Organisational Readiness
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1 Organisational Readiness Alignment of Succession Planning & Talent Management - Making the most of People Intelligence Stuart Hedley, Managing Director
2 Business context is changing One in four CEOs said they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent challenges. One in three is concerned that skills shortages will impact their company s ability to innovate effectively Source: PWC, Annual CEO Survey, Feb 2012
3 Business Outlook The focus on talent has never been greater and is magnified by: Aging workforce; Baby Boomers retiring in droves (10,000 per day in US alone) Critical shortage of years old to replace Baby Boomers Pace of change in market place (uncertain future) Changing business landscape requires new skills
4 Minimising RISK Succession planning as a governance obligation Many businesses booming and failing in the same industries Shareholders demand transparency! A lack of planning or a badly executed CEO succession can have an immediate negative impact on company share price, strategic momentum, company reputation, and employee morale. Source: Bloomberg Business Week, June 2011 Poor succession planning is wiping 2 billion a year from the stock market value of FTSE 350 companies equivalent to 0.6 per cent of total UK annual company profits. Source: Investors in People, 2006
5 Major press coverage surrounding Steve Jobs successor The shares fell as much as 7% in extended trading in the U.S. yesterday after the announcement. Source Bloomberg, August
6 Reported talent shortages around the globe Two thirds of CEO s believe they re facing a limited supply of skilled candidates Source: PWC Annual CEO report 2011 Engineers topped the list of job titles experiencing talent shortage in the UK in 2011 Source: Manpower s 2011 Global Talent Shortage Survey 44% of respondents at companies based in china say a lack of managerial talent is a barrier to conducting activities outside China. Source: McKinsey Report, 2008 As of Jan.1, the oldest of America s baby boom generation started turning 65 at a rate of 10,000 a day a trend that will last for the next 19 years Source: NY Times, % of employers in Australia are experiencing difficulty filling critical positions Source: Manpower s 2011 Global Talent Shortage Survey One in five of all senior executives in the Fortune 500 is eligible for retirement now Source: Rothwell & Associates
7 People are critical to success Talented people have never been more difficult to attract, identify and retain High performance = right person + engagement But few organisations have clear insight into their talent s potential or value
8 Succession Planning v Talent Management The two go hand in hand, though there are key differences: Talent Management starts with People, and aims to identify those with high potential, giving them the opportunity to learn and develop by providing useful experiences to progress their careers......succession Planning starts with jobs, where critical roles are identified and the process of succession ensures the readiness of talent to move into key positions when necessary. This task is made much easier where talent has been well managed.
9 Why good succession planning matters: The Payoffs: Best-In-Class companies achieved; 77% of newly promoted leaders in key positions achieved a rating of exceeds expectation in their most recent performance interview 66% of key positions in the organisation have at least one ready and willing successor 14% year on year reduction in time to fill key positions
10 Effective Talent Management starts with People Intelligence... a deep understanding of the skills, behaviours and potential within an organisation and how they align to current & future business objectives transforming the way you hire and manage talent.
11 SHL Global Assessment Trends Report (GATR) 2012 Workforce Planning/Talent Analytics, specifically, has been cited as a key growth/trend area by analysts who demonstrate that companies have these data on hand, but need a focussed area around analysis to harness the capability of available data (Bersin 2011) Indeed, Manpower cited this as manufacturing talent a strategy to examine talent within the current workforce in order to leverage talent in a new way: anticipating talent needs and having an accurate perspective of workforce talent versus reacting to talent shortages with shortterm fixes (Manpower 2011)
12 Understand, Align, Optimize Talent Mobility Talent Audit Succession Planning Shaping Development Identify key roles for succession (not just leadership, critical roles managers and highly skilled workers both technical & functional) Define behaviours/competencies critical for future roles and motivational, cultural & values fit Identify pools of people that could potentially fit and be high performers Assess people against these criteria Assess readiness of people to move quickly into key positions Provide critical learning & development experiences to accelerate growth Who in your organisation is responsible for providing coaching/mentoring?
