Building Asia\'s Supply Chain Leaders

$Page 1: Building Asia\'s Supply Chain Leaders$
0

Building Asia’sSupply Chain Leaders

Talent development is essential if supplychain organizations are to cope with theimmense changes sweeping Asia.

5th AAPA Material’s Management Conference 2009

Torbjorn KarlssonManaging PartnerAerospace, Defense and Aviation Practice; Asia-Pacific

7 May 2009

11

Agenda

Heidrick & Struggles

We help clients build high-performance leadership teams

Setting the scene

Supply Chain Change and the economic climate - Its effecting us all

Why Talent Management

There is a clear link between investment in strategictalent management & leadership developmentand financial performance

Talent Management Strategies

Driving Business Results through Talent

2

Heidrick & Struggles’ Overview

• An international, premier provider of executive search andleadership consulting services, including talent management,board composition, executive on-boarding, M&A effectiveness

• 50+ years of industry experience and brand equity

• Global team of nearly 400 consultants working from more than60 locations in principal cities of the world and emergingmarkets

• Pioneer in establishing industry practices, equity billing, andpresence in China and other emerging markets

Heidrick & Struggles’ Overview

• Searches and services for Boards and CEOs

• Searches and services supporting CEOs and the entire C-levelexecutive group

• Access to large, global candidate pool• Focused knowledge of candidates in specific functions and

industries

• A range of services to help them build and retain effectiveleadership teams

We Help Clients Build Winning Leadership Teams

With over 60 locations and more than 1,500 employees around theworld, we have the resources and contacts necessary to conduct aglobal, multinational, national, or local market search.

Global Presence

• Interim Executives• Middle East & North Africa

• Diversity Services• Education/Nonprofit

Specialty & Local Practices

• Human Resources• Legal• Research & Development• Supply Chain

• Board of Directors• Chief Executive Officer• Chief Information Officer• Chief Marketing Officer• Financial Officers

• Life Sciences/Health Care• Consumer• Technology

Global Functional Practices

• Business & ProfessionalServices

• Private Equity & VentureCapital

• Financial Services• Industrial

Global Industry Practices

Industry and Functional Search Practices

3

Aerospace, Defense, and Aviation

3

From the board, to the CEO, to the top tiers of executives, we help clients build high-performance leadership teams across this dynamic and complex sector, including

Our depth and breadth of knowledge and experience in these markets is unsurpassed. Ourmajor clients include many of the leading prime contractors who provide both military andcommercial aerospace products, both at the system and subsystem level.

We have also conducted dozens of highly successful searches for the leading informationtechnology consulting, hardware, and services companies for whom the defense market iscentral.

For leading private equity investors who have acquired companies in the defense and aerospacesector, we have helped recruit CEOs, new management teams, and corporate directors.

We have also worked with the world’s leading electronics, structures, and specializedcomponent providers to the airframe OEMs.

► Fractional Ownership

► Fixed-Base Operators

► Government Agencies & Armed Services

► National Laboratories & FFRDC’s

► Industry Trade Associations

► Aerospace

► Defense

► Airlines

► Air Transport

► Aviation Services

► In last 5 years close to 200 Executive Searches and Leadership Solutions

►More than 50% at C-/Board-Level

►Airline clients like ANZ, JetStar, Tiger, Qantas as well as suppliers such as EADS, Airbus,BAe, Bell, Boeing, Honeywell, SRT, ST Aerospace etc.

Experience

44

Agenda



Setting the scene






55

A sneaky suspicionthings arechanging……

6

Accelerated need for change

SC in Asia

• Moving from low cost sourcing to local /regional demand management

• Customer focus – need to understandlocal demand / needs

• Increased focus on financialperformance, especially cash flow

• Strategic coordinated sourcing asopposed to procurement – multisite/multi-region

Aviation Challenges

• Next Generation Supply Chain – Shiftingresponsibilities to suppliers and OEM,New Technology, improved planning &forecasting

• Challenging Cost – Focus on operationalaspects, outsourcing, inventory control

• Supplier Management – Supplierreduction, focus on collaboration, supplychain integration

• Changing customers and partneringneeds - LCCs continue to grow in Asia,is Long-haul low-cost coming?, is front-end traffic under long-term assault?

