Applying a CEO-led strategic and systematic approach to engaging all stakeholders provides one of the most sustainable ways to achieving organizational goals, and yet some studies estimate that less than 20% of organizations have a formal plan to manage human capital. Here’s a quick fact sheet on the field of Enterprise Engagement and ISO human capital standards.
Enterprise Engagement definition: A strategic and tactical process to achieve organizational results by fostering the proactive involvement of all stakeholders who can contribute to organizational success, including customers, employees, distribution partners, vendors, communities, regulators, volunteers, and investors.
This CEO-led strategic and systematic approach is fundamental to ISO Annex SL, ISO 10018 Quality People Management Standards, and ISO human capital standards. Under new ISO Annex SL requirements, all 60 ISO management standards affecting up to 2 million companies now require a formal, written CEO-led process to engage all stakeholders in the organizational mission and be able to demonstrate how the plan is implemented at the strategic and tactical level. While an organization is granted great leeway in its journey to certification, it must be able to disclose a strategic and tactical plan addressing all related stakeholders with measurable results. Companies that follow the new ISO 10018 Quality People Management certification will effectively meet the requirements of Annex SL at the same time. ISO considers these new leadership principles critical to the success of any organization, whether organizations are ISO certified or not. Since 2015, ISO has issued an additional five human capital standards: ISO 30414 human capital internal and external reporting; ISO 30401 knowledge management, ISO 30409 workforce management, ISO 10667 assessment services, and ISO 30405, recruitment.
What’s New: Enterprise Engagement and the related ISO Annex SL and ISO 10018 and other human capital standards do for stakeholder engagement what ISO 9001 quality standards and methods such as Six-Sigma have accomplished for manufacturing and logistics: enhance efficiency and improve performance through a strategic, systematic and measurable approach. The standards require a formal proactive, strategic effort led by the CEO and all levels of management, and the company must have a system that connects all the dots between objectives, management, all stakeholders, etc. to clear strategies, tactics, and measures.
Benefits: Greater financial return and share-price performance for public companies through a better experience for customers, employees and all stakeholders; reduced reputation and litigation risks; lower marketing and recruitment costs; greater efficiency; enhanced safety and occupational health, and greater community support. The purpose of ISO human capital standards is to bring a more strategic, systematic, and proactive approach to key human resources functions that are routinely ad hoc and reactive. ISO standards can also reduce litigation risks by demonstrating an organization’s strategic commitment to effective practices.
1980-2000: Formative period. Visionaries in quality management and marketing identify the need to authentically address the people issue, including: W. Edward Deming, Peter Drucker, Tom Peters, Curt Coffman, Marcus Buckingham, Seth Godin. University of Luton in the U.K. publishes study identifying link between customer and employee engagement.
2002-2008: First Formal Research Institute Founded. The Forum for People Performance Management and Measurement is founded at Northwestern University in 2002 that conducts six years of research from 2002 to 2008 that further helps identify the connection between customer and employee engagement and organizational performance.
2005: First National Business Media Reference. Harvard Business Review publishes the ground-breaking article, Manage Your Human Sigma, by Gallup consultants demonstrating a clear link between customer and employee engagement.
2008: Enterprise Engagement Alliance Formed to Create Formal Roadmap and Curriculum. Several dozen corporate practitioners, solution providers and academics form the Enterprise Engagement Alliance at TheEEA.org to create a formal curriculum on how to implement an enterprise approach to engagement in a measurable way.
2012: Stock Index Created. The EEA creates the first Engaged Company Stock Index, which has consistently outperformed the S&P 500 and is now 40 percentage points higher than the S&P.
2013: ISO Recognizes the Human Factor. The International Organization for Standardized recognizes that it has overlooked the human factor in standards and publishes Annex SL requirements that now apply to 60 IS0 Standards, including ISO 45001, along with Quality People Management standards that reflect Enterprise Engagement principles.
2015: First Executive Position. Adobe names an executive in charge of customer and employee experience.
2016: Investors Awaken. Investors join forces to promote disclosures of human capital investments and outcomes.
2017: First Certification for ISO Annex and ISO 10018 Certification; Investor Pressures Mount. The International Center for Enterprise Engagement at TheICEE.org is formed to create the first formal certification for ISO 10018 quality people management, which audits for the fundamental issues of Annex SL and offers a way for companies to promote their commitment to people. Nearly $15.7 trillion in investment capital calls for engagement disclosures in SEC filings.
2018: Formal Academic Recognition; corporations embrace human capital. The Academy of Management, the world’s largest organization of management academics, sponsors a symposium on Enterprise Engagement at its annual conference.
Two-hundred multi-national corporations form the Social and Human Capital Coalition to promote the creation of human capital reporting standards. JUST Company ETF focused on people raises record $215 billion on its first day.
2019: Annex SL and in Full Effect, ISO 30414 and Other Human Capital Standards Launched. Starting in 2019, Annex SL will be required at up to 2 million companies, which will now have to demonstrate a formal human capital and enterprise engagement plan directed by the CEO that connects the dots between all stakeholders and the tactics used to engage them. The International Center for Enterprise Engagement at TheICEE.org launches certifications in five new ISO human capital standards: ISO 30414 human capital management; ISO 30401 knowledge management; ISO 30409, workforce management, ISO 10667, assessment, and ISO 30405, recruitment.