Managing Talent MANA 4328 Dr. Jeanne Michalski Leaders Matter What do we know about how leaders develop? Corporate Executive Board Voice of the Leader Center for Creative Leadership McKinsey & Company Research War for Talent Performance Ethic *Corporate Executive Board Voice of the Leader Sponsored by Corporate Executive Board Designed to provide systematic evidence to help organizations make decisions on effective leadership development approaches Web-based survey administered to over 15,000 leaders Over 8000 Executives from 31 organizations in 6 industries responded Using conjoint analysis, the effectiveness of leadership development activities was evaluated from the eyes of the leaders What Drives Effective Leadership? Complete List of Characteristics Evaluated by Respondents Source: Corporate Executive Board 2001 Leadership Survey. *Corporate Executive Board Most important attributes of effective leadership Leaders consider people-leadership skills as the most important attributes of effective leadership, followed by strategic-leadership skills. *Corporate Executive Board Most important attributes of effective leadership People-leadership skills Clearly communicating expectations Recognizing and rewarding achievement Inspiring others Strategic-leadership skills Identifying and articulating a long-term vision Understanding markets, competitors, and customers Understanding the strengths and weaknesses of the company *Corporate Executive Board What leadership activities do leaders value the most? Feedback and relationship-based development programs are viewed as more effective than on-the-job experiences, which in turn are viewed more effective than education-based programs. The amount of decision-making authority given to leaders, however, is the single most important factor in leadership development. *Corporate Executive Board Feedback and Relationship programs Creating Leadership development plan Interacting with Peers Meeting with an executive coach Meeting with a mentor Feedback *Corporate Executive Board Most important development activities to leaders 1) Amount of decision-making authority 2) Creating a leadership development plan 3) Interacting with peers 4) Meeting with an executive coach 5) Meeting with a mentor 6) Feedback 7) Turning around a struggling business 8) People-management skills courses 9) Working in new functional areas *Corporate Executive Board Greatest weakness in leaders Though considered very important to effective leadership, identifying and articulating a long-term vision is the single greatest weakness of the leadership bench (Strategic Leadership) *Adapted from McKinsey & Company Bottom Line Impact Evidence suggests that stronger leadership teams can positively affect company economic performance. Companies that are the best at managing talent deliver far better results for their shareholders, up to 22% better High performing employees generate: 40% more productivity from Operations performers 49% increase profits from General Management performers 67% increased revenue from Sales Representatives *Adapted from McKinsey War for Talent Study War for Talent McKinsey & Company groundbreaking study on Leadership Development 77 companies involved in the study at CEO level and the top 300 in the company Top 300 people studied extensively 11 different industries represented All 6,500 executives were asked to complete a 45-minute survey on what they have done in their career, and what drives and keeps them at their current company Unknown to the 6,500 executives, they were split into three buckets: high potential, good performer, below average The companies were split into quintiles by financial performance in their respective industries *Adapted from Corporate Executive Board Research Findings There is a direct link between a companys ability to provide leaders with the development opportunities they most value and the overall strength of the leadership bench. *Adapted from McKinsey War for Talent Study What is important to the high performing leader? The highest performing leaders from the highest performing companies viewed the following as most important to them Great Company Great Jobs Compensation & Lifestyle *Adapted from McKinsey War for Talent Study War for Talent Findings The strongest performing companies dont necessarily have the strongest formal leadership development processes. They DO have a talent mindset at the top of the organization and a culture that supports candor and risk taking when discussing people *Adapted from McKinsey War for Talent Study Build a talent mindset A belief that talent impacts business results A belief that A players will outperform B players, regardless of the challenge Executives know what an A player is, and the A players have been identified Executives are accountable for people leadership and development The best will be rewarded *Adapted from McKinsey War for Talent Study Culture that encourages candor and risk taking when discussing people Executives talk about people frequently in a candid and probing waythey differentiate people on performance and potential Take risks on people and move them into jobs before they are ready (stretch assignments) Executives talk candidly about their own and others development Executives are expected to ask for and give insightful feedback Shared set of values around people development *Adapted from McKinsey War for Talent Study Build solid leadership development processes Performance Management Feedback & Coaching Education & Development Recruiting Assessment *Adapted from McKinsey War for Talent Study War for Talent Findings Need to have the culture and the talent mindset first, in order to support a strong leadership development program (are we developing a good crop of B