Accelerating Leadership Development

Copyright ©2010 by The Segal Group, Inc., parent of The Segal Company and its Sibson Consulting Division. All Rights Reserved

How to Accelerate Leadership Readinessand Development In Uncertain TimesHR Houston – Gulf Coast Symposium

May 12, 2010

Presented by:JP Elliott PhD, Senior Consultant, Sibson ConsultingJennifer McCusker PhD, Director Global Talent Development & Retail HR, Oakley Inc.

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“A typical American office worker checks his email more than 50 times a

day, sends or receives an instant message nearly 80 times a day and

visits more than 40 different websites.”

—Tim Shipman

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The New NormalChange, Disruption and Transformation

Current and Future Environment

VV olatilityUU ncertaintyCC omplexity

AA mbiguity

VUCA acronym originated by Institute for the Future

3

The New NormalWill Your Organization Survive or Thrive?

Organizational capabilities required:

VV ision

UU nderstanding

CC larity

AA gility

VUCA acronym originated by Institute for the Future

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The New NormalThe Future of Work

Three Critical Assumptions for the Future:

Talent will become the single most important factor in driving competitive advantage

Tomorrow’s skills & capabilities do not exist today

Pace of change will accelerate

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Outcome:In groups of three or four, discuss and answer the following questions:• What are the top 2-3 business challenges your organization is currently

facing?

• How have these challenges impacted the type of leaders your organization needs?

The New Normal—What are Your Challenges?

TaskDiscuss what business challenges your organization is facing? How has this impacted the type of leaders you need?

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The Leadership Challenge Talent is plentiful, but leadership is in short supply

Sources:• Bersin & Associates; Talent Watch Research – Winter 2009, Talent Management Factbook 2009, Modern Approach to

Workforce Planning 2008• New Talent Management Network, State of Talent Management, 2010• Talent Management Magazine, State of Industry Report 2010• Making Talent A Strategic Priority, The McKinsey Quarterly, 2008• The People Problem in Talent Management, The McKinsey Quarterly, 2006

Senior Executives view talent as critical to future

• While talent is seen as key enabler to growth, most organizations do not have understanding of their needs:− The increasingly global competition and shortage of talent was identified by executives as the #1 business trend that

would have a major effect on their companies over the next five years

− 64% of companies identified “gaps in their leadership pipeline” as their top talent challenge

− 68% of companies are unable to identify talent gaps within their organizations, with 49% unable to forecast talent gaps

− Only 26% of companies say they have successors identified for the majority of the positions on their executive teams

− Only 14% of companies are using metrics to analyze and track internal talent supply and demand and connect with performance data

Developing talent is a two-way street

• Aligning the talent strategy to the business strategy continues to be an opportunity for HR, while Line Managers need to take more ownership:− 58% of all line managers believe that the HR function lacks the ability to develop talent strategies in line with a

company’s business objectives, though only 25% of HR professionals agreed with that statement

− Only 24% of companies stated their “talent management strategy is completely aligned with the organization’s overarching business goals”

− 52% of the respondents identified an insufficient commitment to developing talent on the part of line managers as a critical barrier to talent development

− Only 50% of companies reported widespread use of development plans – only 8% stated that the development plans are high quality and effective

− Only 28% and 42% of respondents stated that their executives/line managers would rate their “development planning”and “assessing leaders” as effective

− Only 33% of managers are accountable to act on or follow-up on key talent building processes

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Accelerating Leadership Development

Align Leadership Strategy with Business Strategy

Segment Key Leadership Roles

Define Leadership Role Requirements

Assess Leadership Gaps

Design Leadership Development Plans

Measure, Monitor, & Close Gaps

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Align Leadership Strategy with Business StrategyMatching Leadership Needs to the Situation

Transformational Change

Grow

th S

trate

gy Sustaining Success

Finding ways to take the business to the next level

and avoiding decisions that could cause issues

Start-Up / High Growth

Building structures, systems, processes (sales, marketing,

product development) that lead to revenue growth

Re-alignmentRedirecting resources such as abandoning old product line and developing new

technologies often requires changing organization

strategy, structure, and skills

TurnaroundFast decision making and

eliminating non-value added products, resources, and or business units is required to

ensure survival

Retu

rn O

n As

set S

trate

gy

Transactional Change

Key Questions:• What is our current

business situation?

• How does this differ by business unit, geography, product line?

• Where will we be in 1 – 3 years?

• What are the leadership skills/competencies and critical experiences that will be required to be an effective leader now and in the future?

• What leaders have had experiences in each of the four quadrants?

BUSI

NESS

STR

ATEG

Y

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Align Leadership Strategy with Business Strategy Proactive Talent Planning

Business Objectives

Budget Planning

Talent Planning Execution

“Doing the right thing is important, which is where strategy comes in. But doing that thing well—execution—is what sets companies apart.”

—Jeffrey Pfeffer

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Segment Key Leadership Roles Talent Management is no Longer Limited to “Top Talent”

Source: Adapted from McKinsey Workforce Pyramid

Entire Workforce

Key Questions:• Where will you focus your talent development

investments?

• What criteria will you use to prioritize levels or roles?

• Where do you have current leadership gaps or surpluses?

• What roles are most critical to business and must have a pipeline?

• What are the key skills and capabilities for each workforce segment?

• Will these be the same or different in 1 – 3 years?

Top Management

Middle Management

Frontline Management

Employees

Contingent Workforce

High

Pot

entia

ls

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Talent SegmentationThe Foundation of Leadership Development

Segmentation strategically values talent and enables prioritization of talent needs and talent investments.

StrategicCritical to driving long-term competitive

advantage, with specialized skills or knowledge

CoreThe “Engine of the Enterprise,” unique to the company and core to delivering

on its products and/or services

RequisiteCannot do without, but whose value could be delivered through alternative staffing

strategies (other than full-time headcount)

MisalignedTalent whose skill sets no longer align with the company’s strategic direction

Roles that drivethe strategy

Roles thatsupport

the strategy

Roles impacted bythe strategy

Talent SegmentImpact Investments Over Time

Strengthen

Protect

Streamline/Outsource

Redeploy

Segmentation enables you to understand and manage your workforce like a portfolio of assets.

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Define Leadership Role Requirements“Hub” for all Talent Management Decisions

Critical Knowledge, Skills, and Abilities(i.e., Competencies)

Performance Metrics• Financial• Customers• Markets• People / Culture

Common, practical definitions for each executive role

Derived from strategy, critical tasks, and

organizational competencies

Critical Experiences Set• Integration/Divestiture• Cross-Business Exposure• Turn-around Key

Accountabilitiesand Responsibilities

FOUR KEY ELEMENTS OF LEADER ROLE REQUIREMENTS

2.

1.4.

3.

Defined for each

executive role

• Function/Technical• Interpersonal• Business• Strategic

Accountabilities identify the specific outcomes each role is expected to achieve relative to the strategy

Responsibilities identify the primary tasks and activities each role is expected to perform in order to achieve the outcomes expected of the role

Performance Metrics are focused on measuring business outcomes, not activities; enable focus on achieving business impact and drive greater ownership for business impact

Competencies identify the knowledge, skills, and abilities most critical to successfully fulfilling the accountabilities of the role; focus on those competencies that differentiate superior performance

Critical Experience Sets identify the experiences that best prepare someone to fulfill the requirements of the role • Required experiences • Desired experience• Targeted years of experience

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Assess Leadership GapsLeadership Assessments

Multiple techniques should be used to generate robust and valid leadership assessments:• Multi-modal leadership assessments (e.g., assessment centers, 360

feedback, personality inventory, interviews)• Proprietary competency-based assessment tools (e.g., CCL Benchmarks)• Personality inventories (e.g., Hogan, MBTI)• 360 Degree Feedback• Informal feedback• External leadership assessment• Performance ratings / business results achieved

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Introduces Common Thinking about Leadership Talent

Provides Overview of Leadership Talent Pool and Gaps

Promotes Real Action about Performance and Potential

• Improves understanding of the current talent portfolio for critical roles

• Establishes common talent standards

• Aligns assessments

• Brings together multiple viewpoints on individuals

• Gives leaders a sense of fairness, objectivity, and transparency

• Creates consistent data capture and analytics on the pipeline of talent in feeder roles

• Links talent to strategy

• Highlights individual performance success and issues

• Identifies gaps (functional, global, diversity, etc.)

• Makes it easy to see if leaders are building their talent pool

• Identifies feeder roles and provides an assessment of the talent pool in these roles

• Ensures that an adequate supply exists and that action plans are in place to maintain a strong talent pipeline

• Clarifies who owns talent

• Leads to better assignment and development decisions

• Facilitates mobility across functions and divisions

• Refines the messages to be delivered

• Identifies individual contributors who have the interest and potential for movement into critical roles

• Provides more breadth and depth of talent, ensuring that critical roles possess the range of capabilities identified in the role requirement

The Talent Review calibrates assessments and planned actions. Itincludes succession planning and improves performance management.

Assess Leadership GapsTalent Review Sessions

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Do we have enough high potential people in the function?

Is there a significant retention risk in the function?

What are the expectation gaps for each stage?

What are the performance issues at each stage?

Where should we import/export with other functions?

Where do we need to invest in development or new talent?

Do we agree on our assessments or need to recalibrate on some?

What is the strength of the successor pool for key leadership roles, and what actions are necessary to improve the breadth and depth of the pool?

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22

33

44

55

66

77

88

Assess Leadership GapsSuccession Planning/Talent Review – Key Questions

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Assess Leadership GapsSuccession Planning/Talent Review Criteria

There are many different approaches to succession and talent review

Critical positions

Critical positions and feeder roles

Anyone with a manager title or above

Business unit/division leadership

Senior Leadership (Proxy Officers)

CEO owns enterprise decisions

CHRO owns enterprise decisions

CHRO recommends and CEO approves enterprise decisions

Senior Leadership owns decisions within functional area or business/division

Business unit/division HR owns decisions

Business unit/division HR recommends and line leadership approves decisions

Corporate HR designs and is the steward of the process across the enterprise; talent is reviewed across enterprise

Corporate HR designs the process and partners with local HR to facilitate the process; talent is reviewed locally and at the enterprise

Local HR adapts the process and line leadership facilitates the process; talent is reviewed locally

Customized role-based requirements with competencies, experience sets, and metrics

Enterprise-wide leadership standards for all leaders

Proprietary leadership competency models

Enterprise-wide generic competencies

Multi-modal leadership assessments (e.g., assessment centers, 360 feedback, personality inventory, interviews)

Proprietary competency-based assessment tools (e.g., CCL Benchmarks)

Personality inventories (e.g., Hogan, MBTI)

360 Degree Feedback

Informal feedback

External leadership assessment

Corporate leadership institute develops programs

Customized development programs based on individual assessment needs

Job rotation

New job assignment or stretch role

Special project/assignment

External coaching

Mentoring

CEO reviews depth and breadth of leadership pipeline for positions annually

Metrics are shared quarterly with HR stakeholders on developmental progress and the depth and breadth of pipeline

Business Unit/Division leaders review quarterly data with local HR

Business and/or Line leaders reinforce and monitor development actions and progress against plan

Scope/Focus Decision Owners Leader Standards Assessment DevelopmentProcess Metrics &

Talent Reviews

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Critical positionsBusiness unit/division leadershipSenior Leadership (Proxy Officers)

CHRO owns enterprise decisionsSenior Leadership own decisions within functional area or business/division

Corporate HR designs the process and partners with local HR to facilitate the process; talent is reviewed locally and at the enterprise

Enterprise-wide leadership standards for all leadersProprietary leadership competency models

Multi-modal leadership assessments (e.g., assessment centers, 360 feedback, personality inventory, interviews)

Corporate leadership institute develops programsJob rotation New job assignment or stretch role

Scope/Focus Decision Owners Leader Standards Assessment DevelopmentProcess Metrics & Talent Reviews

CEO reviews pipeline annuallyBusiness leaders review quarterly data with HR and monitor development actions

Business unit/division leadership and feeder rolesSenior Leadership (Proxy Officers)

Senior Leadership own decisions within functional area or business/divisionCEO and CHRO have ownership for senior leadership decisions

Corporate HR designs and is the steward of the process across the enterprise; top leadership talent is reviewed across enterprise

Customized role-based requirements with competencies, experience sets, and metrics

Multi-modal leadership assessments (e.g., assessment centers, 360 feedback, personality inventory, interviews)

Job rotation New job assignment or stretch roleMentoring

CEO reviews pipeline annuallyBusiness Unit leaders review quarterly dataBusiness and/or Line leaders reinforce and monitor development

Critical positionsSenior Leadership (Proxy Officers)

Division HR makes recommendations decisions and line leadership approvesCEO and CHRO recommend and approve decisions on senior leadership

Corporate HR designs the process and partners with business HR to facilitate the process; talent is reviewed locally and at the enterprise

Customized role-based requirements with competencies, experience sets, and metrics

Multi-modal leadership assessments (e.g., assessment centers, 360 feedback, personality inventory, interviews)

Customized Development programsJob rotation New job assignment or stretch roleSpecial project/assignment

Business leaders review quarterly data with HR and monitor development actionsBusiness and/or Line leaders reinforce and monitor development

Anyone with a manager title or above

Senior Leadership own decisions within functional area or business/division

Corporate HR designs the process and partners with local HR to facilitate the process; talent is reviewed locally

Enterprise-wide leadership standards for all leaders

Multi-modal leadership assessments (e.g., assessment centers, 360 feedback, personality inventory, interviews)

Corporate leadership institute develops programsJob rotation New job assignment or stretch roleMentoring

Business leaders review annual data with HR and monitor development actions

Source: Conference Board – Talent Management Conference (2008, 2009); Sibson Client Experience.

Assess Leadership GapsSuccession Planning/Talent Review Design Profiles

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Design Leadership Development PlansCritical Learning Experiences

1. A New Assignment/New Perspective: Take on a new project assignment within your current department or role, and/or approaching your current role with a new outlook or perspective

2. Rotation: Take on a new project assignment in another department or role. This may be part of a formal job rotation program and/or rotation outside of business with strategic partners or suppliers

3. Expanded Role: Expand the scope of your current role. This may include the enlargement of current tasks and responsibilities, or taking on additional extra-role duties such as committees or task forces

4. Mentor/Coach & Reverse Mentoring: Request the assignment of a formal or informal mentor or coach who provides personal and professional guidance based on similar experiences and situations

5. Training and Education: Participate in either a formal role-related training course (either in-house or off-site) or educational courses and programs offered by universities and institutes

6. Self-Study: Initiate learning through outside channels, including reading business and industry publications, attending professional conferences held by external vendors, and seeking other information from subject matter experts

80% of 80% of development development should occur should occur

on the jobon the job

20% of development

should be formal training

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Design Leadership Development PlansTalent Pools

Talent Pool – Middle & Frontline

Management

Key Assumptions Driving Talent Pools:• Frequent changes or flexibility to the business

strategy, organizational structure or jobs responsibilities or reporting relationships

• People move vertically and horizontally

• Upward movement is not automatic

• Impossible to plan future jobs – the focus is on the next assignment

• Training is integrated and focused skills that can be used immediately

• People can turn down new assignments without leaving program

Top Management

Middle Management

Frontline Management

Employees

Contingent Workforce

High

Pot

entia

ls

Talent pools focus on developing and nurturing a cross-section of leaders versus just those few that have been identified as candidates for senior level roles

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Design Leadership Development Plans Learnings From the Top Companies for Leaders

“My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.

— Jack Welch

Source: “Top Companies for Leaders 2009” Fortune

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BA

ND

/JO

B F

AM

ILY

A

B

C

D

E

F

88

Role 2

Role 3

Mgr 1

Mgr 3

Mgr 2

SVP 1

COO

SVP 2

CEO

VP 1

VP 3

VP 2

Director1

Director3

Director2

Director4

Role 1

Role 3

Role 2CC

BB

AA

Role 1

Measure, Monitor & Close Leadership GapsQuantitative & Qualitative Metrics

Leadership Pathway and Pipeline Analytics

READINESS ANALYSIS

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1

4

5

4

7

6

6

0

2

4

68

10

12

14

16

Director VP SVP

Ready Now Ready 6-12 Months Ready 12-24 Months

CHURN ANALYSIS

7% 9%3%

10%12%

9%

5%

6%

3%

0%

5%

10%

15%

20%

25%

30%

Director VP SVP

Turnover Transfer Retirement

PERFORMANCE AND POTENTIAL MATRIX

PERFORMANCE

POTE

NTI

AL

Leader 1Leader 2Leader 3Leader 4Leader 5Leader 6Leader 7Leader 8Leader 9Leader 10Ready for advancement POTENTIAL FIT ISSUES

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Outcome:In groups of three or four, discuss and answer the following questions:• What are the top 2-3 challenges your organization is currently

facing in developing leaders?

• How have you addressed these challenges?

Developing Leaders—What are Your Challenges?

TaskComplete the Leadership Development Assessment and discuss the challenges your organization is facing in developing leaders?

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Leadership Development Assessment

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Accelerating Leadership Development

Align Leadership Strategy with Business Strategy

Segment Key Leadership Roles

Define Leadership Role Requirements

Assess Leadership Gaps

Design Leadership Development Plans

Measure, Monitor, & Close Gaps

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“My favorite time to manage is during a bust. It brings more clarity about what your customers need and what your priorities should be.”

—Sergey Brin, founder of Google

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Follow-up Questions and Further Information

10880 Wilshire Boulevard Suite 850Los Angeles, CA 90024T 310.231.1700 www.sibson.com

JP Elliott, [email protected]