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Best Practices ofBest Practices of
Succession ManagementSuccession Management
and Employee Retentionand Employee Retention
Questions To Consider...Questions To Consider...
What % of your employees will
retire in the next 5 years?
Questions To Consider...Questions To Consider...
What % of your employees are
looking for other employment?
So…what are you planningSo…what are you planning
to do about it?to do about it?
Session ObjectivesSession Objectives
Briefly explore current trends
Understand succession management
versus succession planning – and the
alignment to employee retention
Understand best practice processes and
examine a few of the tools and
methodologies being used
Discuss the roadblocks and benefits of
implementation
Explore how to get started
Why the Interest inWhy the Interest in
Succession Planning andSuccession Planning and
Employee Retention?Employee Retention?
 Numbers of people retiring and numbers of
people entering workforce
 Loss of organizational memory
 Skills shortages are acute
 Retention of talent
 Future of work – different needs for generations
of employees
 What else?
Trends and Forecasts*Trends and Forecasts*
By 2008, more people will be leaving the
workforce than entering
44% of workers aged 45-59 say they will
retire before 65
10% of workers aged 50-59 who leave full
time jobs, move into part time within 2
years
1/3 of workers aged 50-59 who leave full
time jobs, move back into full time
* Statistics Canada research
Trends and Forecasts*Trends and Forecasts*
72% of companies predict they’ll have
an increasing number of leadership
vacancies over the next 3-5 years
76% of those same companies are “less
than confident” in their abilities to
adequately staff these positions
* Corporate Leadership Council research
(reported by The Gallup Organization)
Current Economic IssuesCurrent Economic Issues
Workplaces will lose high performers as
economy strengthens
Currently, workplaces that understand
future skills needed are having difficulty
recruiting
Recruitment strategies are strengthening
Retention of talent is increasingly
becoming a “hot” issue
The Internal ChallengeThe Internal Challenge
Who is going to do the work?
What knowledge are we about to lose?
What skills will we lose?
What traditions will change? Is this good?
The External ChallengeThe External Challenge
The market place for good talent will be
competitive
The good people will be able to pick and
choose their working environment
How do we create an organization in where
people want to stick around?
Who is responsible toWho is responsible to
ensure you have the peopleensure you have the people
to get the job done?to get the job done?
Shift from Industrial Age toShift from Industrial Age to
Information AgeInformation Age
The Old Way
HR is responsible for people management
We provide good pay and benefits
Recruiting is like purchasing
Development happens in training
programs
We treat everyone the same
Source: “War for Talent”
Shift from Industrial Age toShift from Industrial Age to
Information AgeInformation Age
The New Way
All managers are accountable for
strengthening their talent pools
We shape our workplace, jobs, and strategy
to appeal to talented people
Recruiting is like marketing
We fuel development through stretch jobs,
mentoring and coaching
We affirm our people, but invest differently
in A, B, and C players
Source: “War for Talent”
Questions To Reflect OnQuestions To Reflect On
If the dam bursts today, what is the
impact to your organization?
How would you replace the people,
knowledge, lost productivity?
One Approach…One Approach…
It’s not just about havingIt’s not just about having
the bodies.the bodies.
It’s about theIt’s about the rightright bodiesbodies
doing thedoing the rightright things.things.
Creating an organization ofCreating an organization of
which people want to be a part.which people want to be a part.
Retention:Retention:
What keeps employeesWhat keeps employees
happy?happy?
Current Retention TrendsCurrent Retention Trends
Towers Perrin (2002) Canadian study
59% are open to changing jobs
11% actively looking
45% passively looking
“To retain me, you’ve got to help me advance,
keep the good people, and provide competitive
pay….”
Top 15 Retention DriversTop 15 Retention Drivers
Retention Items %
1. Exciting work & challenge 48.4
2. Career Growth, Learning & Development 42.6
3. Working with great people & relationships 41.8
4. Fair pay 31.8
5. Supportive management/great boss 25.1
6. Being recognized, valued & respected 23.0
7. Benefits 22.0
8. Meaningful work, making a difference & contribution 17.0
9. Pride in organization, its mission & product 16.5
10. Great work environment / culture 16.0
11. Flexibility 13.6
12. Autonomy, creativity and a sense of control 12.6
13. Job security & stability 10.5
14. Location 10.3
15. Diverse, changing work assignments 7.7
Source: Career Systems International, 2005
Other ResearchOther Research
Retention Items
1. Career growth, learning and development
2. Exciting work and challenge
3. Meaningful work, making a difference and a contribution
4. Great people
5. Being part of a team
6. Good boss
7. Recognition for work well done
8. Fun on the job
9. Autonomy, sense of control over work
10. Flexibility – for example, in work hours and dress code
11. Fair pay and benefits
12. Inspiring leadership
13. Pride in organization, its mission and quality of product
14. Great work environment
15. Location
Source: Love ‘Em or Lose ‘Em, 1999
Understanding the DataUnderstanding the Data
Employees are looking for job growth and
learning opportunities, or they are looking
for a new job
Are you offering the items on these lists to
your employees?
