KENNETH C HOLMES
STRATEGIC HUMAN CAPITAL MANAGEMENT
PROFESSOR: JAMES LANE
MARCH 16, 2015
PHASE 4: INDIVIDUAL PROJECT
STATUS UPDATE ON CHANGE MANAGEMENT PROJECT
This document is a detailed listing and explanation of AGC’s issues and the
recommendations that were applied to address those issues. It is important for AGC management
to understand that issues will always arise, how we address the issues determines our strengths
and weaknesses as leaders. It is my sincere hope the tools and education provided have not only
improved AGC’s structure and climate, but that all management and staff have learned valuable
lessons that they will apply to future endeavors, and use those very tools and education to take
issues and potential issues head on before they become real problems.
The value of implementing human capital management strategies:
Human capital management is the cornerstone in aligning human capital strategies with
the organization’s mission, goals, and objectives through analysis, planning, investment, and key
management of human capital programs. The implementation of the Human Capital plan is the
key for building and achieving a highly effective, performance-based organization by recruiting,
acquiring, motivating, and rewarding a high-performing, top quality workforce. The plan
ultimately becomes the roadmap for continuous improvement, and the framework for cultural
and organizational operations transformation (N.A., 2005).
It must be understood that human capital goals are inexplicably tied to organizational
goals, because you must have organizational goals to tie in with human capital goals, and it is the
human capital that will achieve the organizational goals. That connection is undeniable, and
without the highly-skilled professional workforce, the organizational goals will never be
obtained.
Real world human capital management problems:
In today’s world there are numerous human capital problems to be addressed, and all
companies, nationwide and globally are dealing with those very problems every day. I want
AGC management to understand they are not alone, they are one of many firms dealing with
these real world problems, and thanks to intervention they are being dealt with swiftly and
professionally. Now we shall discuss those real world problems.
Building global leadership and managing organization change is the most urgent need.
The fact is 38 percent of organizations need global leadership at all levels, geographies, and
functional area, and that need is driven by the changing expectations of the workforce, increasing
globalization, and the rate of technological change and innovation. The reality is technology is
outpacing people skills by 2 to 1, and AGC needs leadership that is proactive and anticipates
change, instead of reacts to it. Tied in with global management is performance management. Too
many organizations apply traditional management planning methods that no longer work, with
only 15 percent of organizations enjoying the rewards of performance management, AGC must
apply performance management to performing at their best. In second place is employee
retention and management engagement. The real issue here is that HR and all levels of
management needed to redefine their engagement strategy, and attract and retain qualified,
highly-skilled talent, by creating a workplace that is passionate and embraces ideas and
innovation (Schwartz, 2015, and Samdahl, 2013).
In third place is the reskilling of HR. With up to 75 percent of HR organizations not
ready to address the 12 global trends, HR needed to be transformed from an administrative
function into a performance function by applying talent and HR analytics, workforce analysis,
strategic workforce planning, and global performance management. The time has come for HR
to anticipate and prepare for change instead of just reacting to it. In fourth place comes talent
acquisition and access. This process required the transition from traditional methods to more
modern techniques including: keeping pace with global competition by providing continuous
education to upskill their personnel, and keeping pace with technology; creating a continuous
presence on social media, I-Link, Facebook, Twitter; and focusing on marketing, branding, and
changing workforce expectations to make AGC a place where skilled personnel want to work
and have a career (Schwartz, 2015, and Samdahl, 2013).
Leadership styles and their impact on corporate culture:
AGC’s previous combination of the Process culture and the Autocratic management style
created an environment that negative, uninspiring, non-motivational, and isolating. Their
corporate culture forced employees to abide by rules, regulations and ideologies put in place by
corporate, never encouraged employee input or understanding of AGC goals and mission, and
did not offer coaching, growth, satisfaction or productivity initiatives. The transition to the
Academy culture and the Democratic style of management changed all that. This combination
provides AGC a positive environment that offers employees responsibility, continuous education
to upgrade skills and improve professional competency, positive communication, the welcoming
of ideas and open discussion, makes employees a part of the solution, and ensures employees are
encourages to stay and grow with AGC as human capital assets (N.A., 2013).
