Getting Real with Talent Management

Transcription

1 Getting Real with Talent Management MBA Date BEST or subtitle Conference April Today s Presenter Cheryl Thomas Director, Strategic Advisory Services Wipfli LLP cthomas@wipfli.com 2 Session Highlights Getting the People Thing Right Talent Management Talent Assessment Linking Strategies and Talent Succession Management 3 Copyright Wipfli LLP 1

2 If we don t get the people thing right, we lose. It s the most important thing in all our businesses. Jack Welch, Former CEO, General Electric (GE) 4 The Central Challenge To have the talent that the business needs over time, there are four key imperatives: 1. Safeguard Business-Critical Capabilities 2. Accelerate Development 3. Overcome New-Hire Derailers 4. Leverage Talent 5 What Is Your Business Case? Let s Get Started: What are your top three People Portfolio challenges? What keeps you up at night? 6 Copyright Wipfli LLP 2

3 Why Now? Competitive Changes Economic rebound more opportunity Human capital as a differentiator Labor Market Changes Demographic trends More dynamic labor markets Organizational Changes New organizational structure New focus on leadership and governance 7 CEO Age and Bank Sale Correlation Leadership Change Data reflects medians Source: SNL Financial and KBW Corporate Finance 8 The Business Case 9 Copyright Wipfli LLP 3

4 The Swing: 2010 to 2020 Workforce Demographics: 2010 & 2020* Traditionals Boomers X ers Millennials Boomers X ers Millennials Next Gen *Projected data 10 People aren t a company s most important asset... the RIGHT people are. Jim Collins, Good to Great 11 The Link to Business Strategy Business Strategy and Drivers determine Talent for what? Business Strategy and Drivers Human Capital Strategy Strategy is future focused: What we have today may not be what we need in the future. Talent Strategy Identify Talent Formal Assessment Internal Screening Performance Reviews/Promotions Develop Talent On the job / Off the job Job Assignments Coaching and Mentoring Progress Talent Organization Structure Performance Management / Rewards Career Paths 12 Copyright Wipfli LLP 4

5 Talent Management System Broad Categories of HR Management Recruitment and Selection Development (Skills Training, Employee Development, Leadership Development) Assessment (Performance, Competencies) Rewards (Compensation, Benefits, Perquisites) Operations, Risk Management and Compliance (Policies, Administration, Reporting) Organizational Development (Structure and Design, Culture, Engagement 13 Talent Management System Source: ABA Survey, Strategic Planning Cycle PLANNING TEAM/ PROCESS STRATEGIC PLAN/ IMPLEMENTATION Performance Against Plan Validity of Assumption Corrective Action STRATEGIC ASSESSMENT Environmental Trends SWOT Financial Analysis STRATEGIC PLAN (1-3 yrs.) Strategic Goals, Objectives & Measurements Annual Action Plans Budgeting STRATEGIC DIRECTION Mission Vision Guiding Principles STRATEGIC POSITIONING (3 yrs.) Strategic Priorities Performance Targets 15 Copyright Wipfli LLP 5

6 Talent Management Cycle PLANNING TEAM/ PROCESS IMPLEMENTATION Performance Against Plan Development Outcomes STRATEGIC PLAN Goals Mission-Critical Roles/Functions TALENT MANAGEMENT PLAN (1-3 yrs.) Goals, Objectives & Measurements Action Plans Budgeting TALENT ASSESSMENT Mission-Critical Roles Talent Pool Assessment - - Incumbents - - Known Successors - - Unknown Talent TALENT PRIORITIES (3 yrs.) Mission-Critical Roles Key Talent 16 Workshop Exercise Prioritize your Talent Management Strategies Priorities according to you Where might there be differences: Your Bank s leadership Your Bank s Board 17 The Role of CEO and Human Resources This is a top-down process that needs to be owned and led by the CEO. Partnering closely with human resources and senior leadership, the CEO ensures the bank is taking a long-term review regarding the development and management of its talent to support the strategic direction today and into the future. HR serves an integral role for ensuring the necessary processes and tools are in place to ensure accurate data collection and accountability. 18 Copyright Wipfli LLP 6

