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N A T I O N A L S E C U R I T Y • E N E R G Y & E N V I R O N M E N T • H E A L T H • C Y B E R S E C U R I T Y

© SAIC. All rights reserved.

Smart People Solving Hard Problems

Organizational Leadership Capability – Knowing What

Leadership Investments You Need

J. Keith Dunbar, Asst. Vice President, Learning and Talent Development Director

June 6, 2012

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Welcome

• Ground Rules

– Multi-directional conversation and engagement

• The VUCA Environment

• Elephant in the Room

• Key Differentiators

• World-Class Leadership Development in the Future

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Our Company

SAIC is a FORTUNE 500® scientific, engineering, and technology

applications company that uses its deep domain knowledge to

solve problems of vital importance to the nation and the world in

national security, energy & environment, health and cybersecurity.

Our Successes

– Approximately $10.6 billion in annual revenues

for fiscal year 2012

– FORTUNE 500 company – No. 245

– Superb staff of qualified professionals

• Approximately 41,000 personnel worldwide

• Approximately 10,000 employees with advanced

degrees

• Over 20,000 employees with security clearances

– Leading provider of contracted R&D services

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Me

• U.S. Navy Veteran

– Submarines, Aviation and Surface

– North Pole

– Korea

– Bahrain

– Mediterranean Vacation Cruise

– Pentagon

• U.S. Government Civilian

– Defense Intelligence Agency

• Global Learning Solutions

• Leadership Academy

• Doctoral candidate at University of Pennsylvania Chief Learning Officer (PennCLO) program

• SAIC

– Intelligence, Surveillance and

Reconnaissance Group

• Director of Learning & Talent Development

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Keith’s Callsign in the Navy was…

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1 2

50%50%1. Gomer

2. Goober



Polling Questions – Group Demographics

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I work in the following sector …

7

1 2 3

33% 33%33%1. Private

2. Public

3. Academia

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I have been in the learning & development

profession for …

8

1 2 3 4 5 6 7

14% 14% 14% 14%14%14%14%

1.<1 year

2. 1-3 years

3. 4-5 years

4. 6-10 years

5. 11-15 years

6. 16-20 years

7. >20 years

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As far as leadership development

is concerned … I …

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1 2 3

33% 33%33%

1. Do it everyday

2. Am interested in the

topic

3. Am not

interested…just

killing time…heard

you talk funny.

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Competitive Advantage

- Understanding Profit Drivers

- Differentiation/Cost

- Market Structure

- Supply Chain

- Skills

- Resources

- Dedicated Systems

- Learning

- Competitor Capabilities

- Nature of the

Competitive Game

- Role of Partners

Focused, Stretch, Actionable

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Major Change

11

Employee Engagement

and Motivation

Merger &

Acquisition

Global

Workforce

Generational

Workforce

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The VUCA Environment

• Volatility

– Rate of change

• Uncertainty

– Unclear about the present situation and future outcomes

• Complexity

– Multiplicity of key decision factors

• Ambiguity

– Lack of clarity about the meaning of an event

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I think leaders face more VUCA today than even

one year ago …

13

1 2 3 4 5

20% 20% 20%20%20%

1. Strongly Disagree

2. Disagree

3. Neutral

4. Agree

5. Strongly Agree

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Why should we care?

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Key Drivers of Attraction and Commitment

Development Opportunities

Future Career Opportunities

Respect

Manager Quality

Collegial Work Environment Compensation

Organizational Stability

Attraction Commitment SOURCE: CLC Human Resources, Attracting and Retaining

Critical Talent Segments-Identifying Drivers of Attraction

and Commitment in the Global Labor Market,

Washington, D.C.: Corporate Executive Board, 2006. 15

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We Need Talent Champions

31% 19%

50%

Poor Talent

Outcomes

Superior Talent

Outcomes

Average Talent

Outcomes

Characteristics

• 18% of business leaders have a

successor that will be ready within 24

months

•Employees effort levels are 20% lower

than average

•32% of employees are at risk of

turnover

•Business unit profits are 6% lower than

average

•Business unit revenue is 7% less than

average

Characteristics

• 76% of Talent Champions have a

successor that will be ready within 24

months

•Employees effort levels are 25%

greater than average

•6% of employees are at risk of turnover

•Business unit profits are 6% greater

than average

•Business unit revenue is 7% greater

than average

SOURCE: Corporate Leadership Council 2008, “Creating Talent Champions” – CLC Talent Management Effectiveness Survey

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Why Collective Leadership Capability?