Change management plan steps:
For AGC’s change management plan I used Kotter’s 8 step change model. I believe it
was the best strategy for implementing AGC’s new structure and vision. Kotter’s 8 steps are as
follows: Create a sense of urgency. This step entailed getting both management and employees
behind the need for change, and encouraged open, honest and convincing dialogue about what is
happening in the firm, the marketplace and the competition, and building on that urgency; Form
a powerful coalition. This step required Shawn to lead the change and obtain the backing of top
management and employees, and enlist their help to influence those who were not on board to
understand what we were trying to accomplish; Create a vision for change. This step entailed
taking all the ideas and values presented, and create a larger vision that would help everyone
understand what we were asking them to do, and what we were trying to achieve; Communicate
the vision. This step required Shawn to communicate the message in everything he did, from
decision making and problem solving, to training and performance reviews, and addressing
anxieties openly and honestly. It was his job to keep the vision fresh on everyone’s mind so they
will remember it and respond to it. Realistically he “walked the talk”; Remove obstacles. To
reach this stage, Shawn promoted the vision, had buy-in at all levels, and had the staff busy
achieving the benefits. At this stage, Shawn put in place the structure for change, continually
checked for and removed barriers, empowered the people, and moved the change forward;
Create short-term wins. At this stage, it was up to Shawn to push back the negative thinkers
and create short-term targets that were easily achievable to motivate the entire staff to achieve
the long-term targets; Build on change. It was up to Shawn to establish more quick wins to
promote and achieve the long-term goals. This is where management determined if the new
system was working, to build on what went right, and identify what needs improvement; Anchor
the changes into the corporate culture. This step required top management to solidify the
changes by giving them a permanent place in AGC’s culture, where it would be shown and seen
in the day-to-day work. This step also requires recognizing key players of the coalition, creating
plans to replace key leaders as they move on, and ensuring that current and new company leaders
support the change (N.A., 2015).
Method of diagnosis and data analysis:
The method of diagnosis I felt was best to follow is the PRIMO-F Model. The PRIMO-F
model addresses all key areas of a business including: finance, marketing and operations,
resources, experience, controls and systems, and innovation and leadership. Application of the
PRIMO-F model allows for evaluation of all aspects of a business, determines where the issues
are, their root cause, and provides a simplified way to show strengths and weaknesses in relevant
areas, allowing management to make the necessary adjustments to resolve the issues (N.A.,
PRIMO-F Model: Summary and Forum-12 manage, 2015).
PRIMO-F can be used in combination with PEST Analysis when conducting a SWOT
Analysis. The PEST framework will help investigate the external factors pertaining to the
external environment (threats and opportunities), while PRIMO-F is used to analyze the internal
factors (strengths and weaknesses) of an organization. The PRIMO-F model is considered an
advanced technique to narrow the focus of a strategic analysis to internal factors and uses a
scoring system of 1 to 10, 1 being the weakest and 10 being the best for data collected for each
category (N.A., PRIMO-F-The Business Growth Model, 2011).
The categories of performance and data collected include: Resources. The data collected
includes: Liquidity and availability of financial resources including financing; technological
competencies and expertise level; the state and obsolescence degree of tangible assets; and the
product range and life cycle; Experience. The data collected includes: The business maturity;
managements experience in borrowing, product development, competing in different markets,
use of external resources and change agents; delocalization or outsourcing; and managing
growth; Control. The data collected includes: Information Management and Controlling
Systems; the degree of professionalism and responsibilities of management; planning and
monitoring adequacy; delegation levels; and performance assessment methods; Innovation and
ideas. The data collected includes: Ideas generation within the staff, and the number and quality
of ideas; the number and source of idea innovation being collected; the assessment of new ideas
and the processes involved; the number of developed or tested new ideas compared to
disregarded ideas; the creativity level of the ideas and innovation generated; and the level of
market planning of their ideas; Leadership. The data collected includes: Participation of senior
managers; leader’s personal objectives and ambition; leader’s vision, education level, and
involvement in continuous training; attitude toward staff and leadership development;
management style; attitude to change; and strategic understanding of business environment
(N.A., PRIMO-F Model: Summary and Forum-12 manage, 2015):
Root cause analysis:
I believe the absence of employee input and suggestions is the result of AGC’s
application of the Process Culture and the Autocratic Style of management. The combination of
culture and management style created a corporate environment that was regulatory, uninspiring,
isolating, provided no satisfaction and was negative. It is highly unlikely AGC intended for this
to happen, AGC likely fell into a comfort zone that does not work in the global environment.
This combination works for government organizations, but does not work well in the modern
corporate world.
