1. The Corporate Development Readiness and Effectiveness Measure (CDREM™) Executive Summary
Otto Laske, Phd PsyD, Founder & Principal
Personnel Development Consultation
(781)
Copyright © Personnel Development Consultation, 2001

2. Discussion Topics Understanding the Anatomy of the Workforce
Take-home message #1
Risks in Using Surveys as the Main Data Source for Formulating HR Policy
Take-home message #2
What is a Developmental-Behavioral Analytics?
Take-home message #3
Characteristics of the CDREM™ Readiness Report
Take-home message #4
Steps in Using the CDREM™ Analytics
Take-home message #5
How to Define Individual Category Indexes in CDREM™
Take-home message #6
Comments on a Human-Capital Readiness Summary Report
Take-home message #7
Example of a CDREM™ Progress Report
Take-home message #8
Undertaking a Case Study with CDREM™
Take-home message #9
Combining Surveys with Developmental-Behavioral Measurements
Take-home message #10
CDREM™ Answers to HR Strategy Questions
Copyright © Personnel Development Consultation, 2001
Copyright © Personnel Development Consultation, 2001

3. Understanding the Anatomy of the Workforce
Strategy-focused HR managers presently almost exclusively rely on survey data
to report employee readiness and the effectiveness of HR enablers
to assist executive management as a strategic partner
For understanding the actual anatomy of the workforce, this time-honored approach is limited for several reasons:
survey data do not capture the full complexity of the strategy implementation and value creation process
survey data report “what employees SAY” (espoused theory), not “what employees actually DO and ARE LIKE” (theory-in-use)
the ultimate enabler for strategy implementation and value creation is not what people SAY, but what they DO, AND ARE CAPABLE OF DOING (“meta-enablers”)
analytical data on the developmental readiness and behavioral effectiveness of employees:
“digs deeper” than a survey methodology permits
is more far-reaching since it incorporates prognostic information
can bemore closely targeted to core constituencies since it is derived from a representative sample of the workforce
can be used normatively, to define objectives to be attained within a defined time period
Contemporary research in human development and behavior provides the technology:
to quantify developmental readiness, using theories of adult development in the workplace
to quantify behavioral effectiveness, using validated workplace behavior inventories
to combine developmental and behavioral findings into a unified measure of readiness
These ideas are the foundation of CDREM™, the Corporate Development Readiness and Effectiveness Measure.
Copyright © Personnel Development Consultation, 2001

4. Copyright © Personnel Development Consultation, 2001
Take-Home Message #1
The developmental and behavioral anatomy of your workforce can be objectively assessed, using research in:
adult development in the workplace (long-term)
workplace behavior (short-term)
If your problem is attaining an understanding of workforce anatomy to assess its readiness for executing strategy, collecting survey data (“opinion polls”) will not do: you need analytic developmental and behavioral data
In comparison with survey data, developmental-behavioral data:
gets at the actual anatomy of workforce potential and behavior, in terms of what people DO rather than SAY
introduces prognostic information not available through survey data
facilitates the task of HR, to act from deep insight into cause-and-effect relationships within HR, and between HR and business results
Copyright © Personnel Development Consultation, 2001

5. Risks in Using Surveys as the Main Data Source for Reporting Readiness and Formulating HR Policy
Employee survey data:
is anecdotal in regard to employees’ actual developmental and behavioral disposition (that determines their action)
does not even begin to capture the complexity of the value creation and strategy implementation process
Like opinion poll data:
employee survey data sheds no light on the validity of the answers given
data is not truly diagnostic in the short term, nor prognostic in the long term
does not point to how to solve an HR problem; at best, it indicates that there is a problem to be solved
Risks associated with the exclusive use of survey data:
insight into workforce anatomy is nearly nil
the complexity of value creation and strategy implementation processes is not captured
“handles” on how to improve workforce anatomy are not made available
prognostic data is absent
Copyright © Personnel Development Consultation, 2001

