New Strategies for Managing High-Potential Program Success

New Strategies for Managing High-Potential Program Success 24 March 2016

Agenda Objectives ȕȕ ȕȕ ȕȕ Discuss the common pitfalls of HIPO program failure. Explain the business case for change based on proven insights. Identify best practices to achieve lasting improvement in the performance of HIPO programs. Contact Please contact us with any questions you have following the session. Jean Martin Talent Solutions Architect, CEB MartinJ@ Submit questions using the Q&A toolbar. Use hashtag #HIPO during or after the webinar, and tweet us at @ceb_hr and @ceb_talentmgmt Access more resources on identifying, benchmarking, developing, and managing HIPO programs at /HIPO 2 2016 2015 CEB. All rights reserved. CLC5555516SYN

The Challenge: Realizing the Value of High-Potentials HIPOs are 91% more valuable to organizations than non-hipos. 3

CHROs Are Concerned About HIPO Programs Q: What Is Your Greatest Engagement Concern? Chief Human Resources Officer 21% Increased HIPO Turnover 41% Other 20% Increased Turnover of Employees with Critical Skills n = 195. Source: CEB analysis. 18% Altered Organizational Culture 4

What Are the Current Issues? HIPO Program Manager Perspectives HIPO Program Challenges I struggle to identify who the true high-potential employees in the business are. I know managers often get it wrong. Only 15% of high performers are likely to be high-potential When our HIPOs come back from the formal training program, they don t seem to succeed in converting their learning into improved behaviors in their daily activities. 95% of organizations fail to follow-through on HIPO development plans I have to show the management team a return on investment with my HIPO programs or risk losing my budget and future learning development opportunities. 73% of HIPO programs show neither business outcome nor ROI Source: CEB 2012 HIPO Program Operations and Outcomes Survey; CEB analysis. 5

Three Root Causes for HIPO Program Failure Identify Measures factors critical to HIPO success to accurately identify HIPOs and benchmark your competitive positioning Develop Provide easy, efficient, and scalable development with real performance impact Manage Manage the HIPO talent pool to drive stronger business outcomes 6

Current Performance Does Not Equal Potential High-Potentials Systematic Process Only 15% of High Performers Are High-Potential 46% of Leaders Lack a Systematic Process for Identifying HIPOs 7

CEB HIPO Model: Identifying High-Potential A proven high performer with three distinguishing attributes: Aspiration 1 High Aspiration: yields 11x higher probability to achieve executive position. Will they get there? 2 High Ability: yields 12x higher likelihood of being effective in senior roles. Will they be effective? Ability HIPO Engagement 3 High Engagement: yields 2x higher probability to stay, put in extra effort and meet performance goals. Will they remain with your company? The Challenge: Organizations need to assess for ALL of these distinguishing characteristics to accurately identify their true HIPOs. Source: CEB analysis. 8

The Three Ways High Performers Fall Short Misaligned Stars Engaged Dreamers Unengaged Stars Aspiration Ability Engagement Characteristics Misaligned Stars lack the drive and ambition for success at the next level Despite their outstanding ability and commitment to the organization, they simply don t want it enough Characteristics Engaged Dreamers are employees with a great deal of engagement and aspiration but only average ability Unless the organization can develop requisite skills, the probability of success in the next level is virtually zero Characteristics Unengaged Stars are employees with a great deal of aspiration and ability They hesitate to believe that working for the organization is in their best interest and do not fully believe in their work or organization 44% 0% 13% Probability of success at the next level Probability of success at the next level Probability of success at the next level Source: CEB analysis. 9

Three Root Causes for HIPO Program Failure Identify Measures factors critical to HIPO success to accurately identify HIPOs and benchmark your competitive positioning Develop Provide easy, efficient, and scalable development with real performance impact Manage Manage the HIPO talent pool to drive stronger business outcomes 10

Redefining High-Potential Development From What to Learn to How We Learn Exposure Extraction Performance High-quality learning experiences Extract learning from experience 25% of ability to apply learning Source: CEB On-the-Job Learning Survey; CEB analysis. 75% of ability to apply learning Up to 30% in increased performance 11

Evolve the 70:20:10 Learning Model How We Traditionally Focus Our Effort Formal Training Experience Learning from Others Where We Need to Focus Our Effort to Improve Performance Review Activity Practice Reflect Practice Reflect Get Practice Reflect Feedback Get Feedback Start End Source: More on 70:20:10: Jennings. C (2013) A Framework for High Performance Development Practices. 12

Three Root Causes for HIPO Program Failure Identify Measures factors critical to HIPO success to accurately identify HIPOs and benchmark your competitive positioning Develop Provide easy, efficient, and scalable development with real performance impact Manage Manage the HIPO talent pool to drive stronger business outcomes 13

HIPO Program Management Could be More Impactful? of? HIPOs? high-potential? discussions Do you understand all of the pros and cons related to transparency high-potential status? Do you know how to effectively create a talent deal with your to clarify expectations and accountabilities? Are you formally tracking the impact and success of your program? Are you providing adequate guidance to managers to facilitate with those who are not selected as HIPOs?? Are you doing all that you can to retain your HIPOs, to ensure a return on investment? 14

