value insights

HR Strategy Tools- Valutrics

There is an increasing competition in the labour market for scarce skills. These factors are all tied into the generation of economic value, which in turn feeds back into organizational capability to meet these challenges as a virtuous cycle.

The five stages of implementation for HR strategy implementation are as follows:
1. Diagnosis: what is the scope of the HR opportunity (or threat of it)? What are its objectives, and possible benefits, costs and risks? What is the overall implementation difficulty, and who are the key stakeholders (at a high level)?
2. Options – and the cunning plan: what cunning options are available for implementing the HR breakthrough?
3. Planning: for these strategic HR options, how attractive are they versus how difficult to implement? What key activities are needed, and with what resources?
4. Implementation: is implementation proving effective, and if not, why not? What new implementation forces and stakeholders have come into play, and how might these be handled? Do the original objectives need revisiting, and are these more easily met by other strategies? If so, what are the costs of refocusing efforts?
5. Learning and control: is the implementation of the HR strategy on track in terms of its intended competitive, financial, operational and organizational effects? Did you achieve what you set out to achieve? If not, what were the factors you might have controlled, or attempted to influence, but didn’t? Or do you need to revisit and change your recipes for developing strategies for growth (or for their implementation)? Finally, were the implementation difficulties much greater than envisaged, and if so, why?

Performance driver analysis
Performance driver analysis helps to diagnose organizational performance, either externally or internally (or both). A second way of analysing business and financial performance is to identify the key performance drivers using a tailored version of force field analysis .

Although this method does not purport to be an exact picture of Rover’s performance drivers, it does yield some important concerns about the medium-term attractiveness of BMW’s acquisition of Rover, even if there were longer-term opportunities beyond this analysis. Performance driver analysis can be used for:

  •   Analysing an organizational performance
  •   Understanding a team’s performance
  •   Analysing an individual’s performance.

It is especially helpful in turnaround situations.
In many ways performance driver analysis is more incisive than SWOT analysis, as it focuses on those factors that have an impact on economic value generation in a business. This gets us away from the ‘nice-to-haves’, which often cloud the ‘strengths’ of SWOT analysis. Also, with the vector format the performance drivers are automatically prioritized.
The key benefits of performance driver analysis are that:

  •   The ‘so-what?’ drops out much more readily than in a SWOT analysis
  •   It is already prioritized
  •   It gives a better feel of the overall business context before addressing a specific organizational problem or bottleneck (so that we do not simply respond reactively to a problem)
  •   It makes judgements on performance less of a personal issue.

The performance drivers are, in effect, scored according to their importance multiplied by their relative strength or weakness.

Fishbone analysis
Fishbone analysis is a very quick and easy way of going behind the more immediate definition of the HR problem or opportunity. This illustrates why strategy is frequently not well implemented. This can be done for a variety of reasons, or underlying root causes – including, for example, having too abstract a strategic vision, not fully thinking through implementation, or having too many unprioritized projects. There have been some rather major errors in the business, which places advertisements for companies – sometimes getting these very wrong. In this real-life documentary, the entrepreneur/manager is very angry at the start, and his anger mounts as his staff appear to be unable to cope with his verbal pressure and criticisms. He increasingly loses the plot and eventually appears to lift the office table in the air, propelling it in the general direction of an employee – after the latter has been fired.
The underlying causes of this extreme behaviour are to be found in:

  •   His management skills (perhaps he has had little, or no, management skills training)
  •   His role in the business (which appears to be too dominant)
  •   His self-management capability (he appears to be unable to manage his frustration – he appears red at the start going on a radiant purple towards the end)
  •   His organizational skills (in terms of project management, delegation, coaching, interpersonal skills etc.).

In order to deliver and sustain this vision, alignment factors might be:

  •   To undergo an intensive programme of management coaching
  •   To take valium for 6 months
  •   To not get hooked on valium (or some other drug)
  •   To get a clearer balanced life (work is not a battle, let alone all-out war; if you think that, why not join the SAS if they will have you?)
  •   To restructure the organization
  •   To take up yoga and meditation
  •   To go to Champneys health resort once a month.