The absence of cultural awareness and respect is the result of the assumption that one set
of work culture standards works for all. This approach created a disconnect between
management and employees within each subsidiary, and created an environment with no shared
values, no trust, focus only on problems, no celebration of diversity, no tolerance for failure, and
a loss of confidence in leadership. The fact is one set of rules does not work for all, especially in
the global environment.
The absence of employee continued education is the result of the assumption that it is not
necessary. The truth is employee education is essential for keeping pace with technology,
continually improving professional competency, encouraging growth, and retaining and securing
the best talent available. Firms seeking to retain and acquire highly-skilled and educated talent
have established education programs which include enhancement training and certification
programs. Firms that do not encourage continuous education will find it hard to retain and recruit
highly-skilled employees.
The absence of managerial cross-cultural education training and foreign transaction
training is the result of the assumption it is not necessary. A comprehensive understanding of
common business practices must be followed to conduct business in foreign regions. Since AGC
has divisions in Africa, Asia and South America, it is essential that AGC management and their
sales representatives be culturally intelligent, competent, and able to understand and apply
international cultural differences to represent AGC in a marketing capacity, and perform as
AGC’s cultural liaisons.
The absence of a cross cultural management team is a result of the assumption that one
approach to management works for all cultures, when the truth is different cultures require
different approaches. The situation is simple, AGC’s mission and policies have become lost in
translation because of the absence of management personnel able to assist in the formation of,
and the translation of the mission and policies in each region of operation: Africa, Asia, and
South America. As a result, the previous management was unable to align the variety of cultures
to the local culture, and their highly-skilled personnel were leaving because they feel
disrespected and unappreciated.
AGC’s HR performing as an administrative function is the result of following old
practices, and not realizing the importance of the HR function. HR’s actions and performance
have a direct impact of the firm’s productivity and bottom line. In the case of AGC, HR has
secured the skilled and qualified employees necessary for AGC to perform in their industry, but
their corporate climate made it difficult for AGC to retain the employees HR worked so hard to
attain. HR needed to be reskilled and transformed into a performance function, reconnect with
current global employment issues, local business leaders, the education system, and apply
workforce analysis and strategic workforce planning to focus on what is needed to lead the
business, anticipate and adapt to change, and be acknowledged as a player in the solution.
The potential loss of AGC’s position as global leader in their industry is the result of the
loss of AGC’s mission and goals during the transition to global leader. All too often,
management gets so involved in the day-to-day operations of their business they forget what they
are in business to accomplish. I firmly believe AGC started out with a mission, but their
expansion from a small company to a global leader caught them off guard, and became both a
blessing and a curse. It is a blessing because their explosive growth proved they have the product
line to make it to the top, which they did, the curse is not understanding and knowing how to
handle the growth.
In no way am I placing blame on AGC, but the fact is the greatest barrier to corporate
change is that companies have great difficulty seeing themselves as they actually are. AGC needs
to see the truly important aspects of their company, its inner life, their real drivers, predictors,
and the causes of success and failure, these often remain hidden and unacknowledged. For shortterm and long-term viability and success, values including: assertiveness, leadership, executive
will, entrepreneurship, morale, and the inner life of the company are important. All too often
they are thought of as insignificant, yet they are very significant.
The action plan to implement changes:
The action plan is given two years for implementation, and the steps are as follows:
The first phase is the application of the Democratic management style. AGC management
and HR will seek input from employees of each subsidiary as to what they want to see change
and create the overall vision that will help employees grasp what management is trying to do.
Management and HR will “walk the talk” and apply the new Democratic style, to get employees
accustomed to the new attitude of AGC. AGC will also be promoting the Academy culture and
impress on the staff the benefits they will receive.
The next phase is the institution of AGC’s goals and mission, and the development of
AGC’s Code of Conduct, which will ensure AGC’s protection from unethical and illegal activity
on all level of operation, should be designed to comply with their new corporate culture and
global structure, and ensure compliance with federal and regional laws. Memos will be issued to
each department and subsidiary outlining the changes that will be made, the timeline goal, their
assurance these changes are going to happen, and that this is a good thing.
The next phase, HR will be reskilled and transformed into the performance function they
need to be. The Chief Human Resource Officer (CHRO) will ensure HR is trained on, and
applies workforce analysis and strategic workforce planning, so they will be able to analyze
current industry data, apply their findings, and have the competency to anticipate and adapt to
change.
