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Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Masterclass on “Winning the War for Talent 2.0”
Prof Sattar Bawany Prof Sattar Bawany
Adjunct Facilitator, Aventis Learning Group (ALG)
CEO & Master Executive Coach, Centre for Executive Education (CEE)
Regional Managing Director, Executive Development Associates (EDA)
17-18 December 2014, Aventis’ Campus@Concorde Hotel, Singapore
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Every morning in Asia, a tiger wakes up. It knows it must outrun the slowest deer or it will starve to death.
Every morning in Asia, a deer wakes up. It knows it must run faster than the fastest tiger or it will be killed.
It doesn’t matter whether you are a tiger or a deer: when the sun comes up, you’d better be running…..
Are You a Tiger or a Deer?
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Top – Optimistic
Middle – Realistic
Bottom – Negative,
Pessimistic
Looking at you:
Direct
Devil’s Advocate
Very Detailed:
Analytical
Cautious
Distrustful
Bigger Ears – Better Listener
Little Details:
Ernest
Intense Conviction
Risk taker
Facing Left:
Traditional
Friendly
Good at details
Facing Right:
Innovative
Active
Creative
4 Legs:
Secure
Stubborn
Stick to ideals
3 Legs or Less:
Paranoid of
Change,
Insecure Long Tail – Good Sex Life
How Well Do You Know YOURSELF?
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
4
Module 1:
Introduction and
Workshop Objectives
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
• CEO of Centre for Executive Education (CEE Global)
• C-Suite Master Executive Coach, EDA Asia Pacific
• Adjunct Faculty of Harvard Business School Corporate Learning
• Adjunct Faculty of Duke Corporate Education (CE)
• Adjunct Professor teaching leadership development and human resource courses with Curtin Graduate School of Business
• Over 25 years’ in executive coaching, group facilitation, executive education and senior leadership development and training
• Assumed senior global and regional leadership roles with DBM (Drake Beam & Morin), Mercer Human Resource Consulting, Hay Management Consultants and Forum Corporation
About Your Master Facilitator
7
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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S
C
O
P
E
HARE
HALLENGE
PEN MINDED
LAN OF ACTION
NJOY OURSELVES
The S.C.O.P.E. Approach
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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• Evaluate the today’s current challenges in managing talent
• Understand the best working practices in talent management
• Develop the skill in retaining identifying and managing talent pool
• Develop an effective strategy for employee attraction and retention
• Gain a deeper understanding of performance management
• Leverage on managerial coaching to engage mission critical talent
• Be able to lead and engage a multigenerational workforce
• Develop a SMART Action Plan for developing their effectiveness in Talent Management
This Masterclass will provide you with a foundation of knowledge that will enable you to:
Workshop Objectives
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Key Questions to Ask:
10
Questions for CEOs and Board of Directors to ask:
1. What is the key talent risks associated with our core business
strategies? With our major investments?
2. What is our talent bench strength? How is our organization
mitigating succession risks?
3. What plans are in place to bring about smooth succession or
substitution of our key talent, if the need arises?
4. How can we strengthen our talent-related due diligence in joint
venture and M&A situations of any of our holdings or subsidiary
entities?
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Group Exercise: State of Talent
Management in Organisations • What is the current state of talent management in Singapore Organisations?
• What are the operational challenges and how would you resolve them? What are your recommendations?
Duration: 15 minutes
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Video on
Talent Management @
12
Part I of the Video http://www.youtube.com/watch?v=CCVy7OxThGo
Part II of the Video http://www.youtube.com/watch?v=8_mlEWJ_nto
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Module 2
Understanding
Human Capital and
Talent Management
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Human Resource Management • Human resource management (HRM) is defined as a strategic and
coherent approach to the management of an organization’s most valued assets – the human capital (people working there) who individually and collectively contribute to the achievement of its objectives.
• HRM consists of four generic processes or functions that are performed in all organizations:
Selection – matching available human resources to jobs; Appraisal – performance management; Rewards – the reward system is one of the most under-utilized and
mishandled managerial tools for driving organizational performance; it must reward short as well as long-term achievements
Development – developing high quality employees.
14
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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What is Talent Management (TM)?
Talent Management is the strategic management of the flow of talent through an organization.
Its purpose is to assure that the supply of talent is available to align the right people with the right jobs at the right time based on strategic business objectives.
The right supply of talented workforce is crucial to realize the strategic goals of the organization not only for today but also in the future.
Organization’s efforts to attract, select, develop, and retain key talented employees in key strategic positions.
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Talent Management (TM) Concept
• TM introduced by McKinsey Consultants, in the 1990’s
• TM is identified as the critical success factor in the achieving sustainable organisational success
• TM focuses on
– differentiated performance: A, B, C players or employees influencing company performance and success
– identifying key or critical positions in the organization
• Research has consistently show that firms do recognize the importance of talent management but they lack the competence required to manage it effectively
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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What is Talent?
According to McKinsey; talent is the sum of
• a person’s abilities,
• his or her intrinsic gifts,
• skills, knowledge, experience ,
• intelligence,
• judgment, attitude, character, drive,
• his or her ability to learn and grow.
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Who are Talented People?
• They regularly demonstrate exceptional ability and achievement over a range of activities
• They have transferable high competence in assuming different roles and responsibilities
• They are high impact people who are resilience, emotionally intelligence and can deal with complexity
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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CEE Talent Management Cycle
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Source: Sattar Bawany, ‘How Singapore Companies Can Win the War for Talent’ in Singapore Business Review http://sbr.com.sg/hr-education/commentary/how-singapore-firms-can-win-war-talent, 5 September 2013
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Elements of Talent Management
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1. Talent Acquisition.
2. Talent Development
3. Performance Management
4. Succession Planning
5. Talent Engagement
6. Organizational Results
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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How does TM fits within HR?
TALENT ACQUISITION/PLANNING
Proactively recruiting world-class, diverse leadership talent
Executive Recruiting
New Leader On-Boarding
Assessment/Candidate Slating
PERFORMANCE MANAGEMENT/
SUCCESSION PLANNING Ensuring a strong leadership pipeline to drive growth for today and tomorrow.
Performance Management
EQ-i 360 Feedback
Leadership Transition
TALENT DEVELOPMENT Developing and executing programs,
processes & tools to grow our current and future leaders
Leadership Programs for High Potentials
Executive Coaching
Global Talent Development
TALENT ENGAGEMENT EMPLOYEE SATISFACTION – TALENT RETENTION
Identifying the level of engagement of employees to optimize contribution and reduce enhance retention
ACHIEVING ORGANISATIONAL RESULTS
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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The Business Case for TM
• To compete effectively in a complex and dynamic global environment to achieve sustainable growth
• To develop leaders for tomorrow from within an organization
• To maximize employee performance as a unique source of sustainable competitive advantage
• To empower employees: Cut down on high turnover rates Reduce the cost of constantly hiring new people and
also cost in training them
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Value Proposition of TM
Talent Management strategies help ensure the quality, depth and diversity of a company’s leadership and talent bench.
Effective Talent Management accelerates businesses’ ability to exceed performance expectations and drive future growth by: Developing talent with the values, skills and experiences
needed to be successful today and in the future
Aligning and integrating core HR processes with business processes to increase individual, team and organizational performance
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Group Exercise: Best Practices on
TM Strategies in SG Organisations
• Review of the 10 Best Practices Approaches to Talent Management
• One of the biggest challenges in Talent Management from an HR perspective is to obtain commitment from line management.
• What is your experience on the above?
• Identify other potential barriers to successful implementation of Talent Management and your recommendations to resolve them?
Duration: 15 minutes
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Talent Management in Today’s
Global Economy • Companies today face formidable talent challenges. The ability
to sustain a steady supply of critical talent is a challenge facing all organizations — worldwide.
• Among the issues impacting the “next generation” workforce are impending skill shortages, an increasingly cross-generational and diverse workforce, the need for knowledge transfer from retiring baby boomers, and significant leadership gaps.
• Intense cost pressure from both traditional and emerging competitors, new markets, and more demanding customers are additional elements that give a new sense of urgency to the concept of talent management.
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Increasing
Senior Management
Accountability for
Talent Management Plan
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Questions to Ask:
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Questions for CEOs and Members of Board Directors to ask:
1. What is the talent strategy that supports our organization (business) objectives
and capital investments?
2. What talent KPIs are we monitoring at the board level? How do they connect
to our business strategy?
3. What development have we provided our key successors in the past year? Has
our leadership bench strength changed and why?
4. How does our management access the necessary talent to support operational
excellence, such as lean and other quality and process improvement methods?
What improvements are being made?
5. Which board committee provides primary oversight for our talent programs
and policies? Should a board level talent/human resources committee be
formed to allow more focused oversight by the board?
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Group Discussion: Important
Talent-related KPIs
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There are a number of metrics that directors should be given access to that would help provide more clear insight into talent-related risks. These include: • Succession bench strength • Pipeline for critical organizational roles • Leadership capabilities required in the future vs. current capabilities • Value of engagement score increase (dollars per point)
What are other KPIs that would be relevant to Your Organizations?
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Module 3
Performance Management (Aligning Performance,
Recognition and Discipline)
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Performance Management and
Talent Management • Performance Management is one of the elements in the CEE
Integrated Talent Management Framework (discussed earlier), which also includes Talent Acquisition, Talent Development, Succession Planning, Talent Engagement and Organizational Results.
• Performance Management can be defined as the process of creating a work environment in which people can perform to the best of their abilities. This involves the examination of workforce capabilities to evaluate current skill sets and identify career development for individual employees - is one of the most critical element in the CEE TM framework.
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Elements of Performance
Management System • A performance management system is a part of a continuum of
ongoing information and feedback about the character and quality of work provided over time.
• All performance management systems have three elements in common:
– a process,
– a tool (instrument), and
– A series (mid-year and end-of-year) of performance review or discussion sessions.
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Coaching and Feedback
• Feedback is the process of giving and receiving information that is pertinent to the work being performed in real-time. Feedback is information exchange. The goal of this exchange is to ensure that there is a common agreement of what “good performance” looks like.
• Coaching uses the feedback process to direct and redirect work efforts and behaviors. Coaching provides this direction in the context of a relationship wherein the manager attempts to help the employee be the very best performer he or she can be.
• Good performance management and day-to-day management are designed to create and replicate good performance. When performance exceeds expectations, recognition is appropriate
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Recognition • Recognition is an investment in future performance.
Recognition is reinforcement. It communicates the simple message, “that was good, do it again.”
• Recognition is a required part of good supervision; it is neither optional nor additive—it is an indispensable ingredient.
• An effective recognition program takes advantage of both formal and informal methods.
• The process for receiving formal recognition should be simple, clear, and easily administered.
• Another counterproductive recognition model is one that has an approval mechanism by which a manager’s nomination can be overruled by HR or the CFO.
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Performance Improvement Plan (PIP)
• Most often PIP is provided in a written letter to the employee in question, with defined elements and defined check-in points to follow-up on the matter.
• A model letter has the following elements:
Description of the issue(s)
How it impacts others in the company
Why the issue(s) is/are bad/undesirable
Note who does what, by when to make corrections
Impact of the bad actions on performance
Time frame to follow up
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Characteristics of an Ideal
Performance Management System
• Strategic Congruence
• Thoroughness
• Practicality
• Meaningfulness
• Specificity
• Reliability
• Identification of effective and ineffective performance
• Validity
• Openness
• Standardization
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Case Study: Network Solutions Inc. Consider Network Solutions’ performance management system in light of what we discussed as an ideal system. Then, answer the following questions:
What are the features of the system implemented at Network Solutions that correspond to what was described earlier as ideal characteristics? Which of the ideal characteristics are missing? What would be your recommendations?
Based on the description of the system at Network Solutions, what do you anticipate will be some advantages and disadvantages as well as the potentially positive and negative outcomes resulting from the implementation of the system?
Duration: 15 minutes
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Module 4
Succession Planning
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Succession Planning - Defined
Process of identifying the future leaders of your organization and creating a development plan for them to be ready when the time comes.
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Succession Planning
• It is imperative that Succession Planning is a key part of a company’s strategic planning process
• Without a proper succession plan, it would be difficult to nurture and develop your key talent.
• Succession Planning is much more important than most companies realize.
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Succession Planning &
High Potentials • Succession planning involves the identification of high-potential
employees, evaluating and honing their skills and abilities, and preparing them for advancement into positions which are key to the success of business operations and objectives.
• Succession planning involves:
Understanding the organization's long-term goals and objectives.
Identifying the high-potential candidates and their respective developmental needs.
Determining workforce trends and predictions.
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Steps Involved in Succession
Planning
1. Identifying legal and diversity issues to consider
2. Establishing present and future leadership roles and objectives
3. Selecting key employees
4. Evaluating the strengths, weaknesses and readiness for succession in key employees
5. Planning for the individual development of and ways to retain key employees
6. Identifying “emergency” positions without successors
7. Planning for positions that cannot be filled internally
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Possible Pitfalls of Succession
Planning • Lack of a formal development plan for each key person
• Development plans that are not implemented properly, or plans not implemented at all
• Development plans that are not tailored to the needs of an employee
• Development plans are not discussed with employees, and mutual consent is not obtained
• Key employees not knowing that they are key employees
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Possible Pitfalls of Succession
Planning • Development plans that are not well thought out, and made
just for compliance
• Including employees who are not qualified in the “key employee” list just to make them feel better
• Employees staying in the same position for too long resulting in your best people leaving the organization
• An employee being identified as a successor, but not getting the leadership position when the time comes
Copyright @2014 Centre for Executive Education Pte Ltd (Program Licenced to Aventis Learning Group for Masterclass on Winning War for Talent 2.0)
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Who are High Potentials?
High Potentials consistently and significantly outperform
their peer groups in a variety of settings.
While achieving these superior levels of performance, they
exhibit behaviors that reflect their companies’ culture and
values in an exemplary manner.
Show a strong capacity to grow and succeed throughout
their careers within an organization – more quickly and
effectively than their peer groups do.
Reference: Douglas Ready, Jay Conger and Linda Hill, ‘Are You a High Potential? Harvard Business
Review, June 2010
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The difference between high-performance employees and
high-potential employees is that the high-performance
employee are very good at performing their jobs, while the
high-potential employees have demonstrated measurable
skills and abilities beyond their current jobs.
The real damage is done when the high-performance
employee is promoted to a managerial level, is uncomfortable
and struggles in their new role, resulting in high levels of
stress and anxiety, causing them to quit.
High Performers vs. High Potentials
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Studies show employee turnover can cost companies up to
40 percent of their annual profit. That's for the turnover of
all employees, regardless of their performance levels.
The financial impact of losing a significant number of high-
potential employees (those Gen X and Y who have been
identified as your future leaders) can be exponentially
higher.
High Performers vs. High Potentials
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Building a Leadership Pipeline
Reference: Ram Charan, Stephen Drotter and James Noel “The Leadership Pipeline”, Jossey-Bass,
Wiley, San Francisco, California, 2000
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“Crisis may be an overused word, but it’s a
fair description of the state of leadership in
today’s corporations. CEOs are failing
sooner and falling harder, leaving their
companies in turmoil. At all levels,
companies are short on the quantity and
quality of leaders they need.”
Reference: Ram Charan, “Leaders at All Levels”, Jossey-Bass, Wiley, San Francisco, California, 2008
Business Case for
Succession Planning
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Introduced a clear Gen Y Talent Management Strategy
– Current leaders who espouse performance and development conversations
– HR facilitation without “encumbrance”
Key elements include:
– Selection based on values - creative, courageous, responsive, international and
trustworthy….and explicitly modelling desired behaviour
– Commitment from EXCO down…Talent Management Committee
– Senior Leaders have responsibility to be talent scouts for Gen Y leaders
– Senior Leaders expected to have “Conversations that Count” – performance, learn and
develop, career development and engagement of Gen Y employees
For this Bank, Gen Y Talent Management is a differentiator!
Case Study – Global Bank with
Significant Asia Presence
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Program Evaluation
Development of Pipeline of
Gen Y High Potentials
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• Develop Internally—buying may not be an option • Update Curriculum for Development of Gen X and Y • Update Approach to Organizational Learning • Boost Emphasis on Gen X and Y Future Leadership • Be Clear about Executable Tasks of Leadership Organizations need to be more intentional & articulate
about the leadership skills they require & more creative in designing experiences that help Gen X & Y
employees acquire them
HR’s Role: Building the Pipeline
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Finding leadership talent early is essential. The path from initial recruitment to the senior levels of a company is approximately twenty-five years long and involves, on average, only five jobs before becoming eligible for the CEO post.
The sooner Gen Y potential talent is identified, the better it can be developed and tested.
The most precious resources here are not financial but the time, energy, and attention of other leaders. These are always in short supply and must therefore be devoted to the people who are most likely to succeed at top levels.
Identify Gen Y Talent Early
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Alignment with
Strategic Direction
Expanding Leadership Competence Organization Competence
•Markets
•Competition
•Customers
•Products
• Shift of Mindset (Mental Models)
• Leadership Effectiveness – Core Transitional Skills
• Business and Financial Acumen
• Development of Others (Corporate Coaching Skills)
•Business Processes
•Structure & Accountabilities
•Relationships, Power & Politics
•Staffing & Capabilities (Knowledge Mgt)
Reference: Sattar Bawany, The ART of War for Talent, Human Capital (SHRI), Vol. 10 Issue 1 – January 2010 p40
Transition of High Potentials
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Development
Review Board
Executive Development
Coach Professional
Network
Development
Assignments
Business
Results
Leadership
Growth
Reference: Sattar Bawany, Accelerating the Performance of Your Future Leaders, Human Capital (SHRI), April 2008 p58-61
Accelerating the Development
of High Potentials
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Agenda
Senior insight powerful (+)
HiPo presents goals, aspirations & developmental questions
Career plans assessed in light of organisational needs
Board shares personal insights
Brainstorm specific developmental suggestions & connections
HiPo Development Review Board
HiPo
Executive
Committee
HR Facilitator (Strategic
Business
Partner) Executive
Coach
HR
Reference: Sattar Bawany, Accelerating the Performance of Your Future Leaders, Human Capital (SHRI), April 2008 p58-61
Accelerating the Development
of High Potentials
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Executive Development Approaches
Executive Education (classroom/online), Stretch Assignment, Action Learning,
Executive Coaching and Mentoring
Company/ Sponsor
Expectations
Individual/ Coachee
Expectations
Transition Readiness
Assessment
Company/ Sponsor
Feedback
Individual/ Coachee Feedback
Gaps Action Plan
Gaps Action Plan
Adapted from: Sattar Bawany, The ART of War for Talent, Human Capital (SHRI), Vol. 10 Issue 1 – January 2010 p38-42 Download Complimentary e-copy from CEE Website at: http://www.cee-global.com/6/publication
Framework for Developing Sustainable
Leadership Pipeline
(Critical EQ Competencies)
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• Next Generation of leaders at all levels demonstrate a high degree of Emotional Intelligence in their role
• Emotionally intelligent leaders create an environment of positive morale and higher productivity resulted in sustainable employee engagement
• Critical EI competencies includes: relationship management; cross cultural communication; effective negotiation and conflict management
Reference: Bawany, Sattar: ‘Maximising the Potential of Future Leaders: Resolving Leadership Succession Crisis with Transition Coaching’ In ‘Coaching in Asia – The First Decade’., Candid Creation Publishing LLP, September 2010. Download Complimentary e-copy from from: http://www.cee-global.com/6/publication
Leadership Competencies of Next
Generation of Leaders
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Importance of Developing Leaders in
Achieving Organisation’s Results
Sattar Bawany (2014), “Building High Performance Organisations with Results-based Leadership Framework” in Leadership Excellence, November 2014 (11.2014) issue:www.hr.com/en/magazines/leadership_excellence_essentials/
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Growth Potential
Performance
Low
Medium
High
Low
Medium
High
9 - Hi Potential Future Leader
Superior performer.
Strong possibility of promotion to
next level or beyond within
12 months.
8 - Hi Potential Future Leader Superior performer with moderate
possibility of promotion to next level or
expanded lateral move within organization
within 1-3 years.
6 - Hi Potential Future Leader Solid performer with strong possibility
of promotion to next level within
1-3 years based on increased job
performance in current role.
5 - Hold for Development
Solid performer in current role. May be
relatively new in position and still
growing into job.
Promotion likely in 2-3 years.
2 - Watch List
Performance not good. May be due to
change in job scope or wrong job.
Due to recent performance trend,
potential may be questionable.
3 - Unusual Case
Current performance is not good
but past performance has been strong
(could be short term issue or
wrong job, etc.).
7 - Pro in Position Seasoned Professional.
Consistently superior performer,
difficult to replace but not likely
to be promoted within 12 months.
4 - Solid Performer
Performance has been solid.
Unclear whether individual can
grow with the job. Unlikely to be ready
for promotion in foreseeable future.
1 - Watch List Performance is weak in current role.
Individual is doing just enough to get by.
Chances of fixing are remote.
Consideration should be given to
replacing the individual.
Best Practice: GE* Nine Box Model
*GE Crotonville’s Management Training Center
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Succession Plan Organization Name, Department Name ___________________
Key Position Title Incumbent
Name
Position
Vulnerability
Succession Candidate
Names
Open in
< 1 Yr
Open in
1–3 Yrs
Open in
3 + Yrs
Ready in
< 1 Yr
Ready in
1–3 Yrs
Ready in
3 + Yrs
Tool: Sample Readiness Level Chart
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Overall Performance Summary: (Indicate recent performance including major accomplishments or performance issues.) Key Strengths: (List 2 - 3. Indicate key technical or professional competencies, skills or knowledge the person
has.) Development Needs: (List 2 or 3. Indicate key experiences, skills or knowledge the person lacks in order to move to
the next level.) Development Actions: 1. On The Job: (What new responsibilities do you plan to assign to help this person develop
this year?)
NAME: ________________ TITLE: ________________
Sample Development Plan Tool: High Potential Assessment - 1
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2. Special Assignment: (What task force, projects or special assignments will be given this year to aid development?) 3. Training: (What specific training or seminars are recommended this year for his/her development?) Potential For Promotion: (Indicate this persons readiness to be promoted to the next organizational level.) Ready now for the next level. Ready in the next 24 months. Ready in 2 to 3 years. Recommended Next Position: (List the next assignment that would most benefit the individual in his/her development.)
Sample Development Plan (cont’d) Tool: High Potential Assessment - 2
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Group Exercise: Case Study on
TM and Succession Planning
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• Succession Planning Process: Identify a critical position in the organization (Ann, the CEO)
Delve down three levels below the critical position: no one, then Abby (Head of HR), and finally Robin (Head of Organisational Excellence)
• Looking at this example, what are the potential challenges do you foresee to the subject of succession planning for Ann’s role as the CEO and what are your recommendations to the Board?
Prepare your Group Response on Flipcharts and appoint a Spokesperson to Present to the larger Group
Duration: 15 minutes (Group Discussion) 15 minutes (Plenary Presentation)
Group Exercise: Case Study on
Succession Planning
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Module 5
Talent Retention:
Harnessing the Potential of
Your Multigenerational
Workforce
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VIDEO ON
GENERATIONAL DIFFERENCES
66
Source: http://www.youtube.com/watch?v=i4JxRqWkNlQ
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Gen Z/ i-Generation / Linksters
Generation Y / Millenials
Generation X Baby Boomers Traditionalists
68 and over 50-67 33-49 19-32 18 and under
1922-1945 1946-1964 1965-1980 1981-1994 1995-2010
Value logic and
discipline,
stability, want a
legacy
Idealistic,
competitive,
questions
authority,
dislikes change,
recognition,
stellar career
Work/life
balance,
career
portability,
flexible, some
anxiety, dislike
micro
management
Value diversity,
technologically
superior,
change, want
meaningful
work, embrace
selected
technologies
and don’t let go
Technology a
part of life,
never lost,
multi-profiled,
multi
collaborators,
multi personality
multi locations
The 5 Generational Traits
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Generational Work Perspectives Generation
Years Born Work Perspectives
Traditionalists 1922 - 1945 “Company loyalty” - Believed they'd work for the same company their entire career.
Boomers
1946 - 1964 “Live to work” - Believe in putting in face time at the office. Women enter the workforce in large numbers.
Gen Xers
1965 - 1980 “Work to live” - Believe that work should not define their lives. Dual-earner couples become the norm.
Gen Yers (Millennials)
1981 - 1994 “Work my way” - Devoted to their own careers, not to their companies. Desire meaningful work.
Gen Zers (Linksters)
1995 to present
“Living and Working their way” - Their struggles in the work environment are tied to their youth and inexperience. Desire for change, stimulation, learning and promotion that will conflict with traditional organisational hierarchies.
Sattar Bawany, ‘Unlocking unlocking the benefits of a multi-generational workforce in Singapore’, http://sbr.com.sg/hr-education/commentary/unlocking-benefits-multi-generational-workforce-in-singapore, published in Singapore Business Review on 24 January 2013
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What is the inter-generational mix in
Singapore?
• Key findings from survey commissioned by TAFEP :
Together, Gen X and Gen Y make up 60% of the workforce
Means that 40% of the workforce is over 50 years of age
• Most employees are:
Working in multi-generational teams
In some cases cross cultural teams
In some cases with remote teams in other parts of the world
Source: Tripartite Alliance for Fair Employment Practices (TAFEP) www.fairemployment.sg
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Source: The Straits Times, Singapore 8 April 2010
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Generational Differences
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Bringing a New Type of Language
to the Workplace
• Your gf is getto lol
• Rofl nah she’s cool
• Lol coolies ttyl gtg pos
Your girlfriend is lower class laugh out loud
Rolling on the floor…
Laugh out loud, stay cool, talk to you later, got to go, parents over (my) shoulder
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Group Discussion: Productivity Of
Multi-Generational Workforce • What is the impact a multi-generational workforce has on effectiveness and productivity at your organisation?
• What are the operational challenges and how would you resolve them? What are your recommendations?
Duration: 10 minutes
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Source: http://www.youtube.com/watch?v=rDAdaaupMno
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EI Mini Quiz
Important Note: The purpose of the following short quiz is to provide you with an application of Emotional Intelligence (EI) in managing a multigenerational workforce. The results you get from this quiz are NOT a comprehensive picture of your EQ.
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Scenario 1. You are a Baby Boomer Manager in a meeting when a Gen Y colleague takes credit for work that you have done. What do you do?
A. Immediately and publicly confront the colleague over the ownership of your work.
B. After the meeting, take the colleague aside and tell her that you would appreciate in the future that she credits you when speaking about your work.
C. Nothing, it's not a good idea to embarrass colleagues in public.
D. After the colleague speaks, publicly thank her for referencing your work and give the group more specific detail about what you were trying to accomplish.
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Answer for Scenario 1
The Credit Stealing Colleague:
The most emotionally intelligent answer is D. By demonstrating an awareness of work-place dynamics, and an ability to control your emotional responses, publicly recognizing your own accomplishments in a non-threatening manner, will disarm your colleague as well as puts you in a better light with your manager and peers. Public confrontations can be ineffective, are likely to cause your colleague to become defensive.
A. 0 Points – Immediately and publicly confront the colleague over the ownership of your work.
B. 5 Points – After the meeting, take the colleague aside and tell her that you would appreciate in the future that she credits you when speaking about your work.
C. 0 Points – Nothing, it's not a good idea to embarrass colleagues in public. D. 10 Points – After the colleague speaks, publicly thank her for referencing your
work and give the group more specific detail about what you were trying to accomplish.
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A. Ignore it – the best way to deal with these things is not to react.
B. Call the person into your office and explain that their behavior is inappropriate and is grounds for disciplinary action if repeated.
C. Speak up on the spot, saying that such jokes are inappropriate and will not be tolerated in your organization.
D. Suggest to the person telling the joke he go through a diversity training program.
Scenario 2: You are a Gen X Manager in an organization that is trying to encourage respect for racial and ethnic diversity. You overheard a Gen Y employee telling both sexist and racist jokes. What do you do?
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The most emotionally intelligent answer is C. The most effective way to create an atmosphere that welcomes diversity is to make clear in public that the social norms of your organization do not tolerate such expressions. Confronting the behavior privately lets the individual know the behavior is unacceptable, but does not communicate it to the team. Instead of trying to change prejudices (a much harder task), keep people from acting on them.
A. 0 Points – Ignore it - the best way to deal with these things is not to react.
B. 5 Points – Call the person into your office and explain that their behavior is inappropriate and is grounds for disciplinary action if repeated.
C. 10 Points – Speak up on the spot, saying that such jokes are inappropriate and will not be tolerated in your organization.
D. 5 Points – Suggest to the person telling the joke he go through a diversity training program.
Answer for Scenario 2
The Racist Joke:
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Scenario 3. You are a Gen Y Manager and have recently been assigned a Baby Boomer in your team, and have noticed that he appears to be unable to make the simplest of decisions without seeking advice from you. What do you do?
A. Accept that he "does not have what it take to succeed around here" and find others in your team to take on his tasks.
B. Get an HR manager to talk to him about where he sees his future in the organization.
C. Purposely give him lots of complex decisions to make so that he will become more confident in the role.
D. Engineer an ongoing series of challenging but manageable experiences for him, and make yourself available to act as his mentor.
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The most emotionally intelligent answer is D. Managing multigenerational employees requires high levels of emotional intelligence, particularly if you are going to be successful in maximizing the performance of your team. Often, this means that you need to tailor your approach to meets the specific generational needs of the individual, and provide them with support to help them grow in confidence.
A. 0 Points – Accept that he 'does not have what it take to succeed around here' and find others in your team to take on his tasks
B. 5 Points – Get an HR manager to talk to him about where he sees his future in the organization
C. 0 Points – Purposely give him lots of complex decisions to make so that he will become more confident in the role
D. 10 Points – Engineer an ongoing series of challenging but manageable experiences for him, and make yourself his mentor (reverse mentoring)
Answer for Scenario 3
The indecisive Baby Boomer Employee:
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Module 6
Talent Engagement:
GROW Your Talent with
Managerial Coaching
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“Coaches help people set better goals and then reach those goals, provide the tools, support and structure to accomplish them” International Coaching Federation
“Coaching is a powerful, collaborative relationship between a coach & a willing individual which enables, through a process of discovery, goal setting the realization of strategic action” Corporate Coach U
What is Coaching?
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“Coaching is unlocking a person’s potential to maximise their own performance. It’s helping them to learn rather than teaching them”
The Inner Game in Business by W Timothy Gallwey
“Coaching is the art of improving the performance of others. Managers who coach encourage their teams to learn from and be challenged by their work. Create the conditions for continuous improvement by helping staff to define and achieve goals.”
Coaching Successfully by Roy Johnson and John Eaton.
What is Performance Coaching?
