leadership development: seeing the big picture cirano leadership for tomorrow forum march 17, 2006...
TRANSCRIPT
Leadership Development: Seeing the big picture
CIRANO Leadership for Tomorrow ForumMarch 17, 2006
© Handfield Jones Inc. 2006
Helen Handfield-Jones
2
WHY LEADERSHIP TALENT IS SO IMPORTANT TODAY
Internal pipelines not well stocked
Highly talented
managers in demand
Better talent creates much more value
Demographic crunch on supply
The war for
leadership
talent
3
MANY DIFFERENT WARS FOR TALENT
Talent Intensive Specialized Skill Low Skilled
Performance difference
• Huge • Modest • Little
Supplyconstraints
• High degree of innate talent required
• Talent to be a top performer is rare
• Many years of education, experience, apprenticeship required
• Some innate talent required
• Lots of people have the innate ability
• Several years of education or training, but ready upon graduation
• Little innate talent required
• Widely available labour pool
• Takes a few days to a year of training
Examples • Business leaders• Software designers• Museum curators• Strategy consultants• M&A lawyers• Top research scientists
• Programmers• Librarians• Nurses• Pharmacists• Tool-and-die makers• Pipefitters
• Admin assistants• Call centre staff• Fast food workers• Flight attendants• Assembly workers• Retail sales staff
4
KEY TALENT STRATEGIES DIFFER
Talent Intensive Specialized Skill Low Skilled
Fundamental challenge
• Quality game – get the very best
• Quantity game – get enough to fill spots
• Engagement game – elicit right behaviours
Key talent strategies
• Laser-like recruiting to find and assess the best
• Rich individualized development throughout career
• Regularly weed out lower performers
• Pay high performers significantly more
• Value proposition features challenges and advancement
• Recruit from many diverse pools
• Tap foreign workers
• Increase training capacity
• Encourage people to join this career
• Restructure roles to reduce number needed
• Value proposition features role and work environment
• High-volume recruiting, screen for right attitude
• Manage turnover
• Train company specific procedures
• Recognize and celebrate performance
• Value proposition features job security, working conditions and empowerment
5
ERAS OF EXECUTIVE DEVELOPMENT
1890’s – 1910’s ‘20s ‘30s – ’40s
• Robber Barons• Owner managers• Outsourced to other
owner managers• Acquired owners
became founder executives
• No concept of executive development
• “Generals” emerge• Corporations have
life beyond owners• Founder executives
retiring• Beginning of
professional executives
Executivedevelopment begins:• Career planning• Selection tests• Job rotation
systems• Fill division heads
from a roster
• Depression and War• Survive, hunker
down• Hiring ceased
• Killed the fledgling programs
Source: Peter Cappelli
6
ERAS OF EXECUTIVE DEVELOPMENT
‘50s – ’60s ‘80s
• Booming prosperity• Old executives dying in
office• Realized value of college
educated managers• No pipeline of talent• Can’t hire enough to grow• 15 year planning horizon
Sophisticated executivedevelopment: • High potential programs• Succession planning• Job rotation, career paths• Training programs• Chess masters• Birth of search firms
• Recession• Japanese manufacturers• Lower costs, increase
productivity• Downsized, delayered• Baby boomers and women
entering managerial ranks
• Fewer development positions and ladder rungs
• Reduced intake of talent• Stopped executive
development programs• Downsized HR• Broke the loyalty for lifetime
contract
Source: Peter Cappelli
7
ERAS OF EXECUTIVE DEVELOPMENT
’90s 2000s
• Globalization, new technologies, industries restructuring
• Strategy in the trenches• Dot-com boom• Demand increases for highly
talented managers• Power shifts from capital to
talent
• Human capital notions develop
• Awareness builds• Retention becomes hot issue• Most companies still poor at
talent management
• Same demand pressure as ’90s• Baby boom retirement begins• Next cohort of leaders is
smaller• Internal demographics skewed
to baby boomers• Internal pipelines are weak
• Most companies start talent review, succession planning, high potential programs
• Executive coaching booms• Assessment methods improve• VPs of Talent Management
created
8
TALENT MANAGEMENT WEAK IN 1997-2000
Brings in highly talented people
18%18%
Retains high
performers
7%7%
Knows who are high and low performers
16%16%
Source: The War for Talent, Harvard Business School Press, 2001
Percentage of senior managers who strongly agree
Removes low performers
3%3%
Develops people effectively
3%3%
9
BOARDS OF DIRECTORS INCREASING THEIR FOCUS ON TALENT MANAGEMENT
78
76
66
61
55
51
Talent and skills
Strategy and risk
Developing management
Evaluation of top management
50CEO succession
Evaluation of CEO performance
Current company performance
31Audit and compliance
26Compensation
Percentage of directors who want to spend more time
Source: January 2005 McKinsey Quarterly survey of 1,016 corporate directors
How would you change the amount of time your board is spending on the following issues?