6. Take-Home Message #2
Risk #1: survey data does not capture the complexity of processes of value creation and strategy implementation
Risk #2: survey data provides “illusory handles” on the actual anatomy of the workforce
Risk #3: survey data does not make available long-term, prognostic data
Risk #4: the diagnostic value of survey data is starkly time-limited (like “news”)
Risk #5: survey data contains no pointers to solving HR problems, whether short- or long-term problems
Risk #6: exclusive use of survey data disregards advanced developmental and behavioral research methodologies that have been available to HR since the 1980’s
Copyright © Personnel Development Consultation, 2001

7. What is a Developmental-Behavioral Analytics?
A developmental-behavioral analytics is a methodology that assesses and measures qualities pertaining to readiness and effectiveness in a representative workforce sample
Such qualities comprise the intangibles of HR enablers such as leadership, strategic alignment, culture, etc., and therefore are referred to as “meta-enablers”
The Corporate Development Readiness and Effectiveness Measure (CDREM™) assesses 3 developmental and 3 behavioral meta-enablers fanning out into 25+ scores:
developmental level (15 levels)
developmental potential and risk (e.g., potential for leadership)
systems thinking capability (e.g., ability to think systemically, take multiple perspectives)
self-conduct (e.g., self-concept, risk-taking, autonomy)
task focus (e.g., drive for achievement, resourcefull under stress, quality of planning)
interpersonal perspective (e.g., understanding others, affiliation with, and bias toward, others)
The CDREM™ Analytics:
applies to a representative sample of the workforce, structured in harmony with the current status of scorecard strategy implementation
comprises 25+ criteria for defining individual human-capital category indexes (e.g., for leadership), as well as formulating other customized indexes to be tracked long-term
delivers readiness data in terms of a “potential-to-risk profile” for each of the indexes defined
in the long term, delivers data on the effectiveness of HR policy and strategy
when combined with conventional survey data, establishes the most comprehensive framework for making HR a strategic partner of executive management
Copyright © Personnel Development Consultation, 2001

8. Take-Home Message #3 A developmental-behavioral analytics:
is an assessment tool generating data regarding HR intangibles, both for purposes of measurement and intervention
provides a conceptual framework and language for defining HR strategy and documenting HR policy
The two methodology components of CDREM™ have been validated by way of research since the 1970’s
The intangibles made tangible by CDREM™ are both developmental (prognostic or long-term) and behavioral (diagnostic or short-term)
Since these intangibles “underly” the conventional five human-capital enablers (e.g., leadership), they are referred to as “meta-enablers”
Data on meta-enablers:
deepens insight into the cause-effect links within HR
deepens insight into cause-effect links throughout the company’s strategy map
expands the cause-effect-scape of HR links with business outcomes up into financials
makes visible heretofore invisible HR resources or bottlenecks
contains pointers to future HR policy and strategy
enables the HR function to act from deep and specific insight into workforce anatomy
Copyright © Personnel Development Consultation, 2001

9. Characteristics of the CDREM™ Readiness Report
Procedure:
working with a representative sample (instead of all employees) sharpens the focus on chosen core constituencies of the workforce
the representative sample is customized to the present status of driving down strategy in the company, to fine-tune strategic findings
Assessment outcomes:
reporting outcomes in terms of a “potential-to-risk index” for each human-capital category gives insight into the balance or imbalance of current workforce capabilities with regard to executing company strategy
e.g., a potential/risk index of +.05/-.75 signals “risk over potential”
e.g., a potential/risk index of +.75/-.05 signals “potential over risk,” and the possibility of raising the readiness standard presently adopted
differentiating between developmental and behavioral outcomes makes it possible to refine long-term HR policy and strategy formulations
making cause-effect relationships among HR enablers, and between HR enablers and business outcomes, visible means: tracking them at a “deep-structure level”
Follow-up:
Follow-up assessments made 6 months or a year later are compared to a baseline defined by the initial assessment, and thus deliver differential data
Copyright © Personnel Development Consultation, 2001

