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    Succession Planning Succession Planning Presentation Transcript

    • CLC HUMAN RESOURCES CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD High-Impact Succession Management An Overview of CLC Human Resources’ Best Practices Research Webinar
    • A FRAMEWORK FOR MEMBER CONVERSATIONS The mission of the Corporate Executive Board is to create revolutionary economic advantage for leaders of the world’s great enterprises by enabling them to act with unparalleled intelligence and confidence. We lift their performance at key decision points and career moments by delivering insight drawn from the most powerful global executive and professional network. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside information. All other conversations are welcomed and encouraged. We look forward to the continued and robust sharing of insights by member executives and professionals at Corporate Executive Board events. COPIES AND COPYRIGHT As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center at +1-866-913-6447 for any help we may provide. The pages herein are the property of The Corporate Executive Board Company. Beyond the membership, no copyrighted materials of The Corporate Executive Board Company may be reproduced without prior approval. LEGAL CAVEAT CLC Human Resources has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and CLC Human Resources cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, CLC Human Resources is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by CLC Human Resources or its sources, or b) reliance upon any recommendation made by CLC Human Resources.
    • 3 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN UNPACKING SUCCESSION RISK The Four Succession Risks Portfolio Risk Risk of poor deployment of talent against business goals. Supporting Organization- Wide Objectives 4 Readiness Risk Risk of underdeveloped successors. Transition Risk Risk of poor assimilation of executive talent into the organization. Enabling High Performance of Successors 32 Vacancy Risk Risk of critical leadership positions being vacant. Fixing the Succession Planning Process 1
    • 4 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Risks Vacancy Risk Readiness Risk Transition Risk Portfolio Risk Risk Management Imperatives Safeguard Critical Business Capabilities Accelerate Full Business Exposure Overcome New Hire Derailment Maximize Strategic Talent Leverage FROM RISK TO OPPORTUNITY Four Risks: Four Imperatives
    • 5 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch
    • 6 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN OVERLY DEMOCRATIC PROCESS, WASTED EFFORTS Overall Comparison of Vacancy Risk VP of R&D and CFO Source: Corporate Leadership Council 2003 Succession Management Survey. People and Positions Covered by Succession Management Process1 Position A: VP of R&D Position B: CFO Urgency on Time-to-Fill High High Overall Impact on Business High High Scarcity of Skill Set in the Labor Market High Low Short-Term Cost of Vacancy High Medium Long-Term Cost of Vacancy High High Vacancy Risk High Medium 93% 56% 41% 24% 13% AllPositionsAbove aCertainLevel AllHigh-Potential Employees AllPositionswithSignificant ImpactonBusiness AllPositionsThat RequireSpecializedSkills, Abilities,orExpertise AllPeopleorPositions DifficulttoFindin ExternalLaborMarket n = 234. 1 Respondents could select multiple responses.
    • 7 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD EXECUTIVE TALENT GROWTH REVIEW OVERVIEW Johnson & Johnson protects business-critical capabilities through developing a talent review methodology designed to rigorously assess and plan for senior executive growth.
    • 8 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN MIND THE TALENT GAP Embed Talent Growth Imperative Conduct Talent Review “Roll- Up” Strategy Develop an Aggregate View of Growth Assets Strengthen Quality of Talent Review Dialogue Commit to Rigorous Examination of Talent Options Drive to $80 Billion in Revenue 54321 Number of Senior Executives1 Revenue 1,000 500 0 Year 1 Year 3 Year 5 $100B $60B $20B 1 Actual numbers disguised.
    • 9 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN FOUR LENSES ON EXECUTIVE CAPABILITY Johnson & Johnson’s “Folio Map” 5 4 4 4 4 3 3 3 2 Keepers—Soundly performing executives, whose potential matches their level of accountability. Movers: Blockers—Executives can identify managers with low results or potential “blocking” the development of rising leaders. Low High High Low Performance Results THE FOUR LENSES 1. Potential Assessment 2. Performance Results 3. Position’s Level of Accountability 4. People Development Codes 5–Outstanding 4–Superior 3–Competent 2–Needs Improvement 1–Unacceptable Size of Circle PotentialAssessment Source: Fulmer, Robert, “Johnson & Johnson: Frameworks for Leadership,” Organizational Dynamics, Vol. 29, no. 3, 2001. Growers—Enables identification of high-potential, high-results executives in need of development assignments. Movers: Underperformers— Employees needing reassignment based on suboptimal performance or people development histories.