13 High performer or high potential? One study found that 71% of high performers were not high potentials BUT 93% of high potential employees were also high performers. Source: Corporate Leadership Council, 2005 Confusing performance and potential can have damaging impact on the company, as well as on the employee; High performers in key roles move to positions for which they are incompetent High potentials are overlooked and leave for opportunities in other companies. Source: High Potential Versus High Performance: What Is the Real Difference? Bersin 2008
14 The challenge of identifying potential A hi-potential employee is someone who has the drive, dedication and the capabilities to excel in positions of greater responsibility. They are the employees who are most likely to be top performers at the next level (Source: CLC, 2005) The challenge is how to precisely measure and act upon this
15 Linking the WHAT, HOW and POTENTIAL 1. External/Industry Context 2. Organisation Context 3. Hard, Results: a. Key Results Areas b. Core Accountabilities 4. Observable, Competencies: a. Behaviour b. Skills Potential (Lead) 5. Soft, Potential: a. Motive b. Personality traits c. Cognitive
16 An example: Individual profile Track record, skills and experience 7 years retail experience Turned around a failing store No corporate/planning roles Overall: Ready now for < > Not ready yet Remain in post Manage out Results Strong SM track record over 3 years; waste and breakages targets exceeded, people indicators all met (absence, turnover, and retention albeit after an initial high turnover when first took over). Implemented Stock Order 2000 successfully and became a regional Centre of Excellence. Forecasting within store tolerance levels. Raised mystery shopper scores by 7pts despite no new in-store investment. Seconded to Natural Work Team for cost reduction project in not a success, failed to get senior management or other RM / SM buy-in. Skills and Behaviours Excel: Drive and resilience rated highly by all raters; Customer Focus sets high standards, leads from the front; People Management rated highly by direct reports (inspires loyalty from those close to, gets results) although low from peers see items on empowerment. Moderate: Analytical Skills learnt to use Xxx tool but not naturally analytical. Development needs: Business Planning line manager rated as area for improvement, more instinctively commercial than analytical; Interpersonal Sensitivity (strong evidence that lacks tact, extremely task focussed), could get even more from staff if balanced task and people focus. Potential Highly ambitious and driven. Wants move to Regional Manager role in 12 months not very receptive to challenge re realism of this! Works incredible hours even by xxx standards. No location constraints. So willing to relocate in europe Despite significant development needs, is receptive to feedback and willing to learn undertaken CIPD qualification, and would like to undertake broader business planning project / seek experience recognises failure of NWT experience. Values seeing immediate results and is impatient, struggles to let go likely to be an issue in more senior roles Struggles with complex conceptual thinking low numerical abilities and short-term outlook style wise. Verbally is above average and can talk a good story. Can be seen as detached or dispassionate about others personal needs.
17 An example: Talent Pool review output R&D Customer Management Sales & Marketing Organisational TP MV leadership Senior Manager SK BB SJ JP Middle Manager HF MF ML BM AS FB FW PS Operational PB SC NT JN SM ZP JB KEIR SBLC VSAT MC Management
18 How Talented is your Talent? Talent Analytics TM
19 The essence of analytics is to answer a fundamental question how do we know?
20 The essence of talent analytics is to answer the question... do we know if our talent can achieve what we want to achieve?
21 Global telecoms company and Why are our projects not being delivered to time, cost and quality? Answer given to the CEO Because we do not have enough project managers and this industry does not attract the best! SHL Competency Benchmark % Top Talent Competencies that drive performance
22 Global telecoms company and Why are our projects not being delivered to time, cost and quality? Answer given to the CEO Because we do not have enough project managers and this industry does not attract the best! SHL Competency Benchmark % Top Talent Percentage of top talent in benchmark & client population
23 Global telecoms company and Why are our projects not being delivered to time, cost and quality? Answer given to the CEO Because we do not have enough project managers and this industry does not attract the best! SHL Competency Benchmark % Top Talent Percentage of top talent in global telecoms industry
24 Global telecoms company and Why are our projects not being delivered to time, cost and quality? Answer given to the CEO Because we do not have enough project managers and this industry does not attract the best! SHL Competency Benchmark % Top Talent Percentage of top talent client has attracted and employs
25 Global telecoms company and Why are our projects not being delivered to time, cost and quality? Answer given to the CEO Because we do not have enough project managers and this industry does not attract the best! Perhaps the answer is correct maybe they do not attract the best SHL Competency Benchmark % Top Talent
26 But is that answer correct? They do attract strong talent But they also attract weaker talent too All their people have the qualifications but which ones have the talent to deliver? Benchmarked using SHL s competency profile for effective project managers SHL Competency Benchmark % Top Talent
27 Workforce optimisation Labour costs for project managers US$32 million a year SHL Competency Benchmark % Top Talent
28 Workforce optimisation Labour costs for project managers US$32 million a year Identifying their best talent and aligning them with the most challenging projects SHL Competency Benchmark % Top Talent
29 Workforce optimisation Labour costs for project managers US$32 million a year Identifying their best talent and aligning them with the most challenging projects Identifying performance and development programmes for each tier of their project manager population SHL Competency Benchmark % Top Talent
30 The question is how do you know?
31 Thank You!
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