1. Transforming Your Business Hewitt Associates The Circle Of Simplicity Presented at HR Round Table organized by ISPe & UPES, DehradunSmita Anand

2. The Next 15 minutes...

Quick look at what you already know

• A Sector Overview

Business Alignment Essentials -

• lets acknowledge reality

Crafting People Strategy In An Uncertain World

• A value creation paradigm

• Value creation through alignment

• Simplicity - aligning people developmentto business performance

3. Sector Overview Key Success Factors Macro-economic Legal & Regulatory Competition Process

Political Transformation

Environmental Awareness

Privatization

Deregulation

Competition from global players

Volatility of oil prices

Rapid technology change

Process integration

Optimal product mix

Cost competitiveness

Infrastructure/Logistics

Integration into attractive segments of the energyvalue chain

Alliances and increased M&A activity

Enhancement of customer value

Increasing retail presence

Technological superiority

Marketing, brand building, pricing and risk management

Drivers of Change 4. Sector Overview-Lets Acknowledge Reality Create a higher order purpose The Five Lessons... And Specific People Issues Establish alignment and agility Build capabilities that address hearts and minds Talent Pipeline acceleration Drive organizational performance

Performance & productivity

Workforce efficiencies

Change management

Organization structuring

Managing unions

Leadership

Workforce demographics

Reward & recognition

5. The Value Creation Paradigm Distribution of wealth must be preceded by creation of wealth Organizations require social legitimacy/credibility to be attractiveIts a myth that old organizations cannot really change Organizations first create value for those they serve and then for those who own it Its a myth that organizational efficiencies invariably decrease when change is effected 6. Value Creation - People Issues For Addressal

Performance & productivity

Workforce efficiencies

Change management

Organization structuring

Managing unions

Leadership

Workforce demographics

Reward & recognition

Align to Business Drivers

Build business Line of Sight

Link HR Strategy to Business Strategy

Organisation Design

Job and work levels

Manage Talent

Staffing/ Redeployment

Targeted retraining/ re-skilling

Talent pool/ Leadership development

Benefits & lifestyle / recognition program

VRS schemes

Perform to Reward

Building a performance culture/ system

Fixed pay / performance based pay

Teamperformance and pay linkages

7. Value Creation - Aligned & Adaptive Cultures Matters

Adaptive Companies

• Encourage risk-taking

• Receptive to innovationand change

• Trusting environment

• Leadership encourages change

• Entrepreneurship highly valued

• Proactive management

• Shared feelings of confidenceto be able to manageproblems and take advantage of opportunities

1000% Revenues 0% 200% 400% 600% 800% 682% 166% Adaptive Companies Other Companies Return onShareholder Investment 0% 200% 400% 600% 800% 1000% 901% 74% Adaptive Companies Other Companies 8. Value Creation -Aligning organisation to business driversFrom Business Unit... To Opportunity Based Design

Organizing around skill bases:

• Clear cut accountability and authority

• Dedicated resources

• Stable opportunities

Organizing around customer bases:

• Opportunity centric

• Process/technology integration

• Delayering/ removing overlaps

• Speed to market enabled

• Customer focussed and driven by multi-disciplinary teams

9. Value Creation - Define Performance Philosophy First Variable Enterprise-Business Mix Enterprise-wide Consensus Performance Focus Financial Results Business Unit Driven Customer Process Business Unit Chosen Capability Perception Usage Reward&Recognition Developmental Rater Constitution Single Rater Multi-Rater Unit of Measurement Individual Team Degree of Differentiation No Differentiation High Performers Low Performers Frequency-Depth Mix Project-based Review Quarterly Review with Lower Depth Annual Review with Greater Depth Options 10. Value Creation - Aligning Performance Metrics to business drivers Performance Scorecard

Map objectives to the balanced scorecardframework

Establish metrics, baseline,and set targets

Value Drivers

Identify value levers

List metrics in view of short- and long-term business strategy, anchored to valuecreation requirements

Strategy

Articulate how the business will create value, from high- level strategies to specific initiatives that will support thebusiness objectives

