Business Intelligence

Turbocharge Your Business with Relentless Focus on 12 Key Strategies

by Chet Holmes

To turn your business into the “Ultimate Sales Machine,” you actually don’t have to do 4,000 different things. Instead, you have to do 12 basic things or core competencies 4,000 times. Put another way, success comes from doing the right things with pigheaded determination and persistence.

The twelve building blocks that you must have in place if your company is to succeed long term are:

Instead of bouncing from one new management fad to another, focus on doing each of these twelve things progressively better over time. Work it until every aspect of your business runs with machine-like precision. Make certain everyone in your organization has access to the tools, the training and the resources they will require to master these twelve core competencies.

You can profoundly improve your company or department if you absolutely commit to one hour per week in which you do nothing else but work on making the business much more effective. The key is learning and practicing the pigheaded discipline and determination you need to constantly address and readdress the 12 areas outlined.

–Chet Holmes

The Ultimate Sales Machine

Discover the Choices That Will Take You Beyond Your Talent

by John Maxwell

If talent alone is enough, then why do you and I know highly talented people who are not highly successful?

–John Maxwell

The fact is that as long as there are people in the world, there will always be a large pool of raw talent available. If you genuinely aspire to stand out from the crowd, then there are thirteen choices you need to make in order to maximize your own personal talents:

1. Belief: Belief lifts your talent
2. Passion: Passion energizes your talent
3. Initiative: Initiative activates your talent
4. Focus: Focus directs your talent
5. Preparation: Preparation positions your talent
6. Practice: Practice enhances your talent
7. Perseverance: Perseverance sustains your talent
8. Courage: Courage tests your talent
9. Teachability: Teachability expands your talent
10. Character: Character deepens your talent
11. Relationships: Relationships influence your talent
12. Responsibility: Responsibility strengthens your talent
13. Teamwork: Teamwork multiplies your talent

Life is a matter of choices, and every choice you make makes you. What will you do for a career? Who will you marry? How much education will you get? What will you do with today? But one of the most important choices you will make is ‘who will you become!’ Life is not merely a matteer of holding and playing a good hand as you would hope to do in a card game. What you start with isn’t up to you. Talent is God-given. Life is playing the hand you have been dealt well. That is determined by your choices. Talent plus right choices equals a talent-plus person. The talent-plus people are the ones who maximize their talent, reach their potential, and fulfill their destiny. I hope you will steer yourself in the right direction and make right choices that empower you to become a talent-plus person, build upon the foundation of your abilities, and live your life to its fullest potential.

–John Maxwell

Talent is Never Enough

(07703) Robert Fulmer and Jay Conger say:

The future of succession management looks very bright. The minset that talent is king or, in other words, that talent directly impacts the performance of an organization, is more widely accepted today than at any previous time. Succession management is well positioned to move to center stage as the way in which companies can gain and sustain a significant competitive advantage in the marketplace.

There are several emerging trends in business which will strengthen the transformation of succession management from a replacement tool to a business development and leadership tool. These trends are:

1. Greater integration and alignment
As succession planning becomes better integrated, it will move away from being viewed as an annual event to more of a day-to-day item. This integration will be enhanced by the availability of company-wide databases which positions succession planning as an integrated system rather than as a set of disconnected activities.

2. Succession planning will move away from the IT department to the desktop.
As web-based tools become available, succession planning will feel less like an event and more like something that is carried out weekly or daily. Continuous access to simple tools running on a personal computer rather than then corporate mainframe will enhance that perception and allow empoyees to take ownership of their own succession planning. Ulimately, employees should feel responsible for keeping their own resumes and other information up-to-date and current.

3. Assessments will become more rigorous and less subjective
As managers become more comfortable with assessment methodologies, there will be a move towards evaluating people more objectively. Techniques like 360-degree feedback will accelerate and strengthen this trend.

At the same time as succession planning is moving more to center stage, there are also some challenges on the horizon, specifically:

1. Some organizations will find it difficult to have available sufficient developmental opportunities
Senior roles within a company are generalized, yet many of the positions leading up to these roles are functional in nature. It will become increasingly difficult for potential managers to get cross-functional experience as more companies organize along product lines rather than by geographical areas. Increasingly, organizations will have to become more proactive in searching for management development roles.

2. There will be generational preferences impacting on succession planning
Generation X managers are far less inclined to accept positions overseas than were their Baby Boomer counterparts. In addition, many people are having children later in life. This means the next generation of managers will need developmental assignments that won’t require relocation. International opportunities or even turnaround assignments may not be as alluring in the future as they have been in the past.

