The hallmark of any highly effective organization is making
good decisions and making them better, faster and more
consistently than their competitors.
Paul Rogers and Marcia Blenko
Bain & Company
The Vienna index provides “hard numbers” that measure the financial performance of the money companies spend on human capital (people and programs).
While measuring the financial results of the human capital investment is important for the CHRO, CEO and board, knowing what to do with the results is critical. What’s needed is a comprehensive, cohesive process to translate the human capital ROI, productivity and liquidity results into specific changes in human capital strategy that will lead to improving both human capital financial results and overall business performance.
To achieve that goal, Vienna HCA has developed the Vienna Human Capital Strategy Map. The strategy map is a comprehensive, cohesive and cascading method to identifying the precise human capital strategies that will lead to improved business performance. The strategy map is a combination of data analytics and cross-functional collaboration to achieve consensus on the changes in human capital strategy necessary to drive performance.
In short, the process is:
1. Vienna Index – Dissect and analyze the human capital ROI and productivity formula elements to understand the factors driving the results.
2. HR metrics – Analyze the HR metrics that will help identify the factors driving the ROI and productivity results.
3. HR and Operations Collaboration – probe in collaboration with business managers, the factors driving financial results, and identify the human capital strategy changes necessary to continuously improve productivity, human capital ROI and overall business performance.
4. Write the story – Write the story that explains why the results are what they are, describe the changes necessary to improve the results, and the resources required (people, time and money) to fully develop and implement the solutions.
5. Impact on shareholder value – Calculate the projected impact on shareholder value. This is the so-called business case. Making the business case (improved profits) is a necessary task in navigating the C-suite. Rarely does a CEO agree to invest in a significant change in human capital strategy if a solid business case hasn’t been offered by the sponsor of the change. Chapter 5 of Optimize Human Capital Investments: Make the “Hard” Business Case, provides a step-by-step method to calculate the impact on shareholder value. Click Here