As managers in your organization, how
many of these items do you believe are
within your control?
Understanding the Data – LinkUnderstanding the Data – Link
to Recruitmentto Recruitment
Attraction is part of retention, so this
information also informs recruitment
practices
Employees will be attracted to
organizations that have well-developed
mentoring programs, career development
initiatives, and job enrichment opportunities
Link to EmployeeLink to Employee
EngagementEngagement
Research shows positive correlation of
engagement scores with:
Employee attraction and retention
Engagement scores also have a positive
correlation with:
Customer satisfaction
Revenue growth and shareholder returns
Employee productivity
Employee attendance
What is Engagement?What is Engagement?
SaySay StayStay StriveStrive
Speak positively
about the organization
to co-workers,
potential employees
and customers.
Have an intense desire to be
a member of the
organization.
Exert extra effort & are
dedicated to doing the very
best job possible to
contribute to the
organization’s business
success.
EngagementEngagement
Calculating EmployeeCalculating Employee
EngagementEngagement
I would, without hesitation, highly recommend this organization
to a friend seeking employment.
Given the opportunity, I tell others great things about working
here.
It would take a lot to get me to leave this organization.
I hardly ever think about leaving this organization to work
somewhere else.
This organization inspires me to do my best work every day.
This organization motivates me to do more than is normally
required to complete my work.
SaySay
StayStay
StriveStrive
Scores from the following six questions are used to
calculate the engagement score:
Succession Planning:Succession Planning:
Helping you understandHelping you understand
whowho to focus onto focus on
QuickPoll…
Who has:
No succession planning in place?
Succession planning in place, but not sure it
is, or will be, successful?
A successful succession planning initiative?
The Traditional Approach toThe Traditional Approach to
Succession PlanningSuccession Planning
Often highly political
Little thought given to what kind
of leaders required in the future
Done secretly
Focus on putting names in boxes
(“replacement”)
Few conversations held
Results of This Approach toResults of This Approach to
Succession PlanningSuccession Planning
Strategies become academic and
administrative exercises. Change happens
and rigid plans are not applicable – a
waste of time and money
Little focus spent on the development
of individuals
A Different Way to ThinkA Different Way to Think
About Succession PlanningAbout Succession Planning
Succession management is a process of
ensuring there are leaders and talent that
can implement the organizational vision
It requires the systematic identification of
those individuals who have the potential
to turn the vision of the organization into
reality
Elements of an EffectiveElements of an Effective
Succession ManagementSuccession Management
Process*Process*
1.
Individual Career
Planning and
Development
2.
Succession
Planning
Analyses
3.
Group Discussion
and Review
* The Gallup Organization
Succession ManagementSuccession Management
Focus on individual development
strategically aligned to future vision
Leadership development can ensure that
the potential identified through succession
process is realized
Result is long-term leadership
sustainability through attraction, retention
and development of talent
Succession ManagementSuccession Management
A key strategic initiative
Cannot be done in isolation to other
cultural and people oriented initiatives
in the organization
More than just “putting names in
boxes”
Succession ManagementSuccession Management
Focus on integrating many elements of
organization development
High level steps need to be customized for
each organization
“Leadership Pool” approach is gaining in
popularity (identifying all potential
employees vs. positional replacements)
“There are no recipes or formulae, no
checklists or advice that describe
“reality”. There is only what we
create through our engagement with
others and with events.”
(Margaret Wheatley,
“Leadership and the New Science”)
Vision and CompetenciesVision and Competencies
Alignment to vision and strategy
Business plan for succession initiatives
Succession and leadership aligned to the
vision, critical business issues/skill gaps
Executive commitment
Develop leadership competencies
Develop a succession management
roadmap
Need for a RoadmapNeed for a Roadmap
Implementing succession initiatives
impacts culture
A roadmap shows how to get there
“Without a roadmap, the likelihood is that
you will focus too much attention on details
and miss the ‘big picture’.”
