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Human Capital Strategy for the New Millennium

Human Capital Strategy for the New Millennium. HR Directors Forum Shanghai. About Pricoa SM Financial. Global Strength, Local Presence Locations in Hong Kong, London, Mexico City, Paris, Shanghai, Singapore, Taipei, Tokyo, Toronto, and the United States Assistance Available in 35 Languages

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Human Capital Strategy for the New Millennium

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  1. Human Capital Strategy for the New Millennium HR Directors Forum Shanghai

  2. About PricoaSM Financial • Global Strength, Local Presence • Locations in Hong Kong, London, Mexico City, Paris, Shanghai, Singapore, Taipei, Tokyo, Toronto, and the United States • Assistance Available in 35 Languages • 35+ Years of Relocation and Real Estate Experience • More Than 1,300 Employees Worldwide With 190 Based Outside of the United States • 248,416 Client and Service Initiations in 2004 • Pricoa Financial is a Service Mark of our Ultimate Holding Company Prudential Financial, Inc. With Approximately $470 Billion in Total Assets Under Management (as of September, 2004) Prudential Financial, Inc. of the United States is not affiliated with Prudential plc which is headquartered in the United Kingdom.

  3. PricoaSMFinancial and Global Workforce Development Business • ROI=Accomplishing the Assignment Objectives at the Expected Cost • - Global Relocation Trends 2002 Survey Report, SHRM & NFTC, USA • Average Annual International Assignment Cost = 3 x 11 x Employee Annual Salary • Minimum Investment = USD $1 Million • Failed Assignment = Loss of Business Opportunities and Countless Intangible Costs • 50-60% Aggregated Failure Rate due to Family Adjustment Problem • 17% Complete Failure: 22% Leave Within the First Year, 44% Within the second Year

  4. Globalization and HR • Every Factor of Production, Other Than Workforce Skills, Can be Duplicated Anywhere in the World • Selection, Training and Management are the Keys to Success • HR Professionals Need the Competencies to Match the New Global Trends

  5. Beyond Tangibles • The Knowledge Economy Value is Increasingly Driven by Talent and Other Non-tangible Capital • Competitive Strength of Companies, Social Organizations and Countries is no Longer Tied to Physical Assets or Resources, but Intellectual Capital • For S&P 500, $1 of $6 of “Market to Book” Value Represents Financial or Physical Assets • Intangible Assets are Key

  6. Human Capital • Organizations are Competing on the Basis of Intellect, Creativity, Flexibility, and Execution • These Critical Competitive Levers are Buried Somewhere in Your Marketplace and Workforce, Waiting to be Unleashed • A Solid Understanding of the Fundamentals of Human Capital Management is Critical for Today’s Line Executives

  7. See Change in Value Creation • HR Workers and Executives Have Been Trained to Build Administrative Processes That Can Function “By the Book” and Within a Budget • Today’s HR Structure, Built on an Administrative Model in the Manufacturing Economy, Simply is Not the Most Effective Structure to Deliver Talent-based Value

  8. See Change in Value Creation • Developing and Advancing the Best and Brightest People are the Activities Most Linked to Future Success • These are not “By the Book” Processes, but Risk-based Decisions That Require Mature Business Judgment, Sound Financial Skills and Decisive Action • HR Needs Flexibility, Strategic Awareness, Financial Knowledge, and Risk-based Decision-making Abilities

  9. HR See Change Administrative Transactional 70% 70% Consultative Strategic 30% Consultative Strategic Administrative Transactional 30%

  10. HR’s Strengths • Integrity, Ethics • Philosophy • Values • Communication • Development • Global Awareness

  11. Key HR Competencies • Credibility • People Skills • Understanding the Business • Consultative Approach • Developing Credibility • Comfort With Change • Visioning

  12. HR’s Value • More Widely Accepted and Vital in a Knowledge-based Economy • This Means Managing Human Capital by: • Hiring the right people • Training them in the skills they need • Developing compensation systems to reward the right behavior and performance • Retaining and promoting the best associates (www.shrm.org/hrmagazine/05January)

  13. HR and the Stock Market “The Marketing Guys Come in With Sales Statistics and Monthly and Yearly Comparisons, the CFO Tracks the Financials, and the HR Guy was Left With Reporting on the Increasing Costs of Health Benefits. Now HR has the Tools it Needs to Demonstrate the Relationship Between HR Metrics and Stock Market Success” • Jim Hatch, Principal, PricewaterhouseCoopers/Saratoga • (www.shrm.org/hrmagazine/05January)

  14. HR and the Stock Market “Firms That Spend Between 3.5% and 4% of Their Budgets on Workforce Development Translate Into the Top 5%-10% of the Best Performing Companies Within a Sector.” - Laurie Bassie, Chair, Bassi Investment Inc. • (www.shrm.org/hrmagazine/05January)

  15. Get Feedback • Core Business Leaders Generate Revenue • They Make it Easy to Obtain the Information You Seek • Schedule Appointments with Business Leaders and Groups of Key Employees From Those Units • Brief Online Surveys Can Help • Use the Meetings to Validate Your Data and Probe Deeper Into Core Business Needs and the Performance of HR

  16. Questions to Ask • How is Your Success Measured and how did HR Have an Impact? • What are the Top Three Business Issues HR has Helped You Solve in the Past Quarter/Year? • What was the Impact on Profitability, Quality, Cycle Time or Ability to Respond to Customers?