Transparency of High-Potential Status Does Your Organization Communicate High-Potential Status to HIPOs? Do Your HIPOs Have to Explicitly Commit to Extra Responsibilities in Return for Their HIPO Recognition? 63% No 37% Yes 30% Yes 70% No n = 403. Source: CEB analysis. n = 403. Source: CEB analysis. 15

HIPO Communication: BT Case Story Case In Point : BT Group s Talent Deal HIPO Recognition Strategy What the Best Companies Do to Communicate High-Potential Status 1. Communicate HIPO status and talent deal 2. Commit to HIPOs through the talent deal 3. Audit delivery of the talent deal UNDERSTAND HIPO EXPECTATIONS TO DETERMINE CORRECT ORGANIZATIONAL COMMITMENTS Process for Developing the Organization s Talent Deal Commitments Understand HIPOs Surface MOVE BEYOND COMMUNICATING STATUS Organizational Organizational Expectations Objectives TO DRIVE HIPO COMMITMENT Anatomy Contribute of a Disengaged to the Star Organization s Strategic Objectives Share Insights and Ideas to Improve the Organization Be Recognized for Unique Organizational Achievements Show HIPOs they contribute to key business priorities. Develop Organizational Talent Deal Commitments External Exposure (e.g., Industry conferences, CSR opportunities) Actively solicit HIPO Internal Exposure 2 input on improving Disengaged stars (e.g., are employees Quarterly HIPO with Aspiration corporate performance. a great deal of aspiration newsletter, and senior ability. executive They hesitate to believe development that working discussions) for the organization is in their best Openly communicate interest and do Career Management 3 not fully believe in Ability HIPO movement and their work or organization. (e.g., Talent Movement Portal, achievements resulting mentoring, career review Engagement from the talent deal. board) 1 Receive Specific Development Opportunities How BT Group Grows HIPO Engagement Communicate HIPO Status and Talent Deal Promote HIPO consumption of limited development opportunities that can accelerate their careers. Commit to to HIPOs Through the the Talent Deal 4 Personal Development (e.g., Facilitated 360 feedback, knowledge exchanges, executive coaching) Deliver the Deliver the Talent Deal Talent Deal 1 Communicate HIPO status, benefits, and commitments to recognize HIPOs criticality to the organization while calibrating expectations of talent deal objectives. 2 Translate HIPOs and the organization s expectations into reciprocal commitments to solidify the talent deal and reinforce the value of HIPO recognition. 3 Audit the delivery of the talent deal to alert the organization to opportunities for improvement. Talent Deal: An agreement outlining the opportunities HIPOs have access to as the organization s commitments to each HIPO and the HIPO s commitments to the organization in return. 16

HIPO Communication: BT Case Story Communicate HIPO Status and Commitments to Drive Engagement BT Group s Talent Deal Communications Talent Deal Commitments Document Objective: Explicitly state talent deal commitments for both BT Group and the HIPO. BT Group Commitments Internal Exposure External Exposure Career Management Personal Development HIPO Commitments Continued high performance Work with the HR team Maximize use of HIPO network Steward organizational talent Own personal development HIPO Notification Conversation Objective: Have the HIPO s manager confirm that the HIPO is aware of the Talent Deal, its expectations, and wants to participate. Questions These are the reasons we consider you to be one of our HIPOs... Do you understand what that means for your personal development and the organization? What are your career aspirations and what actions should you take to progress these? What support do you need from BT Group? CEO Letter Objective: Provide seniorlevel recognition of employee achievement of HIPO status and reward opportunities. Key Messages Within the Letter 1. Identification as one of a small group of employees with particularly high performance and strong leadership potential 2. HIPO demonstrated capability to potentially reach a very senior position in the organization 3. Introducing HIPO to the talent deal to explain the HIPO s and the organization s mutual commitments 4. Notification of first upcoming Talent networking event 5. CEO personal signature to highlight recognition Both the CEO letter and talent notification conversation drive HIPOs understanding of the talent deal components. 17

HIPO Communication: BT Case Story Translate Organizational Expectations into HIPO Responsibilities Process for Developing the HIPO Talent Deal Commitments Define organizational expectations for HIPOs Communicate HIPO commitments through the talent deal Use BT values to deliver high performance Work with the HR team Maximize professional use of the HIPO network Steward organizational talent Continued membership in BT HIPO pool is entirely dependent on exceptional performance and demonstrable commitment to One BT and our core values You are expected to attend all events for which you have accepted invitations and submit updated CV-related documentation on request You are expected to make the most of the opportunities to actively build your understanding of the business through the relationships you develop with your talented peers We expect our HIPOs to contribute directly to the attraction and selection processes associated with the acquisition of new talent Lead your own development As a HIPO you are ultimately responsible for putting needs-focused development plans together and turning them into action 18