The next phase is the establishment of the Academy culture. To do this, HR will establish
the connections with local colleges, universities and tech schools within in each subsidiary, and
make the necessary arrangements to secure the classes and instructors needed to establish the
continued education, certification programs, cultural education, and management cross-cultural
education required by the Academy culture.
The next phase, HR will establish the internship programs with those same schools to
start training their new recruits, and will also utilize head hunters to locate and secure individuals
with cross-cultural experience (BCI’s) to train in AGC’s management programs. HR will once
again issue memos to each subsidiary promoting the new education program, and seek interested
individuals to enter the programs. HR will also be responsible for making AGC’s presence
known on social media including the AGC website, LinkedIn, Facebook and Twitter.
With this next phase, management, finance and HR will establish and institute the new
rewards program based on the say-on-pay program which links every employee’s annual bonus
to AGC’s performance on environmental, leadership and technological measures. AGC will also
establish the Field Sales Reward Program which will be based on sales, and technological ideas
resulting in innovation, cost savings and production. This will include sales in the equation, and
increase the innovation and cost savings on yet another level.
With this next phase, HR will assign the first phase of interns and BCI’s who have
accepted positions with AGC, and based on their background and expertise will fill in the ranks
in each subsidiary.
Once the new management is in place, AGC management team will continue to apply the
new culture and management style to their subsidiaries, and provide their management with the
tools they will need to help their staff understand and accept the new guidelines. This process
will help AGC recover from their issues, and provide their entire organization with a renewed
sense of empowerment and pride.
From the start, there will be monthly meetings regarding the progress of the
implementation, consensus and agreement of what resources will be required to ensure full
implementation within two years, address the successes, and discussion and agreement as to how
to address any issues or compliance problems that may arise. Even though the plan calls for two
years, each phase of the process will take into account any modifications and adjustments (tools,
time frame and plans) that prove necessary, and will make all efforts to ensure all employees are
part of the process, feel empowered, and are happy with the changes. AGC corporate
management will also provide continuous support, training and guidance to each subsidiary, and
ensure everyone is on board with and complying with the new corporate culture, management
style and code of conduct guidelines.
Interventions implemented:
My first intervention has to do with the transformation of HR into a performance
function. Too many firms view the HR department as a bunch of paper pushers, in reality their
function is far more important. HR’s efforts recruit, train, and establish the next generation of
highly-skilled and educated personnel and managers for all levels, including Bi-Cultural
Intermediaries (BCI’s), and address AGC’s issues before they become a problem. They are also
responsible for dealing with local and overseas government regulations, vertical and shared
responsibility for AGC’s successes and failures, and for assisting AGC management with
strategic goals and objectives, making them AGC’s strategic partner.
My next intervention has to do with managements transformation into an Academy
culture combined with the Democratic style of management. Their previous culture, the Process
culture, was far too limiting, rigid, and negative. The new culture will provide the climate for all
personnel to learn, grow, excel, and launch AGC to their next level of achievement.
My next intervention has to do with the new rewards programs. The say-on-pay program
is based on technological and environmental productivity, ingenuity, and energy reduction. I
firmly believe this program will increase and improve AGC’s technological advancements,
reduce their costs, improve their image with the government, environmental groups and the
community as a whole.
My next intervention has to do with the establishment of AGC’s cross-cultural
management team. In today’s global environment it is essential for firms to have a staff and
management team that encompasses all global cultures, this helps the firm address issues within
their global divisions, allows the firm to represent their customer properly, and provides a
positive global image that can only benefit the firm.
My last intervention has to do with the removal of the “corporate glass ceiling” that
deters a woman’s success in business and limits competition. The fact is women comprise over
half the college graduates and half the U.S. workforce, yet women only comprise 15 percent of
the functioning corporate officers or board members, and only 12 fortune 500 companies are led
by female CEO’s. The removal of the glass ceiling will provide AGC an expanded leadership
pool, attract people from different cultures and ethnicities, and improve their public image. The
fact is removing the glass ceiling helps firms outperform their competition, and the future trend
of leaders will be increasingly women and people of color. The image of the older white male
leader will diminish (Thomas, 2008).
Measures to determine effectiveness of the plan:
The measurements used by AGC top management for determining organizational change
effectiveness include: Organizational appeal and reputation. How have the changes affected
industry and public perception, and the reputation of AGC?; Are the salaries offered by AGC
competitive enough to retain their skilled employees?; and Have the changes provided the
necessary morale, education, career growth and potential to meet the employee retention goals?
