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TALENT MANAGEMENT & SUCCESSION PLANNING

Any companys greatest asset is their people. No more, senior leaders set the strategy, line managers told the workers what to do, and the Payroll or Personnel Department administered records and paychecks. Workers are people who can transform organizations when properly engaged and motivated. Organizations need to articulate a clear purpose with specific, measurable goals; here comes the concept of management by objective to keep managers in step with those goals. Today, every national or global corporation believes that organizational and employee performance goals need to be carefully developed, clearly communicated and seamlessly aligned. Major companies use talent management technology to organize and execute these initiatives. The world moves too fast and business is too complex not to use these tools to:

Recruit better : Companies can quickly and easily find, assess and onboard the right people
for an organization.

Keep people focused : Companies will be clear on the activities they need to execute and
how they build value for the company. Improve performance : Companies have a framework to discuss measure and improve employee performance. Engage your people : Employees who have clear feedback for professional growth are more likely to care about their jobs and do them well. Retain best employees : The ability to identify and reward top performers and makes it easier to hang on to them. Reward appropriately : Companies are able to pay for performance and reward the people who truly help the organization succeed. Prepare for the future : Companies develop succession plans to prepare talent and leadership for the future and use learning to sharpen and improve skills. Maintain visibility : Companies can understand what is really going on in the workforce and make business decisions based on facts, not intuition. Become an employer of choice : For small companies competing with big organizations for talent, its even more important that they demonstrate to candidates that they take talent management seriously. Its the only way theyll become an employer of choice when faced with big-company benefits and career opportunities.

Companies that use these tools have measureable impact on organizational performance; not only they experience lower turnover of their best employees but also have higher median revenue per employee.

Furthermore, automating manual HR transactions and enabling manager and employee self-service can more than cost-justify the technology expense.

Talent Management Opportunities for Small Businesses


In the startup phase, a company can get away with a bare minimum of or even an absence of talent processes. However, as company grows there is a choice, to stand still and be satisfied with what has been accomplished so far or build the foundation for future growth. Its important to establish the right people processes as soon as possible in order to get the right data to accelerate growth. Talent management technology is an essential step for small companies that are looking to take a big leap along the HR maturity curve. In a small business, managers and employees are more likely to fill multiple roles than in bigger businesses. Efficient, automated talent management processes allow people to focus more on business and less on administration. As a result, its easier for company to:

Increase revenue : For most companies, employee performance is the lynchpin in any
growth plan. Talent management allows you to establish measureable goals for your organization and align those objectives with the things your employees do each day. Cut costs : Process efficiency leads to financial efficiency. Talent management allows your managers and employees to spend less time shuffling paper and more time doing real work and having conversations that will lead to increased productivity. You are better able to do more with less. Introduce new products : Innovation comes from your people. The ability to hire better, develop faster and retain your best employees creates a climate that allows innovation to flourish. Employee alignment with business objectives makes sure that everyone is contributing to a successful outcome. Enter new markets : A growing company will look very different in the future than it does today. With the right skills and the proper alignment with business goals, your people can work productively and efficiently, leading the way into new markets and accelerating your growth.

In many ways, small companies are ideally suited to get started quickly and experience results from talent

Why is integration important?


Integration is an essential component of a successful talent management strategy. Information in our business cant stay within silos such as hiring, payroll, performance and training. This information needs the ability to flow easily among talent management functions. To benefit fully from talent management and to gain workforce insight, integration is essential and allows a business to grow faster with decisions based on data. Integration also increases business competitiveness in tough times by helping an organization to be more reactive to change management. Small companies bring less baggage along with them than big companies, in several ways:

Fewer organizational barriers : Unlike big companies, you dont need to go through
endless rounds of committee meetings, RFPs and procurement department reviews. You are smaller and more agile. A stronger cultural foundation : Smaller companies most often have a clear sense of their cultural identity than bigger ones. This self-awareness allows small businesses to be better prepared to build the competency foundation required for talent management implementation and integration. Easier to achieve buy-in : Smaller companies have fewer layers of management to get to executive approvals and executive buy-in is the key. Talent management success must start at the top. If senior leaders dont see the value, the chances for ultimate success are limited. Ability to achieve alignment : SMART goals Specific, Measurable, Attainable, Relevant and Time-bound that are aligned to company strategy are at the heart of management by objective. The ability to achieve this type of alignment is far easier in a small business because these companies are more adaptable. Less change management is required to introduce and implement these initiatives effectively. Building the infrastructure of talent processes : It paves the way for growth and can speed a company along the maturity curve, allowing you to achieve your growth faster. Efficiency and compliance : Improve HR and manager efficiency by automating paper processes to save time as well as reduce errors from manual data entry and compliance mistakes. You can also limit legal exposure that could come from incomplete paperwork or inappropriate performance reviews. Process improvement : Increase workforce productivity and management by, for example, increasing performance through development and improving engagement and retention through feedback and coaching. You can also give raises based on data and reward the employees who are actually achieving goals and building your business. Business transformation : Increase revenue growth and business results by building a true culture of performance and improving your talent pipeline among leaders and key positions. Above all, you can align employee and organizational goals and leverage reports that provide visibility into your workforce. Climbing the Maturity Curve : Recommendations for Small Businesses Small & Sophisticated: For small businesses that are looking to move forward with talent management technology, consider these recommendations to speed you along your journey: Start with performance assessments : Performance improvement is often the easiest place to start with talent management. In most companies, the paper-based annual performance review is a time-consuming ritual that everyone dislikes and that rarely adds value to an organization. Improving this process will not only be the fastest way to see a return on your investment, it can build momentum for support of future steps. Align individual and company goals : The smart thing about SMART goals is that they give your company a way to take the strategy that you formulate at the executive level and cascade it down to the employee level in a positive and impactful way. Unlike manual goalsetting processes that are usually just one-time conversations, automated alignment and goal

management is a better way to maintain an ongoing dialogue about strategy. Your people and your company can easily share accountability and measure your progress so you can stay on track toward your goals. You are all in the same boat, rowing in the same direction. Bring objectivity to the process : When employees believe that a performance appraisal is based only on the opinion of their supervisor, an employee may spend more time pleasing the boss than executing tasks that build value for the business. When those decisions are grounded in data such as goal achievement or a 360 review employees are more apt to listen and take to heart suggestions for improvement and are more likely to address skills gaps. Also, positive feedback is truly the fast track to employee engagement. Think integration : Even if you are starting small with one aspect of talent management, such as performance management, keep an eye on the ultimate goal of integration. How will performance and compensation data converge with talent profiles and core HR systems. The ability to tie all of this employee data together can give your company an unprecedented level of insight that can turbo charge your growth in the future. Leverage best practices : Your talent processes dont need to be built new from the ground up. With the right partner and the right tools, you can benefit from the experience of thousands of other companies of similar size, industry-type and experience.

Conclusion Small businesses and talent management sophistication are not mutually exclusive. For small businesses that dont intend to stay that way, talent management technology is actually a business accelerator.

Talent Mobility: A New Standard of Endurance


Today, companies are faced with a shortage of capable managers and leaders, and the need for highly skilled technical workers. The goal of a talent management program is to create a highly responsive, high-performing, sustainable organization that meets its business targets. Succession management is an integral component of an overall talent management strategy. Based on recent research into the topic of succession management, a theme emerged that has set new standards for the way organizations develop and move talent. It is called talent mobility and is defined as a dynamic internal process for moving talent from role to role at the leadership, professional and operational levels. To do this, an organization must: Adopt the principles of succession management at all ranks; Provide transparent discussion of skills and potential, as well as organizational needs; and, Focus on development across critical talent pools based on business needs.

Succession management is an integral component of an overall talent management strategy. Succession management has evolved from an exercise of job replacement planning to a dynamic internal process for moving talent from role to role at the leadership, professional and operational levels. The ability to move talent to where it is needed and by when it is needed will be essential for building an adaptable and enduring organization.

Modern-Day Succession Management


Effective succession management enables companies to react quickly to change and to endure difficult times. At its best, succession management allows a company to seamlessly merge its employees capabilities and career aspirations with the companys business strategy and talent needs. In research, a model is developed that identifies five levels of maturity for succession management. It is concluded that succession management remains an immature and relatively new process for most companies fewer than 12 percent of companies have truly integrated succession management programs. The following are brief descriptions of each level of the Bersin & Associates Succession Management Maturity Model. Each level is used as a yardstick for companies that wish to attain the highest level of succession management.

Level 0 : No Succession Process At this level, organizations have no real succession management
process. They may identify potential successors for the CEO and executive-level positions. Research

shows that 21 percent of companies operate at this level, and they typically find themselves limited in growth or business flexibility by a lack of managerial and leadership skills.

