Global Challenges in Talent Management
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1 Paul Evans Shell Chair Professor of Human Resources and Organisational Development, Emeritus INSEAD, Fontainebleau, Singapore and Abu Dhabi CRANET HRM Konferencen, CBS, den 30. august 2012 Global Challenges in Talent Management Plus ça change Talent development Global talent management Leadership development Why deep international experience is important The Danish situation? The response of the emerging countries Standardization of HR processes without losing local differentiation Let s get a theoretical perspective out of the way up front 1
2 Global AND Local Operational Excellence AND Professionalism in Development Accountability AND Teamwork Change AND Continuity Execution/Today AND Innovation/Tomorrow How do you develop people? PROVIDING CHALLENGE MANAGING THE RISKS 2
3 The decline of Japanese multinationals Number of companies in 141 / 68 / FORTUNE Global list % revenues of FORTUNE Global 68% 11% 500 Why the decline? Devotion to the way Isolated domestic market Docile domestic labor force HOMOGENEOUS SENIOR LEADERS Is it time to get nervous? If your company s international revenues approach 50% of the total but < 35% of top leaders come from foreign markets 3
4 «Jeg har aldrig kendt mage til land, hvor folkets sindelag i den grad er af ensartet kaliber og højde som her. Man møder ingen særlige evner eller kvalifikationer, ingen der udmærker sig ved ekstraordinære studier eller erhverv. Alle er nogenlunde ens.» Molesworth, British ambassador to Denmark 1692 Den Danske Stamme Kultur A virtue and a liability The charm of the Danes Danes network well but only with other Danes The Danes as the Koreans/Japanese of Europe The importance of social capital in the knowledge era «Historically, the Danes have not paid attention to SYSTEMATIC talent development» Danes don t believe in systematic processes when it comes to people Difficult to find people for the top jobs SOURCE: Den Globale Udfordring: Rammer om International Human Resource Management,.Evans, Pucik, Barsoux, Engsbye. Copenhagen: JP Boeger,
5 I spend a third to half of my time on leadership development. Nothing I do will have a more enduring impact on P&G's long-term success than helping to develop other leaders. A.G. Lafley, CEO of Procter & Gamble, 2006 How international are the Danes? On the surface The need for transnational managers with a global mindset «International business tourists» Is international experience really necessary? Low percentage of foreign board members Attracting and retaining skilled foreign professionals Singapore vs Denmark Is it still true today? 5
6 Make or Buy Talent? A current study in the US financial services industry on Make versus Buy It takes an outsider 4 years on average to get to the same level of performance as an insider It takes an insider id 7 years to reach the same salary level as an outsider Framing mobility and leadership experience: One example The challenges people experience are more important than the function from which they get the challenge. The skills people develop are more important than where they get them. The best development experiences come from the following categories of roles: Challenging People roles Challenging Assignments Challenging Commercial roles Challenging Expertise roles People will have to move across functions to gain these experiences Crucible experiences at P&G 6
7 The Power of Mobility How do you develop managerial leaders? Spot the people who have potential and then put them in a position where they HAVE to lead REMOVE EXPERTISE FROM UNDER THEIR FEET The pathologies of 7
8 Recent INSEAD research shows that DEEP international experience changes the mind Source: Cultural Borders and Mental Barriers: The relationship between living abroad and creativity, W. Maddux & A.Galinksy, Journal of Personality & Social Psychology, Vol 96:5. And other publications. Building global integration Global Integration in summary «GLOBAL» means teamwork among competent managers on the basis of valid, reliable, holistic, timely information, i.e. COORDINATION «LOCAL» means EXECUTION 8
9 Take a globalized firm like Toyota Local factory managers didn t like globalization because they wouldn t be making a car any longer But after globalization each factory manager is far more important to Toyota than before Responsibility and Accountability at Nestlé Responsibility Accountability Embraces the main tasks of the individual Expects/allows an individual to act with own resources Assumes decision-making authority and the competence/ability to directly enforce the execution of the task Is assigned to an individual and can neither be delegated nor shared Implies full Accountability for the related tasks Responsibility can be described by: Decide set define manage perform act upon assume the results Goes beyond Responsibility as it also includes tasks the individual should influence, but cannot directly enforce Encompasses the areas of Responsibility of the direct reports and/or the areas of Responsibility of the individuals that are functionally led (dotted line) Can be shared, but cannot be delegated Includes an obligation to challenge and follow up on the plan/actions of the responsible individual Accountability can be described by: Propose ensure support facilitate monitor follow up Source: Evans, Pucik & Björkman, The Global Challenge (2 nd edition), 2011, McGraw-Hill Learning how to work in «split egg» ways 2% The Development/ Project Role 98% The Operational Role 9
10 What gets you fired and what gets you promoted Strategy, market and business development (EXTERNAL) 30% 70% The Development/ Project Role The Operational Role INTERNAL development (e.g. cost reduction, process development) Leverage and linkage across the organization (LATERAL) Uncompromising attention to getting the right people in the right places at the right times Coaching and risk management Clarity of objectives and areas of accountability Tomorrow s services, products & capabilities Today s results Global/Group roles Local roles 10
11 Building network ties through Action Learning at Nokia How Talent Management is vital for Managing Cultural Transformation An IBM example 11
12 PERFORMANCE MANAGEMENT Big changes often needed in who is rewarded Strong individual orientation Strong Whole Company Bonus + pay individual results + adequate contribution across boundaries Promotion strong individual + contributed to the performance whole company Manage strong individual + little contribution Out performance to whole Recruitment takes individual + clear whole responsibility attitude Is it still true today? Danish enterprises are world class at global talent management: Senior management reflects the composition of today s and tomorrow s markets The competences and contribution of the person counts more than the passport There is rigorous attention to systemic talent management Don t agree agree Strongly 12
13 The Shifting Frontiers of Global Competition (from an HR perspective) In emerging markets, Western multinationals had the advantage in the war for talent And then it started to change Soon multinationals from emerging markets may become serious competition The $13,000 GDP brick wall Source: Fatas & Mihov (INSEAD), The 4 I s of Economic Growth, Recruitment Increasing awareness of the Hwawei s and Votorantim s that we are competing for talent It is easy to recruit from Tsinghua or Gulio Vargas, but why would someone from CBS join Hwawei or Votorantim? Learning how to recruit from the top of the second tier Awareness that your most recruiters are your people keep your promises to them! 13
14 Plus ça change Let me start with some more down-to-earth challenges: Talent development and management Leadership development Plus ça change We started with some vital but down-to-earth challenges: Talent development and management Leadership development Building global integration through talent management Globalization of the last frontier Standardization of HR processes without losing local differentiation Exploiting technology and virtualization What s at stake? (1) Boundaryless talent (2) Self-help IBM s web-based approach to opening the free flow of ideas and talent across boundaries SOURCE: M.VanStraelen, IBM Director of Learning 14
15 Two deeper issues in an integrated world (1) Control (2) Conflict The Control-Challenge Duality Latin America s fastest growing company The deeper challenge for Global Integration The need for constructive debate in teamwork among gpeople p who have fundamentally different ways of disagreeing 15
16 16
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