7 Execute the Plan Demonstrate intentionality, commitment, and sustainability Ensures effective talent management to achieve strategic goals objectives today and into the future Prepares the Bank and individuals for change by developing critical competencies Promotes continuity of organizational culture 19 Capital Adequacy Human Capital Well capitalized? Adequately capitalized? Under-capitalized? 20 Managing the Human Capital Portfolio Maximizing the return Investment of time Investment of $$ 21 Copyright Wipfli LLP 7

8 Managing the Human Capital Portfolio Managing the Risks Vacancy Risk risk of critical leadership positions being vacant Readiness Risk risk of underdeveloped successors Transition Risk risk of poor assimilation of executive talent Portfolio Risk risk of poor deployment of talent against business goals 22 Workshop Exercise What do you know about your Human Capital Portfolio? Human Capital Portfolio Risks Vacancy Risk Readiness Risk Transition Risk Portfolio Risk 23 Talent Assessment What is Talent?... The skill that someone has quite naturally to do something that is hard.... It is an ability that someone is born with. It is a high degree of ability or of aptitudes. [Wikipedia] Our definition: An employee known to be: High Performing... with High Engagement... and with High Aspirations 24 Copyright Wipfli LLP 8

9 Talent Assessment Calibrated with multiple inputs Changes over time Necessary for planning and prioritization Foundational for all aspects of Talent Management Strategy 25 Talent Assessment Dimensions of Talent: Performance Delivering on goals and accountabilities Potential The ability to adapt to and grow into increasingly complex roles and environments: Motivation Curiosity Insight Engagement Determination 26 Talent Assessments Snapshot in time: Life happens: Motivations change Career aspirations evolve Organizations and environments evolve: Knowledge, skills, competencies change 27 Copyright Wipfli LLP 9

10 Assessing Potential and Performance Potential It is multi-faceted The greater you know the individual and the more you get, the better your judgment will be It is always a judgment call You have no choice but to do it 28 Assessing Potential and Performance Performance Track record of success: Most recent performance review ratings Feedback from others 360 feedback Stretch goals and contributions 29 Potential: Multi-faceted components Evaluate employees on three key sets of characteristics: Track Record Multi-year performance track record Relevant experiences & qualifications Success model fit Strong career desires and ambition to be challenged and continuously grow skills and experiences Mobility preferences Aspirations Learning Agility Cognitive abilities Ability and willingness to learn from experience and apply to new situations Ability to adapt to higher level of job complexity 30 Copyright Wipfli LLP 10

11 The Talent Assessment Talent Assessment Matrix 31 Talent Assessment Results Quantity and Quality of existing talent Relevant to all Talent Management processes and systems Recruiting and Selection Development Total Rewards Performance Management Succession Management 32 INVEST TOWARDS SUCCESS 33 Copyright Wipfli LLP 11

12 Competencies The foundational building blocks on which to base Talent Management processes: Link and align the bank s strategic strengths and needs to roles Bridge present and future definitions of success Establish common language and understanding of what is needed in roles Establish roadmap for development 34 Competencies What is a competency? A set of knowledge, skills, ability, and behaviors needed for success in a role Not: Job responsibilities, education requirements 35 Examples Strategic Agility sees ahead clearly; anticipates future consequences and trends accurately; has broad knowledge and perspective; is future oriented Customer Impact produces products and services that consistently meet and sometimes exceed the expectations of internal and external customers 36 Copyright Wipfli LLP 12

