Develop leaders for the future, Fact based approach

Dr. Mark van DongenHR Director Global Business IntegrationCristal, Jeddah

Agenda

Agenda:1. An integrated model2. MD audits in three global FT 500 companies3. Conclusions

At the back of the room there is a handout, summarizing in a whitepaper what we discussed.

When you provide me your email address, I will send you the audit list and an interpretation tool. Email: dr.mark.van.dongen@gmail.com

An integrated model

• Succession and talent management has moved to the forefront of the agenda’s of CEO’s worldwide

• ‘War for Talent’ will increase due to demographics.• Research has shown that investment in personnel

development has a substantial ROI, depending on the right person being developed, to over 200%

• In the US $125.88 billion was spent on leadership development; of which 24% on leadership development(ASTD 2009). Nevertheless leadership development remains the least explored topic within the field of leadership.

• No integrated theory, or model to date has been accepted.

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Challenges?

• The field of HR is a not a science in itself, it is an amalgamation of different disciplines.

• Fragmented elements are developed, but currently there is not an integrated theory on MD. These elements are derived from non-related sciences, hence from different methodical setup.

• The defined process should be theoretically correct, but also practically useful to both developed as well as less developed companies.

• If the MD process is truly seen as a competitive advantage, it will be difficult to get access to data for the empirical part.

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What is Talent?

A talent is an individual, who generates a disproportional higher value compared to the cost to employ them.

Therefore talent (as such) is not linked to company hierarchy, nor leadership capability.

Talent

For ease of discussion, talent is split out in two ways:

1. Deep talent; individual value creators who do not have vertical talent

a) Workers (skills / competencies based deep talents) b) Deep talent (unique deep knowledge based talents)

2. Vertical talents are individuals with the ability to move upward in the organization.

In this presentation vertical talent is emphasized

What is leadership

Leadership is defined as the ability to exert a conscious influence on the behavior of another person in order to make them pursue targets the leader desires.

The most modern form of leadership is value based leadership, which is a scale with two poles, one is the transactional leader the other is the transformational leaders.• Transformation leaders change the individual perception

to attain the goal• Transactional leaders reward for changing behavior;

bonus for best behavior, etc. • Management is transactional leadership.

Talent and leadership talent

Leader-talents are defined as those who:1. Have the potential (intellectually) to develop

themselves into higher level roles (IQ & EQ)2. Have the development-need-strength to withstand

developmental challenges3. Have the individual engagement to ensure when

developing them, that these value adding capabilities benefits your company.

4. Have personal values aligned with the values of the company

Gaining, keeping and developing such talents remains on the forefront of CEO´s agenda (CIPD, 2012)

Defining and detecting talents

Organizational prerequisites to the effective process

Phase based development of talents

Items reformulated into 44 questions, that form16 clusters

Details of the process put to 34 International HR directors from 11countries in 3 surveys

From process to audit tool and standardized company profile

Process finalized

Case study of companies, including generation of profile

Empirical data from a group of companies

Results on talent defining and detecting talent1. 32.4% state their organization have no

adequate definition of talent and only 26,5% had an organization defining entry level. Combine this with the 44.1% of the companies did not have a valid selection system in place for entry

2. Less then 48.5% match individual values versus those of the company

3. Intellectual capabilities are measured in 51.8 % (IQ) resp. 41.9% (EQ). The rest assumed education as a predictor.

4. 71% measure self motivation to develop, 5. 61.3% stated they measure individual

engagement, but tools used were inadequate to measure this

6. 61.8% found reference checks (candidate provided) a ‘good’ method. Research showed a predictive validity of 0.19. (Anderson et.al., 1993, McClelland, 1998).

7. Categories of talent: Deep talent, 8.8% ; 91.2 % vertical talent.

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HR and MD1. In 97.1% of companies HR leads MD process,2. Only in 23.5 % is the MD (leadership

development) lead by a ´talent´.3. Leading MD is needed to become head of HR

in 23.5% 4. When reviewing the use of leadership models

upon which to base their development, 53% use entirely outdated leadership models (such as situational leadership), though they state they have good knowledge on the topic (58.%).

5. Most people support the definition given on leadership and management. Those that did not, often use SHL methods, which in term supports the definition (Burk et al. (2009) and Burke, (2010))

6. Full andragogical model were not seen. Only in 37% of the companies, input of the talent on their development track was requested.

7. Of those who stated understanding of leadership, 59,8% were not able to mentioned the model their company used. Exception was situational leadership theory which is still used in 53.3% of the companies. Which either captures low knowledge or low influence by HR.

• Informal talent networks in only 14.7%; • Changing preferences of generations, taken into account in 32.3%.• Team based action learning used in 44%

Use of stretch assignments:Expat 54.5% all 35.2% HR

X-functional 64.7% all 26.5% HR

Job challenge measured in 53%• Stretch assignments:• Perfect fit (90%+) 11,8%,

• Near fit (75-90%) 67.7%

• True stretch assignments (60-75% fit) 20.6%

• 41.1% see mistakes as learning experiences, the remaining 58.1% sees it simply as mistakes. No correlation between the assignment score and ‘mistake’-score.

• Job challenge is not measured in 47% of companies.

Organizational prerequisites

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Reviewing performance versus the model of Global Companies

The Audit list itemsThe 16 key elements of the MD model were:1. Talent is defined2. Values of the company and the individual are matched at recruitment3. The culture is more transnational than nationally dominated4. Capability of individuals are assessed.5. Methods of development vary as per the individual needs6. Knowledge is Transferred as per the development phase7. Stage based development model is adhered to.8. Feedback is provided to talents, in line with their phase9. Developmental assignments are used to develop talents.10.Leaders are made responsible for the development of their talents11.Active learning initiatives are used12.Mentoring relationship's and coaching is used13.Talents are rewarded differently14.The performance and development cycle is viewed differently15.There are networking initiatives offered to talents16.HR leads the MD process and is occupied by talents.

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Empirical results; Audited companies

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Empirical results; Audited companies

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Empirical results; Audited companies

TRENDS

Empirical results; Audited companies

ConclusionCompanies believe MD provides a competitive advantage, it is difficult to obtain data utilizing self-surveys, as self criticism was found difficult.

Though Talent is seen as one of the major differentiators for the future, companies often falls behind:

–Do not have a robust system of selection and development in place

–Do not measure needs for developments and developments offered

–Have insufficient knowledge or influence in incorporating leader-development methods.

–Have little knowledge on how development works, nor seem to invest much in understanding, instead of cookie-cutting ‘best practice’ solutions.

Conclusions 2

Many companies do not hold leaders accountable for development of their talents,

Companies do not reward for potential (future of company) instead reward short term goals achievement

Low hanging fruits “left to rot”:Talent networksLeaders accountable for talentsAction learning initiativesHR measured and developed as other talentsMeasure capabilities and their progress

Consequences for HR

• Though HR is accountable for MD, they need substantial improvement to increase knowledge

– Situational leadership model usage– Use of reference to check on applications– Declining decision style method etc.

• For a core process such as MD, signature processes should be developed.

• Though talent is seen as strategic asset, little strategy seems to underlie their development.

• Some short term solutions would already improve outcome, but longer term reviews are needed.

Develop leaders for the future, Fact based approach

Dr. Mark van DongenHR Director Global Business IntegrationCristal, Jeddah