3. There are still too many inconsistencies in selection and rewards
Too many organizations reward behaviors that meet the current needs of the organization while ignoring rewarding behavior that will meet the future needs of the organization. It’s human nature for succession criteria to become entrenched and lose relevance over time. Organizations need to be looking ahead rather than behind in ascertaining what kind of competencies will be valued in the future.

4. There is a danger of oversimplifying the complexities of leadership
Most succession planning is based on the competencies model — leaders should master the basic six or seven competencies and everything else will come together. This thinking is flawed. Leaders have a “X” factor that is mor than their collection of competencies. Succession planning needs to move more to providing experiences and challenges which build sound judgement and leadership capabilities.

5. 360-degree feedback loses its effectiveness when the results becomes public knowledge
Ownership of the data provided by 360-degree feedback is critical. If the data is used for personal develpment only, people are much more likely to take notice of what is suggested. Conversely, when the results of this tool are made public, it often becomes used as a tool to send a signal rather than provide strictly accurate data. Recipients start seeking favorable feedback rather than completely accurate feedback, which can create all kinds of problems and distortions. Or put bluntly, the more 360-degree feedback is used in succession planning, the less effective an assessment tool it becomes.

As in most areas of business, the key to succession planning lies in its implementation. A good succession planning system, supported by the CEO and senior business leaders, can pay long-term dividends. To achieve that, the system must not become too complicated or too bureacratic. Business unit leaders must find the system to be user-friendly and useful before they will get on board. The organization will need a strong HR department to serve as the coordinators of the succession management system. Realistic and consistent talent assessments must be fed into the system on an ongoing basis if it is to remain relevant. The recommendations genreated by the succession management system must be acted upon if it is to have any credibility. And the system must be upgraded and improved continuously to keep in sync with the evolving needs of the organization. Unless all these elements are in place, succession systems will never realize their full potential.

Growing Your Company’s Leaders

(07702) Robert Fulmer and Jay Conger say:

1. Corporate Strategy

Every organization must have a marketplace strategy and a talent strategy which serves as the foundation of its succession management system. Taken together, these two strategies must answer the question of why succession management is worth worrying about.

Succession management is effectively the interface between the firm’s human resource department and its strategic direction. In this role, succession management needs to anticipate the future needs of the organization. The succession management system then finds, assesses, develops and monitors the human capital which will be required for the organization to get where it wants to go.

With this in mind, there are some key questions which should be asked before designing the succession management system:

A viable succession system will require a close partnership between the senior management team and the human resources department. Both must work closely to develop answers to these key questions that make sense. The succession management team must be able to accurately anticipate emerging threats and opportunities. This will only happen if there is a close working relationship between the leaders of the succession management project and the firm’s senior leaders.

2. Sponsors and Owners

Unless the succession management system has earned the sponsorship and support of top management, it just won’t get anywhere. Similarly, ownership needs to be shared amongst the heads of business units for the succession system to work.

Historically, the human resources department has championed succession planning. If succession planning is to be viewed as an activity vital to the firm’s long-term future, however, it needs to have a champion with more clout. In particular, the CEO and his or her senior management team must champion it to demonstrate decisively that talent retention and development is the firm’s highest priority.

Best practices suggest the ideal way forward is for the senior managers to champion succession management and for human resources to be the process owners. The day-to-day implementation of the succession management system really needs to reside with business unit managers because they are in the best position to spot emerging talent, perform assessments, arrange developmental opportunities and everything else that will be required. Or in other words, ideally you want the human resources group to provide the tools and process which the line managers can use to develop their talent with the enthusiastic support of the firm’s senior management team.

Succession Management System:

- Owned by the organization’s senior management who champion the system and instill the mindset that talent really matters

- Managed by the firm’s HR department who provide the tools, keep the process running, provide leadership development initiatives and other resources.

- Utilized by the organization’s line managers who assume responsibility for the deliverables, identify new talent, provide development opportunities and fill gaps in talent needs.
3. Talent Identification

Good succession systems identify outstanding talent early based on past performance, the individual’s potential and the set of organizational and leadership competencies valued by the organization. Identifying promising talent early is important.

Defining and identifying talent is the foundation of succession management. The aim is to accurately assess a person’s “potential” for development. This will be a composite of three main factors:

Potential = Past Results + Leadership Competencies + Organizational Competencies

Past results is a good leading indicator of leadership potential. When a person has excelled at a series of early career assignments, that raises their profile within the organization and marks them as future business leaders. These previous assignments also provide the opportunity for people to develop the skills, knowledge and competencies they will need to get ahead in the organization. At the same time, past assignments should help identify where potential problems lie — for example a lack of integrity, overconfidence, arrogance, inability to perform as part of a team, etc.

