The Executive Guide to Integrated Talent Management. Kevin Oakes, CEO

Transcription

1 The Executive Guide to Integrated Talent Management Kevin Oakes, CEO 1

2 About Kevin Oakes Background Founder, CEO of i4cp Former Chairman, Jambok Former Chairman, ASTD Board Founder, President, SumTotal Systems Former CEO, Chair of Click2learn Founder, CEO Oakes Interactive Kevin Oakes CEO, i4cp 2

3 Who we are: i4cp focuses on the people practices that make high-performance organizations unique. 3

4 Defining high-performance High-performance organizations consistently outperform most of their competitors for extended periods of time. These companies performed better over the past five years, based on these four indicators: 1. Revenue growth 2. Market share 3. Profitability 4. Customer satisfaction 4

5 The 5 Domains of High Performance i4cp research has shown that high-performance companies excel in five core areas: 1. Strategy 2. Leadership 3. Talent 4. Culture 5. Market (customer focus) 5

6 What We Do i4cp helps organizations leverage the core domains of high performance through 4 delivery vehicles: 1. Research 2. Peers 3. Tools 4. Data 6

7 i4cp Network

8 Uniting the silos 8

9 Talent Management New concept or an old idea whose time has arrived? 9

10 Predictions There is no bigger problem in the global marketplace today than how to obtain, train and retain knowledge workers. - Michael Moe, Chairman & CEO ThinkEquity Partners LLC The killer app for the next decade is talent acquisition and retention. - John Doerr, Partner Kleiner, Perkins, Caufield & Byers 10

11 An investment banker s graph Source: CIBC, February,

12 A story From: Ambitious CEO Sent: Thursday, May 03, :02 AM To: Subject: SEIZE Market Leadership Thanks for your time today. Please see attached the draft presentation and proposed CAP chart regarding our joint opportunity (Together, we) will realize the market leading vision we have articulated, and hope we can work together with you to seize this compelling opportunity. If you have additional questions please don't hesitate to contact me directly. I am also prepared to quickly travel to your location to fully articulate the opportunity to you and others. LET'S SEIZE THIS OPPORTUNITY NOW, AND DRIVE THE MARKET!!! 12

13 The Executive Guide to ITM Foreword: Tom Rath Gurus: Peter Cappelli, John Sullivan, Jon Ingham, Ed Lawler, Marshall Goldsmith, Bev Kaye, Noel Tichy, Dave Ulrich Practitioners: Agilent, Novelis, Hertz, Cisco, Edwards Lifesciences, 3M, Deloitte, General Mills Chapters 1. Overview 2. Recruiting 3. Benefits 4. Performance Mgt. 5. Succession 6. Engagement 7. Leadership Development 8. Conclusion 13

14 Nuggets from the book Failures in talent management may be more recognizable than the concept itself. The goal of talent management is the more general task of helping the organization achieve its overall objectives. In the business world, that objective is to make money. Helping the organization achieve its goals begins with recognizing that the most important problem facing virtually all employers is the need to respond quickly to changes in competitive environments. Peter Cappelli Director of the Center for Human Resources Wharton 14

15 Higher-performing organizations (HPO) are more effective at managing talent Overall, to what extent is your organization managing talent effectively? 15

16 What do HPOs include in talent management? 16

17 Nuggets from the book we do not say integrated talent management at Agilent. At least the words are not spoken aloud. And yet I absolutely know it is happening at Agilent. The three dimensions are set and align strategy, build organizational capability, and deliver results; and underneath are specific behaviors. our CEO, Bill Sullivan cares deeply about having the best talent at Agilent. There is not a business strategy where talent is not considered. Teresa Roche VP & CLO Agilent Technologies 17

18 Engagement starts with recruitment What do you look for in new recruits? Organizations with Highly Engaged Employees 1. Has passion for work 1. Intelligent 2. Has positive attitudes toward peers and customers 3. Has desire to set and achieve goals 4. Adaptable Organizations with Disengaged Employees 2. Confident in work abilities 3. Has excellent job skills 4. Has positive attitudes toward peers and customers 5. Intelligent 5. Emotionally mature 6. Confident in work abilities 6. Has passion for work 7. Has excellent job skills 7. Has desire to set and achieve goals 18

