TALENT MANAGEMENT & Succesion Management

Why Talent management is Important ?

The things that wakes me up in the middle of the nights is not what might happen to the economy or what our competitors might do next, it is worrying about whether we have the leadership capacity and talent to implement the new and more complex global strategies
David Whitman, Chairman, President and CEO Whirpool Corporation

 Survey of 400 Fortune Companies revealed that :

Identifying and developing leaders is the single most pressing issue in their companies Only 8 % rated their companys leadership as excellent Nearly 50% rater their leadership capacity to be fair or poor
Conference Board DDI

Why Talent management Important ?(Contd)

On average, organizations will lose

 Among approximately 6.000 respondents, 2/3 reported that their current leader displays behaviours that could derail his/her career On average , organizations will pay $1.000.000 each time an executive role is filled with an external candidate
Development Dimensions International

Why Talent management Important ? (Contd)

Four in ten leaders fail within the first 18 months on the job

What is talent ?
Talent is the sum of a persons abilities-his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgment, attitude, character, and drive. It also includes his or her ability to learn and grow There is no universal definition of an outstanding manager Each company must understand the specific talent profile that is right for it

What is talent ?
The resource that includes the potential and realized capacities of individual and groups and how they are organized, including those within the organization and those who might join the organization
Beyond HR New Science of Human Capital, John W. Boudreau & Peter M. Ramstad

MANAGERIAL TALENT
Some combination of a sharp strategic mind, leadership ability, emotional maturity, communications skills, the ability to attract and inspire other talented people, entrepreneurial instinct, functional skills, and the ability to deliver results

 DDI defines talent management as the system in which people are recruited, developed, promoted, and retained to optimize the organizations ability to realize positive business outcomes in the face of shifting competitive landscapes and labor requirements.

Talent Management Definition

More specifically ..
Talent management is a business process that systematically closes the gap between the talent an organization has and the talent it needs to successfully respond to current and emerging business challenges.

THE WAR FOR TALENT surveys

To understand how companies build a strong pool of managerial talent - how they attract, develop, and retain the people in the top 200 managerial position and how they build a pipeline of younger talent that might one day move into more senior positions
The War for Talent by Michaels, Helen Handfield-Jones and Beth Axelrod

WHATS DRIVING THE CURRENT EMPHASIS ON TALENT MANAGEMENT? There is a demonstrated relationship
between better talent and better business performance. Talent is a rapidly increasing source of value creation. The context in which we do business is more complex and dynamic. Employee expectations are also changing. Workforce demographics are evolving.

Growing propensity to switch companies

The Old RealityThe New Reality
People need companiesCompanies need people Machines, capital, andTalented people are the geography are competitivecompetitive advantage advantage Better talent makes someBetter talent makes a huge differencedifference Jobs are scarceTalented people are scarce Employees are loyal and jobsPeople are mobile and their are securecommitment is short term People accept the standardPeople demand much more package they are offered

A WHOLE NEW APPROACH TO TALENT MANAGEMENT

1. Embrace a talent mindset 1. Craft a winning employees value proposition 1. Rebuild your recruiting strategy 1. Weave development into your organization 1. Differentiate and affirm your people

NEW WAY OF MANAGING The Old TALENT WayThe New Way

HR is responsible for peopleAll managers, starting with the managementCEO, are accountable for strengthening their talent pool We provide good pay andWe shape our company, our benefitsjobs, even our strategy to appeal to talented people Recruiting is like purchasingRecruiting is like marketing We think development happensWe fuel development primarily in training programsthrough stretch jobs, coaching, and mentoring We treat everyone the same,We affirm all our people, but and like to think that everyoneinvest differentially in our A, B, is equally capableand C players

Old Mindset AboutNew Talent Mindset People

A vague notion that people areA deep conviction that better our most important assettalent leads to better corporate performance HR is responsible for peopleAll managers are accountable managementfor strengthening their talent pool We have a two day successionTalent management is a central planning exercise once in apart of how we run the yearcompany I work with the people I inheritI take bold actions to build the talent pool I need

STARTS WITH A TALENT MINDSET

TALENT IS EVERY LEADERS JOB

Establish the gold standard for talent Get actively involved in people decisions deep within the organization Drive a simple, probing talent review process Instill a talent mindset in all managers throughout the organization Invest real money in talent Hold themselves and their managers accountable for strength of the talent pools they build

REBUILD RECRUITING STRATEGY Old RecruitingNew Recruiting

StrategiesStrategies
Grow all your own talentPump talent in at all levels Recruit for vacant positionsHunt for talent all the time Go to a few traditional sourcesTap many diverse pools of talent Advertise to job huntersFind ways to reach passive candidates Specify a compensation rangeBreak the compensation rules and stay within itto get the candidates you want Recruiting is about screeningRecruiting is about selling as well as screening Hire as needed with no overallDevelop a recruiting strategy planfor each type of talent