Obviously, when dealing with an individual who is in a turnaround situation, there may be a very real issue about whether these alignment factors will ever be in alignment.
There are some important guidelines for using fishbone analysis. The do’s are:

  •   Identify the symptom of the cause and position it over towards the righthand side. Where there are a number of possible symptoms, you might need to analyse several problems (and thus draw up several fishbones). Or, you may need to summarize a number of issues into a single, overarching fishbone.
  •   Make sure that the root causes are the real root causes (or at least quite close to being root causes). If you can ask the question ‘why?’, then you are still at the level of a symptom.
  •   Use your common sense to understand at what point you should cease going back up the causal chain. Thus ‘lack of leadership skills’ for most purposes is a satisfactory root cause, rather than going back to ‘the Board appointed the wrong leader’ or ‘there were no really suitable candidates’. (You do not need to go back to the dawn of time to scope and diagnose a problem.)

The don’ts are:

  •   Don’t worry about whether the fishbone causes should go vertically or downwards; there is no special priority in where they are positioned and they are all equivalent. Most fishbones are more complete if they are drawn up in a creative flow rather than in some prestructured manner. If you do want to prioritize the fishbones, write the root causes on ‘Post-its’ and then move them around, perhaps in order of priority of difficulty, or degree of influence, or their attractiveness.
  •   Don’t clutter up the analysis with sub-bones off a main fishbone on the same sheet of paper. This produces a visually complex, messy, and hard to interpret picture. Where appropriate, do the analysis of a particular mini-fishbone for a particular cause on a separate page.
  •   Don’t forget to consider the external causes as well as the internal root causes, and also the tangible versus the less tangible causes of the original symptom.

The fishbone itself is a powerful device for mapping causality of organizational issues, and is not therefore just a brainstorm – it repeatedly asks the ‘why–why?’ question, picking up more and more of the causal system of the problem. This generates more ideas than a simple list because:

  •   The ‘why–why?’ question stimulates further thinking about root causes – either at a deeper level or more laterally (and into other areas of the organization)
  •   Each fishbone can usually be traced back to its sub-fishbones (with a list each point is usually the end of the analysis, and thus is not analysed in greater depth)
  •   Subsequently each fishbone can be prioritized using, for example, the attractiveness–implementation difficulty (AID) analysis or the importance–influence analysis . This effect can be powerfully shown as an overlay of two acetates, one on top of the other, the first acetate being the fishbone and the second one on top being its prioritization.

The fishbone can be explained first before moving on to its prioritization.
2. The fishbone is a visual device, making it easier to communicate (especially to top managers) and generally much more interesting than  a list.
3. With a list the symptom tends not to stand out from the root causes. Also, a common tendency (without using a fishbone) is to talk around general issues rather than real causes.
Having used fishbone analysis for nearly 10 years to diagnose strategic issues, we realized that a number of generic factors were at work. These factors interact as a system, which we now call the ‘root cause system’.

The ten main generic systems that appear to be at work are:
1. The competitive environment
2. Operations (internal)
3. The wider environment
4. The customer
5. Resource availability
6. Decision-making
7. Politics
8. Culture and style
9. Structure and skills
10. Financial imperatives and pressures.

From–to analysis
From–to (FT) analysis helps to scope the extent of the strategic project that you are working on, but in terms of its breadth and its degree of stretch. It is another useful tool for scoping the extent of implementation, especially for organizational change or for operational development. Where a development project has a significant impact on ‘how we do things around here’ or the ‘paradigm’ , then it is essential that at least a rudimentary FT analysis is conducted.
The ‘paradigm’ embraces a raft of organizational processes, some of which are ‘hard’ and tangible and some of which are ‘soft’ and intangible  . For example, managers within Prudential Life Administration used FT analysis based specifically on the paradigm to scope their organizational change project. This helped them to get their minds around the ‘soft’ as well as the ‘hard’ factors .
This kind of analysis can also be used to monitor the progress of a project – perhaps using a score of 1–5, with 1 being the ‘From’ and perhaps 5 being the ‘To’. (In some situations, however, we might well be starting off with better than a 1, as we could already have made some progress towards our goals, prior to embarking on the project. Equally, we might not wish to go all out for a 5, as a 4 or even 3 score might be more realistic and acceptable, depending upon the situation.)
The Prudential example of FT analysis is very much a more ‘gourmet’ approach. We see a semi-structured approach being used to generate the key shifts that the strategic project is aimed at delivering. A simplified approach is quickly to brainstorm the froms and tos in a way much more specific to a particular project. Our main caveat here is that you really must think about the softer factors that are required to be shifted – for example, behaviours, attitudes and mind-set generally.
To perform FT analysis, you need to carry out the following steps:
1. What are you trying to shift? (the critical categories)
2. By how much are you trying to shift them? (the horizontal from and to shifts).
By now it may have become apparent to you that FT analysis is essentially an extended form of gap analysis (see our previous section). Because it breaks the gap down into a number of dimensions, it is generally more specific than gap analysis and is frequently the next step on.
The key benefits of FT analysis are that:

