Creating Value with your HR Strategy - Entrepreneurship 101 (2013/2014)

CREATING VALUE WITH YOUR HR STRAGEGY

Topics   Building, sustaining and transferring value   Individual and team competencies   HR Resourcing – punching above your weight   Finding the Best   HR Health Check – the basics

Building Value

Building…sustaining…transferring value THE STAKEHOLDERS:

•  Investors, shareholders, lenders, acquirers care about this principle •  Look for (and invest in) the team that has the ability to create,

build sustainable value

OWNERS/LEADERS: •  Need to use this filter in growing the company and building the

team

Value Formula

Value = Profit that’s sustainable and transferable

6

7

The decision to start a business or invest in a business – taking current potential and realizing future potential.

Current Actual Value

Future Potential

Value

WILD CARD

Ability of team to realize potential

8 Business Drivers

Addressable Market

Positioning & Differentiation

Brand

Technology

Barriers to entry

Growth

Customer Diversification

Market Share

Market (external) Factors Operational (internal) Factors

Company / Reputation

Sales & Marketing

Financial Resources

Operations

Innovation

Legal

Human Resources Factors   Do you have team a that

can execute to deliver future potential?

  What are the resourcing plans and assumptions?

  What are the team & individual competencies / gaps?

  Are the basics in place to attract, retain, grow the team?

  Is the company legally compliant & are risks being mitigated? Are key employees locked in?

  Organization and team dynamics – working for or against progress?

9 Team Capability?


Future Potential

Value

WILD CARD


1.  Are the individuals you have now the same you need in the future??

2.  Can they deliver??

The challenge is moving from early stage to mature. When do companies “grow up”?

10 Patterns of Struggle #1 – business inflections

Time

Corporate Leadership and Operations Build, deliver & support

Design & development

Marketing & Sales

Hea

dcou

nt

Product definition roles

Bus

ines

s P

erfo

rman

ce

Hea

dcou

nt (m

ix/#

s)

Formation Early Growth

Accelerated Growth

Maturing Growth

Next Stage Growth

Business inflection points = challenges

•  May require different skills & sometimes different people •  Adding bodies not always the answer •  Only gets more challenging not less •  Tendency to not change up the team can seriously impact ability to realize potential

= capability of team

Corporate Operations

Total Addressable Market

Early Stage Focus: NEW CUSTOMERS

Sales, Product Marketing Focus •  New products •  New features

•  New customers

Product Strategy

Design & Development

Manufacturing & Test

Delivery & Support

Patterns of Struggle #2 – early to mature stages 11


Sales, Product Marketing Focus •  New products •  New features

•  New customers

Product Strategy



Delivery & Support

New customer focus drives the priorities - pressures the organization to gravitate towards the state of new customer wins.


Early Stage Focus: NEW CUSTOMERS

Early Stage 12



Sales, Product Marketing Focus: products, features & customers

Product Strategy


Delivery & Support


Existing Customers & Maturing Products New Customers & Products Future Customers & Products

IMPACT:   Demands expand and resources thin or demands on personal time increases.

  Priorities focus on problems and immediate needs and not growth and sustainability.

  Result is organization with resources focused in wrong areas.

Maturing Company 13



Product Strategy


Delivery & Support


Business Pressures:   Expectations on the business increase and change – the “promise” now includes quality, support, scalability   More pressure to continue to innovate – new offerings to continue to lead   Need to manage full product life cycle – not just new products   More products, more customers = more complexity



Maturing Company 14




Product Strategy


Delivery & Support



Dominate tendencies: •  Priority continues to be winning new customers with existing products – other demands overlooked until a crisis •  When pressure increase – add bodies BUT not necessarily the right skills and resources •  Dull and difficult/pesky problems – annoyances to fix vs. structural issues to overcome

Start-up or expanding

business culture/focus

Shift from early stage to maturing stage 15



Product Strategy


Delivery & Support



1.  Must continually be looking for new opportunities with new customers and products 2.  Need to support, manage and grow business with existing customers and mature products 3.  Looking up and beyond now – where are the future opportunities, future markets, future types of

products or offerings. 4.  The transfer of both customers and products from ‘new’ to ‘mature’ must be planned, clear with clear

hand off points. 5.  Need to be able to transfer future opportunities into actual products and actual customers….so a

future view, but with a road map to how the company brings product to market and bring the market to the products of the future.