Leadership competencies refer to the presence of character attributes which are associated with the firm’s strongest performing business leaders. As well as strong technical skills, this will often include the ability to set priorities and solve problems, agility in consensus building and a high tolerance for ambiguity. The ideal set of leadership competencies will be organization-specific, and will also vary as the firm goes through different phases. In essence, leadership competencies are those the senior leaders will need to master in order for the organization to prosper in the foreseeable future.

Organizational competencies, by contrast, are the behaviors, mindsets and values which are highly valued company-wide. These would include technical proficiency, intellectual capacity, business acumen, people skills, integrity, trust, ability to create value and personal effectiveness.

The key principles involved in making talen identification work well are:

The succession process needs to be kept as simple as possible. The more competencies that are packed in, the harder the overall succession process as a whole becomes. For example, Eli Lilly and Company uses just seven leadership attributes to assess performance and potential. Dell Computer uses nine leadership competencies and five organizational competencies to identify its leaders of the future. The succession process is most effective when just a few items are focused on rather than listing every positive trait a potential leader might possess. The more variables there are, the harder it becomes to evaluate people.

The competency model works bets when behaviors that accompany competencies are described in concrete terms. This leaves the evaluation process less open to subjective interpretations. It also removes some of the variation which can arise when different people within the organization have a different viewpoint about what specific competencies and behaviors are.

Best practice suggests potential talent should always be identified by multiple rather than a single rater. This can be enhanced if a number of evaluation techniques are used. For example, 360-degree feedback, personal interviews, performance appraisals and benchmarking will all provide a slightly different perspective of each person’s potential.

This is useful when all are combined together. The organization gets a richer perspective, and there is less opportunity for one evaluator’s personality to bias the results.

Most organizations find it useful to evaluate people into three different groupings:

1. “Ready today”
2. “Ready in the near future”
3. “Ready a year or two down the road”

For the top leadershi positions in an organization, there is often a designated successor who is being groomed. For the levels below, however, most organizations attempt to develop a pool of talent. The logic behind this approach is that this group can be given special assignments and developmental opportunities, and the person who is right will rise to the top. In addition, a talent pool provides back-up so that if one person leaves the company to pursue another commercial opportunity, an alternative leader will already be available. Talent pools also increase the visibility of emerging talent among the various business units.

4. Development Linkages

An effective succession system needs strong linkages between positions and the experiences which will prepare a person to serve. There has to be a logical sequence of stretch assignments which will prepare a person for a position.

Companies with strong succession management programs in place use a variety of tools and developmental activities to form a link between executive positions and business activities. The key, however, is to take these tools and create a specific, individualized development plan for each employee with high potential.

The seven tools which are commonly used as components in an individualized development plan are:

1. Internal leadership programs and executive education.
Typically a good leadership program blends e-learning with in-person training presentations and seminars. These programs are generally designed to improve strategic thinking and encourage executives to have an external focus, consumer orientation and a global perspective. Group discussion opportunities also enhance the future leader’s communication skills.

2. Special job assignments
Most companies believe the best learning takes place on the job. With that in mind, future business leaders are frequently assigned to a task force focused on real and significant issues currently facing the organization. This may be structured as a six-week assignment which incorporates offsite meetings, expert presentations and team-based interviews. These intensive learning exercises provide the participants with an opportunity to study a subject in depth and develop the requisite competencies to deal with it.

3. Mentoring and coaching
In many organizations, formal coaching is used infrequently and often uses outsourced resources. Mentoring, by contrast, is usually a much more informal and widespread developmental process. The advantages of having each employee assigned a mentor who can serve as a role model and provide ongoing feedback are well documented.

4. External or internal university courses.
University-based programs typically bring awareness of best practices to the participants and provide a forum whereby new knowledge can be created. Many high caliber courses are available covering topics like entrepreneurialism, technology and international business. These courses can supplement people’s experiences and help them develop a well-rounded set of skills.

5. Web-based training courses
Many multinational companies have found putting their training courses onto an Internet website is advantageous. Typically, these courses tend to cover topics like safety training, ethics, compliance and Six Sigma. Some corporations have also developed web-based training courses which cover foreign corrupt practices, compensation planning, and other specialized topics. Dow Chemical offers more than 600 online courses, and in a typical week, employees will complete more than 14,000 courses. Many other companies are doing similar things and have had excellent results from these initiatives.

6. Career planning and individual profiling
Career planning means to develop a formal, written development plan for each individual employee. This plan will attempt to match the employees interests and preferences to specific future positions. These development plans can then be reviewed by management who assume responsibility for creating the advancement opportunities specified. Assignments which will fill competency or experience gaps can also be developed.