AAPA members are not alone in their needs

7

Recruiting & Leadership is a challenge today in the industry

• In the face of continued globalization and consolidation, respondents considered the human resourceshortage as their companies’ greatest challenge. 41% ranked a human resource shortage as theirtop concern amongst possible challenges

• Looking at the impact of recruiting, the vast majority of respondents felt it was a significant ormoderate issue for the MRO industry in 2008

• It is expected to become an even more important issue just three years into the future, as evidencedby a stated shift toward considering the issue more "significant" than “moderate” (68%/30%significant/moderate in 2011 vs. 45%/50% significant/moderate in 2008)

• Over one-third (37%) of all MRO organizations do not believe their organization has the rightmanagement in place to deal with expected growth and changes

• Independent MROs and OEM maintenance divisions have the most confidence in their leadership.Airline maintenance departments have the least trust in their management (45%)

Challenge Ranking #1 #2 #3Human resource shortage 41% 30% 13%Qualified leadership shortage 31% 30% 20%Adequate training 4% 18% 26%Parts and materials / supply chain issues 9% 13% 22%Marketing and business development 13% 10% 20%Other 3% 1% 1%

Source: Heidrick & Struggles and TEAM SAI 2008 MRO survey

88

Agenda



Setting the scene






99

There is a clear link between investment in strategic talentmanagement & leadership development and financial performance► Research done to determine correlation between investment in lean manufacturing, talent management

and performance management and financial performance

► Government policy and industrial sector does influence productivity and financial strength BUTmanagement decisions have a greater impact. This hold true even when controlling for the firm’s country,sector and skill levels

► Talent management strategies generates improved sustainable operational, and financial performance. Asingle point improvement in management practice score is associated with the same increase in output asa:• 25% increase in the labour force• 65% increase in invested in capital

100

50

50

40 27

60 73

1 2 3 4 5

0

Lowest HighestManagement Score

100%= 2 19 53 26 0 Number ofcompanies

Poor financialperformance

Good financialperformance

1) 5 year ROCE greater than sector average

In overview the research showed that companieswith stronger financial performance had higher“management scores”

100

50

50

40 27

60 73

1 2 3 4 5

0





100

50

50

40 27

60 73

1 2 3 4 5

0





1) 5 year ROCE greater than sector average

In overview the research showed that companieswith stronger financial performance had higher“management scores”

Index: management score before improvement = 100

Productivity (salesper employee)

Market sharegrowth

Marketcapitalization2

Management scorebefore improvement

Management scoreimproved by 1 point1



Sales growth, % Return on capital employed (ROCE),%

106

100 100 100

171 126

7.9

5.6 8.7

11.5

1) On scale of 1 to 5, where 1 is low and 5 is high

2) Tobin’s Q ratio (market value of company’s assets + their replacement value), assuming constant book value

Additionally the research “calculated” the % improvement across a range of key businessmetrics that a one point improvement in “management score” would generate



Market sharegrowth







106

100 100 100

171 126

7.9

5.6 8.7

11.5





Market sharegrowth







106

100 100 100

171 126

7.9

5.6 8.7

11.5



Additionally the research “calculated” the % improvement across a range of key businessmetrics that a one point improvement in “management score” would generate

Sources: McKinsey on Operations: LSE and Stanford research project, Feb ‘06.Management Practice & Productivity, why they Matter July ‘07

10

Current Economic climate

• 97% of global executives sayaccessing and retaining key talent isimportant – and 72% say it is critical

• High performers are more likely tojob hunt actively – 47% compared to18% for low-performing employees

• 74% of “survivor” employees saytheir productivity declined after alayoff

• 30% of companies retain knowledgepoorly or not at all when workersleave

Sources: nGenera Corp, PricewaterhouseCoopers 12th Annual Global CEO Survey 2009;Leadership IQ, 2006 and 2008; Institute for Corporate Productivity,2009; Leading through Unprecedented Times, Mercer, 2009

1111

Agenda



Setting the scene






12

What Leadership does our company need to succeed today & tomorrow?

What Leadership does our company have in place to day?

How do I close gaps in a way that impacts business performance?

How do I keep the gaps closed (sustain momentum)?Succession is not a ‘one-off’. Developing successors needs to be an internal practice.

• After the initial intensive assessment, it is important that internal practices & processes in are place andintegrated with its business & performance cycles to assess and review the progress made in addressingkey gaps / development needs

Do not stop at Assessment – Follow Up with Development linked to business results.

• Too often organization’s make significant investment in detailed assessments reports that lie on shelves &do not translate into a sustainable shift in executive capabilities & performance. Either executives do notbuy-in to the feedback; or the assessment process does not provide sufficient follow-up.

• The desire to address development needs frequently gets overtaken by business priorities.

Tailor a set of Competencies / Attributes for your unique business context (not a generic list).

• What are the key business priorities and challenges?

• What made us successful in the past?

• What will be required in the future?

Early & transparent communication on the assessment purpose, process & output to participants.

• There are many different assessment methodologies depending on the time, budget and the competenciesbeing assessed.

• Critical to success is that the participants feel that the assessment process is a collaborative partnership withthe company & consultant. This is created through early & transparent communication on the process &ensuring that the participants are the first to see their reports prior to the board.