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Helping an individual:
“Learn what it takes” to improve existing capabilities
Set meaningful goals
Be accountable for results
Understand and eliminate barriers
Focus of Managerial Coaching
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Intention
Words Relationship
TRUST
COACHABLE MOMENT®
Those moments when an individual is open to taking in new information that will effect a shift in his/her knowledge and behavior.
Being a Manager - Coach
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1. Goal 2. Reality
• Invite self assessment • Feedback • Is there a gap?
• Be creative – look at the full range, brainstorm • Offer suggestions for consideration – beware advice!
3. Options 4. Wrap Up • Identify possible obstacles • Commit to action • Identify steps • Agree support
• Agree topic for discussion • Agree specific objective of the session • Set longer term aim if appropriate
Gap?
The GROW Coaching Model
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1. Goal 2. Reality
• What’s the evidence? • What have you already tried? • What did you learn from that? • What other feedback do you have?
• If you looked at this from another angle … what could you do then? • What could you try now? • What else? • What could you do as a first step?
3. Options 4. Wrap Up
• What do you want to cover today? • What are you hoping to achieve today? • What are the priorities?
• What other help/input do you need? • When could you do this? • What could get in the way of your plans? • How will you overcome this? • How will you/others know you’ve been successful?
• End – what have you learnt from today? How have we worked together? What could we do differently next time?
GROW – Coaching Questions
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Conduct these role-play sessions in groups of 3. For each of the role-play sessions, there will be an employee, a manager-coach and an observer. Preparation – 5mins Coaching session – 10 mins Debrief – 5 min Rotate the roles after each role-play session. Focus will be on a real-life case scenarios that you are currently experiencing in your workplace/teams. Alternatively you may consider one of the 3 examples workplace scenarios on page 65.
GROW – Coaching Practice Session
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Module 7
Summary & Crafting a
SMART Personal Action Plan
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Organization
Analysis
-Job descriptions
-Job specifications
Assessing the Employees
A B C D
Potential
Candidates
Performance
Evaluation
Bus. Results
Personal
Development
Activities
Talent
Review
Committees
Potancial
Candidates
and
Succession
Lists
Approval
of the
Lists
Analysis
Assessment
Development
Talent
Development
Programs
January - April May-June July onwards......
Summary: Talent Management Process
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Individual Exercise: Creating a SMART Personal Development Plan
Specific Goal
Measurement When I achieve this goal, I will know I am successful because: Other people will notice the following difference(s):
Actions What action will I take? What will I do differently?
Reality Check Is this goal achievable?
Why is this goal important?
What resource(s) do I need? Funding? Support?
Timeline
When will I start?
When do I expect to meet my goal?
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Appendix
Recommended Further
Readings and Videos in the
Participants’ Resource
Workbook
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Key Readings and Resource Bawany, S (2014) ’Winning the War for Talent 2.0 in Asia Pacific’ in Talent Management Excellence Essentials, January 2014 (01.2014) issue. www.hr.com/en/magazines/talent_management_excellence_essentials/.
Bawany, S. (2010) ‘Maximizing the Potential of Future Leaders: Resolving Leadership Succession Crisis with Transition Coaching’ In ‘Coaching in Asia – The First Decade’. Candid Creation Publishing LLP, E-copy of the Chapter is available as a download from: www.cee-global.com/6/publication
Whitmore, J. (2009) 4th ed., Coaching for Performance, Growing People, Performance and Purpose, Nicholas Brearly.
CEE Published Articles on Talent Management: www.cee-global.com/6/publication
CEE Past Presentations on TM: www.cee-global.com/7/speaking_engagements
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GE Talent Machine - Interview with Jeff Immelt and Jack Welch: http://www.youtube.com/watch?v=CCVy7OxThGo The Daily Coaching Process by Marshall Goldsmith, Global Executive Coach: http://www.youtube.com/watch?v=G9ElB4RILm0 Talent Management Summit: Leading and Engaging a Multigenerational Workforce: http://www.youtube.com/watch?v=BiCJ3s7mRSo Primal Leadership - The Leader's Mood Drives a Staggering 30% of Performance: http://www.youtube.com/watch?v=jZ6_-WhjT8I TED Talk by Simon Sinek on Inspiring Leadership: http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html
95
Recommended Videos
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http://www.youtube.com/watch?v=03o1JZ7c7gI
Leading and Engaging Your Talent
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If you do tomorrow what you did yesterday
Your Future is History……………
If you do tomorrow what we’ve covered today
Your Future is Historic!!!
Final Thoughts…
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Prof Sattar Bawany
CEO, Centre for Executive Education (CEE Global)
Strategic Advisor & Master Facilitator, IPMA Asia Pacific
C-Suite Master Executive Coach, Executive Development Associates (EDA)
Email: [email protected]
Slideshare: www.slideshare.net/ceeglobal
LinkedIn: www.linkedin.com/in/ceeglobal
Facebook: www.facebook.com/ceeglobal
Twitter: www.twitter.com/cee_global
Articles: http://www.cee-global.com/6/publication
Further Dialogue on Social Media
Hewitt’s Human Capital Consulting
In partnership with
The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Human Capital Institute | Hewitt Associates | October 2008
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 1 of 90
The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Copyright © 2008 Human Capital Institute. All rights reserved.
Hewitt AssociatesFor more than 65 years, Hewitt Associates (NYSE: HEW) has provided clients with best-in-class human resources (HR) consulting and outsourcing services. Hewitt consults with more than 3,000 large and mid-size companies around the globe to develop and implement HR business strategies covering retirement, financial and health management; compensation and total rewards; and performance, talent, and change management. As a market leader in benefits administration, Hewitt delivers health care and retirement programs to millions of participants and retirees on behalf of more than 300 organizations worldwide. In addition, more than 30 clients rely on Hewitt to provide a broader range of HR business process outsourcing services to nearly a million client employees. Located in 33 countries, Hewitt employs approximately 23,000 associates. For more information, please visit www.hewitt.com.
For specific questions regarding this report, please send email to: [email protected].
Human Capital InstituteThe Human Capital Institute (HCI) is a catalyst for innovative new thinking in talent acquisition, development, deployment and new economy leadership. Through research and collaboration, our global network of more than 130,000 members develops and promotes creativity, best and next practices, and actionable solutions in strategic talent management. Executives, practitioners, and thought leaders representing organizations of all sizes, across public, charitable and government sectors, utilize HCI communities, education, events and research to foster talent advantages to ensure organizational change for competitive results. In tandem with these initiatives, HCI’s Human Capital Strategist professional certifications and designations set the bar for expertise in talent strategy, acquisition, development and measurement. www.humancapitalinstitute.org.
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The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Table of Contents
Research Highlights: Talent Challenges of Today ..................................................... 1
The State of Talent Management ............................................................................. 5
Talent Strategy .......................................................................................................... 6
Workforce Planning and Talent Acquisition ............................................................ 10
Capability Development and Performance ........................................................... 15
Leadership and High Potential Development ........................................................ 20
Talent Analytics ....................................................................................................... 25
Recommendations for the Future ........................................................................... 29
Acknowledgements ................................................................................................ 33
About the Research ................................................................................................ 34
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1
The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Copyright © 2008 Human Capital Institute. All rights reserved.
Research Highlights: Talent Challenges of Today Companies today face formidable talent challenges. The ability to sustain a steady supply of critical talent is a challenge facing all organizations — worldwide. Among the issues impacting the “next generation” workforce are impending skill shortages, an increasingly cross-generational and diverse workforce, the need for knowledge transfer from retiring baby boomers, and significant leadership gaps. Intense cost pressure from both traditional and emerging competitors, new markets, and more demanding customers are additional elements that give a new sense of urgency to the concept of talent management.
At a time when organizations need to optimize their workforces, most agree that talent management is of strategic importance. To evaluate the extent to which companies act on that belief, Hewitt Associates and the Human Capital Institute undertook a comprehensive study seeking to assess the state of talent management practices in companies today.
About the StudyThe research provides results from both a quantitative survey and qualitative interviews. The survey was designed to gauge the maturity level of a comprehensive set of talent practices; that is, the extent to which an organization’s practices are sophisticated, progressive, practical and well executed. This enabled us to identify strength and challenges in talent management and key areas of focus for the future. Nearly 700 senior-level talent leaders (both HR and non-HR) participated in the study. Through supplemental in-depth interviews, we captured innovative practices at select companies with more developed talent management practices. This combination of quantitative survey data and qualitative interview results helped shape a better understanding of the complex issues surrounding talent management today.
The growing recognition that the quality talent is a sustainable competitive advantage, coupled with a realistic view of the complexity and scope of changes in the global workforce, has led to a renewed focus and urgency around talent management. Based on nearly 700 responses, human resources (HR) and business leaders overwhelmingly identified “attracting and retaining skilled and professional workers” as the workforce challenge most impacting their organizational strategy. ”Developing manager capability,” ”retaining high performers,”“developing succession pool depth,” and “addressing shortages of management or leadership talent” closely followed.
Top 5 Workforce Challenges
1. Attracting and retaining skilled professional workers
2. Developing manager capability
3. Retaining high performers
4. Developing succession pool depth
5. Addressing shortages of management or leadership talent
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The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Copyright © 2008 Human Capital Institute. All rights reserved.
In today’s uncertain economic environment, it’s important that organizations address talent issues promptly, but it’s equally important that they get them right — the first time. There’s little room for trial and error, as all initiatives are expected to produce solid financial results. Unfortunately, most companies are still struggling to institutionalize effective talent management practices and programs.
Positive ResultsBased on the results of this research, our collective experience, and prior research findings, we believe that organizations are indeed improving their talent management capabilities. The skills, performance, engagement, adaptability, and continuity of an organization’s workforce are indisputably a core competitive advantage and prerequisite for sustained financial success. Increasingly, organization leaders, starting with top officers, understand the business payback of focusing on getting these things right. As a result, the advances being made in talent management can be attributed to the following:
Senior Leaders Recognize Superior Talent as a Business Advantage: Senior leaders do “get it.” In nine out of ten organizations, they believe superior talent provides a vital competitive advantage. They increasingly recognize the critical linkage between effective talent management and business success.
Focus on Talent Management: The pressure to attract and retain key talent has led organizations to expend increased energy and resources on talent-related initiatives over the past half-decade. Significant progress has been made on a variety of talent management fronts — from getting foundational programs in place to creating and deploying new programs, such as high potential development, leadership development, and succession planning. However, most of the progress has been made in the executive ranks, with less focus beyond the highest management levels.
Leadership Involvement: The need for more leadership involvement in talent management is driven by the criticality of talent strategy development, articulation, and execution. Some business leaders are starting to play an increasingly visible and active role in talent management, understanding that their practices must be aligned with these talent strategies in order to have a direct impact on workforce engagement and performance.
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The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Copyright © 2008 Human Capital Institute. All rights reserved.
Opportunities for Improvement Although organizations have made significant progress raising awareness and attention to talent management and implementing foundational programs, these efforts have not led to well-executed talent management programs that are aligned with business priorities. Organizations still lag in their ability to integrate talent management programs and evaluate the return on their talent investments. The reasons are many, including:
Human Capital is Not Sufficiently Aligned With Business Strategy: While senior leaders clearly recognize the importance of human capital, a number of companies struggle to connect their people practices with their business imperatives. Only 17% of respondents say their workforce strategy is consistently aligned with their business strategy across the organization, while even fewer (7%) report consistently utilizing a specific quantitative framework in which investments in talent management are aligned with business results.
Lack of Accountability and Capability for Talent Development: While most organizations hold their executives and managers accountable for achieving business results, they are not being held accountable for talent development. Few organizations consistently hold managers (7%) or senior executives (10%) accountable for developing their direct reports. Furthermore, most managers lack the basic capability to develop talent effectively. Just 5% of organizations say their managers have the skills to grow people in their jobs or to provide the constructive feedback that supports and encourages employee development consistently across the organization.
Inconsistent Execution and Integration of Talent Programs: The majority of companies report having fundamental processes for talent management in place, such as basic workforce planning, development programs for high potential employees, and succession planning. However, few consistently execute these programs across the entire organization. While slightly more than two-thirds (69%) of companies say they conduct workforce planning across all divisions and business units, fewer than one-fifth (15%) do so consistently. Furthermore, only 21% of companies consistently integrate talent practices across the organization (e.g., rewards are tied to performance; performance is tied to development).
Limited Use of Meaningful Talent Analytics: Data and analysis have long played a role in driving business decisions; yet when it comes to talent analytics, most organizations have a long way to go. Mired in tracking traditional workforce measures, such as headcount, turnover, and cost-based metrics, few have graduated to tracking the metrics that matter. Fewer than 10% of responding companies measure the effectiveness of talent management programs, track the quality of talent, or use specific quantitative frameworks to align human capital investments with their business strategy.
.
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The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities
Copyright © 2008 Human Capital Institute. All rights reserved.
Select Companies are Leading the WayThere are exceptions, of course. Despite the monumental challenges facing organizations, a few select companies have made significant strides in managing talent. What sets them apart is their dedication and commitment to talent management and the creative, comprehensive approach they take to developing their people in the following ways:
Depth and Consistency of Practices: Talent management is given top priority at these companies — and it shows. Specific programs, such as talent reviews and succession planning, are institutionalized throughout the organization, ensuring they are implemented and integrated consistently across businesses, geographies, and employee segments. Managers are taught how to develop employees, and talent programs are pushed deeper into the organization to reach a broader group of employees.
Higher Commitment and Accountability for Talent Development: Abandoning the belief that talent management is solely HR’s domain, these organizations consider it a shared business and HR responsibility requiring active engagement, commitment, and accountability from leaders and managers. From the CEO down, these business leaders not only emphasize the importance of talent management, but are also actively engaged in the processes. Additionally, they hold themselves responsible and accountable in tangible ways for developing the next generation of talent across the entire organization — not just at the leadership level.
Progressive and Innovative Practices: Never satisfied with the status quo, these organizations are consistently investing in new ways to manage talent. Approaches vary widely, but examples include progressive approaches to workforce planning, innovative employer branding strategies, and more comprehensive efforts related to onboarding and development of high potential employees. Some leading organizations are using sophisticated predictive analytics to help drive strategic human capital decisions and ensure that those decisions are aligned with the business strategy.
While most organizations still struggle to manage their talent effectively, select employers are leading the way. They serve as role models to those who are struggling to build core talent management capability by holding leaders and managers accountable for talent initiatives, driving greater consistency in talent programs globally, and continually seeking new and progressive ways to manage talent. The increased adoption of these approaches to talent management point to an evolutionary trend toward better practices overall.
This report identifies the talent challenges that exist today, summarizes key findings from the research, and draws examples of innovative talent practices from select companies. Recommendations based on the research provide a foundation upon which companies can build and strengthen their talent management capability to meet the business challenges of the future.
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Today’s fast-paced, global business environment, coupled with the ever-growing challenge of a rapidly changing workforce, requires a well-planned, rigorous approach to talent management. Fortunately, both HR and business leaders recognize that talent is a critical driver of business performance. It comes as no surprise then that talent management practices are often cited as a key strategic priority. However, the execution of these practices is where companies often fall short.
To gain a better understanding of the state of talent management, we examined current practices in five specific areas: Talent Strategy; Workforce Planning and Talent Acquisition; Capability Development & Performance; Leadership and High Potential Development; and Talent Analytics.
Using this framework, we examined talent management practices holistically — from initial strategy through measurement practices. We looked at all major areas related to how organizations acquire, develop, retain, and reward employees. Beyond prevalence, we examined the sophistication of such programs and the effectiveness of their execution. Finally, we analyzed the extent of alignment; that is, how an organization’s talent management strategy aligns with its business goals and how individual talent management programs and processes connect to one another.
The State of Talent Management
Talent Strategy
Talent Analytics
Workforce Planning & Talent
Acquisition
Capability Development &
Performance
Leadership & High Potential Development
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Talent management is a complex discipline, encompassing a wide array of programs and processes. For such initiatives to be successful, a concrete talent strategy must serve as a constant guide, providing direction for how the organization will acquire, develop, and retain employees, while always reflecting the key business goals of the organization. Successful companies embed their talent strategy into the overall strategic planning process, integrating individual programs and practices to ensure they are all driving toward the same set of objectives.
Senior leaders value talent, but there is limited alignment with business strategy
No strategy can be effective without the support of senior leadership — and talent management is certainly no exception. In the past, HR struggled to convince business leaders to invest their time and money in talent management. Today, the challenge is not just whether to invest resources in talent management, but also how to identify what talent practices provide the greatest return; where leaders can most effectively spend their time developing people; and how to drive greater consistency, integration, and alignment of talent practices with the business strategy.
Without a doubt, senior leadership plays a key role in creating a culture that supports talent development. This belief was strongly echoed by our survey respondents, with 92% agreeing that their senior leaders see superior talent as providing a vital competitive advantage. At Humana, for example, CEO Michael McCallister clearly demonstrates the importance of aligning the company’s consumerism strategy with human capital. He is credited with fostering a culture of growth and development. By providing visible support and commitment, he instills a “talent mindset” throughout the organization — that is, a deep conviction that the best and brightest will create shareholder value.
Many more CEOs today are active champions for talent management and they and their leadership teams try to foster talent cultures within their organizations. At McDonalds, a Hewitt Top Companies for Leaders winner, CEO Jim Skinner has designated talent management and leadership development as one of his top three priorities. It’s a commitment he embraces in his everyday actions. At every opportunity, he espouses the importance of talent and leadership development, both in regular communications and when speaking publicly.
Key Findings in Talent Strategy and Planning
Senior leaders value talent, but there is limited alignment with business strategy
Consistent execution and integration of talent practices continues to fall short
Organizations are building stronger employment brands as part of their talent strategy
Talent Strategy
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In these select companies, the alignment and integration of workforce strategies with business strategy underscores the high priority that companies are placing on talent management. Granted, not all organizations have managed to successfully translate leadership’s belief in talent management into concrete actions that are linked to the business. While over three-quarters (78%) of companies report aligning and integrating workforce strategies with their overall business strategy to some or a considerable degree, just 17% say they are doing so consistently across the organization.
Some attention is being placed on the identification of critical roles as part of this alignment process. More companies today recognize that they have limited dollars to spend on talent management and are looking for ways to get the highest value from their investment. One way of doing this is to identify future critical roles that will have the greatest impact on business success and focus planning efforts more heavily on these roles. Today, 42% of companies are identifying critical roles and capabilities to a considerable degree within their organizations, but only 17% are doing this consistently across the organization. This inability to consistently identify future skill requirements creates challenges for organizations trying to build capability.
Figure 5: Degree of Alignment and Integration of Workforce
Strategy with Business Strategy
Figure 6: Degree to Which Critical Roles and Capabilities
are Identified
0
5
10
15
20
25
30
35
40
To Some Degree
Not at All To a Considerable
Degree
Consistently Across the
Organization
40%38%
4%
17%
0
10
20
30
40
50
Consistently Across the
Organization
To a Considerable
Degree
To Some Degree
Not at All
42%38%
3%
17%
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Consistent execution and integration of talent practices continues to fall short
While most companies have fundamental talent management processes in place, few have managed to consistently execute and integrate such capabilities across the organization. Just 13% report consistent execution of talent management practices across all regions in which they operate. In addition, little is being done to integrate talent practices with other talent initiatives (e.g., tying rewards to performance). According to our survey, only 21% of companies do so consistently.
Through our broader research, we have found that companies with more mature talent practices are driving better integration and consistency through a combination of approaches including:
1) Investing in robust talent management technology solutions coupled with process redesign;
2) More clearly defining corporate and field HR roles for designing and delivering talent solutions, including greater use of talent specialists (in some cases business partners) in the field to help improve integration; and
3) Implementing global centers of excellence for talent management to improve the coordination and consistency of practices across regions and businesses.
Figure 7: Degree to Which Organizations Execute and Align
Talent Practices
Not at
All
To Some Degree
To a Considerable
Degree
Consistently Across the
Organization
Execute consistent talent management practices across all regions in which you operate
11% 45% 31% 13%
Integrate talent practices (e.g., rewards are tied to performance; performance is tied to development)
6% 38% 35% 21%
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Organizations are building stronger employment brands as part of their talent strategy
Leading organizations have clearly defined employment brands that include a strong focus on diversity and corporate social responsibility. As part of their brands, these companies also clearly define the values and behaviors that they expect from people in the organization. Recognizing that a compelling employment brand is critical to becoming an employer of choice, organizations are building employment brands as a long-term solution for attracting the best quality applicants. More than one-half (60%) of survey participants report having a clearly established and well-defined employment brand, and 50% say they believe their employment brand provides a clearly differentiated competitive advantage that attracts and retains the best talent. In a sign that employment branding is working, nearly one-half (46%) of respondents report that their leaders and managers can describe the brand in consistent terms.
Closely linked to a strong employment brand is a clearly defined set of values that signal what an organization considers important. Here, the majority of organizations (88%) report having a clearly articulated set of values. Increasingly, these values include cultivating an inclusive work environment, an endeavor that has been embraced by the vast majority of organizations. Two-thirds (67%) of companies are actively working to develop and sustain a culture of diversity and inclusion, while 24% report doing so consistently across the organization.
Increasingly, employers are coming to understand that a winning strategy includes a compelling employment brand, an inclusive work environment, and the foundation of strong values. Without these key components, it will be nearly impossible to succeed in today’s talent market.
0 10 20 30 40 50 60
Our employment brand provides a clearly differentiated competitive advantage
that attracts and retains the best talent
All of our leaders and managers would describe our employment brand
in consistent terms
We have a clearly established and well-defined employment brand
50%50%
46%54%
60%40%
Agree
Disagree
Figure 8: Employment Brand
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Both workforce planning and talent acquisition are critical links in an organization’s talent supply chain. Some companies are using increasingly sophisticated approaches to workforce planning and talent acquisition as part of their strategic business planning process. Successful workforce planning and talent acquisition initiatives focus on meeting both the short- and long-term workforce needs. These areas are often the most visible services that HR provides, yet many HR organizations struggle with developing an effective approach that meets business needs.
Some companies are investing heavily in building workforce planning and talent acquisition capability, but most organizations approach these areas in limited ways — focusing primarily on meeting the talent needs of today, with very little emphasis on tomorrow. While most organizations have foundational recruiting programs and processes in place, workforce planning and talent acquisition processes are often not integrated and technology is underutilized. Despite these challenges, most organizations report being able to attract the talent they need.
Workforce planning in most organizations is short-term focused, although some companies are becoming more strategic
Effective workforce planning requires a clear understanding of what talent is currently in place and what is required to be successful in the future. By matching future demand to current supply, organizations can effectively identify their hiring needs and use these projections to inform their sourcing efforts. While 69% of companies say they conduct workforce planning broadly across all divisions and business units to some or a considerable degree, only 15% report doing so consistently throughout the organization.
Most workforce planning efforts focus on top executive, management, and critical roles. Thirty to forty percent of the companies surveyed report using workforce planning to forecast the supply and demand of talent in these roles for one to two years in advance, and 33% of companies report forecasting top executive talent needs three or more years in advance. However, below the senior leadership level, few companies are looking out beyond two years to identify the kind of skills and capabilities needed to support the business long-term. Only one out of ten companies forecasts its
Key Findings in Workforce Planning and
Talent Acquisition Workforce planning in most
companies is short-term focused, although some companies are becoming more strategic
Talent Acquisition fundamentals are in place but there is plenty of room for improvement
Despite challenges, most companies report being able to attract the talent they need
Workforce Planning and Talent Acquisition
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talent requirements for front line management and critical non-management roles three or more years into the future. Remarkably, at least one-fifth of all companies do not forecast supply and demand for any employee segment.
While these findings show limited use of workforce planning, a small, but innovative group of organizations are using more advanced workforce planning techniques, such as leveraging predictive workforce analytics to anticipate both supply and demand for key skills and capabilities. John Deere, for example, has adopted a sophisticated forecasting process for projecting its internal supply of talent in key areas. Employing simulation software adapted from its engineering group, the company factors in historical trends with retirements and resignations, using an algorithm to project retirement patterns. Drilling down relatively deeply into the organization, John Deere is able to more accurately project supply, particularly for specific critical skill sets. This process has proven to be an effective means of forecasting which skills and capabilities will be needed to meet business requirements up to five years into the future.
Figure 9: Forecasting the Supply and Demand for Skills
(Years in Advance)
30%25%
29%
36%21%
24%
21%
14%
26%
3–5 years
1–2 years
Less than 1 year
No forecast
More than 5 years
0 5 10 15 20 25 30 35 40
Critical Non-Management Roles (Product
Development, Scientist, IT, etc.)
Front Line Management (Manager, Supervisor,
or Equivalent)
Senior Management (SVP, VP, Directors,
or Equivalent)
Top Executive Talent (Business Unit Leaders)
2%8%
27%
19%
34%
10%1%
18%
5%
11%
7%
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Talent acquisition fundamentals are in place, but there is plenty of room for improvement
Most organizations have the fundamental aspects of talent acquisition firmly in place, including processes to ensure compliance, incentives for employee referrals, and internal job posting mechanisms.
However, few organizations have well-integrated talent acquisition processes or are effectively leveraging technology. A mere 16% of organizations consistently use technology to automate their recruiting processes. Their shortcomings don’t stop there, as little is being done to integrate talent acquisition practices with other talent initiatives. While 68% of organizations make considerable use of competency-based hiring, just 12% of organizations consistently link candidate screening criteria to other talent management processes, such as performance management, development, and succession planning.
Despite challenges, most companies report being able to attract the talent they need
Nonetheless, most organizations believe their talent acquisition efforts are paying off. The majority (73%) feel they are successful in consistently attracting high-quality candidates. Even more encouraging, 82% report that these candidates typically accept their job offers. Organizations are less certain that their future supply of candidates will meet their stated diversity goals. However, these findings indicate a high degree of satisfaction with the outcomes of their talent acquisition processes.
Figure 10: Fundamental Talent Acquisition Practices
0 20 40 60 80 100
We have processes in place that ensure compliance with government
regulations and laws
We provide incentives for employeesto refer candidates
We have an effective internal job postingprocess and policy that facilitates growth
and movement within the organization
79%
98%
70%
30%
21%
2%
AgreeDisagree
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This is certainly good news, but it is important to note that the talent acquisition process does not end with attracting quality candidates. It is equally critical to have a comprehensive approach to assimilating new hires. Unfortunately, this is an area where we have discovered companies to be faltering:
Only 20% consistently use a systematic onboarding process for new hires across the entire organization.
54% do not offer networking, mentoring, or job support for the first 6- to 12- months of employment.
45% of organizations report an inability to maintain a high level of engagement with new hires during their first year.
Figure 12: Attracting Quality Candidates
0 20 40 60 80 100
We consistently attracthigh quality applicants
Our high quality applicantstend to accept our job offers
We have a strong pipelineof diverse candidates
40%
73%
82%18%
60%
27%
Agree
Disagree
Figure 11: Use of Technology and Integration
0 5 10 15 20 25 30 35 40
Link candidate screening criteriato other talent management processes
such as performance management,development, and succession planning
Interview job applicants using competency-based and/or
behaviorally-based techniques
Leverage recruitment technologyin all aspects of
the recruitment process
16%29%
38%16%
29%39%
25%7%
23%
12%25%
39%
Consistently across the organizationTo a considerable degreeTo some degree
Not at all
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Given the importance of having the right talent in place — as well as the high cost of recruiting new employees — it is critical for organizations to place significant emphasis on their onboarding and assimilation efforts to ensure retention during the first 12 months and beyond.
While most organizations struggle in this area, select organizations are applying more proactive approaches to improve onboarding and assimilation. One company we interviewed recently launched an onboarding Web site designed to introduce new hires to the organization. In addition to a welcome message from the CEO, it provides information about the company’s history and leadership principles. New hires can take a virtual tour of the office and access information about the orientation process, as well as a set of checklists for the first 90 days. The site also features corresponding manager checklists to ensure that managers are clear about their role in the onboarding process. Seeking feedback on the onboarding experience, they ask new hires to complete an evaluation after one month and then again after four months. That information is then used to make improvements to the program. The company reports very limited turnover during the first year of employment, an accomplishment which it attributes in large part to the effectiveness of the onboarding program.
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Achieving sustained organizational performance through the development of a capable workforce lies at the very heart of talent management. Unfortunately, most companies aren’t very good at it. More than one-half (56%) of the respondents in our study do not feel their organization is effective at developing the capability of their employees. Outside of the leadership ranks, capability development occurs sporadically — and with limited accountability. Further, most organizations do not believe that their managers have the capabilities needed to manage and develop talent. Employees are not getting sufficient guidance on how to develop their skills and grow in the organization. The lack of accountability for developing talent below executive levels, coupled with managers’ lack of capability to develop talent, are key drivers of the struggle many organizations have effectively and consistently executing talent management practices.
Lack of accountability and capability for workforce developmentOrganizations successful at building capability and bench strength demonstrate the value of employee development. Commitment starts at the top and permeates all management levels. These leading organizations are truly on the front lines of talent development — guiding, rewarding, inspiring, and growing their talent pools. According to Hewitt’s Top Companies for Leaders study1, leaders and managers in Top Companies spend significant amounts of time on talent development. In the vast majority of Top Companies, leaders (including the CEO and Board) spend at least 20% of their time developing talent. Granted, much of this focus is driven by a sense of accountability, as 70% of Top Companies hold their leaders formally accountable for developing talent. At American Express, for example, 25% of the senior leadership team’s annual incentive is based on their performance against specific talent and employee objectives.
Here, our research reveals some interesting differences in the focus on accountability for results versus accountability for development. The vast majority of organizations agreed that senior executives and managers are held accountable for achieving business results (88% and 87%, respectively). However, this focus on results does not extend to the workforce capability development needed to support organizational priorities. Only 10% of organizations consistently hold senior executives accountable for developing
Capability Development and Performance
Key Findings in Capability Development and
Performance Lack of accountability and
capability for workforce development
Select organizations directly tackle capability development challenges
Reward differentiation is still more of a concept than a reality
1 Hewitt Associates, Top Companies for Leaders 2007: North American Highlights, October 2007
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their direct reports, and just 7% do so with managers. Organizations may be saying that developing talent is important, but they fail to follow through with visible actions, rewards, or consequences.
This lack of accountability for talent development is compounded by significant shortfalls in managerial capability. Just 26% of organizations believe their managers have the skills and capabilities to grow people in their jobs to a considerable degree, and only 5% believe their managers demonstrate this ability consistently across their organization. When asked if managers provide ongoing developmental feedback to employees, respondents reported similar results.
