Shining the Light on the Real Value of HR via the Human Resources Scorecard November 17, 2010 Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Presentation Objectives ◙ Introduce you to the strategy map - THE alignment tool you must use to link your value-creating HR strategy with business strategy ◙ Review the key steps in building an HR scorecard that is aligned with corporate objectives and metrics ◙ The key attributes of best in class HR balanced scorecard metrics Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The KEYS to demonstrating the value of HR to business success are: ● Showing what HR activities/interventions have the biggest business impact ● Measuring the performance of contributing HR activities and interventions ● Demonstrating their impact and its value ($$/ROI) Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

How can HR do ALL this? By leveraging the Human Resources Scorecard ● Showing what HR activities/interventions have the biggest business impact ● Measuring the performance of contributing HR activities/interventions ● Demonstrating their impact and its value ($$/ROI) By leveraging the Human Resources Scorecard Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

What is the (balanced) scorecard? The Balanced Scorecard is a method and a tool that facilitates the implementation of a strategic management system. It includes: ◙ A strategy map where a focused set of strategic objectives are placed over four perspectives in order to clarify the strategy and the cause and effect relationships that exists among them, ◙ A set of measures/indicators (usually 16 – 36 max) that directly reflect or represent the strategy/strategic objectives. Their prime purpose is to measure that the desired change or development defined by the strategic objectives actually takes place. In short, strategic indicators allow you to measure and manage strategy execution and achievement progress, ◙ The core processes and strategic initiatives that will drive or support the actual change required by the strategic objectives. Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The scorecard is not just a set of indicators … Scorecard Objectives The scorecard is not just a set of indicators … Enable a focus on the “vital few” Achieve alignment and focus on strategy and achievement of our mission Balance short-term, operational decisions with long-term strategic decisions more effectively Unlock organizational capacity by enabling employees to clearly see where their actions fit into the bigger picture An organizational alignment & performance management tool/process A communication tool A tool for ongoing learning and refinement of strategy Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

A true balanced scorecard: ◙ Demonstrates alignment with corporate strategy/objectives (departments & BU’s), ◙ Contains a limited set of strategic objectives and indicators, ◙ Is focused on indicator quality rather than quantity (focused on measuring what matters strategically), Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

A true balanced scorecard: ◙ Is primarily focused on scoring the success of strategy execution (rather than simply monitoring metrics or key performance indicators), ◙ Helps people learn – about how the parts of your business interact to produce results, about the progress of your strategy and your challenges, the validity of your strategy, and the value it produces in the organization, and ◙ Creates a strategy-focused organization rather than a metrics-focused organization. Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The HR Scorecard Development Process Project Planning/ Launch 1. Cascade Corporate Strategy 2. Create HR Strategy Map 3. Create Existing Indicator List 4. Define HR BSC Philosophy 5. HR BSC Development Workshop 6. Detail HR BSC Indicators 7. Document HR BSC Hierarchy 9. HR BSC Indicator Review Workshop 10. HR BSC Indicators FINALIZED 11. Define HR BSC Implementation Plan 8. Define HR BSC Governance Model Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

You CANNOT have an HR BSC indicator set without an HR Strategy Map! Strategy Map Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

What is a Strategy Map? It uses the same framework as the balanced scorecard It’s a one page document that describes how your organization “creates value” and contributes at an actionable/operational level to the achievement of the overall strategy It provides a “picture” of your strategy It provides a uniform & consistent way of describing your strategy A visual representation of the cause & effect relationships between the components of your strategy (your “theory” of how everything/everyone works together to achieve results – the story of your strategy) Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The Strategy Map – Key Elements Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Filling the Strategy Map with Value-Creating Strategic Objectives To deliver the results our shareholders demand and achieve our mission and vision, how must we perform financially? To achieve the financial returns we desire, what must we deliver to our customers so they will reward us with their business & loyalty? To give our customers what they expect, what business processes must we focus on and excel at? To execute our businesses processes at the required level, what skills and capabilities, culture, and tools and technologies must we have in place? Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Mission: Bringing Protection to Life. Vision 2015: Group Life & Health Insurer Vision 2015: Be a world class financial services provider, delivering exceptional customer value through the excellence and integrity of our people. Achieve Sustained Profitable Growth Financial Acquire New Profitable Group Insurance Business Improve Cost Structures Maintain Existing Profitable Group Insurance Business Develop Non-Advisor Distribution Channels Optimize Advisor Distribution Channels Customer Focus on Drivers of Customer Satisfaction Be Easy to Do Business With Become a Long-Term Disability Industry Leader Internal Process Focus on Process Improvement Organizational Capabilities Develop Competencies in Key Strategic Roles Foster a Constructive Culture Implement One System, One Overall Process Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367 CORE VALUES Partnership Entrepreneurship Continuous Learning Community Citizenship A Factual Approach to Decision Making