7. Performance management and 360-degree feedback
Typically performance management will get used for compensation and promotion decisions whereas 360-degree feedback is effective in development applications. Smart companies align these two tools intelligently. 360-degree feedback simply means data on performance is collated from the individual’s customers, direct reports and peers as well as his or her boss’s feedback. Performance management is more goal oriented, and analyzes what needs to be done in order for that person to meet their personal targets.

Overall, organizations have found a variety of tools are needed to quantify performance and form linkages to future job opportunities. When multiple approaches are used consistently, there needs to be a high degree of alignment between development activities and succession management.

5. Assessors

Assessors, in a succession management system, determine who has high potential and decide who gets promoted. They need a cross-functional perspective and the ability to bring together the various elements and activities.

To ensure consistency and continuity, multiple levels of assessors need to be actively involved in the succession management system. If a person were to rely solely on his or her boss for management of their career, all kinds of anomalies might arise. For example, it would then become difficult for an employee to rise above their immediate boss in the organization, irrespective of their level of potential.

Assessors might include:

Your boss, and your boss’s boss
Your peers
Your subordinates
Your internal customers
Your mentor
Your training coaches
Someone from your organization’s HR department

Ideally, there needs to be a good ongoing dialogue between you and your assessors if their feedback is to be of practical use to you. You neecd to be able to explain to them your career interests and goals, and they need to be able to advise you of any roadblocks or constraints they can see arising.

6. Tracking System

Tracking in a succession management system means to monitor progress and results. A good tracking system will involve both quantitative and qualitative measures and will highlight the successes and shortfalls of the overall system.

The development of leadership talent is a long-term investment. Effectiveness is determined by the system’s ability to move talented individuals into the right opportunities at the most appropriate time. Tracking the progress of individuals is a necessary element of any world-class succession system.

Typically, two types of performance data tends to be collected:

1. Quantitative data which includes measures like:
How often has an opening been filled by internal candidates rather than outside hires?
What degree of ethnic and gender diversity is there in promotions?
What are the current retention/attrition rates, and how have these rates varied over time?
How many new promotions receive positive job evaluations after their promotion?

2. Qualitative assessments and data which may include the answers to quetsions such as:
What was the transition experience like for people newly appointed to positions? Did they feel well prepared for their new roles?
Did the transition go smoothly?
Was there a good range of applicants available for each position?
Were the applicants properly prepared through suitable developmental opportunities having been offered?
Did the job applicants have a suitable level of training and job experiences?
Did the person who was hired excel at their new position?
Were there a good set of tools available to use?

In practice, the tracking system enables top management to evaluate whether or not their organization’s succession management system is working. Technology can be a great aid to this effort. Some firms track their succession management systems using web-based systems which can be accessed worldwide. Others use simple spreadsheets to monitor results and analyze the data, in order to make the information easy, accessible and understandable. The key is, as usual, to keep things as simple as possible.
7. Success Metrics
To tell whether a succession management system is working, individual metrics and system metrics are required. These will allow the effectiveness of the system to be evaluated over time, which will lead to ongoing changes and enhancements.

In just the same way as tracking the progress of each individual is important, so too is measuring the performance of the system overall — how many times the system has succeeded in identifying individuals, moving them into suitable training opportunities and having people available when a vital position becomes vacant.

Success metrics come in two varieties:

1. Individual metrics which rates individual job candidates on performance versus their perceived potential.
2. System metrics which evaluate how often a job is filed internally rather than needing to go outside the organization for suitable people.

The metrics vary widely according to business goals and company culture. To take some examples:

Dow Chemical. Measures the success of its succession program by its “hit rate” — whether the person placed was on its succession planning list or not. The company tries for a hit rate of 75- to 80-percent. Dow also looks at the attrition rate of its future leaders and the level of agreement of its operating board on the selection of future leaders as measures of success. Dow tracks the ongoing success of the people who have moved through its succession program to get a feel for its overall success rate.

Eli Lilly and Company. Looks at the overall quality of talent in its pipeline and the number of appointments where two or more people were prepared as key measures of success. The company sets goals for the ratio between the number of incumbents and the number of employees with the same potential at every level of management as a key metric of success. The company also tracks its record in appointing new managers with diverse ethnic backgrounds.

Sonoco. Doesn’t use any statistical measures. Instead, human resources asks for feedback from line managers on one key question: “Are we placing candidates in appropriate open positions, and are they successful in those positions?”

Dell Computer. Focuses on benh strength. Each business unit is required to report what percentage of management positions have a current successor in place. In addition, the company also tracks the movement and devlopment of its global corporate talent pool.

