Transforming HR Function to Value Adding Activities that Focus on Business Goals Instead of Administrative Bureaucracy Aligned to Sentimentality.

1. Creating Business Value
Through
HR Function
Dr. Elijah Ezendu
FIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,
PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr

2. Business Value
Business value refers to a collective set of
results generated in sync with goals of an
organisation. Organisational activities usually
yield some outputs that may be acceptable by
certain groups of workers as equitable value due
to justification by perception. On the contrary,
competitive activity value analysis demonstrates
existence and extent of connectivity between
activity output and an organisation’s goals.

3. Competitive Activity Value Analysis
This involves the following steps:
•Choose a Function to be analysed
•Identify business processes in the function
•Delineate every activity in each process
•Identify activity output and measures
•Identify primary user of activity output (internal or external customer)
•Value-Added Analysis
•Fixed & Variable Activity Assessment
•Work Flows and Detail Procedure Analysis
•Performance Measurements Analysis
•Operational Implications Assessment
•Financial Implications Assessment
•Evaluation of aggregate competitiveness of activity
Source: Elijah Ezendu, Competitive Activity Value Analysis

4. Activity Value Analysis
Yes No

5. Questions About Value
• What is the purpose of that activity?
• Does it aid achievement of organisational
goal?
• Is it only a tool of bureaucracy?
• Is it only a departmental norm?
• What is the impact of non-performance?
• Is there a genuine alternative to the activity?

6. Questions About Quality
• Does defect occur?
• What is the rate of deviation?
• What are causes of deviation?
• What are consequences of deviation?

7. Questions About Cycle Time
• What is the standard time required for
performing activity according to international
benchmark?
• What is the actual time used for performing
activity in that organisation?
• Is there appropriate provision of required
resources for activity?
• Is there a fitting workload balance?
• Is there a clear activity ownership?

8. Value-Added Analysis
Value-added analysis concentrates on
identification of a relationship between activity
output and product or service of a firm. A value-
adding activity is one that contributes to
organisational pool of output earmarked for
generating product or service.

9. Non-Value Adding Activity
A non-value adding activity is one which does
not contribute to organisational pool of output
earmarked for generating product or service,
and is not for executing compliance to
Government requirements. This should be
eliminated for purpose of trimming the work to
match requirements of organisational goals.

10. Provision of Value
This is the essence of presence in the value
chain of an organisation. Inability to provide
minimal value is tantamount to muda and
unjustified existence.

11. Value Chain
The value chain concept was developed by Prof.
Michael Porter for describing activities that
occur within and around an organisation and
relating them to its competitive strength.
• It differentiates primary activities from non-
core that are regarded as support activities.
• It provides for identification of key activities in
every functional silo as part of the value chain
of an organisation.

12. Value Chain Concept
Source: M.E. Porter, Competitive Advantage, Creating and Sustaining Superior Performance

13. Value Chain Snapshot
In a scenario where the value chain snapshot of
an organisation highlights some key activities in
HR function as part of the value chain, whereas
they are non-value adding activities; they would
crystallize as invalid links in the value chain, and
indicate quandary, dissonance, nonconforming
focus, miscarriage of resources, in addition to
systemic blunder.

14. Where Business Value Shows Up
Fortunately, there are only five places in a business where we can see
the value of our work. These are the same for any type of
organization, whether it’s a commercial enterprise, a government
entity, or a non-profit group (similar to how accounting practices are
essentially the same across each type).
We can identify business value by asking the following questions about
the end results of our project:
•Will it increase revenue?
•Will it decrease expenses?
•Will it bring in new customers?
•Will it bring in more money from existing customers?
•Will it increase shareholder/taxpayer value?
Depending on the nature of our business, a given project could affect
any of these value areas. It could increase revenues or decrease
expenses. In fact, sometimes a project could affect two or three
simultaneously, such as increase revenues, bring in more new
customers, and increase revenue from existing customers.
Source: Jared Spool, Identifying Business Value of What We Do

15. Business Alignment
Business Alignment is occasioned by placement
of key activities with content and direction that
are geared for achievement of organisational
goals.
Effective Business Alignment of HR Function
shall occur when every activity output from
each section of HR contributes fittingly to
organisational pool of output earmarked for
generating product or service.