(William Rothwell)
Talent Review ProcessTalent Review Process
An interactive dialogue and discussion to
support the performance and potential of
talent in the organization
A process to look at key talent, open
positions, promotions and leadership
development
Discussion to support shared ownership
of the talent pool and development
opportunities
Talent Review ProcessTalent Review Process
Robust Talent Review (“War for Talent”):
Full day on-site for each division
Discuss quality of incumbents
Review individuals and the talent
strength of each unit, and discuss other
issues such as retention or recruiting
Rigorous, candid and open debate
Talent Review ProcessTalent Review Process
Robust Talent Review, continued:
Drive to a distribution of ratings
Specific action plans written and
followed up for each unit
As important and intense as the budget
process, with real accountability and a
performance focus
Talent Review RoadmapTalent Review Roadmap
QuestionsQuestions
How far down in the organization? What
groups?
High potentials or everyone?
Replacement or pool – or both?
Assess on performance and potential
Other assessments required?
Who will assess? Do they have the skills
to assess?
Pool versus ReplacementPool versus Replacement
Identifying “bench weakness” (e.g.
managers, technicians)
Assess individuals
Develop as pool – stretch
assignments, leadership development
Track progress
Folio MapFolio Map
Potential
Performance
3.6
3.6
High Performance/ High Professional
New in Position/High Potential High Performance and Potential
5.0
5.0
Outplacement
Needs Improvement
Competent/ Capable
2.6
0
Identifying High Potentials
High
Low High
Potential
Performance
J
J
J
JJ
J
J JJ
J
J
J
J
J
J
J
J
J
J
J
J
J
JJ
J
J
J
J
J
J
J
J
J
J
J
J
J
J
JJ
J
J
J
J
J
J
J
J
J
J
Our leadership
“Talent Pool”
The “bar” is a rating
of 3.6 or above on
potential
Must be at least
competent in each
of the Standards of
Leadership
3.6
1.0
5.03.61.0
Folio MapFolio Map
Permits participants to identify
specific developmental actions for
employees
Assists conversations regarding next
steps
Shows progress from year to year
Critical Positions/People*Critical Positions/People*
Critical Position – A critical position in the
organization that is imperative to running
the business. Key strategic importance to
have back fill.
Critical Person – A critical person in the
organization which would result in a
significant adverse impact on the
business if the person left.
* Johnson & Johnson definitions
Example
Multi-level ownershipMulti-level ownership
CEO
Reviews plan to monitor corporate future
President/Sr. VP
Review functional plans & Develops Company level plan
Functional Area/Company Managers
Identifies high potentials across area
Drafts succession plan
Manager
Discussion with employee & functional manager re. development/succession
Employee
Create Development Plans & Performs Leadership Assessment
Succession
Management
Retention
??
File it away…File it away…
Start having conversations!Start having conversations!
Great LeadersGreat Leaders
Make AMake A
Great DifferenceGreat Difference
Leadership EffectivenessLeadership Effectiveness
and Turnoverand Turnover
19
9
14
8
10
12
14
16
18
20
22
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
TurnoverPercent
Leadership EffectivenessLeadership Effectiveness
and Retentionand Retention
19
51
79
0
10
20
30
40
50
60
70
80
90
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
IntentiontoStaywith
Company(%)
Leadership EffectivenessLeadership Effectiveness
and Customer Satisfactionand Customer Satisfaction
21
50
82
0
20
40
60
80
100
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
RatingsofCustomer
Satisfaction(%)
Making LeadershipMaking Leadership
Development WorkDevelopment Work
 Identify, inform and invest heavily in talent
 Use 360s to build on strengths
 Set extremely high expectations for your
leaders – and measure their results
 Make leadership development a long term
process and not an event
 Use the succession process as an
opportunity to develop and measure the
leadership potential
Senior Management RoleSenior Management Role
 Responsible for succession process
 Approve high potentials, individual
development, leadership development
 Determine success measures, next
steps and time frames
 Determine management
accountability
 Follow-up on actions
MeasuresMeasures
 Define up front what you want to
achieve in the broader scope
 Then…once succession data gathered,
define specific measures, timing and
accountability. Measure regularly.
 Track development of talent, and their
progress, regularly over the long term.