players?) High potential and high performing individuals want challenges Stretch people and build capability through aggressive job assignments Provide feedback and rewards to reinforce culture, performance and development Need to have a model in place for when and why professional coaches are brought into the organization - the times when it is most critical for an employee to learn the skill, then the return on the investment will be high Focus on people-leadership and strategic-leadership skills for all people leaders *Adapted from McKinsey War for Talent Study First Break all the Rules Gallup Organizations research 80,000 managers in 400 organizations First Break all the Rules What the Worlds Greatest Managers Do Differently Select the right talent Correctly coach for the right outcomes for direct reports Maximize strengths Place the right person in the right job at the right time Create heroes in every role Reward performance Frequent interaction regarding performance Focus on future and the next level *Adapted from McKinsey Performance Ethic Study Performance Ethic Study McKinsey & Company - 6,900 managers in 56 organizations *Adapted from McKinsey Performance Ethic Study Performance Ethic Study These are the things high performing companies do consistently: Mission / Inspiration Highly aggressive short- and long-term goals Flat, atomized, accountable organizational units Transparent performance feedback Consequence management Coordination and control Levers Motivation levers *Adapted from Center for Creative Leadership Great leaders share similar backgrounds Raw Material Intellect, Character, Ability to Relate, Motivation to Achieve and Lead Experience - Variety - Intensity - Adversity - Diversity Ability & Willingness to Learn from Experience - Responsive to Feedback vs. Repeating Past Mistakes + x How do leaders develop? Experience and Feedback! *Adapted from Center for Creative Leadership How Do Leaders Develop? Assignments Full job change Job restructure based on development needs Special projects and assignments Coaching and Feedback Multi-rater feedback and evaluation Coaching by a skilled manager Training Motivated self-development Coursework (just in time) Descending Value Where should Companies Invest Leadership Development Resources? All People Leaders: Build Leadership Transformation skills Produce Great Coaches High Potentials & High Performers: Accelerate the development of high potential and high performing employees New Hires and Newly Promoted Provide new-hire and newly-promoted people leaders development appropriate to their level of accountability Development & Training Strategy Establish required curriculum for career transitions First line supervisors Mid-managers Senior managers Executives Develop bi-annual programs with specific themes/topics that continue to focus leaders on achieving strategic initiatives and creating performance ethic for: First line supervisors Mid-managers Senior managers Executives Newly Promoted Supervisors Mid-Level Management Senior Management Executive Leadership A Winning Culture 1st Line Management Career Transitions Skills and A Winning Culture = Leveraged Training Right skills at the right time Instill behaviors in support of Vision and Values Talent Planning Conduct CEO-led audit of leadership talent to assess depth of the leadership bench Create ownership for assessing and developing talent at all levels of the organization Prepare for anticipated retirements in the next five years Attract and develop talent with different capabilities: Growth orientation Risk-taking Innovation People are the drivers of BNSFs Strategic Wheel Leadership Development Strategy Produce leaders who are aligned with the BNSF Strategic Initiatives exhibit behaviors consistent with BNSF Leadership Transformation embrace Performance Ethic can effectively attract, motivate and retain talent Provide learning experiences to all people leaders as appropriate to their level of accountability Build a culture that encourages and supports innovation, risk-taking and a growth orientation Leadership Development Strategy Provide leaders the development they what leaders need at different organizational levels Identify high potentials and high performers Provide different learning experiences depending on the amount of time in their current role What is Effective Leadership at BNSF? Create a Compelling Vision Set a vision and a strategy for the future and inspire others to follow your vision. Show passion for the vision. Build enthusiasm, optimism and ownership for both the journey and the destination. Motivate people to be pioneers and achieve the vision in spite of obstacles. Model the Way Build trust through competence, openness, and integrity. Always show respect for others. See work as an adventure and enjoy the journey. Accept individual differences and find ways to build on them. Lead More; Manage Less Leadership is situational. Rely more on coaching, teaching, and enabling. Be directive in select situations and normally empowering. Know how things work. Tell people not only what needs to be done, but tell them why. Encourage leadership and innovation at all levels of your organization. Build strong teams and coach them to challenge the status quo, initiate solutions and act with a sense of urgency. Communicate, Communicate, Communicate Listen and involve. Set high standards for performance and clearly communicate responsibilities and expectations to your team. Assess performance and provide candid, constructive feedback. Recognize and celebrate successes frequently. Make Development a Priority Develop the talents of your people. You are accountable for the success of your team. When people fail, we fail as leaders. Embrace and inspire lifelong development.