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CSTD Beijing

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  1. CSTD Beijing Organization Development Beijing, May 5th 2012

  2. Content • Introduction • Objective and expectations • What is OD? • Why OD? • What are the benefits? • Top 100s Best Practices & Cases • The China Practices: • Misconception in the market place • Why? • OD - Where does it start? What does it link to?

  3. Content • Critical parts of OD • Organization Structure and Processes • Workforce Planning (Job Families and Role Competencies) • Talent Management (Career and Succession management) • Management Development – “filling the Gaps” • Top 100s’ Practices

  4. Objective & Expectation • All participants to learn about Organization Development: • What is it? • How is it being done? What to focus? • Processes and Steps • Sharing the Best Practices and methodology • Take away some tools

  5. Your Expectations • 希望能对OD有一个全面的了解, • 建立OD意识和思维模式 OD的理论基础、 • 实际操作工具及对OD从业人员的职业要求 • 国内OD的发展情况 • 实践案例——世界100强的OD发展, 尤其是在领导力发展方面

  6. QuestionWhat is the greatest challenge(s) that your Organization is facing today?

  7. Greatest challenge(s) ? • Is it Shortage of Talents? • Is it Business Strategies? • Or ……. Quick Exercise: • Take 5 minutes • Discuss in your group/table • Share findings with all

  8. Organization Development • What is it? • Why OD? • What are the benefits of doing OD? • Top 100s Best Practices -The China market place Misconception – why?

  9. Exercise: • At your table / group • Discuss for 10 minutes on What is OD?Include in your discussion: • What does it include? • How are you doing it? • Do you have dedicated resources (team or individual) assigned to it? • Where and how is it being initiated? • Who is the owner? • Are your senior leadership aligned to it? • Representative report to big group

  10. What is OD? Organization Development is defined as: • A systematic methodology that companies use to develop their organization structure and people based on their medium to long term business strategies (normally for periods of 5-10 years) • This includes the consideration of the companies’: • Business Strategic Priorities • Products • Target Markets • Customers • Sales Channels • Internal Management Capabilities • Market Availability of Talents • Etc….

  11. Why OD? Organization Development is critically important to companies. Given the abovementioned criterions, in order to succeed now and in the future, companies must: • Be able to determine what kind of structure they need and management practice to match to it • Clear about what do they currently have and what is needed to achieve the business strategies in the future, including: • How many? • What kind? • When? • Where? • As well the sources (i.e. internal or external) of these required Talents

  12. Benefits of OD? Major benefits of OD are: • Clearly Understand our current and future HR needs which in turn enable companies to maximize their Human Resources capabilities • Minimize unnecessary wastage of man-power and enhance the efficiency of the HR $ • Anticipates up coming excess and/or shortages of required Talents • Identify critical Gaps in Talent supply (both internally and externally) thereby establish strategic priorities to recruit, train, develop • More…..

  13. Top 100s Best Practices • All Top 100s companies have an OD function and this is at their WW HQs • Many of them are tied-in with MD (due to its close relationship) • Both centralized and de-centralized OD operations are commonly found i.e. TOP down from HQ and regionalized OD operations in say GRC (Greater China), Latin America, Eastern Europe, Indian and South ASIA, etc…. • Recently, some of the Biggest Conglomerates re-structured their organizations and have their WW HQs relocated to ASIA e.g. GE in HK

  14. The China Market • Majority of the MNC China operations are performing an MD function rather than “OD” • Mostly in response to HQs’ directions • Focus on “Current” issues / problems • Tied to Talent Management and/or Succession/Career Management • HR is lacking Capabilities due to inadequate business understanding, OD/MD function training, etc. • Loosely or no linkage to business strategies • Minimal and/or no Senior Management involvement and/or support • Etc….

  15. Organization Development • OD - Where does it start? What does it link to? Typical Process • Critical parts of OD • Organization Structure and Management Practice • Workforce Planning (Job Families and Role Competencies) • Talent Management (Career and Succession management) • Training and Development – “filling the Gaps”

  16. OD – The Starting Point & Linkages Organization Mission / Vision / Values / Strategies Leadership &Top Team Alignment Organization Development HR Policy and Procedure & HRIS SOFTWARE Organization Structure & Processes Organization Culture HARDWARE Workforce Planning Reward Training / Development Job Analysis/Role Clarification (KRA / KPI) Target Role Competencies Performance Management Job Evaluation Grading / Leveling MD - Talent, Career & Succession Planning Individual & Role Competencies match Career Ladder or Job Family Recruitment & Selection EMPLOYEE ENGAGEMENT COMMUNICATION

  17. Typical Process • Derive from the Business Medium or Long Term Strategies (typically 5-10year plans), decide on… • Organization Structure required, building on : • Business Functions, geographic location, customer segmentations, etc… • Organization Desired Culture and Role Competencies • Work Processes – decision on what kind of work being perform where? • Overall Workforce Planning based on the above • Then Talent Management – review of what we have, do not have and define Training/Development needs • Then Recruit or Train and develop …….