The HR Scorecard Development Process Project Planning/ Launch 1. Cascade Corporate Strategy 2. Create HR Strategy Map 3. Create Existing Indicator List 4. Define HR BSC Philosophy 5. HR BSC Development Workshop 6. Detail HR BSC Indicators 7. Document HR BSC Hierarchy 9. HR BSC Indicator Review Workshop 10. HR BSC Indicators FINALIZED 11. Define HR BSC Implementation Plan 8. Define HR BSC Governance Model Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Strategy Cascading The key to building an HR balanced scorecard that is aligned with corporate strategy Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Cascading Corporate Strategy The Objective: To build an aligned HR strategic plan and strategy map using the same framework as the corporate strategy Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Cascading Corporate Strategy Remember: ◙ Not every strategic objective from the level above you will cascade into your strategy – it depends on what applies to your team/your contribution to the achievement of organizational strategy ◙ You might have new/unique strategic objectives to add to your strategy based on the unique needs of your business - the needs/expectations of your stakeholders, your operating environment, etc. Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Strategy Cascading - An Example Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Developing the World’s Next Leaders. Metro City University Mission: Developing the World’s Next Leaders. Metro City University Vision 2018: We are recognized as one of the top 50 universities in the world. Stakeholder Build a Strong, Sustainable Reputation Enable the Best Student Experience Enable World Class Scholarship Achieve an Influential Research Profile Internal Process Enhance Student Learning, Development, & Academic Performance Promote & Support Intentional & Informal Learning Promote Excellence in Research & Graduate Education Balance Program & Service Quality & Quantity Increase Our Use of Multiple Delivery Options for Programs & Services Enable Knowledge Generation Aggressively Pursue the Best Students Organizational Capabilities Financial/ Resource Management Leverage Advanced Technology & Tools for Teaching, Research, & Program Management Maintain Affordable Tuition & Fees Demonstrate Strong Fiscal Management Attract & Retain High Quality Staff & Leading Academics Build Relationships & Partnerships with Alumni & Stakeholders Nurture a Diverse Campus Culture & Environment Aggressively Maximize Financial Support & Research Funding Continually Upgrade & Modernize Campus Facilities & Infrastructure Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367 Curiosity & Innovation Meaningful Contribution Collaboration & Partnership A Devotion to Excellence CORE VALUES

Developing the World’s Next Leaders. Metro City University Mission: Developing the World’s Next Leaders. Metro City University Vision 2018: We are recognized as one of the top 50 universities in the world. Stakeholder Build a Strong, Sustainable Reputation Enable the Best Student Experience Enable World Class Scholarship Achieve an Influential Research Profile Internal Process Enhance Student Learning, Development, & Academic Performance Promote & Support Intentional & Informal Learning Promote Excellence in Research & Graduate Education Balance Program & Service Quality & Quantity Increase Our Use of Multiple Delivery Options for Programs & Services Enable Knowledge Generation Aggressively Pursue the Best Students Organizational Capabilities Financial/ Resource Management Leverage Advanced Technology & Tools for Teaching, Research, & Program Management Maintain Affordable Tuition & Fees Demonstrate Strong Fiscal Management Attract & Retain High Quality Staff & Leading Academics Build Relationships & Partnerships with Alumni & Stakeholders Nurture a Diverse Campus Culture & Environment Aggressively Maximize Financial Support & Research Funding Continually Upgrade & Modernize Campus Facilities & Infrastructure Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367 Curiosity & Innovation Meaningful Contribution Collaboration & Partnership A Devotion to Excellence CORE VALUES

Developing the World’s Next Leaders. Metro City University Mission: Developing the World’s Next Leaders. Metro City University Vision 2018: We are recognized as one of the top 50 universities in the world. Stakeholder Build a Strong, Sustainable Reputation Enable the Best Student Experience Enable World Class Scholarship Achieve an Influential Research Profile Internal Process Enhance Student Learning, Development, & Academic Performance Promote & Support Intentional & Informal Learning Promote Excellence in Research & Graduate Education Balance Program & Service Quality & Quantity Increase Our Use of Multiple Delivery Options for Programs & Services Enable Knowledge Generation Aggressively Pursue the Best Students Organizational Capabilities Financial/ Resource Management Leverage Advanced Technology & Tools for Teaching, Research, & Program Management Maintain Affordable Tuition & Fees Demonstrate Strong Fiscal Management Attract & Retain High Quality Staff & Leading Academics Build Relationships & Partnerships with Alumni & Stakeholders Nurture a Diverse Campus Culture & Environment Aggressively Maximize Financial Support & Research Funding Continually Upgrade & Modernize Campus Facilities & Infrastructure Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367 Curiosity & Innovation Meaningful Contribution Collaboration & Partnership A Devotion to Excellence CORE VALUES

Mission: Metro City University HR Vision 2018: Providing HR Leadership and Partnering with our Stakeholders to develop the World’s Next Leaders. Metro City University HR Vision 2018: We are recognized as one of the top 50 universities in the world to work for. Stakeholder Build a Strong, Sustainable Reputation Enhance the Employee Experience & Satisfaction HR Internal Process Attract & Retain High Quality Staff & Leading Academics Deliver Timely, Reliable, & Quality HR Programs & Services Develop & Implement a Strategy-Focused Human Capital Plan Implement Efficient & Effective HR Programs & Processes Provide Pro-active Organizational HR Leadership Understand the Needs and Strategic Priorities of the Business & Our Stakeholders HR Organizational Capabilities Financial/ Resource Management Build the Human Resources Team Enhance University Financial Performance Develop Internal Human Resources Skills & Capabilities Implement & Leverage Advanced HR Tools and Technologies Demonstrate High Corporate HR ROI Enhance Employee Productivity Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367 Curiosity & Innovation Meaningful Contribution Collaboration & Partnership A Devotion to Excellence CORE VALUES