10. Take-Home Message #4 Procedure:
Assess intangible meta-enablers undergirding HR enablers
Use a representative workforce sample depending on the current status of scorecard implementation or strategy requirements
Customize indexes to be tracked to current company strategy, or to HR issues of strategic concern
Assessment outcomes:
Potential-to-risk index for each human-capital category guides HR decision-making
Cause-effect relationships within and beyond HR are deepened
Cause-effect links across the company’s strategy map can be scrutinized at a deeper level, of insight into the workforce
Follow-up:
Developmental findings: annually or bi-annually
Behavioral findings: every 6 months, preferably annually
Copyright © Personnel Development Consultation, 2001

12. Take-Home Message #5 Pre-assessment Post-assessment
scrutinize HR deliverables in terms of current concerns not answered by survey data or observation, and in light of the company’s strategy map
structure and size the representative sample based on insight into the status of “driving down” strategy to workforce levels
define an index for each of the human-capital categories, or for pertinent issues of strategic concern to HR
Post-assessment
assess the potential-to-risk ratio for each of the (human-capital) indexes defined, to find the presently weakest and strongest HR domain(s)
assess the difference between developmental and behavioral sub-indexes (e.g., for leadership), to set HR objectives and define HR programs
link developmental-behavioral outcomes to survey outcomes within HR
link developmental-behavioral outcomes to cause-effect configurations within the company’s strategy map
question the validity of presently defined cause-effect links in the map
Copyright © Personnel Development Consultation, 2001

14. Take-Home Message #6
CDREM™ findings on readiness in the five human-capital categories (or idiosyncratic HR indexes) are reported in percent over three classifications:
% of members of the representative sample who do not meet the standard set (e.g., for leadership)
% of members of the sample who do meet the standard
% of members of the sample that exceed the standard
This procedure allows to determine a potential-to-risk index for each HC category:
Positive potential/risk indexes indicate the chosen standard can be raised
Negative potential/risk indexes indicate that remediation is required to protect the standard
Findings are divided into developmental and behavioral ones:
developmental findings are prognostic, pointing to needed HR programs
behavioral findings are diagnostic, assessing present capability
When developmental (prognostic) findings numerically approach behavioral (diagnostic) ones, the developmental potential for strengthening readiness in the workforce in the near future is nil, or very modest at best
When the overall ratio of below-standard findings exceeds above-standard findings (e.g., p. 13, columns 4 & 6, row 15, in red), the readiness of the representative sample in the category concerned (e.g., leadership) puts the category standard set at risk
Note: In the CDREM™ Summary Report, percentages describing individual indexes (e.g., leadership) are represented in the form of ratios, with the standard set to 1 (see p. 15)
Copyright © Personnel Development Consultation, 2001

15. Copyright © Personnel Development Consultation, 2001

16. Take-Home Message #7
The report on p. 15 describes readiness in five human-capital categories, based on the percentage of “below-standard” and “above-standard” attainment (demonstrated for the leadership index on p. 13)
In the report, the proportion of the representative sample that meets the standard is set to 1, in order to assess deviations from the standard
In the example, a positive potential-to-risk index exists only in the category of competence; all other human-capital categories show a negative P/R-Index
The negative P/R-Index is highest in strategic awareness & culture (-1.11)
Overall, the P/R-Index for all human-capital categories is negative (-1.24)
The company, or company division, in question has a significant strategic awareness problem and may fail despite high marks in the area of use of competence, unless HR takes action
The first-order requirement is to remediate strategic awareness, followed by strategic alignment
The information contained in this report is invisible to employee surveys.
Copyright © Personnel Development Consultation, 2001