  18. Organization Structure and Management Practices

  19. Decision-making Processto develop an appropriate structure for your organization • Clarify strategicintent • Define work culture and management practices • Determine your customer segments • Identify core business processes • Evaluate the basic options • Check with a decision criteria • 3 more questions to consider

  20. 1. Clarify Strategic Intent • Strategic Objectives: what are the key outcomes your business must achieve in the marketplace? The strategic objectives should define success for your business relative to your customers, competitors, and stakeholders. • Critical Success Factors: what are the key things the business must “get right” internally in order to achieve its strategic objectives? The critical success factors should define the company’s core competence that must be built from within to give it competitive advantage.

  21. 2. Define Desired Work Culture and Management Practices Work Culture: • How is work being done? • Expectation of how our people should behave • How we will treat our business partners i.e. customers, suppliers, etc…. Management Practices: • Centralization vs De-centralization • Where decisions will be made i.e. what work being done where?

  22. From Values... To Culture … are an integral feature of our mission statement, which has already been rolled out worldwide, … form the link to the new Leadership Principles, … form the basis for a strong common corporate and management culture, … are therefore essential for our success.

  23. Management Practices • Centralized vs de-centralized • Decision levels and points: • Set Direction and Policy • Organization and Planning • Implementation & Execution • Administration

  24. 3. Determine Customer Segments Typical options for market segmentation include: • Type of customer or business volume (individual consumer; small, medium, large commercial customers) • Type of buying pattern (standard, customized, integrated) • Geographic location (city, region, country) • Sales channel (web-based, telephone, in-person) • Some combination of the above

  25. 4. Identify Core Business Processes Classic Business Process Design

  26. 5. Evaluate the Basic Options • There are 6 basic design options for any business • Functional • Product • Market/customer segment • Matrix • Process • Hybrid

  27. Typically Used: Small organization Simple product line Stable markets and products Efficiency focus Advantages Clear responsibility within functions Technical specialists are managed within a function Efficiencies of scale Disadvantages: Lack of accountability for profit/loss Harder to support cross-functional problem solving and coordination Harder to develop general management experience Typically Used: Distinct products/services exist Product line volume allows for efficiency of scale Product technology distinct Advantages Clear responsibility for product line success Resources are managed within a product line Product expertise is developed General management within a product line can be developed Disadvantages: Duplication of resources across product lines Harder to coordinate marketing of multiple products to same customer Difficult to obtain synergies(innovation, expertise, financial) across products basic design options Functional Structure Product Structure

  28. Typically Used: Market/customer requirements vary greatly Depth of knowledge of market segments critical Volume exists within each market Advantages Market/customer knowledge and expertise can be developed Products/services can be tailored to respond to market segment need Easier to coordinate delivery of product/service to customer Disadvantages: Duplication of resources across market/customer lines Harder to coordinate resource allocation across market segments Difficult to obtain synergies (innovation, expertise, financial) across market segments Typically Used: Both technical expertise and market/customer expertise required Integration across functions and markets is required Large scope and scale across products and markets exists Advantages Integrates both technical expertise and market/customer expertise Technical resources can be flexibly allocated to project teams to serve specific markets Synergies can be realized across market segments Disadvantages: High degree of horizontal and vertical coordination and communication required High degree of management talent required to resolve conflicting priorities Clarity of accountabilities and career paths required to maintain employee satisfaction basic design options Market/Customer Segment Structure Matrix Structure

  29. Typically Used: Customer service priority Managerial capability is mature to work across boundaries Employee competence is highly developed to work across functions Advantages Highly responsive to changing customer requirements Employees focused on clear accountabilities to meet customer requirements Cross-functional teams allow for broad employee development Lean management Disadvantages: High degree of horizontal and vertical coordination and communication required May require high degree of investment in information technology High degree of leadership and employee competency required Typically Used: Large markets Complex products Growing customer base Distinct business lines Advantages Structure flexibly designed based on product and market/customer requirements Disadvantages: Harder to create clarity of accountabilities for profit/loss Harder for customers and employees to understand mission and vision of company Requires high degree of management talent to integrate and coordinate resources Difficult to create clear career paths basic design options Hybrid Structure Process Structure