2 4 1 5 3

Shift from early stage to maturing stage

Five organization elements to build value that is sustainable & transferable:

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Sales

Product Design

New Product

Immediately?? Late??

Gravitates to the newest,

the best, now.

Gravitates to released design, when it is ready.

Customer’s perspective

Cus

tomer

’s pe

rspec

tive

Mature Existing Product

Patterns of Struggle #3 - Organization Structure & Natural Business Forces 17

Sales

Product Design

New Product



Finance, Operations, Delivery, Support

Gravitates toward the predictable and precision (forecasts, schedule, eliminate risk)

Organization Structure & Natural Business Forces 18

Sales

Product Design

New Product




Product Strategy

Needs to balance all of the business elements

•  Technology intelligence •  Customer intelligence •  Business intelligence


Sales

Product Design

New Product




Product Strategy




Sales

Product Design

New Product



Finance, Operations, Delivery, Support Product Strategy




•  Has there been any additions or changes to your leadership team?

•  Does your organization achieve relatively less with more people?

•  Pressure on margins despite revenue growth

•  No or exceptionally low turnover OR exceptionally high turnover

•  Confidence around leadership team

•  Succession plans – single points of failure

•  Productivity & performance – a team that can achieve results (revenue/head)

•  Cost of over loaded team

•  Skills to achieve what the business needs

Value Depressors

Indicators of Workforce Weakness

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•  Expectations not articulated

•  No communications around corporate goals

•  Connection of corporate goals

to individual goals and behaviours

•  Lack of approaches to reward behaviours that drive value

•  Missed milestones and key deliverables

•  Star performers not identified and not locked into business

•  Nothing in place to push performance – possible low caliber team

Value Depressors

Indicators of Low Performing Team

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MORPHING THE TEAM

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Valu

atio

n

Time Current Value

$50M

Future Value

$70M

$30M

$60M

$20M

$40M

$90M

$80M

$100M

How do you get the team driving this additional valuation?

A team that can drive value… •  Fill in the gaps – solve structural issues (balance immediate and long term) •  Attract and retain stars •  SMART resourcing •  Take care of the basics to sustain and retain the value that is created

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Can the current team execute to realize future potential? AND

Through the transition from early stage to maturity?


Future Potential

Value

WILD CARD


Formation

Technical Milestones

Proo

f of

Co

ncep

t

V.1

Prod

uct

V.1

GA

Prod

uct

V.2

Prod

uct

V.2

GA

Prod

uct

Financial Milestones

Seed

Fu

ndin

g

Seri

es A

Seri

es B

Stra

tegi

c Re

venu

e

+ M

argi

n Re

venu

e

Year

ly

Reve

nue

Gro

wth

Qua

rter

ly

Reve

nue

Gro

wth

Seri

es C

IPO

/M&

A

Customer Milestones

Com

pany

La

unch

Earl

y Cu

stom

er

BD

Cust

omer

Tr

ials

Stra

tegi

c Cu

stom

er

Sale

s

Repe

at

Sale

s

Repe

at

Sale

s

Repe

at

Sale

s

New

Ac

coun

ts

New

Ac

coun

ts

New

Ac

coun

ts

V.1

Sust

aini

ng

V.2

Sust

aini

ng

Organizational Milestones

CEO

R&D Lead

CFO (P/T?)

PLM

Sr. R&D

Marcomms

Int./Jr. R&D

BD/Sales

QA

SE’s Sales

(Hunter) Sales

(Farmer)

CTO

Sales Support

Customer Support

HR (P/T?)

