SuccessConnect 2010 kicked off today in the beautiful city of Frankfurt, our final SuccessConnect destination for 2010.

The event started with a bang with the ever energetic, Lars Dalgaard taking the stage.  Announcing the acquisition of YouCalc, a Danish company, to a jam packed house, Lars explained how SuccessFactors latest purchase will let business create and share custom reports and analytics from the cloud.

Jay Larson, SuccessFactors Head of Sales, was next up to the podium. Jay discussed HR’s new economic reality – do more with less: more ROI; greater business impact; connect HR with the business; and close the gap between strategy and execution.  He then went on to share success stories from those who have implemented more for less and have “BizX’ed” their organizations.  

Dmitri Krakovsky drilled further into SuccessFactors recent YouCalc acquisition explaining the new Calculator in the Cloud feature that will allow users to perform analytic mash-ups and what-if scenarios from any cloud based application. Dmitri also expressed his excitement over SuccessFactors new partnership with Jobvite, pointing out that the time to hire is not as important as hiring the best.

The final SuccessConnect of the year showcased the best of the best with Norbert Kleinjohann, CIO Siemens AG and Marion Horstmann, Corporate Vice President of HR, Siemens AG sharing their secrets for success.  

Marion Horstmann shared Siemens transformation of the HR function using a global people strategy of which transparency was a key element. Marion expressed her delight that her three requirements for a strong HR strategy were inherently delivered via SuccessFactors solutions: integrated applications for all people processes; a uniform product completely that speaks in a single global language; and recurring efficiency and higher quality.

Norbert Kleinjohann then went on to discuss how Siemens positioned their standard HR system, labeled 4Success, for success. “During the evaluation process, Siemens IT team worked with their HR colleagues to assess 50 possible suppliers, both on premise and in the Cloud. We awarded the contract to SuccessFactors in March 2009, based on functionality and usability and the provisioning of an integrated solution with consistent data models,” says Kleinjohann.  (See article SuccessConnect: The Biggest Cloud in the World) Kleinjohann cites: “We have seven modules in place – target setting, performance management, compensation management, roundtables, career development planning, recruitment management, and employee profiles. We went live within 6 months with the target setting module which we rolled out to 170,000 employees. We now have 400,000 employees information loaded into 4Success and have 40,000 log ins per day.” SuccessFactors had the fastest implementation, best functionality, usability, and integrated capabilities.  Kleinjohann says: “I believe that Cloud Computing will be adopted by IT sooner than we expect.”

The audience enthused over the Siemens presentation stating that it was a pretty impressive story for an impressive first day in Frankfurt!

SuccessFactors Research recently surveyed 227 companies in the UK and Ireland and found that 60% of the respondents listed staff morale as the number one effect of the crashing economy, followed closely by goal alignment and achievement, which was selected by 31% of the respondents. What does this mean for business? I am sure you have noticed the title of this blog, Carrying Rocks or Building a Castle. People who are not aligned with their organization are merely carrying rocks, doing work without building the castle. Companies simply cannot afford to let their people do unproductive work, whether in a good or bad economy. Workers with low morale who are not engaged may never pick up the rock at all.

The cost of an unmotivated workforce is quite substantial. SuccessFactors Research has always maintained that a company’s ability to execute is based on three factors: motivation, talent, and organizational ability (tools, etc.) In fact, we consider these three factors to be multiplicative, so low motivation, or low engagement, directly and negatively impacts the other two factors across the company. Companies can tackle both challenges highlighted in our survey, low morale and goal alignment, with an effective goal management strategy.

Having a direct line of sight between one’s individual contribution and the company’s goals is one major driver of engagement. Goal management can help provide that line of sight, linking and cascading goals so that the worker always has a context for his or her actions.

When optimizing the workforce, potentially laying off staff, and adjusting to the changing business environment, you can’t afford to let low morale effect your organisation’s ability to execute. Ensure that goals are clearly set and managed effectively, and build strong teams committed to building the castle.

