The Best Practices in Talent Management Succession Planning by kumar12

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									                                               The Best Practices in Talent
                                         Management & Succession Planning



                                                    Alan Lindsay
                                               President / CEO
                                              PLS Consulting, Inc.




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064
                                                                          The Schedule At A Glance

                Setting The Stages - Session Objectives
                •   Demonstrate Forecasted Demographics To 2012
   8:45         •   Review The Impact on The US And Globally
                •   Discuss The Impact And Potential Changes In HR’s Approach to Work
                    Force Management

                Best Practices in Succession Planning – Session Objectives
                •   Review The Results Of A Nation Study In Best Practices
   9:15
                •   Look Into Key Characteristics In Sustainable Programs
                •   Review Key Practices That Support Successful Programs

                Measuring the Return On Investment – Session Objectives
                •   Why Measure ROI from Succession Planning
   9:40
                •   What to Measure if Talent Measurement
                •   The ROI Model for Succession Planning and Talent Management




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                                                                                     Facilitator Introduction

       Alan C. Lindsay
       • Founder, President and CEO of PLS
         Consulting, Inc.

       • Background includes 20 years of experience as
         the Director of Employee Development at
         PacifiCorp

       • Founded PLS Consulting in 1985 and has
         worked with companies throughout the U.S.,
         Canada, and Australia, meeting their
         leadership development objectives

       • National conference presenter in Training &
         Development and Human Resource
         Management

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                                                                                                PLS Consulting

       The Organizational Performance Company

       • 20 Years of Human Capital Management
       • Utility, Manufacturing, Government, Financial Services
       • Strengthening the Systems that Link People to the Business
         Strategy
              –    Human Asset Strategies
              –    Organizational Assessments
              –    Job Analysis
              –    Performance Management
              –    Employee Development and Training
              –    Succession Planning and Leadership Development
              –    Organizational Change




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                                                                                 PLS Clients (Examples)
 Utility                                         Manufacturing                                  Government
 Arizona Public Service                          ABB C-E Services, Inc.                         Bureau of Land Management
 The Bonneville Power Administration Amoco                                                      City of Modesto
 City Public Service                             Boehringer Ingelheim                           Comptroller of the Currency
 Con Edison                                      Cadillac Motor Car Co.                         Municipality of Anchorage
 Duke Solutions                                  Caterpillar, Inc.
 El Paso Electric
                                                                                                Insurance &
                                                 Dow Chemical
                                                                                                Investment
 El Paso Natural Gas                             Intel Corporation
                                                                                                Dunn & Bradstreet
 Kansas City Power & Light                       Lanoga Corporation
                                                                                                Jefferson Insurance Group
 MEAG Power                                      Levi Strauss & Co.
                                                                                                Metropolitan Life Insurance Co.
 MidAmerican Energy                              McDonnel Douglass Helicopter
 Niagara Mohawk Power Co.                        Nestles
 Ohio Edison                                                                                    Medical
                                                 PACCAR Inc.
 ONCOR                                                                                          HealthNet
                                                 Procter & Gamble
 TXU                                                                                            Kaiser Permanente
                                                 Wacker Siltronic
 Salt River Project                                                                             Merk-Medco
                                                 WILSOART International
                                                                                                Olympic Health Management

Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064                                 5
                                                                                                Population Trends




 Source: Poulos, S., & Nightingale, D. The Aging Baby Boom: Implications for and Training Programs.
 Washington: The Urban Institute. http://www.urban.org/aging/abb/agingbaby.html
 Prepared under contract for the U.S. government.


Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064                6
                                                                      The Baby Boom: 1946-1964




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                                                             Percent of Population Age 60+: 2000




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   8
                                                             Percent of Population Age 60+: 2025




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   9
                                                                            The Workforce Imperative




               Source: http://www.microsoft.com/issues/essays/2003/04-09aging.asp


Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   10
                                                                      Why This Issue Is Important

Key Workforce And HR Trends: What Do They Mean?