  30. 6. Check with Decision Criteria • Supports strategic intent of the business • Supports the desired work culture • Reflects core business processes • Represents a logical grouping of functions and activities • Supports effective interface with customers and markets • Reasonable spans of control exist • Reporting lines and relationships are clear • Levels of authority are clear to support management control and decision making • Encourages effective employee communications • Resources are allocated efficiently • …

  31. 7. More questions to answer • What level of decision making authority do you want delegated? • How broadly do you want to define job accountabilities? • What is the existing management capability within the organization?

  32. Workforce Planning

  33. Strategic Workforce Planning Long-term business plan 2. Identify gaps and optimize workforce mix Workforce Supply Workforce Demand Workforce currently in place and available in the market Workforce required to execute business plan 1. Project workforce requirements of the business plan 3. Implement action plans to execute workforce strategy Source/Attract Develop Retain Engage Contract/Outsource 4. Optimize programs to drive desired behavior People processes and programs

  34. Strategic Workforce Planning is a process owned and leveraged by a range of people within HR It is critical to target the project against specific workforce issues! Lines of Business/HRBP • How do I create a process and tools to determine the talent requirements of my business? • What is the demand, supply and cost of talent? • In what way do the assumptions impact the forecast? Heads of Staffing/ Workforce Planning Rewards • What are the best locations for certain types of jobs? • Have I maxed out in a certain market? • How do I convert the long-term plan into an operational plan that can be executed? • As part of Total Rewards Strategy, what does our current and future workforce look like? • What will be the cost of the programs? • How do I design a transition strategy?

  35. The questions that companies are asking and evolving in sophistication Evolving “Next Practice” Business Focus Demand Planning Based on business drivers, how do I forecast future talent needs? Labor Optimization How do I drive towards the optimal mix of full-time, part-time, contract or offshore labor? Global Sourcing What are the best locations to find available cost at the right cost? Connected Thinking Analyze, deliver, measure and quantify across a range of areas HR Business Partner Assessment and development of systemic solutions from a BU and enterprise perspective Enduring Areas of Business Focus Growth How do I quantify the number of people I need? Labor Mix How can I evaluate current state of types of workforce being used Geographic Sourcing What does the current state of key markets we operate in look like? Tools and Process Enabling ongoing analysis and functions HR Capability Attract, develop, engage and retain talent *Sources: Towers Perrin best practices

  36. Based on the questions from clients during 2006, significant upgrades have been made to all areas of the SWP offer Major Updates Major Updates New Features Brand New! 35

  37. New processes and online tool enable the loading of current data and prior year data to get automated reports on turnover segmented by Business unit Location Job type Pay grade Age Gender Pay Ethnicity Review of hiring, turnover and retirement experience Value to client Easy analysis and reports on turnover trend data Given cost of turnover of 0.5 to 1.5 or more of salary, analysis provides critical information 1. Workforce Scan: Mining current state PLUS turnover trend data Turnover by Job Type Major Updates Turnover by Year of Service and Region Major Updates

  38. 2. External labor scan: U.S. • For U.S., whole new upgraded interface that enables • Selecting multiple cities • Viewing a range of statistics on cost, quality of life, education, language skills • “Best locations” analysis that allow you to sort on headcount, cost, diversity or overall ranking • Value to client • Am I tapped out in my current geography? • Is there a better place for this kind of work? • As I think about acquisition, what are the local labor market issues? Major Updates Major Updates

  39. 2. External labor scan: New model reports New Features • New labor market maps that can be created by Tillinghast colleagues • Use for key jobs like technology, engineering, call center, nursing • Can also be applied to internal data to understand recruiting zones and opportunities for improvement • Multi-source data can be organized in model reports and charts to help compare locations in terms of being an “overall” market of choice vs. a great city for certain specific types of talent High New Features 5 City 7 4 New features City 11 City 4 City 8 City 1 Tech Market of choice City 9 3 City 12 City 2 City 6 City 10 City 5 2 City 3 1 1 2 3 4 5 Low Overall Market of Choice High

