Optimizing a company’s human capital and identifying leaders requires a proactive talent management process. Material handling companies need to attract, retain and develop top performers to attain and maintain competitive advantage. A systematic human resources approach is necessary to achieve this goal.
Six human resources conditions need to be considered for a successful talent management program:
- Performance-oriented culture
- Low turnover (particularly in premium employee groups)
- High levels of employee satisfaction
- A cadre of qualified replacements
- Effective investment in employee compensation and development
- The use of institutional competencies (success factors) in employee selection and performance evaluation processes.
Leadership talent is a special concern for emerging and fast-growing businesses. The trend is for companies to focus on the competencies needed to lead—teamwork, collaboration and coaching—when selecting and developing present and future leaders. Leaders are also chosen for their interpersonal skills that impact the psychological needs of workers. Organizations are becoming increasingly aware that they must seek to develop leaders who can inspire others and lead teams. However, each company has unique competency requirements that must be defined and communicated before identifying current and potential talent.
Defining your Company’s Competencies
A strategy for identifying and developing leadership talent should begin with a management discussion on the competencies that are most important in your company. Agreeing on the skills an organization needs to be successful is the first building block of talent management.
Murray M. Dalziel of The Hay Group outlines a process for identifying leaders and high performers with the right combination of behaviors. Dalziel suggests that an executive level discussion begin with a list of competencies generally associated with leadership. Several competencies that can be considered are: keeping promises, acting on values, encouraging others, cooperating, inspiring others and building bonds. From the competency list, the executive team selects those that “make the most difference, that would be necessary for top-notch, superior performance, or a killer if missing,” and then discusses how these are displayed within the company.
Next, the executive team decides on the key requirements for leadership roles. Their debate should conclude with a list of about seven accountabilities that define the role. The executives then “map out the critical competencies they have decided on and show how these enable people in the role to fulfill their accountabilities in superb ways.”
The executives think concretely about whom they see as top performers in the key roles and compare them to average performers. The executives should focus on what the top performers are actually doing. The same definitions that are used to identify and develop talent within the company should be used in the process for recruiting talent.
QVC Develops a Management Leadership Process
With QVC growing at 18 percent a year, it required a formal approach to staffing with the immediate pressing need of identifying and developing a core leadership team of internal people to start up a new call center. Below are several key points of QVC’s Management Leadership Review Process:
- The process was initiated by the senior leader, who ensured that all employees understood its importance to them as well as to the organization, but was driven by line managers.
- Appropriate competencies were developed that were anchored to specific jobs with a set of weighted behavioral descriptions appropriate to each job embedded in the competency definition.
- Human resources and training professionals helped with developing the competency definitions to ensure they were clear, actionable, concise and measurable.
- All the employee evaluation tools were tied together into one concise document. This linked employee performance—the “what” they accomplished—with the “how” they accomplished it.
The MLRP process included clear development plans for addressing employee weaknesses and leveraging employee strengths and presented a succession plan for key positions by identifying backups, voids and blockages. Current and future leadership and the appropriate training and development for these leaders were linked to the QVC competency requirements.
Sunoco Confronts Leadership Succession Planning
Sunoco was confronted with the unenviable possibility that almost 50 percent of its 200 managers would be eligible for retirement within the next five years. Sunoco had failed to consider the transference of a healthy, successful business to the next generation of employees. It lacked a system-wide approach to identify and analyze possible successors and had no existing plans to develop the employees who could lead the company in the future.
Sunoco chose to use the Talent-Reservoir process to resolve its talent management requirements. The first step was to take a collaborative approach to defining Sunoco’s core competencies. The ten most senior executives, including the CEO, reviewed a list of typical corporate competencies and independently identified the competencies that he/she believed were the best indicators of success at Sunoco. The group then collaborated to clearly define nine competencies vital to Sunoco success.
The second step involved the assessment of salaried employees by managers and was also driven by top management. Each senior executive met with his senior human resources manager to begin the assessment of the people reporting to that manager. The inputs on the assessment include the performance rating based on the company’s performance measurement system, assessments of the individual against the core competencies as described for his/her job level and an assessment of potential future positions and possible replacements. Additional employee-specific data on strengths and weaknesses, suggested coaching and training, and suggested actions for career development are included. After the assessments were completed, the data were compiled and summarized reports were generated for each executive, showing all their reports and the overall bench strengths for their groups. These reports revealed crucial information, such as how many key positions lack replacements and how many high-potential individuals are blocked from advancing. The reports highlighted those individuals, the crown jewels, who have the potential to emerge as Sunoco’s future leadership.
Assurances must be made that these people remain with the organization. They must be kept in challenging jobs and given opportunities when they occur. They must have development plans established to give them the skills required in future positions. They need to be encouraged and rewarded through incentive programs and given the opportunity to work on special projects. Most importantly, they must become role models and mentors for the rest of the organization.
From the experiences at QVC, Sunoco and other organizations that have successfully managed their talent and the input of talent management experts, a talent management program must be an integrated process driven from the executive level with ownership developed through employee input and communications. It must be clear, concise and linked to competencies specific to the organization. The competencies should be anchored to jobs with a set of weighted behavioral descriptions appropriate to each job embedded in the competency definition. Employees are assessed and developed based on the corporate competencies. Future leadership gaps can be exposed as well as recognized leaders rewarded, trained and mentored.