• Beginning in 2001, one out of every six workers was
  age 55 or over
• 45% of today’s workforce is between the ages of 40
  and 57
• The average annual employee turnover in 2004 was
  19.2%
• 30-40% of CEO’s hired from outside the
  organization are fired
• By 2010 there will be 5.6 million more jobs than
  workers to fill them
• 1 of every 5 senior executives in the Fortune 500 is
  eligible to retire now



Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   11
                                                                                          A Growing Shortage:
                                                                            U.S. Labor Force vs. Labor Demand




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064           12
                                     Best Practices in Succession Planning
                                                   and Talent Management




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064
                                                             The Difference Between Talent Management and
                                                               Succession Planning/Succession Management



       The Difference Between Talent Management
       and Succession Planning/Succession
       Management

              – Succession planning/management focuses on
                developing internal talent to meet future
                organizational requirements

              – Talent management focuses on integrating efforts
                to attract, develop and retain the best people



Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064      14
                                                                                        Succession Planning vs.
                                                                                           Talent Management

       The Cascading Process




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             15
                                                                                The Best-Practice Study

       How does succession planning and talent management
       most impact the bottom-line?

              – Ensures Qualified Supply of Talent
              – More Effective Leadership
              – Improved Productivity
              – Transfer of Knowledge to
                 replacement workers
              – Increased Retention
              – Links workforce plans to
                 strategic direction




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064      16
                                                                               The Research Approach



      Phase I: Background Research
                                                                  •      A two year study
          Phase II: Research Design                               •      87 companies
                                                                  •      1200 executives
           Phase III: Data Collection
                                                                  •      Crossing 22 business
         Phase IV: Data Analysis and
                                                                         environments
             Report Generation


         Phase V: Shared Learnings




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   17
                                                                                                Major Findings

       Centralized Focus
              #1 One group in the organization is dedicated to succession
                      planning and management, leadership development, and
                      performance management


       This is a best practice because. . . . .
                      For succession planning and management to be
                      successful, someone or some group must take
                      responsibility for following through




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             18
                                                                                                Major Findings

       Carefully Links to Career Planning
              #2 Integrates career goals and development (traditionally a
                      bottom-up practice because driven by the individual) with
                      succession planning (traditionally a top-down practice
                      because driven by the organization)


       This is a best practice because. . . .
                      Without career planning, a succession planning and
                      management program misses talented people aspiring to
                      develop and grow to specific roles




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             19
                                                                                                Major Findings

       Increase the Speed of Development
              #3 Accelerated development is a noticeable—and important—
                      term. Targeting people and individualizing development
                      creates pools of talent faster


       This is a best practice because. . . .
                      Organizations can no longer leisurely assess and groom
                      talent over years of painstaking effort. Large numbers of
                      workers at all levels are qualifying to leave their
                      organizations with insufficient numbers of qualified
                      replacements. The experience drain will be astonishing!




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             20
                                                                                                Major Findings

       Linking Development To Strategic Direction
              #4 Companies use sophisticated development processes
                      geared to build the competencies linked to future success

       This is a best practice because. . . .
                      Some means must be available to identify and narrow
                      developmental gaps, and measure readiness.
                      The Right people, right place, right time and with
                      the right competencies!




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             21
                                                                   An Integrated Services Model


       The Foundation               Focused Individual Development                              Feedback and Coaching

                                                                 360s                                        Career Goals
           Vision 2016
                                                             Skills/Attribute
                                                                    s                                          Diversity
                                                             Development
            Business                  Development             Priorities                Leadership              Mobility
            Strategies                  Planning                                       Development
                                                               Mentoring
                                                                                                           Global Leadership
         Competencies                                        Performance
                                                             Development                                    Exec Program
                                                              Partnership




                                                   Succession Planning

                                                    Executive Selection


Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064                                  22
                                                                                                Major Findings

       Include Values in People Development
              #5 Companies use values as a way to bring together
                      equivalent standards across many national cultures and
                      across merged organizations. Values become the hinge-
                      pin to Leadership development and corporate
                      performance. (The right people)


       This is a best practice because . . . .
                      it emphasizes the importance of values as a unifying
                      strategy




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             23
                                                                                                Major Findings

       Drive the Program With Senior Management
              #6 The company has benefited from the strong, active
                      participation of a senior management team willing to
                      devote time to doing training at the company's corporate
                      university


       This is a best practice because. . . .
                      Companies can also develop an exemplary approach to
                      competency models, which distinguish among people
                      leaders, process leaders, and business leaders that
                      make other components of the succession planning and
                      management effort relatively easy to explain and measure




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             24
                                                                                                Major Findings

       Build the Business Case
              #8 The case shows the value of making the business case,
                      which means showing the link between the succession
                      planning and management program and company strategy


       That is a best practice because. . . .
                Companies can make the most compelling case for
                aligning the succession program to company plans and
                clarifying the manager's role in worker development,
                readiness and availability




