How to Turn Wasted Talent Into Killer Leadership
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How to Turn Wasted Talent Into Killer Leadership
- 1. How To Turn Wasted Talent Into Killer Leadership Presented by: Carmine Domanico HR Principal Atticus Human Resource www.atticuscanada.com Reduce Business Risk. Right Now.™
- 8. Talent Strategies by Industry Source: Bersin & Associates: Talent Management: Benchmarks, Trends,& Best Practices June 2010
- 9. 7 Obstacles to Good Talent Mgmt 2007
- 15. Differentiating Human Capital Uniqueness of Human Capital Competitive Advantage of Human Capital Low High Source: Trinet White Paper: Employee Retention June 2010 Professional Partners Strategic Capabilities Unique Skills but can be sourced externally firm through specialty firms. Unique skills and/or intellectual knowledge critical to your business Contract Candidates Operational Partners Highly specialized skills, but not unique to your business. Can be outsourced. Skills are less unique but who are critical to running your business operations.
- 17. Risk Analysis Results then lead to appropriate strategies to deal with identified risks. Bottom Line : Business leaders think about these factors – uniqueness, performance, potential and value – because understanding them leads to the desired actions necessary to properly retain people and increase the success of the merger . Source: Trinet White Paper: Employee Retention June 2010 Who’s at Risk? Value to Business Risk of Leaving Low Medium High Low Medium High
Editor's Notes
- Many companies are still struggling to execute effective talent management practices and programs consistently. In a recent Hewitt Associates study nearly 700 senior-level human resource and business leaders who participated identified attracting and retaining skilled workers as the workforce issue that is most affecting their organizational strategy. Specifically they cited the need to address shortages of management or leadership talent and succession pool depth, develop manager capabilities and retain high performers. There are advances being made in talent management. Improvements can be attributed in large part to more senior leaders recognizing superior talent as a business advantage and, therefore, getting more involved in their company’s talent management strategy. Despite this, the study shows a key gap in talent management execution, particularly around accountability To be successful, organizations need to make talent management a shared business and HR responsibility. I hope to share with you through this presentation some approaches to help you deal with the talent management challenges that arise in mergers – I must disclose to you that there is no magic involved
- Lack of accountability is just one of the hurdles to today’s talent management efforts. The study identifies four additional challenges to well-executed talent management programs: Gaps in talent development capabilities. Only 5 percent of organizations reported having the managerial capability to grow people in their jobs or provide feedback to support employee development consistently across the organization. Lack of alignment between human capital and business strategy. While human capital is viewed as important, only 17 percent of respondents indicate their workforce strategy is consistently aligned with their business strategy across the organization. Inconsistent execution of talent programs. Most companies have fundamental talent management processes in place, such as workforce planning, high-potential development programs and succession planning. However, few execute these programs consistently across the organization. Limited use of meaningful analytics. Most organizations track traditional workforce measures, such as headcount, turnover and cost-based metrics. But few have graduated to tracking the metrics that matter. A mere 10 percent of companies measure the effectiveness of talent management programs consistently, and even fewer (7 percent) use quantitative frameworks consistently to align human capital investments with their business strategy.
- Sometimes, the failure of an acquisition to generate good returns for the parent company may be explained by the simple fact that they paid too much for it. Having bid over-enthusiastically, the buyer may find that the premium they paid for the acquired company's shares wipes out any gains made from the acquisition. However, even a deal that is financially sound may ultimately prove to be a disaster, if it is implemented in a way that does not deal sensitively with the companies' people and their different corporate cultures. There may be acute contrasts between the attitudes and values of the two companies, especially if the new partnership crosses national boundaries A merger or acquisition is an extremely stressful process for those involved: job losses, restructuring, and the imposition of a new corporate culture and identity can create uncertainty, anxiety and resentment among a company's employees Research shows that a firm's productivity can drop by between 25 and 50 percent while undergoing such a large-scale change; demoralisation of the workforce is a major reason for this Companies often pay undue attention to the short-term legal and financial considerations involved in a merger or acquisition, and neglect the implications for corporate identity and communication, factors that may prove equally important in the long run because of their impact on workers' morale and productivity Managers, suddenly deprived of authority and promotion opportunities, can be particularly bitter: one survey found that "nearly 50% of executives in acquired firms seek other jobs within one year". Sometimes there may be specific personality clashes between executives in the two companies.
- Senior executives have frequently acknowledged their failure (and that of their line managers) to pay enough attention to these issues. Research of global corporations has highlighted the obstacles that executives face, including short-term mind-sets, minimal collaboration and talent sharing among business units, ineffective line management, and confusion about the role of HR professionals. To manage talent successfully, executives must recognize that their talent strategies cannot focus solely on the top performers; that different things make people of different genders, ages, and nationalities want to work for (and remain at) a company; and that HR requires additional capabilities and encouragement to develop effective solutions. Only in this way will talent management establish itself at the heart of business strategy.
- Business leaders have instinctively known that top talent drives superior performance Talent management and Business management are more and more integrated today. Investors and board members are more and more asking the C-Suite about their company’s leadership, succession plans and how they are developing the talent pool. Managers must have a deeper understanding of the skills and capabilities of their teams and ensure their people are aligned to business goals and objectives.