New approach to Development Old Approach toNew Approach to

DevelopmentDevelopment
Development just happensDevelopment is woven into the fabric of the organization Development means trainingDevelopment primarily means challenging experiences, coaching, feedback, and mentoring The unit owns the talent; peopleThe company owns the talent; dont move across unitspeople move easily around the company Only poor performance haveEveryone has development needs development needsand receives coaching A few lucky people find mentorsMentors are assigned to every

high-potential person

RUN A ROBUST TALENT REVIEW PROCESS Traditional SuccessionRobust Talent Review

Planning
A half day session once a yearA full day on-site for each at corporate headquartersdivision Discuss possible successorsDiscuss quality of incumbents Review individualsReview individuals and the talent strength each unit, and discuss other issues such as retention or recruiting Polite, senatorial presentations Rigorous, candid debate No effort to calibrateDrive to a distribution of ratings assessment No action plans agreed toSpecific action plans written and followed up for each unit An annual paper exerciseAs important and intense as budget process, with real

NEW PAY PHILOSOPHY

Old Pay PhilosophyNew Pay Philosophy
Pay for the jobPay for the person and the performance Job-scope and seniority driveValue creation drives pay pay Pay what others in the companyPay what the individual could get (internal equity)get elsewhere (market equity) Set a range and range and hireBreak the compensation rules within itto hire the right candidate

Talent Management (DDIs view)

Best Practice #1: Start with the end in mindyour current and future business needs
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 a utility in the midst of deregula- tion. Consumers will have choices. On top of that, we are getting into new busi- nesses. How will the skills of our current talent fit with our new

 Best Practice #2: Talent management is Job #1 for senior leaders. Best Practice #3: You must know what youre looking forthe role of success profiles. Best Practice #4: Build a systematic and integrated approach to all work- force development activities. Best Practice #5: Talent management is much more than succession management
Effective talent management requires not only

Talent Management (DDIs view)

 Best Practice #6: Clear distinctions are made between potential, performance, and readiness.

Talent Management (DDIs view)

Best Practice #7: Look at the team mosaic Best Practice #8: Turn your leaders into talent managers. Best Practice #9: Talent management is all about putting the right people in the

High potentials stand out

Talent

TALENT MANAGEMENT ASSESSMENT TOOLS

Performance appraisal Potential forecast Measurement scales for performance and potential Core/institutional competencies Mapping and weighting competencies Segmenting the Talent Reservoir Employee and job demographics

Talent Development Goal : Acceleration of HiPos in Leadership Talent Pipeline

Executives
Those who lead organizations

Managers
Those who lead businesses and people

Accelerate Quality Internal and External Talent in Leadership Pipeline at All Levels

Domain Experts
Those who do not yet lead people and/or have technical focus

Talent Pipeline

Entry Level
Entry talent college recruits

Talent

Segmentation of Performance and Potential Grade Performance

C A
High
Give warning Provide coaching Consider if it appropriate job Plan next move Provide extra coaching

A+

Plan multiple moves Ensure pay is sufficient

Potential

B
Keep in place

A
Identify next development opportunity

Low

C Manage out
Low

Performance

High

THE CLASSIFICATION OF EMPLOYEE Superkeepers

Those employees who greatly exceed expectation Demonstrated superior performance Who have inspired others to achieve superior performance Who embody the core competencies of the organization

Keepers
Those employees who exceed organization expectation

Solid Citizen
Meet organization expectation

Misfits
Employees who do not meet organization expectations for performance, working with others, and/or organization competencies

High potential High potential = behavior + track record + identification ambition + stretch;

High performers with the ambition to be treated as key talent Has what it takes to grow into bigger, more complex, more senior roles in the organization (cognitive capacity, domain expertise, commitment, maturity/balance) Demonstrates personal accountability and initiative They can be found in the top 20 ranking OR in the 70 ranking due to their current objectives and situation

High performers = behavior + track record; Consistently demonstrates and embraces leadership values Has a record over time of sustained high performance Has what it takes to grow to their next role domain expertise Understand the difference between High Performers and High Potentials Ambition and Stretch Provide examples

Talent

HiPo Development Cycle

Assessment & Planning
360 degree Survey + LPI IDP

Selection Consistent Process Evaluation criteria

Reward & Retain

Meritocracy Recognize

HiPo Talent
Evaluate Performance Effectiveness
PPR IDP progress

Develop
Differentiated needs Targeted development activities

Talent Pipeline

Studies in 1998 by the Hay Group showed that organization with better operating statistics are morelikely to have succession management programs

Page 30

Grow your own leader- William C Byham,PhD