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                                                                                                      Major Findings

       MRR’s Connection w/ Aligning Employees
       Toward Business Goals
                          Business Strategy/
                          Business Plan


                                      MRR:
                                      Capabilities Review                                       Training and
                                                                                                Development
                                      Succession Planning
                                                                                                Opportunities
                                      Individual Development Plans




                         Individual Goal/
                                                                               Performance Review
                         Performance Planning


                                      Platform of Senior Executive Competencies

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                                                                                                Major Findings

       Incorporate Gap Assessments
              #9 Companies conduct a gap a (risk) assessment of the
                      senior management group and uses individualized self-
                      assessments that are completed first by individuals and
                      then reviewed by their immediate supervisors

       These practices are exemplary because. . .
                      Risk assessments make the business case in a compelling
                      way and the individualized self-assessments encourage
                      individual self-reflection and responsibility for development

                      Leadership competencies, Functional competencies,
                      Personality profiles, Intellectual profiles, Emotional
                      Intelligence, etc.




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             27
                                                                                                Major Findings

       Major Findings: What are the Top 10 Trends?

              1. Identify high-potential talent early and devise
                 strategies to retain that talent

              2. Encourage the rapid and successful socialization
                 of high-potential new hires into the corporate
                 culture to avoid turnover

              3. Use succession planning and management to
                 foster diversity and excellence



Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             28
                                                                                                Major Findings

       Major Findings: What are the Top 10 Trends?

              4. Use succession planning and management
                 programs to encourage employee retention

              5. Integrate executive recruitment from outside with
                 development from inside, using common
                 competencies and values

              6. Apply mentoring programs to encourage real-
                 time coaching and development


Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             29
                                                                                                Major Findings

       Major Findings: What are the Top 10 Trends?

              7. Manage assignments and rotations to build talent
                 and not just let them happen on their own or
                 without their developmental implications subject
                 to management oversight

              8. Link executive rewards, in part, to the cultivation
                 of talent

              9. Track talent and monitor its development over
                 time

              10.Use technology to manage documentation
Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064             30
                                                             The Difference Between Talent Management and
                                                               Succession Planning/Succession Management



       Remember the Difference Between Talent
       Management and Succession
       Planning/Succession Management

              – Succession planning/management focuses on
                developing internal talent to meet future
                organizational requirements

              – Talent management focuses on integrating efforts
                to attract, develop and retain the best people



Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064      31
                                                                      Seven Factors That Indicate a Top-Tier
                                                                                   Leadership Organization


       • Factor 1: Senior executives are truly committed to
         development
       • Factor 2: The organization provides incentives and/or
         recognition for managers who develop talent
       • Factor 3: Individuals are hired for their compatibility
         with the organization
       • Factor 4: A culture of meritocracy exists in the
         organization



         Source: Corporate leadership council. (2002). High impact succession management: From
         succession planning to strategic executive talent management. Retrieved from
         www.executiveboard.com

Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064         32
                                                                      Seven Factors That Indicate a Top-Tier
                                                                                   Leadership Organization


       • Factor 5: ―Rising stars‖ are given projects that give
         them broad visibility and exposure
       • Factor 6: Successors are selected for their leadership
         ability
       • Factor 7: The succession management system
         focuses on skills scarce in the labor market and
         emphasizes ―fit with position‖ compared to general
         development



         Source: Corporate leadership council. (2002). High impact succession management: From
         succession planning to strategic executive talent management. Retrieved from
         www.executiveboard.com

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                                                                                                Resources

       Online Resources

       •    SHRM 2006 Succession Planning Survey Report
       •    SHRM 2006 Talent Management Survey Report
       •    Building Engineering & Science Talent
       •    Center for Creative Leadership
       •    Corporate Leadership Council
       •    Human Capital Institute
       •    International Labour Organization
       •    Institute for Workplace Studies
       •    Milken Institute




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064        34
                                                         Measuring the Value Of Talent
                                                              Management Programs




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064
                                                                   The Value Of Talent Management


       Remember The Objective
       • Succession Planning and
         Talent Management’s
         Contribution:
            Succession or Replacement


       Your Role:
       • Measure Performance of
         the System Against the
         Plan




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   36
                                                                                  The Hierarchy of Metrics


                                                                  LEVEL FOUR: VALUE CONTRIBUTION
                                                                  Measures the economic contribution (Value)
                                                                  associated with the changes. Allows initiatives
                                                                  to be compared to alternative uses of funds.
                                                                  Also allows for comparisons to standard
                                                                  investment ―hurdle-rates.‖


                                                                  LEVEL THREE: COMPARATIVE ANALYSIS
                                                                  Measures the difference () between the
                                                                  way things were and the way things are now.
                                                                  Note this requires establishing benchmark
                                                                  data prior to the start of a project or initiative.


