ORC Sightlines
December 2006
- Enterprise Strategy Demands Enterprise Governance
- Building a High-Performing Safety Culture
- Chief HR Officers Voice Concern with Wider Array of Talent Management Issues
Enterprise Strategy Demands Enterprise Governance
As business organizations have become more global, many have found themselves with redundant organization structures, technology applications, business processes, and policies, all leading to fragmentation, complexity, and uncompetitive cost structure. One of the major opportunities for improving operating efficiency and reducing costs in this environment has been the restructuring of “back office” operations such as IT, human resources, and finance. Often, the solution includes standardizing processes and policies, centralizing service delivery via shared service models, and implementing common, globally integrated technology systems and platforms.
However, such enterprise-level strategies have presented serious challenges to existing decision-making and management processes, creating the need for new approaches to governance. According to Jodi Starkman, director of ORC’s global talent management practice and a leader of its HR Technology Solutions (HRTS) Network, an enterprise strategy requires an enterprise governance model that answers these key questions:
- How do we organize ourselves? (That is, ensure ownership, objectivity, efficient decision making, and action)
- How do we decide? (That is, ensure enforcement of a common set of principles and make sure that the broader business strategy is represented in all decisions)
- How do we operate? (That is, ensure participation, accountability, coordination, integration of initiatives, and timely process change)
Some of the companies in the HRTS Network have answered these questions by forging a formalized, global partnership among HR, IT, and Finance. Integrating these three key back-office operations enables multiyear strategy setting and allows the company to establish routine, consistent leadership and oversight for working groups and clear accountability and transparency in decision making.
There are a number of ways to organize partnership-based governance systems, but essentially they require that all three functions partner at every level. Typically, this arrangement includes:
- An executive sponsor level, which provides funding and is ultimately responsible for the success of enterprise initiatives
- A small, senior-level group that determines strategy
- A program management office (PMO) that owns the execution of the strategy, including identifying solutions, prioritizing initiatives, coordinating resources, establishing and monitoring standards, tracking compliance and benefits realization, and facilitating cross-functional integration
- Subject-matter experts and others who design, develop, and deliver the solutions
Global governance is challenging enough, but coordinating across three global functions, each with separate reporting relationships, budgets, funding processes, etc. is bringing the challenges of enterprise governance to a new level, one that is slowly but surely being achieved by companies that recognize its value.
For more information about this topic or the HR Technology Solutions Network, contact Jodi Starkman, 212-852-0394.
Building a High-Performing Safety Culture
Every respectable company believes in safety, right? No one wants employees to be hurt, if for no other reason than to avoid the trouble and expense of being caught in violation of government regulations. So, if everyone is exerting good faith efforts to comply with safety rules, why do some companies get much better results than others?
Because compliance is not enough. To really have an impact on how safely employees execute their tasks every day, the entire culture needs to reinforce a safety orientation and support safe processes. In other words, employees at all levels have to really believe that safety is important and that they can make a difference.
How to build a safety culture was a topic of spirited conversation at last month’s meeting of ORC’s Occupational Safety and Health (OSH) Group, spurred by a presentation from Ontario Power Generation. OPG has changed its culture from safety as a “priority” to safety as a “value,” and its safety record has improved steadily over the past four years, a result Mary Lou Sinclair, director of corporate safety, attributes to a simple but relentless strategy:
- Visible commitment by leaders. (Examples include setting of strong corporate safety objectives and goals; safety-focused site visits by senior leaders, integration of safety in performance planning and pay; senior executive review of safety performance and serious events, including a re-presentation of incident reports to the company president to see what has been done.)
- One company-wide safety management system.
- Establishment of a formal “Internal Responsibility System” that specifies responsibilities of all workforce parties to identify health and safety problems and solutions. (Authority and responsibility for health and safety is delegated downwards to all employees in the corporation, while accountability for safety flows upward to the company’s highest levels, including the board of directors.)
- Frequent communications that put expectations and values in personal terms and celebrate success. (One example is OPG’s “The Reason Why I Work Safely” campaign that featured pictures of employees holding portraits of their families.)
- Partnering with stakeholders. (Examples include labor/management forums; joint H&S committees to oversee safety programs and assess effectiveness; and regular meetings with government regulators, outreach to suppliers, contractors, schools, and community.)
Through it all, Sinclair advised her OSH Group peers, “don’t be afraid to be passionate about safety.”
For more information on this topic or about ORC’s Occupational Safety & Health and Environmental Groups, contact Joanne Linhard in ORC’s Washington, DC office, 202-293-2980.
Chief HR Officers Voice Concern with Wider Array of Talent Management Issues
ORC’s 2007 Annual HR Priorities Survey suggests that senior HR executives are grappling with more complex talent management issues than ever before. Survey participants identified talent management as by far the most pressing strategic issue they face in the coming year. Interest in this area is not new, of course, but never before has the survey shown as deep an interest in managing and integrating the full spectrum of processes involved in the talent supply chain. Participants in past surveys noted concern with leadership development and succession planning for senior positions. This year, HR officers also told us they are focusing on acquisition, development, and retention of key talent and are pushing succession planning further down in the organization.
Although many organizations have been working in these areas for decades, survey participants rated their companies’ capabilities as lacking in areas such as leadership development and succession planning, workforce planning, and diversity. One of the main reasons seems to be the increased complexities introduced by growth and globalization. Comments by many of the participants (and echoed in our discussions with members of ORC networks) confirm that much of their talent management effort is directed at acquiring and developing talent in emerging markets and at globalizing policies, programs, and processes.
HR executives are confronting the need to improve their own infrastructure in order to meet the new challenges. HR Technology, especially, has been a source of heartburn for many participants. Globalization, mergers, and other forms of growth have so increased the demands on information systems that often apparently simple functions are difficult to carry out. (“I can’t even get an accurate head count of my global workforce!” is a common refrain among frustrated HR executives in ORC’s senior HR networks.)
It is not surprising, then—given the strategic importance of these issues—that many senior HR officers are also spending significant time and resources on transforming the HR function. In fact, this area came in second only to talent management in the list of activities expected to consume the majority of HR executives’ time in the coming year. One of the items of chief concern is finding and developing highly skilled talent management and organizational development professionals with global experience.
Members of ORC’s Senior HR Officers’ Networks received the full report of results from the 2007 HR Priorities Survey of Senior Human Resources Executives. For more information on these networks, or to discuss any of the issues in the survey, please contact Susan Carter, 708-358-1361.