    • 10 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN ■■ Time for independent thought—Reviewing executives are given time to consider talent independently before discussion. ■■ Consistent standards for evaluation—Provides opportunity for executives to consider the entire slate of candidates before beginning formal review, thus escaping “evolution of standards” as review progresses. ■■ Everyone can speak—Facilitator ensures that each executive with a comment on an individual has an opportunity to voice that comment. Executives spend 15 minutes evaluating folio map with initial talent evaluations… …then “commit” to voicing, in detail, any thoughts or questions concerning the ratings by placing a sticky note by specific ratings. Results Potential Liz ■■ David DECEPTIVELY SIMPLE Steps of “Talent Scope” Calibration Exercise Output of Calibration Exercise Benefits of Sticky Note Calibration • Calvin • Sapana • Jeremy • Linda • David • Judith • Felix • Homer Jeff Liz Jeff Jeff Jan • Anna • Rob • Tom Low High High Low Performance Results PotentialAssessment Reviewing executives may flag talent either to question or validate any aspect of the managers’ ratings. Jan Liz
    • 11 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD NEEDS-BASED SUCCESSION PLANNING OVERVIEW Duke Energy guides succession management efforts by focusing on key questions regarding executive talent supply and demand.
    • 12 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Annual Succession Conferences Do we have candidates qualified to assume key positions? What are the ongoing talent risks to the organization? What is the best way to move talent in the event of succession? PLANNING BASED ON ORGANIZATIONAL PRIORITIES 2 43 What are the departure risks we need to act on now? 1
    • 13 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Retention Outlook Low Medium High Criticality High 1% 16% 46% Medium 2% 13% 19% Low <1% 2% <1% 5 91 237 12 70 103 3 15 4 ASKING “WHAT” WON’T BE HERE NEXT YEAR? Assessing Immediate Turnover Risk: Retention–Criticality Matrix1 Identify Capabilities at Risk Executives can click on tabs within the matrix to review at-risk talent and prepare specialized retention strategies or plan for loss of talent. Assess Retention Risks ■■ Total compensation versus market compensation ■■ Future career opportunities within and outside of Duke Energy ■■ Exposure to senior managers and the degree to which that exposure has been favorable Focus on Critical Positions By drawing out experience and competency requirements, position profiles provide a means to assess a position’s criticality. More specifically HR considers the following: ■■ High experience or competence requirements ■■ Degree to which critical business processes would stop if left vacant ■■ Barriers of entry to position, stemming from specialization or educational requirements ■■ Position’s impact on customers, revenue, or productivity 1 All examples are hypothetical.
    • 14 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN 1 All examples are hypothetical. FOCUSING MANAGERS ON FIT HR Successor Slate Evaluation ,QFXPEHQW 5HSRUWV 7R 3RVLWLRQ 6WRQH 'HEUD 0 'HEELH
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    • 15 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN 1 All examples are hypothetical. MUSICAL CHAIRS Evaluation of Chain of Moves1 Potential Successor Availability? Successor Ratio Successors Position Fit Move? Janet Bell Assumed current role six months ago; currently well placed (!) 1:1 (!) David 93% Lars Ulrich Within three months; finishing current assignment 3:1 Thomas; Lynne; Seàmus 90% Isabella Smith One year or more (!); engaged in critical assignment 0:1 (!) (None) 85% Eric Weiss Immediate availability 2:1 Sylvia; Alberto 65% (!) Successor List, VP Strategic Planning 1. J. Bell 93% 2. L. Ulrich 90% 3. I. Smith 85% 4. E. Weiss 65% Succession Risks D. Roth VP, Strategic Planning J. Bell First-Level Risk Second-Level Risk Manager Availability Managers may be engaged in critical assignments or be well placed and not in need of a new assignment. Successor Ratios Insufficient ratio of successors requires close examination of the risks of moving managers out of their current roles. Quantified “Stretch Risk” Position fit, by showing the skill gap the candidate will need to overcome if selected, also gives an indication of the “stretch risk” from placing a manager in a position.
    • 16 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management
    • 17 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD EXPERIENCE-BASED SUCCESSION MANAGEMENT OVERVIEW IBM improves its executive development by using its succession management system to ensure more effective matching of development experiences to executives.
