Weathering the Storm: Assessing, Attracting, Retaining and Developing Critical Talent

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Weathering the Storm: Assessing, Attracting, Retaining and Developing Critical Talent in Basic Materials Sector Right Now

Text of Weathering the Storm: Assessing, Attracting, Retaining and Developing Critical Talent

  • T he turbulent global economic environment is forcing senior executives in the basic materials industry to adjust the capabilities and skills of their leadership teams. To better understand the nature of these ongoing leadership talent

    adjustments, Korn/Ferry International conducted interviews with nearly

    100 global industry CEOs and senior human resources executives

    (some of their insights are cited throughout this paper) during late

    2008 and early 2009. The purpose of the discussions was threefold:

    1. To identify how different organizations currently are responding to the

    global economic downturn from a leadership and talent management

    perspective;

    2. To understand the specific decisions and processes basic materials

    companies are executing to ensure their long-term survival and

    success; and

    3. To identify which of Korn/Ferrys Leadership Characteristics industry

    executives view as most critical to their leadership teams performance

    in successfully navigating through the current economic storm.1

    WeaThering The STorm: aSSeSSing, aTTracTing, reTaining and developing criTical TalenT in The BaSic maTerialS SecTor righT noWby Jay millen and david Sapp

    Key Takeaways: The assortment of leadership capabilities sought by companies in the global basic materials sector has shifted in meaningful ways since the onset of the global economic downturn. CEOs, senior human resources executives and key leaders who participated in Korn/Ferrys leadership research in late 2008 and early 2009 emphasize the need for talent capable of balancing a strategic mindset with the increasingly imperative ability to drive the execution of pricing, cost-reduction, customer retention and process improvement initiatives on a daily basis.

  • 2This research yielded compelling results.

    First, industry executives describe a growing desire for senior leaders who are capable of balancing a strategic mindset with the increasingly imperative ability to drive the tactical execution of pricing, cost-reduction, customer retention and process improvement initiatives on a daily basis.

    Second, the research indicates that the relative importance of select leadership characteristics namely Acting with Honor and Character, Dealing with Trouble, Focusing on Actions and Outcomes, Inspiring Others and Communicating Effectively has significantly increased in the past several months (see Mission Critical Leadership Profile chart on page 3).

    Third, senior leaders point to a common set of five strategic considerations that they believe should be addressed if they are to successfully realign the business during the global downturn and properly assign the leadership capabilities required to drive this realignment.

    Engaging the leadership team across both of our primary businesses is one of our key objectives in todays environment, reports Mark Towe, chief executive officer of Oldcastle, Inc. N.A. In order to develop a leadership structure and succession capability in both units, we have switched the two business unit presidents to the opposite role and are preparing our next level leadership teams to be more flexible in progression between the two businesses.The emphasis Towe places on leadership team engagement was echoed by other interview subjects. If there is a silver lining to the economic crisis, it may be the industrys interest in leveraging the downturn to conduct leadership assessment and development activities and changes that help create leadership teams who are more adept at thriving during bright periods while always remaining prepared to manage during darker market conditions.

    Key Takeaways (continued): Industry CEOs indicate that the relative importance of a handful of leadership characteristics Acting with Honor and Character, Dealing with Trouble, Focusing on Actions and Outcomes, Inspiring Others and Communicating Effectively, respectively has significantly increased in the past several months.

    Given the pressures the industry confronts in the current economy, basic materials executives express an interest in leadership assessment, team development and organizational development activities as a means of strengthening decision-making around staff reductions and succession planning.

  • 3requirements for Successful leadership Like many other industries, the basic materials sector faces one of the most complex and uncertain economic environments in a generation. The economy-wide challenge of pricing and demand volatility are particularly pronounced in the basic materials arena, where capital scarcity, cash flow problems and slackening global demand for basic materials and commodities further complicate the process of guiding companies through the economic maelstrom.

    To identify the impact of the global economic crisis on industry leadership teams and talent management activities (including leadership assessment and development), Korn/Ferry surveyed

    mission critical leadership profileThe following seven leadership characteristics were identified as mission critical in a 2008-2009 survey of basic materials senior executives conducted by Korn/Ferrys Leadership and Talent Consulting group:

    Percentage of respondents who identified the leadership characteristic as mission critical

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    88%

    79% 79%75%

    71%

    63%58%

    Actin

    g with

    Hon

    or

    and

    Chara

    cter

    Deali

    ng w

    ith Tr

    ouble

    Focu

    sing o

    n Acti

    ons

    and

    Outco

    mes

    Inspir

    ing O

    thers

    Comm

    unica

    ting

    Effec

    tively

    Evalu

    ating

    and

    Deplo

    ying P

    eople

    Accu

    rately

    Unde

    rstan

    ding

    the B

    usine

    ss

  • 4nearly 100 senior industry leaders on the current talent dimensions of the economic crisis. The survey consisted of reviewing and ranking 20 leadership characteristics. Following the survey, the executives were interviewed to glean their qualitative assessment of the leadership and talent issues they view as top priorities right now.

    In addition to the mission-critical leadership profile the survey produced, the results and follow-up discussions yielded the following insights:

    a blend of specific functional skills and mission-critical leadership characteristics will determine which companies survive and thrive in the coming months.

    Companies often face a difficult decision between hiring (or retaining) leaders who are custodians or developers/innovators during tough times the decision needs to be made based on the specific business conditions within each organization;

    With a pan-regional and global business that is unique in each local market, the pressure to ensure we have the best players in each market has magnified as the market leader in Europe, notes Andrew Harvey, deputy managing director, human resources of Antalis. Each unit is facing different challenges, but common leadership denominators requiring greater capability are effective communication, flexibility, and dealing with very difficult business situations; and

    A companys best role players or specialists may not qualify as the best combined functional leaders. Each organization should assess the best functions to bridge for example, supply chain and commercial operations, finance and IT, or procurement and customer service based on the business requirements and the leadership teams unique characteristics.

    These unprecedented economic times magnify the need for core skills around out-front leadership, managerial courage, visible and clear communications abilities, agility, and acting with honor and character. There are two ways to drive company profitability: sell more or spend less. In the current market, basic materials executives assert that the leadership team must focus on both activities simultaneously.

  • 5 Commercial leadership takes on increasing complexity in todays market, notes Consolidated Container Company President & CEO Jeff Greene. Our ability to stay out in front of the customer and deliver new solutions that create value must be implemented with a much tighter focus on financial management and recovering costs in todays marketplace.

    Staying in front of customers, providing new solution sets, product/process innovations and managing cash have become even more critical than ever. Revenue generation will drive survival and potential long-term growth. Industry leaders note that drastically reducing the companys cost base can help ensure survival; however, without revenue improvements, dramatic cost-reduction efforts merely delay an inevitable decline.

    The leadership challenge in front of us is far more demanding that any time during my career, notes Paul McElligott, president and chief executive officer of TimberWest. The potential consequences of even small leadership and strategic mistakes are catastrophic in comparison to the implications of far greater mistakes in more stable or growth environments. Now, more than ever, leaders have to be out in front and in the details of the business.

    providing emerging leaders with meaningful and challenging assignments during periods of retrenchment marks a critical senior leadership responsibility. During the most difficult times, new leaders emerge in organizations based on an entirely different focus and sense of urgency.

    Industry leaders say that now is the time to secure the best talent for the long haul if you have the stomach for it. The troubled economic situation and the unique challenges the industry confronts provide a