13 Competency Models Describes what effective leadership entails Knowledge, skills abilities for leadership Describes how the work gets done Typically 8-16 competencies Acquired or developed: Adopted from a validated model (e.g., Lominger, PDI, Polaris, Halogen, Cornerstone) Created from scratch Derived from values and strategic priorities 37 Examples of Leadership Competencies Managers Lominger Polaris Wipfli Delegation Developing Direct Reports and Others Directing Others Informing Managing and Measuring Work Delegation Financial Acumen Organizing and Planning Talent Management Team Management Technology Savvy Conflict Management Managing Performance Organizational Knowledge Priority Setting Delegation Fostering Teamwork Directing and Developing Others Change Leadership Authenticity/Self-Esteem Planning Executives Dealing with Ambiguity Creativity Innovation Management Perspective Strategic Agility Change Mastery Influence Leader Identification Mission Focus Risk Taking Strategic Thinking Visioning Enterprise Guardian Change Agent Perspective Navigating Ambiguity Strategic Agility Visionary Entrepreneurial Spirit 38 Workshop Exercise Competencies Identify 2-3 organizational capabilities needed to achieve the business strategy Identify the few behaviors and skills that will differentiate the highest potential leaders over the next 3-5 years 39 Copyright Wipfli LLP 13

14 LINKING STRATEGIES AND TALENT 40 Foundational Big 4! 1. Recruiting and Hiring 2. Assessment 3. Training and Development 4. Total Rewards 41 Recruiting and Hiring Shared Responsibility To find qualified candidates for the job that are fits for the Bank 42 Copyright Wipfli LLP 14

15 Recruiting and Hiring Shared Responsibility To attract and select the most qualified AND best fit for the job 43 Recruiting and Hiring: 9 Basics 1. Updated Job Description(s) 2. Performance Standards Teller transactions per hour New accounts opened per month Loan portfolio size / number of clients Deposit portfolio size / number of relationships 3. Job Posting Process / Policy 44 Recruiting and Hiring: 9 Basics 4. Standardized Recruiting / Sources 5. Employee Referral Process 6. Skilled Behavioral Interviewing 7. Centralized Job Offer Process with background checks 8. New Employee Orientation 9. On-Boarding 45 Copyright Wipfli LLP 15

16 46 Social Media Landscape 15 Most Popular Social Networking Sites 1. Facebook 2. Twitter 3. Linked In 4. Pinterest 5. GooglePlus+ 6. Tumblr. 7. Instagram 8. VK 9. Flickr 10. MySpace 11. Tagged 12. Ask.frm 13. Meetup 14. MeetMe 15. ClassMates Source: EBizMBA Rank 48 Copyright Wipfli LLP 16

17 General Social Media Facts Most-used websites Google Facebook YouTube - One hour of video is uploaded to YouTube every second that s 24 hours of video every 24 seconds - 4 billion video views globally every day There is an app born every minute 49 The Generations Baby Boomers ( ) Generation Xers ( ) Millennials ( ) Homelanders ( ) Copyright Wipfli LLP 17

18 52 53 General Social Media Facts Social media content is forever There is no cost to join many of the social media sites There is little or no verification to become a member Information on social media sites is not validated 54 Copyright Wipfli LLP 18

19 Social Media Uses How is your bank using social media? 55 Social Media Uses How does your bank want to use social media? 56 Social Media Business Statistics 50% of people follow brands in social media 75% of companies now use Twitter as a marketing channel 60% of employees would like help from employers to share relevant content 40% of companies admit to having no training or governance of social media 41% of the class of 2011 used social media in their job search 38% of CEOs label social media as high business priority Source: The Social Skinny 57 Copyright Wipfli LLP 19

20 80% of job seekers will be considered passive by 2020 source: unknown 58 Total Rewards: 7 Components 1. Base Salary 2. Incentive Compensation (Variable) 3. Benefits (both hard/soft) 4. Perks 5. Executive (BOLI, deferred comp) 6. Equity Stake (real or phantom) 7. Non-financial Flex time Virtual office 59 Benefits: Key Part of Package Welfare Benefits vs. Retirement Benefits Annual Disclosures Salary / Benefits as % of Average Assets (UBPR) Average Personnel Expense per Employee Total Package: 35-40% of Base Salary 25%: Hard costs 10-15%: Soft costs 60 Copyright Wipfli LLP 20