In most organizations, the responsibility for employee development is shared between employees and managers. While companies are making it easier for employees to take charge of their own development, they are under-investing in manager capability and resources to develop employee capability. Fewer than one-half (49%) of companies indicate that every employee has an individual development plan, and just 48% feel that employees have a clear picture of the skills they should build to support business growth. In addition, many organizations struggle with providing
Figure 13: Leadership and Manager Accountability
Figure 14: Manager Capability to Develop Employees
Not at all
To some degree
To a considerable degree
Consistently across the organization
0 20 40 60 80 100
Managers accountable fordeveloping their direct reports
through the performance management process
Senior executives accountable for developing their direct
reports through performance management process
18% 49% 26% 7%
19% 44% 26% 10%
Not at all
To some degree
To a considerable degree
Consistently across the organization
0 20 40 60 80 100
Managers consistently provideongoing developmental feedback
to support and encourage employee development
Managers have the skillsand capabilities to grow
people in their jobs3% 65% 26% 6%
2% 62% 32% 4%
0.0 0.2 0.4 0.6 0.8 1.0
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internal mobility opportunities to employees. Only 35% claim to offer a considerable number of opportunities, and just 11% report moving people around consistently across the organization.
Based on Hewitt’s extensive research on employee engagement and retention, we know the top three levers that motivate and engage employees are: 1) a sense of job fulfillment; 2) career advancement opportunities; and 3) the right mix of rewards that recognize contributions. Given the pivotal role managers’ play in supporting employees in each of these areas, this lack of capability can have serious ramifications for retaining top talent.
Select organizations directly tackle capability development challenges While the majority of companies are struggling, a few select organizations are way ahead of the pack, confronting these challenges by implementing manager development programs, holding managers accountable for talent development and engagement through the incentive process, and better defining career paths and capabilities needed to develop employees. At FedEx Express, for example, a development initiative called the “Aspire Program” helps prepare managers for their role. It consists of three levels: 1) understanding management as a concept and a role; 2) management certification through a specific set of courses; and 3) practicing management before becoming a manager. This kind of development ensures that managers are equipped to conduct evaluations, feedback discussions, and other critical interactions with their employees.
Figure 15: Employee Development
48%
45%
77%
23%
49%
51%
52%
55%
AgreeDisagree
0 10 20 30 40 50 60 70 80
Managers and employees share accountability for
employee development
Employees can easily access accurate information on available
development opportunities
Every employee has an individual development plan
Employees have a clear picture of skills they should build to
support business growth
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Kellogg is another leading organization that has taken a proactive approach to workforce development. Through rigorous job analysis, the company identified key competencies for every position within the organization. Kellogg created a career development model for everyone from individual contributors to senior executives, with specific competencies for every level. Managers and employees are clear on what it takes to progress, and Kellogg puts significant emphasis on rotating people into various roles throughout the organization to help them develop key skills.
Reward differentiation is still more of a concept than a reality While organizations report making efforts toward aligning performance with rewards, only 14% consistently provide meaningful pay differentiation to high performers or high-potential employees through both base and variable pay. And, just 13% consistently ensure performance ratings, pay, and recognition are proportional to employees’ performance and impact. In addition, many companies may be missing the opportunity to communicate a “total rewards” picture to employees which includes non-cash drivers, such as benefits and development opportunities.
Figure 16: Rewarding Performance
14%To some degreeTo a considerable degreeConsistent across the organization
Not at all
0 5 10 15 20 25 30 35 40
Invest the resources necessary to utilize up-to-date market data on
competitive total rewards
Ensure performance ratings, pay, and recognition are proportional to
employees'performance and impact
Provide meaningful pay differentiation to high performers/high potentials
through both base and variable pay
Align rewards within the context of a total rewards strategy
(includes compensation, benefits, and development opportunities)
7%
11%
40%
40%
40%
17%
10%
11%33%
35%
17%
37%
35%
32%
13%
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Despite their shortcomings, many organizations are taking steps in the right direction. As we’ve already discussed, the majority of companies are imposing high levels of accountability for driving business results. This extends not only to leaders and managers, but to employees as well. Eighty-two percent of survey respondents affirmed that employees are held accountable for achieving results in their organization, but without a consistent pay-for-performance system, it is difficult to motivate and align employees’ efforts toward specific business results. The implications of this finding are clear — only 11% of respondents feel employees understand organizational priorities and align their individual performance goals with them consistently across the organization.
To have a truly high performance workforce, accountability for results and opportunity for rewards and advancement must be clearly aligned. Leaders and managers play a key role in connecting the two.
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In today’s uncertain business environment, strong leadership is more important than ever before. Heightened financial pressures, intense competition, and complex global challenges have increased the demand for crucial skills, such as innovation and the ability to manage change. The ability to develop leaders who can effectively face tomorrow’s global business challenges is critical to an organization’s success. But it won’t be easy. Demographic changes over the next five to ten years will make the competition for leaders even fiercer. Thus, many organizations have come to realize the only way to ensure a strong pipeline of leadership talent is to develop it themselves — an undertaking that has become increasingly challenging.
Significant progress has been made in building leadership capability Today’s organizations are placing a significant amount of attention on leadership development — more than any other talent discipline surveyed. More than one-half (60%) of respondents report active involvement of the CEO and Board of Directors in leadership development activities, with 64% saying their organization’s current leaders teach and develop new leaders. At almost three-quarters (73%) of organizations, senior leaders are viewed as corporate assets, rather than business unit or geographic assets. Clearly, the responsibility for developing the leadership team is being taken very seriously.
Leadership and High Potential Development
Key Findings in Leadership Development Significant progress has
been made in building leadership capability
Opportunities exist to better align and execute leadership programs
High potential development is a priority for many organizations, but consistent execution falls short
Figure 17:Executive Involvement in Leadership Development
Agree
Disagree
0 10 20 30 40 50 60 70 80
Our organization's leaders teach and develop new leaders
Our CEO and Board of Directors are actively involved with
leadership development activities
Senior leaders are viewed ascorporate assets (versus business
unit or geographic assets)
73%
40%
64%
36%
60%
27%
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A number of companies have made significant strides in building strong leadership capability. That fact is evident in Hewitt’s Top Companies for Leaders study. From its inception in 2002 to 2007, the study found marked improvement in both the amount of attention paid to leadership development and the quality of leadership programs. Even more encouraging is the finding that leadership development is becoming more interwoven with other talent management systems, particularly succession planning and performance management. Apparently, organizations have discovered that focusing on the quality and integration of leadership development can have a positive impact on business growth.
Opportunities exist to better align and execute leadership programs While progress has been made with regard to the emphasis placed on leadership development, significant shortfalls still exist. To effectively build bench strength, for example, companies must align leadership development with their overall business processes. Unfortunately, our research shows most organizations are lagging on this front.
Even the best-designed leadership development efforts may not meet the ever-evolving needs of the business if the organization’s strategic business planning process fails to include a review of existing and future leadership needs. When asked if such a review takes place within their organizations, just 27% of respondents said it is done “to a considerable degree.” A mere 14% claimed such a review takes place consistently throughout the organization.
Organizations also have plenty of room for improvement in terms of how they execute leadership programs. By all accounts, they appear to be struggling with “growing their own” leaders. Just 23% conduct semi-annual talent reviews “to a considerable degree,” while 17% perform such reviews consistently. Their struggles don’t end there, as they also express difficulties in using formal succession management processes to fill executive positions and conducting performance reviews based on a clear set of leadership competencies.
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Of particular concern is the lack of special assignments designed to grow leaders. Only 8% of companies said they consistently use developmental assignments to address specific leader development needs. Likewise, just 9% of respondents consistently use global assignments as a training ground for developing global management capability.
Fortunately, not all companies are wrestling with these areas. Select organizations are demonstrating strength in leader assessment and development. Health insurance company Humana believes that successful development evolves from aligning strategy execution with a combination of on-the-job and formal training that aligns active learning and business simulations to create experiential learning by doing. Through its succession process, Humana has identified its top 150 future leaders and is actively developing them. Meanwhile, Lockheed Martin offers a series of leadership development programs that start at entry level and build on one another through the ranks of senior leadership. Elements include rotational assignments, courses at major universities, and task forces focused on solving real-life business problems.
At Whirlpool, one of Hewitt’s Top Companies for Leaders, the culture is not one in which “the cream rises to the top”; instead, individuals are proactively developed for future leadership roles through specific success plans. Leaders identify key developmental roles in the organization, and give high
Figure 18: Leadership Development Activities
To some degree
To a considerable degree
Consistent across the organization
Not at all
35%
29%
31%44%
38%31%
9%
37%27%
37%
0 10 20 30 40 50
Global assignments are used to develop global
management capabilities
Developmental assignments are used to address specific leader development needs
Formal succession management is used to fill executive positions
throughout the organization
Leadership performance reviews and development activities are
based on well-defined leadership competencies
Senior executives conduct talent reviews on at least
a semi-annual basis
8%
15%
17%
17%
13%24%
21%
24%
23%
19%
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potentials access to critical experiences through these roles. Some of these roles focus on global operations, others innovation, and still others running a P&L. Senior leadership regularly reviews lists of “exportable talent,” and movement of key talent is planned well in advance. This is how Whirlpool has been able to develop “global managers” so successfully.
Developing high potential employees is a priority, but consistent execution falls short
Growing recognition of the need to develop leadership talent early has given rise to “high potential” or “emerging leader” programs, in which promising talent is identified and cultivated to become the leaders of tomorrow. Not only does this ensure a strong pipeline to meet future needs, it increases the engagement of the company’s most valuable employees.
While most understand the need for such programs, many organizations struggle with consistency in terms of high potential identification, communication, and development. At 86% of companies, management identifies high potentials early to at least “some degree” and takes actions to proactively develop them. However, only 7% said this was being done consistently. And while 69% of companies give high-potential employees additional opportunities to interact with senior management, only 13% do so consistently across the organization. Without a well-defined approach to grooming high potential employees, many organizations avoid informing
Figure 19: Elements of High Potential Programs
0 10 20 30 40 50 60
Management identifies high potentials early and takes action
to proactively develop them
Our high potential pool is frequently reviewed
and calibrated
High potentials are given additional opportunities to
interact with senior management
We expose high potential employees to assignments or
special projects outside of their normal business units
High potentials are aware of their status
14%
7%
10%
45%
33%
24%36%
14%
27%7%
25%
37%18%
23%
13%
11%
32%
29%
52%
To some degree
To a considerable degree
Consistent across the organization
Not at all
43%
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them of their status. More than two-thirds (70%) of organizations either do not inform them at all or do so only to a small degree. Just 7% communicate status to high-potentials consistently across the organization.
While the majority of companies are struggling, a few organizations are taking innovative approaches to identifying and developing high potentials. At EMC Corporation, significant emphasis is placed on implementing talent reviews consistently to facilitate the identification of top talent across the globe. Each business unit conducts a rigorous review process to identify top talent. Subsequent cross-business unit calibration sessions ensure consistency in how top talent is viewed across the organization. This culminates in a review session with the CEO. Seeking to streamline the process and make it more efficient, the company recently introduced new technology designed to automate the entire process.
Caterpillar Financial also devotes extensive time, energy, and resources to identifying and developing future leaders. Preferring to promote from within, the company rarely hires externally at the management level. Instead, Caterpillar Financial prepares employees for future leadership roles by ensuring access to cross-functional experiences. Managers work with employees to document current skills, career aspirations, and the skills and experiences they need to get there. The company also offers a mentoring program and an extensive learning and development function that includes both on-site and Web-based training for employees.
For organizations to be ready to tackle the business challenges of tomorrow, they must begin building a cadre of strong leaders today. While many have already embarked on this journey, it’s clear that more sustained focus and consistency is needed to effectively build this capability.
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Savvy companies manage their human capital much like other investments — using measurement to drive decisions and improve results. Metrics help to weave a “talent mindset” into the operating fabric of the business, clarifying expectations and creating a framework for tracking and reporting talent-related results in a language that business leaders understand. As with many areas of talent management, however, we found significant gaps in both the collection and usage of data. Organizations vary dramatically in terms of the quality of their metrics and how they are used, but most are still taking a traditional approach. Few organizations leverage talent analytics to make strategic investment decisions or link them to business performance. As the pressure on revenues and returns increases, companies will need a more strategic approach for measuring talent effectiveness and demonstrating a link to business results.
Few companies are strategic about what they measureInstead of being empowered by decision science, the majority of established talent analytics do a good job at telling companies what has happened and how they’re doing operationally but do little to trigger action. Traditional HR metrics, such as benefit and healthcare expenses, are systematically tracked by the vast majority of companies. However, far fewer organizations track metrics related to the quality of talent or the effectiveness of talent programs. Only 10% of organizations employ metrics to gauge the effectiveness of workforce management practices consistently across the organization, and even fewer (7%) consistently use metrics to align human capital investments with business results.
By and large, organizations take an ad hoc approach to measurement, tracking a large number of low-impact metrics. Such measurement is helpful in that it provides good current state information, but it does not enable the prioritization and focus needed to improve talent practices or link talent analytics to business results. While 92% of organizations measure total turnover, for example, only 51% measure leadership turnover and just 43% track turnover of high performers. Even with the mass exodus of the baby boomers upon us, only 51% of companies are measuring the percent of employees, managers, and executives scheduled to retire within the next five years.
Talent Analytics
Key Findings in Talent Analytics
Few companies are strategic about what they measure
For most, the focus is on operations rather than outcomes
Select organizations are leading the way in talent analytics
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For most, the focus is on operations rather than outcomesThe majority of companies approach measurement by tracking operational metrics, rather than focusing on outcomes. The most commonly tracked recruiting metrics remain time to fill open positions (76%) and percent of external hires (72%), while more quality-related metrics such as the percent of critical positions that are filled and new hire first-year performance rating are tracked by just 53% and 39% of companies, respectively.
Similarly, operational measures prevail in both development and succession metrics. While 48% of organizations regularly measure learning and development hours and dollars per employee, only 24% measure the percent of employees with critical skills. In addition, just 37% track the depth of their succession pipeline, while even fewer (33%) track job openings filled from the succession pool. This focus on operations, rather than outcomes, makes it difficult for organizations to use metrics as a strategic decision-making tool.
Figure 20: Turnover Metrics Tracked
Figure 21: Recruiting Metrics Tracked
0 20 40 60 80 100
Total turnover rate
Voluntary turnover rate
High performer turnover
Leadership turnover rate
Percent of employees eligible for retirement within 5 years
New hire 90 days separation rate
43%
51%
51%
51%
84%
92%
0 10 20 30 40 50 60 70 80
Time to fill open positions
Cost per hire
Number of applicants per hire
Offer acceptance rate
Percent diverse hires
Percent of external hires
Percent of critical/key positions filled
New hire first year performance rating 39%
53%
72%
67%
61%
76%
0.0 0.2 0.4 0.6 0.8 1.0
69%
56%
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Select organizations are leading the way in talent analyticsClearly, many companies are struggling to figure out exactly what they should be measuring and how best to make use of the resulting data. Fortunately, the next frontier for HR analytics is already in sight. Nearly all the Top Companies for Leaders measure the effectiveness of their talent and leadership development efforts and many use metrics to track how specific leaders are moving, developing, and retaining talent. Top Companies are also more likely to track broader outcomes, such as the long-term performance of a placed successor2.
One ranking Top Company for Leaders, Caterpillar, uses a “leadership index” and “engagement index” to measure its leaders’ effectiveness at developing, engaging, and inspiring talent. Planned movement is encouraged throughout the organization as a primary means of developing its workforce. Individual leaders are rewarded not only for the results they produce, but also for their ability to build functional and leadership capability.
These examples are part of a larger shift occurring among leading-edge organizations when it comes to measuring HR and Talent Analytics. Select companies are moving from solely tracking data to make operational decisions to utilizing more predictive future-focused metrics to drive business decisions.
Figure 22: Percentage of Companies Collecting
Development and Succession Planning Metrics
0 10 20 30 40 50 60
Learning and development spent per employee
Learning and development hours per employee
Participation rate in developmental activities
Percent of employees with critical skills
Internal promotion rate
Succession pipeline depth
Percent job openings filled from succession pool 33%
37%
56%
46%
48%
49%
24%
2 Hewitt Associates, Top Companies for Leaders 2007: North American Highlights, October 2007
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Applying rigorous analytical thinking to drive human capital decisions is still a relatively new concept. However, a growing number of companies are taking bold steps in that direction. For example, Capital One created a workforce analysis team that has been making major inroads in linking human capital and workforce performance to business results. Recently, the team designed an interactive workforce planning process aimed at helping business units establish optimal “build, buy, or borrow” strategies for the future. Using sophisticated data mining and modeling techniques, the team identified how various talent sourcing approaches affected workforce engagement and productivity. This enabled the team to predict the optimal mix of external hiring, internal promotion, and other people practices for driving long-term engagement.
Clearly, metrics have the potential to serve as a powerful tool to enhance talent management effectiveness and drive critical human capital decisions. To harness their full power, however, companies must adopt a systematic and strategic approach focused on the consistent tracking of a limited set of measures that drive business value creation.
Figure 23: Metrics Evolution Current State of HR Metrics
Tactical ApproachesFuture State of HR Metrics
Strategic Approaches
What is measured Static and current state HR metrics (answers the question: What are we doing?)
Predictive and future-focused metrics (answers the question: What should we do next and why?)
How it’s measured Ad hoc approach where many measures are tracked (examples: headcount, labor costs, turnover, total compensation)
Selective approach where quality is valued over quantity (examples: ROI of human capital, performance drivers, leadership capability)
How the data is accessed and used
HR primarily collects and uses data to make operational decisions
HR partners with business units to interpret data to drive business decisions
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Recommendations for the Future Given the increasingly challenging global business environment, talent management will — and must — remain a top priority for executives in the years ahead. The future of talent management will need to evolve from where it is today to become a more systematic business process. Our research shows us that:
Leaders see the value of talent, but most organizations are still struggling to systematize and integrate their talent management processes.
There is a need for more direct, tangible accountability for developing talent among leaders and managers, but this accountability needs to work both ways. Companies must provide the training and support managers need to build their management skills and capabilities.
Leadership development is clearly a priority, but again, more sustained focus is needed on execution to ensure organizations are ready to tackle tomorrow’s business challenges.
Metrics are critical for connecting talent management initiatives and priorities to business results. While there are some clear innovations in this area, most organizations need to push past static operational measures to more strategic, predictive analytics.
Ultimately, leading companies demonstrate both breadth and depth of their talent management practices with a clear alignment to overall business and talent strategies and an indefatigable commitment to program execution.
So what do companies do now to address the key talent management challenges identified in this report? What is the practical starting point for companies today? Regardless of industry, size, or geography, the following are key actions to help your organization improve current talent management practices or jump-start ones that are just getting off the ground.
Sustain executive commitment to talent managementSustaining executive buy-in to the criticality of talent management is especially important in a challenging business climate, when organizations need, more than ever, to have the right people focusing on the right things. Pressure to deliver business results can divert emphasis away from actions that signal an organizational commitment to talent management. Experience tells us that strong performers will always have choices about where to work. To
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retain your most valuable talent and build a foundation for tomorrow, now is the time to ensure that your talent practices are progressive and effective.
To sustain leadership commitment, provide executives with data that substantiates the value of talent management. Straightforward analyses that look at the relative contributions of low, average, and high performers can provide compelling “evidence” that acquiring and developing the right talent is critical to achieving business results. Ensure that executives keep talent management on the agenda for every discussion of organizational priorities, and push for consistent, future-focused decisions that communicate the continued importance of talent management.
Establish DirectionTo ensure you are moving in the right direction, you must start with the end in mind. Establish a clear understanding of your organization’s business goals and objectives; then determine whether your current talent management strategy is aligned to drive these goals. Ask the hard questions: Does our organization have the talent it needs to execute our business strategy? How well are talent initiatives coordinated across our business units and the regions in which we operate? Do our talent programs penetrate deeply enough into the organization to support the business effectively? Are managers capable enough to develop and support capability growth?
Once you have taken an objective assessment of your strengths and weaknesses, you can begin to frame solutions. This leads to another set of questions: What specific talent outcomes are needed to achieve success? How do we address the shortcomings in our talent management approach? What are the biggest priorities? How do we measure success effectively? Use these questions to start a dialogue within your organization to determine which talent management initiatives will have the biggest impact.
Vet the opportunities for real impact
“A leader who says I’ve got ten priorities doesn’t know what he’s talking about“
— Larry Bossidy and Ram Charan, in Execution — The Discipline of Getting Things Done
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Now more than ever, it’s important to focus on issues that, if addressed, will have the greatest business impact. As in all aspects of running the organization, effective prioritization of talent management initiatives will yield the maximum payback on precious resources expended.
Look for ways to get and maintain an accurate picture of how well the organization’s talent practices are actually “landing on people.” This means finding out what’s happening from a qualitative perspective (e.g., employees’ perceptions of development and career opportunity) as well as quantitative data (e.g., such as the number of hits on the development Web site). Non-intrusive workforce surveys, quick pulse questionnaires, “open-mic” employee teleconferences for feedback about talent practices, focus groups, and high performer panels are a few of the many ways organizations are gathering and distilling reliable insight about the essential few areas for action now.
Combining feedback of employee perceptions of talent programs with the assessment of capabilities needed to drive business results will help identify key talent management opportunities that have the greatest impact on your organization.
Look for new ideas and approaches you can adaptTalent management is no longer about exhaustive benchmarking studies; it’s about scanning the landscape for approaches, steps, and tools being tried and applied, and finding the ones worth looking at more closely. Which other organizations, inside and outside your industry, have practical ideas and methods you might find useful? The idea is to spot opportunities to kick-start, supplement, or re-wire current practices by adapting or tailoring aspects or elements of others’ talent management systems. Colleagues in professional organizations, conference presenters, and publication authors are examples of sources for new thinking that goes beyond the customary talent practices. Look to them for input on thorny issues (e.g., How can we build manager capability when supervisors are stretched by individual and unit workloads at current staffing levels? How do we create the cross-generational and cultural inclusion that will engage everyone to give their best?).
Also remember to look within your own organization for the talent practices working well in one part of the business. Find out what they’re doing, why it’s working, and how their learning and practices can be leveraged more broadly across the company. In many organizations, great practices that could help the entire firm win are occurring “under the radar screen.”
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Create a realistically aggressive action planAs business and talent management leaders, we all know how to build action plans incorporating critical steps, milestones, and target outcomes. However, as we’ve seen throughout this report, execution is a critical and often mismanaged aspect of building a talent management strategy. Identifying best practices is vital, but effectively implementing them based on a solid action plan is just as important. As you create your action plan, build in sound project management principles to ensure an effective rollout. Consider using pilot programs versus enterprise-wide implementations, time your rollouts with other business initiatives and cycles, and provide consistent communication to foster clarity and commitment.
Once you have the solid foundation of project management in place, make sure you maintain a realistically aggressive focus on results. Ask yourself: Does our talent strategy push hard enough to accelerate timelines for results, compared to other areas of the overall business plan? And, does it identify the highest priority areas for action and commit to a limited number of critical deliverables? Do we have clear, quantifiable metrics in place to measure the effectiveness of the implementation and the business impact of our talent-related initiatives?
ConclusionWhile many of these actions appear straightforward, putting them in place is not easy. As with any organization-wide initiative, there is a need for discipline, innovation, and sheer persis-tence to see lasting results. Many of the organizations we’ve highlighted with effective talent management practices have been at it for years — consistently demonstrating their commit-ment to developing great talent. And over time, this commitment has translated into a strong base of talent and a pipeline of leaders with a demonstrable impact on business results. Innovative ideas, strong execution, and a foundation of clear metrics can enable many more talent management professionals to create a talent mindset that will prepare their organiza-tions to face the challenges ahead.
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Acknowledgements
Sponsoring Executives Bob Campbell Leader, North America Talent Management Practice, Hewitt Associates [email protected]
Allan Schweyer Executive Director and Co-Founder, Human Capital Institute [email protected]
Research TeamMary Ann Armatys Senior Research Consultant, Hewitt Associates [email protected]
Diane Caldwell Senior Consultant, Talent and Organizational Consulting, Hewitt Associates [email protected]
John Eggert Senior Researcher, Human Capital Institute [email protected]
Katherine Jones President, ICS and Member of HCI Executive Research Board [email protected]
Mollie Kohn Principal, Talent and Organizational Consulting, Hewitt Associates [email protected]
Michael MacLeod Principal, Talent and Organizational Consulting, Hewitt Associates [email protected]
ContributorsMichelle Freiberg Senior Consultant, Talent and Organizational Consulting, Hewitt Associates [email protected]
Tina Kao Senior Consultant, Talent and Organizational Consulting, Hewitt Associates [email protected]
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More than 50,001 employees
25,001 to 50,000 employees
10,001 to 25,000 employees
5,001 to 10,000 employees
1,001 to 5,000 employees
1,000 or fewer employees
12%
12%
12%
21%
8%34%
12%8%
5%6%
16%10%
18%
7%7%
9%
0 5 10 15 20
Less than $10 Million$10 M to $30 Million$30 M to $50 Million$50 M to $50 Million
$100 M to $500 Million$500 Million to $1 Billion
$1 B to $5 Billion$5 B to $10 Billion
$10 B to $25 BillionMore than $25 Billion
2%9%
5%
4%
3%
3%3%
8%
12%
16%
23%
2%
2%
2%
2%
2%
0 5 10 15 20 25
OtherTransportation Services
Telecom Services and EquipmentRetail (Includes Wholesale)
PharmaceuticalsHealth Care
GovernmentFood and Beverages
Financial ServicesEnergy/UtilitiesManufacturing
ConstructionComputer Hardware and Services
ChemicalsBusiness Services
Aerospace/Defense1%
1%
1%
1%
6%
2%
8%
9%
0 10 20 30 40 50 60 70 80
Other
Australia
Asia
Africa
Europe
South America
Mexico and Central America
Canada
United States 70%
Figure 1: Number of Employees
Figure 2: Revenue Size
Figure 4: Industry
Figure 3: Geographic Location
About Talent Practices Impact Survey: 2008 Conducted in 2008 by the Human Capital Institute and Hewitt Associates, this study reflects the input of nearly 700 respondents to an on-line Talent Practices Impact Survey, as well as in-depth interviews of a sampling of participants. Participants represent senior-level talent leaders (both HR and non-HR) who are directly involved in functional areas, such as HR, talent management, organizational development, leadership development, and succession planning. Together, they represent a mixture of public and privately held companies from around the globe in a variety of industries, geographies, and sizes.
Participating organizations range in size from fewer than 1,000 to more than 50,000 employees. Just over one-half (55%) of participating companies have fewer than 5,000 employees, while the remaining half are somewhat evenly distributed (between 5,000 and 50,000+ employees). Seventy percent of respondents represent talent management practices and processes for U.S. companies, while the remaining 30% are non-U.S. companies. Nearly two-thirds (63%) have operations around the globe.
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∂≠∏π2006 SHRM® Research Quarterly
≠Talent Management: Driver for Organizational Success
ResearchSHRM
By Nancy R. Lockwood, SPHR, GPHR, M.A.Manager, HR Content Program
Sponsored by:
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Introduction“It is nearly unanimous that HR can and should add more value to corporations. The best way to do this is by being a business partner—by directly improving the performance of the business. This can be accomplished by effective talent manage-ment, helping with change management, influ-encing strategy and a host of other value-added activities that impact effectiveness.”1
In a competitive marketplace, talent management is a primary driver for organizational success. Broadly defined, talent management is the implementa-tion of integrated strategies or systems designed to increase workplace productivity by developing improved processes for attracting, developing, retain-ing and utilizing people with the required skills and aptitude to meet current and future business needs.2 A recent study shows that 85% of HR executives state that the “single greatest challenge in workforce management is creating or maintaining their compa-nies’ ability to compete for talent.”3 Without question, effective talent management provides one of the most critical points of strategic leverage today.
Offering enormous business value, talent man-agement is complex and continually evolving. Influenced by external factors such as the econ-omy, global expansion and mergers and acquisi-tions, critical success factors for effective talent management include alignment with strategic goals, active CEO participation and HR manage-ment. Over time, common themes around talent management are emerging, such as the role of line leaders in the development of talent (see Figure 1). Overall, the main recurring themes are CEO involvement, culture, management, processes and accountability.4
Research shows that organizations increasingly focus on talent management. Moving from reac-tive to proactive, companies are working hard to harness talent. According to SHRM’s 2006 Talent Management Survey Report, 53% of organizations have specific talent management initiatives in place. Of these companies, 76% consider talent management a top priority. In addition, 85% of HR professionals in these companies work directly with management to implement talent manage-ment strategies.5
Yet different companies may not define talent the same way. The belief in talent and its impact on the bottom line are at the heart of talent manage-ment. To be effective, the talent mindset must be embedded throughout the organization, starting with the CEO. Going beyond succession planning for top leadership positions, companies that value talent have a deep appreciation for the contribu-tion of individuals at all levels, now and for the future. In essence, talent is the vehicle to move the organization where it wants to be.6
Drivers for Talent Management To gain competitive advantage, the demand for human capital drives talent management. Talent management strategies focus on five primary areas: attracting, selecting, engaging, developing and retaining employees. Although pay and ben-efits initially attract employees, top-tier leadership organizations focus on retaining and developing talent (see Figure 2).7
Workforce trends drive talent management strate-gies. Factors such as an increasingly global and virtual workforce, different generations working together, longer life expectancies and an empowered and autonomous workforce have forever changed the workplace. Due to demographic changes, the workforce is also increasingly diverse-—from age, gender and ethnicity to lifestyles, migration patterns and cultural norms. Organizations are already taking advantage of these workplace trends. For example, The Home Depot, Inc., the home improvement giant, focuses its staffing initiatives on older workers and partners with AARP for referrals; 15% of its workforce
AbstractIn today’s global economy, companies must continually invest in human capital. In the role of business partner, HR leaders work closely with senior management to attract, hire, develop and retain talent. Yet the skills shortage presents both socio-economic and cultural challenges as talent crosses borders. Thus, in view of workforce trends such as shifting demographics, global supply chains, the aging workforce and increasing global mobility, forward-looking organizations must rethink their approach to talent management to best harness talent. By doing so, they will be positively positioned to succeed in a highly competitive marketplace. In addition, organizational culture, employee engagement and leadership development have a significant impact on talent retention. Taking these factors into consideration, an integrated approach to talent management offers a pathway toward sustaining outstanding business results.
Common Principles of the Talent Management Agenda
1. Expectations regarding the differentiation of talent.2. The role of line leaders in the development of
people.3. Philosophy regarding the movement of people
across businesses and functions.4. The role of diversity in staffing strategy.5. Beliefs about hiring for potential versus hiring for
position.
Source: Why the leadership bench never gets deeper: Ten insights about executive talent development. (2002). HR. Human Resource Planning.