    • 18 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Annual Executive Resources Discussion Experience-Based Development Models Development-Based Succession Plans Executive Talent Management System Executive Assignment “Five-Minute Drills” Ongoing Experience- Based Coaching and Consulting ExecutiveCoach Support from the GEOC—To support the integration of succession planning and executive development, IBM creates a corporate Global Executive and Organizational Capability (GEOC) department integrating experts in succession planning, leadership consulting, and executive coaching, who serve as consultants to the line. Executive Coaching/ Consulting Executive Development Succession Planning VP, GEOC VP of Talent SVP of HR Executive Leadership Competencies Derailment Factors Long-Term Development Plan Ultimate Potential Business Results AN INTEGRATED EXPERIENTIAL DEVELOPMENT SYSTEM 6 5 4321 GEOC Support Staff Profile • Senior HR professional • 5–10 years experience with executive coaching and consulting General Managers Business Value Selling Country GM Technical GM Moves to Position Position From Current Job One Job Away Two Jobs Away VP, Storage Solutions • E. Johnson • L. Hasega • R. Lizardi • J. Hansen • J. Ross • C. Norbin
    • 19 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN DIFFERENT ENDS, DIFFERENT MEANS IBM Career Development Models Sample Country GM Development Model Experiences ■■ Country knowledge ■■ Government/ political interface Sample Technical GM Development Model Experiences ■■ Technical/ development experience ■■ Manufacturing experience ■■ Technical systemwide view Integrate Experiences with Competencies To create a single, cohesive development system, the GEOC team clarifies how each experience relates to the company’s executive leadership competency model. General Managers Business Value Selling Country GM Technical GM 2 Identify Senior Leadership Roles • Senior roles with significant breadth and business impact • Roles for which internal successors are critical • Differentiated by unique, critical skill requirements 1 Identify Development Experiences The GEOC interviews both successful and average executives to identify critical experiences for success in each senior leadership role. 3 Sample General Manager Development Model Experiences ■■ High-stakes assignments ■■ Handling external pressure Sample Business Value Selling Development Model Experiences ■■ Industry experience ■■ Services experience ■■ Software experience
    • 20 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Moves to Position Position From Current Job One Job Away Two Jobs Away VP, Storage Solutions ■■ E. Johnson ■■ L. Hasega ■■ R. Lizardi ■■ J. Hansen ■■ J. Ross ■■ C. Norbin TARGETING DEVELOPMENT NOT REPLACEMENT NEEDS Succession Planning Chart Source: “How No. I Big Blue Builds Leaders,” Chief Executive Vol. 179 (June 2002). Development Needs Experience Required Cross-Border Partnerships Global Project Development Team Team Leadership Leadership Role in 10–50 Person Unit Ability to Build Relationships Cross-Cultural Role Possible Next Jobs: ■■ VP, European e-Business Integration Team ■■ VP, Asia Data Services Talent Profile Development Needs Lenses Executive Development Plan Experiences Competencies Derailment Factors Potential Successor Shortlist When the position becomes vacant, people on this list will be evaluated for their readiness to assume the role. Vitality of Bench Enables an assessment of the breadth of bench and the depth of the talent supply available to fill a position. Shifted Burden for Development The focus on needed jobs creates a need to ask “what experiences do we need to deliver to this person for them to develop and to prepare them for their ultimate position?” 3 2 1
    • 21 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN MAKING THE TOUGH CALLS Chairman’s “Five-Minute Drill” Rules ■■ Senior talent viewed as corporate, not business unit, assets ■■ Everyone is fair game—no hoarding of talent ■■ The group approves all moves for the top 300 positions ■■ All decisions are made by consensus ■■ Focus is on the capability of individuals to drive results SVP, Server Group CFO Chairman SVP, Software Group SVP of HR Five-Minute Drill Agenda August 4, 2003 1. Recap last month’s moves 2. Discuss and approve appointments to known opportunities and new positions in the top 300 positions Position Prioritized List of Candidates Others Candidates Considered VP, Storage Solutions 1. Rafael Lizardi 2. Ashley Gigandet 3. Lisa Hasegawa ■■ Lisa Screeton— insufficient time in current role ■■ Kenny Baer—vital in current position 3. Identify development jobs for key talent Person Projected Rotation Date Desired Development Experience Joe Ross Q1, 2004 Needs P&L responsibility and exposure to complex financial challenge Chairman’s “Five-Minute Drill” Forcing the Hard Discussions The Chairman’s expectations are designed to ensure a candid debate about the short- and long-term costs and benefits for each executive move. Benefits Considered: • Network building • Best-practice sharing • Innovation Costs Considered: • Temporary performance drop • Executive burnout Full Slate Transparency A list of other candidates considered but not selected is included to demonstrate that there can be no hoarding. Executive Talent Profile The group reviews the executive’s talent profile and development plan to discuss development areas and possible assignments. Development Model Experience Competency Score
    • 22 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD NON-OBVIOUS DEVELOPMENT MOVES OVERVIEW As part of the succession planning process Schlumberger identifies “non-obvious” cross-business development move opportunities for a selected group of rising high-performing leaders.
