Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Why All The Fuss?

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Why All The Fuss? “ Talent Wars” Value of Commitment HR & the Bottom Line Competitive Advantage “People are our most important asset” – from Rhetoric to Reality

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 A Study of 610 companies in the U.K. has demonstrated a clear “line of sight” Number of good HR practices Efficiency of HR practices Efficiency of HR department Employee Quality Commitment Employee Flexibility Productivity Quality of Goods and Services Source: Guest et al, 2000 Financial Performance

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 The Talent Pool is Changing  Broken Deal  Perceptions of Careers  Education  Values & Expectations  Work/Life Balance  Psychological Profile

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Value of Intangibles is increasing 38%  85% 2000 Cost of losing a talented person in 2002/3 $200,000 - $250,000 Bottom line impact of a bad hire $300,000 + Cost of operating without a key player Around $500,000 pa (for salary of $40,000)

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Drivers of Change New Strategic Direction Value Created by Key Players More Global and Integrated From service to commodity New direction and culture New Values Culture Change and new strategy Enabling better strategic decisions

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Given the significance of the Drivers it was surprising to find in a recent international study that:  66% of organisations did not have an age profile of the workforce  63% had no inventory of available skills  49% had no company-wide assessment of training and development needs

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Paradox One We need less and more Paradox Two There are more, yet fewer Paradox Three They want structure and freedom Paradox Four They want to belong and they want to be individuals Paradox Five Talent is exclusive and inclusive Paradoxes

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 What Do We Mean By Talent Management?

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 WHY MANAGE TALENT? There are two fundamental reasons for managing talent – whether the primary focus is upon developing current and future senior leaders, or all employees: 1.Repeated research has shown that the organisation’s access to superior talent is one of few key factors in creating and sustaining competitive advantage. 2.The organisations that manage talent well have significantly greater access to talent than those who don’t. Talent, therefore, should be managed just like other key strategic resources e.g. customers, shareholders, cash, suppliers, brand, channels etc.

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Defining Talent Senior Leader Focus Senior Leaders & High Potentials All Employees Definition should be determined by key business drivers

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Sourcing Selection Securing Induction Performa nce Managem ent Criteria Talent Strategy Components Busine ss Strat egy Develop & Deploy The Talent Strategy should flow from the Business Strategy

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Goals of Talent Management  To ensure that the supply of talent for business leadership is sufficient to fund both leakage and business growth  To constantly increase the “potency” of the talent mix to create & sustain business competitive edge  To develop talent in such a way that they realise their potential  To deploy talent in a way that supports business strategy & plans thereby maximising value

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Balancing Talent Processes with Leadership Involvement

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006  Talent processes – whilst important – are not the key differentiator between organisations that manage talent well from those that don’t. The critical differentiator is leadership. Indeed, over complex processes can actually get in the way.  Great leadership of talent comprises 4 key elements; senior leadership attention, integration with business planning, line & HR capability and accountability being clearly defined within line management  Building talent capability is about continuous and step by step effort, not a “big bang” launch.

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 LINE LEADERS ROLE The success or failure of an organisation’s talent management effort largely depends on line leaders carrying out their role effectively, supported by “driveable” and not over complex processes – supported by the HR and Talent specialists. Line leaders have a key role to play in the following areas: Identifying high potentials Coaching high potentials Talent panel or equivalent membership Leading and participating in Succession, Talent & Deployment meetings Assessing top executives Deploying talent – making appointments

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Business Planning: the degree to which talent management is integrated within the business planning process in the same way as other key organisational resources. Leadership Attention: the amount of personal attention given by senior leaders and top leadership teams to talent management processes and to talented people. Talent Skillbuilding: the effort put into building line management skills and confidence in the operation of the organisation’s talent processes & into identifying and developing talented people. Line Accountability: the degree of clarity of accountability within the line – both in job specifications and performance contracts, for talent management outcomes & performance. Line Involvement

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Differentiating High Potential: continuously being able to identify again and again those who have high potential amongst the ranks of the organisation’s top performers Developing with Edge & Support: encouraging talented people to take on challenging experiences & supporting them to be successful, both in terms of performance and in learning. Retain: systematically reviewing key succession & retention risks, and identifying and implementing actions based upon data. Deploy: planning deployment (i.e. appointments) in order to match the best talent into roles where they can have the biggest organisational impact and where they can maximise their personal development. Processes

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Talent Management Ownership CEO driven CEO and all of Partner board Informal and diverse Line & senior management teams Top team and global head of HR CEO and top line leaders CEO, Top team and HR

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 An Example of “Balance”

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Exercise

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006  How do we get Talent on leaders’ agendas in a meaningful way? ( i.e. How do we make the case in a way which makes sense to the businesses?)  How can we ensure that line leaders accept their accountability for Talent Management?  What practical steps can we take to make this happen? Questions for discussion:

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Context  Challenges of quantification (the “Holy Grail” ?)  Benefits identified in other organizations/Research  Key Drivers  Business value of “Employer of Choice”  Significance of CEO to success

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Some recent insights:  Finding “Champions” (Pilots & Experiments)  Process simplification  Surveys  Total Reward Strategies  Job Focus (Stretch & Grow)  Culture Mapping and feedback  Coaching CEO/Top Leaders  Using major change initiatives

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 “Metrics” Succession coverage Access to most desirable Staff People prepared for constant external change Succession coverage Retention of key talent Stretch assignments for all future potentials Perceptions (employee surveys) Direct feedback Impact on business outcomes Level of line ownership Financial commitment to succession planning and stretch assignments Structure of global teams Top line growth Bottom line growth Leaders having space to implement strategy Succession coverage Reduced external hires for key posts

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 A Broader View of Talent Management

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Employer of Choice -What is the Value?  Retention  Attraction  Profitability& Growth  Flexibility  Commitment  Absenteeism  Motivation  Trust

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006  What Does It Take?  Research from the US suggests:  High level rewards  Sense of ownership  Extensive T&D  Work-Life Balance  Fun  Sense of Purpose  Benefits available to all

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006  What Does It Take?  From the latest Times top 10 Employers of Choice  Attractive rewards  Extensive Benefits  Focus on,and investment  in, development  Share options  Flexible benefits  Benefits available to all  A strong positive  culture

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Financial Rewards Development Environment Benefits A “Total Reward “ Framework Attractive High Level & Flexible Extensive A Positive Culture

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006  What Does It Take? A strong positive culture  From the latest Times top 10 Employers of Choice  Involvement  Open Style  Flexibility  Fun  Strong Communication  Sense of Pride  Empowerment

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Employee Engagement

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Engagement Based Strategies Benefits include:  Productivity  Quality  Retention  Attraction  Margins  Revenue

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Building Engagement  Organisational affiliation  Employer commitment and trust  Leadership culture  Meaningful work  Inclusive culture  Challenge and development  Respect work/life balance  Develop positive relationships  Positive reward culture  Fun and humour

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 An Emerging Viewpoint; The Application of Positive Psychology Weaknesses Strengths Develop Deploy

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 An Emerging Viewpoint; The Application of Positive Psychology Weaknesses Strengths Why did you not hit your sales goal? What actions can we take to develop your skills in account management? What are your main areas of strength? How can we structure a role which exploits these strengths?

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006 Questions?

Beyond “High Potentials”: Successful Talent Management Professor Malcolm Higgs 2006