Organizational Alignment = Effective and efficient strategy execution Why focus on organizational alignment? ◙ Organizations that include organizational alignment as a key strategic management component experience dramatic performance benefits Organizational Alignment = Effective and efficient strategy execution Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The HR Scorecard Development Process Project Planning/ Launch 1. Cascade Corporate Strategy 2. Create HR Strategy Map 3. Create Existing Indicator List 4. Define HR BSC Philosophy 5. HR BSC Development Workshop 6. Detail HR BSC Indicators 7. Document HR BSC Hierarchy 9. HR BSC Indicator Review Workshop 10. HR BSC Indicators FINALIZED 11. Define HR BSC Implementation Plan 8. Define HR BSC Governance Model Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

HR BSC Indicator Selection Guidelines Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Strategic Indicators ◙ Strategic indicators are indicative of a strategic objective (i.e. results are representative of the state of a strategic objective’s “health”) ◙ Underperformance of a strategic indicator prompts further detailed data review and root cause analysis (usually using operational measures/KPI’s) ◙ Underperformance of a strategic indicator prompts you to look at & take action on issues related to the strategic objective rather than focusing on fixing the performance of the indicator (let’s look at an example) Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The Indicator Identification Process 1. Identify KEY Macro Processes Aligned with the SO 2. Identify Possible Process Inputs, In-Process Measures, & Outputs/Outcomes 3. Review Existing & Best Practice Indicators 5. Make “Final” Indicator Recommendations 4. Select SMART Preliminary Indicator(s) Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The Indicator Identification Process SMART criteria S = specific & simple (the indicator relates closely to the definition of the strategic objective; the indicator isn’t complex, making it easier to understand and take action on) M = measurable (the measure currently exists - results for the indicator are currently available or could be available quickly with a little work) A = available (performance results are available shortly after the conclusion of the measurement period – e.g. ideally 3 – 5 days after the end of the month/quarter) R = reliable (the indicator/data is reliable and sensitive enough to show changes in performance) T = timely (results for the indicator are available, ideally, on a monthly basis or, at minimum, a quarterly basis – no annual indicators should be considered) Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The HR Scorecard Development Process Project Planning/ Launch 1. Cascade Corporate Strategy 2. Create HR Strategy Map 3. Create Existing Indicator List 4. Define HR BSC Philosophy 5. HR BSC Development Workshop 6. Detail HR BSC Indicators 7. Document HR BSC Hierarchy 9. HR BSC Indicator Review Workshop 10. HR BSC Indicators FINALIZED 11. Define HR BSC Implementation Plan 8. Define HR BSC Governance Model Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Important indicator information required BEFORE you can “go live” with your indicator set Word definition and/or calculation formula Performance target(s) Performance tolerance ranges (red-yellow-green coding scheme) Data collection frequency (monthly or quarterly) Data sources Data collection processes (manual or automated) Data Owner Results Commentary Owner Contributing measures for root cause analysis purposes Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Were you hoping for a list of HR BSC indicators tonight that you could just implement in your organization? Let’s talk about why I haven’t done this … Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

But, let’s walk through an example… Strategic Objective: Attract, Retain, and Develop our Health Care Professionals Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The Indicator Identification Process 1. Identify KEY Macro Processes Aligned with the SO 2. Identify Possible Process Inputs, In-Process Measures, & Outputs/Outcomes 3. Review Existing & Best Practice Indicators 5. Make “Final” Indicator Recommendations 4. Select SMART Preliminary Indicator(s) Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

The HR Scorecard Development Process Project Planning/ Launch 1. Cascade Corporate Strategy 2. Create HR Strategy Map 3. Create Existing Indicator List 4. Define HR BSC Philosophy 5. HR BSC Development Workshop 6. Detail HR BSC Indicators 7. Document HR BSC Hierarchy 9. HR BSC Indicator Review Workshop 10. HR BSC Indicators FINALIZED 11. Define HR BSC Implementation Plan 8. Define HR BSC Governance Model Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

HR BSC Implementation – The HR BSC Roll Out ◙ The roll out of the HR Scorecard indicator set must be a component of the overall communication plan for the HR strategy and HR Scorecard. ◙ Be clear on the objectives of the roll out and design a roll out that supports these objectives. ◙ Your roll out sets the tone and expectations for the HR scorecard – make sure that its scope is appropriate to the expectations you wish to set Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

An Important Resource for You to Know About Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Please contact me at: sandyrichardson_bsc@yahoo.ca Website: www.sfo-consulting.com Blog: http://sfo-blog.typepad.com/sfo-blog/#tp Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367

Questions? Strategy Focused Business Solutions Inc. sandyrichardson_bsc@yahoo.ca (416) 722-1367