17. Example Progress Report, Category of Cultural Alignment Readiness
Value, 1998
Target
Measure
Employees’ Internal Cultural Alignment
-1.11/+0.22
0.0/+1.0+
Strategic Objective
To gain a deeper understanding of the workforce anatomy regarding internal cultural alignment, based on developmental-behavioral criteria provided by CDREM™
Measurement Intent:
By way of a representative sample, to measure what might be the root causes, from an HR perspective, of the discrepancy of business results with positive survey data
Composition of Representative Sample
: balanced sample
2000 f: management sample
Measure Formula
“potential-to-risk index” for cultural alignment, i.e., ratio of employees exceeding and missing the chosen CDREM™ standard [ (-1.33)= -1.11; p. 15, row 3, column 2]
Target
Below-standard [culture] = 0
Above-standard [culture] = 1.0
Supporting Initiatives
Restructuring the representative sample, justified by progress in driving down strategy to middle management (executive members of the sample becoming less crucial)
Establishing a middle-management mentoring program
Hiring based on using CDREM™ criteria as normative selection criteria (model: Winterthur)
+1.0
+0.5
-0.5
-1.0
-1.5
1998
1999
2000
2001
2002
Developmental-behavioral potential-to-risk index of internal cultural alignment [see slide 11]
Comments
In 1998, the firm whose cultural alignment index is depicted above, was generating business results that were in conflict with a moderately positive showing of survey indexes in all five HC-categories. Management decided it was time to investigate employees’ internal, not just external, alignment with strategy, to find the root causes of its modest success, especially in customer relations. As shown, cultural alignment proved to be the lowest of the developmental-behavioral indexes, a fact that could not be compensated for by a positive index of use of competence alone (+0.91, see p. 15). In 1999, HR paid primary attention to augmenting adherence to the standard of strategic alignment and integration. As a result, the cultural alignment index sank further (from to -1.19). HR hypothesized that the culprit was middle management, and switched the composition of the representative sample from a Balanced (E=M=T=I=25%) to a Management Sample (E=10, M=50, T=20, I=20 %), starting in To support this switch in sampling (while maintaining the developmental-behavioral standards chosen), HR introduced a one-on-one mentoring program geared to cultural alignment, and used CDREM™ criteria as normative criteria for hiring new managers.
Format adopted from BSCOL Mockup Readiness Report, slide 6, August 2001
Copyright © Personnel Development Consultation, 2001

18. Take-Home Message #8
The report on p. 17 gives an example of a progress report on one of the five individual category indexes
A report tracking other, idiosyncratic HR indexes has the same format
The report:
pinpoints one of the root causes of the company’s failure to produce business results in harmony with moderately positive survey indexes
compares the 1998 risk-to-potential index of cultural alignment [risk:-1.11, potential +0.22] to the ultimate target for that index [risk 0.0, potential 1.0]
justifies the restructuring of the representative sample in accordance with an increase in “driving down strategy” to middle-management levels
names the initiatives that were undertaken to remediate cultural alignment, as well as their results
Go to p. 15, to view the report in the overall context of all five human-capital indexes
Copyright © Personnel Development Consultation, 2001

19. Undertaking a Case Study with CDREM™
Some Rationales for Undertaking a Case Study:
HR survey data is not borne out by business results (especially internal business process, but also customer relations, and financials)
HR management wants to understand the long-term prospects of workforce readiness in a company division whose contribution is critical to future company success
HR management wants to strengthen its role as a strategic partner, by acquiring deeper insight into workforce anatomy, and bolstering its contribution to strategy
The Executive Team believes there is a need for an intensive analysis and upgrading of the workforce, but does not know in what part of the company to begin probing
The company is being merged with a different business culture of only partial compatibility
The company (an auditor) experiences an extraordinary increase in liability suits
Suggested Steps in Implementing CDREM™:
Based on a study of the strategy map and HR deliverables required, as well as the status of “driving down strategy,” or based on high-priority HR concerns of any kind:
define the target population of the assessment
size and structure a representative sample
define five human-capital indexes (and/or indexes regarding high-level objectives)
collect and score developmental-behavioral data
scrutinize cause-effect links across the strategy maps in light of the findings (a computerized Learning-and Growth Management System will help)
present the readiness report to executive-level management
follow up the report by implementing remedial and/or pro-active HR programs
repeat the developmental-behavioral assessment in a year’s time, to substantiate long-term progress or lack thereof
Copyright © Personnel Development Consultation, 2001