    • 23 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Promote and Identify Non-Obvious Development Move Opportunities Balance Long-Term and Short‑Term Benefits and Risks (NON) OBVIOUS DEVELOPMENT BENEFITS Potential Gains from Non-Obvious Development Moves Total $ Increased HIPO Retention Improved Performance Transfer of Best Practices Realization of New Cross- Business Opportunities TotalDollarValue Analyze “Stretch Errors” to Improve Future Risk Taking Support Individuals in Non‑Obvious Development Moves Identify HIPO Successors Early in Their Careers 5 4 321
    • 24 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN STARTING EARLY Schlumberger’s HIPO Reservoir HIPO Reservoir 9 Percent of Exempt Population (4,300 in 2002) Schlumberger, Ltd. 78,500 employees Annual HIPO Identification Process ■■ Minimum three years tenure ■■ High performer ■■ High potential Global Talent Pool (50 Percent) Talent Profile Name: Eva Vasquéz Position: Integrated Project Management Location: Jakarta, Indonesia ■■ 68 percent under age 35 ■■ Entry-level to senior executive–level staff ■■ Global development move every 2–3 years Development Strategy Candidates for Non-Obvious Development Moves Expert Talent Pool (50 Percent) Name: Larry Roth Position: Geophysicist, Oil Field Services Location: Paris, France ■■ Hard-to-get functional skills ■■ Premier expert in function ■■ High tenure within one function Functional Expert Path
    • 25 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN GOING AGAINST GUT FEEL Development Move Risk–Return Analysis Succession Plan, Oil Field Services Non-Obvious Move Discussion Items ■■ Non-obvious move opportunities for “ready in the future” candidates ■■ Business benefits ■■ Business risks ■■ Chain of moves CEO EVP VP of HR Low Medium High Low High Medium Long-TermBusinessBenefit Short-Term Business Risk Obvious Moves ■■ Direct vertical move within same function ■■ Move of “ready now” successor into business-troubled position ■■ Move into a role with limited development benefit Non-Obvious Moves ■■ Cross-business or cross-geography move ■■ Developmental stretch move ■■ Manageable risk to business Excessive Risk Moves ■■ Cross-business move into business-challenged position ■■ Developmental “over-stretch” move ■■ Excessive, non-manageable risk to business “Ready in the Future” Successor Characteristics ■■ Have been identified as high-potential ■■ Are considered for “non- obvious” move opportunities when vacancies appear in other BUs ■■ Are lacking experience and exposure in function or businessrisk to business Position “Ready Now” “Ready in the Future” VP, Drilling and Measurement Director, Drilling and Measurement, Ann King Recruiter, Drilling and Measurement, France, Young Lee Manager, Drilling and Measurement, Africa, Lisa Gil Manager, Seismic, U.S., Tom Smith
    • 26 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN BUILDING A SAFETY NET HR’s Individual Risk Evaluation Team Strength Risk Mitigation Position-Based Risk Assessment Potential Risk Factors ■■ Avoids conflict ■■ Micromanagement tendency ■■ Weak communicator Hire Assessment Performance Assessment Profiles of Past Moves Profiles of Individual Constraints 1. Strengthen Direct Reports 3. Use Internal Training and Coaching 2. Delegate High-Risk Responsibilities Hiring Manager Past Position Holder A World Within Past Holders of Position Name Current Position Telephone Extension Rob Crist SVP, Sales x4567 Jan Miller Director… x4123 Matt Reif Manager… x4890
    • 27 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management
    • 28 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN LOW SUCCESS RATES Internally and Externally Hired CFOs Promoted to CEO, President, or COO Roles Failure of External Candidates 40% Failed Within 18 Months 60% Successful in Role Internal Hires External Hires 31 11 n = 200.