- A new model developed by CIMA suggests the cost of losing just one employee can be surprisingly large. And when typical rates of attrition are considered the total annual bill can be staggering. The model for the Cost of Losing Talent© (COLT©) was developed by CIMA to help employers of all sizes measure the cost of losing each employee. The tools have been developed by Vox Pop Consulting Ltd, an independent consultant working with key CIMA staff. The model is based on EBITDA (Earnings before interest, taxes, depreciation and amortisation). EBITDA is increasingly used by investment analysts to measure the ability of the business to generate cash. Many regard it as the purest form of operational performance. Employee EBITDA measures the average contribution of each employee to the business. It is easily calculated by dividing total EBITDA by the number of employees. This figure is then weighted to reflect the seniority of the employee at three distinct levels; operational staff, managerial level and senior management. The weightings were identified as part of the CIMA Global Employer Study 2010 representing 450 employers drawn equally from North and South America, Asia and EMEA, across all major sectors. The global study was also used to identify the average number of weeks a role at each level of seniority is vacant. The table below details the weightings and average length of vacancy at each staff level. These weightings are intended only as guidelines or ‘norms’ – users should use company specific data wherever possible. These inputs allow users complete the model, which is detailed below. In many developing markets the war for talent means that employees are moving sometimes every few months. In September 2009 it was estimated by one recruitment firm in the US that 60% of employees were looking to move job ‘when the economy improved’. The cost to companies is staggering and urgently needs to be identified. The COLT© model above is half the true cost of losing talent. To get the full picture the cost of replacing that talent also needs to be factored in. The model for the Cost of Replacing Talent© (CORT©) will be discussed in my next blog. If anyone has any comments or suggestions please leave them here or get in touch.
- Most organizations don’t know who is valuable and who isn’t Organizations underestimate the need for processes and tools to effectively merge and integrate It is extremely challenging to retain and motivate the survivors (in both companies) Decisions must be made quickly Processes must be humane, but risk must be mitigated as well Resources are limited
- A critical analysis must be undertake to differentiate human capital and is competitive advantage Based on the principle that everyone cannot be treated in the same way Not everyone has the same skill set and not everyone can provide the competitive advantage you need
- You don’t want to lose your stronger performers who score high in the leadership potential area, but you also may not want to lose those who have already demonstrated leadership but who may only be mid-level performers
- Organizations that are making significant strides in managing talent are differentiating themselves in the following ways: Depth and consistency of practices. These companies have been effective in institutionalizing specific talent management programs (e.g., talent reviews, succession planning and employee development) and are applying these programs more deeply and broadly in their organizations. Higher commitment for talent development. They view talent management as a shared business and HR responsibility and require active engagement, commitment and accountability from leaders and managers. Progressive and innovative practices. Some organizations are introducing new and innovative ways to manage talent, including progressive approaches to workforce planning and employer branding. A growing number of companies are using predictive analytics to guide human capital decision-making and business alignment. “ Successful companies embed their talent strategy into the overall strategic planning process, integrating individual programs and practices to ensure they are all driving toward the same set of objectives,” notes the report. “ Organizations striving to improve their talent management practices have to start by acknowledging challenges,” says Allan Schweyer, executive director of HCI. “This report will help companies understand those challenges, and reprioritize their human capital initiatives accordingly.”
- Talent planning: identify talent challenges and solutions based on business goals Integration strategy: how to link talent processes Change management strategy: transitioning from current state to future talent approach Measurement approach: key talent metrics and how to evaluate success
- Moving toward Transparent Talent Mobility There are 10 best practices that we prescribe for companies that want to adopt and progress toward the stage of talent mobility. 1. Facilitate Process-Driven Succession Management – Business leaders should talk about talent often throughout the year and not only during scheduled talent review sessions. 2. Promote a Transparent Process and Data – Inform all managers that there is a succession management process, how it works and what their roles are. 3. Align Capabilities with the Business Strategy – In order to build a robust pipeline with the knowledge, skills and competencies necessary to steer the company into the future, a company’s business and succession strategies must be closely aligned. 4. Hold Leaders Accountable – Succession management requires that business leaders, as well as HR, ensure that key positions are filled with high-performing, qualified people. 5. Broaden the View of Talent – Understanding the capabilities of key talent across an organization increases the adaptability and responsiveness of organizations – and decreases potential disruptions to the business that may result from swift or unexpected talent changes. 6. Implement the Same Process at All Organizational Levels – The same tools, language and approaches should be used for succession at all levels for which the program is implemented. 7. Create a Culture of Sharing Talent – Managers must share their best talent in order to leverage talent throughout the organization. 8. Integrate with Talent Management Processes – Succession management decisions and actions should be aligned with performance management, career development, learning and recruiting processes. 9. Establish a Measurement Strategy – Establish key metrics at the onset of the process and calibrate the effectiveness of succession management against those measures regularly. 10. Recognize That Technology Is a Tool and Not a Solution – The process should drive the technology and not the other way around; the purpose of technology is to increase data integrity, boost the accessibility of data for business leaders and improve talent-based decision-making.