Figure 1
� Talent Management: Driver for Organizational Success
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is over 50.8 Talent management strategies also pro-vide the context for diversity and inclusion. Proctor and Gamble, for example, feels that getting the right mix of people is a major part of talent management and hires many of its leaders as university recruits.9
Talent management is also driven by the antici-pated skills shortage in the coming years. While not all organizations, industries and professions will experience a lack of skills, organizations are already competing for talent. For example, cus-tomer service, health care, computer support and technology repair are areas where there is an anticipated acute talent shortage.10 In addition, as noted in SHRM’s 2005 Future of the U.S. Labor Pool Survey Report, the anticipated loss of talent in the next decade will vary by organization size, sector and industry. For example, large organiza-tions—as compared with small and medium com-panies—are more concerned about loss of talent from the retirement of the baby boom generation, and public and government organizations are more concerned about the loss of potential talent than private companies.11
Finally, key business strategies also drive talent management. For example, with the growing need for global technical expertise, Ford Motor Company links competency development to its organizational stra-tegic goals. Corporate branding, a key organizational strategy, is another business strategy that drives talent management. Increasingly, firms are linking their brand to employees and corporate behavior. At JPMorganChase, for example, the concept of leader-ship for all employees is part of its corporate brand-ing: “One Firm, One Team, Be a Leader.”12
Ownership of Talent ManagementSupported by the CEO and the board of directors, talent management is headed by human resourc-es, usually the head of the HR organization (e.g.,
vice president of HR, chief human resource offi-cer). While responsibility for talent management is shared throughout the organization—from the CEO to the line manager—the role of HR is to identify and deploy optimal strategies to engage employ-ees by driving satisfaction, loyalty and retention. Commitment to talent management requires HR to be a strategic business partner. A 2005 study on global human capital found that chief HR offi-cers (CHROs), as “chief talent architects,” played a central role as strategic business advisors by leveraging human capital to improve organizational performance and workforce effectiveness. Based on CEO priorities, the top seven CHRO initiatives were organization transformation, people develop-ment, talent management, HR transformation, leadership development, recruitment initiatives and rewards.13
Moving talent management initiatives forward, however, requires organizational buy-in. That is, all levels of management must be on board with the importance of talent management strategies. When the board is involved, the value of talent management is apparent and has high visibility. Yet to be successful, the value must be under-stood throughout the organization. In high-perform-ing companies, for example, senior management also is responsible for the success of talent man-agement. At the same time, for talent manage-ment initiatives to be effective, organizations need formal processes, with many people involved and with strong links between leadership and talent to translate into specific organizational value-based behaviors.14
Ownership of talent management is also reflected in dedicated resources. A formal budget for talent management initiatives, for example, is evidence of organizational commitment. As noted in SHRM’s 2006 Talent Management Survey Report, firms with talent management initiatives are more likely than organizations without such initiatives to have formal recruitment budgets (72% compared with 39%, respectively).15
Further, it is important that HR educate top man-agement on the link between the talent manage-ment cycle and the cost of turnover. For example, an employee’s decision to stay or leave is related to career possibilities in the company as well as how he or she can become better prepared to move to other opportunities. To keep a valued employee, the easy answer is not merely compen-sation. Employee loyalty tends to be more directed to his or her professional skills rather than to the organization.16 Thus, to best attract, engage, devel-op and retain talent, those who have responsibility
1. Senior executive commitment to development.2. Organizational reinforcement of development
(through manager incentives and recognition).3. Hiring for organizational compatibility.4. Culture of meritocracy.5. Offering rising executives a full exposure to the
business.6. Selecting successors based on leadership ability.7. A succession management system focused on
skills scarce in the labor market and emphasizing position fit above general skill development.
Source: Corporate Leadership Council. (2003). High-impact succes-sion management: From succession planning to strategic executive talent management. Retrieved from www.executiveboard.com
Seven Hallmarks of Distinction of Top-Tier Leadership Organizations
Figure 2
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for talent management must understand what is important to employees.
The Role of HR As a primary owner of talent management, HR has many roles—one of the most important is that of facilitator of the talent mindset. HR leads the way for the organization to own, as an entity, the role of talent management for organizational success. In the role of business partner, HR works closely with the board, the CEO and senior management to ensure that they are committed to talent manage-ment work. As talent management facilitator, HR also pays close attention to how the organization’s culture supports talent. Broadly speaking, HR’s role encompasses communicating the talent man-agement philosophy companywide and knowing the industry competition. In addition, HR needs to develop an integrated and proactive strategic approach to talent management—the big picture—as well as managing critical information, such as tracking turnover and knowing what factors contrib-ute to retention (see Figure 3).
To integrate talent management into all areas of the company, HR also plays a role of change management agent. To drive this change, HR addresses four diverse talent management activities: recruitment, performance manage-ment, leadership development and organizational strategy. In this role, HR manages four major risks to the business: 1) vacancy risk (to safe-guard key business capabilities, focus on scarce skills and fit to position); 2) readiness risk (to accelerate leadership development, provide full business exposure to rising stars); 3) transition risk (to avoid loss of key talent, select succes-sors with leadership ability and hire for organiza-tion capability); and 4) portfolio risk (to maximize strategic talent leverage, focus on senior man-agement’s commitment to development and per-formance standards).17
Finally, proactive HR leaders take a holistic approach to talent management. It is important to establish clear expectations and communicate openly about the talent management process. By HR explaining to management and employees why talent management is important, how it works and what the benefits are to the organization and par-ticipants, talent management strategies are more likely to be seen as a fair process.18
Employee Engagement and Its Relationship to Talent ManagementEffective talent management policies and practices that demonstrate commitment to human capital result in more engaged employees and lower turn-over. Consequently, employee engagement has a substantial impact on employee productivity and talent retention. Employee engagement, in fact, can make or break the bottom line. Employees who are most committed perform 20% better and are 87% less likely to resign. In addition, the foun-dation for an engaged workforce is established by the quality, depth and authenticity of communica-tion by HR and senior management to employees, as well as the quality of supervision. The role of the manager as the most important enabler of employee commitment to the job, organization and teams cannot be overemphasized. Furthermore, when done well, practices that support talent man-agement also support employee engagement (e.g., work-life balance programs—flex time, telecom-muting, compressed workweeks, reward programs, performance management systems).19
Rewards and recognition also help both to retain talent and to improve performance. A Carlson/Gallup study on employee engagement and busi-ness success showed that employees who were extremely satisfied at work were four times more likely than dissatisfied employees to have a formal measurement process in place as well as receive regular recognition. Further, 82% said recognition
1. Develop an integrated, proactive talent management strategy: View “employer of choice” status as an outcome of coherent corporate culture rather than ad-hoc programs.
2. Balance grassroots involvement in talent attraction and retention with management accountability.3. Know the company’s business environment and plans—the competitive climate: Know plans for growth, merger,
divestiture, new products or technologies and project their impact on immediate and longer-term talent needs.4. Know what factors contribute to difficulties in attraction and retention: Base initiatives on the real concerns of
employees. Raw numbers on turnover can show where retention problems are but not what they are.5. Keep various retention factors in balance, especially the mix of compensation and nonfinancial motivators.6. Track turnover: Know its costs and where they are the greatest and convey them to management to support the
business case for retention.7. Market the company and its brand to current employees as vigorously as to the outside talent pool.
Source: Dell, D., & Hickey, J. (2002). Sustaining the talent quest. New York: The Conference Board.
Seven Keys to Effective Talent Management Figure 3
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motivated them to improve job performance.20 Increasingly, organizations are putting formal and informal reward programs in place. For example, according to SHRM’s 2005 Reward Programs and Incentive Compensation Survey Report, 84% of companies offer some form of monetary and/or nonmonetary reward programs to employees. To be most effective, however, organizations must regularly communicate to employees about reward programs. Discussing reward programs as early as during the interview process demonstrates that the organization values its employees.21
The process of building employee engagement is ongoing. Beyond compensation and benefits, employee engagement is best fostered through a meaningful and emotionally enriching work experi-ence. Effective employee engagement—a mixture of tangible and intangible factors—fosters an environment of stimulation, development, learning, support, contribution and recognition. However, a recent study found that less than one-fifth of employees were highly engaged, one-fifth of the workforce was disengaged and about two-thirds were moderately engaged. The impact of employee dissatisfaction varies, depending on work experi-ence (e.g., overwhelming workloads, distant and noncommunicative senior leadership, few develop-mental opportunities). The risk is that moderately engaged employees may move toward being dis-engaged. The opportunity and challenge for HR, working with senior management, is to increase the strength of employee engagement. Focus on engagement demands strong leadership, a sense of shared destiny, autonomy, accountability and opportunities for development and advancement. To better engage workers, companies must work harder to inspire people and provide a sense of passion, pride and mission.22 Ultimately, it is organizational culture that determines employee engagement and retention of talent.
Finding the Right PeopleIn the war for talent, organizational success depends on effective recruitment and retention. To accomplish this goal, HR can provide value by focus-ing on five key areas: ensuring organizational sta-bility, emphasizing employer brand and reputation, developing integrated talent strategies, supporting multilevel accountability, getting involved in talent management initiatives and offering opportunities for career and personal development.23
Regarding recruitment and retention, HR has a number of challenges to address. According to SHRM’s 2006 Talent Management Survey Report, the top areas in need of improvement regard-ing talent management practices and strategies
are 1) building a deeper reservoir of successors at every level; 2) creating a culture that makes employees want to stay with the organization; 3) identifying gaps in current employee and candi-date competency levels; and 4) creating policies that encourage career growth and development opportunities.24
To attract and retain talent, hiring for compatibil-ity—the “fit” between employer and employee—is critical. In addition, companies with excellent reputations and strong brands are well positioned to attract top talent. Yahoo! Inc. exemplifies the organization that effectively links organizational cul-ture and company values in its recruiting initiatives to determine the best candidates. This process, however, takes time. For example, in the first six months of 2004, Yahoo spent 6,000 hours inter-viewing candidates to fill 500 positions—an aver-age of 12 hours per new hire.25
Another effective recruiting strategy is tapping into specific labor pools. By assessing the organiza-tion’s areas of strength in its workplace programs and policies, HR may identify possible segments of the labor force to target. For example, women who have either not yet begun their careers or are reentering the labor market from childbearing years represent a sizeable talent pool. With a workplace environment supportive of women’s career devel-opment, Whirlpool Corporation, a top U.S. home appliance maker, targets women in recruiting and promotion. Some organizations focus on workers with disabilities, an excellent source of talent. For example, at IBM, 42% of the organization’s dis-abled workers possess key skills such as market-ing, IT architecture and software engineering.26 By carefully assessing the organization’s current and future talent needs, HR can develop recruiting and retention strategies that align with the company business goals, thus promoting organizational growth and sustainability.
Succession Planning ManagementInvestment in human capital requires careful plan-ning. Under the talent management umbrella, suc-cession planning and leadership development are important organizational business strategies to develop and retain talent. As noted in the 2005 Human Capital Index Report, succession planning is also one of the key strategies to reduce turnover costs.27 While in the past succession plans were primarily focused on key leadership roles, organiza-tions are now establishing leadership development and succession planning initiatives early in the pro-cess of employee career development. In addition, according to SHRM’s 2006 Succession Planning Survey Report, 58% of organizations have either a
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formal (29%) or informal (29%) succession plan and 26% plan to develop one. The survey findings note that large organizations (500 or more employees) and publicly or privately owned for-profit organiza-tions are more likely to have formal succession plans. The responsibility for implementing succes-sion planning varies, starting with HR and followed by senior management, the president/CEO and the chief operating officer. However, not all organizations are jumping on the bandwagon to develop succes-sion plans; 16% do not intend to do so. The rea-sons vary, with companies saying more immediate needs take precedence, some companies have too small a staff size, while others have not yet consid-ered it, and still others have no support from senior management.28
At the same time, organizations grapple with how to best utilize succession planning—and the cor-responding leadership development initiatives—to manage, develop and retain talent. For those con-sidering leadership development as part of their talent management agenda, it is important to 1) determine whether the parts of the program, when combined, enable the organization to be more com-petitive; 2) assess if the leadership development system reinforces perceptions about the company that the organization wants others to have; and 3) evaluate whether employees view the leadership programs as legitimate. For example, do they take
them seriously? Do these initiatives really affect business decisions?29
Increasingly, organizations are putting structured processes in place for leadership development (see Figure 4). As highlighted in SHRM’s 2006 Talent Management Survey Report, organizations anticipate that their employee development bud-gets will increase in the next three years (accord-ing to 60% of organizations with talent initiatives and 58% of those without talent initiatives).30 Clearly, employee development is seen as impor-tant for organizational stability and growth. S.C. Johnson & Son, the consumer products company, is a good example of a company that uses its performance appraisal program to identify rising stars for management and technical positions. High performers are evaluated through 360-degree feedback to evaluate promotion readiness. The company has processes to identify ready replace-ments for crucial jobs. Due to the organization’s carefully-honed talent development strategies, nine out of 10 positions are filled internally.31 As HR leaders work to support their organizations, lead-ership development and succession planning are areas that provide substantial business value.
Measuring Business ImpactTalent management metrics link human capital investment to financial performance. According to
Fueling the Talent Engine DVD Finding and Keeping High Performers: A Case Study of Yahoo! Inc.
If you would like to find out more about talent management, watch the SHRM Foundation’s DVD on this topic. This DVD showcases talent management at Yahoo! Inc. as an integrated set of stra-tegic decisions. Yahoo’s strategy focuses on attracting, selecting and keeping the very best talent to achieve a competitive edge in the global marketplace. The DVD includes interviews with many of Yahoo’s top executives, including the chief people officer, the chief financial officer and the vice president of engineering.
The video features two segments: a 20-minute version perfect for classroom use and a 10-minute version ideal for use in chapter programs and meetings. As a bonus, the DVD includes a slideshow on Yahoo! Inc. and a discussion guide. For the international audience, the DVD may also be viewed with subtitles in Spanish, Chinese or Japanese.
The DVD…· Makes the concept of talent management come alive· Is classroom-tested, easy to use· Includes a discussion guide that enhances understanding· Is hosted by Wayne Cascio, Ph.D., noted teacher, author and scholar
How to order:The DVDs are available for purchase from the SHRMStore. Full price: $80 SHRM member price: $50Visit http://shrmstore.shrm.org/shrm or call 1-800-444-5006, option #1, to order.
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management gurus Huselid, Becker and Beatty, there are three critical challenges to successful workforce measurement and management. First, there is “the perspective challenge”—meaning, do all managers really understand how workforce behaviors and capabilities drive strategy execution? Second, there is “the metrics challenge”—that is, are the right measures of workforce success identi-fied (e.g., workforce culture, mindset, leadership, competencies and behaviors)? The third challenge is “the execution challenge”—specifically, in order to monitor progress and communicate the strategic intent of talent management initiatives, are manag-ers motivated to use these data and do they have access and capability to do so?32
Talent management metrics are evolving. As orga-nizations increasingly focus on talent management strategies, they seek ways to validate these initia-tives and measure their business impact. Many firms are beginning to include talent management in their dashboards or scorecards. For example, HSBC, a banking and financial services institu-tion, uses the Balanced Scorecard™, with talent management listed under learning and growth. Scorecards provide a clear “line of sight” to orga-nizational strategic goals by linking talent manage-ment to objectives and performance appraisals.
Measures may include factors such as employee survey results, turnover (e.g., talent pools) and the number of employees on secondments (temporary assignments).33
Companies also create their own measurements to fit their organizational cultures. Pfizer, for example, developed three primary talent management objec-tives—strength of leadership team and pipeline, robustness of talent management processes, and development of talent mindset and values—with corresponding drivers and metrics. One metric used to evaluate the robustness of talent manage-ment processes is the percentage of key position holders with individual development plans.34 Avon, a global cosmetics company, is an example of a company that transformed its talent management system by shifting how it looks at talent and con-sequently how it utilizes technology. This transfor-mation was necessary to be able to answer four key questions: 1) is there the necessary bench strength to staff the organization’s growth and transformation initiatives; 2) is world-class talent in key roles; 3) how can the talent “hit rate” be increased; and 4) when and where does the com-pany make or buy talent? The core of this transfor-mation was the change from a “referral of talent” mode (e.g., a manager recommends an employee for a position) to a more objective and formal approach to talent management. This shift result-ed in talent being assessed objectively through a leadership model to better determine suitability for various roles. To be able to identify where tal-ent in the organization is located, a database now houses employee profiles, which can be routinely updated. As a result, the organization can make more data-driven decisions regarding talent.35
Increasingly, talent management technology to house and track talent management strategies is becoming available. Databases with all relevant data in one location can result in significant time savings for staffing, such as the ability to quickly identify talent for open positions. Organizations are recommended, however, to carefully evaluate which talent management technology program best fits their current and future needs. Some vendors include talent management solutions in their HR suites. Strategic talent management software may help manage workforce skills and capabilities (hour-ly, salaried and contingent), demographics, career planning, employee retention initiatives, workforce and succession planning, and performance and learning management. Although few vendors offer all of these options in one package, it is important to know if the software can be integrated with other systems.36 Opinions vary, however, on the value of technology systems regarding talent management.
Figure 4 Structured Process to Develop,
Track and Evaluate Employees
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
84%
Evaluateemployeesannually onperformance
61%
Track potentialleaders’
performance
52%
Developpotentialleaders
53%
Evaluateemployeesannually onpotential
Note: Excludes respondents who indicated that their organizations did not have formal or informal succession plans.
Source: SHRM 2006 Succession Planning Survey Report
n = 214
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Challenges of Global Talent Management Global competition for skilled workers is keen; worldwide, many employers are experiencing a tal-ent shortage. A survey of nearly 33,000 employers in 23 countries reveals that 40% are struggling to locate qualified candidates.37 With the liberation of trade policies, transnational companies moving production to low-cost areas and the correspond-ing growth of global supply chains, increased globalization has resulted in socio-economic and cultural challenges. Further, talent now takes many forms, from migrants crossing borders (temporarily or seeking new homes), students gaining degrees and expatriates on assignment to tourists, refu-gees and business travelers. Consequently, the demand for skills has countries working hard to develop policies that will attract talent with human and technological skills to support economic growth, retain talent and even reverse talent migration. In a “reverse brain drain” effect, China and India, for example, encourage their educated nationals to return and fill jobs at home.38
Thus, the need for talent creates movement between countries. The United States relies on for-eign talent, particularly in certain fields. U.S. univer-sities, for example, are not graduating enough U.S. students in science and engineering, and by 2010, 25% of the nation’s scientists and engineers will reach retirement age. Reflecting this shift, in 2000, 22% of all U.S. science and engineering positions were held by foreign-born professionals, up from 14% in 1990.39 In contrast, countries such as China and India have a wealth of talent in science, engi-neering and technology. Each year, China produces 350,000 graduate engineers and India 120,000, compared with 63,000 in the United States.40 In addition, the demand for foreign-born talent is fur-ther demonstrated by the fact that the total cap on the number of available H-1B visas under U.S. immigration policies is regularly reached months in advance of the application deadline. Clearly, the ability to attract and retain talent is increasingly important to long-term growth.
Managing global talent has challenges and sig-nificant implications for sustainability and growth. A recent study of global companies, for example, states that companies are concerned about the development of future leaders capable of navigat-ing the global business environment. Key findings show that the most important determinant of global talent management (GTM) success is the degree of involvement by the CEO, the board of directors and the GTM leader in talent manage-ment activities. On average, for example, CEOs spend 16% of their time speaking publicly about GTM, mentoring high potentials, participating in tal-
ent reviews and approving the succession plans. Board members in 46% of companies provide input into assessment of key employees and 39% meet with high potentials during the year.41
In sync with the trend to develop global HR policies and practices, organizations are creating global talent management processes. For example, at Intel Corporation, a global chip maker, HR uti-lizes a talent management program and works with management to assess workforce needs.42 Research shows organizations value having global frameworks, specifically around a common lan-guage and structure in areas such as performance management, leadership development for high potentials and professional development. There is less agreement, however, about developing com-mon frameworks for recruitment.43
Recent Studies on Talent ManagementStudies on talent management reveal a number of common themes. First, the focus on talent management forces companies to become aware of—and assess—their workforce talent and cur-rent and future talent needs. Second, organiza-tions that understand the business case for talent management successfully link talent management and organizational strategy, reaping benefits in increased workplace performance. Third, organiza-tions are seeking effective ways to measure talent and determine bottom line impact.
• 2005 Talent Management Strategies Survey44
According to this study, 43% of companies see retention of key talent as the issue that will have the most impact on their business. Further, 72% of organizations are concerned about the nega-tive effect on the bottom line due to inadequate skills of incoming workers. The study empha-sizes that as baby boomers turn 62 in 2008 and skills gaps widen, the impending talent crisis will quickly become a global, cross-industry threat. For example, 33% of companies state that 11% of their workforce may retire in the next two or three years. For 31% of companies, the issue of retirement and impending skills shortages is being discussed at the board level. However, only 50% of organizations have a defined list of critical skills for the future.
• The High-Performance Workforce Study 200445
Executives in six countries spanning more than 15 industries were surveyed. The findings reveal six practices that dramatically improve workforce per-formance, yielding strong contributions to business performance. The number one practice is a formal process for talent management, supported by tech-nologies, that enables an organization to objectively
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assess employee skills and capabilities and quickly identify the best candidates for open positions.
• Survey of Global Talent Management Practices46
This survey explores global talent management practices among multinational companies (MNCs), focusing on global-scale processes to identify and develop leaders. According to the study findings, the most effective processes for identifying talent and increasing visibility of high potential candidates are assessment processes with open and frank discussions. Yet not all MNCs consider these discussions at the same level; 80% of American companies see talent review meetings as open and frank, compared with 55% of European companies. Many MNCs explicitly seek and encourage diversity in their talent pools. Within development planning, the most critical experiences are those that provide high potentials with a broad organizational view, vis-ibility and experience outside of their comfort zones (e.g., participation on global task forces, two- to three-year international assignments, inclusion in critical meetings).
• How Leading Organizations Manage Talent47
From in-depth interviews with HR leaders of large employers in a variety of industries, this study reveals that leading companies make attracting, engaging and retaining employees a strategic busi-ness priority. Senior leadership focuses on clearly communicating the business strategy to the work-force as well as defining the role people play to execute that strategy. Effective leaders have a clear understanding of what drives value in their organi-zations, what motivates their customers and how to achieve growth in the future. Many companies have developed talent management metrics to support business and financial measures, with metrics built into the balanced scorecard. Through the perfor-mance management system, managers are held accountable for employee retention and creating opportunities for high-potential employees.
Looking to the FutureAnticipated workforce changes and cost-effective ways to access talent are key to the next genera-tion of talent management. Predictive workforce monitoring will lead to effective strategic talent decision-making. Factors such as flexible talent sourcing, customized and personalized rewards, distributed and influential leadership, and uni-fied and compassionate workplace cultures will be important for successful talent management. Companies will increasingly utilize different types of employment relationships, and nonstandard employment models will continue to evolve. Free agency employment relationships—contracting for the best talent on an as-needed basis—will
become more common. To benefit from the knowl-edge, skills and corporate memory of mature workers, phased retirement will become prevalent. Keeping workers engaged—particularly the next generations—may call for HR to redesign the work-week, benefits packages and reward programs.48 Scenario planning and talent-match databases will become essential planning tools.
In closing, to sustain outstanding business results in a global economy, organizations will rethink and reinvent their approaches to talent manage-ment. Effective talent management calls for strong participatory leadership, organizational buy-in, employee engagement and workplace scorecards with talent management metrics. Companies that master talent management will be well-positioned for long-term growth in workforce performance for years to come.
Online Resources
SHRM 2006 Succession Planning Survey Reportwww.shrm.org/surveys
SHRM 2006 Talent Management Survey Reportwww.shrm.org/surveys
Building Engineering & Science Talentwww.bestworkforce.org
Center for Creative Leadershipwww.ccl.org
Corporate Leadership Councilwww.corporateleadershipcouncil.com
Human Capital Institutewww.humancapitalinstitute.org
International Labour Organizationwww.ilo.org
Institute for Workplace Studieswww.cornell.edu/iws
Milken Institutewww.milkeninstitute.org
Saratoga Institutewww.saratogainstitute.com
The Conference Boardwww.conference-board.org
The Institute of Executive Developmentwww.execsight.org
The Performance Institutewww.performanceweb.org
World Economic Forumwww.weforum.org
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AcknowledgmentsThe author would like to extend sincere appre-ciation to members of the SHRM Organizational Development Special Expertise Panel for their valu-able insights: Fernan R. Cepero, Isaac E. Dixon, SPHR, Juliet C. Hafford, SPHR, Ruthann Liagre, Patricia A. Miller, SPHR, GPHR, and Judy Tansky, Ph.D.
Endnotes 1 Lawler, III, E. E. (2005, Summer). From human resource management
to organizational effectiveness. Human Resource Management, 44, 2, 165-169.
2 SHRM HR Glossary, www.shrm.org 3 AberdeenGroup Inc./Human Capital Institute. (2005). Retaining talent:
Retention and succession in the corporate workforce. Boston: Author. 4 Morton, L. (2004, January). Integrated and integrative talent manage-
ment: A strategic HR framework. New York: The Conference Board. 5 Fegley, S. (2006, January). 2006 talent management survey report.
Alexandria, VA: Society for Human Resource Management. 6 Morton, L. (2005). Talent management value imperatives: Strategies for
execution. New York: The Conference Board. 7 Towers Perrin. (2003). Working today: Understanding what drives
employee engagement. Retrieved February 14, 2006, from www.towersperrin.com
8 Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent manage-ment: Insights on how workforce trends are changing the face of talent management. Retrieved January 26, 2006, from www.hewitt.com
9 Morton, L. (2005). Talent management value imperatives: Strategies for execution. New York: The Conference Board.
10 Dell, D., & Hickey, J. (2002). Sustaining the talent quest. New York: The Conference Board.
11 Collison, J. (2005, June). 2005 future of the U.S. labor pool survey report. Alexandria, VA: Society for Human Resource Management.
12 Morton, L. (2005). Talent management value imperatives: Strategies for execution. New York: The Conference Board.
13 IBM Corporation. (2005). The capability with: The global human capital study 2005. Retrieved January 12, 2006, from www.ibm.com
14 Morton, L. (2005). Talent management value imperatives: Strategies for execution. New York: The Conference Board.
15 Fegley, S. (2006, January). 2006 talent management survey report. Alexandria, VA: Society for Human Resource Management.
16 Dell, D., & Hickey, J. (2002). Sustaining the talent quest. New York: The Conference Board.
17 Corporate Leadership Council. (2003). High-impact succession management: From succession planning to strategic executive talent management. Retrieved January 27, 2006, from www.executiveboard.com
18 Walker, J. W., & LaRocco, J. M. (2002). Perspectives: Talent pools: The best and the rest. HR. Human Resource Planning, 25, 3, 12-15.
19 Corporate Leadership Council. (2004). Driving performance and retention through employee engagement. Retrieved January 27, 2006, from www.executiveboard.com
20 The Gallup Organization. (1998). Employee engagement = business success. Retrieved March 7, 2006, from www.bcpublicservica.ca
21 Burke, M. E. (2005, March). 2005 reward programs and incentive compensation survey report. Alexandria, VA: Society for Human Resource Management.
22 Towers Perrin. (2003). Working today: Understanding what drives employee engagement. Retrieved February 14, 2006, from www.towersperrin.com
23 Dell, D., & Hickey, J. (2002). Sustaining the talent quest. New York: The Conference Board.
24 Fegley, S. (2006, January). 2006 talent management survey report. Alexandria, VA: Society for Human Resource Management.
25 Throop, M. (2005). Fueling the talent engine: Finding and keeping high performers, a case study of Yahoo! Inc. Alexandria, VA: SHRM Foundation.
26 Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent manage-ment: Insights on how workforce trends are changing the face of talent management. Retrieved January 26, 2006, from www.hewitt.com
27 Watson Wyatt. (2005). Maximizing the return on your human capital investment: The 2005 human capital index report. Retrieved March 6, 2006, from www.watsonwyatt.com
28 Fegley, S. (2006, June). 2006 succession planning survey report. Alexandria, VA: Society for Human Resource Management.
29 Cohn, J. M., Khurana, R., & Reeves, L. (2005, October). Growing talent as if your business depended on it. Harvard Business Review, 83, 10, 62-70.
30 Fegley, S. (2006, January). 2006 talent management survey report. Alexandria, VA: Society for Human Resource Management.
31 Cohn, J. M., Khurana, R., & Reeves, L. (2005, October). Growing talent as if your business depended on it. Harvard Business Review, 83, 10, 62-70.
32 Huselid, M. A., Becker, B.E., & Beatty, R. W. (2005). The workforce scorecard: Managing human capital to execute strategy. Boston: Harvard Business School Press.
33 Morton, L. (2005). Talent management value imperatives: Strategies for execution. New York: The Conference Board.
34 Ibid. 35 Accenture. (2004). The high-performance workforce study 2004. Retrieved
January 31, 2006, from www.accenture.com36 Schweyer, A. (2004). Talent management systems: Best practices in
technology solutions for recruitment, retention and workforce planning. Canada: John Wiley & Sons Canada, Ltd.
37 Manpower. (2006, February). Talent shortage survey: Global results. Retrieved February 21, 2006, from www.manpower.com
38 Kuptsch, C., & Pang, E. F. (Eds.) (2006, January). Competing for global talent. Retrieved January 30, 2006, from www.ilo.org
39 Building Engineering & Science Talent/BEST. (2004). The talent impera-tive: Meeting America Section 1s challenge in science and engineering, ASAP . San Diego, CA: Author.
40 Gandossy, R., & Kao, T. (2004). Channels to anywhere: The supply chain for global content. Retrieved January 26, 2006, from www.hewitt.com
41 Industrial Relations Counselors, Inc. (2004). IRC survey of global talent management practices. Retrieved January 12, 2006, from www.orcinc.com
42 Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent management: Insights on how workforce trends are changing the face of talent management. Retrieved January 26, 2006, from www.hewitt.com
43 Morton, L. (2005). Talent management value imperatives: Strategies for execution. New York: The Conference Board.
44 Deloitte. (2005). 2005 talent management strategies survey. Retrieved February 8, 2006, from www.deloitte.com
45 Brakeley, H., Cheese, P., & Clinton, D. (2004). The high-performance work-force study 2004. Retrieved January 13, 2006, from www.accenture.com
46 Industrial Relations Counselors, Inc. (2004). IRC Survey of global talent management practices. Retrieved March 6, 2006, from www.orcinc.com
47 Towers Perrin. (2002, September). Talent management powers perfor-mance at leading companies. Retrieved January 23, 2006, from www.towersperrin.com
48 Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent manage-ment: Insights on how workforce trends are changing the face of talent management. Retrieved January 26, 2006, from www.hewitt.com
10 Talent Management: Driver for Organizational Success
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Talent Management: Driver for Organizational Success 11
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17Talent Management excellence essentials presented by HR.com | 01.2014
By Sattar Bawany
In ASIA Pacific Region.