Pan Canadian. Uses informal feedback sessions and exit interviews to assess the effectiveness of its succession management system. The company also tracks the amount of time key positions remain vacant and emphasizes diversity awareness as an integral part of its succession management goals.

Bank of America. Gauges the success of its succession program on the answers to some key questions:
Is each business unit meeting its talent goals?
Does each unit have the business leaders it requires?
Are there two replacements ready now for key positions?
Do we have the right diversity mix in our leaders?
Are we retaining our top performers?

The experiences of these companies in developing their succession planning systems have brought out some key lessons:

It’s better to have one common IT system serving as a succession database company-wide than to have different IT systems in place which cannot talk with each other.

The CEO genuinely has to be hands-on with succession planning. The best way to structure this as a general rule is to have the CEO personally set the annual agenda on succession planning. He or she should also conduct a series of two-hour talent reviews for each of the top revenue-generating business executives and functional leaders.

Simplicity is a key driver of succession planning success. Unless the information is easy to absorb, it will rarely be actionable. Senior executives need to be comfortable using the record keeping system if enough information is to be gathered to be of any practical use.

Allow tijme for the succession planning system to take hold. Executives will buy-in once they see the new approach is owned by the senior executives, and once they can observe the new system is not overly omplicated or over-engineered. It will take some time before those traits will become obvious, so be patient.

Good succession systems aren’t just conerned with finding the right person for the right job. They also smooth the transition into the new role and provide high levels of support to make that happen.

A robust and practical succession system will always provide individuals with a clear understanding of both their strengths and their weaknesses as viewed by a range of individuals. This group feedback avoids any bias or personality clashes which may arise.

The best succession systems are unambiguous. People know exactly what kind of competencies they will need for the job they’re targeting. This increases fairness and enhances diversity in hiring practices.

Ideally, succession systems should provide a range of good choices when openings arise. The harder and more painful the final selection decision is, the better a succession system is working.

Growing Your Company’s Leaders

(07701) Robert Fulmer and Jay Conger say:

Why the renewed interest in succession management?

There are several reasons why succession management has moved to the top of the agenda again:

1. Leadership is a scarce and therefore valuable resource
2. Leaders no longer stay with one company for their careers
3. It’s important to give future leaders the right challenges
4. It’s very easy for leaders to find new opportunities
5. Executive recruiters have become very good
6. The marketplace is changing and leadership is needed

Therefore, organizations which develop great succession management systems have a strong competitive advantage over those which do not.

To expand on the reasons why succession management has become of great interest today:

1. Leadership is a scarce and therefore valuable resource.
Even after decades of effort, effective leaders are still a relatively rare asset in most organizations. There is an ongoing war for executive talent which is going to be exacerbated by the impeding retirement of the Baby Boomer executives over the next decade.

2. Leaders no longer stay with one company for their careers.
Leaders are knowledge workers - they get paid for their expertise and their brainpower. Rather than anticipating they will stay with one company, most people today expect to change careers a number of times as new opportunities arise through the ebb and flow of industries.

3. It’s important to give future leaders the right challenges.
Unless high performers are given challenges that help develop their skills, many potential leaders will have no hesitation in going elsewhere to access those growth opportunities.

4. It’s very easy for leaders to find new opportunities.
Anyone with access to the Internet can log onto the employment supersites and find interesting and better job opportunities. The increased ease and speed with which this can be done today means high performers have many job possibilities at their finger tips.

5. Executive recruiters have become very good
Headhunters today have more clout and greater sophistication. They know how to find and lure potential leaders into new positions. They also know precisely what other organizations are prepared to pay for executive talent and take advantage of any arbitrage opportunities.

6. The marketplace is changing and leadership is needed.
Organizations today need to change constantly to stay in sync with their evolving markets. As a result, organizations have needs for new talent today all the time. Gaps are appearing unexpectedly before organizations have the realistic opportunity to grow their own talent.

Taken together, talent retention and development is now of great interest to most organizations. Better information technology means it’s feasible to develop and monitor a succession management system better than could have been achieved a few generations ago. Companies ignore succession management at their own peril, because the availability of a succession system is one of the deciding factors for new hires.
In practical terms, a good succession management system will have two purposes:

1. To serve the needs of the organization - by helping provide a continuous and deep supply of talent needed to fill the gaps. Without a forward-looking succession management system, corporations will constantly need to scramble to try and fill the gaps with whatever talent is available.

2. To serve the needs of employees, especially the high performers - because they will have so many opportunities elsewhere. Unless your best people have a sense their career is moving forward, they will be inclined to go somewhere else.

To be effective, good succession management systems:

Growing Your Company’s Leaders