• Organizations with Top-Tier Leadership Teams Outperform Competitors

– Number of Leaders Substantially Outperforming Revenue Expectations

– Number of Leaders Substantially Outperforming Profit Expectations

Leaders with Poor

Leadership Skills

Leaders with Top

Leadership Skills

1.0x

1.8x

Leaders with Poor

Leadership Skills Leaders with Top

Leadership Skills

1.0x

1.5x

SOURCE: CLC Human Resources, Improving

Business Leader Effectiveness Survey,

Washington, D.C.: Corporate Executive Board,

2008.

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Why Collective Leadership Capability?

• Leaders Impact on Employees

Employees Reporting

To Manager A

Employees Reporting

To Manager B

1.0x

1.52x

Employees Reporting

To Manager A Employees Reporting

To Manager B

1.0x

1.25x

Employee

Performance Intent to Stay Emotional

Commitment

Employees Reporting

To Manager A

Employees Reporting

To Manager B

1.0x

1.40x

SOURCE: CLC Human Resources, Improving

Business Leader Effectiveness Survey,

Washington, D.C.: Corporate Executive Board,

2008.

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Leadership Capability Drives Growth

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SOURCE: "Return on Leadership" – joint study by Egon Zehnder International and McKinsey & Company

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The Cost of Turnover – Case Study

Research estimates

75%-150%

of base salary

Chief Systems Engineer

@$200K

New Chief Systems Engineer

~$150K-$300K

SOURCE: Chasing Stars– Boris Groysberg, Harvard Business School

Turnover Planning Factors

-~35 days to fill vacancy

- Average bill rate ~ $150/hour

- 1500 voluntary turnover in FY12

- 70% billable (1050)

~ $44.1M in lost revenue

Does not include:

-Overhead costs

(Source/recruit/interview)

- Lost performance

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Internal Promotes versus External Hires

SOURCE: Promote or Hire? Paying More to Get Less – Matthew Bidwell, Wharton School

Comparison

of 7,000

employees

(2003-2009)

internal

promotes vs.

external hires

- Performance

Rank

- Competence

- Results

Promotes

outperform

hires

Three years

for hires to

catch-up to

promotes

Small, but

significant

increase in

compensation

for colleagues

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• What is keeping us from being successful and achieving our goals in leadership

development?

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Elephant in the Room

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Developing future leaders is important to my

organization

23

1 2 3 4 5

20% 20% 20%20%20%1. Strongly Disagree

2. Disagree

3. Neutral

4. Agree

5. Strongly Agree

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My organization is effective at developing future leaders

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1 2 3 4 5

20% 20% 20%20%20%1. Strongly Disagree

2. Disagree

3. Neutral

4. Agree

5. Strongly Agree

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Importance/Effectiveness

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*2010 IBM Global CHRO Study

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Group Discussion

• Five minutes

• Why the disparity between importance-effectiveness?

• Identify #1 reason by consensus

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Key Differentiators

• Challenges in realizing leadership development investments

– Disconnected strategy

– Misaligned outcomes

– Uncoordinated HR activities

*Corporate Leadership Council – Improving Returns on Leadership Investments

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Center for Creative Leadership and

Leadership Strategy

• Five Key Components of Leadership Strategy

– Quantity

– Qualities

– Skills and behaviors

– Collective leadership capabilities of leaders

– Desired leadership culture

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* Developing a Leadership Strategy– Center for Creative Leadership

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Recent Penn CLO Program Research

• Leadership strategy = the kind of leaders organization needs explicitly

• Organizations focus on skills and behaviors in strategy

• Leadership strategy = increased leadership development funding

• Business needs drive the leadership strategy

• Leadership strategy must be dynamic

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Does my organization have a leadership strategy

aligned to the business/mission strategy?

31

1 2 3 4

25% 25%25%25%

1. Yes

2. No

3. No clue

4. What is a strategy?

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IBM 2012 Global CEO Study

• Customer-obsessed leaders will drive the organization toward deeper, more contextual

customer insights.

• Inspirational leaders will engage, motivate and guide employees with values and shared

purpose rather than tight control.

• Leaders who team will model collaboration for their organizations. They’ll be coalition

builders, internally and externally.

