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									                               Differentiating the Best
                                     from the Rest:
                                    Identifying and
                                  Developing Future
                                        Leaders


Audrey Williams-Lee
Senior Director,
U.S. Talent Management


Denise Broz
Director,
Global Talent Management


            IQPC
Talent Management Conference
        Tucson, Arizona
        October 16, 2007
                                                          1
McDonald’s at a Glance
 System-wide Sales = $57B
 Total Revenues $21B
 $4.4B Operating Income
 31,886 Restaurants in 118 markets
 More than 70% of restaurants are operated
 by franchisees and joint ventures
 Serve 52 million customers per day


                                             2
Serving 52 Million Customers Daily




                                     3
Some Unexpected Succession
Needs...
 Jack Greenberg resigns as CEO – Dec 2002
 Jim Cantalupo becomes CEO – Jan 2003
 Jim Cantalupo dies unexpectedly and Charlie Bell
 named CEO – April 2004
 Charlie Bell resigns due to illness – Nov 2004
 Jim Skinner becomes CEO – Dec 2004
 Four CEOs in 3 years!




                                                    4
…in the Midst of Some Business
Challenges
 First time ever reporting a loss (Q4 2002)
 Jack Greenberg Resigns (December 2002)
  – Stock price: $14.24

 New CEO changes strategy to “Right the Ship”
 From “adding restaurants to customers” to “adding
 customers to restaurants”…from “getter bigger to
 getting better”
     –   “Back to basics”
     –   Upgrading service
     –   Improving food taste
     –   Menu innovation

                                                     5
McDonald’s Today
 Through August 2007:
   52 consecutive months and 17 consecutive
   quarters of positive comparable sales
   Stock price over $50




                                              6
Overview of Talent
Management @ McDonald’s
 Established as a new department within Human
 Resources in 2002
 Initial focus on top 200 positions and the talent pool for
 those positions
 Expanded focus to include longer-term talent pipelines
 Aligned to provide guidance and support to the Areas
 of the World
 – Global Talent Management Business Partners
 – U.S. Talent Management Function

 Global Leadership Institute launched in 2006
 – Focus on all Director-level and above employees



                                                              7
2007 Top Companies for Leaders –
Fortune Magazine




                                   8
Talent Management Message Map

                                           Tomorrow's Leaders
 Today’s Leaders                            Deep, diverse pool
  High performing,                           of replacement
 committed leaders                          candidates for all
     in all key                              key leadership
     positions                                   positions
                        Goal of TM
                     Ensure McDonald’s
                     has the leadership
                       talent to drive
                      business success
                       both today and
                       into the future




                     Development Culture
                         Culture that
                        both demands
                          & supports
                        learning and
                         development




                                                                 9
Talent Management @ McDonald’s…
Enabling the Business




    Assessing Potential




                                  10
Talent Identification

 Tools and processes utilized to
 assess potential and readiness for
 advancement:
  –   Performance Development System
  –   Performance Calibration Roundtables
  –   Talent Review Roundtables
  –   Talent Management Plan Process
  –   Enhanced Potential Assessment Process




                                              11
Differentiating Talent -- an
Evolution

                                                                               2007

                                                           2006                   • Introducing CLC
                                                                                    framework and
                                         2003-                                      new criteria for
                                                                                    assessing
                                         2005               • Workshops for         potential
                                                              senior leaders
                                                              regarding talent
                                                                                  • Workshops to
                                                              management
                    2002                  • Programs in       process,
                                                                                    strengthen skills
                                            all areas of                            of HR
                                                              differentiating
                                            the world to                            practitioners
                                                              and retaining top
                                            accelerate        talent
                                            development
2001                 • Common global
                                            of high
                       performance                          • Broader use of
                       management           potential         external
                       framework            talent            assessments
  • New
    Performance      • Performance        • Talent
    Rating             Calibration and      Management
    Guidelines         Talent Review        planning
    (20/70/10)         Roundtables          framework
                       implemented
  • Performance
    Drivers added
                                                                                                        12
McDonald’s Definition of Potential