  40. 2. Global templates have also been created and new global data have been loaded into the tools • The online tool has data for Canada, U.K., France and Germany on high-level availability and ethnic diversity • More data to come (Japan and Netherlands are next for the developed countries) • Model reports help to summarize key output in decision framework • GCG contacts Emma Carter and Melissa Marvan can help to compile data for developing countries High City 1: U.K. City 2: U.K. New Features City 2: U.S. Cost City 3: U.K. City 1: U.S. City 1: Philippines City 1,: India City 2: India Low Low High Availability

  41. Exercise • Your client has just acquired a company that needs to centralize operations to a number of cities for IT positions • Look at the current workforce and turnover patterns by age, gender and years of service • The initial choices are Austin, Boston, Chicago and Paris • What are the key pros and cons of each city? • What other data do you need beyond what is in the tool? Where will you get the data from? • What are the follow-up opportunities from this process?

  42. 3. Translate business plan demand to workforce requirements New Features • In health care and energy, more case work and tools for the translation of business plan to headcount requirements • Standard interview guides for assumptions • Ability to model business drivers in online tools • Value to client • Based on changes in business volumes, what is the future staffing needed? • How can I get business plan input on the future direction? My outpatient caregiver needs are growing faster than inpatient needs I can align business with staffing volume drivers

  43. 3. Workforce projection model: Understand the future requirements • New scenario capability to look at • Short service, mid-career and retirements separately • FTEs vs. contract • Maximum hiring capacity • Vacancies • Modifying hiring capacity to reflect • Pipeline of new graduate talent • Ability to absorb and train new employees • Value to client • Understanding of future headcount, cost, demographics and sources of loss of talent • Enables aligned strategies • Recruiting partnerships • Onboarding • Phased retirement • Rewards work

  44. Focuses on 18- to 24-month plan Enables analysis of more operational aspects of staffing including Internal vs. external hires Time to fill Time to train Number of recruiters required Expected cost of hiring Monitoring of monthly projected versus actual staffing requirements Diversity targets Integrated with the SWP suite of tools Demos available online Value to client Creates an operational view of long-range planning for the staffing group Provides key ongoing measurement and targets 4. “Operationalizing” the forecast:Staffing Planning Tool Brand New!

  45. Market updates Towers Perrin is focusing in SWP worldwide but fail to deliver in China and Asia markets due to inability of local consultants and lack of data. (This is true for all other major consulting firms as well) • Mercer appears to be directly positioning itself to compete against TPs SWP offering • Workforce Forecaster — brand new Web-based tool for workforce planning that analyzes current workforce and prior trends and models future workforce; does not analyze external labor • These tools appear to be still fragmented internally; however, Mercer appears to be offering solutions, not just strategies for companies to follow • Wyatt: Has workforce planning but no major move or updates for 2007; can be a strong competitor in the marketplace • CLC: Has workforce planning and metrics in its spin-off called Inform (used to be CLC metrics) Mercer Wyatt CLC/Inform

  46. Case Studies • Guangzhou MTR • HP (Asean) • Pepsi-cola (China) • EDS (China) – a case of failure

  47. Career Ladder / Job Family

  48. What is Career Management? Career Map Talent Applications Recruitmentand Selection + Learning and Development Career Ladder Functional Competencies Career Pathing & Planning The career ladders describe the progression of organization-wide competencies-- Talent requirements and expectations at each level are clearly stated Functional competencies clarify technical requirements and responsibilities unique to a function Performance Management Rewards & Job Evaluation The organization-wide competencies define expectations that are common for all jobs across the company. Functional competencies define the unique set of competencies for employees in a specific function. The two sets of competencies are complimentary and are not intended to overlap.

  49. Career Ladder Framework Professional Senior Manager Sample GroupManager Senior Expert Manager Expert Consulting Manager Support Team Leader Specialist Senior Manager Expert Career Lead Career Manager Associate Associate Senior Lead Supervisor Entry Entry Intermediate Advanced Individual Contributor Sales & Account Management Supervisory/Management Entry Intermediate Business Support Services Entry Managers Production andOperations Individual Contributors

  50. Career management Becomes Transparent Sample Managerial Ladder Individual Career Ladder Guiding/Shaping M4 P6 M3 Guiding M2 Guiding P5 M1 Applying/Guiding P4 Competency Level Characteristics Shaping — Leading Through Vision Guiding — Contributing Through Others Applying — Contributing Independently Learning — Helping and Learning P3 P2 Applying Applying P1 Learning Learning