TALENT MANAGEMENT

& Succesion Management

TALENT MANAGEMENT

& Succesion Management

Why Talent management is Important ?

• The things that wakes me up in the middle of the nights is not what might happen to the economy or what our competitors might do next, it is worrying about whether we have the leadership capacity and talent to implement the new and more complex global strategies

David Whitman,Chairman, President and CEOWhirpool Corporation

Why Talent management Important ?(Cont’d)

• Survey of 400 Fortune Companies revealed that :– Identifying and developing leaders is the single most

pressing issue in their companies– Only 8 % rated their company’s leadership as

excellent– Nearly 50% rater their leadership capacity to be fair

or poorConference Board DDI

• On average, organizations will lose one third of their executives to retirement within next 5 years

DDI research ,

Why Talent management Important ? (Cont’d)

• Among approximately 6.000 respondents, 2/3 reported that their current leader displays behaviours that could derail his/her career

• On average , organizations will pay $1.000.000 each time an executive role is filled with an external candidate

Development Dimensions International

• Four in ten leaders fail within the first 18 months on the job

Manchester Consulting

What is talent ?• Talent is the sum of a person’s abilities-his

or her intrinsic gifts, skills, knowledge, experience, intelligence, judgment,

attitude, character, and drive. It also includes his or her ability to learn and grow

• There is no universal definition of an outstanding manager

• Each company must understand the specific talent profile that is right for it

The War for Talent by Michaels, Helen Handfield-Jones and Beth Axelrod

What is talent ?• The resource that includes the potential

and realized capacities of individual and groups and how they are organized,

including those within the organization and those who might join the organization

Beyond HR – New Science of Human Capital, John W. Boudreau & Peter M. Ramstad

MANAGERIAL TALENT

• Some combination of a sharp strategic mind, leadership ability,

emotional maturity, communications skills, the ability to attract and inspire

other talented people, entrepreneurial instinct, functional

skills, and the ability to deliver results

The War for Talent by Michaels, Helen Handfield-Jones and Beth Axelrod

Talent Management Definition

• DDI defines talent management as the system in which people are recruited, developed, promoted, and retained to optimize the organization’s ability to realize positive business outcomes in the face of shifting competitive landscapes and labor requirements.

More specifically …..

• Talent management is a business process that systematically closes the gap between the talent an organization has and the talent it needs to successfully respond to current and emerging business challenges.

THE WAR FOR TALENT surveys

• To understand how companies build a strong pool of managerial talent - how they attract, develop, and retain the

people in the top 200 managerial position and how they build a pipeline of younger talent that might one day move into more

senior positions

The War for Talent by Michaels, Helen Handfield-Jones and Beth Axelrod

WHAT’S DRIVING THE CURRENT EMPHASIS ON TALENT MANAGEMENT?• There is a demonstrated relationship

between better talent and better business performance.

• Talent is a rapidly increasing source of value creation.

• The context in which we do business is more complex and dynamic.

• Employee expectations are also changing.

• Workforce demographics are evolving.

Growing propensity to switch companies

The Old Reality The New RealityPeople need companies Companies need people

Machines, capital, and geography are competitive

advantage

Talented people are the competitive advantage

Better talent makes some difference

Better talent makes a huge difference

Jobs are scarce Talented people are scarce

Employees are loyal and jobs are secure

People are mobile and their commitment is short term

People accept the standard package they are offered

People demand much more

A WHOLE NEW APPROACH TO TALENT MANAGEMENT

1. Embrace a talent mindset2. Craft a winning employees value

proposition3. Rebuild your recruiting strategy4. Weave development into your

organization5. Differentiate and affirm your people

NEW WAY OF MANAGING TALENTThe Old Way The New Way

HR is responsible for people management

All managers, starting with the CEO, are accountable for strengthening their talent pool

We provide good pay and benefits

We shape our company, our jobs, even our strategy to appeal to talented people

Recruiting is like purchasing Recruiting is like marketing

We think development happens in training programs

We fuel development primarily through stretch jobs, coaching, and mentoring

We treat everyone the same, and like to think that everyone

is equally capable

We affirm all our people, but invest differentially in our A, B, and C players

STARTS WITH A TALENT MINDSET

Old Mindset About People

New Talent Mindset

A vague notion that ‘people are our most important asset’

A deep conviction that better talent leads to better corporate performance

HR is responsible for people management

All managers are accountable for strengthening their talent pool

We have a two day succession planning exercise once in a

year

Talent management is a central part of how we run the company

I work with the people I inherit I take bold actions to build the talent pool I need

TALENT IS EVERY LEADER’S JOB

• Establish the gold standard for talent• Get actively involved in people decisions

deep within the organization• Drive a simple, probing talent review

process• Instill a talent mindset in all managers

throughout the organization• Invest real money in talent• Hold themselves and their managers

accountable for strength of the talent pools they build

REBUILD RECRUITING STRATEGYOld Recruiting

StrategiesNew Recruiting Strategies

Grow all your own talent Pump talent in at all levels

Recruit for vacant positions Hunt for talent all the time

Go to a few traditional sources Tap many diverse pools of talent

Advertise to job hunters Find ways to reach passive candidates

Specify a compensation range and stay within it

Break the compensation rules to get the candidates you

want Recruiting is about screening Recruiting is about selling as

well as screening

Hire as needed with no overall plan

Develop a recruiting strategy for each type of talent

New approach to DevelopmentOld Approach to

DevelopmentNew Approach to Development

Development just happens Development is woven into the fabric of the organization

