Talent succession

CEO Challenge

Source: www.conference-board.org 2

Regional Views

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4 4

Introduction

“Over their entire tenures, CEOs appointed from the inside tend to outperform outsiders“

(Booz Allen Hamilton Consulting)

“ Every company has a succession planning document. The question you have to ask is

Will it be operational?“

(Prof. David Larcker, Stanford University)

5

Why people risk is important?

6

Human capital risk is seen to be one of the most significant threat to global business operations1.

“The ability to understand risk is one of the fundamental drivers behind our global economy. Without it, we can’t make the investments, and we can’t take the initiatives required to succeed.”

Greg Case President & CEO, Aon Corporation

1 Best Practices in Risk Management: A Function Comes of Age: A report from the Economist Unit Sponsored by ACE, IBM and KPMG,

The Economist Intelligence Unit, 2007, 21 pages

As companies become more global, there is an increasing need for understanding risk profiles for talent.

Talent pools vary across locations and companies have to adjust their talent strategies to address the risks associated with talent in those locations.

People Risks in APAC

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2009 2011 2013

1 Economic slowdown Economic slowdown Economic slowdown / slow recovery

2 Regulatory / legislative changes Regulatory / legislative changes Regulatory / legislative changes

3 Business interruption Increasing competition Increasing competition

4 Increasing competition Damage to reputation / brand Damage to reputation / brand

5 Commodity price risk Business interruption Failure to attract or retain top talent

6 Damage to reputation Failure to innovate / meet customer needs

Failure to innovate / meet customer needs

7 Cash flow / liquidity risk Failure to attract or retain top talent

Business interruption

8 Distribution or supply chain failure

Commodity price risk Commodity price risk

9 Third-party liability Technology failure / system failure

Cash flow / liquidity risk

10 Failure to attract or retain top talent

Cash flow / liquidity risk Political risk / uncertainties 10

5

7

Source: Aon Hewitt 2014

Top 5 People Risk Issues in APAC

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Talent Retention 1

Talent Development 2

Leadership Skill & Management Capability 3

Leadership Shortage : Succession Plan 4

Ability to Attract Talent / Poor Talent Selection 5


People Risk in Thailand

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Participant Average Source: Aon Hewitt Best Employers – Thailand 2015 (CEO Questionnaire)

54%

42% 37%

25%

4%

25%

35%

46% 48%

0%

20%

40%

60%

80%

100%

Criticalskills

shortage

Inabilityto attract

talent

Poor availabilityand selection oftalent in external

labor market

Inabilityto

retainemployees

Poor laborrelations

Lowemployee

productivity

Inadequatecapabilityof currentleaders

Inadequateleadership

pipeline

Risingsalaries

Percentage of organizations

The people risks, as identified by CEOs in Thailand, are shown as follow:

What are the Risks related to People?

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1. Workforce Planning

2. Talent Acquisition

3. Employment Practices

4. Talent Management

5. Leadership

6. Exiting

• Talent shortages • Skills shortages

• Ability to attract talent • Poor talent selection

• Compliance • Labor relations • Rewards • Safety, health & absence

• Talent development • Productivity • Talent retention

• Leadership shortage • Leadership skill & Management

capacity

• Aging workforce • Compliance • Attrition

Impact on: • Revenue • Expenses • Execution of

strategy

Top People Challenges in Thailand for the next three years


Key Challenges in Today’s Market

Talent challenges Business challenges

Insufficient numbers of ready-now leaders

Change in demand for talent and skills required for success

Pace of talent development does not match with speed of growth initiatives

Business growth

Cost pressures

Product/Service innovation

Source: Aon Hewitt Top Companies For Leaders 2014

Laying the Foundation for Success: What Companies Must Get Right

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Seamless Execution

Leadership Strategy &

Accountability

Attracting Leaders

Leadership Assessment

Leadership Development

High Potentials

Succession Management

Metrics

Programs are strategically tied to the goals, values and culture of the organization. Leaders demonstrate and are held accountable for strategically-driven behaviors in the right way.

Leaders are engaged and values-driven. Companies utilize a consistent and rigorous approach to selection and onboarding

Valid and objective feedback assessments to understand capabilities, guide development, inform succession plans

Provide accelerated development through meaningful, experiential, relational, and traditional processes

Conduct robust talent reviews to consistently define, identify, calibrate and develop

high-potential and critical talent

Maintain a deep and robust talent pipeline via

succession management

Utilize metrics to track progress, evaluate effectiveness and

drive desired results


What is the DNA of top companies?

1. When it comes to building leaders, top companies strongly endorse a full spectrum approach to assessing the whole leader (experiences, competencies, values, organization fit) early in their career to understand the unique needs of their talent pipeline that fuels the right development solutions to move people forward faster.

2. Top companies have self-aware leaders who exhibit tremendous understanding of their personal strengths as well as blind spot and use this information to become more effective leaders of others.

3. Top companies build resilience in their leaders through inclusive cultures where multiple perspective and ideas are expected to help the organization meet fast changing business challenges.

4. Top companies are intentional about identifying and building engaging leaders who are stabilizers, ambidextrous, and connected to people and events inside/outside their organization.

5. Top companies are focused on the building sustainable programs and practices that strategically drive business outcomes.

In the face of today’s volatile, uncertain, complex and ambiguous (VUCA) business environment, top companies have the edge to successfully support leadership and talent growth that result in stronger organizational performance—via their fundamental cadence:

Source: Aon Hewitt Top Companies For Leaders 2014 13

Assessment

14

Cu

sto

miz

ed

Stra

tegi

c

Assessment


Self-Awareness

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Self awareness

as integral

building

an

block

leadership

of


Self-awareness is knowledge

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Knowing Self

Knowing How To

others

(means)

…

Lead

Influence

Motivate

Inspire

Impact

Strengths

Blind spots


Resilience: Getting Comfortable with the Uncomfortable

Stretch people

outside of their

comfort zones…

…but be there

to catch them,

coach them,

watch them grow

17 Source: Aon Hewitt Top Companies For Leaders 2014

Engaging Leadership

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Purpose

Commitment

Authenticity

DNA DNA

The storytellers and stewards of the

company vision, mission, values, and culture

Understand that engaging others is core

to their role in the organization

Stabilizers, ambidextrous, humble, and connected to the people and events that surrounding their organization

DNA of Engaging Leader


Sustainability

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Personal & Organizational Growth

Alignment

Future-orientation

Accountability

Integration

Culture, Vision, Mission, Values


Great Organizational Performance

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Getting ahead of the pack

Challenge

Create

Build

Core practices and assumptions to respond to rapidly changing market conditions Accountability to

generate sustained change

A distinctive culture through leaders at every level


Leadership & Management

Talent succession