10
HOW TO BUILD A STRONG POOL OF LEADERSHIP TALENT
1. Talent review process and leadership development
2. Laser-like recruiting strategies
3. Attractive value proposition
11
FUNDAMENTAL PRINCIPLE OF TALENT MANAGEMENT
A+ High potential Invest heavily in their development
A High performers Retain and leverage
B Good performers Affirm and engage
C Low performers Act decisively
12
WHAT REALLY DRIVES DEVELOPMENT
0
10
20
30
40
50
60
70
80
0 10 20 30 40 50 60 70 80
Informal coaching/ feedback
Told strengths/
weaknesses
Role models
Being mentored
Development plans
360-degree feedback
Formal performance evaluation
Testing/ assessment
outside
Feedback/coaching
Non-traditional learning programs
Individual learning
Training within company
Traditional training outside
company
Formal training
Job rotation
Way jobs structured
Speed of job rotation
Special project assignments
Stretch/developmental jobs
Co
mp
any
effe
ctiv
enes
s
Exc
elle
nt
or
very
go
od
Importance to my development
Absolutely essential or very important
Source: “How Executives Grow”, McKinsey Quarterly 2000 Number 1
Percentage of top 200 executives
13
Advancement opportunities blocked
Their people not developed
Productivity and morale of group is low
Fewer “A” players attracted to join the company
Performance in job is low
Keep low performers in
leadership jobs
Keep low performers in
leadership jobs
THE VICIOUS CYCLE OF “C” PLAYERS
Source: The War for Talent, Harvard Business School Press, 2001
High performers leave the company
14
TALENT REVIEW PROCESS DRIVES LEADERSHIP DEVELOPMENT
Talent review process
Feedback
Learning programs
Staffing decisions
Coaching and
mentoring
Job experience
Develop-ment plans
Recruit for future
needs
15
WHAT IS A TALENT REVIEW PROCESS
• Get the spotlight on the As and Cs
• Develop insights into each person’s strengths and weaknesses
• Craft action plans for each individual
• Assess succession depth
• Identify strengths and gaps in the pool
• Craft action plans for each business unit
The overall talent pool:
Each individual:
Leadership team discusses talent 1-2 layers below
16
ABOVE AND BEYOND PERFORMANCE MANAGEMENT
Performance evaluation Talent review
• Help individuals improve and understand themselves
• Help individuals chart satisfying careers
• How well performed this job this past year
• What might they be capable of in the future
• Perform the job to best of their ability
• Develop future leaders
• Drives recognition, rewards, and coaching
• Drives promotions, moves, terminations, and improves coaching
• Manager to individual • Leadership team looking collectively at a pool of people
17
Average-performing companies
High-performing companies
37
24
40
28
20
7
21
8
Identifies high, average, low performers
Has intensity and importance of the budget process
Includes frank, open discussion
Results in action plans for individuals
Our talent review process:
HIGHLY EFFECTIVE TALENT REVIEWS
Source: The War for Talent, Harvard Business School Press, 2001
Percentage of corporate officers who strongly agree
18
LEADERSHIP DEVELOPMENT STRATEGY FRAMEWORK
Development plans
Talent Review
Additional Assessments
Training/ Learning Programs
Performance Management
Job Experience and Staffing
Coaching / Mentoring
Assess and give feedback
Provide development opportunities