a performer gc talent management summit 2012 presentation v1

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Organisational Readiness

Alignment of Succession Planning & Talent Management -

Making the most of People Intelligence

Stuart Hedley, Managing Director

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Business context is changing

“One in four CEOs said they were unable to pursue a

market opportunity or have had to cancel or delay a

strategic initiative because of talent challenges.

One in three is concerned that skills shortages will

impact their company’s ability to innovate effectively”

Source: PWC, Annual CEO Survey, Feb 2012

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Business Outlook

The focus on talent has never been greater and is magnified by:

• Aging workforce; Baby Boomers retiring in droves (10,000 per day in US alone)

• Critical shortage of 35-50 years old to replace Baby Boomers

• Pace of change in market place (uncertain future)

• Changing business landscape requires new skills

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Minimising RISK

Succession planning as a governance obligation

• Many businesses booming and failing in the same industries

• Shareholders demand transparency!

• “A lack of planning or a badly executed CEO succession can

have an immediate negative impact on company share price, strategic momentum, company reputation, and employee

morale.”Source: Bloomberg Business Week, June 2011

•“Poor succession planning is wiping £2 billion a year from the

stock market value of FTSE 350 companies – equivalent to 0.6 per cent of total UK annual company profits”.Source: Investors in People, 2006

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Major press coverage surrounding Steve Jobs successor

“The shares fell as much as 7% in extended trading in the U.S. yesterday after the announcement”. Source Bloomberg, August 26 2011

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Reported talent shortages around the globe

“As of Jan.1, the oldest of

America’s baby boom generation

started turning 65 at a rate of

10,000 a day — a trend that will

last for the next 19 years”Source: NY Times, 2011

“54% of employers in Australia

are experiencing difficulty filling

critical positions”Source: Manpower’s ‘2011 Global Talent

Shortage Survey

“44% of respondents at

companies based in china say a

lack of managerial talent is a

barrier to conducting activities

outside China.”Source: McKinsey Report, 2008

“Engineers topped the list of job

titles experiencing talent shortage

in the UK in 2011” Source: Manpower’s

‘2011 Global Talent Shortage Survey

Two thirds of CEO’s believe they’re facing a limited supply of skilled candidates Source: PWC Annual CEO report 2011

One in five of all senior executives in the Fortune 500 is eligible for retirement nowSource: Rothwell & Associates

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People are critical to success

• Talented people have never been more difficult to

attract, identify and retain

• High performance = right person + engagement

• But few organisations have clear insight into their

talent’s potential or value

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Succession Planning v Talent Management

The two go hand in hand, though there are key differences:

Talent Management starts with People, and aims to identify

those with high potential, giving them the opportunity to learn

and develop by providing useful experiences to progress their

careers...

...Succession Planning starts with jobs, where critical roles are

identified and the process of succession ensures the

readiness of talent to move into key positions when

necessary. This task is made much easier where talent has

been well managed.

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Why good succession planning matters: The Payoffs:

Best-In-Class companies achieved;

•77% of newly promoted leaders in key positions achieved a rating of “exceeds expectation” in their most recent performance

interview

• 66% of key positions in the organisation

have at least one ready and willing successor

•14% year on year reduction in time to fill key positions

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“Effective Talent Management starts with

People Intelligence...

a deep understanding of the skills, behaviours and

potential within an organisation and how they align

to current & future business objectives

transforming the way you hire and manage talent.”

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“Workforce Planning/Talent Analytics,

specifically, has been cited as a key

growth/trend area by analysts who

demonstrate that companies have these data

on hand, but need a focussed area around

analysis to harness the capability of available

data” (Bersin 2011)

“Indeed, Manpower cited this as

“manufacturing” talent – a strategy to

examine talent within the current workforce

in order to leverage talent in a new way:

anticipating talent needs and having an

accurate perspective of workforce talent

versus reacting to talent shortages with short-

term fixes” (Manpower 2011)

SHL Global Assessment Trends Report (GATR) 2012

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Understand, Align, Optimize

Talent Mobility

Talent Audit Succession

Planning

Shaping

Development

• Identify key roles for succession

(not just leadership, critical roles – managers and highly skilled workers both technical & functional)

• Define behaviours/competencies critical for future roles and motivational, cultural &

values fit

• Identify pools of people that could potentially fit and be high performers

• Assess people against these criteria

• Assess “readiness” of people to move quickly into key positions

• Provide critical learning & development experiences to accelerate growth

• Who in your organisation is responsible for providing coaching/mentoring?