19 Nuggets from the book Hiring the right people makes developing the right skill sets so much easier. Hiring the right person sets the foundation for every talent activity that follows. Individual opinion is terribly unpredictable, and worse, it s often wrong. Despite a great education in the science and practice of employee selection managers consistently ruined my handiwork by choosing the person they liked best sometimes despite the clear evidence that there were other equally qualified candidates with a far higher likelihood of being successful. Leslie Joyce Chief Talent Officer Novelis 19

20 Lower-performers are often more likely to measure tactical recruiting metrics than higher-performers Number of recruiter requests 59% 68% Hiring cycle time 66% 82% Cost to fill Acceptance rate of first offers 57% 56% 46% 50% High Market Performers Low Market Performers Percent of offers accepted 45% 56% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 20

21 Higher-performers are more likely to measure quality of recruiting efforts than lower-performers Employee referral rates 39% 61% Cycle time to competency or full productivity Employee referral rates by specific segment 15% 19% 26% 43% High Market Performers Low Market Performers 0% 10% 20% 30% 40% 50% 60% 70% 21

22 Nuggets from the book This volatile business context accelerated the need for Hertz to implement integrated structures, thus eliminating silos not only within HR, but across the entire enterprise. Adopting new behaviors can only be encouraged, implemented, and sustained if they are properly compensated and rewarded. cutting a budget meant not doing what the business leaders asked for in the first place. Karl-Heinz Oehler VP, Global Talent Management Hertz 22

23 Rewarding high performers What are the primary drivers for pay-for-performance programs in your organization? To recognize and reward high performers 32% 47% Low Performing Orgs High Performing Orgs 0% 20% 40% 60% 23

24 Rewarding high performers 37% of HPOs consider their P4P strategy to be highly effective at improving individual performance 16% of LPOs consider their P4P strategy to be highly effective at improving individual performance 31% of HPOs give their highest performers merit increases of 7% or more 17% of LPOs give their highest performers merit increases of 7% or more 25% of HPOs give their highest performers 150% or more of their annual bonus target 0% of LPOs give their highest performers 150% or more of their annual bonus target 24

25 Nuggets from the book The existence of an effective performance management system is often the major differentiator between organizations that produce adequate results and those that excel. People at all organizational levels go through the motion of formulaic performance appraisals with astonishing insincerity and have little to show for it. All too often in traditional organizations, performance appraisal is something the top tells the middle to do to the bottom. Edward Lawler III Distinguished Professor of Business USC 25

26 The decline of forced ranking 25% Forced Distribution & Ranking Trends Among High-Performance Organizations 20% 15% 10% 5% 0% Forced Distribution Forced Ranking 26

27 Nuggets from the book In the business world, CEOs have one priority: growth. In the world of talent management, practitioners should only have one priority: their CEO s vision. Today s performance management systems must link to three imperatives in order to drive the growth our CEO s need; business integration, organizational performance, and an emphasis on return on investment. And if culture will eat strategy for lunch, then traditional performance management systems will eat innovation for lunch. Annmarie Neal Vice President Robert Kovach Director Cisco Center for Collaborative Leadership 27

28 9 Keys to Performance Management 1. The performance management process includes developmental plans for the next work period 2. Manager training is provided on conducting a performance appraisal meeting 3. The quality of performance appraisals is measured 4. There is a system in place to address and resolve poor performance 5. The appraisal includes information other than that based on the judgment of managers 6. The performance management process is consistent across the organization 7. Employees can expect feedback on their performance more often than once a year or multi-rater feedback is used to support the performance management process 9. The performance management process includes ongoing goal review and feedback from managers 28

29 Nuggets from the book Our goal is to have a minimum of two successors for each critical job. A few years back, I asked my compensation leader for the average bonus percentage paid to all top talent and the average bonus percentage paid to the rest of the salary exempt employees. Believe it or not, top talent was lower. During a decade when many organizations faced significant turmoil due to economic conditions that challenged sales growth, Edwards talent performed extremely well. It is talent that executes business strategies. Rob Reindl VP Human Resources Edwards LifeSciences 30

30 Best, Next and The Rest practices for developing those in the succession planning pipeline Next Highly correlated with highperformance, yet most companies don t do it Best Most highperformance companies do it The Rest Most companies do it, but it has little impact on performance 31

31 Some succession candidate identification tools have a greater impact than others Next 16% of use other types of assessment, such as psychological testing, which has a.30 correlation with success. Best 57% of use designation as high-potential talent to identify candidates to a high or very high extent, with a.23 correlation with success. Rest 76% of all respondents say their organizations use senior leader s nomination to identify candidates for succession planning to a high or very high extent, but this shows the weakest correlation with succession planning success. 32