Assign accountability to managers for
progress, assign mentors, reward
Possible SuccessionPossible Succession
MeasuresMeasures
 By ___ 90% of development actions complete
 Increase movement of high potentials to other
areas of workplace
 Increase employee engagement/satisfaction
 By year 20xx, increase high potential leaders by
x%
 Over x years, increase high potential retention by
x%
 External measures - attract high potentials
Employee ConversationsEmployee Conversations
What needs to happen
in these conversations?
Individual DevelopmentIndividual Development
PlanningPlanning
Actions
Goals and measures
Follow-up, follow-up, follow-up
More Best Practices (Hewitt)More Best Practices (Hewitt)
Senior management lead the charge
Maniacal focus on the best talent
High potentials are carefully identified
Compensation is highly differentiated
Assignments drive high potentials’ growth
Tracking progress is critical
ChallengesChallenges
Time
Buy-in
Lose sight of big picture –
administrative nightmare
Employee/manager conversations
Cultural biases
Resource issues that arise
Results of Implementing
Succession Management
A high-performance culture that
continuously attracts and retains the right
people
Strong leaders who can develop others
Mentors that can provide a legacy
A culture of openness and focus
Results of Implementing
Succession Management
No “unspoken agenda” concerning
individuals’ aspirations and potential
Investor confidence – Hay (1988) and
McKinsey (1999) studies link effective SM
to increased ROI and annual return to
shareholders
Keys to SuccessKeys to Success
Top management must buy-in and be
active participants
Link succession efforts to needs and
strategic objectives of the business
Minimize paperwork and bureaucracy
Make succession and leadership
development a constant preoccupation
Keys to SuccessKeys to Success
 Identify high potential talent early –
devise strategies to retain that talent
 Recognize that effective succession
management is not fast
 Spend time to evaluate results and
provide feedback to stakeholders
Keys to SuccessKeys to Success
 Ensure leaders have an opportunity to
apply the skills they are learning
 Ensure everyone is, and can be,
responsible for their own development
 Ensure effective role modeling of
leadership excellence
 Measure behaviour change
DiscussionDiscussion
Where should we start?
What will be easy?
What will we stumble
over?
ResourcesResources
 “War for Talent” – McKinsey & Co.
 “Leadership Pipeline” – Ram Charan
 “Grow Your Own Leaders” – W. Byham
 “Effective Succession Planning” – W. Rothwell
 “Love ‘Em or Lose ‘Em” – Kaye & Jordan-
Evans
 Centre for Creative Leadership – www.ccl.org
 Statistics Canada – www.statcan.ca/
 “The Extraordinary Leader” – Zenger &
Folkman

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Best Practices of Retention

  • 1. Best Practices ofBest Practices of Succession ManagementSuccession Management and Employee Retentionand Employee Retention
  • 2. Questions To Consider...Questions To Consider... What % of your employees will retire in the next 5 years?
  • 3. Questions To Consider...Questions To Consider... What % of your employees are looking for other employment?
  • 4. So…what are you planningSo…what are you planning to do about it?to do about it?
  • 5. Session ObjectivesSession Objectives Briefly explore current trends Understand succession management versus succession planning – and the alignment to employee retention Understand best practice processes and examine a few of the tools and methodologies being used Discuss the roadblocks and benefits of implementation Explore how to get started
  • 6. Why the Interest inWhy the Interest in Succession Planning andSuccession Planning and Employee Retention?Employee Retention?  Numbers of people retiring and numbers of people entering workforce  Loss of organizational memory  Skills shortages are acute  Retention of talent  Future of work – different needs for generations of employees  What else?
  • 7. Trends and Forecasts*Trends and Forecasts* By 2008, more people will be leaving the workforce than entering 44% of workers aged 45-59 say they will retire before 65 10% of workers aged 50-59 who leave full time jobs, move into part time within 2 years 1/3 of workers aged 50-59 who leave full time jobs, move back into full time * Statistics Canada research
  • 8. Trends and Forecasts*Trends and Forecasts* 72% of companies predict they’ll have an increasing number of leadership vacancies over the next 3-5 years 76% of those same companies are “less than confident” in their abilities to adequately staff these positions * Corporate Leadership Council research (reported by The Gallup Organization)
  • 9. Current Economic IssuesCurrent Economic Issues Workplaces will lose high performers as economy strengthens Currently, workplaces that understand future skills needed are having difficulty recruiting Recruitment strategies are strengthening Retention of talent is increasingly becoming a “hot” issue
  • 10. The Internal ChallengeThe Internal Challenge Who is going to do the work? What knowledge are we about to lose? What skills will we lose? What traditions will change? Is this good?