Winning The War For Talent 2.0Interactive
In 1997, a groundbreaking McKinsey study exposed the “war for talent” as a strategic business challenge and a criti-cal driver of corporate performance. Then, when the dot-com bubble burst and the economy cooled, many assumed the war for talent was over. It’s not.
Subsequently in 2001, the authors of the original study revealed that, because of enduring economic and social forces, the war for talent will persist for the next two decades. McK-insey & Company consultants Ed Michaels, Helen Handfield-Jones, and Beth Axelrod argued that winning the war for leadership talent is all about much more than frenzied recruiting tactics. It’s about the timeless prin-ciples of attracting, developing, and retaining highly talented managers - applied in bold new ways. And it’s about recognizing the strategic importance of human capital because of the enormous value that better talent creates
The outcome of the study is applicable to many companies operating in Asia Pacific markets as it was fortified by five years of in-depth research on how companies manage leadership talent - including surveys of 13,000 executives at more than 120 com-panies and case studies of 27 leading companies - the authors propose a fundamentally new approach to talent management. They describe how to: create a winning EVP (employee value proposition) that will make your company uniquely attractive to talent; move beyond recruiting hype to build a long-term re-cruiting strategy; use job experiences, coaching, and mentoring to cultivate the potential in managers; and, strengthen your talent pool by investing in A players, developing B players, and acting decisively on C players.
Central to this approach is a pervasive talent mindset - a deep conviction shared by leaders throughout the company that competitive advantage comes from having better talent at all levels. Using practical examples from companies such as GE, The Home Depot, PerkinElmer, Amgen, and Enron, the authors outline five imperatives that every leader - from CEO to unit manager - must act on to build a stronger talent pool. Written by recognized authorities on the topic, this is the definitive strategic guide on how to win the war for talent.Today’s Context in Asia Pacific Region
In today’s tight labor market in fast growing Asia Pacific region, companies are facing intense competition for talent – and are giving increased attention to ways to retain talent rather than rely on costly replacement and retraining. Retention of talent with critical skill sets is vital for achievement of business growth and to build organizational competencies, which represent a competitive advantage. The loss of needed talent is costly because
of the resultant bidding up of market salaries for experienced hires to replace them, the costs of recruiting and assimilating new talent, the lost investment in talent development, and the hidden costs of lost productivity, lost sales opportunities, and strained customer relationships.
Can companies win the “war for talent”? Will we be able to define and implement a retention strategy that will give us the stable, committed, capable workforce required to achieve a competitive business advantage? Consulting firm and research organization reports, published books and articles, and internal company retention studies suggest that everyone is following the same overall plan. How will this approach give a company an edge?
Few, if any, organizations today have an adequate supply of talent. Gaps exist at the top of the organization, in the first- to midlevel leadership ranks, and at the front lines.
Talent is an increasingly scarce resource, so it must be managed to the fullest effect. During the current economic downturn we may experience a short ceasefire in the war for talent, but we’re all seeing new pressures put on the talent running our organizations.
Are today’s leaders able to do more with less? The A-players can, and there should be a strategic emphasis on keeping those leaders—and developing their successors. Many organizations are reducing their workforces, but let’s be careful not to cut so deep that talent is scarce when the economy rebounds.
The supply of leadership talent is critical to any organization’s prosperity and is, therefore, a central element of talent manage-ment. The increasing trend of growing leaders from within is based on a dawning realization that a popular alternative for acquiring talent—poaching key people from competitors—ulti-mately leads to frustration. Outstanding leaders who can ‘ramp up’ quickly are hard to find, increasingly expensive, and even when successfully recruited, tend to move from company to company. So the best approach, usually, is to develop systems and processes to identify available leadership talent.
Many studies have shown that an important factor for com-mitment and retention is the effectiveness of immediate man-agement. Employees say it is an important element of the work environment; research shows it highly correlated with commitment and retention scores, and employees cite poor management as a key reason for leaving a company. Accordingly, there have been many books focused on manager effectiveness. One big seller was First, Break all the Rules, reporting on the Gallup Organization’s findings and recommendations for better management of people. Integrated Talent Management System
So, what do we mean by talent management? In the broadest possible terms, it is the strategic and tactical management of the flow of talent through an organization. Its purpose is to assure that the supply of talent is available to align the right people with the right jobs at the right time based on strategic
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Talent Management excellence essentials presented by HR.com | 01.201418
business objectives. The term “talent management” is often used to denote e-recruitment and automated applicant track-ing systems. This emphasis on staffing and recruiting is more appropriately called the talent acquisition phase of the talent management cycle (see Figure 1), an important but preliminary step in the overall process.
Figure 1: CEE Talent Management CycleVision, Mission, Strategy and Values
The Talent Management Cycle includes the proactive analysis and planning to assure long-term strategic development and deploy-ment of critical leadership and other resources through systematic identification, assessment, planning, and developmental action.
Talent Management Cycle is composed of several essential elements:
1. Talent Acquisition: Proactively recruiting world-class, diverse leadership talent and providing on-boarding support for them to ac-celerate their assimilation into their roles.
2. Talent Development: Developing and executing learning and development programs, processes & assessment tools to grow current and future leaders
3. Performance Management: The process of creating a work environment in which people can perform to the best of their abilities.
4. Succession Planning: This is critical towards developing a leadership pipeline or assuring near-term leadership continuity by thoughtful consideration of the availability, readiness, and develop-ment of internal talent (including High Potentials) to assume critical “priority” leadership roles.
5. Organizational Results: Achieving favorable and desired results is obviously the ultimate outcome expected out of any effective inte-grated talent management system. However it is a lagging indicator and business leaders will have to focus on the organizational climate which will have an impact on the other elements of Talent Manage-ment Cycle as explained earlier. The flow of effective communication and the systems of recognition and rewards are integral part of the climate which influences the talent’s performance effecting productiv-ity, creativity and in driving results with the right impact. The climate is impacted by a values-driven leadership team. ITM
Prof Sattar Bawany s the CEO of Centre for Executive Education (CEE Global), Managing Director of Executive Development Associates in Asia Pacific and Strategic Advisor of IPMA in Asia Pacific. Email [email protected] www.cee-global.com.
There’s an old adage from business writer and former man-agement professor Michael LeBoeuf that, “what gets measured gets done.” Yet for many companies, the quest to measure em-ployee engagement isn’t reaping the expected outcomes. In fact, avast majority of North Americancompanies may find employees planning to pursue new job opportunities in 2014. According to a recent onlinepoll by Right Management,83% of 900 employees who responded indicated they intend to ac-tively seek a new position in the New Year.With an improving labor market and employee satisfaction continuing its down-ward trend, employee engagement should be a top concern for companies who want to keep their best talent.
Do you plan to pursue new job opportunities in 2014?
2013 2012 2011 2010 2009
Yes, I intend to actively seek a new position.
83% 86% 84% 84% 60%
Maybe, so I’m net-working.
9% 8% 9% 8% 21%
Not likely, but I’ve updated my resume.
3% 1% 2% 3% 6%
No, I intend to stay in current position.
5% 5% 5% 5% 13%
High employee dissatisfaction has a ripple effect that can hurt the bottom line, disrupt productivity and damage morale. While many companies focus on measuring engagement, few have a true pulse on the significant value an engaged workforce provides. Even fewer are taking the necessary action for driving sustainable change and ensuring a return on their investment. In fact, results of a recent Right Management global survey on the effectiveness of employee engagement shows a majority (56%) of the human resources managers who responded con-cedingthat their organization’s employee engagement efforts fell short in driving bottom-line business objectives.
At the same time, we are in a new Human Age where compa-nies continue to navigate the growth of emerging markets, the
Optimize Employee Engagement to Retain
Key Talent and Drive Higher Performance. By Robin Guarnieri
Ask, Listen, Involve
Interactive
Winning The War For Talent 2.0Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 50 of 90
18 Talent Management excellence essentials presented by HR.com | 09.2014Submit your Articles
Managing Talent
ByProf.SattarBawany
In today’s challenging economy and hypercompetitive busi-ness environment, CEOs and senior executive teams are facing enormous challenges when it comes to achieving and sustaining breakthrough operating results. Intensifying War for Talent, globalization, economic change, more stringent regulation, and tougher governance make realizing shareholder value increas-ingly difficult. But, there is a tougher challenge: identifying and developing new leaders which is critical for developing the sustainable competitive advantage for the organisation and its eventual success.
Talent management and retention is perennially at the top of CEO’s most pressing worries. A company’s leadership pipeline is expected to deliver its “next generation” of ready-now leaders. The key to ensuring an organisation has the leaders it needs when it needs them, is to accelerate the performance of future leaders including high potential employees, so that their skills and leadership abilities are as strong as possible when they are needed particularly as leaders transition from role to role.
According to Ram Charan in his article published in the 2005 Harvard Business Review, as CEO tenure continues to shrink, with two out of every five new CEOs failing in their first 18 months, it has become absolutely critical for companies to cul-tivate internal candidates for top positions. Yet corporations are beginning to realize that executive geographic and organization culture succession pipelines are broken and will adversely affect the ability to identify and nurture future leaders.
This can be alleviated however by establishing on-going pro-grams that correctly ascertain the high potential executives and provide them with meaningful and measurable development.
The payoff is a supply of leadership talent that simultane-ously achieves targets, bolsters and protects ethical reputation, and navigates transformational change in pursuit of a bright competitive future. Unfortunately, some Boards and CEOs neglect their talent management accountability - consequently, their pipelines run dry. When this occurs, the downward spiral of competitive capability becomes discernable, the edge is lost, and the “magic” disappears. The competition begins to outwit, outflank and outperform these companies.
BOARD’S ROLE IN TALENT MANAGEMENT In most organizations, talent is the essential resource — In fact
your talent is the one thing that can distinguish you from your competitors. Without the right people to execute and deliver the organization’s strategy and objectives at all levels, the business will fail to reach its full potential.
A board’s oversight responsibility is well understood in the areas of risk governance, ethics, and corporate responsibility, but less often mentioned with regard to talent. Yet, talent is an intrinsic part of the risk culture of an organization.
Instances where talent is at the core of major organizational risk are increasingly prevalent. Talent is, however, an area of organizational risk where boards often fail to implement com-prehensive controls.
Oversight of an organization’s talent clearly falls within the board’s responsibilities. Traditionally, talent had been focused on hiring the chief executive officer, determining executive com-pensation, planning senior executive succession, and recruiting and developing board members. Yet the board’s responsibility for talent extends well beyond those duties. The ability to attract, develop, and retain talent, particularly at the leadership level, has become a major factor in all capital investments, business strate-gies, and organizational growth. As a result, it is an important consideration for boards of multinational and owner-managed businesses alike. How can the board help the organization attract, develop, and retain talent?
Boards play a key role in overseeing that talent strategies are in place to execute on the overall business objectives as well as manage the talent-related risk inherent in the commercial world today. In this role, the board should confirm that its organiza-tion has an effective and robust talent management program capable of delivering value for shareholders. Talent is one of the five critical governance elements over which the board provides active oversight. Executing active oversight with regard to the five elements—performance, strategy, governance, talent, and integrity—cannot be delegated to management.Questions for Board Directors to ask:
1. What is the key talent risks associated with our core business strategies? With our major investments?
2. What is our talent bench strength? How is our organization mitigating succession risks?
3. What plans are in place to bring about smooth succession or substitution of our key talent, if the need arises?
4. How can we strengthen our talent-related due diligence in joint venture and M&A situations of any of our holdings or subsidiary entities?THE BOARD OVERSIGHT OF TALENT MANAGEMENT IN ORGANISATIONSThe Talent-Intelligent Board
Risk oversight is the foundation for the board and management to
Demystifying board’s role in talent management
“Talent-related risks traditionally include lack of succession planning; planned or sudden loss of key personnel; lack of return on leadership invest-ment or senior external hires; and failure to attract, develop,and retain talent.
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19Talent Management excellence essentials presented by HR.com | 09.2014 Submit your Articles
ManagingTalent
govern the organization and make sound business decisions. Organi-zational risks include talent-related risks and are frequently identified by organizations as some of the most critical issues they face.
Talent-related risks traditionally include lack of succession planning; planned or sudden loss of key personnel; lack of return on leadership investment or senior external hires; and failure to attract, develop, and retain talent. These risks can extend to poor talent planning to support capital investments and business strategy; for example, limited leadership bench strength reputational exposure, productivity risk, and inability to execute due to lack of workforce planning.
To more effectively oversee risks related to talent, boards should periodically and proactively consider the following talent-related risks identified in a Deloitte report:• Reputational risks: Financial missteps, ethical breaches, legal
problems, or even poor performance by executives can have an impact on a company’s revenue, profits, and market value for years to come, particularly when publicly reported in the media. This is particularly important because decisions are often made by one or more key individuals in an organization.• Crisis management: “Black swan” events—low-probability
events that have far-reaching impact—are increasingly common. Does senior management have a detailed crisis management plan that governs how the organization addresses these issues? Risks include changes in economic and market trends, the sudden departure of business-critical talent, poaching of whole teams by external sources, and health and safety incidents. • Business and regulatory risks: Boards should satisfy themselves
that their talent strategies, compensation, and incentive plans are aligned to create a culture that supports the pursuit of business goals within regulatory constraints.• Broader HR risks: HR risks have expanded beyond compliance
with labor regulations. While those remain important, companies now face a broad range of talent-related risks that can undermine organizational performance. These range from security, intellectual property, employee fraud, and financial risks to the risks of incom-petence, poor judgment, and lack of loyalty.Improving Board Oversight of Talent-Related RisksImproving the oversight of talent risk begins with understanding those risks and management’s approach to addressing them. Here are five key steps for boards to consider in their talent oversight role: • Review talent-related risks: Many boards have adopted a twice-a-
year talent review in which the chief human resources officer (CHRO) summarizes the external talent trends, and workforce and talent strategy for the business, including a comprehensive review of talent, HR risks and the associated mitigation strategies.• Develop measurable outcomes: It is also wise to request a bench-
mark analysis that covers employee engagement, top performer and executive attrition, and other factors related to talent retention at the senior levels and for other critical positions. This can be accomplished by leveraging industry or HR data and/or using historical organiza-tional data as comparisons.• Assign the responsibility: More and more boards designate a
director and/or members of the remuneration committee to address talent-related issues and risks (often a former or current CHRO), and ask for frequent “in camera” sessions with the board on talent-related risks. The head of HR could report to both the CEO and the board. For the board, this designated director can help raise awareness of
talent issues; moreover, this individual has the appropriate background to question management and inform the board about talent-related risks and how management is addressing them.• Monitor the talent pipeline: Talent supply and demand data
should be reviewed as part of capital investments and business strategy reviews at least annually, and ideally more frequently. In addition, the need to develop new products, enter new markets, or combat new competitors will dictate the demand for specific experience and skills. The board should ascertain that management and the HR team have plans in place to meet that demand.• Align the talent and business strategy: In reviews of strategy,
the board should ask management how it aligns the talent strategy with the business strategy. Forward-looking talent strategies maintain this alignment while helping target investments in talent development for optimal efficiency and effectiveness. The board should also be aware of talent issues related to any initiative that comes up for its review or approval. For example, in merger and acquisition (M&A) situations, talent due diligence is often neglected and talent the organization intended to acquire on Day 1 may be lost.
In general, sound talent management strategies and programs can greatly reduce risk, improve sustainable performance, and improve the organization’s ability to attract external talent. Board oversight into this process can not only provide experienced insight, but help to identify and reduce the risks and take talent management to the next level. ITM
BIBLIOGRAPHY
• Bawany, Sattar, “Maximising the Potential of Future Leaders: Resolving Leadership Succession
Crisis with Transition Coaching” in ‘Coaching in Asia – The First Decade’., Candid Creation Publishing
LLP, September 2010. Available as e-download at: http://www.cee-global.com/6/publication
• Bawany, Sattar, “Winning the War for Talent”, Human Capital, Singapore Human Resources
Institute, (September-October 2007); 54-57.
• Charan, Ram. “Ending the CEO Succession Crisis”. Harvard Business Review, (February
2005); 83-86.
• Charan, Ram. “Leaders at All Levels”, Jossey-Bass, Wiley, San Francisco, California, (2008); 1-4.
• Deloitte Human Capital Trends 2012: Leap Ahead, Published by Deloitte, www.deloitte.com
Professor Sattar Bawany is the Chief Executive Officer of the Centre for Executive Education (CEE Global). Prof Bawany is also concurrently the Stra-tegic Advisor & Member of International Professional Managers Association (IPMA) Board of Trustees and Governing Council. He is also the Managing Director as well as Master Executive Coach & Facilitator with Executive Development Associates (EDA) Asia Pacific. Email [email protected] Visit www.cee-global.com
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 52 of 90
By Prof. Sattar Bawany
Leadership pipeline for succession planning
Transforming the Next Gen Leaders
30 leadership excellence essentials presented by HR.com | 07.2014
Talent management and retention is perennially at the top of CEO’s most pressing worries. A company’s leadership pipe-line is expected to deliver its “next generation” of ready-now leaders. The key to ensuring an organisation has the leaders it needs when it needs them, is to accelerate the performance of future leaders including high potential employees, so that their skills and leadership abilities are as strong as possible when they are needed particularly as leaders transition from role to role.
A company’s leadership pipeline is expected to deliver its “next generation” of ready-now leaders. The payoff is a supply of leadership talent that simultaneously achieves targets, bolsters and protects ethical reputation, and navigates transformational change in pursuit of a bright competitive future. Unfortunately, some Boards and CEOs neglect their talent management ac-countability - consequently, their pipelines run dry. When this occurs, the downward spiral of competitive capability becomes discernable, the edge is lost, and the “magic” disappears. The competition begins to outwit, outflank and outperform these companies. The Current Realities
Organizations move their leaders through positions of respon-sibility and challenge to develop talent and ensure capability for the future. These transitions are known as “role to role” transi-tions, i.e. a leader who is successfully performing in one role takes on another role with different responsibilities.
Successfully assuming a new leadership role is almost never easy. It is more often challenging and daunting—regardless of the amount of experience a leader may have. In the 2009 Harvard Business Review article “The Realities of Executive Coaching”, Coaches surveyed reported that 48% of the time they are hired to develop high potentials or to facilitate transitions.
Actions taken in the first few months of a leadership transition directly impact a leader’s chances of success. Transitions can be times of both great opportunity and great risk. Transitioning leaders often find the eyes of superiors, colleagues, direct reports, and even shareholders firmly fixed on their first moves. Expecta-tions are high. So what are the secrets of succeeding and thriving in times of role transition, with so much at stake?What are the Challenges or Pitfalls leaders in transition face?
The specific challenges leaders face depend on the types of transitions they are experiencing. Leaders who have been hired externally (on-boarding) confront the need to adapt to new business models & organizational cultures, and to build supportive networks of relationships. For those who have been promoted internally (role-to-role transitions), the challenge lies in understanding and developing the competencies required to be successful at the new level. Hence, it is essential to carefully diagnose the situation and craft transition strategies accordingly.
The biggest trap new leaders fall into is to believe they will continue to be successful by doing what has made them success-ful in the past. There is an old saying, “To a person who has a
hammer, everything looks like a nail.” New leaders should focus first on discovering what it will take to be successful in the new role, then discipline themselves to do the things that don’t come naturally if the situation demands it.
New leaders are expected to “hit the ground running.” They must produce results quickly while simultaneously assimilat-ing into the organization. The result is that a large number of newly recruited or promoted managers fail within the first year of starting new jobs.
There is growing evidence that the range of abilities that constitutes what is now commonly known as emotional intel-ligence plays a key role in determining success for leaders and in the workplace. Longitudinal research, conducted by Centre for Executive Education (CEE Global) has uncovered links between specific elements of emotional intelligence and leader-ship styles as well as specific behaviors associated with leadership effectiveness and ineffectiveness. CEE has found that, higher levels of certain emotional intelligence components appear to be connected to better performance in leadership roles. The study also identified potential problem areas that could contribute to executive derailment.What are the transitional skills required for leaders in tran-sition?
Leaders must identify the right goals, develop a supporting strategy, align the architecture of the organization, and figure out what projects to pursue to secure early wins.
Leaders at all levels of the organization must demonstrate a high degree of emotional intelligence in their leadership role. Emotionally intelligent leaders create an environment of positive morale and higher productivity and this would result in sustainable employee engagement.
The critical transitional skills for leaders in transition include having social and emotional intelligence competencies in effective relationship management, diversity management, cross-cultural communication, effective negotiation and conflict management in a multigenerational workplace.
The reality for leaders in transition is that relationships are great sources of leverage. By building credibility with influen-tial players, you are better able to gain agreement on goals, and commitment to achieving those goals.
In the leader’s new situation, relationship management skills are critical as they aren’t the only one going through a transi-tion. To varying degrees, many different people, both inside and outside the leader’s direct line of command, are affected by the way he or she handles his or her new role.
Put another way, leaders negotiate their way to success in their new roles.Demystifying Executive Coaching
“The goal of coaching is the goal of good management: to make the most of an organization’s valuable resources.” - Harvard Business Review (November 1996)
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31leadership excellence essentials presented by HR.com | 07.2014
Executive Coaching is one of the fastest growing and most misunderstood professions of this decade. Coaching used to be an “executive perk” for large company executives to help them make better business decisions. Today, coaching is rapidly being recognized as one of the best strategic weapons a company can have in its arsenal.
Effective coaching is a major key to improving business perfor-mance. Executive Coaching focuses on the qualities of effective leadership and improved business results. It is comprised of a series of structured, one-on-one interactions between a coach and an executive (coachee), aimed at enhancing the executive’s performance in two areas:• Individual Performance or Effectiveness • Organisational Performance or Effectiveness When executives are first confronted by being coached, they
are not always clear about how best to use their sessions and quite unaware that it is they who set the agenda; in fact, some executives expect executive coaching to be like a one-on-one tailored training programme where the executive coach initi-ates the agenda. Executive coaching teaches the beneficiary to minimise, delegate, or outsource non-strengths by changing ineffective behaviours or changing ineffective thinking.
An Executive Coach only has one item on his agenda – the client’s or coachee’s success. This means going where it might hurt by confronting and challenging the client, and keeping a client accountable to achieving their goals. Coaching helps people grow personally and as professionals. This growth allows then to commit completely to the success of an organization. When professional coaches work with organizations they can turn performance management into a collaborative process that benefits both the employee and the organization.
The Coaching Methodology (see Figure 1) consists of a proven four-step process that is firmly grounded in leadership develop-ment best practices:
Figure 1: A.D.A.M. Coaching Methodology
1. Assess: Through a series of assessment and information gathering from various stakeholders, the coachee determine how their performance links to current business goals.
2. Debrief: The coachee will be provided with feedback based on the results of the assessments and with the support of the Coach will develop a Development Plan which will enable coachees to determine what to do to close the gaps in their leadership capability. The Sponsor will sign off the Development Plan to ensure that there is alignment to the business objectives.
3. Action Plan: The Coachee will implement the Development Plan by taking well-defined action steps and regular feedback during scheduled coaching sessions with the Coach which enables the Coachees to move toward measurable goals.
4. Measure: A full evaluation of the coaching process and engagement based on the agreed success metrics at the beginning of the assignment yields objective measures of business results and professional outcomes for both the organisation and the coachee.Executive vs Transition Coaching Approach
Transition coaching has three overall goals: to accelerate the
transition process by providing just-in-time advice and counsel, to prevent mistakes that may harm the business and the leader’s career, and to assist the leader in developing and implementing a targeted, actionable transition plan that delivers business results.
While many of the issues covered by transition coaching are similar to those included in executive coaching, such as sorting through short and long-term goals, and managing relationships upwards as well as with team members, transition coaching is focused specifically on the transition and designed to educate and challenge new leaders. The new leader and coach will work together to develop a transition plan, a road map that will define critical actions that must take place during the first 90 days to establish credibility, secure early wins and position the leader and team for long-term success.
The transition coaching relationship also includes regular meetings with the new leader as well as ongoing feedback. Fre-quently, the coach conducts a “pulse check” of the key players, including the boss, direct reports, peers and other stakeholders, after four to six weeks to gather early impressions so that the new leader can make a course correction if needed.
The entire transition coaching process provides new leaders with the guidance to take charge of their new situation, achieve alignment with the team, and ultimately to move the business forward. Organizations make a significant investment when they recruit and hire new leaders, and they have much to lose if a new hire does not succeed, possibly several times the hire’s base compensation.Conclusion
Whether an executive is moving into a new position or looking to get back on the road to success, executive and transition coach-ing work to bring out the best in leaders through the support of a professional relationship. Both relationships are built on a foundation of trust and confidentiality. The ability of coaches to provide leaders with an outside resource that can also act as a sounding board helps them become the successful leaders they were meant to be.
Organizations must clearly define the purpose of coaching, gauge the process, and evaluate results. Coaching is not just about providing support. Ultimately, coaching should deliver what any business needs – real results. LEBibliography
Bawany, Sattar, “Maximising the Potential of Future Leaders: Resolving Leader-ship Succession Crisis with Transition Coaching” in ‘Coaching in Asia – The First Decade’., Candid Creation Publishing LLP, September 2010Bawany, Sattar, “Winning the War for Talent”, Human Capital, Singapore Human Resources Institute, (September-October 2007); 54-57.Coutu, Diane. & Kauffman, Carol. “The Realities of Executive Coaching”. Harvard. Business Review Research Report. (January 2009); 6-7 Charan, Ram. “Ending the CEO Succession Crisis”. Harvard Business Review, (February 2005); 83-86. Ready, A. Douglas; Conger, A. Jay and Hill, A. Linda. “Are You A High Potential”. Harvard Business Review. (June 2010); 78-84. Prof Sattar Bawany is the CEO & C-Suite Master Executive Coach of
Centre for Executive Education (CEE Global) and Executive Development Associates (EDA). CEE Global offers talent management and executive development solutions including executive coaching and leadership development programs that help professionals develop the skills and knowledge to embrace change and catalyze success in their industries.Visit www.cee-global.comEmail [email protected]
Individual (Coachee) and Organisational Success
MeasureDebrief ActionAssess
Transforming the Next Gen LeadersResource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 54 of 90
Source: Sattar Bawany, “Making Results-based Leadership Work in Singapore” published in Singapore Business Review,
12 February 2013: http://sbr.com.sg/hr-education/commentary/making-results-based-leadership-work-in-singapore
Source: Sattar Bawany, “Building High Performance Teams Using SCORE Framework” in Talent Management Excellence,
April 2014 issue: www.hr.com/en/magazines/talent_management_excellence_essentials/
Centre for Executive Education Pte Ltd
259 Tampines Central, Singapore 915209 | Tel: (65) 6789 0977 | Fax: (65) 6789 0911
Email: [email protected] | Website: www.cee-global.com
CHARACTERISTICS OF HIGH-PERFORMING TEAMS
CEE “RESULTS-BASED LEADERSHIP” (RBL) FRAMEWORK
CEE “S.C.O.R.E.” FRAMEWORK FOR TEAM EFFECTIVENESS
• Profitability/Market Share• ROI/Cost Optimization
• Company Culture, Policies• Rewards and Flexibility
• Employee Satisfaction/Loyalty• Employee Turnover Rate
• Customer Satisfaction/Loyalty • Service Value/Relationship
• Emotional & Social Intelligence• Leadership Styles/Servant Leadership• Ontological Humility/Level 5 Leadership
1 Self-Leadership & Team Effectiveness
2 Organizational Climate
3 Employee Engagement
4 Customer Engagement
5 Organizational Results
TEAMWORK
Cohesive Strategy
RapidResponse
OpenCommunication
Effective Leadership
Clear Roles &Responsibilities
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 55 of 90
www.hbr.org
Talent Management for the Twenty-First Century
by Peter Cappelli
Every talent management
process in use today was
developed half a century ago.
It’s time for a new model.
Reprint R0803E
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 56 of 90
Talent Management for the Twenty-First Century
by Peter Cappelli
harvard business review • march 2008 page 1
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Every talent management process in use today was developed half a
century ago. It’s time for a new model.
Failures in talent management are an ongo-ing source of pain for executives in modernorganizations. Over the past generation, talentmanagement practices, especially in theUnited States, have by and large been dysfunc-tional, leading corporations to lurch fromsurpluses of talent to shortfalls to surplusesand back again.
At its heart, talent management is simply amatter of anticipating the need for humancapital and then setting out a plan to meet it.Current responses to this challenge largelyfall into two distinct—and equally ineffective—camps. The first, and by far the most com-mon, is to do nothing: anticipate no needsat all; make no plans for addressing them(rendering the term “talent management”meaningless). This reactive approach reliesoverwhelmingly on outside hiring and has fal-tered now that the surplus of managementtalent has eroded. The second, common onlyamong large, older companies, relies on com-plex and bureaucratic models from the 1950sfor forecasting and succession planning—
legacy systems that grew up in an era whenbusiness was highly predictable and that failnow because they are inaccurate and costly ina more volatile environment.
It’s time for a fundamentally new approachto talent management that takes into accountthe great uncertainty businesses face today.Fortunately, companies already have such amodel, one that has been well honed overdecades to anticipate and meet demand inuncertain environments—supply chain man-agement. By borrowing lessons from opera-tions and supply chain research, firms canforge a new model of talent management bet-ter suited to today’s realities. Before gettinginto the details, let’s look at the context inwhich talent management has evolved overthe past few decades and its current state.
How We Got Here
Internal development was the norm back inthe 1950s, and every management develop-ment practice that seems novel today wascommonplace in those years—from executive
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coaching to 360-degree feedback to job rota-tion to high-potential programs.
Except at a few very large firms, internaltalent development collapsed in the 1970sbecause it could not address the increasinguncertainties of the marketplace. Businessforecasting had failed to predict the economicdownturn in that decade, and talent pipelinescontinued to churn under outdated assump-tions of growth. The excess supply of manag-ers, combined with no-layoff policies forwhite-collar workers, fed corporate bloat. Thesteep recession of the early 1980s then led towhite-collar layoffs and the demise of lifetimeemployment, as restructuring cut layers ofhierarchy and eliminated many practices andstaffs that developed talent. After all, if thepriority was to cut positions, particularly inmiddle management, why maintain the pro-grams designed to fill the ranks?
The older companies like PepsiCo and GEthat still invested in development becameknown as “academy companies”: breedinggrounds for talent simply by maintainingsome of the practices that nearly all corpo-rations had followed in the past. A numberof such companies managed to ride out therestructurings of the 1980s with their pro-grams intact only to succumb to cost-cuttingpressures later on.