© SHL, 2011

High performer or high potential?

• Confusing performance and potential can have damaging impact on the company, as well as on the employee;

• High performers in key roles move to

positions for which they are incompetent

• High potentials are overlooked and leave for

opportunities in other companies.

Source: High Potential Versus High Performance: What Is the RealDifference? Bersin 2008

One study found that 71% of high performers were not high potentials… BUT

93% of high potential employees were also high performers.Source: Corporate Leadership Council, 2005

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The challenge of identifying potential

“A hi-potential employee is someone who has the drive, dedication

and the capabilities to excel in positions of greater responsibility.

They are the employees who are most likely to be top performers at

the next level”

(Source: CLC, 2005)

The challenge is how to precisely measure and act upon this

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5. “Soft”, Potential:

a. Motive

b. Personality traits

c. Cognitive

4. “Observable”, Competencies:

a. Behaviour

b. Skills

3. “Hard”, Results:

a. Key Results Areas

b. Core Accountabilities

Potential(Lead)

2. Organisation Context

1. External/Industry Context

Linking the WHAT, HOW and POTENTIAL

© SHL, 2011

An example: Individual profile

• Results

• Strong SM track record over 3 years; waste and breakages targets exceeded, people indicators all met (absence, turnover, and retention – albeit after an initial high turnover when first took over). Implemented Stock Order 2000 successfully and became a regional Centre of Excellence. Forecasting within store tolerance levels.

• Raised mystery shopper scores by 7pts despite no new in-store investment.

• Seconded to Natural Work Team for cost reduction project in 2003 - not a success, failed to get senior management or other RM / SMbuy-in.

• Skills and Behaviours

• Excel: Drive and resilience – rated highly by all raters; Customer Focus – sets high standards, leads from the front; People Management – rated highly by direct reports (inspires loyalty from those close to, gets results) although low from peers – see items on ‘empowerment’.

• Moderate: Analytical Skills – learnt to use Xxx tool but not naturally analytical.

• Development needs: Business Planning – line manager rated as area for improvement, more instinctively commercial than analytical; Interpersonal Sensitivity (strong evidence that lacks tact, extremely task focussed), could get even more from staff if balanced task and people focus.

• Potential

• Highly ambitious and driven. Wants move to Regional Manager role in 12 months – not very receptive to challenge re realism of this! Works incredible hours even by xxx standards. No location constraints. So willing to relocate in europe

• Despite significant development needs, is receptive to feedback and willing to learn – undertaken CIPD qualification, and would like to undertake broader business planning project / seek experience – recognises failure of NWT experience.

• Values seeing immediate results and is impatient, struggles to ‘let go’ likely to be an issue in more senior roles

• Struggles with complex conceptual thinking – low numerical abilities and short-term outlook style wise. Verbally is above average and can ‘talk a good story’.

• Can be seen as detached or dispassionate about others personal needs.

Overall:

Ready now for <______>Not ready yet

Remain in postManage out

Track record, skills and experience

• 7 years retail experience

• Turned around a failing store

• No corporate/planning roles

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R&D Customer

Management

Sales & Marketing

Organisational

leadership

Senior Manager

Middle Manager

Operational

Management

TP MV

JPSJSK BB

HF MF ML

PB SC NT JN SM

FWFBBM AS

IRKEZP JB SB LC MC

PS

ATVS

An example: Talent Pool review output

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Talent AnalyticsTM

How Talented is your Talent?

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The essence of analytics is to answer a fundamental question ...

... how do we know?

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The essence of talent analytics is to answer the question ...

do we know if our “talent” can achieve what we want to achieve?

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Global telecoms company and “Why are our projects not being delivered to time, cost and quality?”

% Top Talent

SHL Competency Benchmark

Answer given to the CEO “Because we do not have enough project managers and this industry does not attract the best!”

Competencies that

drive performance

© SHL, 2011

But is that answer correct?

They do attract strong talent

But they also attract weaker talent too

All their people have the qualifications but which ones have the talent to deliver?

Benchmarked using SHL’s competency profilefor effective project managers

% Top Talent


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% Top Talent



Identifying their best talent and aligning them with the most challenging projects

Identifying performance and development programmes for each tier of their project manager population

a performer gc talent management summit 2012 presentation v1

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