The Conference Board
Succession Management Conference

How Organizations Are Using Analytics in
Succession Decisions
Octob...
Image: theatlantic.com

David Underwood
Head Talent Management & Analytics
CSAA Insurance Group

2
Current Areas of Focus

• Process & Analytics
• Succession focus on Readiness and Diverse Bench
• Extending talent review ...
Image: theatlantic.com

Succession Analytics
4
Succession Management

Succession management is a strategic and
systematic process that enables us to
identify, select and...
6
© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

Image: businessenglishp...
Human Capital
Most Important Factor in Maintaining Competitive Advantage

Leading Through Connections: The IBM 2012 Chief ...
Human Capital
#1 CEO Challenge
2013 CEO Challenge Study – The Conference Board
Human Capital

Operational
Excellence

Inno...
Image: IBM - Engines of a Smarter Planet

The purpose of [succession] analytics is
to IMPROVE BUSINESS PERFORMANCE.
© 2013...
What’s Holding Back HR’s Progress
Analytics May Be the Accelerator

• Inability to confidently and assertively solve busin...
CEO’s Clearly Want More from the HR Data They’re Getting

© 2013 AAA Northern California, Nevada & Utah Insurance Exchange...
HR Data Credibility Is Suffering

Issue

Percent

Percent business leaders who believe HR analytics focus on the right
bus...
Doing Talent Analytics Well

1. Analytics Leaders, those in the top quartile of all companies had
12 percent better talent...
Analytics succeed only to the extent that
they address key business issues, are
understandable/consumable, inform those
do...
© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

15
The Analytics Maturity Curve
Where Are You?

© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidentia...
From Reporting to Analytics
Moving to Higher Ground

Talent Analytics is the integration of data and the use of analysis, ...
Just because a metric is easy to capture
doesn’t mean it’s the right one to use.

Jonah Berger

Image: mashable.com

© 201...
From Reporting to Analytics to Predictive Analytics
Pushing the Curve Forward

Reporting

Analytics

Hindsight

Insight
80...
Image: blog.neosgeo.com

© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

...
Data Visualization
Improves Communications, Understanding & Action

© 2013 AAA Northern California, Nevada & Utah Insuranc...
Measurement Drives Motivation and Focus
Be Careful How You Use It

© 2013 AAA Northern California, Nevada & Utah Insurance...
© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary.

23
Building Analytics Capability
Roadmap

Start with a critical business (talent) problem
Use what you have – begin where you...
Building Analytics Capability
Think Broadly

1. Do only what delivers real business results
2. Start where you are at, bui...
Analytics Strategy
Unify Data, Reporting and Analytics Platform

© 2013 AAA Northern California, Nevada & Utah Insurance E...
Beyond a Foundational Level of Data Capability
Additional Investment Returns Low Additional Benefits

© 2013 AAA Northern ...
Start with Business Questions, and Ask Different Ones

Do you know what makes your best talent, your best?
Do you know wha...
Succession Management Metrics
Examples
• Succession Pipeline Depth: Average number succession planning candidates for each...
It’s an “AND” Conversation

© 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary...
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2013 conference board succession management conference succession analytics 101713 r3