Potential (Growth Potential) =
Likelihood of being a high performer in a position of
  greater responsibility in the future




                                                        13
A New Synthesis of Employee Potential
An employee’s potential is determined by his or her aspiration, ability and engagement




                                                                                    14
New Attributes – McDonald’s



                     Desire to Lead
                       (Aspiration)




    Organizational                           Learning
    Engagement                            Orientation
    (Engagement)                      (part of Ability)




                                                          15
McDonald’s Predictors

 Past Performance
 – Trend of results achieved over last 3 years

 Leadership Competencies
 Other Attributes (New)
 – Learning Orientation
 – Desire to Lead
 – Organizational Engagement




                                                 16
Past Performance

 Why does past performance matter?
 – Predictive power (especially if new role is similar to
   previous role)
 – Reinforce a high performance culture


 What we look for:
 – Trend in performance ratings over last 3 years
 – Consistency in ratings of same person by different
   managers
 – High performance in different types of roles




                                                            17
Learning Orientation

 Behaviors
 – Seeks feedback on a regular basis and acts on it
 – Learns lessons based on experience; does not make the same
   mistakes twice
 – Demonstrates ability to personally change for the better
 – Quickly processes and grasps new concepts and information




                                                                18
Desire to Lead

 Behaviors
 – Seeks out and assumes increased responsibility on job without
   being asked
 – Willingly goes above and beyond the call of duty on a regular
   basis
 – Steps up to assume leadership positions when placed in teams
 – Getting ahead is clearly important to him/her




                                                                   19
Organizational Engagement

 Behaviors
 – Personally aligned to the organization’s vision and values
 – Enthusiastically supports his/her organization/dept. and influences
   others to commit to its mission
 – Is a positive advocate for the business in all dealings external to
   McDonald’s
 – While candid and vocal internally about how things can be
   improved, emanates a positive attitude about his/her
   organization/department.




                                                                         20
Improving Clarity Regarding Long
Term Potential

From                             To
Promotion Readiness              Potential For Advancement
 Ready Now – immediately
                                           Then
 Ready Future – within 2 yrs
                                 Promotion Readiness
 Current Level – longer than 2
 yrs                              Ready Now – immediately
                                  Ready Future – within 2 yrs
                                  Long Term – longer than 2
                                  yrs




                                                                21
Talent Management @ McDonald’s…
Enabling the Business




 Accelerated Development




                                  22
Accelerated Leadership
Development – Purpose
Use leadership development process to drive
business results, shape culture and build leadership
depth
Strengthen and build the capabilities of future senior
leaders
Broaden participants’ understanding of strategic
business issues and challenges from a
multifunctional, multicultural perspective




                                                         23
Accelerated Leadership
Development – Purpose
Provide an opportunity to broaden participants’
internal and external networks
Provide means for senior leaders to better know the
capabilities of talent within geographically dispersed
markets
Encourage and support a mindset of continuous
learning




                                                         24
The Beginning: Leadership @
McDonald’s Program (LAMP)
 Global program
  – Australia, Indonesia, Ireland, Panama, U.S., Venezuela

 Participants nominated by senior leaders
  – High potential Senior Directors/Directors
  – Recently promoted Officers

 22 cross-functional participants
  – 60% female
  – 44% minority

 Nine month program (June ‘03 - February ‘04)



                                                             25
Accelerated Leadership
Development – Current Status
Leadership @ McDonald’s Program (LAMP)
 – U.S., Latin America, Canada
 – 112 participants, 5 programs

European Leadership Development Program (ELDP)
 – 46 participants, 4 programs

APMEA Leadership Development Program (ALDP)
 – 53 participants, 3 programs

Global Leadership Development Program (GLDP)
 – 20 participants, 1 program




                                               26
Global Diversity

                                 43 Countries


                                                     Sweden
                                           UK
               Canada                             Denmark
                                Ireland                               Russia
                                                      Poland
                                  Belgium           Germany     Ukraine
                   USA          Portugal        France
                                                            Turkey                          Japan
                                   Spain                                       China
                                                       Egypt
      Mexico
                                                                                 Hong Kong
                                                      UAE
                                                                 Thailand              Taiwan
          Panama
                           Venezuela                                            Singapore
                                                                 Malaysia
                                                                                       Philippines
                                  Brazil                                       Indonesia
                                                        South
                                                                                        Australia
                                                        Africa
                   Chile       Uruguay
                             Argentina                                                          New Zealand