  •   It gives a clear and more complete vision of the extent of the potential difficulty that achieving that vision may cause
  •   It can be used actually to monitor strategic progress
  •   It is a very useful technique for communicating what needs to be done, or for exploring the implications and for getting greater buy-in.

More specifically, it is especially helpful in presenting a business plan for an HR strategic breakthrough. If it does have any drawbacks, these are that managers may struggle to come up with their desired categories for development and change (presumably because of a lack of clarity and ownership).
FT analysis also links into a number of other techniques, as follows:

  •   It can be used to summarize changes in the external marketplace, for example by drawing, as a prelude to delivering, the key HR/organizational issues
  •   It can help to move from a performance driver and/or fishbone analysis to a programme of development and change
  •   It can help give an overview of the more detailed ‘how–hows’
  •   It can be used prior to force field analysis and stakeholder analysis (see later in this chapter) to scope likely implementation difficulty and the level of stakeholder support.

How–how analysis
How–how analysis is useful in the detailed planning of implementation, which comes originally from project management. It is also useful for finding a way forward that might not have been considered before.
While fishbone analysis works backward from the current situation to find out how and why it exists, how–how analysis works forward to see how it can be resolved in the future.

How–how analysis adds the most value when you have not really thought very hard about the detailed implementation steps that will be needed to achieve something. However, even when you have thought about this, it will be useful just to help identify the less tangible as well as the tangible aspects of HR strategy, especially:

  •   Positioning
  •   Communicating
  •   Influencing
  •   Team-building.

How–how analysis will also help to get some approximate order of the likely sequence in which things need to happen – and potential critical paths, which are likely to be soft and approximate for HR strategic breakthroughs, rather than something you can manage on Microsoft Project Manager Software.
The major benefits of how–how analysis are that it is common sense and it exposes assumptions about what actually has to happen, thus reducing blind-spots. Its key potential disadvantage is that it can tell you little more than you already know, if you have thought about something really well already.
How–how analysis links to other tools as follows:

  •   It may help to go from the fishbone’s root causes to some potential implementation solutions
  •   It can help to operationalize the various shifts that have been identified in the FT analysis
  •   It can feed into the attractiveness–implementation difficulty (AID) analysis.

Attractiveness–implementation difficulty analysis
By looking at the relative attractiveness and its difficulty of implementation  it is possible to begin to evaluate HR strategies at a microlevel, from a number of perspectives:

  •   A portfolio of strategic activities, any one of which can be undertaken, can be prioritized
  •   Mutually exclusive strategic activities can be prioritized
  •   Different options for implementing the concept can be evaluated
  •   The different parts or activities within an activity can be prioritized.

It is sometimes the case that parts of a possible strategy can be undertaken without doing others. For example, a competency analysis is a preliminary project to a training intervention, or could be a stand-alone project.

Value and cost driver analyses
Value and cost driver analyses help us to get a better steer on the ‘attractiveness’ of a particular strategic breakthrough (the vertical axis of the AID grid). A value driver is defined as ‘anything outside or inside the business which either directly or indirectly will generate cash flows – either now or in the future’; a cost driver is defined as ‘anything outside or inside the business which either directly or indirectly will generate cash outflows – either now or in the future’.
Examples of value drivers include:

  •   Organizational responsiveness
  •   A highly motivating leader
  •   Excellent cross-functional teamwork.

Examples of cost drivers include:

  •   Organizational complexity
  •   Excessive and inappropriate politics
  •   Bureaucratic processes and structures.

Each one of the above bullet points is then broken down into its subdrivers, just as we did earlier for ‘how–how’ analysis. Value and cost driver analyses can be used to restructure a company’s cost base strategically , to avoid costs beings managed primarily on a short-term basis, and in isolation.
Value and cost driver analyses are essential for anyone doing a business case for HR strategy, especially before doing the financial numbers. (Imagine how wrong our numbers would have been had we not done this analysis!)

Its key benefits are that:

  •   It provides a key bridge between HR strategy and finance
  •   It helps to stretch thinking laterally about less obvious areas of value  and cost
  •   It is highly flexible.

The key linkages with other techniques are as follows:

  •   With AID analysis, to test out assumed ‘attractiveness’
  •   With performance driver analysis, to analyse an individual performance driver in depth.

Value-over-time curves
The value-over-time curve helps us to understand when value will be delivered over time. This curve (especially if coupled with scenarios) is helpful not only when doing a business case for an HR project, but also for project management generally, and for monitoring the value/for corrective action.
The curve can be used to track (in real time) the value added during an HR strategic meeting or workshop.

Force field analysis
Force field analysis is a technique that brings to the surface the underlying forces that may pull a particular HR strategy project or programme forward, prevent its progress, or even move the change backwards. These ‘forces’ can be separately identified as ‘enablers’ or ‘constraints’. However, neither set of forces can be adequately identified without first specifying the objectives of the implementation.
When managers first see force field analysis, they often read it as being some form of extended cost–benefit or ‘pros and cons’ analysis, which it is definitely not. Force field analysis is simply concerned with the difficulty of the journey that a strategy is likely to make throughout its implementation.
The difficulty of this journey, like that of any other journey in life, has nothing to do with the attractiveness of reaching the destination. The only sense in which it is permissible to incorporate the perceived benefits of a strategy as a force field enabler is insofar as:

  •   There is actually a genuinely attractive business case for the HR strategy, and one that has turned on its key stakeholders, and/or
  •   Key stakeholders are attracted by the strategy for other reasons.

The most effective way of evaluating the forces enabling or constraining the achievement of the HR strategy’s objective is to draw this pictorially. This picture represents the relative strength of each individual enabling or constraining force by drawing an arrowed line whose length is in proportion to that relative strength.

The example of the telecommunications company highlights one important truth about force field analysis, namely that the degree of ease of the strategic project is only in proportion to the extent of your pre-existing cunning implementation plan.
Managers who have not already thought hard about the phases of difficulty and about options to get round potential hurdles (for example, push versus pull strategies), may be doomed to suffer a Very Difficult Project.
As a rule of thumb, the enablers should be outweighing the constraints by a factor of at least 1.5 to 2 overall, in accordance with the principle of military dominance. Otherwise we should be concerned and potentially worried that implementation droop will set in. Also, any stoppers really must be addressed, otherwise implementation really won’t happen. During (and before) implementation the key implementation forces should be continually monitored to ensure that none of them threaten to ‘go critical’ and become a stopper.
The next issue that arises is how to evaluate the relative strength of the various forces. Two methods used successfully in the past include:

  •   Scoring each force as having ‘high’, ‘medium’ or ‘low’ impact
  •   Scoring each force numerically on a scale of 1 to 5.

Where a team may wish to change its mind (and does not wish to spoil its artwork), then by using ‘Post-its’ the length of the arrows can be changed.
One of the common objections to force field analysis is that the whole scoring exercise is highly subjective. This feeling normally occurs within the first 10 minutes or so of any analysis exercise. It arises usually because all managers have done is to identify that a force is an enabler or a constraint, without exploring questions including:

  •   Why is it an enabler or a constraint?
  •   How important an influence is it on the change process (and at which stage)?
  •   What underlying factors does it depend upon in turn?

This highlights that any force field analysis is dependent on many assumptions, a number of which are implicit. A more successful and less subjective analysis will have brought to the surface, shared, and agreed these implicit assumptions.
A number of pitfalls need to be avoided in the use of force field analysis for managing HR strategy implementation. These include:

  •   Focusing primarily on tangible (as opposed to less tangible) implementation forces
  • ? Missing out major constraints because the team wishes to paint an ‘ideal’ rather than a realistic picture of the change
  •   Failing to identify a ‘stopper’ – that is, a change that has such a powerful impact that it is likely to stop the change in its tracks. ‘Stoppers’ should be drawn either as a thick black arrow or as an arrow that goes right to the bottom of the force field analysis and ‘off the page’. (This assumes that you are using the vertical format for force field analysis.) A ‘stopper’ can be defined as an influence that will effectively put an end to the initiative either through direct confrontation or passive resistance.

There may also be cases where a specific enabling force can be made strong and prove decisive in moving the strategy forward. This kind of force may be described as an ‘unblocker’, and can be drawn as a very long (or thick) positive line upwards on the force field picture.
There may be instances where a negative and constraining force can be flipped over to make a positive force, and in so doing transform the picture. For instance, if an influential stakeholder (who is currently negative) can be turned around in favour of the change, this can provide a major driver in the strategic project’s progress. To prioritize which force to focus on, begin with the most presently limiting (or constraining) factor. This is the first key tenet of the Theory of Constraints

The key benefits of force field analysis are that it:

  •   Encourages you to think about the difficulty of an HR strategic breakthrough as opposed merely to attractiveness
  •   Helps you to focus on the context and process for its implementation, rather than its context
  •   Gives an early warning of ‘mission impossible’ HR projects.

The key dis-benefits of force field analysis are that it:

  •   Is sometimes too much of a snapshot of the short and medium term (however, this can be remedied by a later technique of the ‘difficultyover-time’ curve)
  •   Can be incomplete, which might give you the misleading impression that implementation is not too difficult really (this can be availed by again asking the question, ‘what is the One Big Thing we have forgotten?).

The key linkages with other techniques include the following:

  •   With attractiveness–implementation difficulty analysis, to test out the assumed level of difficulty
  •   With stakeholder analysis, to understand the context for change more deeply
  •   With how–how analysis, to analyse the difficulty of specific activities
  •   With fishbone analysis, by using fishbone analysis to ask the question for major constraining forces, ‘why is this so difficult?’.

Difficulty-over-time curves
Whilst force field analysis is very good at tackling the short-and mediumterm difficulties of HR strategic breakthroughs, it may not stretch managers’ thinking about the longer-term dynamics of implementation.
To address this issue we need the difficulty-over-time curve. Sometimes implementation of HR strategic breakthroughs gets easier over time, but more commonly it gets more difficult. This can occur at all kinds of different stages, perhaps as a steady incline, or the level of difficulty could climb a little and then fall back before getting really, really difficult. This reminds one of the authors of his experience on a roller coaster in Los Angeles. It appeared to be two roller coasters, one small and one that was quite awesome. He thought he had gone on the small one until he went over the first peak to see the Very Big One right ahead. The experience was amplified by the fact that it was very quiet and early in the day.
Indeed, he and his companion were the only two people on the ride – so they couldn’t get solace or company from other people’s screams. They would also probably not have been missed had they fallen out – until the bodies were found! A roller coaster strategy of this kind can be just as bad as you are not prepared for the sudden onrush of difficulty as implementation proceeds. The difficulty-over-time curve can be plotted either for the total difficulty of the implementation activity or project, or for just one constraining force.
The difficulty-over-time curve is most helpful when creating scenario storylines for implementation. The curve is also really useful for plotting the trajectory of a workshop or of a meeting, and is a major aid to the HR strategy facilitator.
The key benefits of the difficulty-over-time curve are that it:

  •   Is dynamic, and helps to stretch our thinking about the future about an HR strategic breakthrough
  •   Is easy to visualize mentally.

The difficulty-over-time curve has the following linkages to other techniques:

  •   With force field analysis, it provides a visual way of thinking about the various forces through time
  •   With AID analysis, it helps to think about where a strategic project might shift to
  •   With stakeholder analysis, to examine how the difficulty of dealing with them is likely to change over time.

Stakeholder analysis
Stakeholder analysis is another major tool for analysing implementation. A stakeholder is an individual or group who has one of the following:

  •   A decision-making role
  •   An advisory role
  •   An implementing role
  •   A role as a user or as a victim.