  • 11. The External ChallengeThe External Challenge The market place for good talent will be competitive The good people will be able to pick and choose their working environment How do we create an organization in where people want to stick around?
  • 12. Who is responsible toWho is responsible to ensure you have the peopleensure you have the people to get the job done?to get the job done?
  • 13. Shift from Industrial Age toShift from Industrial Age to Information AgeInformation Age The Old Way HR is responsible for people management We provide good pay and benefits Recruiting is like purchasing Development happens in training programs We treat everyone the same Source: “War for Talent”
  • 14. Shift from Industrial Age toShift from Industrial Age to Information AgeInformation Age The New Way All managers are accountable for strengthening their talent pools We shape our workplace, jobs, and strategy to appeal to talented people Recruiting is like marketing We fuel development through stretch jobs, mentoring and coaching We affirm our people, but invest differently in A, B, and C players Source: “War for Talent”
  • 15. Questions To Reflect OnQuestions To Reflect On If the dam bursts today, what is the impact to your organization? How would you replace the people, knowledge, lost productivity?
  • 17.
  • 18. It’s not just about havingIt’s not just about having the bodies.the bodies. It’s about theIt’s about the rightright bodiesbodies doing thedoing the rightright things.things. Creating an organization ofCreating an organization of which people want to be a part.which people want to be a part.
  • 19. Retention:Retention: What keeps employeesWhat keeps employees happy?happy?
  • 20. Current Retention TrendsCurrent Retention Trends Towers Perrin (2002) Canadian study 59% are open to changing jobs 11% actively looking 45% passively looking “To retain me, you’ve got to help me advance, keep the good people, and provide competitive pay….”
  • 21. Top 15 Retention DriversTop 15 Retention Drivers Retention Items % 1. Exciting work & challenge 48.4 2. Career Growth, Learning & Development 42.6 3. Working with great people & relationships 41.8 4. Fair pay 31.8 5. Supportive management/great boss 25.1 6. Being recognized, valued & respected 23.0 7. Benefits 22.0 8. Meaningful work, making a difference & contribution 17.0 9. Pride in organization, its mission & product 16.5 10. Great work environment / culture 16.0 11. Flexibility 13.6 12. Autonomy, creativity and a sense of control 12.6 13. Job security & stability 10.5 14. Location 10.3 15. Diverse, changing work assignments 7.7 Source: Career Systems International, 2005
  • 22. Other ResearchOther Research Retention Items 1. Career growth, learning and development 2. Exciting work and challenge 3. Meaningful work, making a difference and a contribution 4. Great people 5. Being part of a team 6. Good boss 7. Recognition for work well done 8. Fun on the job 9. Autonomy, sense of control over work 10. Flexibility – for example, in work hours and dress code 11. Fair pay and benefits 12. Inspiring leadership 13. Pride in organization, its mission and quality of product 14. Great work environment 15. Location Source: Love ‘Em or Lose ‘Em, 1999
  • 23. Understanding the DataUnderstanding the Data Employees are looking for job growth and learning opportunities, or they are looking for a new job Are you offering the items on these lists to your employees? As managers in your organization, how many of these items do you believe are within your control?
  • 24. Understanding the Data – LinkUnderstanding the Data – Link to Recruitmentto Recruitment Attraction is part of retention, so this information also informs recruitment practices Employees will be attracted to organizations that have well-developed mentoring programs, career development initiatives, and job enrichment opportunities
  • 25. Link to EmployeeLink to Employee EngagementEngagement Research shows positive correlation of engagement scores with: Employee attraction and retention Engagement scores also have a positive correlation with: Customer satisfaction Revenue growth and shareholder returns Employee productivity Employee attendance
  • 26. What is Engagement?What is Engagement? SaySay StayStay StriveStrive Speak positively about the organization to co-workers, potential employees and customers. Have an intense desire to be a member of the organization. Exert extra effort & are dedicated to doing the very best job possible to contribute to the organization’s business success. EngagementEngagement
  • 27. Calculating EmployeeCalculating Employee EngagementEngagement I would, without hesitation, highly recommend this organization to a friend seeking employment. Given the opportunity, I tell others great things about working here. It would take a lot to get me to leave this organization. I hardly ever think about leaving this organization to work somewhere else. This organization inspires me to do my best work every day. This organization motivates me to do more than is normally required to complete my work. SaySay StayStay StriveStrive Scores from the following six questions are used to calculate the engagement score:
  • 28.