    • 29 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD NEW EXECUTIVE CAREER LAUNCH OVERVIEW Beginning in 2001 American Express launched a suite of initiatives to overcome the problem of early external hire departure, in particular the company focused on three key components of the onboarding process.
    • 30 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN AVOIDING NEW HIRE STALL POINTS Key Elements of New Executive Career Launch ■■ Uses onboarding interventions to proactively manage new hire expectations across the first year. ■■ Overcomes performance- damaging peaks and troughs in attitude toward the new role. ■■ Focuses the individual on long- term development and uses coaching to overcome potential early derailers. ■■ Communicates acceptance of development needs and ensures that the new hire understands the organization’s long-term commitment to them. ■■ Goes beyond exposing individuals to critical stakeholders to fostering meaningful relationships. ■■ Provides new hires the networks they need to succeed in company consensus–driven culture. Managing the Expectation–Reality Gap 1 12 Months4–7 Months1 Month NewHire Perception ofNewRole Highly Pessimistic Highly Optimistic Initiating Development at the Point of Hire 2 Build Key Relationships for New Executives 3
    • 31 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN “THE EXPECTATION–REALITY ROLLER COASTER” Change in New Executive Hire Attitude Toward Company First Year of Employment Highly Optimistic Highly Pessimistic NewHirePerception ofOrganization 1 Month 12 Months4–7 Months Typical New Hire Experience Desired New Hire Experience High Potential for Performance Errors “Reality Check” Managing Down Expectations ■■ No “Duty Free” Onboarding ■■ Immediate Development Requirements “These Things Take Time” Managing up Expectations ■■ 360-Degree Feedback ■■ Feedback in Context “We’re Betting on You” Ongoing Solutions for Success ■■ A New Plan ■■ Emphasis on Organizational Commitment
    • 32 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN AN IMMEDIATE FOCUS ON LONG-TERM DEVELOPMENT American Express Parallel Development Focus Early Focus on Long-Term Development Leader Benchmarking From Assessment to Development Long-Term IDP Within 30 Days Individual Development Plan Goal One: Manage cross- functional reorganization Goal Two: Work toward AEXP “innovation” leadership standard Parallel Focus on Role- Based Learning On-Call Assimilation Assistant ■■ HR provides an assistant to serve as “on-call” support to answer simple orientation questions for the new hire. ■■ Because the assistant is outside the business unit, there is no stigma associated with asking “basic” questions. 100–Day Organizational Learning Plan ■■ HR provides a templated “First 100 Days” plan that covers all major “exposure” points an individual needs to master the role. ■■ Plan provides step-by-step series of checklists, contacts, and activities to follow. Point of Hire External Assessment © 2001 Corporate Executive Board Catalyst Adaptor Orchestrator CultivatorRelationship Builder Visionary Goal Driver Step #4: Evaluate Rising Leaders’ Scores Against Top Executive Norms Story Behind the Numbers Pre-Executives’ Scores Are Summed and Analyzed Against Norms Spider Graph Comparison*Pre-Executive Scorecard* * Corporate Leadership Council illustrative. 3.5 Source: GE Medical Systems; Corporate Leadership Council research. 7.0 18b 0.0 Leadership Development Needs of Bob Oliver (in order of priority) • Relationship Builder • Visionary • Cultivator Bob Oliver’s Scores Average Scores of Top Executives Catalyst 7 6.2 Adaptor 6 6.5 Orchestrator 5 5.3 Cultivator 6 6.6 Relationship Builder 5 5.7 Visionary 5 5.6 Goal Driver 7 6.6 Category Individual Category Score Top Executive Norm Scores Name:Bob Oliver Development Needs Assessment* “Norm” scores are derived from average scores of current top executive responses. New Hire Manager Pre Hire Immediate Orientation Early Development Planning
    • 33 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN MORE THAN JUST MEET AND GREET Three Levels of Relationship Building I Pre-Booked Calendar of Meetings 2 Perspective Exchange Opportunities 3 Cross-Business Networking CRITICAL ELEMENTS ENCOURAGING NETWORK DEVELOPMENT Instilling a Sense of Contribution Tapping for New Ideas Building Cohorts Meeting with the CEO New Hire Perspective Forum Annual New Leader Summit Gaining Multiple Views of the Organization Meeting Customers
    • 34 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management
    • 35 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN WRONG PLACE, WRONG TIME, WRONG JOB “Untapped Opportunity?” Asking Too Much? 33% 15% PointofOptimumLeverage 49% Meeting Business Objectives 51% Not Meeting Business Objectives 1 From “War for Talent,” The McKinsey Quarterly (3 November 1998): 44–57. Percentage of Leaders Not Meeting Business ObjectivesExecutive Leverage1
    • 36 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD STRATEGIC HUMAN CAPITAL REVIEW OVERVIEW Marriott’s HR department creates a succession management system that provides line managers the tools, skills, and impetus to ensure continuous alignment of talent and organizational capabilities with business priorities.