32 Promotion Rate Promotion Rate is defined as a change in job code and an increase in salary in the HRIS system of record including progression promotions, internal hires, development assignments 33

33 Internal Placement Rate Internal Hire is defined as a current employee is selected for a role that was posted on an external job board 34

34 Quality of Movement Scorecard 35

35 Nuggets from the book 3M has been actively measuring employee attitudes about the workplace since Innovation, arguably 3M s most treasured asset, rests upon and is fueled by employee engagement. At 3M, managing and engaging talent isn t an annual event, but a continuous process, composed of various integrated sub-processes, evaluations and tools. Karen Paul Manager HR Measurement 3M 36

36 Estimate the percentage of your workforce that you believe fit into the following categories Highly Engaged 34.00% Disengaged 23.40% Moderately Engaged 42.60% 37

37 Perceived degree of worker engagement Low Market Performers Moderately Engaged 42% High Market Performers Moderately Engaged 42% Highly Engaged 22% Disengaged or Minimally Engaged 36% Highly Engaged 42% Disengaged or Minimally Engaged 16% 38

38 Nuggets from the book One person desperately wants flexibility, another wants fun, and yet another craves stability. But how could we have known? We can only know, and then deliver, by asking. Why are we so willing to conduct exit interviews, but seldom take the time or summon the courage to conduct stay interviews with the people we can least afford to lose? Bev Kaye Founder and CEO Career Systems International We know of a CEO who charged $30,000 to a manager s operating budget because he needlessly allowed a talented person to leave. Now, that s what we call holding someone accountable. Sharon Jordan-Evans Founder and CEO Jordan-Evans Group 39

39 Attrition Metrics Tactical Finding: When comparing large organizations (10,000+ employees), there is no significant difference between higher- and lower-performers likelihood of measuring tactical retention metrics. 40

40 Attrition Metrics Strategic Finding: When comparing large organizations (10,000+ employees) higher-performers are more likely to measure who is leaving the organization than lower performers. 41

41 Nuggets from the book Unfortunately, integration isn't easy and can quickly degrade over time. The reality is that knitting talent things together is hard work because there are as many forces pulling us apart as pulling us together. The best systems providers are promoting integrated, full-suite talent management systems. The evolution is promising but the conversion process usually means someone gives up their favorite functionality for the greater (promised) good. I've never seen an organization overcome poor managerial talent management habits by imposing a sophisticated out-of-the-box software package. Kevin Wilde VP, Organizational Effectiveness & CLO General Mills 42

42 Integration is a challenge for all organizations 43

43 A note on ITM technology vendors There are no more Learning Mgt. System, Recruiting or Performance Mgt. Vendors Everyone claims to be an Integrated Talent Management Vendor M&A will continue to be the primary vehicle to get there Taleo buys Vurv and Learn.com Authoria & PeopleClick merge StepStone buys Mr Ted ADP buys Workscape Kenexa buys Salary.com Cornerstone IPO s and buys Sonar6 SumTotal buys Softscape, GeoLearning, CyberShift and Accero SuccessFactors buys InfoHRM, CubeTree, Jambok & Plateau SAP buys SuccessFactors Oracle buys Taleo Salesforce buys Rypple IBM buys Kenexa 44

44 M&A: Four Primary Areas Know the Roots Recruiting Learning ITM Performance HRIS/ERP Source: i4cp Note: Most of these companies consider themselves ITM vendors; areas shown represent their roots 45

45 Nuggets from the book Talent differentiates, drives productivity, determines customer service and increases intangible shareholder value. Talent matters. Talent is too important to be left to uncoordinated events. Simply stated, competence deals with the head (being able), commitment with the hands and feet (being there), and contribution with the heart (simply being). Dave Ulrich Professor of Business University of Michigan An emerging talent formula might be: competence x commitment x contribution = talent. 46

46 For More Information: Corporate 411 First Avenue South Suite 403 Seattle, WA, U.S.A Telephone i4cp (4427) Fax Research 8950 Ninth Street North Suite 115 St. Petersburg, FL, U.S.A Telephone Fax Institute for Corporate Productivity, Inc. Member companies may reproduce and distribute this file on an unlimited basis to their employees for internal management purposes only. Nonemployees (including outside consultants) may not be given copies of or access to i4cp s reports, online services or conference materials. 47