  17. More Questions to Ask • How Else Could HR Help You Deliver Business Results? • What Things did HR do Well for You? • What do You Need More/Less of?

  18. Knowledge-Driven HR How to Manage Virtual Networks How to Manage Processes 3 2 How to Manage Knowledge How to Manage Functions 1 4

  19. Service Concept Financial Outcomes External Customers Employee Loyalty Satisfaction Profitability Satisfaction Service Value Capability Revenue Growth Loyalty Productivity Output Quality

  20. Global Managers Future Team Cultural Quotient EI Ethics and Dilemma Reconciliation Physical CI Individual Past Process Knowledge

  21. Emotional Intelligence (EI) • It is not Uncommon to Feel Inadequate When it Comes to Understanding and Dealing With Emotions • A Global Manager’s Job Description Should Include: • Identifying how people feel • Using their feelings to direct their thinking • Understanding the reasons for these feelings • Managing to stay open to the data in feelings • Using the data to make optimal decisions

  22. EI and Corporations • Downsizing and Reengineering Lead to a Focus on Cooperation and Teamwork • Companies Want Managers Who can Tap Into and Maximize Intellectual Capital Amid Heavy Workloads and Fewer Resources • Workers are Less Willing to Accept an Autocratic, Command-and-Control Management Style; They Want to be Treated as Equals in Congenial Work Environments

  23. EI: Sustained Leadership • The Art of Sustained Leadership is Getting Others to Produce Superior Work • Social Capital is Needed to get the Best From People Under Business Pressure • High IQ Can Cover for EI Until Times get Tough for the Business • IQ Alone is Insufficient to Build Social Capital for the Tough Times

  24. What is EI? • EI Consists of a Set of Leadership Attributes and Talents (Goleman: Emotional Competence Inventory-ECI) • EI is a Group of Personality Traits That Promote Well-being and Self-actualization (Reuven Bar-On: EQ-I Self-report and Assessment) • EI is Specific Abilities That Capture a Distinct Type of Intelligence(Mayer, Salovey and Caruso: Mayer, Salovey, Caruso Emotional Intelligence Test)

  25. The Definition of EI • Ability to Accurately Perceive Your Own and Others’ Emotions • Ability to Understand the Signals That Emotions Send About Relationships • Ability to Manage Your Own and Others’ Emotions

  26. EI: Areas of Application • Communication Skills • Change Management • Customer Service • Relationship Management • Internal Consulting • Conflict Resolution • Team Building • Management Development

  27. Practical Applications • Cross-cultural Issues • M&As, JVs and alliances • Supplier relationship management • Technology transfer • Negotiations and sales • Organizational Development • Leadership assessment/development • International teambuilding • Policy development/localization

  28. Organization Financials Structure Marketing Objectives Behavior Attitude Relationships Feelings Spirit Emotional Intelligence Values

  29. Peter’s Projection Peter’s Projection Magellan

  30. Culture “Characteristic Behavior of a Group Resulting From Shared Beliefs, Values and Assumptions.”

  31. Global HR Leaders • Cross-cultural Sensitivity (Competencies) • Ability to Deal With Culturally Derived Ethical Dilemmas • Ethics brings the rational economic model face-to-face with the human condition in a world of finite resources • Dealing with cross-cultural moral and ethical dilemmas may be the most difficult developmental task

  32. Global HR Leaders • The Rapid Pace of Unpredictable Change and the Complexity of Global Business Means That Competitiveness Depends on the Quality of an Organization’s Leadership • They know they do not have all the answers • They are willing to learn alongside their team members • They “learn how to learn”

  33. Global HR Leaders • High Level of Cognitive Complexity • Excellent Interpersonal Skills • Ability to Learn From Experiences • Advanced Moral Reasoning • Operate Outside Personal Cultural Context: • Where am I today? • Who is sitting across the table from me? • How can I be most effective here?

  34. Strategic Thinker Networker Consultant Knowledge Broker Ambiguity Manager Resource Facilitator Process Facilitator Energizer Respecter of National Differences Appreciator of Culture and Organization Virtual Worker Global HR Leaders

  35. Open-mindedness Respect for Other Beliefs Trust in People Tolerance Personal Control Flexibility Patience Social Adaptability Initiative Risk Taking Sense of Humor Interpersonal Interest Interpersonal Communication Cross-Cultural Competencies Adapted from “Overseas Assignment Inventory”, PricoaSMRelocation

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