    • 37 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN THINKING OUTSIDE OF THE BOX Expand Scope of the Succession Management Process to Include Organizational Capability 1 Ensure Accountability for Driving Talent— Organization Alignment 4 Enhance Talent Assessment Criteria 2 Enable Business Unit Talent—Organization Alignment 5 Enable Business Unit Evaluation of Organizational Design and Talent Implications 3 Rating Organizational Capability Focus Area E F C I Organization Design/Organizational Structure Design q q q q Organization Design/Process Design q q q q Organization Design/Job Design q q q q Business/Culture Alignment q q q q Performance Management System and Measurement Frameworks q q q q Change and Learning Management q q q q Project Plan Enablers of Change ❏ Purpose and goal explained ❏ New department mission clear ❏ Training in place to support group Talent Management Organizational Capability Business Priorities
    • 38 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Have we established the right organizational circumstances to get maximum ROI from our talent? Areas Reviewed ■■ Organizational Design (Structure, Process, and Job) ■■ Business Culture Alignment ■■ Change and Learning Management ■■ Performance Measurement Systems EVP, BU THE THIRD LEG OF THE STOOL Marriott’s Human Capital Review Annual meetings are held between the president/COO and each business unit EVP to discuss in depth the unit’s talent health, organizational structure, and needs. Are we attracting, developing, and retaining the best industry talent? Areas Reviewed ■■ Talent Acquisition ■■ Performance Development ■■ Total Compensation ■■ Work Environment ■■ Retention Management Human Capital Review ■ Executive and Key Talent Review ■ Leadership Continuity Planning ■ Organizational Capability Assessment Key Questions Addressed SVP HR, BU President/ COO EVP, HR SVP, TM & OC Business Priorities Talent Management Organizational Capability
    • 39 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Rating Organizational Capability Focus Area Exceptional Full Contributing Inhibiting Organization Design/Organizational Structure Design: Leadership structured to provide/execute decision making at right level. Resources organized effectively and efficiently; span of control provides desired results. Virtual teams, task forces utilized to appropriate degree and enable cross-functional work to be successfully performed. Organization effectively responds to external challenges and work requests in a timely manner with appropriate quality/value. All key positions and reporting relationships exist to accomplish work from strategy to execution/ evaluation. Organization Design/Process Design: Right results are achieved at right time. Accountability is consistently clear, and high quality decisions are consistently made on time. Intended outcomes/outputs achieved within desired/required time frame and budget. Common approach is used to perform core, repetitive work. Work flows effectively, the number of hand-offs is as minimal as possible. Organization Design/Job Design: Senior positions designed with clear roles/responsibilities. Jobs are appropriate to senior talent sufficient autonomy; necessary interdependence without overlap). Positions are appropriately sized to be realistic. Jobs are designed to include career development/progression/ broadening. Job design promotes retention. Measurement criteria exists and utilized to judge performance results. Business/Culture Alignment: Strategy, leadership impact, decision making style, communications are aligned to foster/sustain the overall Marriott International culture and unique subculture/climate necessary to a specific unit to achieve business goals and work priorities. Senior leadership behavior congruent with desired values/culture. Results are appropriately balanced with how results are accomplished. Distinct approaches/environment exists to achieve/sustain a competitive advantage. Ability to respond to adverse situations quickly/ effectively while maintaining values. Performance Management System and Measurement Frameworks: Interactive and systematic ways are used to assess impact the leadership team has on core objectives, and key operating results achieved by the organization, groups and teams. Evaluation criteria includes “return on investment” (benefit gained against invested resources, etc.); “leading” and “lagging” indicators are in use. Goals (what is to be achieved) and boundaries (what is to be avoided) are clearly delineated. Change and Learning Management: Ability of leadership to effectively, quickly and easily introduce and manage [major] change; necessary changes implemented and adopted by associates as intended. Change is sustained. Infrastructure for learning and knowledge transfer in place; benefits from learning and experience are institutionalized and internalized throughout organization. Consistent rewards/recognition for re-using/ enhancing as opposed to creating new. A DETAILED LOOK AT THE ORGANIZATION Organizational Capability Review (OCR) Tool Targeted questions help focus managers’ attention on key organizational design and talent utilization questions. Additional questions encourage managers to think broadly about the overall talent environment. Rating Criteria Exceptional—Strong facilitator of goals; source of competitive advantage Full—Strong performance but enhancement possible Contributing—Adequate performance but enhancement necessary Inhibiting—Performance below expectations; major realignment needed