  1. 1. The Conference Board Succession Management Conference How Organizations Are Using Analytics in Succession Decisions October 18, 2013 Image: theatlantic.com 1
  2. 2. Image: theatlantic.com David Underwood Head Talent Management & Analytics CSAA Insurance Group 2
  3. 3. Current Areas of Focus • Process & Analytics • Succession focus on Readiness and Diverse Bench • Extending talent review to all employees • Accelerating cross-business movement of high potential talent • Predictive Analytics • Predicting Executive success – Success Model • Predicting retention of High Potential and High Performing Talent • Predicting future fit with respect to skills and culture © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 3
  4. 4. Image: theatlantic.com Succession Analytics 4
  5. 5. Succession Management Succession management is a strategic and systematic process that enables us to identify, select and manage talent, build bench strength and ensure the readiness of leaders to move immediately into key positions when necessary. It is designed to minimize leadership gaps and ensure all leaders have the skills and capability to deliver on our business strategy today and in the future. Doing succession management well guarantees leadership continuity and minimizes the risk of vacancy in mission-critical roles. © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 5
  6. 6. 6 © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. Image: businessenglishpod.com
  7. 7. Human Capital Most Important Factor in Maintaining Competitive Advantage Leading Through Connections: The IBM 2012 Chief Executive Officer Study – 1700 CEO’s, Global © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 7
  8. 8. Human Capital #1 CEO Challenge 2013 CEO Challenge Study – The Conference Board Human Capital Operational Excellence Innovation Customer Relationships Global Political/ Economic Risk 1 Grow talent internally Provide employee training and development Integrate long-term risk recognition into strategic planning Reduce exposure to risky countries/regions 3 Raise employee engagement Break down internal silos Apply new technologies (product, process, information) Engage in strategic alliances with customers, suppliers, and/or other business partners Find, engage, and incentivize key talent for innovation Enhance quality of products/services 2 Raise employee engagement and productivity Focus on reduction of baseline costs 4 Improve performance management processes and accountability Continual improvement (Six Sigma, total quality, etc.) Increase speed of product and services to market 5 Increase efforts to retain critical talent Seek better alignment between strategy, objectives, and organizational capabilities Create culture of innovation by promoting and rewarding entrepreneurship and risk taking Develop innovation skills for all employees Sharpen understanding of customer/client needs Engage personally with key customers/clients Use competitive intelligence to better understand customer/ client needs Implement contingency plans for crises (e.g., geographical, political, relocation of employees) Manage currency risk Establish crisis management teams and procedures The above represents the Top Five CEO challenges identified in the 2013 CEO Challenge Study. For each challenge, the top strategies are listed. Human Capital was the #1 Global Challenge. The Study represents input from CEO’s, Presidents and Chairmen of 729 global companies. © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 8
  9. 9. Image: IBM - Engines of a Smarter Planet The purpose of [succession] analytics is to IMPROVE BUSINESS PERFORMANCE. © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 9
  10. 10. What’s Holding Back HR’s Progress Analytics May Be the Accelerator • Inability to confidently and assertively solve business issues with line leaders • Support function mindset, failure to communicate value as a strategic business partner • Lack of access to data blocks definition of ROI/business impact of function • Lack of faith in the ability to execute necessary changes • Low strategic license restricts role, available talent/tools, expertise to be strategic Source: The State of Human Capital 2012 – The Conference Board, McKinsey & Company Global survey >500 HC professionals, plus 18 focus groups (N=175) HC Members of The Conference Board Councils © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 10
  11. 11. CEO’s Clearly Want More from the HR Data They’re Getting © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 11
  12. 12. HR Data Credibility Is Suffering Issue Percent Percent business leaders who believe HR analytics focus on the right business questions 17% Percent business leaders who trust talent data and insights from HR 18% Percent business leaders who have changed a business decision in the past year as a result of data from HR 15% Percent of business and HR leaders who believe HR staff understand the business < 20% Percent of senior HR leaders who believe they are getting returns on their talent analytics investments 8% Percent of HR leaders who believe staff limitations are a barrier to improving HR analytics 80% Source: CEB Research, Global Labor Market Survey 2013 © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 12
  13. 13. Doing Talent Analytics Well 1. Analytics Leaders, those in the top quartile of all companies had 12 percent better talent outcomes than their average counterparts 2. Improving Analytic Impact from medium to maximum led to  4% improvement in gross profit margin  $12.8 million in savings for every $1 billion in revenue Source: CEB Research, Global Labor Market Survey 2013 © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 13
  14. 14. Analytics succeed only to the extent that they address key business issues, are understandable/consumable, inform those doing the work, and drive key behavior changes leading to measurable business improvement. © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 14
  15. 15. © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 15
  16. 16. The Analytics Maturity Curve Where Are You? © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 16