                                                                                             Pacific Islands


                                                                                                               27
Accelerated Leadership
Development – Structure
 Common framework with ability to customize
 – Leadership of self, of others and of the
   organization
 – Rigorous Assessments
 – Coaching and Feedback
 – Leadership Modules & Experiential Activities
 – University Experience
 – Action Learning




                                                  28
Program Timeline




     Insert Lamp Timeline




                            29
Developing the Pipeline

 China Leadership Development Program
 Germany Director Development Program
 U.S. Real Estate Leadership Development
 Program
 U.S. Career Development Initiative




                                           30
Leadership Development – Officer
Feeder Pool
 U.S. Functional Accelerated Programs
 – Accelerated Operations
 – Cross-Functional Development

 Leadership Institute
 – Broad-based Leadership Development




                                        31
McDonald’s Leadership Institute –
“Be Your Best Leader”
A global community that drives McDonald’s
business by guiding leaders to reach their
potential and drive business success
Eligible leaders are those at the Director level and
above (or equivalent) around the world




                                                       32
Portal to Connect to Resources




                                 33
Talent Management @ McDonald’s…
Enabling the Business




     Measuring Success




                                  34
We Identify A Few Key Metrics…

Talent Management Plan Metrics
AOW Scorecards
Qualitative Data




                                 35
…That Show Progress and Align
with the Business
Talent Management Plan Metrics
 – Strength of incumbent leadership team:
   – At least 95% meeting or exceeding objectives
   – 100% of low performers on improvement plans
 – Year-over-year diversity improvement
 – 90+% of positions with strong
   successors
 – 95+% retention of top performers
 – Development plans in place for all leaders




                                                    36
APMEA Talent Measures

Annual reporting of talent plan metrics
Quarterly reporting tied to overall business results
Semi-annual country level talent scorecard with
measures linked to APMEA-wide talent objectives




                                                       37
APMEA Country Level Talent
Scorecard
 Overall Bench Strength
 – Examples: % positions with adequate replacements, unique
   successors, ratings for existing team
 Process
 – Examples: Time to fill, % from succession plan
 Talent Assessment & Development
 – Examples: written development plans, annual development spend by
   level
 Diversity
 – Examples: % positions held by local talent
 Planned Actions from Talent Plan




                                                                      38
APMEA Country Level Talent
Scorecard




                             39
Measurement Goes Beyond the
Numbers
Qualitative Data – Accelerated Leadership
Programs
 – Senior Leadership involvement and commitment
 – On-going funding and support for the existing Accelerated
   Leadership programs
 – The strength of the ALDP, ELDP & LAMP “brand”
 – Unsolicited feedback from leaders of program participants
 – Development of new programs focused on talent
 – Increased leadership capabilities of our overall Officer
   population




                                                               40
Some Challenges…

 Open and honest conversations with employees
 about potential
 Assessing talent cross-culturally
 Better use of planned job moves to accelerate
 development
 Optimal allocation of development resources
 Managing career development and growth in a
 flatter organization
 No technology infrastructure to support processes


                                                     41
In Summary
 We invest in developing all leaders, but invest
 more in our high potential population

 The process is an evolution
  – Cannot do more than your organization is ready to
    absorb (LAMP)
  – Accept your small wins and be on the lookout for
    opportunities (US Functional Programs)




                                                        42
In Summary
 Standardize on a few key forms and processes

 Lack of technology not always a barrier
  – Forced to focus on limited number of priorities (and a
    smaller set of data!)
  – Won’t hide behind the technology; more dialogue




                                                             43
Questions?




             44

								
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