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Human Capital Development: A Systemic Approach

Capacity

Assessment

Individual Assessment

& Group

Assessment

Impact

Capabilities Solution Portfolio (CSP)

Business Impact Measurement (BIM)

Hire

Top Performers

Strategic

Thinkers

Challenges

To

Business

Desired

Behaviors

Organizational, Behavioral, & Capability

Requirements Definition (BRD)

Recruit, Hire, & Deploy

Workforce Capability

Develop

Outsource Partners & Contractors

LEVERAGE

BUILD

BUY

Perceived

Value

Workforce

Learning

Impact

Transfer

of

Learning

to individual

to organization

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Best Practice Leadership Practices

• Job rotations

• High potential programs

• Management training programs

• Management and functional leadership tracks

• Executive recruiting

• Peer assessments

• Executive candidate assessment

• Action learning

• Execution education programs

• Coaching

• Mentoring

• Run line organization

* “What’s Old is New Again: Managerial “Talent” in a Historical Context” – Peter Cappelli

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Center for Creative Leadership and

Leadership Development

• More focus on vertical development

• Transfer of greater developmental ownership to the individual

• Greater focus on collective rather than individual leadership

• Much greater focus on innovation in leadership development methods

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*SOURCE: Future Trends in Leadership Development – Center for Creative Leadership

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My organization, with respect to leadership

development , focuses on …

36

1 2 3 4

25% 25%25%25%1. The What

2. The What and How

3. The How

4. None of it

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My organization with respect to leadership

development is focused on …

37

1 2

50%50%

1. Individual leadership

capability

2. Collective leadership

capability

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Leadership Capability Measurement

• Difficult nut to crack

• Academic research indicates wide variance in role of leadership in organizational

performance

• * Measurement should include financial and non-financial metrics to understand

performance effects

– Financial

– Customer satisfaction

– Employee engagement

• Collective leadership metrics

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*SOURCE: Missing Links in Understanding the Relationship between Leadership and Organizational

Performance - Fenwick Feng Jing and Gayle C. Avery

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Leadership Capability Portfolio Management

3.5

4.5

4.0

Capability Assessment by High Potential Cohort

Capability Assessment by Business Unit

Capability Assessment by Management Level

Emerging

Talent

The 15

ISRG

HiPo

Red Flag

Red Flag

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STRATEGIC

PLANNING

• Business Strategy

• Talent Strategy

• HR Systems Strategy

• Metrics & Measurement

• Process Governance & Policy CAPABILITY

MANAGEMENT

• Business Values

• Organizational Competencies

• Leadership Competencies

• Functional Competencies

• Job Profiles & Design

STAFFING &

RETENTION

• Sourcing

• Social Networking

• Candidate Pools

• Employer Brand

• Assessments

• Selection

• Compensation LEARNING & KNOWLEDGE

DEVELOPMENT

• On-boarding

• Learning Needs Assessment

• Organizational Culture

• Role-Based Curricula

• E-Learning Strategy

• Informal and Formal Learning

• Certification Programs

• HR Information Systems

PERFORMANCE

MANAGEMENT

• Goal/Objective Setting

• Self-Assessment

• Manager Assessment

• 360 Assessment

• Development Planning

• Competency Assessment

• Short- & Long-term Assessment

LEADERSHIP & SUCCESSION

PLANNING

• Leadership Development

• Talent Reviews

• Hi-Potential/Hi-Performer ID

• Career Planning

• Talent Mobility Plan

• Re-deployment & Retirement

Talent Management Life Cycle

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Final Thoughts

• Everything , and in particular leadership, must

enable the business/mission strategy

• Identify and create people capabilities … Leadership

capability is #1

• Best-in-class leadership capability is a competitive

advantage

“An organization’s ability to learn, and

translate that learning into action

rapidly, is the ultimate competitive

advantage.”

- Jack Welch

“The illiterate of the future are not

those that cannot read or write. They

are those that cannot learn, unlearn,

and relearn.”

- Alvin Toffler

“If you dislike change, you're going to

dislike irrelevance even more.”

- Gen. Eric Shinseki

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Thank You

• SAIC: [email protected]

• LinkedIn: J. Keith Dunbar

• Twitter: @JKeithDunbar

• Google+: J. Keith Dunbar

• Blog: DNA of Human Capital - http://dna-of-humancapital.blogspot.com/

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mailto:[email protected]

http://dna-of-humancapital.blogspot.com/







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