But, successfully promoting a paperless office and shifting people from the office to the home, requires systems that support these activities. Goal alignment, ensuring that people are working on the right things for the right reasons, is very important. People need to feel like part of the team, even if they aren’t physically present. Traction, not action is the mantra for successful execution. Goal alignment ensures that people are moving in the right direction downfield to score, and not just gaining yardage. In fact, if your players are moving in the wrong direction, they are moving farther away from the goal. Goal alignment helps ensure that this doesn’t happen. It is not a substitute for supervision from a manager, but keeps the team working toward the overall company strategy.

Human Capital Management is a critical to earning green, and going green, enabling people to work from home, in global teams, anywhere, anytime. How green is your organization?

By and large, studies have found execution is the clear driver of company value and financial performance. How much? Well, about 15% of company’s performance is attributable to strategy – the remaining 85% is attributable to execution, as found by Becker and Huselid’s “ High performance Work Systems and Firm Performance.” Joyce, Nohria, Roberson found a similar ratio in “What really works.”

That’s right – Execution of the strategy is 6 times more important than the strategy itself!

How do you execute on a strategy? In a word: People. At the end of the day, it is the employee who makes things happen, who gets results – not machines, strategies, vendor relationships or what have you. People are your real differentiator and now typically make up 70% of a company’s cost (and growing). This is doubly true in today’s knowledge-focused economy. We see today that about 80% of a company’s valuation cannot be explained by the balance sheet, which shows the growing importance of intangibles and people performance to future cash flow. The value of a company is no longer in its factories, IT systems, or physical assets – it is created by the company’s people.

Your company is in fact already on the field, fighting for customers, revenues, and a competitive position. Instead of “picking out the best play”, focus on what will most help you move downfield toward your goals: people performance, 85% of your success depends on it. Goal alignment, individual accountability, and engagement equal strong execution. Build up these strengths and capabilities of your company to help ensure you can make the big plays. So yes, people performance does matter, because their ability to execute is the key factor in creating value and driving results for your company.

It’s an entertaining tale, you should read it even if just for a laugh. But it make you take note of the fact that Performance management ain’t a cure for stupidity, – that’s for sure.

It often occurs to me that some of the highly educated people that comprise the management ranks at our nation’s most highly regarded companies are so capable of strategizing that they never actually DO anything. They just think.

Not that there’s anything wrong with that by itself.

But, in that world, the people that are actually doing the work are just that – doers. Well what if the doers thought and the thinkers did? What a wonderful, productive world it would be. In some ways, I think that’s part of the promise of goal alignment in particular and performance management in general.

Just a thought.

But earlier this week, I sat in on one of the all-hands training sessions we had and I realized there’s actually more to it. Technology enabled Goal Alignment doesn’t only have to be a mechanism for a manager that enables her to say “hey employee, this is what I’m working on – you work on it too.” It can actually be a far richer and more dynamic process.

There are two aspects to it, I think. The first is directional. By this I mean Up and Down. Everyone knows goals are most often cascaded down, but what about cascading up? Some progressive companies are realizing that line workers often are closest to projects and problems – and are relying on them to generate important goals that involve lots of people.

The second is transactional. Most often goals are pushed from managers to employees. But what about pull? If employees could go into the goal plans of managers to understand how their work related to the level above them (and even the level above that) – one clear benefit would be visibility. But another would be the ability to pull goals into their own plans – effectively saying “I’m supporting you on this.”

So now we’ve spoken about two important  types of cascading – but, when you think about it cascading is essentially copying. The copying of a goal from a manager down through her organization. Or the copying of a goal by an employee from a manager. But goal alignment can also involve linking – the creation of a brand NEW goal that supports a related goal.

For example, if a manger has a goal to “increase sales by 200% in California,” a marketer might create the goal “execute advertising campaign in California” and link his goal to his managers’.

The widely-held belief that a cascade is a simple “copying down” of a goal is true, but not the whole truth. And as companies search for new ways of aligning their oganizations behind shared goals dynamic goal alignment can be an important enabler.

