Discuss Why Every Business Needs Top Talent at Every Link of the Organization

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Discuss Why Every Business Needs Top Talent at Every Link of the Organization Powered By Docstoc
					   Best Practices of
Succession Management
and Employee Retention

 The LGMA / GFOA Conference
          June 2, 2005

     Lori Maida, MA, CHRP
Questions To Consider...

What % of your employees will
 retire in the next 5 years?
Questions To Consider...

What % of your employees are
looking for other employment?
% of Employees Looking for
     Other Employment

  Conference Board of Canada
        (2005) reports,
of Canadian employees are open to
    move to other organizations
So…what are you planning
    to do about it?
Session 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
Explore how to get started
Why the Interest in
Succession Planning and
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*
 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
 1/3 of workers aged 50-59 who leave full
  time jobs, move back into full time
* Statistics Canada research
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 Issues

Workplaces will lose high performers as
 economy strengthens
Currently, workplaces that understand
 future skills needed are having difficulty
  Recruitment strategies are strengthening
Retention of talent is increasingly
 becoming a “hot” issue
   The 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 Challenge

The market place for good talent will be
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 to
ensure you have the people
   to get the job done?
Shift from Industrial Age to
Information Age
The Old Way
HR is responsible for people management
We provide good pay and benefits
Recruiting is like purchasing
Development happens in training
We treat everyone the same
Source: “War for Talent”
Shift from Industrial Age to
Information 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 On

If the dam bursts today, what is the
    impact to your organization?

How would you replace the people,
  knowledge, lost productivity?
One Approach…
   It’s not just about having
           the bodies.

  It’s about the right bodies
     doing the right things.

 Creating an organization of
which people want to be a part.
What keeps employees
 Current 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
     Top 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 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 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 – Link
       to Recruitment
Attraction is part of retention, so this
information also informs recruitment
Employees will be attracted to organizations
that have well-developed mentoring
programs, career development initiatives,
and job enrichment opportunities
       Link to Employee
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?

      Say                          Stay                         Strive

  Speak positively       Have an intense desire to be     Exert extra effort & are
about the organization        a member of the           dedicated to doing the very
   to co-workers,               organization.               best job possible to
 potential employees                                         contribute to the
   and customers.                                         organization‟s business

       Calculating Employee
Scores from the following six questions are used to
  calculate the engagement score:
   I would, without hesitation, highly recommend this organization
   to a friend seeking employment.
   Given the opportunity, I tell others great things about working

   It would take a lot to get me to leave this organization.
   I hardly ever think about leaving this organization to work       Stay
   somewhere else.

   This organization inspires me to do my best work every day.
   This organization motivates me to do more than is normally        Strive
   required to complete my work.
 Succession Planning:
Helping you understand
    who to focus on
            Quick Poll…

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 to
Succession Planning

Often highly political
Little thought given to what kind
 of leaders required in the future
Done secretly
Focus on putting names in boxes
Few conversations held
 Results of This Approach to
 Succession 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 Think
About 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
Elements of an Effective
Succession Management

                                    Individual Career
              Group Discussion
                                      Planning and
                 and Review


* The Gallup Organization
Succession 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 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
Succession 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 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
Need 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 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
Discussion to support shared ownership
 of the talent pool and development
Talent 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 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 Roadmap
How far down in the organization? What
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 Replacement
Identifying “bench weakness” (e.g.
 managers, technicians)
Assess individuals
Develop as pool – stretch
 assignments, leadership development
Track progress
Folio Map
              New in Position/High Potential   High Performance and Potential

        3.6 Competent/ Capable                 High Performance/ High Professional
              Needs Improvement


          0                                  3.6                                5.0
Identifying High Potentials
   1.0         3.6          5.0
                                         Our leadership
           J           JJ J J            “Talent Pool”

         J J
      J JJ
       J J J
         J J
                      J J
                                         The “bar” is a rating
                                         of 3.6 or above on
         J J JJ J
         J JJ JJ J
   JJ J J J J J       J                  Must be at least
                                         competent in each
                                         of the Standards of
     J J J
   J                                     Leadership
  J J
              J J JJ               1.0
Low                             High
Folio Map

Permits participants to identify
 specific developmental actions for
Assists conversations regarding next
Shows progress from year to year
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
      Multi-level ownership
                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
Discussion with employee & functional manager re. development/succession

      Create Development Plans & Performs Leadership Assessment

File it away…
Start having conversations!
 Great Leaders
    Make A
Great Difference
   Leadership Effectiveness
        and Turnover
Turnover Percent

                   10                                        9
                        Bottom 10%    Middle 80%           Top 10%
                                Leadership Effectiveness
           Leadership Effectiveness
                and Retention
Intention to Stay with

    Company (% )

                         60                     51
                              Bottom 10%     Middle 80%      Top 10%
                                      Leadership Effectiveness
            Leadership Effectiveness
           and Customer Satisfaction
Ratings of Customer

  Satisfaction (%)

                      60                      50


                            Bottom 10%    Middle 80%           Top 10%
                                    Leadership Effectiveness
Making Leadership
Development Work
 Identify, inform and invest heavily in
 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 Role
 Responsible for succession process
 Approve high potentials, individual
  development, leadership development
 Determine success measures, next
  steps and time frames
 Determine management
 Follow-up on actions
 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 Succession
 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
 Over x years, increase high potential retention by
 External measures - attract high potentials
Employee Conversations

 What needs to happen
 in these conversations?
Individual Development

Goals and measures
Follow-up, follow-up, follow-up
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
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
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
Keys 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 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 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

  Where should we start?

    What will be easy?

   What will we stumble
 “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-
 Centre for Creative Leadership – www.ccl.org
 Statistics Canada – www.statcan.ca/
 “The Extraordinary Leader” – Zenger &
   Telephone: 604-899-4192
   Toll free: 1-866-899-4182

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