VP Sales

VP Marketing

Admin. Support CFO

(F/T) Accountant COO?

HR (F/T?)

Workforce Planning – mix

Company Stage – business inflection points

Pre-revenue Early revenue Repeatable revenue Maturing Products Major Revenue Growth

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28 Be honest and brutal in the assessment

Not at all likely 50/50

Good probability

Very likely

Low probability

Likelihood of achieving results with current team.

MILESTONES

1 Milestone 1

2 Milestone 2

3 Milestone 3

1 Milestone 1

2 Milestone 2

3 Milestone 3

Not at all likely 50/50

Good probability

Very likely

Low probability

Likelihood of achieving results with a modified team.

MILESTONES

Modified Team Recommendations:

Team Strength Snapshot

✔ ✗ ? Lead Support Create Sell Build Deliver

If you have at least 3 ✗ or ? in any column, you have team weaknesses that you should be addressing.

Corporate Leadership

Internal Operations

Product/Service Strategy

Marketing & Sales

Design & Develop product or offering

Deliver & Support Product or Service

1. Do you have a leader for this functional area?

2. Is this leader fully accountable for delivering a known result this year?

3. Does this individual have the capability to drive results to the next level of growth you want for the company? 4. Does this leader know what the overall corporate goal is this year and longer term?

5. Will they be rewarded for helping to achieve this corporate goal?

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PUNCHING ABOVE YOUR WEIGHT

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Flexible resources used as needed for:

•  Peak work •  Special skills/expertise •  Bench strength

Time

Hea

dcou

nt

SMART WORKFORCE PLANNING

Build, deliver & support Corporate Leadership and Operations

Design & development

Marketing & Sales Product definition roles

Strategic Core Team

Technology Platforms that support ‘just-in-time’ resourcing:

Contests

Platforms

Collaborators

Platforms

Complementors

Platforms

Crowd Labour Markets

Platforms

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SELL

•  What is your core? •  How and when can you strategically resource? •  What is critical IP, knowledge, know-how that is fundamental to the product/service

offering?

PLAN & DELIVER

CREATE & INNOVATE

LEAD & MANAGE THE

BUSINESS

Core Team

Flex Team

ASK 32

FINDING THE BEST

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Employer Value Proposition 34

Employer Value Proposition

Not everyone can be

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BUT You Can Tell Your Story 36

BUT You Can Tell Your Story

•  LEADING INNOVATION •  PULLING WITH A TEAM TO

ACCOMPISH BIG THINGS •  SEE CREATION FROM START

TO FINISH •  BIG SUCCESS WITH SMALL

TEAMS

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Speak to your stars….

Every chance you can: •  tell your story – job postings; blogging; web site; let them

know why they must join you (now or in the future)

•  Compelling job postings – speak to your future stars

•  DO NOT leave this in the hands of those who will simply staff a role – this is critical to your business to create value

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39 Resourcing for what


Future Potential

Value

WILD CARD


What problem are you solving with this hire and is it the right problem?

Understand your perfect candidate! Same principles as understanding your customer

SEGMENTATION

•  Research the profile of the perfect candidate for each role •  What are the attributes, behaviours, career patterns and indicators of high

potential •  What are the relevant career satisfaction factors

  This will inform key messages to these target candidates   AND channels to reach them

HOW - Strategic Sourcing vs. Recruitment 40


MESSAGING

•  Based on what you know and what you discover – develop the messages and brand that speaks to these passive candidates

•  GOAL is to implant the idea of your company as a career choice to all passive and active ideal candidates

•  This messaging will be heard through branding, recruitment activities, marketing programs, speaking notes, and on-line activities and promotions



CHANNELS

•  Based on what you know and what you discover – develop strategic sourcing programs that address a full spectrum of channels to REACH the active, near-active and passive candidates