Level 1 : Replacement Planning Organizations at Level 1 Maturity focus on senior-level positions. A list of high potentials2 is created, but there is no formal development process in place. Research shows that approximately 15 percent of organizations today function at Level 1. Level 2 : Traditional Succession Planning Organizations that implement succession planning target
critical senior-level positions. Talent reviews are conducted and development plans are put in place. Research shows that 52 percent of organizations operate at this level today.

Level 3 : Integrated Succession Management Companies at Level _ target all critical positions at all
levels. Companywide succession is tightly aligned with the business strategy and talent management processes. Research indicates that fewer than 12 percent of companies have achieved this Level of Maturity.

Level 4 : Transparent Talent Mobility Level 4 is the next practice of succession management. As far
as we know, there are no companies that have achieved this Level of Maturity. At Level 4, companies completely understand the capabilities and potential of their workforces; talent decisions are made naturally, based on what is best for the business as a whole.

Ultimately, organizations want to build a dynamic internal process for moving talent from role to role at the leadership, professional and operational levels. Referred to as transparent talent mobility, this is a new trend for succession management. Companies at this level of maturity know the capabilities and potential of their workforces extremely well. Key attributes of companies at Level 4 include the following. Succession planning is pool-based, as opposed to position-based. Job profiles exist for all roles and talent profiles exist for all employees. Business leaders and managers hold regular talent discussions; talent reviews are integral to the business strategic operating plan. Business leaders are rewarded for their abilities to build and move talent throughout the company. Managers have candid discussions with employees about their performance, career aspirations and development needs for possible next positions. Development is highly experiential, deliberate and prescriptive for building the readiness of talent. Employees move seamlessly from one job to the next, vertically and horizontally often crossing business, function and geographic lines. Talent decisions are made naturally and continuously, based on what is best for the business as a whole.

There are recognizable differences between a solid integrated succession management program, as compared with a more fluid culture that embraces talent mobility.

FEATURES of INTEGRATED SUCCESSION MANAGEMENT


The CEO and executive team actively engage in succession management. Executives rely on HR to develop tools, structure discussions and facilitate the process. HR is also a primary contributor in identifying and assessing high performers and high potentials. Business leaders have an enterprise wide view of talent, and do not limit replacements by function, business or geography. Succession management is highly aligned to the business strategy. Talent in both professional and management career tracks is highly valued; high performers who may have topped out (but are in key positions) are also highly valued. Companies at this level prepare for future business needswhile taking into consideration future business changes, such as the restructuring, growth and development of new product lines. Managers are held accountable for carrying out action items that were set forth in the talent review sessions. Provides focused development opportunities. Succession management processes are linked to other talent management activities, including a strong integrated development component.

TRANSPARENT TALENT MOBILITY


Company adopts the principles of succession management at all ranks. Leaders provide transparent discussions of skills and potential, as well as organizational needs. Talent strategy focuses on development across critical talent pools based on business needs. Succession planning is pool-based, as opposed to position-based. Job profiles exist for allroles and talent profiles exist for all employees. Business leaders and managers hold regular talent discussions; talent reviews are integral to the business strategic operating plan. Business leaders are rewarded for their abilities to build and move talent throughout the company. Managers have candid discussions with employees about their performance, career aspirations and development needs for possible next positions. Development is highly experiential, deliberate and prescriptive for building the readiness of talent. Employees move seamlessly from one job to the next, both vertically and horizontallyoften crossing businesses, functions and geographic lines. Talent decisions are made naturally and continuously, based on what is best for the business as a whole.

Integrated Talent Management Propels Talent Mobility


Talent mobility can only be achieved through a well-integrated talent management strategy. In addition to its role in succession management, how a company recruits talent, manages its employees careers and develops the right capabilities to fulfill business needs is essential for enabling a mobile, highperforming workforce. For example, the importance of accessing and building both internal and external talent pools to fill critical roles makes integration with recruiting a key element.