Enable Managers of HIPOs: Novartis Case Story Building Manager Awareness About HIPOs Retentive Risk Assessment Manager Questions and Scoring Illustrative Retention Risk Assessment Checklist Directions: Answer each question with yes or no Scoring System 0-5 No s: Low Risk 6-10 No s: Medium Risk 11-15 No s: High Risk The organization decides which retention categories are most important and divides these categories into specific behaviors that managers can inflect. Susie Smith John Doe Jane Doe Part I: Manager-Employee Relations Do I maintain an open, trusting, and mutually respectful relationship with this employee? Yes No No Do I know this employee's objectives and work with him or her toward these goals? Yes Yes No Do I know that this employee perceives his or her total rewards to be fair and receives recognition for achievements? No No Yes Do I understand why this employee works here and not at another firm? Yes Yes Yes Part II: Employee's Work-Life Balance Satisfaction Do I understand if the working environment fits with this employee's personal and career needs? Yes Yes No Do I understand and support this employee to expand his or her interests or hobbies? No Yes No Do I know if this employee's attitude, physical health, and overall status have been healthy for the past six months? Yes Yes No Part III: Employee's Job-Interest Alignment Do I know if the employee's values are consistent with the organization's values and culture? Yes Yes Yes Does this employee demonstrate passion and enthusiasm for his or her work? Yes No No Do I know how satisfied the employee is with aspects of his or her work situation (e.g., projects, coworkers)? Yes No No Part IV: Employee's Career Goals Do I know if the employee's current work is aligned with his or her long-term goals? Yes Yes No Have I discussed different career choices with this employee? Yes Yes No Am I currently and actively working with this employee toward his or her career goals? Yes Yes No Have I had a discussion with this employee about ways to contribute to the company? No No No Do I proactively support this employee's development through training and challenging learning opportunities? Yes No Yes Retention Risk (Based on Number of "No"s) Low Med High When complete, the checklist provides a rough measure of the team s and key individuals turnover risk. The checklist provides a reality check for managers on their knowledge of their teams. 19

Enable Managers of HIPOs: Novartis Case Story Enable Managers to Act on Retention Concerns Manager To Do List Illustrative Retention Risk To-Do List for Managers Directions: Identify and incorporate the following steps in your interactions with your critical talent based on their specific retention risks. Retention Risk Category Target Action Steps to Areas of Concern Recognize employee's accomplishments both publicly and privately. Jane Doe Manager Employee Relations Employee s Work Life Balance Satisfaction Employee s Job Interest Alignment Conduct regular meetings formally and informally. Inquire about his or her work motivations pinpoint why he or she is working here Ask questions to learn what is important to him or her. Ensure employee understands communications about pay and feels open to ask questions. Discuss reasons for noted health or attitude changes (e.g., tiredness, mood swings). Learn about the employee's personal interests outside of work. Ask how the employee works best. Discuss options for employees' work hours, work style, work load, etc. Demonstrate the organization s values and recognize employees for exhibiting them. Express your own enthusiasm and passion for the job. Offer new types of projects across functional or divisional areas to the employee. Create a development plan that focuses both on skills for the current job and for future jobs. Employee s Career Goals Offer new types of projects across functional or divisional area to employee. Work with the employee to ensure he or she can attend training events. Discuss the value the employee brings to the organization. Learn about the employee s career goals and personal aspirations. 20

It s Worth Getting Right: Business Impact HIPOs bring 91% more value to the organization HIPOs exert 21% more effort than non-hipos Strong leaders can achieve over 90% more revenue Strong leaders can achieve 2x more profit growth Organizations that foster an effective learning environment can increase employee performance up to 14% Source: CEB 2014 Learning Culture Survey; CEB analysis. 21

CEB High-Potential Solution: A New Approach Key Benefits Identify Measure Factors Critical to HIPO Success Accurately identify true highpotentials using CEB Talent Assessments. Measure factors critical to HIPO success Accurately identify your HIPOs using scientific objective tools Benchmark where your HIPO program stands against competitors Develop Develop Future Leaders to Achieve Their Full Potential Develop high-potentials using CEB DevelopmentCoach; a scalable, cloud-based solution to improve learning and performance. Save time and resources by learning through on the job work Provides individual learning activities Supports manager-led development by providing easy-to-use tools and activities Manage High-Potentials Best Practice and Decision Support An always-on resource of best practices and tools to help you manage and evolve HIPO programs. Sustain the impact of your HIPO initiatives 22

Key Takeaways Only 15% of high performers are likely to be high-potential Use objective and predictive measures to identify and validate true HIPOs 46% of organizations lack a systematic process for identifying HIPOs Assess an individual s aspiration and engagement in addition to ability to ensure precise identification of potential 95% of organizations fail to follow-through on HIPO development plans Consider not just what your HIPOs learn, but how: the reality is that we learn by doing 55% drop out of the HIPO talent pool in a five-year period Review HIPO retention strategies and build manager awareness about HIPOs 23

Thank You Jean Martin Talent Solutions Architect, CEB MartinJ@ Access more resources on identifying, benchmarking, developing, and managing HIPO programs at /HIPO