2013 conference board succession management conference succession analytics 101713 r3

1

The Conference BoardSuccession Management Conference

How Organizations Are Using Analytics in Succession Decisions

October 18, 2013 Image: theatlantic.com

2

David UnderwoodHead Talent Management & AnalyticsCSAA Insurance Group

Image: theatlantic.com

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=wYgzO3gB10xc_M&tbnid=iTAv96JlYuhnSM:&ved=0CAUQjRw&url=http://www.theatlantic.com/sponsored/ibm-power-data/archive/2012/07/chief-analytics-officer-the-newest-member-of-the-c-suite/260570/&ei=MA9TUsP_Aof2iwKEtIC4Aw&bvm=bv.53537100,d.cGE&psig=AFQjCNGht8SGjfFvVFqURmdBTo-F0PQ-Mg&ust=1381261451024754

3

Current Areas of Focus

• Process & Analytics

• Succession focus on Readiness and Diverse Bench

• Extending talent review to all employees

• Accelerating cross-business movement of high potential talent

• Predictive Analytics

• Predicting Executive success – Success Model

• Predicting retention of High Potential and High Performing Talent

• Predicting future fit with respect to skills and culture

© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

4

Succession Analytics

Image: theatlantic.com

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=wYgzO3gB10xc_M&tbnid=iTAv96JlYuhnSM:&ved=0CAUQjRw&url=http://www.theatlantic.com/sponsored/ibm-power-data/archive/2012/07/chief-analytics-officer-the-newest-member-of-the-c-suite/260570/&ei=MA9TUsP_Aof2iwKEtIC4Aw&bvm=bv.53537100,d.cGE&psig=AFQjCNGht8SGjfFvVFqURmdBTo-F0PQ-Mg&ust=1381261451024754

5

Succession Management

Succession management is a strategic and systematic process that enables us to identify, select and manage talent, build bench strength and ensure the readiness of leaders to move immediately into key positions when necessary. It is designed to minimize leadership gaps and ensure all leaders have the skills and capability to deliver on our business strategy today and in the future. Doing succession management well guarantees leadership continuity and minimizes the risk of vacancy in mission-critical roles.


6Image: businessenglishpod.com© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

7

Human CapitalMost Important Factor in Maintaining Competitive Advantage

Leading Through Connections: The IBM 2012 Chief Executive Officer Study – 1700 CEO’s, Global


http://iveybusinessjournal.com/wp-content/uploads/2012/07/Lesser-figure.jpg

8

Human Capital#1 CEO Challenge

2013 CEO Challenge Study – The Conference Board

Human Capital Operational Excellence

Innovation Customer Relationships

Global Political/ Economic Risk

1 Grow talent internally Raise employee engagement and productivity

Apply new technologies (product, process, information)

Enhance quality of products/services

Integrate long-term risk recognition into strategic planning

2 Provide employee training and development

Focus on reduction of baseline costs

Engage in strategic alliances with customers, suppliers, and/or other business partners

Sharpen understanding of customer/client needs

Reduce exposure to risky countries/regions

3 Raise employee engagement

Break down internal silos

Find, engage, and incentivize key talent for innovation

Engage personally with key customers/clients

Implement contingency plans for crises (e.g., geographical, political, relocation of employees)

4 Improve performance management processes and accountability

Continual improvement (Six Sigma, total quality, etc.)

Create culture of innovation by promoting and rewarding entrepreneurship and risk taking

Increase speed of product and services to market

Manage currency risk

5 Increase efforts to retain critical talent

Seek better alignment between strategy, objectives, and organizational capabilities

Develop innovation skills for all employees

Use competitive intelligence to better understand customer/ client needs

Establish crisis management teams and procedures

The above represents the Top Five CEO challenges identified in the 2013 CEO Challenge Study. For each challenge, the top strategies are listed. Human Capital was the #1 Global Challenge. The Study represents input from CEO’s, Presidents and Chairmen of 729 global companies.


9

The purpose of [succession] analytics is to IMPROVE BUSINESS PERFORMANCE.

Image: IBM - Engines of a Smarter Planet


10

What’s Holding Back HR’s ProgressAnalytics May Be the Accelerator

• Inability to confidently and assertively solve business issues with line leaders

• Support function mindset, failure to communicate value as a strategic business partner

• Lack of access to data blocks definition of ROI/business impact of function

• Lack of faith in the ability to execute necessary changes

• Low strategic license restricts role, available talent/tools, expertise to

be strategic

Source: The State of Human Capital 2012 – The Conference Board, McKinsey & Company Global survey >500 HC professionals, plus 18 focus groups (N=175) HC Members of The Conference Board Councils


11

CEO’s Clearly Want More from the HR Data They’re Getting


12

HR Data Credibility Is Suffering

Issue Percent

Percent business leaders who believe HR analytics focus on the right business questions 17%

Percent business leaders who trust talent data and insights from HR 18%

Percent business leaders who have changed a business decision in the past year as a result of data from HR 15%

Percent of business and HR leaders who believe HR staff understand the business < 20%

Percent of senior HR leaders who believe they are getting returns on their talent analytics investments 8%

Percent of HR leaders who believe staff limitations are a barrier to improving HR analytics 80%

Source: CEB Research, Global Labor Market Survey 2013


13

Doing Talent Analytics Well

1. Analytics Leaders, those in the top quartile of all companies had 12 percent better talent outcomes than their average counterparts

2. Improving Analytic Impact from medium to maximum led to

4% improvement in gross profit margin

$12.8 million in savings for every $1 billion in revenue

Source: CEB Research, Global Labor Market Survey 2013


14

Analytics succeed only to the extent that they address key business issues, are understandable/consumable, inform those doing the work, and drive key behavior changes leading to measurable business improvement.


15© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

16

The Analytics Maturity CurveWhere Are You?


17

Talent Analytics is the integration of data and the use of analysis, statistics, and consulting to create new insights about our organization that help drive a high

performance culture and allow us to better serve our members

Reporting vs. Analytics

Reporting is focused on operational outcomes and historical information

Analytics supplements historical reporting with high level insights and future predictions

Reports are pulled to review existing problems for monitoring purposes

Analytics regularly reviews current problems, analyzes external contexts, and provides comprehensive assessment of the current state in a summary format only when key issues need to be addressed

Reports are generally provided in raw data format or basic summary tables

Analytics highlights the key indicators to be explored by drill-down analysis and brings focus to concerns relevant to management

Statistics are not part of the process Statistics are used regularly to substantiate findings

Deliver Actionable Business Information – Improve Decision Making

From Reporting to AnalyticsMoving to Higher Ground


18

Just because a metric is easy to capture doesn’t mean it’s the right one to use.

Jonah Berger

Image: mashable.com


19

From Reporting to Analytics to Predictive AnalyticsPushing the Curve Forward

Reporting Analytics Predictive Analytics

Turnover Cost/Cause/Timing of Turnover Who will leave and when?

Percent High Potential What makes best talent best? Competencies, assessments performance, personal attributes, engagement, culture, etc.

Who should fill the role we will create next year to accelerate market growth and how successful will they be?


Hindsight Insight Foresight

Examples

80% Reporting/20% Analysis 20% Reporting/80% Analysis

20

Image: blog.neosgeo.com


21

Data VisualizationImproves Communications, Understanding & Action


22© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

Measurement Drives Motivation and FocusBe Careful How You Use It

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=qDwosmyBsLZduM&tbnid=-216_69i6VfGpM:&ved=0CAUQjRw&url=http://inovasi.com/2013/05/30/visier-pengelolaan-tenaga-kerja-profesional-untuk-mengoptimalkan-produktivitas-dan-mendorong-bakat-terbaik/&ei=8BxPUvO9FMqoigLP34CQCg&bvm=bv.53537100,d.cGE&psig=AFQjCNGWsRgvGvYdEWIbKqmks3J7hWayqQ&ust=1381002749995565

23

RESULTS


24

Building Analytics CapabilityRoadmap

Start with a critical business (talent) problem

Use what you have – begin where you’re at

Look for actionable patterns in your talent data

Keep it simple, less really is more

Identify the key insights

Apply insights to drive better business decisions

Use data to predict business outcomes

Focus & scale capability and technology


25

Building Analytics CapabilityThink Broadly

1. Do only what delivers real business results

2. Start where you are at, build credibility first and than scale

3. Create Pull vs. Push - ensure the business owns it, and sees the value

4. Democratize – give business users access, let them own, drive, and configure

5. Keep it simple, think 80/20

5. Approach holistically - Integrate with IT, Marketing and Finance

6. Acquire the right tools and expertise (data scientists)


26

Analytics StrategyUnify Data, Reporting and Analytics Platform


27

Beyond a Foundational Level of Data CapabilityAdditional Investment Returns Low Additional Benefits


28

Start with Business Questions, and Ask Different Ones

Do you know what makes your best talent, your best?

Do you know what skills, experiences, attributes drive success?

Do you know how prepared your leaders are to respond to future changes?

Do you know who in your high potential population will leave and why?

Do you know if your new hire/new promotion will be successful?

Do you know what impact leadership/succession diversity has on business results?

Do you know how engagement and culture impact succession?

Do you know the fully-loaded cost/ROI of your succession development efforts?

Do you know who to develop and how fast to prepare for an anticipated vacancy?

Do you know where your key talent gaps are, and how to close them?

Do you know if your ready now successors are?

Do you know the optimal balance between readiness and opportunity?

Do you know if what you are doing is impacting the bottom line?


29

Succession Management Metrics Examples

• Succession Pipeline Depth: Average number succession planning candidates for each role

• Succession Pipeline Utilization: Percent key positions filled by internal succession candidates

• Succession Planning Depth: Percent key roles with succession pool one or more unique candidates

• Succession Turnover: Percent succession candidates who voluntarily left the organization

• Succession Diversity Profile: Percent identified diverse succession candidates (female/minority)

• Succession Slate Uniqueness: Percent unique succession candidates

• Executive Tenure: Average time in role for key incumbents

• Succession Readiness Over Time: Percent change in readiness over time key succession candidates

• Succession Diversification: Percent identified successors outside division/area of responsibility

• Bench Strength: Percent management that has been identified as ready for promotion

• Churn: Hires, promotions and attrition [source, destination, and characteristics – e.g., diverse, high potential]

• High Potential Voluntary Separation Rate: Percent high potential employees who voluntarily left

• Diverse external Hiring Rate: Percent diverse external hires (female/minority)

• High Potential Diversity Profile: Percent identified diverse high potentials (female/ethnicity)

• Diverse Promotion Profile: Percent diverse promotions (female/ethnicity)

• Diverse Separation Rate: Percent females/ethnically diverse employees who voluntarily left

• Internal Fill Rate: Percent open roles filled with internal talent

• High Potential Mobility Rate: Percent high potentials who experienced upward or lateral movement

• High Performer Mobility Rate: Percent high potentials who experienced upward or lateral movement

• Diverse Mobility Rate: Percent diverse talent who experienced upward or lateral movement

• High Potential Development Rate: Percent high potentials who completed 100% targeted development


30

It’s an “AND” Conversation


2013 conference board succession management conference succession analytics 101713 r3

Business

percent of business

nevada utah insurance

aaa northern california

business performance

business strategy

business issues

business decision

business partners