16. HR Value vs. Business Goal
Contemporary HR Value had been self-centred
and somewhat disconnected from business goal
orientated perspective. That’s why such output
is not identified as ‘value adding result’ in
corporate strategic outlay.

17. HR Thrust
Effective Business Alignment of HR Function
implies every component of HR system,
structure, policy, procedures, initiatives,
objectives and strategy must be focused on
provisioning of excellent enablement for
achievement of organisational goals. This should
be the HR Thrust.

18. Best Practices – How to Bridge the Business Divide
•Evaluate current opportunity with the business
# Bringing insight to investment decisions
# Building future value through today’s forums
# Bridging the people visibility gap
# Removing barriers and optimize performance
•Develop platforms for strategic conversation
•Transform HR Business Partners into strategic advisors
•Report Links
Source: Amy Wilson, Wilson Insight

19. The Top 10 Best Practices of
High Impact HR Organisations
1. Structured governance and business case development
2. Developing advanced workforce planning capabilities
3. Implementing the “right” HR philosophies
4. Reducing administrative work for HR Business Partners
5. Implementing flexible HR organisation design
6. Improving employee-facing HR systems
7. Measuring both HR operational and business metrics
8. Developing internal HR skills
9. Improving line manager capabilities
10. Outsourcing HR services strategically
Source: John Hollon, TLNT- The Business of HR

20. “The business value HR professionals
contribute to their organizations is growing
as more CEOs recognize the power of
effective people management”
- Susan Meisinger, SPHR

21. 2011 HR Executive’s Agenda
Analysis of 450 organisations in various parts of
the world shows on a scale of 1 to 5 where 5 is
very strategic and 1 is very reactive, business
leaders scored HR an average of 2.71 for
strategic importance and the level of
connectivity between HR and business
objectives. This confirms a demanding gap in
global firms.
Source: Aberdeen Group

22. Which is Important?
Results or What Produces Results

23. According to James and Mona Fitzsimmons, the
value equation should be as stated below.
Value = (Results Produced) + (Process Quality)
(Price) + (Cost of Acquiring the Service)

24. Prodding Factuality of Value Equation
If value as a function is relevant
Then ‘results produced’ and ‘manned processes
for producing results’ are both relevant.
Therefore, the strategic stance of outstandingly
competitive organisations focus on results and
what produces results, for the purpose of
achieving effective value mapping from Chicken
to Egg.

25. Identity of Results Produced
Results Produced should be within the context
of the receiver’s stance and not the perception
of producer. HR must identify its service value in
terms of relative worth to the receiver.
The right sets of results that are unique,
influential and conspicuous constitute
competitive advantage.

26. Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise
in Interim Management, Strategy, Competitive Intelligence, Transformation, Restructuring, Turnaround
Management, Business Development, Marketing, Project & Cost Management, Leadership, HR, CSR, e-
Business & Software Architecture. He had functioned as Founder, Initiative for Sustainable Business
Equity; Chairman of Board, Charisma Broadcast Film Academy; Group Chief Operating Officer, Idova
Group; CEO, Rubiini (UAE); Special Advisor, RTEAN; Director, MMNA Investments; Chair, Int’l Board of
GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training),
Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management
Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead
Consultant/ Partner, JK Michaels; Turnaround Project Director, Consolidated Business Holdings Limited;
Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles),
Fortuna, Gambia & Malta; Chief Advisor/ Partner, D & E; Vice Chairman of Board, Refined Shipping;
Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria;
Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic
Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria;
Country Manager (Nigeria) & Adjunct Faculty (MBA Programme), Regent Business School, South Africa;
Adjunct Faculty (MBA Programme), Ladoke Akintola University of Technology; Editor-in-Chief, Cost
Management Journal; Council Member, Institute of Internal Auditors of Nigeria; Member, Board of
Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business
Administration and Fellow of Professional Institutes in North America, UK & Nigeria. He is Innovator of
Corporate Investment Structure Based on Financials and Intangibles, for valuation highlighting
intangible contributions of host communities and ecological environment: A model celebrated globally
as remedy for unmitigated depreciation of ecological capital and developmental deprivation of host
communities. He had served as Examiner to Professional Institutes and Universities. He had been a
member of Guild of Soundtrack Producers of Nigeria. He's an author and extensively featured speaker.

27. Thank You