                                                                  LEVEL TWO: GOAL ACCOMPLISHMENT
                                                                  Measures the results achieved against the
                                                                  intended objectives, either Qualitative or
                                                                  Quantitative. Did we hit the goal?


                                                                  LEVEL ONE: SATISFACTION
                                                                  Typically identifies how people feel about
                                                                  the contribution of what was done. Did it
                                                                  help them or make things easier?




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064                           37
                                                                          What Is A Business Case?

       A Business Case is:
       • A tool that supports planning
          and decision making.

       It Answers the Questions:
       • Should we do this (or do
           something else)?
       • What are the potential
         consequences (financial and
         business)?
       • What are the quantified costs
         and benefits?
       • How do we stay on course?




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   38
                                                                          What Is A Business Case?




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064   39
                                                                                            The Business Case

       The Business Case Answers:

                                What All-in Costs                                    Why is the
                                are Anticipated?                                     Process
                                  (People, Money, Time,
                                   Hardware/Software)                                Needed?



               When Will the                                                                    How Will it Solve
                                                           Business
                Solutions be                                                                       Issues or
               Implemented?                                  Case                                Opportunities?



                                                                                   What is the
                                 What are the
                                                                                  Recommended
                                Defined Benefits?
                                                                                    Solution ?



Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064                       40
                                                                                                Resources

       Online Resources

       •    Saratoga Institute
       •    The Conference Board
       •    The Institute of Executive Development
       •    The Performance Institute
       •    World Economic Forum




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064        41
                                                                                                Other Resources

       •    AberdeenGroup Inc./Human Capital Institute. (2005). Retaining talent: Retention and
            succession in the corporate workforce. Boston: Author.
       •    Cohn, J. M., Khurana, R., & Reeves, L. (2005, October). Growing talent as if your business
            depended on it. Harvard Business Review, 83, 10, 62-70.
       •    Collison, J. (2005, June). 2005 future of the U.S. labor pool survey report. Alexandria, VA:
            Society for Human Resource Management.
       •    Corporate Leadership Council. (2004). Driving performance and retention through employee
            engagement. Retrieved January 27, 2006, from www.executiveboard.com
       •    Corporate Leadership Council. (2003). High-impact succession management: From
            succession planning to strategic executive talent management. Retrieved January 27, 2006,
            from www.executiveboard.com
       •    Dell, D., & Hickey, J. (2002). Sustaining the talent quest. New York: The Conference Board.
       •    Fegley, S. (2006, January). 2006 talent management survey report. Alexandria, VA: Society
            for Human Resource Management.
       •    Morton, L. (2004, January). Integrated and integrative talent management: A strategic HR
            framework. New York: The Conference Board.
       •    Morton, L. (2005). Talent management value imperatives: Strategies for execution. New
            York: The Conference Board.




Northwest Public Power Association l 9817 NE 54th Street, Ste. 200 l Vancouver, WA 98662-6064              42
                                                                                                Other Resources

       •    Throop, M. (2005). Fueling the talent engine: Finding and keeping high
            performers, a case study of Yahoo! Inc. Alexandria, VA: SHRM Foundation.
       •    Towers Perrin. (2003). Working today: Understanding what drives employee
            engagement. Retrieved February 14, 2006, from www.towersperrin.com
       •    Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent management:
            Insights on how workforce trends are changing the face of talent management.
            Retrieved January 26, 2006, from www.hewitt.com
       •    Tucker, E., Kao, T., & Verma, N. (2005). Next-generation talent management:
            Insights on how workforce trends are changing the face of talent management.
            Retrieved January 26, 2006, from www.hewitt.com
       •    Walker, J. W., & LaRocco, J. M. (2002). Perspectives: Talent pools: The best
            and the rest. HR. Human Resource Planning, 25, 3, 12-15.
       •    Watson Wyatt. (2005). Maximizing the return on your human capital investment:
            The 2005 human capital index report. Retrieved March 6, 2006, from
            www.watsonwyatt.com




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                                                                                  Readiness Assessment




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