This is an obvious conclusion for many of us, but nevertheless the result of a nationwide survey from last month. The top three sources of stress were “deadlines (52%), interruptions (42%) and conflicting responsibilities (37%)” according to this ground-breaking research.

The last one is the only one that made my ears perk up. Conflicting responsibilities. Certainly we all have things pulling us in different directions. That’s a normal part of any job. Prioritization. But I wonder to what extent it relates to the idea of goal alignment.

If it were clear which actions were in line with overall corporate goals - which work would most drive the company forward – perhaps it would help make “conflicting responsibilities” less conflicting. Perhaps.

We asked, “What is your most pressing HR issue?” 

We had 50 people respond to the poll, and the results are interesting. Despite all the talk about succession and compensation, the core issue (28%) for our respondents was Performance Reviews followed followed closely by Goal Alignment (24%).

To me, it indicates that Performance Management and Goal Alignment are still the biggest pain points for HR practitioners. They represent the heart of talent management initiatives, and Succession and Comp. are just further down in the hierarchy of HR needs.

I’d be curious to hear what you guys have to say about the results. Do you think they’re generally representative, or are they skewed for some reason?

Though the interview starts with the interviewer stating that he always felt that “HR is just a barrier, a bureaucratic engine that is just a support function” the topic soon shifts to more valuable thinking from Mr. Barney. I’d recommend a listen if you have the time (it’s about 50 mins – a little long for my taste).

Healthcare is a very unique industry with a number of difficult people-related challenges. As Mr. Barney notes, 40 – 50% of all expenses in the hospital world are people – they are the main instrument for providing care. But, with a very diverse workforce with workers from across the educational spectrum and a “tradition of hierarchy” aligning the workforce behind common goals is no simple task. Nevertheless, he says, there are just simply too many moving pieces to allow credentials to get in the way. It’s necessary to bring everyone to the table in order to move forward.

Obviously, SSM has done a good job of goal alignment. With a stated focus on quality, the organization won the Malcom Baldridge National Quality Award in 2002. It was the first healthcare organization of any kind to so.

One of the more interesting moments in the discussion came when Barney spoke about a couple of the HR challenges he sees in the healthcare space:

1. Matching the workforce to demands of new intiatives. New technology like Electronic Medical Records and state of the art imaging require appropriately trained people to make them worthwhile. Barney speaks about the many hundreds of millions his hospital planned to spend on a brand new facility to cater to increased community needs, and the difficulties they may face in finding the right workers to work there.

2. Diversity. The increasing diversity of the American population means that hospitals have to work increasingly hard to hire and retain an equally diverse workforce. He notes that the people in the beds have cultural and ethnic needs that hospitals must work to satisfy.

One other bit I found interesting was that Barney disagrees with the common perception that there is a dearth of leadership in the healthcare space. He feels its not a lack of talent, but a reliance on hierarchy and lack of vision that gets in the way. Curious to know if any of you have a reaction to that?

From the report’s press release:

According to Sau Lam, Research Analyst at AMI-Partners, “Several factors are fueling this trend. Traditional on-premise HR applications are often too costly, time-consuming and resource-intensive for most SMBs to deploy and manage. Full-service HR outsourcing can also be too expensive. Plus, it requires that customers sacrifice visibility and control. Web-based solutions can potentially provide SMBs with a more viable option for servicing their HR needs,” Ms Lam continued. “At the same time, SMB HR needs are growing. They need to automate operations to meet increasing regulatory requirements, and compete more effectively to maintain a dwindling supply of skilled personnel in a shrinking labor force.”

Much has been made about the Internet as a force of democratization, and that’s true even in the world of enterprise software. As a former small business owner, I loved SaaS applications becuase they gave me functionality that similar sized competitors could only dream of. In that way, they lent a real competitive advantage. That advantage is especially true with HR software.

Workforce performance management is, in some ways, more impactful in smaller companies in which there is less margin for error. Good HR applications can reduce administrative burdens that can bog you down. They can also provide the benefits of goal alignment and performance management processes that make sure everyone is pulling together and that the company is getting the most out of its employees and vice versa.