21 Compensation Strategies The Role of Total Compensation Components Compensation Role Form of Compensation Attract Retain Shortterm Motivate Long-term Change Behavior Provide Security/ Protection Base Salary X X Annual Incentives X X X X Long-Term Incentives X X X Basic Benefits Supplemental Benefits Supplemental Retirement Plan Perquisites X X X X X i.com 61 Compensation Strategies Desired Market Position Compensation Component Base Salary Annual Incentives Long-term Incentives Benefits Perks Total Compensation Market Position Compensation 25 Strategies th Percentile 50 th Percentile X Desired Market PositionX X X X 75 th Percentile X Compensation Structure Example Base Salary Annual Incentive Long-Term Incentive Benefits Retirement Perquisites Total Comp Executives Below Market Substantially Above Market Substantially Above Market Below Market Below Market Below Market Above Market Management and Supervisors At Market Above Market Above Market At Market At Market NA Above Market Employees Slightly Above Market At Market NA At Market At Market NA Slightly Above Market Copyright Wipfli LLP 21

22 Assessment Talent Assessment Mission Critical Roles Leadership Succession Performance Assessment 64 Performance Management Loop 6. SALARY REVIEW 1. JOB DESCRIPTION 2. JOB EVALUATION 5. PERFORMANCE REVIEW 3. SALARY GRADE/RANGES KEY Non-Incumbent Specific Incumbent Specific 4. EMPLOYEE OBJECTIVES 65 Performance Management Toolkit Performance Standards Current Job Descriptions Total Compensation Key Resources 66 Copyright Wipfli LLP 22

23 Performance Evaluation 1. Formal system / timetable 2. Self-appraisal 3. Objective criteria 4. Job description / goals 5. Closed-door session 67 Development of Talent Important part of Talent Management Most often overlooked or underinvested Training AND Development 68 Developing the Training Plan ASSESSMENT PROCESS Linkage with annual Performance Review Short-term training needs Skills and Competencies Longer-term career goals KEY: Management/Supervisory Accountability 69 Copyright Wipfli LLP 23

24 Training Priorities and Budget 80/20 Rule Product Training Sales Training Customer Service Training Technology Training Compliance Training Knowledge of the Organization, Values and Culture 70 Development Priorities and Budget Tuition Reimbursement Policy Supervisory / Management Skills Leadership Skills Career Development Coaching Mentoring Talent Assessment 71 Development Planning Individual Development Planning the process of clarifying the development gap between what they can already do and what they must be ready to do for advancement 72 Copyright Wipfli LLP 24

25 Development Planning Internal Development uses: Planned training Education On-the-job work assignments Coaching Special Projects 73 Individual Development Plans 8-Step Process: 1. Identify possible key positions to target 2. Consider likely time during which to prepare 3. Diagnose learning needs 4. Specify learning objectives 5. Specify learning resources and strategies 6. Specify evidence of accomplishment 7. Complete the plan 8. Evaluate learning and outcomes 74 Workshop Exercise List what your organization does today for Development (Use Checklist to indicate Development programs and activities) What works well.what needs work 75 Copyright Wipfli LLP 25

26 SUCCESSION MANAGEMENT PROCESS 76 Succession Management An integrated set of proactive processes within the overall talent management system that identifies and prepares successors for key roles needed to deliver the business strategy. Processes include: Talent Assessment Succession Planning Development Planning 77 Three Simplified Steps 1. Identify what you need and don t need in critical roles. 2. Assess talent you have, don t have, and risks 3. Develop and/or invest towards success! 78 Copyright Wipfli LLP 26

27 2 Distinct Components 1. Mission-Critical Positions 2. Mission-Critical Talent 79 Mission-Critical Roles Ground Rules: All roles in the organization matter Not all roles have equal impact on business success 80 What Are Mission-Critical Roles Critical to Strategic Goals Key leadership and functional expertise Defined by: Key Responsibilities WHAT is to be accomplished Competencies HOW work gets done (knowledge, skills, and abilities) 81 Copyright Wipfli LLP 27