Development means training Development primarily means challenging experiences, coaching, feedback, and mentoring

The unit owns the talent; people don’t move across units

The company owns the talent; people move easily around the company

Only poor performance have development needs

Everyone has development needs and receives coaching

A few lucky people find mentors Mentors are assigned to every high-potential person

RUN A ROBUST TALENT REVIEW PROCESSTraditional Succession

PlanningRobust Talent Review

A half day session once a year at corporate headquarters

A full day on-site for each division

Discuss possible successors Discuss quality of incumbents

Review individuals Review individuals and the talent strength each unit, and discuss other issues such as retention or recruiting

Polite, senatorial presentations

Rigorous, candid debate

No effort to calibrate assessment

Drive to a distribution of ratings

No action plans agreed to Specific action plans written and followed up for each unit

An annual paper exercise As important and intense as budget process, with real accountability and a performance focus

NEW PAY PHILOSOPHY

Old Pay Philosophy New Pay Philosophy

Pay for the job Pay for the person and the performance

Job-scope and seniority drive pay

Value creation drives pay

Pay what others in the company get (internal equity)

Pay what the individual could get elsewhere (market equity)

Set a range and range and hire within it

Break the compensation rules to hire the right candidate

Talent Management (DDI’s view)

• Best Practice #1: Start with the end in mind—your current and future business needs

– “We are a global automobile manufacturer that has steadily lost market share. What sort of talent are we going to need to shake up the status quo, rejuvenate our brand, and give us the action-orientation required to turn things around?”

– “We are a utility in the midst of deregula- tion. Consumers will have choices. On top of that, we are getting into new busi- nesses. How will the skills of our current talent fit with our new business model?”

Talent Management (DDI’s view)

• Best Practice #2: Talent management is Job #1 for senior leaders.

• Best Practice #3: You must know what you’re looking for—the role of success profiles.

• Best Practice #4: Build a systematic and integrated approach to all work- force development activities.

• Best Practice #5: Talent management is much more than succession management– Effective talent management requires not only

developing people for their current roles, but also getting them ready for their next transition

Talent Management (DDI’s view)

• Best Practice #6: Clear distinctions are made between potential, performance, and readiness.

• Best Practice #7: Look at the team mosaic

• Best Practice #8: Turn your leaders into talent managers.

• Best Practice #9: Talent management is all about putting the right people in the right jobs

Talent Development

High potentials stand out

TALENT MANAGEMENT ASSESSMENT TOOLS

• Performance appraisal• Potential forecast• Measurement scales for performance

and potential• Core/institutional competencies• Mapping and weighting

competencies• Segmenting the Talent Reservoir• Employee and job demographics

Talent Development

Talent Development Goal : Acceleration of HiPos in Leadership Talent Pipeline

Executives

Those who leadorganizations

Managers

Those who lead businesses and

people

Domain Experts

Those who do not yet lead people and/or have

technical focus

Talent Pipeline

Accelerate QualityInternal and ExternalTalent in LeadershipPipeline at All Levels

Entry Level

Entry talent – college recruits

Segmentation of PerformancePerformance and Potential Grade

C• Give warning • Provide coaching• Consider if it

appropriate job

A•Plan next move•Provide extra coaching

A+•Plan multiple moves

•Ensure pay is sufficient

B•Keep in place

A•Identify next development

opportunity

C•Manage out

High

Low

Low High

Potential

Performance

THE CLASSIFICATION OF EMPLOYEE• Superkeepers

– Those employees who greatly exceed expectation– Demonstrated superior performance– Who have inspired others to achieve superior

performance– Who embody the core competencies of the organization

• Keepers – Those employees who exceed organization expectation

• Solid Citizen– Meet organization expectation

• Misfits– Employees who do not meet organization expectations for

performance, working with others, and/or organization competencies

Talent Development

High potential identification• High potential = behavior + track record +

ambition + stretch; – High performers with the ambition to be treated as key talent – Has what it takes to grow into bigger, more complex, more senior roles in

the organization (cognitive capacity, domain expertise, commitment, maturity/balance)

– Demonstrates personal accountability and initiative– They can be found in the top 20 ranking OR in the 70 ranking due to their

current objectives and situation

• High performers = behavior + track record; – Consistently demonstrates and embraces leadership values– Has a record over time of sustained high performance– Has what it takes to grow to their next role – domain expertise

• Understand the difference between High Performers and High Potentials– Ambition and Stretch– Provide examples

Page 30

HiPoTalent

Assessment &Planning

360 degree Survey + LPIIDP

DevelopDifferentiated needs

Targeted development

activities

Evaluate PerformanceEffectiveness

PPRIDP progress

HiPo Development Cycle

Reward &Retain

Meritocracy Recognize

SelectionConsistent

ProcessEvaluation criteria

Talent Pipeline

Studies in 1998 by the Hay Group showed that organization with better operating statistics are morelikely to have succession management programs –

Grow your own leader- William C Byham,PhD