The problems faced by Unilever’s Indianoperations after 2000 are a case in point.Known as a model employer and talent devel-oper since the 1950s, the organization sud-denly found itself top-heavy and stuck whenbusiness declined after the 2001 recession. Itswell-oiled pipeline saddled the company with1,400 well-trained managers in 2004, up 27%from 2000, despite the fact that the demandfor managers had fallen. Unilever’s implicitpromise to avoid layoffs meant the companyhad to find places for them in its other inter-national operations or buy them out.
The alternative to traditional development,outside hiring, worked like a charm throughthe early 1990s, in large measure becauseorganizations were drawing on the big poolof laid-off talent. As the economy continuedto grow, however, companies increasinglyrecruited talent away from their competi-tors, creating retention problems. Watchingthe fruits of their labors walk out the door,employers backed even further away frominvestments in development. I remember a
conversation with a CEO in the medical deviceindustry about a management developmentprogram proposed by his head of human re-sources. The CEO dismissed the proposal bysaying, “Why should we develop people whenour competitors are willing to do it for us?”By the mid-1990s, virtually every major cor-poration asserted the goal of getting betterat recruiting talent away from competitorswhile also getting better at retaining its owntalent—a hopeful dream at the individuallevel, an impossibility in the aggregate.
Outside hiring hit its inevitable limit by theend of the 1990s, after the longest economicexpansion in U.S. history absorbed the supplyof available talent. Companies found theywere attracting experienced candidates andlosing experienced employees to competitorsat the same rate. Outside searches became in-creasingly expensive, particularly when theyinvolved headhunters, and the newcomersblocked prospects for internal promotions, ag-gravating retention problems. The challengeof attracting and retaining the right peoplewent to the very top of the list of executives’business concerns, where it remains today.
The good news is that most companies arefacing the challenge with a pretty clean slate:Little in the way of talent management is actu-ally going on in them. One recent study, forexample, reports that two-thirds of U.S. em-ployers are doing no workforce planning ofany kind. The bad news is that the advice com-panies are getting is to return to the practicesof the 1950s and create long-term successionplans that attempt to map out careers yearsinto the future—even though the stable busi-ness environment and talent pipelines inwhich such practices were born no longer exist.
That simply won’t work. Traditional ap-proaches to succession planning assume amultiyear development process, yet duringthat period, strategies, org charts, and man-agement teams will certainly change, and thegroomed successors may well leave anyway.When an important vacancy occurs, it’s notunusual for companies to conclude that thecandidates identified by the succession planno longer meet the needs of the job, and theylook outside. Such an outcome is worse in sev-eral ways than having no plan. First, the can-didates feel betrayed—succession plans createan implicit promise. Second, investments indeveloping these candidates are essentially
Peter Cappelli
([email protected]) is the George W. Taylor Professor of Management and the director of the Center for Human Re-sources at the University of Pennsylva-nia’s Wharton School in Philadelphia. He is the author of several HBR articles and the book Talent on Demand, forth-coming from Harvard Business School Press, which further develops the ideas presented in this article.
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Talent Management for the Twenty-First Century
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wasted. Third, most companies now have toupdate their succession plans every year asjobs change and individuals leave, wastingtremendous amounts of time and energy. As apractical matter, how useful is a “plan” if ithas to be changed every year?
Talent management is not an end in itself.It is not about developing employees or creat-ing succession plans, nor is it about achievingspecific turnover rates or any other tacticaloutcome. It exists to support the organiza-tion’s overall objectives, which in business es-sentially amount to making money. Makingmoney requires an understanding of the costsas well as the benefits associated with talentmanagement choices. The costs inherent tothe organization-man development modelwere largely irrelevant in the 1950s because,in an era of lifetime employment and a cul-ture in which job-hopping was considered asign of failure, companies that did not de-velop talent in-house would not have any atall. Development practices, such as rotationaljob assignments, were so deeply embeddedthat their costs were rarely questioned(though internal accounting systems wereso poor that it would have been difficult toassess the costs in any case).
That’s no longer true. Today’s rapid-firechanges in customers’ demands and compet-itors’ offerings, executive turnover that caneasily run to 10%, and increased pressure toshow a financial return for every set of busi-ness practices make the develop-from-withinapproach too slow and risky. And yet thehire-from-without models are too expensiveand disruptive to the organization.
A New Way to Think About Talent Management
Unlike talent development, models of supplychain management have improved radicallysince the 1950s. No longer do companies ownhuge warehouses where they stockpile thecomponents needed to assemble years’ worthof products they can sell with confidence be-cause competition is muted and demand emi-nently predictable. Since the 1980s, companieshave instituted, and continually refined, just-in-time manufacturing processes and othersupply chain innovations that allow them toanticipate shifts in demand and adapt prod-ucts ever more accurately and quickly. What Iam proposing is something akin to just-in-time
manufacturing for the development realm: atalent-on-demand framework. If you considerfor a moment, you will see how suited thismodel might be to talent development.
Forecasting product demand is comparableto forecasting talent needs; estimating thecheapest and fastest ways to manufactureproducts is the equivalent of cost-effectivelydeveloping talent; outsourcing certain aspectsof manufacturing processes is like hiringoutside; ensuring timely delivery relates toplanning for succession events. The issues andchallenges in managing an internal talentpipeline—how employees advance throughdevelopment jobs and experiences—areremarkably similar to how products movethrough a supply chain: reducing bottle-necks that block advancement, speeding upprocessing time, improving forecasts to avoidmismatches.
The most innovative approaches to manag-ing talent use four particular principles drawnfrom operations and supply chain manage-ment. Two of them address uncertainty onthe demand side: how to balance make-versus-buy decisions and how to reduce the risks inforecasting the demand for talent. The othertwo address uncertainty on the supply side:how to improve the return on investment indevelopment efforts and how to protect thatinvestment by generating internal opportuni-ties that encourage newly trained managersto stick with the firm.
Principle 1: Make
and
Buy to Manage Risk
Just as a lack of parts was the major concern ofmidcentury manufacturers, a shortfall of tal-ent was the greatest concern of traditionalmanagement development systems of the1950s and 1960s, when all leaders had to behomegrown. If a company did not produceenough skilled project managers, it had topush inexperienced people into new roles orgive up on projects and forgo their revenue.Though forecasting was easier than it is today,it wasn’t perfect, so the only way to avoid ashortfall was to deliberately overshoot talentdemand projections. If the process producedan excess of talent, it was relatively easy topark people on a bench, just as one might putspare parts in a warehouse, until opportuni-ties became available. It may sound absurd tosuggest that an organization would maintain
What I am proposing is
something akin to just-
in-time manufacturing
for the development
realm: a talent-on-
demand framework.
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the equivalent of a human-capital supplycloset, but that was extremely common in theorganization-man period.
Today, a deep bench of talent has becomeexpensive inventory. What’s more, it’s inven-tory that can walk out the door. Ambitious ex-ecutives don’t want to, and don’t have to, sit onthe bench. Worse, studies by the consultingfirm Watson Wyatt show that people who haverecently received training are the most likely todecamp, as they leave for opportunities tomake better use of those new skills.
It still makes sense to develop talent inter-nally where we can because it is cheaper andless disruptive. But outside hiring can befaster and more responsive. So an optimal ap-
proach would be to use a combination of thetwo. The challenge is to figure out how muchof each to use.
To begin, we should give up on the ideathat we can predict talent demand with cer-tainty and instead own up to the fact that ourforecasts, especially the long-range ones, willalmost never be perfect. With the error rateon a one-year forecast of demand for an indi-vidual product hovering around 33%, andwith nonstop organizational restructuringsand changes in corporate strategy, the ideathat we can accurately predict talent demandfor an entire company several years out is amyth. Leading corporations like Capital Oneand Dow Chemical have abandoned long-term talent forecasts and moved toward short-term simulations: Operating executives givetalent planners their best guess as to whatbusiness demands will be over the next fewyears; the planners use sophisticated simula-tion software to tell them what that will re-quire in terms of new talent. Then they repeatthe process with different assumptions to geta sense of how robust the talent predictionsare. The executives often decide to adjusttheir business plans if the associated talentrequirements are too great.
Operations managers know that an integralpart of managing demand uncertainty is un-derstanding the costs involved in over- orunderestimation. But what are the costs ofdeveloping too much talent versus too little?Traditionally, workforce planners have implic-itly assumed that both the costs and the riskseven out: that is, if we forecast we’ll need 100computer programmers in our division nextyear and we end up with 10 too many or 10 toofew, the downsides are the same either way.
In practice, however, that’s rarely the case.And, contrary to the situation in the 1950s,the risks of overshooting are greater thanthose of undershooting, now that workers canleave so easily. If we undershoot, we can al-ways hire on the outside market to make upthe difference. The cost per hire will begreater, and so will the uncertainty about em-ployees’ abilities, but those costs pale in com-parison to retention costs. So, given that thebig costs are from overshooting, we will wantto develop fewer than 100 programmers andexpect to fall somewhat short, hiring on theoutside market to make up the difference. Ifwe think our estimate of 100 is reasonably
Operations Principles Applied to Talent Management
A supply chain perspective on talent management relies on four principles, two that address the risks in estimating demand and two that address the un-certainty of supply.
Principle 1: Make
and
Buy to Manage Risk
A deep bench of talent is expensive, so companies should undershoot their estimates of what will be needed and plan to hire from outside to make up for any shortfall. Some positions may be easier to fill from outside than oth-ers, so firms should be thoughtful about where they put precious resources in development: Talent management is an investment, not an entitlement.
Principle 2: Adapt to the Uncertainty in Talent Demand
Uncertainty in demand is a given, and smart companies find ways to adapt to it. One approach is to break up develop-ment programs into shorter units: Rather than put management trainees through a three-year functional pro-gram, for instance, bring employees from all the functions together in an 18-month course that teaches general management skills, and then send them back to their functions to spe-
cialize. Another option is to create an organization-wide talent pool that can be allocated among business units as the need arises.
Principle 3: Improve the Return on Investment in Developing Employees
One way to improve the payoff is to get employees to share in the costs of development. That might mean ask-ing them to take on additional stretch assignments on a volunteer basis. An-other approach is to maintain relation-ships with former employees in the hope that they may return someday, bringing back your investment in their skills.
Principle 4: Preserve the Investment by Balancing Employee-Employer Interests
Arguably, the main reason good em-ployees leave an organization is that they find better opportunities else-where. This makes talent development a perishable commodity. The key to preserving your investment in develop-ment efforts as long as possible is to balance the interests of employees and employer by having them share in ad-vancement decisions.
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accurate, then perhaps we will want to de-velop only 90 internally, just to make sure wedon’t overshoot actual demand, and thenplan to hire about 10. If we think our estimateis closer to a guess, we will want to developfewer, say 60 or so, and plan on hiring therest outside.
Assessing the trade-offs between makingand buying include an educated estimation ofthe following:
• How long will you need the talent? Thelonger the talent is needed, the easier it is tomake investments in internal developmentpay off.
• How accurate is your forecast of thelength of time you will need the talent? Theless certainty about the forecast, the greaterthe risk and cost of internal development—and the greater the appeal of outside hires.
• Is there a hierarchy of skills and jobs thatcan make it possible for candidates who do nothave the requisite competencies to learn themon the job, without resorting to specialized de-velopment roles or other costly investments?This is particularly likely in functional areas.The more it is so, the easier it will be to de-velop talent internally.
• How important is it to maintain the orga-nization’s current culture? Especially at thesenior level, outside hires introduce differentnorms and values, changing the culture. If it isimportant to change the culture, then outsidehiring will do that, though sometimes in un-predictable ways.
The answers to these questions may verywell be different for different functional areasand jobs within the same company. For in-stance, lower-level jobs may be easily andcheaply filled by outsiders because the re-quired competencies are readily available,making the costs of undershooting demandrelatively modest. For more highly skilledjobs, the costs of undershooting are muchhigher—requiring the firm to pay for an out-side search, a market premium, and perhapsalso the costs related to integrating thenew hires and absorbing associated risks,such as misfits.
Principle 2: Adapt to the Uncertainty in Talent Demand
If you buy all of your components in bulk andstore them away in the warehouse, you areprobably buying enough material to produce
years of product and therefore have to forecastdemand years in advance. But if you bring insmall batches of components more often, youdon’t have to predict demand so far out. Thesame principle can be applied to shorteningthe time horizon for talent forecasts in someinteresting, and surprisingly simple, ways.
Consider the problem of bringing a newclass of candidates into an organization. Atcompanies that hire directly out of college,the entire pool of candidates comes in all atonce, typically in June. Let’s assume they gothrough an orientation, spend some time intraining classes, and then move into develop-mental roles. If the new cohort has 100 peo-ple, then the organization has to find 100developmental roles all at once, which can bea challenge for a company under pressure,say, to cut costs or restructure.
But in fact many college graduates don’twant to go directly to work after graduation.It’s not that difficult to split the new group inhalf, taking 50 in June and the other 50 inSeptember. Now the program only needs tofind 50 roles in June and rotate the new hiresthrough them in three months. The June cohortsteps out of those roles when the Septembercohort steps into them. Then the organizationneed find only 50 permanent assignments inSeptember for the June hires. More impor-tant, having smaller groups of candidatescoming through more frequently means thatforecasts of demand for these individuals canbe made over shorter periods throughouttheir careers. Not only will those estimatesbe more accurate but it will be possible tobetter coordinate the first developmental as-signments with subsequent assignments—for instance, from test engineer to engineerto senior engineer to lead engineer.
A different way to take advantage ofshorter, more responsive forecasts would beto break up a long training program into dis-crete parts, each with its own forecast. A goodplace to start would be with the functionallybased internal development programs thatsome companies still offer. These programsoften address common subjects, such as gen-eral management or interpersonal skills,along with function-specific material. Thereis no reason that employees in all the func-tions couldn’t go through the general trainingtogether and then specialize. What used tobe a three-year functional program could
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become two 18-month courses. After everyonecompleted the first course, the organizationcould reforecast the demand for each func-tional area and allocate the candidates ac-cordingly. Because the functional programswould be half as long, each forecast wouldonly have to go out half as far and would becorrespondingly more accurate. An addedadvantage is that teaching everyone the gen-eral skills together reduces redundancy intraining investments.
Another risk reduction strategy that talentmanagers can borrow from supply chainmanagers is an application of the principle ofportfolios. In finance, the problem with hold-ing only one asset is that its value can fluctu-ate a great deal, and one’s wealth varies a lotas a result, so investment advisers remind usto hold several stocks in the same portfolio.Similarly, in supply chain management it canbe risky to rely on just one supplier.
For a talent-management application, con-sider the situation in many large and espe-cially decentralized organizations where eachdivision is accountable for its own profit andloss, and each maintains its own developmentprograms. The odds that any one division willprepare the right number of managers tomeet actual demand are very poor. Some willend up with a surplus, others a shortfall. If,however, all of these separate programs wereconsolidated into a single program, the unan-ticipated demand in one part of the companyand an unanticipated shortfall in anotherwould simply cancel out, just as a stockportfolio reduces the volatility of holding in-dividual stocks. Given this, as well as the du-plication of tasks and infrastructure requiredin decentralized programs, it is a mysterywhy large organizations continue to operatedecentralized development programs. Somecompanies are in fact creating talent poolsthat span divisions, developing employeeswith broad and general competencies thatcould be applied to a range of jobs. The fitmay be less than perfect, but these firms arefinding that a little just-in-time training andcoaching can help close any gaps.
Principle 3: Improve the Return on Investment in Developing Employees
When internal development was the onlyway to produce management talent, compa-
nies might have been forgiven for paying lessattention than they should have to its costs.They may even have been right to considertheir expensive development programs as anunavoidable cost of doing business. But thesame dynamics that are making today’s talentpool less loyal are presenting opportunitiesfor companies to lower the costs of trainingemployees and thereby improve the return ontheir investment of development dollars, asthey might from any R&D effort.
Perhaps the most novel approach to thischallenge is to get employees to share in thecosts. Since they can cash in on their experi-ence on the open market, employees are themain beneficiaries of their development, soit’s reasonable to ask them to contribute. Inthe United States, legislation prevents hourlyworkers from having to share in the costs ofany training required for their current job.There are no restrictions, however, even forhourly workers, on contributing to the costs ofdevelopmental experiences that help prepareemployees for future roles.
People might share the costs by taking onlearning projects voluntarily, which meansdoing them in addition to their normal work.Assuming that the candidates are more or lesscontributing their usual amount to their regu-lar job and their pay hasn’t increased, they areessentially doing these development projectsfor free, no small investment on their part.Pittsburgh-based PNC Financial Services isone of several companies that now offerpromising employees the opportunity to vol-unteer for projects done with the leadershipteam, sometimes restricting them to onesoutside their current functional area. Theyget access to company leaders, a broadeningexperience, and good professional contacts,all of which will surely help them later. Butthey pay for it, with their valuable time.
Employers have been more inclined to ex-periment with ways to improve the payofffrom their development investments by re-taining employees longer, or at least for somepredictable period. About 20% of U.S. employ-ers ask employees who are about to receivetraining or development experiences to sign acontract specifying that if they leave the busi-ness before a certain time, they will have topay back the cost. As in the market for carboncredits, this has the effect of putting a mone-tary value on a previously unaccounted for
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cost. This practice is especially common incountries like Singapore and Malaysia: Em-ployees often leave anyway, but typically thenew employer pays off the old one.
A more interesting practice is to attempt tohang on to employees even after they leave,making relatively small investments in main-taining ties. Deloitte, for example, informsqualified former employees of importantdevelopments in the firm and pays the costof keeping their accounting credentials up-to-date. Should these individuals want to switchjobs again, they may well look to the placewhere they still have ties: Deloitte. And be-cause their skills and company knowledgeare current, they will be ready to contributeright away.
Principle 4: Preserve the Investment by Balancing Employee-Employer Interests
The downside of talent portability, of course,is that it makes the fruits of managementdevelopment perishable in a way they neverwere in the heyday of the internal develop-ment model. It used to be that managers andexecutives made career decisions for em-ployees, mating individuals and jobs. In theorganization-man period, the company woulddecide which candidates were ready for whichexperience, in order to meet the longer-termtalent needs of the organization. Employeeshad little or no choice: Refusing to take a newposition was a career-ending move.
Today, of course, employees can pick upand leave if they don’t get the jobs they wantinside—and the most talented among themhave the most freedom to do so. In an effortto improve retention, most companies—80% in a recent survey by applicant-trackingcompany Taleo—have moved away fromthe chess-master model to internal job boardsthat make it easy for employees to apply foropenings and so change jobs within the or-ganization. Dow Chemical, for example, cutits turnover rate in half when it moved itsvacancies to such internal boards.
These arrangements have effectively turnedthe problem of career management over toemployees. As a result,employers have muchless control over their internal talent. Employ-ees’ choices may not align with the interestsof the employer, and internal conflicts areincreasing because half of the employers in
the U.S. no longer require that employeesseek permission from their supervisors tomove to new positions.
So it has become imperative for companiesto find more effective ways to preserve theirmanagement development investment. Thekey is to negotiate solutions that balance theinterests of all parties. McKinsey’s arrange-ment for associates relies not only on howthey rank their preferences for projectsposted online but also on how the principalsrunning the projects rank the associates. Thefinal decision allocating resources is madeby a senior partner who tries to honor thepreferences of both sides while choosing theassignment that will best develop the skill setof each associate. Bear, Stearns establishedan office of mediation, which negotiates in-ternal disputes between managers when anemployee wants to move from one job toanother in the firm.
• • •
The talent problems of employers, employ-ees, and the broader society are intertwined.Employers want the skills they need whenthey need them, delivered in a manner theycan afford. Employees want prospects foradvancement and control over their careers.The societies in which they operate and theeconomy as a whole need higher levels ofskills—particularly deeper competencies inmanagement—which are best developedinside companies.
Those often-conflicting desires aren’t ad-dressed by existing development practices.The language and the frameworks of theorganization-man model persist despite thefact that few companies actually employ it;there simply aren’t any alternatives. Thelanguage comes from engineering and isrooted in the idea that we can achieve cer-tainty through planning—an outdated no-tion. But before an old paradigm can beoverthrown there must be an alternative,one that describes new challenges betterthan the old one can. If the language of theold paradigm was dominated by engineer-ing and planning, the language of the new,talent-on-demand framework is driven bymarkets and operations-based tools bettersuited to the challenges of uncertainty. Tal-ent on demand gives employers a way tomanage their talent needs and recoup invest-ments in development, a way to balance the
The language of the
talent-on-demand
framework is driven by
operations-based tools
better suited to the
challenges of uncertainty.
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Talent Management for the Twenty-First Century
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interests of employees and employers, and away to increase the level of skills in society.
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The war for talent
Tell me again: Why would someone really good want to join your company? And how will you keep them for more than a few years? Yes, money does matter.
ELIZABETH G. CHAMBERS, MARK FOULON, HELEN HANDFIELD-JONES, STEVEN M. HANKIN, AND EDWARD G. MICHAELS III
1998 Number 3
Better talent is worth fighting for. At senior levels of an organization, the ability to adapt, to make decisions quickly in situations of high uncertainty, and to steer through wrenching change is critical. But at a time when the need for superior talent is increasing, big US companies are finding it difficult to attract and retain good people. Executives and experts point to a severe and worsening shortage of the people needed to run divisions and manage critical functions, let alone lead companies. Everyone knows organizations where key jobs go begging, business objectives languish, and compensation packages skyrocket.
In an effort to understand the magnitude of this war for talent, we researched 77 large US companies in a variety of industries (see text panel). We worked with their human resources departments to understand their talent-building philosophies, practices, and challenges. And to gain a line manager perspective, we surveyed nearly 400 corporate officers and 6,000 executives from the "top 200" ranks in these companies. Finally, because numbers never tell the whole story, we conducted case studies of 20 companies widely
regarded as being rich in talent.1 What we found should be a call to arms for corporate America. Companies are about to be engaged in a war for senior executive talent that will remain a defining characteristic of their competitive landscape for decades to come. Yet most are ill prepared, and even the best are vulnerable.
You can win the war for talent, but first you must elevate talent management to a burning corporate priority. Then, to attract and retain the people you need, you must create and perpetually refine an employee value proposition: senior management's answer to why a smart, energetic, ambitious individual would want to come and work with you rather than with the team next door. That done, you must turn your attention to how you are going to recruit great talent, and finally develop, develop, develop!
Our survey reveals that some companies do all of these things, but many more fall short of the mark.
There is a war for talent, and it will intensify
Many American companies are already suffering a shortage of executive talent. Three-quarters of corporate officers surveyed said their companies had "insufficient talent sometimes" or were "chronically talent-short across the board." Not surprisingly, search firm revenues have grown twice as fast as GDP over the past five years.
Part of the cause may be cyclical, the product of a strong economy at the peak of its cycle. But what should keep CEOs awake at night is a number of trends that threaten a wide-ranging shortage in talent over the next five years.
Until now, the executive population has grown roughly in line with GDP. This means that an economic growth rate of 2 percent for 15 years would increase demand for executives by about a third. But supply is moving in the opposite direction: the number of 35- to 44-year-olds in the United States will decline by 15 percent between 2000 and 2015 (Exhibit 1). Moreover, no significant countervailing trends are apparent. Women are no longer surging into the workforce, white-collar productivity improvements have flattened, immigration levels are stable, and executives are not prolonging their careers.
This would be challenge enough, but the numbers tell only half the story. Large companies also face three qualitative challenges. First, a more complex economy demands more sophisticated talent with global acumen, multi-cultural fluency, technological literacy, entrepreneurial skills, and the ability to manage increasingly delayered, disaggregated organizations.
Second, the emergence of efficient capital markets in the United States has enabled the rise of many small
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and medium-sized companies that are increasingly targeting the same people sought by large companies. Small companies exert a powerful pull across the whole executive spectrum, offering opportunities for impact and wealth that few large firms can match. As Julian Kaufmann, director of organization development and information systems, human resources at AlliedSignal, explained, "We are competing with startups, not General Electric. We are not getting access to a whole raft of talent."
Third, and not surprisingly given the above, job mobility is increasing. Ten years ago, a high performer might have changed employers just once or twice in a full career. According to 50 senior executive search professionals we surveyed, the average executive today will work in five companies; in another 10 years, it might be seven. A war once conducted as a sequence of setpiece recruiting battles is transforming itself into an endless series of skirmishes as companies find their best people, and in particular their future senior executives, under constant attack.
All are vulnerable
Our research suggests that executive talent has been the most undermanaged corporate asset for the past two decades. Companies that manage their physical and financial assets with rigor and sophistication have not made their people a priority in the same way. Only 23 percent of some 6,000 executives surveyed strongly agree that their companies attract highly talented people, and just 10 percent that they retain almost all their high performers. Perhaps more alarmingly, only 16 percent think their companies even know who their high performers are. And only 3 percent say their companies develop people effectively and move low performers out quickly.
Companies skilled at attracting, developing, and retaining talented senior executives do exist, however. Of 20 cases that we studied, seven appear to have thrived largely because of a strong performance ethic. Nine had combined strong corporate aspirations with rapid growth, as well as wealth accumulation and attractive jobs for employees (what we describe later as an attractive employee value proposition). But many of these companies had not managed talent particularly consciously until they began to see problems emerging on that front. Even now, they face important talent-building challenges.
Make talent management a burning priority
Superior talent will be tomorrow's prime source of competitive advantage. Any company seeking to exploit it must instill a talent mindset throughout the organization, starting at the top.
Leaders with a talent mindset share AlliedSignal CEO Larry Bossidy's conviction that "At the end of the day, we bet on people, not strategies." They understand why, when Jack Welch met with The Home Depot to share what is distinctive about GE's approach to managing growth, he took two human resources executives with him. They believe building their bench is a crucial part of their job. "If it's the most important thing," says Dick Vague, CEO of First USA, "your calendar reflects it. I have been personally involved in hiring everyone in the top management group, and many three or four levels below that."
Leaders put in place a gold standard for talent, and act on it. The leadership group, whether CEO, COO, or executive committee, should be directly responsible for applying the standard to the top 200 to 500 executives. At medical devices company Medtronic, "Over the past seven years, CEO Bill George has upgraded the talent pool of our top 300. At present, 25 percent come from the outside. Some people left because they could not meet the new bar." Similarly, when SunTrust's banking units needed more people to expand the business in large markets, "We assessed our top 120 line of business managers [and found] about 15 percent were underleveraged and about a third were over their heads. We've moved on more than half of those over their heads."
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Once united by a talent mindset, the leadership group must foster the right talent-building behavior by holding regular discussions to review the performance of executives at every level. The backbone of a company's talent effort, these reviews must be candid, probing, and action-oriented, and link talent to strategy. They must set high standards, ensure that performance is assessed fairly, and act as a vehicle for fostering personal development. Ultimately, they should improve the quality of decisions about staffing.
Human resources executives at half our top-quintile companies strongly agree that "Discussions in our meetings are frank and open, and everyone contributes actively." For mid-quintile companies, the figure is just 17 percent. At The Home Depot, the ethos is "To say what you think in the room, not after the meeting."
Companies must insist that their line managers are accountable for talent. At Monsanto, half a senior executive's bonus is based on his or her people management skills. At First USA, the ability to recruit talented new people is understood to be a criterion for promotion. Although 78 percent of corporate officers questioned in our survey agree that companies should hold their line managers accountable for the quality of their people, only 7 percent believe that their companies actually do so. It seems that many line managers are not accountable for the quality of their staff. This was perhaps our most shocking finding. Clearly, things must change.
To support the talent-building challenge, the role of human resources should be redefined and its capabilities strengthened. More than process managers, HR executives need to be effective, proactive counselors with personal and business credibility and strong relationships with business units. The need for such a dynamic profile is fast becoming conventional wisdom (78 percent of corporate officers agree HR should be a partner in efforts to build a stronger talent pool), but it is more honored in the breach than the observance (only 27 percent of corporate officers strongly agree that HR plays this role at present).
When all these things are in place, managers can take risks and deploy innovative solutions in the quest for talent. They can hire 650 military officers over two years, as General Electric did, or replace half their 400 manufacturing managers, like AlliedSignal.
Create a winning employee value proposition Companies with superior employee value propositions have a compelling answer to the question, "Why would a talented person want to work here?" A store manager at The Home Depot told us, "This is my $50 million business; I can double it or run it into the ground. Where else could I get that independence and challenge at 33?"
The top-quintile companies in our survey in terms of shareholder value outperform mid-quintile companies in 13 out of 19 employee value proposition dimensions we measured (those listed in Exhibit 2), and perform about the same in the other six. This stronger employee value proposition translates into a stronger pull on talent: 83 percent of top-quintile HR executives say their job offers are rarely turned down compared with 60 percent for mid-quintile executives, and 88 percent of top-quintile executives say they seldom lose top performers to other companies as against 73 percent of mid-quintile executives.
Creating a winning employee value proposition means tailoring a company's "brand" and "products"—the jobs it has to offer—to appeal to the specific people it wants to find and keep. It also means paying what it takes to attract and retain strong performers (the "price"). A company's "brand" is the face it presents to the world. At its heart must be an appealing culture and inspiring values: qualities that apply to every activity and function within the company, and to every aspect of its behavior.
If we carry our analogy with marketing a step further, the executive talent pool can be segmented into four groups. All care deeply about culture, values, and autonomy, but each differs in what it looks for in a company:
"Go with a winner" executives seek growth and advancement in a highly successful company; they are less concerned with its mission and location. This cluster most closely mirrors the overall "top 200" population.
"Big risk, big reward" executives value compensation and career advancement over their company's success or its active role in their personal development.
"Save the world" executives demand an inspiring mission and exciting challenges, and care less about compensation and personal development.
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"Lifestyle" executives are more interested in flexibility with respect to lifestyle choices, geographic location, and compatibility with the boss than in company growth and excitement.
We found that successful organizations tend to have a dominant talent segment, while their weaker peers have a bit of everything. But no company can be all things to all people. Ideally, a company should simply figure out who it is aiming for, and make sure its brand is tailored to the talent segment it seeks to attract.
No brand can be transformed overnight, however. It's an enormous task, and to be undertaken only in the most extreme situations, although the excitement generated by a turnaround can itself be a powerful component of a new employee value proposition. Arthur Martinez's commitment to shaking up Sears, for example, transformed perhaps the United States' most traditional retailer into "a compelling place for employees, customers, and investors."
What a company can and should consider changing straight away are the particular products it offers: its jobs. If a company succeeds in attracting a target executive group with great jobs, the brand should take care of itself as the changing mix of employees reinforces the values the company is seeking to build.