H&S Approach - 4 Key Questions that create Value

13

Driving Business Results through TalentAlignment of Business and Talent

► Enable smooth transitions

► Stay connected withalumni and retired employees

Transitioning

► Role and needs definitions

► Evaluation criteria

► Develop, support, and coachsuccessors

► Sustaining the process

Succession Planning

► Identify and develop highpotentials

► Leadership development andcoaching

Leadership Pipeline

► Workforce strategy

► Differentiating the Company

► Communicating the talentagenda

► Building diversity

Identifying & Attracting

► Understanding talent needsand sources

► Executing business/talentplans

► Interviewing methods andskills

► Managing the talentacquisition investment

Recruiting & Hiring

► Talent development process

► Link to succession planning

► Clearly defined promotionand rotation criteria

► Assessment, feedback, andcoaching

Promotion & Rotation

► Pre-employment support

► Managing expectations for theentry process

► First 90 days onboarding

► Planning and supporting mergersand acquisitions

Onboarding & Integration

► Active communication

► Performance and careermanagement

► Work/life balance issues

► Recognition and rewards

► Leading people throughchange

Engaging & Retaining

► Developing a learning mindset

► Learning to enable businessexecution, productivity andefficiency

► Competency and skillsdevelopment

► Experience and relationship-basedlearning

► Coaching, follow-through, andsupport

Continuous Learning &Development Experiences

Talent

14

An Integrated Talent Management Framework –setting the policy, standards and direction

Talent Management Information System

Communication and Management of Change

Strategic TalentManagement

CorporateGovernance

Model

TalentManagement

Strategy

StrategicCompetencies

StrategicBusiness

Indicators(Company, BU,

Exec)

ConsequenceManagement

Fe

ed

back

Career Management

Management of Potential

Management of Performance

© 2008 Heidrick & Struggles

Compensationand Benefits

SalaryBenchmark

CareerPlanning

Mobility andProgression

Competencies’Gap Analysis

TalentSegmentation

Competencies’Development

SuccessionPlanning

Talent HiringSupport

PotentialEvaluation &

Analysis

PerformanceEvaluation

PerformanceEvaluation

Model

15

Case Study from Another Industry in Asia:Leadership for Business Growth – Hindustan Lever

What Leadership is required for Success?

In 2002, HUL faced market and internal challenges which included:

► A slowdown in overall business growth

► Key business units missing KPI’s

► Being at threat of losing status as first choice for top talent and new MBAs

What are the Key Gaps?

Addressing and meeting the business needs demanded an insight to these emerging leadership issues:

► Autocratic styles contributing to lack of ownership and apathy towards goal achievement

► A ‘play it safe’ mentality generating an aversion to risk

► A diminishing commitment to development resulting in talent departure

► Insufficient emotional engagement resulting in a lack of trust, teamwork, accountability & creativity

How did we close Gap?

The “Developing Leadership Engagement” (DLE) program was designed and delivered across the business as both an immediate

intervention and a sustainable solution:

Self Awareness (Mindset Change)

Focus on personal responsibility

Feedback rich environment

Ownership of development needs

Coaching plan that ties developmentto business results

Catalyst Workshop

(4 days) Deep bench strength of coaches with

both business and developmentexperience

Benchmarked checkpoints to ensuresuccess

End-to-end support from HR as abusiness partner

Apply in the Workshop(4 months)

Performance presentation to TopTeam

Deep debrief on learning and designof next phase of development

Finale (1 day)

16

Case Study (cont’d):Leadership For Business Growth – Hindustan Lever

Key Success Factors:

The key success factors of the program included:

► The explicit support of DLE from the CEO & Board

► Demonstrated results on real business issues that were a priority to management

► A commitment to growth and development that was integrated with performance through skilled coaching

“I firmly believe that DLE was the first breakthrough in getting the people in Business to acknowledge theirlack of leadership and began to empower themselves to lead. From 2004, the Business started doing well –10% top-line and 15% bottom-line growth. Last year onwards, we are on a real roll – 20% growth quarter-

on-quarter and by next year we will have doubled the business in size since 2003. The new ManagementCommittee is mostly 40 years old and are the biggest symbols of the change in HUL.”

Leena Nair – Executive Director HR HUL

Outcomes of the DLE Program:

► A 100% growth in the business over the next five years

► Linking leadership behavior and actions to a development culture that supported the business objectives and ultimately contributed to thesuccession of the Management Committee

► HUL regarded as the top choice for career development by Business Schools

17

Thank you!

“I firmly believe that DLE was the first breakthrough in getting the people inBusiness to acknowledge their lack of leadership and began to empower

themselves to lead. From 2004, the Business started doing well – 10% top-line and 15% bottom-line growth. Last year onwards, we are on a real roll –20% growth quarter-on-quarter and by next year we will have doubled thebusiness in size since 2003. The new Management Committee is mostly 40

years old and are the biggest symbols of the change in HUL.”

Leena Nair – Executive Director HR HUL

18

#20-01 Suntec Tower One

7 Temasek Boulevard

Singapore 038987

+65-6332 5001

[email protected]

www.heidrick.com