  • 29. Succession Planning:Succession Planning: Helping you understandHelping you understand whowho to focus onto focus on
  • 30. QuickPoll… Who has: No succession planning in place? Succession planning in place, but not sure it is, or will be, successful? A successful succession planning initiative?
  • 31. The Traditional Approach toThe Traditional Approach to Succession PlanningSuccession Planning Often highly political Little thought given to what kind of leaders required in the future Done secretly Focus on putting names in boxes (“replacement”) Few conversations held
  • 32. Results of This Approach toResults of This Approach to Succession PlanningSuccession Planning Strategies become academic and administrative exercises. Change happens and rigid plans are not applicable – a waste of time and money Little focus spent on the development of individuals
  • 33. A Different Way to ThinkA Different Way to Think About Succession PlanningAbout Succession Planning Succession management is a process of ensuring there are leaders and talent that can implement the organizational vision It requires the systematic identification of those individuals who have the potential to turn the vision of the organization into reality
  • 34. Elements of an EffectiveElements of an Effective Succession ManagementSuccession Management Process*Process* 1. Individual Career Planning and Development 2. Succession Planning Analyses 3. Group Discussion and Review * The Gallup Organization
  • 35. Succession ManagementSuccession Management Focus on individual development strategically aligned to future vision Leadership development can ensure that the potential identified through succession process is realized Result is long-term leadership sustainability through attraction, retention and development of talent
  • 36. Succession ManagementSuccession Management A key strategic initiative Cannot be done in isolation to other cultural and people oriented initiatives in the organization More than just “putting names in boxes”
  • 37. Succession ManagementSuccession Management Focus on integrating many elements of organization development High level steps need to be customized for each organization “Leadership Pool” approach is gaining in popularity (identifying all potential employees vs. positional replacements)
  • 38. “There are no recipes or formulae, no checklists or advice that describe “reality”. There is only what we create through our engagement with others and with events.” (Margaret Wheatley, “Leadership and the New Science”)
  • 39.
  • 40. Vision and CompetenciesVision and Competencies Alignment to vision and strategy Business plan for succession initiatives Succession and leadership aligned to the vision, critical business issues/skill gaps Executive commitment Develop leadership competencies Develop a succession management roadmap
  • 41. Need for a RoadmapNeed for a Roadmap Implementing succession initiatives impacts culture A roadmap shows how to get there “Without a roadmap, the likelihood is that you will focus too much attention on details and miss the ‘big picture’.” (William Rothwell)
  • 42. Talent Review ProcessTalent Review Process An interactive dialogue and discussion to support the performance and potential of talent in the organization A process to look at key talent, open positions, promotions and leadership development Discussion to support shared ownership of the talent pool and development opportunities
  • 43. Talent Review ProcessTalent Review Process Robust Talent Review (“War for Talent”): Full day on-site for each division Discuss quality of incumbents Review individuals and the talent strength of each unit, and discuss other issues such as retention or recruiting Rigorous, candid and open debate
  • 44. Talent Review ProcessTalent Review Process Robust Talent Review, continued: Drive to a distribution of ratings Specific action plans written and followed up for each unit As important and intense as the budget process, with real accountability and a performance focus
  • 45. Talent Review RoadmapTalent Review Roadmap QuestionsQuestions How far down in the organization? What groups? High potentials or everyone? Replacement or pool – or both? Assess on performance and potential Other assessments required? Who will assess? Do they have the skills to assess?
  • 46.
  • 47. Pool versus ReplacementPool versus Replacement Identifying “bench weakness” (e.g. managers, technicians) Assess individuals Develop as pool – stretch assignments, leadership development Track progress
  • 48. Folio MapFolio Map Potential Performance 3.6 3.6 High Performance/ High Professional New in Position/High Potential High Performance and Potential 5.0 5.0 Outplacement Needs Improvement Competent/ Capable 2.6 0
  • 49. Identifying High Potentials High Low High Potential Performance J J J JJ J J JJ J J J J J J J J J J J J J JJ J J J J J J J J J J J J J J JJ J J J J J J J J J J Our leadership “Talent Pool” The “bar” is a rating of 3.6 or above on potential Must be at least competent in each of the Standards of Leadership 3.6 1.0 5.03.61.0
  • 50. Folio MapFolio Map Permits participants to identify specific developmental actions for employees Assists conversations regarding next steps Shows progress from year to year
  • 51. Critical Positions/People*Critical Positions/People* Critical Position – A critical position in the organization that is imperative to running the business. Key strategic importance to have back fill. Critical Person – A critical person in the organization which would result in a significant adverse impact on the business if the person left. * Johnson & Johnson definitions
  • 52. Example Multi-level ownershipMulti-level ownership CEO Reviews plan to monitor corporate future President/Sr. VP Review functional plans & Develops Company level plan Functional Area/Company Managers Identifies high potentials across area Drafts succession plan Manager Discussion with employee & functional manager re. development/succession Employee Create Development Plans & Performs Leadership Assessment
  • 54. File it away…File it away…
  • 55. Start having conversations!Start having conversations!