    • 40 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN OCR Standard and Investigating Questions Areas of Talent Misalignment Identified Opportunities Jobs are designed to include career development/ progression/broadening ■■ Are there multiple feeder positions for each job? ■■ Is there any job that is so customized that a single successor is not possible? Role change and customization has led to gaps in the development ladder Identify and validate career pipelines for this and related positions Job design promotes retention ■■ Are there positions which have historically high turnover? ■■ Does analysis of the job turnover point to an organizational rather than individual cause? Growth in role complexity has resulted in some “impossible” jobs Identify and restructure problematic roles Leadership structured to provide/execute decision making at the right level ■■ Are individual executives frustrated with their levels of autonomy? ■■ Are high-risk decisions being made with appropriate oversight? Static role definitions leave approval authority too centralized Redistribute executive responsibilities to provide appropriate authority and development “stretch” Jobs are appropriate to senior talent ■■ Are the skills of executives being fully leveraged in their current positions? ■■ Are some executives holding responsibilities that others could do better in or develop more from? Jobs are not sufficiently customized to fully leverage individual skill sets Consider areas where job responsibilities could be shifted to fully leverage available talent UNCOVERING OPPORTUNITIES FOR IMPROVEMENT
    • 41 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN 1 Proactively Assess Talent and Organizational Capability Business unit head and SVP of HR discuss talent and organizational implications of new business priorities or strategy shift. 2 Identify Key Performance Levers LTDI and OCR used to surface opportunities for improvement. 3 Recommend and Select Intervention Option Business unit leaders work with OC specialist to develop and select options for intervention. 4 Design, Develop, and Implement Change OC specialist partners with business unit head and senior HR generalist to carry out change. 5 Evaluate Results The team assesses the implementation and establishes metrics to ensure sustained realization of benefits. HR Center of Expertise for Talent Management and Organizational Capability, Organizational Capability Department ■■ Staff with expertise in organizational design, change management, and performance management systems. ■■ Led by a VP of Organizational Capability who reports to the SVP of Talent Management and Organizational Capability. ■■ Consult with business units to increase organizational effectiveness. Recent Organizational Capability Engagements ■■ Merging departments (e.g., currently integrating a large corporate division and a lodging division into a single organization) ■■ Building cross-organizational business processes (e.g., end-to- end work flow of the hotel development process) ■■ Creating new departments ■■ Re-allocating job accountabilities TURNING THE SHIP (ON A DIME) Hypothetical Example of an Organizational Capability (OC) Engagement
    • 42 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Succession Risks Imperatives for All Organizations MANAGING SUCCESSION RISKS: A FOUR-PART ACTION PLAN Portfolio RiskTransition RiskReadiness RiskVacancy Risk Imperative #4: Maximize Strategic Talent Leverage Imperative #3: Overcome New Hire Derailment Imperative #2: Accelerate Full Business Exposure Imperative #1: Safeguard Critical Business Capabilities
    • 43 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Succession Planning Reactive Process Management of Individual Departure Events HIGH-IMPACT SUCCESSION MANAGEMENT Vacancy Risk Readiness Risk Transition Risk Portfolio Risk I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long- Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch Strategic Executive Talent Management Proactive Strategic Management of Talent Portfolio in Support of Business Goals
    • CLC HUMAN RESOURCES™ CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN