We recently came across this figure: the extramarital escapades of Tiger Woods cost the shareholders of his 5 major sponsors anything between US$ 5bn and 12bn (see http://faculty.gsm.ucdavis.edu/~vstango/tiger003.pdf). This is a lot of money and companies have become increasingly aware of the risk they take with celebrity advertising.

However, it often seems that a factor most likely to be far more important is off the radar screen of executives: the every day impact of your employees behaviour, even when they are not directly interacting with customers.

• It’s the way the drivers of your branded vans behave in traffic – not to forget unbranded company cars, which are often easy to recognise from number plates or just colour and type.
• It’s how employees talk about their employer, when they are with friends and family (do you recon they say “We are going to launch this product” or “They are…”)
• It’s when this employee of a credit card company says at the store checkout: “I know these cards are crap. I only use it, because I work there”.
• And it’s when prominent managers behave disgraceful in public, even where no explicit connection with the company is made. And make no mistake: much less is needed to damage your brand on a local level than a CEO being arrested for antisocial behaviour in the centre of Rome (this 15 years old escapade of Daimler’s CEO Jürgen Schremp still comes up second on Google, when searching for “Daimler” and “Rome”)

All these things can constantly erode your brand value, leaving your marketing department fighting an uphill battle. What you really want are employees taking pride in the organisation they are representing and broadcasting a positive message. So what?

We are not suggesting that you should police your workforce’s behaviour nor should you draw up a huge set of rules on “How to behave brand friendly 24/7”. On the contrary. If you want your people representing your brand positively, than it has to be their brand to begin with. It is still striking how often organisations treat their “normal” brand and employer brand as two separate entities. On this basis, you’re not going to excel.

What you need is a set of shared values to build a brand upon your people are proud of. If you create ONE culture, ONE reality, then there’s no micromanagement required to keep each employee in line with the brand. Culture is much stronger than rules and formal controls.

This is not that easy? Right! This is a strategy for winners, not for the mediocre firm. It’s a long shot and it’ll never be 100% perfect, but even if you get it nearly right, you probably won't need the Tiger Woods’ of this world any more to raise your brand value.

And as this is a Monday and Mondays are perfect to start something new, here’s the first step for you: take stock of your organisation’s culture and values. Not the executives’ view! Go out there and do a proper cultural audit across your organisation. And then find out what journey lies ahead of you to get it where it needs to be…

A well known Human Capital consulting firm recently published their structured approach to taking HR to the next level. Within this was a section focused on identifying HR’s primary performance measures.

Quite rightly they suggest that HR performance measures should focus on business impact, not just on HR operating efficiency. They go on to say that one of the best ways to measure how effectively a company is leveraging the value of its people is to consider its workforce productivity, defined as revenue per employee divided by profit per employee.

Sounds great, right?

Unfortunately in the HCM sphere, there is a tendency to force complex people metrics into oversimplified, financially relevant KPIs. Whilst HCM should absolutely be linked back to business value, value is not delivered by creating relationships between HCM and financial performance that at best are not causal*, and at worst do not exist at all.

“Workforce Productivity” is an example of a metric that has absolutely nothing to do with measuring the effectiveness of people. Before the iProCon HCM email server is crashed by countless emails pointing to the existence of “Employees” in the definition, consider the following:

A company (let’s call it B.Com**) makes widgets in a factory staffed by 10 people. In 2007 B.Com made £12k of profit on revenues of £100k. In 2008 B.Com increased profits on the same £100k revenues to £15k, without changing their staffing. B.Com have done well in 2008, but their Workforce Productivity has declined from 8.3 to 6.7! But wait, there’s more...

Consider the definition of Workforce Productivity: Revenue/Employee divided by Profit/Employee


Basic maths tells us that this equation can also be expressed as: Revenue/Employee multiplied by Employee/Profit


Cancelling out the “Employees” from the top and bottom lines leads to: Workforce Productivity = Revenue/Profit


Don’t believe it? Consider B.Com again: In 2007 they made £12k of profit on revenues of £100k, rising to £15k profit on £100k revenues in 2008.

2007 Workforce Productivity = 100/12 = 8.3
2008 Workforce Productivity = 100/15 = 6.7

Jargon and irrelevant but nice sounding KPIs are prevalent within the HCM sphere, as more organisations try to show how their HCM solutions drive real, sustained business value. The challenge is to see through the flashing lights and marketing spiel and ensure that real, causal links exist from HCM interventions back to the core drivers of business value.


* Causal: when one event occurs as a direct result of another event. Some events may be correlated (i.e. they move together), but there is always the chance that they move together because of another event.
**B.Com is a fictional company. Any resemblance to other companies, either past or present, is purely coincidental.

A recent HBR article (“Innovation in turbulent times”, June 2009: http://tinyurl.com/mmpgfg) discussed the need for businesses to have creative, “right brain” types in leadership positions. It suggests that innovation is the result of pairing creative with analytical thinkers - when businesses have too few creative thinkers in leadership positions, innovation is vulnerable to unwise cost cutting, in particular during hard times.

Whilst there is some truth in the need to have a good mix of “left and right brain” thinkers, that is nothing new – diversity of thought is vital to establish the strong funnel of ideas from which to promote those with the most promise. Where the article falls short is in the lack of structure it places around the innovation process as a whole. In fact, it starts with the statement “innovation is a messy process – hard to measure and hard to manage”.

Innovation doesn't have to be messy, and it should certainly not be left to the effective partnership between two individuals in leadership positions. When managed effectively innovation is simply another business process, taking ideas through prioritisation and realisation in a way that meets the organisation’s strategic objectives and takes account of the innovation culture.

For additional information on frameworks and tools to help deliver and measure innovation in your organisation please contact us.

iProCon HCM has deveoped a workshop to help HR experts

• to understand the concept and components of shareholder value
• to understand HR's current contribution to shareholder value and discuss it with line managers, the Finance Director or the executive board
• to develop approaches to increase HR's contribution to shareholder value through a redesigned HCM or new HCM initiatives.

One tangible result of this workshop is an HR Shareholder Value Map. Click here to see a simplified real life example of how one organisation identified and redesigned their HCM value drivers. Or find a 1day workshop design here.