20. Take-Home Message #9 There are numerous reasons for employing CDREM™
all having to do with the need for deeper insight into the developmental-behavioral anatomy of the workforce (that survey data and observation do not reveal)
The steps needed to implement a developmental-behavioral workforce analysis by way of CDREM™ require HR:
to have an excellent grasp of the company’s strategy map, and the HR deliverables, and intangibles following from it
to be forward-looking (pro-active) rather than remedial:
by striving for a deepened understanding of workforce anatomy in terms of readiness to execute strategy
by aiming for increased strategic HR effectiveness regarding the company future
Copyright © Personnel Development Consultation, 2001

21. Combining Surveys with Developmental-Behavioral Measurements
Survey and developmental-behavioral data shares significant properties:
both are customizable to business unit and strategy
both provide a rational basis for HR decision making
both promote accountability and incentives based on data
both provide a continuous cycle of updates
both allow benchmarking across units
both are aggregated from individual assessments, thus safeguard privacy and confidentiality
CDREM™ data outdoes survey data in the following respects:
it provides insight into the actual readiness of the workforce--its level of developmental readiness and behavioral disposition and alignment
it deepens insight into cause-effect links to the level of intangibles undergirding HR enablers
it constitutes partly prognostic data that specifies actual risks in relation to the available HR potential (potential to risk index; see p. 15)
it has greater specificity with regard to goals, initiatives, targets, annual milestones
it provides a “deep” conceptual framework for refining and revamping strategy maps, thereby supporting HR as management’s strategic partner
Copyright © Personnel Development Consultation, 2001

22. Take-Mome Message #10
Both kinds of data promote HR accountability, and alignment of HR with company strategy
Survey data provides a first approximation of remedial issues, as well as a rough outline of goals
Developmental-behavioral data provides refinement and correction:
a deepened insight into heretofore intangible resources
a deepened follow-up of remedial issues
higher specificity in defining HR goals and targets
a conceptual map for designing HR programs
a conceptual framework for holding HR to higher standards
Where structural issues (mergers, re-structuring, downsizing, etc.) are involved, developmental-behavioral data has no equal
Both kinds of data collection and analysis together:
constitute the most solid and flexible framework presently available for defining HR strategy
Copyright © Personnel Development Consultation, 2001

23. CDREM™ Answers to HR Strategy Questions
Where lies our greatest overall weakness in terms of HR deliverables?
In which of the five human capital domains do we presently:
have the largest or smallest developmental potential?
Have the largest or smallest behavioral capacity?
need to undertake urgent remedial action?
need to be pro-active, to use available developmental potential optimally, or hire new capacity?
How do we need to re-conceptualize (and re-position) HR priorities (deliverables) to act in accordance with developmental-behavioral findings?
Where do we need hiring (or re-sizing) based on normative developmental-behavioral criteria, in order to guarantee adherence to reasonable human-capital standards?
Once CDREM™ follow-up data are available:
where do we need to re-focus our present interventions and programs?
where do we need to focus in establishing new reward and succession structures?
Once two (or more) company divisions have been compared with each other in terms of their developmental-behavioral anatomy:
should these two divisions be merged under new leadership?
how can we best structure cross-functional teams composed by employees from both divisions?
Copyright © Personnel Development Consultation, 2001

24. What gets measured, gets managed
Personnel Development Consultation
Human-Resources Measurement Specialists
Otto E. Laske PhD PsyD
Founder & Principal
51 Mystic St.
West Medford, MA 02155, U.S.A.
(781)
What gets measured, gets managed
Consultation on strategic human-resources management
Design of developmental-behavioral employee metrics