  17. 17. From Reporting to Analytics Moving to Higher Ground Talent Analytics is the integration of data and the use of analysis, statistics, and consulting to create new insights about our organization that help drive a high performance culture and allow us to better serve our members Reporting vs. Analytics Reporting is focused on operational outcomes and historical information Analytics supplements historical reporting with high level insights and future predictions Reports are pulled to review existing problems for monitoring purposes  Analytics regularly reviews current problems, analyzes external contexts, and provides comprehensive assessment of the current state in a summary format only when key issues need to be addressed  Reports are generally provided in raw data format or basic summary tables  Analytics highlights the key indicators to be explored by drilldown analysis and brings focus to concerns relevant to management Statistics are not part of the process Statistics are used regularly to substantiate findings Deliver Actionable Business Information – Improve Decision Making © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 17
  18. 18. Just because a metric is easy to capture doesn’t mean it’s the right one to use. Jonah Berger Image: mashable.com © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 18
  19. 19. From Reporting to Analytics to Predictive Analytics Pushing the Curve Forward Reporting Analytics Hindsight Insight 80% Reporting/20% Analysis Predictive Analytics Foresight 20% Reporting/80% Analysis Examples Turnover Cost/Cause/Timing of Turnover Who will leave and when? Percent High Potential What makes best talent best? Competencies, assessments performance, personal attributes, engagement, culture, etc. Who should fill the role we will create next year to accelerate market growth and how successful will they be? © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 19
  20. 20. Image: blog.neosgeo.com © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 20
  21. 21. Data Visualization Improves Communications, Understanding & Action © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 21
  22. 22. Measurement Drives Motivation and Focus Be Careful How You Use It © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 22
  23. 23. © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 23
  24. 24. Building Analytics Capability Roadmap Start with a critical business (talent) problem Use what you have – begin where you’re at Look for actionable patterns in your talent data Keep it simple, less really is more Identify the key insights Apply insights to drive better business decisions Use data to predict business outcomes Focus & scale capability and technology © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 24
  25. 25. Building Analytics Capability Think Broadly 1. Do only what delivers real business results 2. Start where you are at, build credibility first and than scale 3. Create Pull vs. Push - ensure the business owns it, and sees the value 4. Democratize – give business users access, let them own, drive, and configure 5. Keep it simple, think 80/20 5. Approach holistically - Integrate with IT, Marketing and Finance 6. Acquire the right tools and expertise (data scientists) © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 25
  26. 26. Analytics Strategy Unify Data, Reporting and Analytics Platform © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 26
  27. 27. Beyond a Foundational Level of Data Capability Additional Investment Returns Low Additional Benefits © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 27
  28. 28. Start with Business Questions, and Ask Different Ones Do you know what makes your best talent, your best? Do you know what skills, experiences, attributes drive success? Do you know how prepared your leaders are to respond to future changes? Do you know who in your high potential population will leave and why? Do you know if your new hire/new promotion will be successful? Do you know what impact leadership/succession diversity has on business results? Do you know how engagement and culture impact succession? Do you know the fully-loaded cost/ROI of your succession development efforts? Do you know who to develop and how fast to prepare for an anticipated vacancy? Do you know where your key talent gaps are, and how to close them? Do you know if your ready now successors are? Do you know the optimal balance between readiness and opportunity? Do you know if what you are doing is impacting the bottom line? © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 28
  29. 29. Succession Management Metrics Examples • Succession Pipeline Depth: Average number succession planning candidates for each role • Succession Pipeline Utilization: Percent key positions filled by internal succession candidates • Succession Planning Depth: Percent key roles with succession pool one or more unique candidates • Succession Turnover: Percent succession candidates who voluntarily left the organization • Succession Diversity Profile: Percent identified diverse succession candidates (female/minority) • Succession Slate Uniqueness: Percent unique succession candidates • Executive Tenure: Average time in role for key incumbents • Succession Readiness Over Time: Percent change in readiness over time key succession candidates • Succession Diversification: Percent identified successors outside division/area of responsibility • Bench Strength: Percent management that has been identified as ready for promotion • Churn: Hires, promotions and attrition [source, destination, and characteristics – e.g., diverse, high potential] • High Potential Voluntary Separation Rate: Percent high potential employees who voluntarily left • Diverse external Hiring Rate: Percent diverse external hires (female/minority) • High Potential Diversity Profile: Percent identified diverse high potentials (female/ethnicity) • Diverse Promotion Profile: Percent diverse promotions (female/ethnicity) • Diverse Separation Rate: Percent females/ethnically diverse employees who voluntarily left • Internal Fill Rate: Percent open roles filled with internal talent • High Potential Mobility Rate: Percent high potentials who experienced upward or lateral movement • High Performer Mobility Rate: Percent high potentials who experienced upward or lateral movement • Diverse Mobility Rate: Percent diverse talent who experienced upward or lateral movement • High Potential Development Rate: Percent high potentials who completed 100% targeted development © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 29
  30. 30. It’s an “AND” Conversation © 2013 AAA Northern California, Nevada & Utah Insurance Exchange. Confidential and proprietary. 30
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