  • 56. Great LeadersGreat Leaders Make AMake A Great DifferenceGreat Difference
  • 57. Leadership EffectivenessLeadership Effectiveness and Turnoverand Turnover 19 9 14 8 10 12 14 16 18 20 22 Bottom 10% Middle 80% Top 10% Leadership Effectiveness TurnoverPercent
  • 58. Leadership EffectivenessLeadership Effectiveness and Retentionand Retention 19 51 79 0 10 20 30 40 50 60 70 80 90 Bottom 10% Middle 80% Top 10% Leadership Effectiveness IntentiontoStaywith Company(%)
  • 59. Leadership EffectivenessLeadership Effectiveness and Customer Satisfactionand Customer Satisfaction 21 50 82 0 20 40 60 80 100 Bottom 10% Middle 80% Top 10% Leadership Effectiveness RatingsofCustomer Satisfaction(%)
  • 60. Making LeadershipMaking Leadership Development WorkDevelopment Work  Identify, inform and invest heavily in talent  Use 360s to build on strengths  Set extremely high expectations for your leaders – and measure their results  Make leadership development a long term process and not an event  Use the succession process as an opportunity to develop and measure the leadership potential
  • 61. Senior Management RoleSenior Management Role  Responsible for succession process  Approve high potentials, individual development, leadership development  Determine success measures, next steps and time frames  Determine management accountability  Follow-up on actions
  • 62. MeasuresMeasures  Define up front what you want to achieve in the broader scope  Then…once succession data gathered, define specific measures, timing and accountability. Measure regularly.  Track development of talent, and their progress, regularly over the long term. Assign accountability to managers for progress, assign mentors, reward
  • 63. Possible SuccessionPossible Succession MeasuresMeasures  By ___ 90% of development actions complete  Increase movement of high potentials to other areas of workplace  Increase employee engagement/satisfaction  By year 20xx, increase high potential leaders by x%  Over x years, increase high potential retention by x%  External measures - attract high potentials
  • 64. Employee ConversationsEmployee Conversations What needs to happen in these conversations?
  • 66. More Best Practices (Hewitt)More Best Practices (Hewitt) Senior management lead the charge Maniacal focus on the best talent High potentials are carefully identified Compensation is highly differentiated Assignments drive high potentials’ growth Tracking progress is critical
  • 67. ChallengesChallenges Time Buy-in Lose sight of big picture – administrative nightmare Employee/manager conversations Cultural biases Resource issues that arise
  • 68. Results of Implementing Succession Management A high-performance culture that continuously attracts and retains the right people Strong leaders who can develop others Mentors that can provide a legacy A culture of openness and focus
  • 69. Results of Implementing Succession Management No “unspoken agenda” concerning individuals’ aspirations and potential Investor confidence – Hay (1988) and McKinsey (1999) studies link effective SM to increased ROI and annual return to shareholders
  • 70. Keys to SuccessKeys to Success Top management must buy-in and be active participants Link succession efforts to needs and strategic objectives of the business Minimize paperwork and bureaucracy Make succession and leadership development a constant preoccupation
  • 71. Keys to SuccessKeys to Success  Identify high potential talent early – devise strategies to retain that talent  Recognize that effective succession management is not fast  Spend time to evaluate results and provide feedback to stakeholders
  • 72. Keys to SuccessKeys to Success  Ensure leaders have an opportunity to apply the skills they are learning  Ensure everyone is, and can be, responsible for their own development  Ensure effective role modeling of leadership excellence  Measure behaviour change
  • 73. DiscussionDiscussion Where should we start? What will be easy? What will we stumble over?
  • 74. ResourcesResources  “War for Talent” – McKinsey & Co.  “Leadership Pipeline” – Ram Charan  “Grow Your Own Leaders” – W. Byham  “Effective Succession Planning” – W. Rothwell  “Love ‘Em or Lose ‘Em” – Kaye & Jordan- Evans  Centre for Creative Leadership – www.ccl.org  Statistics Canada – www.statcan.ca/  “The Extraordinary Leader” – Zenger & Folkman

Notas del editor

  1. Ask for a response by a show of hands. Of those who know, how many will lose 20%? 30%? 40?
  2. Pause and ask people to hazard a guess.
  3. Check for understanding of A, B and C players.
  4. What to do???
  5. These are some of the different faces of frustration…
  6. You may not necessarily want to keep every employee in the company. How do you choose who – and what – to focus on?
  7. Here’s the “what”.
  8. Survey conducted by Career Systems International and published in Training & Development magazine, April 2005. 7,600 respondents to the survey Interesting to note that the top 3 replies are the same today as they were at the peak of the tight labor market in 2000
  9. 90% of respondent listed at least one of the first 3 items among the top 3 or 4 reasons they stayed.
  10. <number> Hewitt and other organizations have conducted numerous studies over the last ten years to assess this relationship between engagement and business results and have found the following: There is a significant link between employee engagement, customer loyalty, and profitability Engaged employees are twice as likely to be advocates of the company,its products, and services Engaged employees are more likely to stay with the company.
  11. <number> We hear a lot these days about engagement. There is a proven correlation between engagement and retention. One way of measuring engagement is through a survey developed and administered by Hewitt Associates for Report on Business magazine. At a high level here is how engagement is defined. Simply stated - if you are engaged you Speak positively… Have an intense desire to stay… Exert extra effort for our success…
  12. <number> If a high percentage of employees are positive on these six statements, this will feel like a great place to work.
  13. What keeps employees happy – and keeps them with an organization – is influenced by all interactions they have within the organization. Retention, therefore, is part of the larger organizational system.
  14. Now we’re going to move into the “who”. How do you know who to focus on? Who are the people who most influence organizational success? Who are the people who have the skills – or POTENTIAL TO DEVELOP THE SKILLS – that you’ll need next year, or 2 or 3 years from now? A succession planning or succession management process can help you to answer these questions.
  15. Ask for a show of hands.
  16. Succession planning helps to identify top talent within your organization. With this approach, forms were often completed, put in a binder and placed on a shelf.
  17. Challenge is not the model – it’s what goes on in the organization during implementation. Bumps up against other elements – culture, performance, having conversations, and, change ORG. TALENT REVIEW – assess both current performance and leadership potential. Key here is ability to have meaningful conversations NOTE: some organizations start with replacement SP and move to SM (integration of LD) later…but there still needs to be assessment on current performance and future Leadership. Some try pilots in one department the first year, or key levels only. Need to determine
  18. <number>
  19. <number>
  20. <number> J&J example
  21. Ensure replacements for these positions/people
  22. So, how do you take the information gathered through succession management and translate it to retention?
  23. You can file it away…
  24. Talk to those people you’ve identified as having potential. Are they happy? What do they need? Think about the lists of employee retention items and ask questions about those items. Make sure they know how valued they are! Data from exit interviews consistently reveals that employees who leave organizations did not know how valued they were. Often, they had no idea they were viewed as being in succession for a more responsible role. This is where investing in developing leaders at all levels in the organization can really help. Managers need help having these types of conversations. They need to develop coaching and mentoring skills to ensure successful development of their team.
  25. <number>
  26. <number> Research reported in the book, The Extraordinary Leader, by Zenger and Folkman (2002). Conclusive evidence that good leaders produce good results for their organizations. In fact, good leaders are more effective than bad leaders in almost every dimension, including improving productivity, employee retention, enhancing customer service, and creating high levels of employee commitment. These next few slides show the impact of the best and worst leaders on achieving bottom-line results. On the “X” axis we have leadership effectiveness shown in percentiles.
  27. <number>
  28. <number>
  29. <number>
  30. Specific measures can include: Decrease turnover of high potentials Increase movement of high potentials to other areas of company Decrease spending on ? Training Leadership development ROI Decrease recruitment costs Develop lower performers to higher level – or – terminate low performers by…. Measure productivity Change reward systems to attract and retain high performers - Broad scope measures By ? Year increase high potential leaders by __ Over ? Years, increase high potential retention by __ Leadership skills in management group will increase… Decrease turnover Known as best company – attract high potentials
  31. No promises, honest, frequent