So what is a great job? We see some half-dozen attributes: "elbow room" to allow executives room to maneuver; "head room" to allow them to make decisions without seeking constant approval from above; a clear link between daily activities and business results (even if not a P&L); a position that stretches but does not defeat, while being something an executive can "get their arms around"; something new to work on as often as possible; and great colleagues, above, around, and below. If this seems too much to think about, companies might adopt Dick Vague's rule of thumb: "I aspire to create an enterprise where everyone's job consists of at least 80 percent of things they love doing."
And naturally there is the question of money. As Jude Rich, chairman of HR consulting firm Sibson puts it, "Highly competitive compensation—particularly long-term wealth accumulation—is an essential ticket to the game of attracting and retaining top talent. Companies that can distinguish truly great talent and have opened the vault find the return on their investment is terrific."
Many companies fear that deep differences in pay will create cultural problems, but the issue is too important to ignore. Money alone can't make a great employee value proposition, but it can certainly break one. To get the people they want, 39 percent of top-quintile companies pay whatever it takes, compared with 26 percent of their mid-quintile counterparts. Once they are on board, faster career progression is the most effective way to put individual high performers on a different compensation trajectory without disrupting overall pay structures.
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Making sure top performers' compensation is considerably higher than that of their average colleagues is a relatively straightforward way to keep the exit price high and raise barriers to poaching. When a senior manager at GE was told a division was going to give its highest performers a 10 percent salary increase and its average performers 5 percent, he said, "Ten percent? Not nearly aggressive enough! Go for 15 percent, 20 percent, or 30 percent!"
The ability to define, develop, and deliver a superior employee value proposition will be especially critical for large companies facing the small-company challenge. Small companies offer employees a chance to satisfy their desire for meaning, excitement, flexibility, impact, and reward. They may also offer equity ownership in a business small enough that a few talented executives can drive the stock price.
Large companies need not be too defensive, however. They possess natural advantages of their own: magnitude of impact (be a big fish in a big pool), depth (the resources to take risks, particularly with people), capital (the resources to support big decisions), and variety (a range of experiences over the course of a career). They can also make themselves feel smaller in a number of ways: by creating smaller, more autonomous units, improving mentoring, differentiating pay, and so on.
Sourcing great talent
Instilling a new talent mindset and developing a powerful employee value proposition will operate as a compelling advertisement for your company, but they aren't enough. A robust sourcing strategy is crucial. That means being clear about the kinds of people that are good for your organization, using a range of innovative channels to bring them in, and having a complete organizational commitment to getting the best.
A few companies are good at specifying the qualities likely to translate into success for them. Hewlett-Packard looks for smart engineers who are good team players. The Home Depot wants customer-obsessed, entrepreneurial leaders. Enron seeks independent deal makers with a financial bent. Dick Vague of First USA asks, "Are they really smart? Can they get things done under pressure and in unfamiliar circumstances? Are they nice? We can't tolerate high-performing inconsiderates. Are they straightforward and trustworthy? I can't stand obfuscation. They can't be high maintenance. We need to have fun here."
But most companies don't really know who they want. They must find out, and quickly, or their recruiting programs will be flawed before they even begin. We found that it is relatively straightforward for individual companies to develop detailed profiles of the kind of people they are after by analyzing the background and experience of their current high performers (Exhibit 3). Once you know what you are looking for, there are a number of routes you can take. Some get what they need largely through acquisitions, which is fine if acquisitions are an intrinsic part of corporate strategy. Some "outsource" by snapping up people they believe are better trained elsewhere. Those who can attract the best college graduates and excel at early development "insource" instead.
Some
strategies will work better for some companies than others. Companies that grow slowly, for example, have fewer opportunities to develop people through rotation, so they will tend to get talent in from the outside. But while each company will gravitate naturally toward a dominant sourcing method, no company should rely
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exclusively on one strategy, just as no company would rely on a single vendor for a critical commodity. Continuing to invest in secondary sourcing strategies helps achieve balance and diversity.
Hewlett-Packard captures people early through summer internships and part-time jobs for high school students. One US-based accounting firm hired a third of one year's graduates from a top Indian college. The Home Depot hires its competitors' best employees. Enron recruits retired military officers because "people from the army are used to traveling a lot, and this work is like what they have been doing." Ten years ago, McKinsey's new hires were almost all MBAs; now over 40 percent are lawyers, doctors, economists, scientists, military officers, or former government officials.
Talent-winners also recruit continuously, rather than simply to fill openings. Thirty-one percent of HR directors at top-quintile companies strongly agree that they are always looking for great talent and bring it in whenever they find it, compared to only 9 percent at mid-quintile companies. Arrow Electronics is "constantly looking at our competitors, suppliers, and customers to spot great people." At Baan, "Everyone must be a talent scout." Companies whose approach to hiring is to fill any open slot within three months should expect to lose the talent game.
Even where the dominant strategy is to spot talent early and train it within, companies should consider regularly hiring senior executives from outside. Rather than seeing this as a failure of the internal development pipeline, they should view it as a way to accommodate rapid growth, refresh the gene pool, and calibrate the internal talent standard.
Bill George recruited many new hires to facilitate Medtronic's moves into new products and geographies. Amgen has hired in close to a quarter of its top 500 people to feed 50 percent annual growth. Despite the success of its internal development efforts, General Electric routinely fills up to a quarter of its senior openings from the outside to calibrate its talent and raise the bar. Nor should companies hesitate to go outside their own industry. Sears hired Gulf War general Gus Pagonis to run its logistics; Banc One hired Taco Bell head Ken Stevens to lead retail banking.
Developing talent aggressively
Elevating talent as a priority throughout the company, developing a sound employee value proposition, and ensuring your sourcing strategy is a powerful one will do much of what is needed to make your position in the market for talent compelling. Our research suggests that there are also a number of specific steps to do with development that companies should take to complete their talent program.
Put people in jobs before they're ready Academics and HR professionals have long known what our research confirms: the key to development is "a big job before I expected it." Yet only 10 percent of "top 200" executives strongly agree that their company uses job assignments as a very effective development lever. Forty-two percent have never made crossfunctional moves, 40 percent have never worked in an unfamiliar business unit, 34 percent have never held a position with P&L responsibility, and 66 percent say they have never had a leadership role in starting a new business.
All sorts of reasons explain this sorry state of affairs: there's often precious little clarity about who should be developed, let alone how; senior people worry that moving people around is not worth the disruption; divisions hoard their best staff; and HR executives, who should know better, are often preoccupied with training and other "auditable" initiatives. But like it or not, people learn by being put in situations that require skills they don't have—a truth poorly served when "Who can do this job best right now?" dominates staffing decisions.
All companies could do better. At a structural level, they should consider what they can do to form smaller, more autonomous units, create the maximum number of P&L jobs each business will bear, and use special project teams to provide new challenges and ways of working together. Overall, the characteristics that make a job good for development are similar to those that make it attractive in the first place, with one notable exception: executives always prefer to have full control over everything they are responsible for, but jobs that require them to achieve results by influencing rather than controlling others contribute powerfully to their development.
Put a good feedback system in place Everyone knows how important feedback and coaching are, yet most companies don't do them very well. Seventy-three percent of executives view informal feedback and coaching as essential or very important to development, but only 30 percent rate their company as excellent or very good at providing them. Sixty percent strongly value being mentored, but only 25 percent are content with their mentoring.
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Good feedback and coaching raise everyone's game, not just that of the high flyers. Fortunately, companies can nudge leaders to offer more feedback through "360-degree feedback" programs (where contributions come from those above, below, and around an individual) and other formal mechanisms. Arrow Electronics uses its 360-degree feedback system, monitored by CEO Steve Kaufman himself, to determine whether managers are actually providing the feedback and coaching that they should.
Understand the scope of your retention problem Most companies recognize they could improve recruitment and development; few realize they have a retention problem. They focus only on the top 200 executives, where average attrition is below 4 percent a year. But it is the early and middle ranks of managers three to eight years out of college, their basic training already paid for, that represent a company's investment in its future. Senior executives seldom notice them, and they may not feel connected to the organization; they are also more mobile and demanding. All in all, this is a volatile mix. The situation will come to a head as the number of 25- to 34-year-olds continues to decline over the next decade, and as their perception of future opportunities dims with the preponderance of older executives occupying the top positions in most companies.
Paradoxically, it is the companies that have done the best job of recruitment and development that may be most at risk from poaching. But every company needs to understand why its high performers are leaving. Attrition must be tracked by performance level. The common practice of tracking voluntary as against involuntary attrition is not good enough: it's probably your high performers who are choosing to leave.
Creating and delivering a great employee value proposition is clearly the best way to retain people, yet only 16 percent of those surveyed say they are effective at giving high performers more exciting jobs to retain them. What can you do? Start by giving them a sense of belonging; as John Doe of Arrow Electronics points out, "It's harder to quit if you are having lunch every quarter with your mentor." Send them a clear message that they are valued: two very well-run companies recently discovered that several high performers had no idea that they were highly regarded and were being groomed. And wherever possible, give them a great boss.
Just as account managers nurture and develop their key accounts, someone in every company should be responsible for nurturing and developing each key employee. Top-potential people should never fall off the screen.
Move on the poor performers now It's hard to give all your high performers a great boss if too few of your bosses are high performers themselves. Most companies have a number of weak players in their organization. They aren't exactly failing, but neither are they leading the way.
The cost of carrying such people is enormous. Don't fool yourself that weeding them out will destroy morale; it's probably lower than you think already. Their low productivity drags down the performance of all they work with: teams go underdeveloped, and high performers get discouraged and leave. The weak performer ends up surrounded by a circle of weak performers, the ripple effects flow out across the organization, and the company's employee value proposition is damaged.
Our research suggests that taking action to deal with poor performers is the most difficult, least exploited talent-building lever for any company. Indeed, ineffective people often stay in position for years.
Different companies deal with weak performers in different ways. AlliedSignal moves them out: "When a career stalls, it is better for us and them to move them on." The Home Depot tries to move them into a job where they can do better. Arrow Electronics takes every care to make the process tolerable: "After we have made the decision to remove someone from a job, [we treat] the person with velvet gloves to make the transition as easy as possible for him or her."
The more respect and care that can be brought to this process, the better. But however you do it, do it.
Establishing the right mindset, crafting a powerful employee value proposition, sourcing, developing, and retaining talent—it all makes for an enormous challenge. Companies start from many different positions and vary widely in the strength of their existing bench. Some have powerful, sustainable employee value propositions; some cannot even articulate why a talented person should join them. Some companies have a talent-building process but no follow-through; others have no process at all.
There are also different ways of getting going. A company undergoing a turnaround will have to bring in top talent fast to bring about a transformation in its employee value proposition. Companies in less dire straits
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can work more gradually on refining recruitment, employee value proposition, development, and compensation simultaneously. The key is to start now. The coming war for talent may seem like a crisis, but
like any crisis, it's also an opportunity to seize—or squander.
About the research
To investigate the talent problems faced by large organizations, we studied 77 companies from a variety of industries. The companies chosen were in either the top or the middle quintile within their industries in terms of 10-year total return to shareholders. We grouped the companies into sectors so as to compare high performers with average players.
We also asked the companies to provide disguised performance data on their executive pools, grouping senior managers into 20 percent high performers, 60 percent average performers, and 20 percent low performers. This allowed us to compare the responses to survey questions of groupings of high-, average-, and low-performing executives.
We questioned corporate officers (CEOs and their direct reports; 359 respondents) about the strength of their company's talent pool and how it might be improved. We talked to the top 200 executives in each company directly to understand why they work where they do and how they became the professionals they are (5,679 respondents). We asked senior HR executives (72 respondents) about the way their company manages its top executive group; for some companies that meant 50 people, for others 400. The quotations in the article are taken from these interviews.
In addition, we interviewed a dozen leading academics in the field of organization and mined the research base. As a reality check, we relied on a steering committee comprising HR leaders, executive search, compensation, and assessment experts, and McKinsey partners with experience in organizational consulting.
Return to reference
About the Authors
Libby Chambers is a principal in McKinsey's New York office, Mark Foulon is a former consultant in the Washington,
DC office, Helen Handfield-Jones is a consultant in the Toronto office, Steve Hankin is a principal in the Charlotte,
North Carolina office, and Ed Michaels is a director in the Atlanta office.
In addition to the five authors, a team consisting of Stephanie Durr, Larry Kanarek, Nikitas Koutoupes, Bill Kunze,
Mathias Lingnau, and Drew Scielzo worked extensively on this research. Jude Rich of Sibson & Company, a human
resource and compensation consulting firm, also made a considerable contribution.
Notes
1They were: AlliedSignal, Amgen, Arrow Electronics, Baan, Enron, First USA (Banc One), General Electric, Harley-Davidson, Hewlett-Packard, The Home Depot, Intel, Johnson & Johnson, Medtronic, Merck, Monsanto, Nabisco, NationsBank, Sears, SunTrust, and Wells
Fargo.
Copyright © 1992-2007 McKinsey & Company
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1
register on the web banffmanagement.com
How do you focus and keep talented people?
This issue of retaining talent is among the biggest challenges for many of
today's leaders.
In the 21st century, talented professionals are increasingly mobile, have highly
transferable skills, are internet-literate, well informed, and above all, sought after.
Many managers and leaders are currently struggling to find and keep these valu-
able individuals.
Consulting firm McKinsey & Company indicates that we are in the middle of a
war for talent.1 According to a year-long study conducted by McKinsey & Company,
talent is the strategic asset of the 21st century and the availability of talent
is decreasing.
A tight labour market, changing workforce demographics such as the shrinking
of the most desirable labour pool (25- to 34-year olds), and the impact of down-
sizing on employee loyalty, have also led corporate Canada to search for answers
to recruiting and retaining the strategic asset of the twenty-first century: talent-
ed people.2 According to a 1999 Mercer/Angus Reid poll of 307 Canadian CEOs,
23% reported that attracting and retaining high caliber employees was their
most important priority (second only to profitability, at 30%).3
How do you build strong loyalty among the most productive and talented peo-
ple in the workforce? The Gallup organization has an answer. Gallup research
shows that people join companies, but they leave managers.4 Their findings sug-
gest that keeping your people starts and stops with the manager. An individual
may join Nortel, General Electric, or Disney because of their generous benefits
package and their reputation for valuing employees. However, it is the relation-
ship with their immediate manager that will determine how long people stay and
how productive they are. "In the end, these questions tell us that, from the
employee's perspective, managers trump companies."5
Gallup’s meta-analysis was performed on
data from approximately 200,000 individuals
in 36 organizations and across 21 different
industries. An associated research effort, in
which Gallup studied more than 80,000
managers, focused on discovering what great
managers do to create quality workplaces.
Gallup’s analysis revealed the following six
key elements for retaining talent:
1. "I need to know what is expected of me at work."
First, do your people know exactly what is
expected of them? Are they able to meas-
ure how well they are doing with respect to
the achievement of their goals? If people
know what is expected of them and are
measured according to their contributions, they are more likely to see a link
between their efforts and their performance. If managers’ expectations are con-
sistently unclear, people are more likely to seek opportunities where this is not
the case. It is difficult to hold people accountable for their work unless expec-
tations of them are made clear.
2. "I need the materials and equipment to do my work right."
Are you providing the right support, resources, and tools to enable your people
to use their talents and capabilities? Are your systems and work processes facil-
itating the accomplishment of work or impeding goal attainment? If the tools
and resources aren’t in place, people tend to get discouraged and may perceive
expectations as unrealistic. These factors may then become sources
of demotivation.
Becoming a Leader of Choice
Winning the war for talent
By Dr. Bastiaan Heemsbergen
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 74 of 90
register by phone 1.800.590.9799
2
LEADERSHIP Compass
3. "I need to do what I do best every day."
Do your people find that their talents, knowledge, and capabilities match the
demands of their jobs? All talent is not created equal. Talents can be very spe-
cialized and narrow, and therefore knowing each individual's strengths
and limitations is critical in maintaining optimal health in the workplace. For
example, a chartered accountant has different role demands than a public
speaker. It is possible that some individuals can do both well, but the
competencies that are demanded of people in these roles are very different.
Know the key competencies required in each role and ensure that they match
the individual’s capability.
4. "I need to know that my manager cares."
Do your people know someone who demonstrates compassion for them –
preferably their manager? If they don't, you may find it difficult to retain them.
The relationship between you and your people is critical. Do you truly listen to
the ideas and concerns they express? Do you send encouraging messages that
don’t discount people? Talented, productive people thrive on being respected,
appreciated, and recognized for what they have contributed. A weak or dimin-
ished relationship with you directly affects their staying power.
5. "I need to feel that my team members are committed to quality."
Do you recognize the real contributors and put them on teams with other peo-
ple with similar standards? Everybody in your business unit knows who the
real contributors are, and who the non-contributors are. If the leader tends to
recognize the real contributors, and put them together with other team mem-
bers who strive for quality, results tend to follow. Talented individuals set high
standards and depend upon those around them to support their growth
toward excellence. On the flip side, arbitrarily placing individuals on teams, or
not dealing with people who consistently perform below expectations, can be
demotivating for other team members. Gallup results find that team members
want others to share their commitment to quality, and want to be part of an
organization that challenges and enables them to excel.
6. "I need opportunities to learn and grow."
Do you create an environment that encourages people to improve, innovate,
and create new opportunities? Or are your people afraid of making mistakes
and taking risks? The challenge is to create a work culture that supports the
exploration of new ways of "doing things" without fear of rejection or retribution.
Individuals also need to know that opportunities to improve their competencies
are available and encouraged.
According to Gallup’s research, there is nothing very complicated about retain-
ing great talent:
❖ Be clear about what you expect from people and measure
their contributions
❖ Provide individuals with the materials and tools they
need to perform their jobs
❖ Provide individuals opportunities to do what they do
best, every day
❖ Ensure that people have a manager who cares about them
❖ Surround talented individuals with people who have a
similar drive for quality
❖ Provide opportunities for individuals to learn and grow
Leaders who do these things are much more likely to be successful in keeping
their most talented individuals. Those who are unable to do these things are
likely to continue to lose talent, and their goal to become a "leader of choice"
will continue to elude them.
——————————————————————
Dr. Heemsbergen is faculty at The Banff Centre for Management,corporate psychologist, and a renowned international consultant on perform-ance management. He has trained over 20,000 individuals in leadership andcoaching.
In the 21st century, talented professionals are increasingly
mobile, have highly transferable skills, are internet-liter-
ate, well informed, and above all, sought after. Many
managers and leaders are currently struggling
to find and keep these valuable individuals.
References:
1. Fishman, Charles. "The War For Talent." Fast Company, August 1998.
2. Stephen A. Murphy. What to do Before the Well Runs Dry: Managing Scarce Skills. The Conference Board of Canada.
ISBN 0-827- 1070.
3. William M. Mercer. "Beyond the Bottom Line: What CEOs are Thinking". William M. Mercer Company.
4. Buckingham, Marcus and Coffman, Curt. "First Break All the Rules: What the World's Greatest Managers Do Differently." Simon & Schuster, May 1999
5. Coffman, Curt. Gallup's Discoveries About Great Managers and Great Workplaces reported in "THE WORKPLACE COLUMN"
October 9, 2000, http://www.gallup.com/poll/managing/mr001009.asp
6. Coffman, Curt. Gallup's Discoveries About Great Managers and Great Workplaces reported in "THE WORKPLACE COLUMN"
February 4, 2000, http://www.gallup.com/poll/managing/RightPeople.asp
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© Development Dimensions International, Inc., MMVI. Revised MMIX. All rights reserved.
NINE BESTPRACTICES FOR EFFECTIVETALENT MANAGEMENTINTRODUCTIONOrganizations know that they must have the
best talent in order to succeed in the hyper-
competitive and increasingly complex global
economy. Along with the understanding of
the need to hire, develop, and retain talented
people, organizations are aware that they
must manage talent as a critical resource to
achieve the best possible results.
Few, if any, organizations today have an ade-
quate supply of talent. Gaps exist at the
top of the organization, in the first- to mid-
level leadership ranks, and at the front lines.
Talent is an increasingly scarce resource, so
it must be managed to the fullest effect.
During the current economic downturn we
may experience a short ceasefire in the war
for talent, but we’re all seeing new pressures
put on the talent running our organizations.
Are today’s leaders able to do more with
less? The A-players can, and there should be
a strategic emphasis on keeping those lead-
ers—and developing their successors. Many
organizations are reducing their workforces,
but let’s be careful not to cut so deep that
talent is scarce when the economy rebounds.
The idea of managing talent is not new.
Four or five decades ago, it was viewed as a
peripheral responsibility best relegated to
the personnel department. Now, talent man-
agement is an organizational function that is
taken far more seriously. In The Conference
Board’s 2007 CEO Challenge study1, CEOs’
rankings of the importance of “finding
qualified managerial talent” increased by 10
percentage points or more when compared
to the same research conducted just one
year earlier. Research conducted in 2008
by DDI and the Economist Intelligence Unit
(EIU)2 found that 55 percent of executive-
level respondents said their firms’ perform-
ance was likely or very likely to suffer in the
near future due to insufficient leadership
talent. This point of view was reiterated in
one-on-one interviews with top executives,
conducted as part of the same research study.
This emphasis on talent management is
inevitable given that, on average, companies
now spend over one-third of their revenues
on employee wages and benefits. Your
organization can create a new product
and it is easily copied. Lower your prices
and competitors will follow. Go after a
lucrative market and someone is there
right after you, careful to avoid making
your initial mistakes. But replicating a
high-quality, highly engaged workforce is
nearly impossible. The ability to effectively
hire, retain, deploy, and engage talent—at
all levels—is really the only true competi-
tive advantage an organization possesses.
WHITE PAPER
RICHARD S. WELLINS, PH.D.,
SR. VICE PRESIDENT
AUDREY B. SMITH, PH.D.,
SR. VICE PRESIDENT,
EXECUTIVE SOLUTIONS
SCOTT ERKER, PH.D.,
SR. VICE PRESIDENT,
SELECTION SOLUTIONS
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TALENT MANAGEMENT DEFINEDThere is no shortage of definitions for this
term, used by corporate leadership the
world over. With a nod to other points of
view, DDI defines talent management as a
mission critical process that ensures organi-
zations have the quantity and quality of
people in place to meet their current and
future business priorities. The process cov-
ers all key aspects of an employee’s “life
cycle:” selection, development, succession
and performance management.
Key components of a highly effective talent
management process include:
> A clear understanding of the organization’scurrent and future business strategies.
> Identification of the key gaps between thetalent in place and the talent required todrive business success.
> A sound talent management plan designedto close the talent gaps. It should also beintegrated with strategic and business plans.
> Accurate hiring and promotion decisions.
> Connection of individual and team goals to corporate goals, and providing clearexpectations and feedback to manageperformance.
> Development of talent to enhance per-formance in current positions as well asreadiness for transition to the next level.
> A focus not just on the talent strategyitself, but the elements required for suc-cessful execution.
> Business impact and workforce effective-ness measurement during and afterimplementation.
WHAT’S DRIVING THE CURRENT EMPHASIS ON TALENT MANAGEMENT?Organizations have been talking about the
connection between great employees and
superior organizational performance for
decades. So, why the current emphasis on
managing talent?
There are several drivers fueling this
emphasis:
1. There is a demonstrated relationshipbetween better talent and better busi-ness performance. Increasingly, organi-
zations seek to quantify the return on
their investment in talent. The result is a
body of “proof” that paints a compelling
picture of the impact talent has on busi-
ness performance. To highlight just a few:
> A 2007 study from the Hackett Group3
found companies that excel at managing
talent post earnings that are 15 percent
higher than peers. For an average
Fortune 500 company, such an improve-
ment in performance means hundreds
of millions of dollars.
> A study from IBM found public compa-
nies that are more effective at talent
management had higher percentages
of financial outperformers than groups
of similar sized companies with less
effective talent management.4
> Similarly, a 2006 research study from
McBassi & Co.5 revealed that high scor-
ers in five categories of human capital
management (leadership practices,
employee engagement, knowledge
accountability, workforce organization,
and learning capacity) posted higher
stock market returns and better safety
records—two common business goals
that are top of mind for today’s senior
leadership.
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2. Talent is a rapidly increasing sourceof value creation. The financial value ofour companies often depends upon thequality of talent. In fact, the BrookingsInstitution found that in 1982, 62 percentof an average company’s value was attributed to its physical assets (includingequipment and facilities) and only 38 percent to intangible assets (patents, intellectual property, brand, and, most ofall, people). By 2003, these percentagesnearly flip-flopped, with 80 percent ofvalue attributable to intangible assets and20 percent to tangible assets.6
3. The context in which we do businessis more complex and dynamic.Hyper-competition makes it more diffi-cult than ever to sustain a competitiveadvantage long term. New products—and new business models—have shorterlife cycles, demanding constant innova-tion. Technology enables greater accessto information and forces us to move “atthe speed of business.” Global expansionadds to these challenges—a single com-pany may, for example, have its headquar-ters in Japan, its R&D function in China,and its worldwide sales operations basedin California.
And as we mentioned already, the recenteconomic downturn following years ofrapid economic growth adds a wholenew dimension to how we manage tal-ent. Record layoffs, lower engagement,and less opportunity for advancementall present additional challenges to man-aging talent.
4. Boards and financial markets areexpecting more. Strategy + Businessmagazine once described CEOs as “theworld’s most prominent temp workers.”7
In 2007, CEO turnover was 13.8 percent,and the median tenure for a CEO wholeft office was six years.8 Boards andinvestors are putting senior leadersunder a microscope, expecting them tocreate value. This pressure, most visibleat the CEO level but generally felt up anddown the org chart, drives a growingemphasis on the quality of talent—notjust at the C-level, but at all levels.
5. Employee expectations are alsochanging. This forces organizations
to place a greater emphasis on talent
management strategies and practices.
Employees today are:
> Increasingly interested in having
challenging and meaningful work.
> More loyal to their profession than to
the organization.
> Less accommodating of traditional
structures and authority.
> More concerned about work-life
balance.
> Prepared to take ownership of their
careers and development.
Responding to these myriad challenges
makes it difficult to capture both the
“hearts” and “minds” of today’s work-
force. Yet, it’s critical to do so, as
research from IBM and the Human
Capital Institute highlights.9 Their July
2008 study showed that 56 percent of
financial performers understand and
address employee engagement. This is
just one piece of a large body of evi-
dence that illustrates how the cultures
built within our organizations are crucial
to attracting and retaining key talent.
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6. Workforce demographics are evolv-ing. Organizations wage a new “warfor talent” these days. Today, 60 per-
cent of workers over the age of 60 are
electing to postpone their retirement
due to the financial crisis, according to
a 2009 survey by CareerBuilder.10 Many
hold top positions, squelching the oppor-
tunity for lower-level talent to advance
and leaving younger workers feeling
stuck (and potentially looking for oppor-
tunities with other organizations). At all
levels, each deferred exit from the work-
force is one less new hire in an already
depressed job market.
TALENT MANAGEMENT: DDI’S VIEWFor four decades, DDI has helped thousands
of organizations around the world achieve
superior business results through hiring,
developing, and retaining exceptional talent.
Through both this experience and extensive
research, we identified a number of best
practices we believe should serve as the
foundation for a talent management system.
Best Practice #1: Start with the end inmind—talent strategy must be tightlyaligned with business strategy.
Effective talent management requires that
your business goals and strategies drive the
quality and quantity of the talent you need.
Procter & Gamble, for example, views “busi-
ness decisions and talent decisions as one.”
And research put forth by the Aberdeen
Group showed that best-in-class organiza-
tions are 34 percent more likely to connect
succession management strategies with
organizational strategies.11
Below are statements made by organizations
whose specific business goals and strategies
drive their talent needs:
> “We acquired one of our largest competi-
tors and have redundant talent. How will
we ensure we retain the best? Who will
oversee the integration? What is the right
management team for our new company?
Who will help us focus on quality and cost
containment, while pursuing new markets?
And which employees will best fit the
new culture?”
> “We are a global automobile manufacturer
that has steadily lost market share. What
sort of talent are we going to need to
shake up the status quo, rejuvenate our
brand, and give us the action-orientation
required to turn things around?”
> “We are introducing a ‘blockbuster’ drug
that requires us to double our sales force
in the next eight months. In addition to
sheer numbers, we also need to add the
right kind of talent—sales reps who take a
consultative approach with physicians.”
The real scenarios described above repre-
sent clear-cut examples of why matching
talent to business needs is so powerful.
These organizations all hold a common
belief that business success hinges on having
the right talent in place—at the right time.
Each of the organizations described above
is proactively addressing its talent needs.
But far too often, the connection between
talent and business strategy is considered
long after strategic plans are inked.
Best Practice #2: Talent managementprofessionals need to move from a seatat the table to setting the table.
When we gather groups of HR professionals
for events, we often ask them who owns tal-
ent management. They point to senior man-
agement. Many have a seat at the table,
where they’re involved in discussions about
business and leadership strategies that were
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previously held behind closed boardroom
doors. But securing the right to listen in is
not enough. Talent managers need to own
parts of the process and serve as partners,
guides, and trusted advisors when it comes
time to talk talent.
Research shows this is no easy feat. In fact,
it looks as though neither HR nor senior
leader is at the helm of the talent manage-
ment ship. DDI regularly takes the pulse
of leadership practices around the world.
In the most recent report, the Global
Leadership Forecast 2008/200912, leaders
were asked to rate the overall quality of
HR. Only a quarter offered a very good
or excellent rating, and just 30 percent of
CEOs viewed HR as a strategic partner.
On the flipside, those critical CEOs face
challenges of their own. Top corporate lead-
ers, such as former General Electric CEO
Jack Welch, report spending about 50 percent
of their time on their people.13 They got
involved in recruiting top talent, grooming
high-potentials, and reviewing talent pools.
Speaking on the topic of talent management,
Campbell’s CEO Doug Conant tells us, “I
would say CEOs, on average, understand and
appreciate talent more than the everyday
person because they know they can’t do
their jobs without it.” Yet, we find evidence
in our Global Leadership Forecast14 research
that not all CEOs share this mindset. We
asked both CEOs and HR professionals how
often CEOs are actively engaged in four dis-
tinct talent management activities. Though
half of CEOs took credit for personally
developing or mentoring other executives,
ratings from both CEOs and HR were star-
tlingly low in all other categories, as illus-
trated in Figure 1.
FIGURE 1: CEO Involvement in Talent Management
If talent management is a core part of any
organization—if it can be hard-wired into
the fabric and operations of an organiza-
tion’s most essential functions—HR and
senior leadership must work together.
The most successful initiatives are driven
by HR with active and enthusiastic support
from the CEO and other senior leaders—
who provide the resources, the budget,
the communication and support necessary
for success.