11. People issues require a proactive strategy for addressal

Performance & productivity

Workforce efficiencies

Change management

Organization structuring

Managing unions

Leadership

Workforce demographics

Reward & recognition

Build Capability

Develop business leaders

Skill shortage in leadership

Leadership bench strength

Defining a clear leadership paradigm

Manage Change

Communication/ integration

Career mapping / promotion / policy integration

Cultural issues

Transformation related

Trust building

Building a new image

12. Aligning talent strategy to business BusinessStrategy Initial TalentStrategy Questions Focused TalentStrategy Questions Grow Revenues by 10% over FY02 through M&As and JVs Sourcing Do you have the necessary talent inside the company, or will you look outside ? Assessing What goals will the leadership team have to accomplish? Developing What skill sets and competencies are critical for success? Compensating What are the right target reward levels given this new challenge? Do these skills existin-house and with whom? Where these skills are missing, do we build internally or seek externally? For whom is this an ideal developmental assignment? How will we measure our success developing these skills and assess the need for other skills? 13. Manage talent proactively Who are your essential people? Crucial Employees Identification of the critical talent pool within the organisation is imperative to survive the War For Talent 14. Manage talent proactively What should we do with our most important people? Plan Engage Develop Deploy Reward By identifying the right levers for change within each employee group, we can adaptand orient talent to the changing business needs Critical Important Low Priority Optimise Productivity Link Performance to Rewards Optimise Workforce Recruit/ Train/ MentorSuccession Planning Knowledge Workers Middle Management Skilled Workers Less- Skilled Workers Top Executives 15. Align leadership to business strategy A firms Leadership strategy must align with its business strategy and the change required in their environment Growth Return Transformational Change Leadership systems reinforcing: Vision, Speed, Aggressiveness, Risk-taking, Managing Change, Driving Results Leadership systems reinforcing: Speed, Aggressiveness, Process Management, Risk-taking, Planning, Task Focus Leadership systems reinforcing: Vision, Decision-making, Financial Acumen, Managing Change, Risk Management, Cost Control Leadership systems reinforcing: Risk Management, Process Management, Financial Acumen, Cost Control, Rule Orientation, Task Focus Transactional Change 16. Align Capability Requirements To Business

Stream of New Products

• Breakthrough innovation

• Speed to market

• Big risks/big rewards

The Most Value at the Lowest Costs

• Tight value definition

• Process improvement/cost reduction

• Rigorous measurement and accountability

Superior Levels of Service

• Tailored solutions/fabulous service

• Deep commitment to customers

• Responsiveness and flexibility

Product Leadership Operational Excellence Customer Intimacy 17. Building Commitment- Providing Real-World Road Maps of Opportunities High-Level View of Next Career Move Architect 3People 2Sales 1Service 1Knowledge 2Culture Architect On a higher complexity engagement 3People 2Sales 1Service 1Knowledge 2Culture Technical StrategistOn an equal or lowercomplexity engagement 2People 1Sales 2Service 1Knowledge 2Culture Project Manager On an equal or lower complexity engagement 1People 3Sales 1Service 2Knowledge 3Culture Note: Numbers indicate mega -process focus for each role(1=highest significance) Designer 3People 3Sales 1Service 1Knowledge 2Culture On a higher complexity engagement Knowledge Manager On an equal or lower complexity engagement 4People 3Sales 2Service 1Knowledge 5Culture Team Leader On a higher complexity engagement 1People 2Sales 1Service 1Knowledge 3Culture You Are Here 18. Is There Training Without ROI Analysis? Sample Training ROI Analysis Tool 19. Is There Training Without ROI Analysis? Sample Training ROI Analysis Tool High-Level Findings 20. Aligning Your Workforce With Your Change Direction Fwd Rew Exploring Creating Home 21. Managing Change - From Insight to Action

What Do We Need To Do?

Attract

Develop

Engage/retain

Redeploy

Contract/source

Reinforce

Change

Identify

Develop

Engage

What Do We Need?

Critical roles and competencies (e.g. SAP specialists, project managers, go-to-market savvy)

Culture (e.g. performance, global, customer focused, ownership innovation)

Leadership bench strength (e.g. Succession planning,re-deployment )

Whats Our Time Frame?

Urgent

Intermediate

Long-term

Urgent

Intermediate

Long-term

Urgent

Intermediate

Long-term

Fwd Rew Exploring Navigating Creating Home 22. In summary, Five Lessons on What needs To Change1 Speed of change 2 Recognizing full impact of technology & customers 3 ROI on people - key measure for HR effectiveness 4 Distribution of wealth-competitive fixed,attractive variable 5 Drive organizational performance