•  Develop plans and programs with a view to:   find talent   nurture relationships   convert passive candidates to active candidates   close on perfect candidates


Understanding who you are targeting; what they care about and how to reach them will result in:

1.  Clarity on what a successful candidate looks like for your organization

2.  Creating a compelling job posting that will speak to the best candidates for your company – giving higher likelihood of good matches

3.  Roll out a deliberate and effective recruitment campaign that will reach the target candidates that are best for your organization


Reach is Key

DIRECT SOURCING

Job Boards User Groups Schools Relevant Associa@ons

Networking Events

Awards of Significance

•  Post ac@ve (hiring within next 2-‐3 months) opportuni@es on target job boards

•  Post ac@ve opportuni@es in UG job sites that exist; broadcast opportunity in UG.

•  Note do not overuse this -‐ only when opportuni@es are real.

•  Post ac@ve opportuni@es in university job boards -‐ target schools with relevant programs.

•  Connect with someone from schools if possible to properly promote opportunity

•  Post ac@ve opportuni@es in relevant associa@on sites;

•  Make contact with associa@on to see if there is a way to tap into their community.

•  Only if networking event has known recruitment focus -‐ consider par@cipa@ng with ac@ve opportuni@es.

•  Explore awards related to employers of choice.

•  Coordinate any promo@on of these with direct recrui@ng opportuni@es

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Reach is Key

INDIRECT SOURCING Job Boards User Groups Schools Relevant

Associa@ons Networking

Events Awards of Significance

•  Examine boards for opportunity to create banner ads and other promo@onal opportuni@es

•  Have team join relevant groups; par@cipate in group discussions to build presence

•  When opportuni@es become ac@ve can send message out to group.

•  Networking with schools, alumni, etc. to raise awareness of Prolucid.

•  Team to join relevant associa@ons that have high value in terms of reaching target audience.

•  Will want 'speaking notes around who we are always looking for'

•  Team to aWend 'high value' networking events that promote Company; speaking opportuni@es to be explored.

•  Want speaking notes on resources we are always looking for

•  Explore awards that posi@on company in a highly valued technical, sector, work environment.

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Tight Execution is Key

Focus in on a tight plan in the context of a bigger picture

Effective Recruitment

•  Know what you are looking for and when •  Think of a highly targeted approach •  Process from start to ‘in-seat’ will generally take no less than six weeks

WITH all stars aligning – plan for 2 months or more if highly specialize role •  Think before you act – a little preparation will make the effort much more

productive

Organizational Milestones

CEO

R&D Lead

CFO (P/T?)

PLM

Sr. R&D

Marcomms

Int./Jr. R&D

BD/Sales

QA

SE’s Sales

(Hunter) Sales

(Farmer)

CTO

Sales Support

Customer Support

HR (P/T?)

VP Sales

VP Marketing

Admin. Support

CFO (F/T)

Accountant COO? HR

(F/T?)

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TAKING CARE OF BASICS

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Taking care of the basics…

•  Protect IP & assets •  Retain or lock in key employees •  Appropriate liabilities and obligations; mitigate risks

Contracts

Compensation

Sales Incentives

Policies

Workforce Planning & Recruitment

Performance Management

•  Appropriate compensation for market •  Motivate and Reward performance

•  Sales compensation plans that drive quota attainment •  Models that make financial sense and are in line with market •  Terms that create appropriate obligations

•  Policies that ensure compliance with laws •  Practices that align with business values, motivate the right behaviours,

and ensure sustainable business operations

•  Exceptional recruitment process and selection practices – resourceful and diligent sourcing; hire for best fit

•  Workforce plans that align with business goals

•  Effective feedback tools; programs that build goals that align with business goals

The basics protect the value that has been created and helps drive additional performance

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Thank You! Questions?

Creating Value with your HR Strategy - Entrepreneurship 101 (2013/2014)

Business

new customers sales

new customers early

existing products

product marketing focus

new opportunities

new offerings

corporate operations

value formula value