(N.A., 2015)
The measurements used by HR for determining effectiveness include: The rate of human
capital and labor cost; cost per hire; time per hire. This refers to the time it takes from
recruitment to the actual hire of the individual; cost per trainee; opportunity cost; supervisory
ratios (span of control). This refers to the number of employees a supervisor can effectively
manage; efficiency of recruitment and selection; Has the appraisal procedure improved morale
and retention?; return on investment; quality of movement. This refers to the ideas generated to
respond to innovation and global changes; turnover versus attrition (gross and net turnover); and
the cost of compensation and benefits (N.A., 2015).
It can be safely assumed the figures for the first year of the transformation will be high.
This of course is related to the complete overhaul of AGC’s structure. I have no doubt the
changes made in the long run will pay for themselves, and the difference in AGC’s new
corporate order will provide a more positive and beneficial climate for AGC to operate globally.
Improvements that could be made:
I recommend AGC’s HR’s leadership and team pursue the Society of Human Resource
Management (SHRM) certification. Their program offers two levels, Senior Certified
Professional (SCP), and Certified Professional (CP). Both certifications are highly regarded and
will provide AGC’s HR department with advanced skills necessary to help lauch ACG into the
future.
I also recommend AGC make all necessary modifications to their mainframe and
communication system, and enhance and expand their computer network to make
communication with their global subsidiaries easier, faster and more efficient. This modification
would make all information available in real time, and would allow for quick implementation of
changes and assessments.
I also recommend the institution of annual employee reviews, and that management of all
departments performs quarterly employee updates to ascertain the individual’s strengths and
weaknesses, to determine if they need coaching or assistance of any kind to help them perform to
AGC standards, to ensure they are achieving their best performance, and to ensure the individual
has attended and complied with the continuous education requirements.
I also recommend AGC consider entering into licensing, corporate alliance, and joint
venture agreements to expand their market share, and their product base. Licensing can generate
revenue flow with only a small new investment, and can be a good choice for a firm that possess
advanced technology, a strong brand image, and valuable intellectual property. Corporate
alliance also known as global strategic partners (GSP’s) are a popular market entry for the 21st
century. GSP’s are ambitious, cross-border alliances that involve business partners in a number
of different country markets (N.A., Global Strategy, Market Segementation, and Positioning,
2010).
Next step:

Make any necessary modifications or adjustments to any initiative or program, to ensure
they are current and comply with AGC needs, corporate culture, goals and mission.
REFERENCES
N.A. (2005). Key Components of a Strategic Human Capital Plan. Retrieved from
www.opm,gov/heaaf_resources_cener/assets/Sa tool 1.pdf
N.A. (2010). Global Strategy, Market Segementation, and Positioning. Retrieved from
www.ctuonline.edu/phase 4 MUSE
N.A. (2011, January 29). PRIMO-F-The Business Growth Model. Retrieved from
www.rapidbi.com/business-diagnostic-model
N.A. (2013). Management Style - Meaning and Different Types of Styles. Retrieved from
www.managementstudyguide.com/management-style.html
N.A. (2013). Types of Organization Culture. Retrieved from
www.managementstudyguide.com/types-of-organization-culture.html
N.A. (2015). Kotter's 8-Step Change Model. Retrieved from www.mindtools.com>Project
management
N.A. (2015). Measuring Human Capital: The Use of KPIs For Measuring effectiveness of HR.
Retrieved from www.naicd.com/pdf/measuring_human_capital(1).pdf
N.A. (2015). PRIMO-F Model: Summary and Forum-12 manage. Retrieved from
www.12manage.com/description_PRIMO_F_model.html
Samdahl, E. (2013, January 23). The 4 Most Crucial Human Capital Issues of 2013. Retrieved
from www.i4cp.com/productivity-blog/2013/01/23/the-4-most-critical-human-capital-issues
Sarbanes-Oxley Act. (2010). CTU Week 3 MUSE. Career Education Corporation. Retrieved from
ctu.
Schwartz, J. (2015). Human Capital Trends 2014 Survey. Retrieved from
www.dupress.com/articles/human-capital-trends-2014-survey-top-10-findings
Thomas, D. (2008, October 13). Managing Human Capital: Global Trends and Challenges.
Retrieved from www.hbs.edu/centennial/business summit/global-business/managing