28 Mission-Critical Roles: Identification Mission-Critical Roles refer to positions that are essential to the achievement of long-term strategic business priorities through their strategic impact and/or contribution of unique capabilities. Identifying Mission-Critical Roles in the organization Goal Identify which jobs are mission critical Accurately identify top talent Less than 15% of jobs Top players in mission critical roles Rationale Strategy executed by mission critical roles Top performers impact the bottom line Few jobs qualify as mission critical Don t want B/C payers in strategic roles 82 Mission Critical Roles: Differentiating Roles A Positions B Positions C Positions Characteristics Direct Strategic Impact AND High performance variability among those in position, representing upside potential Indirect strategic impact by supporting strategic positions OR Strategic impact, but exhibits little performance variability among those in position May be required for the company to function but has little strategic impact Scope of Authority Autonomous decisionmaking Specific processes or procedures typically must be followed Little discretion in work Effect on Value Creation Creates value by substantially enhancing revenue or reducing costs Supports value-creating positions Has little positive economic impact Consequences of Mistakes May be costly, but missed revenue opportunities are a greater loss May be very costly and can destroy value Not necessarily costly Consequences of hiring wrong person Significant expense in lost training investment and revenue opportunities Fairly easily remedied through hiring of replacement Easily remedied through hiring of replacement Source: A Players or A Positions? The Strategic Logic of Workforce Management M. Huselid, R. Beatty and B. Becker 83 Mission Critical Roles: Characteristics Has direct impact on the company s strategic success and creates wealth Significantly more top talent in these roles would enhance the success of the company s business model Usually less than 15% of an organization s positions qualify Not determined by hierarchy but rather impact High variability in performance across incumbents 84 Copyright Wipfli LLP 28

29 Workshop Exercise Identify your Mission-Critical Roles 85 The people... in the seats... for the time. 86 Succession Planning The process of identifying potential successors and the knowledge, skills, and abilities needed to successfully perform a role. 87 Copyright Wipfli LLP 29

30 Replacement Planning vs. Succession Planning Replacement Planning Reactive Risk Management Replacing/Substituting Unstructured Approach Exclusive Rigid Succession Planning Proactive Talent Management Renewing/Energizing Organized Alignment Inclusive Flexible Source: Grow Your Own Leaders Authors: Byham, Smith, and Paese 88 Succession Planning Process 10-Step Process Standard tools and forms Follow-up Step Process 1. Identify the company s Mission-Critical Positions to be included 2. Determine leaders to participate 3. Train on process and tools 4. Key leaders complete process utilizing tools for talent assessment and succession readiness 5. Compile all input 90 Copyright Wipfli LLP 30

31 10-Step Process 6. Review input with others to validate and finalize 7. Finalize changes 8. Prioritize follow-up on positions and people 9. Create action plans 10. Implement and track progress 91 Who to Involve Executive Team Direct Reports to Executive Team 92 Succession Management Training Succession Management concepts Talent and Talent Assessment Succession Readiness Review positions/tools/timing Outline accountabilities of Leaders in the process Prepare for one-on-one meetings Set expectations for follow-up and development 93 Copyright Wipfli LLP 31

32 Key Succession Tools 1. Job Descriptions 2. Organizational Chart 3. Leadership Competencies 4. Talent Assessment grid 5. Readiness Chart 6. Least Afford to Lose (list) 7. People to Keep an Eye On Across the Company (list) 1. Compilation of demographic data for Successor Candidates (HR) 2. Development Plans for Successor Candidates (HR) 3. Tracking/Monitoring Tools (HR) 94 Talent Assessment Matrix 95 Questions to Consider Does this person have a proven track record for accomplishing impressive results not just meeting expectations? How do unexpected changes affect this person s performance? How does this person respond to obstacles? Does this person inspire others and lead through persuasion and influence? Does this person seek responsibility? Is this person continually seeking solutions and new ideas? 96 Copyright Wipfli LLP 32