Stakeholder analysis is performed as follows:
1. Identify who you believe the key stakeholders are at any phase of implementation.
2. Evaluate whether these stakeholders have high, medium or low influence on the issue in question. (You need to abstract this from their influence generally in the organization.)
3. Evaluate whether at the current time they are for the project, against it,
or idling in ‘neutral’  . In order to estimate approximately where a stakeholder is positioned, you will need to see the world from that particular stakeholder’s perspective.
From experience, we have found that the best way to convey this is to ask managers to have, in effect, an OUT-OF-BODY EXPERIENCE – not quite literally, of course! This involves trying to sense not merely the surface attitudes of stakeholders to a particular issue, but also the deeper-seated emotions, focus, anxieties and even prejudices.
Later we will illustrate how a specific stakeholder’s agenda can be mapped using stakeholder agenda analysis, which is another application of force field analysis.
To bring home the point that stakeholder analysis really does involve having the out-of-body experience, we usually go as far as showing an acetate of the two television stars of The X-Files, Moulder and Scully! From experience, managers who literally take the perspective that ‘I am the stakeholder’ are typically at least 50 per cent more accurate in their analysis.
It is a particularly useful idea to position yourself on the stakeholder grid, especially if you are the project manager. This helps you to re-examine your own position and your underlying agendas, which may be mixed. Following your tentative, first-cut analysis, you should then move on to the next phase:
1. Can new stakeholders be brought into play to shift the balance of influence or can existing players be withdrawn in some way (or be subtly distracted)?
2. Is it possible to boost the influence of stakeholders who are currently in favour of the project?
3. Is it possible to reduce the influence of any antagonistic stakeholders?
4. Can coalitions of stakeholders in favour be achieved so as to strengthen their combined influence?
5. Can coalitions of stakeholders antagonistic to the project be prevented?
6. Can the project change itself, in appearance or in substance, and be reformulated to diffuse hostility to it?
7. Are there possibilities of ‘bringing on board’ any negative stakeholders
by allowing them a role or incorporating one or more of their prized ideas?
8. Is the pattern of influence of stakeholders sufficiently hostile for the project to warrant its re-definition?
Once you have done the stakeholder analysis, it may well be worthwhile revisiting the force field analysis either to introduce one or more new forces, or to revise earlier views. The force field analysis will now incorporate all of the enabling and constraining forces, including some of the more political and the less tangible ones.
Often a particular stakeholder may be difficult to position, and this may be because his or her agendas are complex. It is quite common to find that it is only one specific negative agenda that has made a stakeholder into an influential antagonist.
Where there are very large numbers of stakeholders at play on a particular issue, this may invite some simplification of the implementation. For instance, the implementation project may need to be refined, perhaps even stopped and then restarted, in order to resolve an organizational mess.
In order to use stakeholder analysis effectively, you may need to set some process arrangements in place where a team project is involved. First, the analysis may be usefully performed in a ‘workshop’ environment so as to give the analysis a ‘reflective’ or ‘learning’ feel. This will help to integrate managers’ thinking on a key strategy. It may also be useful to devise code words for key stakeholders in order to make the outputs from this change tool feel ‘safe’. On several occasions managers have decided to adopt nicknames for the key players. An element of humour will help to diffuse the potential seriousness of performing stakeholder analysis.

Motivator–hygiene factors
motivator–hygiene factor analysis allows us to link customer value with organizational delivery. This tool is optional, and can be used both externally and also to assess the value generation of a department, of the HR department specifically, and even the HR strategy itself. Here the ‘motivators’ are the distinctive aspects of a product or service that will make it very difficult for a customer to switch to another source  of supply, and will encourage repeat buyer behaviour. The ‘hygiene’ factors are those basic standards of delivery that are assumed, but have not been delivered well.
The motivators and hygiene factors are now drawn as vector areas or lines, their relative lengths being dependent on:

  •   Their degree of importance
  •   The extent to which they have been delivered distinctively well (motivators) or have not been fulfilled (hygiene factors) – where hygiene factors have been met well, you do not need to draw a downward line at all.