THE NEW MEASURES O f PLRCORMANCE

Rathrt than masudng pqformance agafnrt budgetary targets, rhvrkglc lcadm continuafly assess cwtfomer satf&actfm andpwjtabilfty. l k y invwt in dvitiu that attract and ntafn Qdmnt XVwtonurs-

hose who aw both pjtabk and r+.

CUSTOWRRS

Unprofitable

Profitable

Dissatisfied

I

Exit the market

1 1 1

Act quickly to correct problems

Hope. “People do. Knowledge workers such as researchers, design- ers, engineers, marketers, and even accountants are not driven solely by financial targets and incentives. The time taken in preparing and man- aging budgets is anathema to these people.”

In any case, adds Jeremy, “the futil- ity of the exercise is evident as sud- den currency change, a crumbling

I I

Reduce costs/ increase revenues

I V

Invest and expand

Satisfied

export market, a competitor’s sur- prise product, or the loss of a major customer renders the best-laid plans utterly meaningless.”

Maybe that is why one Fortune 100 CEO has said that “the budget is the bane of corporate America- it should never have existed.” Inno- vative leaden around the world are beginning to take that statenicnt to heart.

THE NEW WORKFORCE

Traclung Talent for the Future ow do you develop manage- H ment talent, promote di-

versity, and plan for leadership succession, all a t once? And do it without spending a dime on con- sultants? For Harriet S. Wasser- strum, vice chairman of Chase Bank of Texas and manager of Chase Technology Solutions-Tesas, the answer to this managerial h a t trick “seemed obvious.”

The bank already had a simple arid cffective process for tracking man- agement talent. Every year senior managers are asked to list three people who could immediately step into their jobs if the managers were to leave. The executives are also asked to list three people who could handle their job afier two or three years of training. Starting in 1997, Wasserstrum asked her 16 subordinates to add a third column to those two lists: three female or minority candidates who could step into the job with additioiial training or experience.

Cascading Innovation

T h a t process is then repeated down the line, with cacti of the

Fall1999 51

110 people in the next level of management idenafjlng immediate successors, high-potential prospects, and additional female or minority prospects. The result: Technology Solutions (which does all the bank’s transaction pmessing and has about one-third of the bank’s l0,OOO em- ployees) identifies 450 people a year as future leaders.

Each manager works with his or her high-potential candidates to develop a career plan. Together they assess the candidate’s skills, goah, and strategies for professional pwth.These mq&t take the form

base should mirror the commu- nity,” she says.“We think that gives us a market advantage in better serving customers and in attracting more diverse talent. And we know we will have better decisions ifdi- verse people make them.”

Building Accountability

Ekpanchng the scope of the review process has made managers more aware of the importance of devel- oping others, says Wasserstrum. To identlf) up-and-coming minority candidates, managers are often forced to look beyond their own

8

Leadership development and succession planning now reach deep within the organixation.

8

ofjob rotations, committee assign- ments, community work, or spe- cialized training. However, to avoid establishing unhealthy rivalries or unreasonable expectations, candi- dates are not told that they are considered immediate successors. Rather, career planning is recog- nized as part of the bank’s perfor- mance assessment process.

Wasserstrum saw her initial effort as a way to enhance the bank’s di- versity. “We believe the employee

department; this has helped gener- ate a wider pool of hture leaders and has led to “cross-fertilization of talent and ideas,” she says. “It has brought new skills to old areas of operation and helped make the bank feel smaller.” Among the changes that have come out of the process have been several mi- nority promotions.

Wasserstrum admits that initially many managers were fiustrated by having to identie high-potential

candidates, cultivate their potential, and be inclusive. She adds that “succession planning in general is something that people don’t spend enough time thinking about.” But because managers are accountable for sM development, many have paid more attention to training and recognition. Some division heads have created new development opportunities, such as mentoring programs or one-year special as- signments, largely to attract people who otherwise might escape their attention.

Putting Talent to Work

This more integrated approach to management development allows the bank to groom talent from within, which strengthens corpo- rate culture and reinforces values- including the value of diversity. It also has helped the bank extend the leadership succession process deep into the ranks of middle manage- ment. “Whenever someone an- nounces they are leaving, the first reaction is usually panic,” says Wasserstrum. “But once we stop and look up who is available to take their place, people we wouldn’t necessarily think of immediately, we have tremendous confidence that we can carry on.”

The program addmses key tasks of leadership, says consultant, author, and management educator Ram

52 Leader to Leader

Charan. “The job of leaders is to find future leaders and exercise their latent capabilities. The crucial role for a mentor, a leader, is to search out talent, apply that talent to the q h t job, and then ~ e e what c o a c h or training is required to further develop that talent. Noth- ing is more important than identi- @ng talent and matchmg talent to the job. This dort brings diversity to management, and diversity sup ports creativity and innovation.”

THE SOCIAL SECTOR

A New Model for Managing

Wealth 8

fter a decade of economic A growth, most Americans are wealthier than they think. Their

of executives and professionals an opportunity to change society by changing haw they calculate their wealth-and by giving away more than they thought they could &Old.

largely untapped assets give millions

SOSaySSan FranciscophilanthFopist and retired investment manager Claude Rosenberg. Five years ago

trated about people who had ex- h a b e r g w SO “w a d h-

cess wealth and did little with it” that he began creating a model to help people calculate what they can realistically give to charities.

communities better and safer. They just haven’t created the time or de- veloped the habit to do it.”

Out of his research came a book, Wealthy and Wise: How You and America Can Get the Most Out of Your Giving, as well as Newtithing Gmup, an educational and research organization that aims to increase the size and productivity of charita- ble donations. Rosenberg founded and chairs Newtidung Gmup (and has directed much of his own giv- ing through a $32 million family foundation).

Benefits of Sharing the Wealth

Through his research of Internal Revenue Service and other data, Rosenberg has determined that Americans can almost triple their annual giving without reducing their quality of life or financial se- curity. That would raise the $132 billion Americans are expected to give to charity in 1999 to $374 billion-and, according to his cal- culations, would barely affect most families’ net worth.

The group’s central tenet, “new ti+,’’ is a method for charitable giving that determines comfort-

“Our mission is to get people to understand that there is a more

8

Most Americans are wealthier than they think.

ably afbdable donations based on surplus income and investment as- sets, excluding housing.

“One of the major problems today is that people have not developed a habit 6f philanthropy-and phil- anthropy is exactly that, a habit:’ he says. “Down deep, people want to help. They want to make their

modern and sophisticated way of lookmg at money,’’ says Rosenberg. “When I grew up, everything was focused on income. People didn’t have much faith in investment assets. But now, average people in Silicon Valley have stock options that are higher than their income, and there is tremendous untapped capacity to give. Stock options and

Fall1999 53