33 Succession Readiness Succession Readiness A process of identifying potential successors having the knowledge, skills and abilities to successfully perform a role... (Need to refine) 97 Succession Readiness 5 Stages of Readiness: Interim 98 Readiness Level Chart SUCCESSION PLANNING READINESS CHART Position Title: Position Key Competencies: Current Incumbent: Evaluator: Candidate Name Current Position Title Current Department Interim Readiness Level Ready 2 3yrs 3 5 yrs Now Long Shot Strengths Development Needs 99 Copyright Wipfli LLP 33

34 Readiness Level Chart SUCCESSION PLANNING READINESS CHART Position Title: Position Key Competencies: Current Incumbent: Evaluator: Commercial Banking Manager Results Focused, Problem Solving/Analytical Thinking, Leadership, Delegation Jerry Blue Janet Jones Candidate Name Current Position Title Current Department Interim Readiness Level Ready Now Years Years Long Shot Competency Strengths Competency Development Needs Jane Doe Commercial Banking X Results Focused Coaching/Performance, Leadership, Delegation Jim Brown Commercial Banking X Leadership Initiated Delegation, Results Focused Sally Snow Market President X Problem Solving, Initiative, Results Focused Coaching/Performance Management, Leadership, Delegation 100 Composite of Succession Readiness (aka Portfolio Risk 101 Human Resource: Checks & Balances Turnover Rates Exit Interviews / Stay Interviews Employee Opinion / Engagement Surveys Performance Reviews 102 Copyright Wipfli LLP 34

35 Human Resource: Checks & Balances Overall Compa Ratio Out-of-Range Exceptions Succession Readiness Talent Assessment 103 Human Resource: Checks & Balances Staffing practices and policies Wellness Awareness Communication 104 Summary Your Human Capital Strategy should unequivocally support your strategic plan. Talent Management creates focus within your Human Capital Strategy Manage risk of not fulfilling strategic plan Identify your Mission-Critical Roles Assess your Talent Portfolio Manage readiness risk with tests... not guesses Identify what you have to divest and reinvest Develop the rest to their best 105 Copyright Wipfli LLP 35

36 Questions? Cheryl Thomas Director, Strategic Advisory Services Wipfli LLP Copyright Wipfli LLP 36

37 Leadership Development Please indicate which of the following your Bank currently offers to support Leadership development: Leadership Development Please Indicate Yes or No Tuition Reimbursement In-house Training On-the-job Assignments Formal Coaching Informal Coaching External Seminars Banking Association Webinars Formal Mentoring Informal Mentoring Partnership with Academic Institution Graduate School of Banking Special Projects Job Shadowing Job Redesign Org Structure Redesign Self-study with Support of Resources Development Planning Workshop Exercise Leadership Development Activities

38 Mission-Critical Roles Utilizing your organizational chart, please indicate roles you believe to be mission critical to the future success of the organization, and why. Mission Critical Role Impact on Bank s Strategic Success Workshop Exercise Mission-Critical Roles

39 Succession Management Practice Instructions 1. Talent Assessment Utilizing the Talent Assessment Matrix tool a. Complete a Talent Assessment Matrix considering the performance and potential: For yourself For your staff b. Share your thoughts about the placement of people on the matrix. 2. Succession Readiness Utilizing the Succession Readiness Chart a. Identify the Key Competencies needs in your role. b. Identify candidates who are potential successors for your role and the timeframe you believe it will take for them to be ready to assume the responsibilities of the role. c. Identify any strengths or development areas of the successors that could be leveraged or developed to increase the likelihood of success in the role. 3. On a separate sheet of paper, list ideas or suggestions for Development programs or activities that could prepare candidates for your role. Workshop Exercise Succession Management Practice