But HR needs to step up and play a critical
role—more so than in the past. One wouldn’t
question who owns the marketing process,
or the financial oversight of an organiza-
tion—that’s clearly the domain of the top
marketing or financial officer and their
teams. Likewise, HR needs to own and put
in place professional talent management
processes. And they need to get closer to
the business. One way to do this: Work
with line managers to develop business
plans that integrate talent plans, including
advice on the ability to meet the business
goal with the talent on board. When gaps
exist, talent management professionals need
to offer solutions to close them. In short,
talent management professionals have to be
trusted business advisors that execute the
organization’s talent management process.
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Best Practice #3: You must know whatyou’re looking for—the role of SuccessProfilesSM.
Numerous studies show that companies
with better financial performance are more
likely to use competencies as the basis for
succession management, external hiring, and
inside promotions. Research highlights
include:
> The Aberdeen Group found 53 percent of
best-in-class companies have clearly
defined competency models, compared to
just 31 percent of other organizations
(which post less impressive performance).15
> Aberdeen research also shows that best-in-
class organizations are 45 percent more
likely to have models for key positions16
and 64 percent more likely to have models
for all levels of their organizations than
other organizations. 17
> Research from the Hewitt Group illustrates
that top global companies consistently
apply their competency models across the
organization, and their competencies are
significantly more aligned with overall
business strategies. Eighty-four percent of
top global companies demonstrated align-
ment, compared to just 53 percent of
other organizations.18
The power of competencies broadens when
organizations use what we call “Success
ProfilesSM.” There are two reasons this
approach is more effective than mere com-
petency models. First and foremost, Success
ProfilesSM are designed to manage talent in
relation to business objectives—they should
reflect key plans and priorities as well as
change with new strategies. Additionally,
they go beyond just competencies to
include four complementary components:
> Competencies: A cluster of related
behaviors that is associated with success
or failure in a job.
> Personal Attributes: Personal disposi-
tions and motivations that relate to satis-
faction, success, or failure in a job.
> Knowledge: Technical and/or profession-
al information associated with successful
performance of job activities.
> Experience: Educational and work
achievements associated with successful
performance of job activities.
The end result: detailed definitions of what
is required for exceptional performance in
a given role or job. Success Profiles can be
used across the entire spectrum of talent
management activities—from hiring and
performance management to development.
Best Practice #4: The talent pipeline isonly as strong as its weakest link.
Many organizations equate the concept of
talent management with senior leadership
succession management. While succession
planning is obviously important, our belief is
that talent management must encompass a
far broader portion of the employee popula-
tion. Value creation does not come from
senior leadership alone. The ability of an
organization to compete depends upon the
performance of all its key talent, and its
ability to develop and promote that talent.
Many people know this as a Leadership
PipelineSM. Figure 2 illustrates DDI’s
approach to managing talent using a
Leadership PipelineSM strategy.
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FIGURE 2: DDI’s Leadership Pipeline Model
The Aberdeen Group19 found evidence tosupport the importance of a LeadershipPipeline approach in a 2008 report on suc-cession management. They found the best-in-class organizations they studied are 40percent more likely than all other organiza-tions to focus on developing a LeadershipPipeline across all levels of the organization.
A more encompassing approach to manag-ing talent is also essential to proactivelymanage career transitions. Each level in ourmodel has different, but overlapping,Success Profiles, as well as its own set oftransitional challenges. Effective talent man-agement requires not only developing peo-ple for their current roles, but also gettingthem ready for their next transition. Forexample, individual contributors being con-sidered for frontline leadership positionsmust make a critical transition from definingsuccess based on their own performance tothe performance of the team they manage.Similarly, the operational leader beinggroomed for a strategic leadership positionmust shift from a business unit or functionalperspective to that of an enterprise guardian.
A planned approach to transitions is espe-cially important as organizations place moreemphasis on “growing their own leaders”rather than making often risky outside hires.The bad news is that few organizations haveproactive succession processes in place at
lower leadership levels. Our Global
Leadership Forecast study revealed that only28 percent of the companies we surveyedhave a system in place for key individualcontributors and just 38 percent have onefor frontline leaders.20
Best Practice #5: Talent Management is not a democracy.
Bank of America has a philosophy: Invest in
the Best. Many companies do the opposite,
and make a mistake by trying to spread lim-
ited resources for development equally
across employees. We’ve found that organi-
zations realize the best returns when prom-
ising individuals receive a differential focus
when it comes to development dollars.
So who should get these benefits? Two
major categories: high-potential leaders and
individuals who create value for their organi-
zations. For example, Sunoco places special
emphasis on mid-level plant managers
because these leaders are, for the first time,
managing multiple functions. Extra develop-
ment increases their success in these pivotal
roles. 21 Countless other organizations mine
their mid-level ranks for leaders with the
potential to advance into strategic or senior
roles. And some companies focus on value
creators such as engineers or sales associ-
ates whose results are most beneficial for
their employers. These groups are most likely
to return the most on any investment in
their development.
Best Practice #6: Potential, performanceand readiness are not the same thing.
Many organizations understand the idea of
a high-potential pool or a group of people
who receive more developmental attention.
But sometimes, they fail to consider the dif-
ferences between potential, performance,
and readiness.
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An excellent analogy to consider when
examining the differences between potential
and readiness is the early career of an athlete.
The stars of today’s fields, courts, pools,
rinks, and every other venue you can think
of are ready. They’re ready to compete, and
equipped to win. But they achieved their
success through years of practice, with
attention from coaches or trainers and
countless hours of preparation and practice.
One can assume they’ve had excellent per-
formance at each level of competition—
however good performance on a high
school team may fall woefully short at the
college level and good performance at one
level of competition is no promise that the
athlete can keep up at the next level. Early
on in that athlete’s career, it’s likely that
someone somewhere likely recognized his
or her potential. The young athlete may still
be learning the correct way to hold a bat or
throw a ball, but coaches can see innate tal-
ent that signals a star athlete—with years of
practice and coaching, of course.
Taking a leader from potential to readiness is
an equally long process. It takes, on average,
10 years for a high-potential leader to
advance into a senior position and along the
way, that individual needs mentoring, stretch
assignments, personalized development
plans, and development activities to build
key skills. In short, it’s a lot of work.
And it’s work, we’ve found, that organiza-
tions are not doing. The Global Leadership
Forecast reports that only about half of the
world’s organizations identify high poten-
tials. Even fewer (39 percent) have pro-
grams to accelerate development.22 If
organizations—like athletics—don’t scout
for talent and then prepare individuals for
top performance, how can they expect to
have a winning team in the future?
Best Practice #7: Talent management isall about putting the right people in theright jobs.
The late Douglas Bray, Ph.D., a reveredthought leader in the field of industrial andorganizational psychology, devoted much ofhis career to one of the most famous andrespected studies ever done on talent man-agement: The AT&T Management ProgressStudy. Bray followed AT&T managerial talentthroughout their 30-plus-year careers, mark-ing changes in their skills and motivationsover time. More than a decade ago, hemade a statement that stuck with one ofthe authors of this white paper: “If youhave only one dollar to spend on eitherimproving the way you develop people or improving your selection and hiringprocess, pick the latter.”
Why should an organization place the higher priority on selection rather thandevelopment?
> Not everything can be developed. Manyelements of Success Profiles are impossi-ble, or at least very difficult, to develop.Training people to improve their judg-ment, learning agility, adaptability—allcore requirements for most of the talenthired today—is difficult, if not impossible.Lack of motivation for a specific role or apoor fit between employees’ values andthose of the organization leads to poorperformance, and no classroom experi-ence or learning activity will change thisfundamental mismatch. But you can get aread on these areas during a well-designedhiring/promotion process.
> Hiring for the right skills is more efficientthan developing those skills. What aboutthe areas that are developable, like inter-personal skills, decision-making, or techni-cal skills? Assessing those areas at the timeof hire is likely to cost less than developingthem later.
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Best Practice #8: Talent management is more about the “hows” than the“whats.”
Organizations have many “whats” relative
to talent management, including executive
resource boards, software platforms, nine-
box grid comparing potential to perform-
ance, development plans, and training,
training and more training. These “whats”
promise nothing on their own. Guarantees
come from “hows” instead. Our five realiza-
tion factors for sound execution are:
> Communication—Links the talent man-agement initiative to the business drivers,puts forward a vision the organization canrally around, and sets expectations forwhat will happen in the organization.
> Accountability—Role clarity so that eachindividual in the talent management ini-tiative knows what is expected of them.
> Skill—Developing the right skills and providing coaches and mentors for support.
> Alignment—Must align talent manage-ment initiatives to the business driversbut also need the right kinds of systemsto identify high potentials, to diagnose for development, to link to performancemanagement, and to do development thatreally changes behavior.
> Measurement—You can’t manage whatyou don’t measure. It creates the tension,and objectives become clearer to help execute a talent strategy. The most effectivemeasurements go beyond mere statistics
to quantify what’s working in talent man-agement, why those initiatives are effec-tive, and what impact they have on theorganization.
As part of our Global Leadership Forecast
research23 we compared the effectiveness
of organizations’ leadership development
efforts and how well they used the five
factors of realization. Organizations with
the most effective leadership development
programs in place also used the realization
factors most effectively to execute develop-
ment strategies—outperforming organiza-
tions with the least effective development
programs by 28-62 percentage points!
Best Practice #9: Software does not
equal talent management.
Claiming a piece of software can provide a
full talent management system is a bit like a
food processor will produce a five-star meal.
These tools are valuable in support of a
good plan or recipe. The right tools clear
the path for smoother execution and may
improve the end product. But tools mean
nothing without the right expertise and the
right ingredients behind them.
A recipe for five-star talent management
includes a potent blend of content, expertise,
and technology. It takes best-in-class content
to drive the assessment and development of
people, and a system constructed by knowl-
edgeable experts who have seen a range of
implementations—they should know what
works, and what doesn’t. Software should
support the process, but it can’t stand alone.
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ABOUT DDI’S TALENT MANAGEMENT APPROACHDDI has combined the best practices
described above into a comprehensive
talent management approach, represented
visually in Figure 3.
This approach, which we have applied suc-
cessfully in multiple organizations, encom-
passes all of the major steps, processes, and
activities required to systematically manage
an organization’s talent.
The first “business landscape” block is your
starting point (see Figure 4).
FIGURE 4:Business Landscape
What are the critical current and future business contexts and challenges yourorganization is facing? This includes strategicpriorities, which come from long-rangeoperational plans. Other elements are cul-tural, guiding how you expect your associatesto act and behave. When combined, thesepriorities inform an organization’s businessdrivers, which are the challenges leadersand key talent must face to successfullyexecute on strategy and culture. A fewexamples of business drivers that our
clients are using include: Build a HighPerformance Culture, Drive ProductInnovation, and Enter New Markets.
Because our philosophy centers aroundstarting with the end in mind, we look atthe “outcomes” box (see Figure 5) next.
FIGURE 5: Outcomes
© Development Dimensions International, Inc., MMVI. Revised MMIX. All rights reserved.
FIGURE 3: DDI’s Talent Management Model
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 85 of 90
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Though last in line in this model, it’s impor-
tant to examine what success looks like
early. What are the targets for success, and
how will they be measured? Workforce
effectiveness measures deal with lead indica-
tors such as engagement scores, cost of hire,
time to productivity, number of open posi-
tions filled internally, and improvement of
leadership skills. Business impact measures
focus on the efficacy of talent management
systems, including improvements in produc-
tivity, number of new innovations or
patents, and growth in emerging markets to
name a few examples.
So how are we getting to our outcomes?
The initial focus is on “talent implications”
(see Figure 6).
FIGURE 6: Talent Implications
Here you would ask, “does our organization
have a sufficient supply of talent in key posi-
tions to execute our strategies today and
tomorrow?” Examining capacity gaps entails
looking at the quantity and quality of talent
in house. Many companies compile a “talent
balance sheet” to track strengths and liabili-
ties of leaders and other key value creators.
Next, look ahead to capacity projections.
Ask where the business is going, and if you’ll
have the capabilities necessary to accom-
plish longer-term goals. People trends are
also part of the talent implication equation.
Internal and external forces such as retire-
ments, cultural diversity, and regional
recruiting trends all affect future success.
Organizations want to ensure their supply
of leaders meets demand, so identifying and
addressing future gaps has to be part of the
plan today. Finally, analysis of the organiza-
tional situation discerns the state of talent
management within a company. It defines
who owns talent management, how it is
supported by senior leadership, what sys-
tems will support individual initiatives, and
the role of HR in executing the strategy.
After talent implications, the focus turns to
the “growth engine,” pictured in Figure 7.
FIGURE 7: Growth Engine
This encompasses the systematic and
integrated initiatives that will close the
talent gap:
> Selection to ensure a sufficient supply of
talent at all levels;
> Development to build individuals’ readi-
ness to achieve organizational, role, and
personal objectives;
> Performance management to create the
alignment and focus needed for strategy
execution;
> And succession management to develop
and elevate talent over time.
© Development Dimensions International, Inc., MMVI. Revised MMIX. All rights reserved.
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These initiatives are most effective when
they are built on common competency
models or, optimally, Success Profiles. The
advantage of Success Profiles is that they are
informed by the business drivers described
in the business landscape box, so they natu-
rally create the alignment we feel is so
important to success.
THE VALUE OF PLANNINGTalent management has never been more
of an immediate concern than it is right
now. But in the rush to fill a perceived tal-
ent management void, organizations must
be careful not to rush into implementing
initiatives or programs that are more about
taking action than about implementing a
well-crafted solution.
Careful planning, culminating in a sound tal-
ent strategy that is tightly connected to the
organization’s overall business strategies and
business needs, is required for talent man-
agement to become ingrained in an organi-
zation’s culture and practices. Only when
this happens is it possible for talent manage-
ment to be both effective and sustainable.
© Development Dimensions International, Inc., MMVI. Revised MMIX. All rights reserved.
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 87 of 90
CONTACT INFORMATION
WORLD HEADQUARTERS412.257.0600
E-MAIL [email protected]
WWW.DDIWORLD.COM/LOCATIONS
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REFERENCES1 Rudis, E. (2007). CEO challenge: Perspectives and
analysis 2007 edition. (R-1418-08-RR). New York: The Conference Board.
2 Growing global executive talent: High priority, limitedprogress. (2008). Development DimensionsInternational (DDI) in cooperation with The EconomistIntelligence Unit. Pittsburgh, PA: DevelopmentDimensions International.
3 Teng, A. (May 2007). Making the business case forHR: Talent management aids business earnings.HRO Today magazine. Retrieved fromhttp://www.hrotoday.com/Magazine.asp?artID=1693on April 17, 2009.
4 Bassi, L. & McMurrer, D. (2006 April). Human capitaland organizational performance: Next generationmetrics as a catalyst for change. McBassi &Company white paper available online atwww.mcbassi.com.
5 Integrated talent management part 1: Understandingthe opportunities for success. (2008 July). IBMInstitute for Business Value. Available online atwww.ibm.com.
6 Kaplan, R. & Norton, P. (2000). The strategy-focusedorganization. Boston: Harvard Business SchoolPress. See also: Blair, M. (1995). Ownership andcontrol: Rethinking corporate governance for thetwenty-first century (Chapter 6). Washington, D.C.:Brookings Institution.
7 Lucier, C., Schuyt, R., & Tse, E. (2005, Summer). CEOsuccession 2004: The world’s most prominent tempworkers. Strategy + Business, (39), 28-43.
8 Karlsson, O., Neilson, G., & Webster, J. (2008,Summer). CEO succession 2007: The performanceparadox. Strategy + Business, (51).
9 Integrated talent management part 1: Understandingthe opportunities for success. (2008 July).
10 Six-in-ten workers over the age of sixty postponingretirement due to economic downturn, finds career-builder survey. (2009 March.) Retrieved April 17,2009 from http://www.careerbuilder.com/ shareaboutus/ pressreleasesdetail.aspx?id=pr485&sd=3%2f17%2f2009&ed=12%2f31%2f2009&cbsid=13ea99228bae472c9463a8324d75d491-293294162-wc-6.
11 Saba, J. & Martin, K. (2008 October). Successionmanagement: Addressing the leadership developmentchallenge. Aberdeen Group research report availableonline at www.aberdeen.com.
12 Howard, A. & Wellins, R. (2008). Global LeadershipForecast 2008/2009. Pittsburgh, PA: DevelopmentDimensions International.
13 Handfield-Jones, H., Michaels, E., & Axelrod, B.(2001, November/December). Talent management: A critical part of every leader’s job. Ivey BusinessJournal, 66 (2), 53-58.
14 Howard, A. & Wellins, R. (2008).15 The looming leadership void: Identifying, developing,
and retaining your top talent. (2007 November).Aberdeen Group Research report available online at www.aberdeen.com.
16 Saba, J. & Martin, K. (2008 October).17 The looming leadership void: Identifying, developing,
and retaining your top talent. (2007 November).18 Gandossy, R., Salob, M., Greenslade, S., Younger, J.,
& Guarnieri, R. (2007). Top companies for leaders2007. Hewitt & Associates in partnership with Fortuneand the RBL group. Lincolnshire, IL: Hewitt &Associates.
19 Saba, J. & Martin, K. (2008 October).20 Howard, A. & Wellins, R. (2008).21 Conger, J. A., & Fulmer, R. M. (2003 December).
Developing your leadership pipeline. HarvardBusiness Review, 81(12), 76-84.
22 Howard, A. & Wellins, R. (2008).23 Howard, A. & Wellins, R. (2008).
MKTEAWP01-0409MB © Development Dimensions International, Inc., MMVI. Revised MMIX. All rights reserved.
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Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 88 of 90
IntroductionSo – what is all the fuss about Generation “Y” (those born
between 1980 and 1995)? Are they different? Yes. Are they dif-ficult? Different is only difficult when we don’t understand or can’t understand what the difference means. As a leader, manager, supervisor, what can you do to increase your effectiveness when motivating and managing Generation “Y”?
Influence and inspire. As a Gen Y myself, from discussion with my peers, we believe these are the two values Gen Y em-ployees admires most about their leaders. Their leaders must have the ability to empower and excite them towards not only the organisation’s goals but towards personal excellence as well.
Many bosses find themselves in leadership positions without ever having consciously made the choice to become a leader, let alone a great leader.
For these bosses to evolve into an exceptional leader for the youth, they first have to step down to the level of the youths. They have to show them that they were exactly where they are when they started and that it is indeed possible to climb up the corporate ladder to reach the position they are in now. Now
how exactly does one do so? Here are some practical guidelines:1. Talk to them
Everyone wants to feel important, and what better way to show the importance of your employees then to get to know them on a personal level. Share with them your personal journey about how you’ve reach to the top of the ‘food chain’. Provide them with that sense of belonging that motivated you to stay on with the organisation and it is likely that that same reason would be the reason that would make them want to stay on as well. 2. Hang out with them
Now, I don’t mean to be weekend hang out buddies, no. There still need to be a boundary between boss and employee. However, have a get together every now and then to show your employees that you care and that you are genuinely concerned about their well-being and their happiness in the organisation. Yes, there are retreats and all that usual shenanigans, but you need to show that you are involved. You are interested and involved in the team bonding efforts that go on in the organisation. 3. Be a confidant
Everyone loves a listening ear, especially the youths at our
Generation YAnd practical guidelines to deal with their expectations
By Adam Bawany
6 leadership excellence essentials presented by HR.com | 08.2014
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 89 of 90
day and age. They have the constant perception that the boss is only someone who gives orders and instructions and not to be messed around with. Whilst being firm, offer to be a friend to the employees. Don’t just listen, but hear them out, their prob-lems and what challenges they are facing. Help them understand the reason for some operation procedure and the direction the organisation is heading in the next few years. That way, everyone would be on the same page.
Today’s Gen Y is an interesting group of people and a vital one for that matter. Succession planning is crucial and there is always a need to stay relevant, on that note youths are the future of the next generation, thus there is a need to invest significantly in them.Leading and Engaging Gen Y at Work
For the first time in modern history, workplace demographics now span four generations, meaning that 20-year-old new hires can find themselves working side-by-side with colleagues who are older than they are by 50 years (or even more).
The Gen Y (including in large number of today’s Youths) are also individuals who holds on to grudges, any bad experi-ence with you and they will remember it for a long time, so be careful what you do to them. At the same time, the youth these days make it a point to go above and beyond their call of duty and often produces exceptional work. All they ask in return is acknowledgement. A simple pat on the back and words of encouragement does the trick, trust me.
Leaders for the youths are scrutinised pretty intensely at this day and age. They play a vital part in the motivation process of the youth’s professional journey. Leaders with the ability to present themselves well have already won the hearts of the youth. Youths feel that, “If I put in effort to look good and professional, you should too.” Now, I’m not talking about superficiality, I’m talking about looking professionally good.
All in all, the ability to connect and gel with the youth is not an easy task. It takes a lot of effort and may be a little time consuming but the results would be tremendous. Good leader-ship is hard to come by, good leadership for the youth, is extra work. However, it would be all worth it when you hand over that office of yours to your predecessor who was once a youth under your wing. What Gen Y looks for in their Leaders?
Things are not how they used to be. Employee expectations have definitely changed with regard to work. Leaders can no longer ignore these new expectations nor refuse to adapt their leadership style and methods to deal with these new expectations.
In a research report published in Singapore on “Gen Y at Work, Their Views and How they are Viewed”, Gen Y-ers believe that it is most important for their leaders to be caring, inspiring and competent. On the other hand, managers from the Other Generations believe in demonstrating competence, honesty and a forward-looking orientation to the Gen Y-ers they lead and manage.
The overall pattern of results clearly suggests that there is a gulf between the Gen Y workforce’s expectations, and their managers’ beliefs about how to lead them. The results suggest that Gen Y prefers relationship-oriented leaders, while their managers believe in demonstrating a relatively more task-oriented
approach to leading them.In several cases that Centre for Executive Education (CEE)
came across in consulting engagements, well intentioned promises of leadership development, coaching or mentoring were made to the leader when they were appointed, only to fall by the wayside because more pressing business matters crowded out the hours in the leader’s day.
Like a captain of a sporting team or a general of an army, leaders need to innovate, inspire, excite or provide a clear vision to others. They hold and believe in a vision and just as importantly, have the self-belief and conviction to communicate it to others. Furthermore leaders do not have definitive characteristics. Some inspire and organise, whereas others are strategic or tactical, spot opportunities or protect against disaster.
Leadership is a journey of discovery. It is the expression of a person at his or her best whose aim is to transform something for the better and to develop this potential in others. It is not a solitary pursuit but one that harnesses the energy of those around you.
A manager can implement processes, monitor performance, set business goals and objectives and generally take care of the day-to-day needs of their staff. However, achieving authentic leadership takes more than textbook management skills.
CEE believes that with the relevant executive development support, those with leadership potential can be developed into outstanding leaders.
No one can argue that a great leader can boost an organiza-tion’s growth and performance in much the same way a poor leader can run one into the ground. But what makes a leader effective or ineffective is a more nebulous concept to pin down.
Overall, CEE research suggests that Generation Y is an ambi-tious, impatient and yet tremendously promising generation, one that employers must listen to in order to bring fresh ideas and perspectives to traditional operations. Though successfully connecting with Generation Y may be challenging at times, the consequences can take employers from good to great, and prepare for an uncertain and rapidly-changing future.
Leaders today are facing a critical challenge: how to adapt their leadership practices and style to get the best out of Generation Y employees. They can’t do so alone. Organizations have a respon-sibility to help managers understand how workers’ expectations have changed and how they can adapt their leadership style to these new conditions. More importantly, organizations needs to provide leaders with the tools and processes which allow leaders to reward and recognize, train and develop, empower generation Y employees more effectively. LE
Adam Bawany is the Gen Y Business Development Manager of Center for Executive Education (CEE Global) and is a recent graduate of Ngee Ann Polytechnic’s School of Business and Accountancy in Singapore. CEE Global offers executive coaching and leadership development programs that help professionals develop the skills and knowledge to embrace change and catalyze success in their industries.Email [email protected] www.cee-global.com
Generation Y
7leadership excellence essentials presented by HR.com | 08.2014
Resource Reading Materials for Masterclass Winning the War for Talent 2.0 Page 90 of 90
By Prof. Sattar Bawany
Building High Performance Organisations
Building High Performance Organisations
“Research has found six distinct leadership styles, each spring-ing from different components of emotional intelligence. The styles, taken individually, appear to have a direct and unique impact on the working atmosphere of a company, division, or team, and in turn, on its financial performance.” - Daniel Goleman (Leadership That Gets Results, Harvard Business Review, March 2000)
In essence, the heart of the leadership challenge that confronts today’s leaders is learning how to lead in situations of ever greater volatility and uncertainty in a globalised business environ-ment, allied with the needs to deal with scale, complexity and new organisational forms that often break with the traditional organisational models and structures within which many have learned their ‘leadership trade’. So the basic assumption that past experience is the key for future leadership success is more open to scrutiny than ever.
Leadership is all about the ability to have impact and influence on your followers so as to engage them towards ACHIEVING RESULTS of your organisation through both Ontological Hu-mility and Servant Leadership approaches blended with elements of Social Intelligence competencies and Socialised Power.
Leadership is an art and a science. It is an art because it continually evolves, changes form, and requires creativity. It is a science because there are certain essential principles and techniques required.
A good leader knows when it is time to change shape because they are highly attentive to those around them. Coming from a position of strength, a great leader takes risks by freeing up the creative genius in their followers to build their capability and multiply the talents of the organization. This leads to com-munity and greatness. By powerfully communicating a vision that animates, motivates, and inspires followers, a great leader is able to transform his or her organization. The New Realities: Results-Based Leadership
We are operating in a hypercompetitive business environment. The world moves faster today when compared to10 years ago. Companies feel the pressure to decrease time to market and improve the quality of products while delivering on ever-changing customer expectations to maintain competitive posture – that is, be adaptive and nimble. Driving results is difficult even for companies who have the benefit of dedicated and knowledgeable employees and business leaders to leverage.
In the early years leadership studies, the so-called “trait theory” took the view that there is a set of traits that separates the leader from the pack. Traits purported to be characteristic of leaders included intelligence, a drive to dominate others, being extro-verted and having charisma. Today, people often point to the importance of emotional intelligence in achieving leadership effectiveness.
There is growing evidence that the range of abilities that constitute what is now commonly known as emotional intel-
ligence plays a key role in determining success in life and in the workplace. Recent research has uncovered links between specific elements of emotional intelligence and specific behaviors associ-ated with leadership effectiveness and ineffectiveness.
Flexible leadership, however, involves being able to adapt your leadership style according to the situation and the state of the team - e.g.: taking charge when a team is forming but playing the role of coach when a team is managing itself well. This is critical in developing and sustaining employee engagement. There are six distinct leadership styles, each one springing from different components of emotional intelligence.
Organizations need leaders to visualize the future, motivate and inspire employees, and adapt to changing needs. On-going research by CEE indicates that, with the right leadership develop-ment support including executive coaching, those with leadership potential can be developed into outstanding leaders. Emotional Intelligence competencies are perhaps the most challenging for leaders to develop effectively and yet it is the one that often has the most impact. As emotionally intelligent leaders rise through the ranks of an organization, their profile becomes more visible to employees and their increased power can have greater impact towards achieving the organisational results (see Figure 1).
Putting Employees First Before Customer and ProfitsPutting the customer first has been the mantra of many companies
for a long time. But however correct the mantra may be, perhaps it’s time to question the wisdom of it. Some companies already have, that is, put the customer second, after employees. The results are surprising and enlightening – engaged and contented employees and companies cited for their best practices. Moreover, customers are satisfied. This Workshop presents an operating model and proven approach for putting employees first.
Steady, long-term competitiveness requires an organization to be committed to putting employees first and developing quality training programs that are linked to its strategic objectives. Without a true commitment to the employees at all levels throughout an organization, the journey to enhance organizational performance will be an elusive adventure. Quality employees equate to organizational success. Un-qualified and poorly trained employees equate to organizational failure.
An organization’s employees have always made the difference between
46 leadership excellence essentials presented by HR.com | 11.2014Submit your Articles
5 Organizational Results
4 Customer Engagement
3 Employee Engagement
2 Organizational Climate
•Profitability/Market Share•ROi/Cost Optimization
•Customer Satisfaction/loyalty•Service Value/Relationship
•Employee Satisfaction/loyalty•Employee turnover Rate
•Company Culture, Policies•Rewards and Flexibility
1 Self-Leadership & Team Effectiveness•Emotional & Social intelligence•leadership Styles/Servant leadership•Ontological Humility/level 5 leadership
FIGURE 1 Results-Based Leadership Framework
a truly successful organization and a mediocre entity, but it’s amazing how often managers overlook or discount this fundamental recipe for economic survival. Organizations with cultures that focus on their people and that invest in their future will in the long-run, be more competitive than cultures that view employees as mere costs to be reduced in times of trouble.
Extensive published research including from CEE own consulting engagement, have resulted in the understanding the organization that plans every action around its employees will thrive in the marketplace.
It’s the employees who breathe life into an organization for it’s their skills and abilities that give an organization its competitiveness. As stated by Peters and Waterman, Jr. (2004, 1982) “productivity and the economic rewards that go with it are achieved through the people of an organization.” A fundamental rule of organizational survival is to put employees first and develop their abilities and skills by establishing a quality training environment.
How to improve employee loyalty is one of today’s most difficult problems that troubles business leaders. Research has consistently shown that by putting employees first you can actually deliver your promise of customers first. If you do not put the employee first – if the business of management and managers is not to put employee first – there is no way you can get the customer first.
CEE Research has consistently found that the Employees First ap-proach produces far more passion than any motivational or recognition program. Why? Because it proves that management understands the
importance of the work being done by the employees in the first place. It demonstrates that we are actively helping them in ways that make it easier for them to do their jobs. It shows that we trust them to do what needs to be done in the way they believe it should be done. And it shows that we respect them for the value they bring to the company.
We give them understanding, help, trust and respect–which are the drivers of employee engagement. LEConclusion
There is growing evidence that the range of abilities that constitute what is now commonly known as emotional intelligence plays a key role in determining success in life and in the workplace.
Since leaders lead people, the style with which you do it is important. It must truly represent you, fit with the situation, the results you wish to achieve and the people you hope will follow your lead. In truth, having a particular style is not as essential to being a leader as having a vision of what could exist, being committed to the vision, bringing great energy to realising that vision and having people to support you towards achieving the organisational results.
Prof Sattar Bawany is the CEO & C-Suite Master Executive Coach of Centre for Executive Education (CEE Global). CEE is a premier network for estab-lished human resource development and consulting firms around the globe which partners with our client to design solutions for leaders at all levels who will navigate the firm through tomorrow’s business challenges.Email [email protected] www.cee-global.com
47leadership excellence essentials presented by HR.com | 11.2014 Submit your Articles
Building High Performance Organisations