through a variety of expensive means (usually belonging to the HR department) has to be destroyed and we, as a business community, need to be reoriented around the fact that strategy doesn’t get executed without a grassroots campaign to ensure employees at every level are aligned and committed to a culture of execution.
The caveat? HR actually holds the key to making this monumental shift.
How HR Makes the Shift
It’s easy, and common, for CEOs and other business leaders to lose interest and faith in employee engagement. Oftentimes, they have stared at the engagement needle for too long, expecting it to jolt to the positive side unprovoked. Leaders get frustrated at the time and money they’ve signed off on to funnel into fruitless efforts to create human capital ROI – and this is what you’re walking into to make your sell for the need for a new way to engage employees.
Your secret weapon is that you know this model works. Here’s how you prove it:
Today’s issue: Roadmaps for business transformation are not actually strategic plans (they’re usually operational plans in disguise) and/or these plans are too tactical to provide a clear bigger picture. In the past, Band-Aid fixes have been applied to situational issues with the plan, but without leadership buy-in, these plans stray farther from the people who are actually executing them – further estranging your employees and their desire to optimize business results.
The way to solve it: Plans should be created with employees of all levels in the room. Once a plan has been created with the right tools and framework, cross-functional teams can implement the plan company-wide. Project plans can then be prioritized using the new roadmap, and by balancing quick wins and major impacts.
Today’s issue: The one person that drives the culture in an organization is the CEO. If that person is not propagating a culture of execution in your company, you have to look at the root cause. A lot of times, the reason for this pessimistic approach to getting the workforce involved is because the executive lacks true visibility into what initiatives are and aren’t being completed and the general progress of projects. I track this back to reporting. If your reporting isn’t automated, doesn’t include live data (or close to it), and doesn’t provide a big enough picture, the communication of results doesn’t reach all senior levels on a regular basis. This is huge! How can we expect our CEO to be bought in and support our efforts when we can’t provide the information to let them know what’s going on?
The way to solve it: The most effective way to get ongoing executive support is by providing regular progress reporting that garners ongoing visibility and support. If you’re still using email, Excel, and PowerPoint to do this, consider using specialized software for tracking and reporting on your plans – otherwise, you could also be suffering from uncalculated dangers.
Commitment to Execution
Today’s issue: The gap between plan creation and successful execution is created when companies implement solutions that don’t tie the company strategy to more granular initiatives and tasks. Top-down initiatives are important drivers to set the culture, structure, and reporting for company-wide focus on opportunities, costs, and risks. Yet the power and motivation for change still have to come from employees. This requires a bottom-up employee success roadmap. Employees can then be trained, coached, and shown how their personal career success can tie into how the company defines success. All parties win.
The way to solve it: Once a strategic roadmap is defined and supported by the entire CEO team, HR can fully participate in adjusting processes to support the roadmap that best fits the business. This tweaking of the plan for a best-fit model engages almost every HR process and helps transform HR into a new model that shows ROI and value for the organization and for every employee.
Strategy Execution Suffers Without Employee Engagement
Human capital may be your greatest challenge, but it’s also your number one opportunity for success that others aren’t harnessing yet. Even if you’re not the CEO of your organization, employees at all levels can benefit from this human capital ROI model – especially individuals looking to set themselves up for greater career success.
Many of these concepts may be new. Many are old, but you’re drowning under the weight of approvals, buy-in, and paperwork, so you’ve chosen to stick with the mediocrity of the status quo. But in our rapidly changing world, is there really another competitive option?
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