Career Management
Up until about the 1980s, it was understood that employment was for life and that people worked their way up the career ladder within the same company. In the 1990s to early 2000s, careers were redefined. Employees became free agents; they were the owners and major decision-makers of their careers. Today, though the responsibility still primarily lies with the employee, businesses are partnering with employees and fostering a collaborative approach to career development that meets the needs of the business, while fulfilling employees career aspirations. A win-win for the employer and employee, a company must create opportunities that are aligned with the business strategy, and then communicate and facilitate an employee match. This modern-day approach to career management strategy promotes job flexibility, increases employee engagement and encourages talent mobility

Leadership Development
Leadership development enables the development of leaders in order to be successful in their current roles, but also to fulfill the companys succession plan. Without development plans and, more importantly, without the execution of such plans, companies are unable to prepare successors for future leadership positions; the bench strength of an organization becomes weak; and, leadership pipelines are truncated. These development plans should include a combination of both formal and informal development activities. Most leadership development happens with coaching, mentoring and other forms of informal learning, such as job shadowing. Also, the integration of social learning: Encourages group collaboration; Allows a company to leverage the expertise of many people to solve problems; and, Enhances the visibility of key talent in other business units.

Companies that develop concrete plans to prepare high-potential employees for other critical roles and to ensure those plans are completed have much more effective succession management programs. Fifty-eight percent of companies at Level 4 Maturity have development plans as an integrated part of their succession management processes as compared with zero companies at Level 1. Development planning is probably the most instrumental piece of a strategic succession management process. Without development plans in place and capable leaders ready and able to execute those plans, the succession management process is only a list of names.

After the leadership strategy is developed, the learning group held ongoing meetings to vet the programs with department and business unit leaders. The people results portion of the framework advocated developing a pipeline (a talent mobility program) of ready talent who could step into leadership roles. The pipeline reached beyond company walls, including a strategy to recruit outside talent. Throughout the design of the leadership programs and the design of the progression of training, the companys leaders kept in mind the lifecycle of a leader inside the organization. The progressive nature of the training assures its leaders consistent, ongoing learning that prepares them for the next step in their careers. It also provides the company with a ready pipeline of leaders who understand the intricacies of the organization and their roles in meeting overall company goals. The leadership courses and learning experiences are designed to: Prepare leaders for success as they enter a new role; Build and refine existing leadership skills, improving personal and team capabilities.

Technology Facilitates Talent Mobility


As organizations seek to advance their succession management practices beyond top leadership replacement planning, they require more advanced tools to: Identify and assess talent at all levels of the organization; Monitor organizational readiness, gaps and bench strength; and, Plan for development.

To support these objectives through a more integrated approach to talent management, software solution providers have extended their singularly focused applications. These new talent management suites include support for comprehensive career and succession management practices, among other talent processes. Taleo Succession, in December 2008. The systems key functionality:

Integrate information about employee performance, competency ratings, _60 feedbacks, their goals and career plans; Use a nine-box model11 to achieve further talent segmentation (A nine-box grid is a matrix tool that is used to evaluate and plot a companys talent pool, based on two factors, which most commonly are performance and potential. For more information, The Nine-Box Grid: An Essential Tool for
Talent Calibration, Bersin & Associates / Kim Lamoureux, April 6, 2009. Available to research members at www.bersin.com/library.)

Identify critical positions within the organization and identify potential successors and interim successors; Create leadership development plans, based on competency gaps, to get successors ready for the next level.

Moving toward Transparent Talent Mobility


There are 10 best practices that we prescribe for companies that want to adopt and progress toward the stage of talent mobility. 1. Facilitate Process-Driven Succession Management Business leaders should talk about talent often throughout the year and not only during scheduled talent review sessions. 2. Promote a Transparent Process and Data Inform all managers that there is a succession management process, how it works and what their roles are. 3. Align Capabilities with the Business Strategy In order to build a robust pipeline with the knowledge, skills and competencies necessary to steer the company into the future, a companys business and succession strategies must be closely aligned. 4. Hold Leaders Accountable Succession management requires that business leaders, as well as HR, ensure that key positions are filled with high-performing, qualified people. 5. Broaden the View of Talent Understanding the capabilities of key talent across an organization increases the adaptability and responsiveness of organizations and decreases potential disruptions to the business that may result from swift or unexpected talent changes. 6. Implement the Same Process at All Organizational Levels The same tools, language and approaches should be used for succession at all levels for which the program is implemented. 7. Create a Culture of Sharing Talent Managers must share their best talent in order to leverage talent through out the organization. 8. Integrate with Talent Management Processes Succession management decisions and actions should be aligned with performance management, career development, learning and recruiting processes Track two key metrics: Bench Strength The number of employees ready for promotions out of the total talent pool, and Planning Ratio The number of succession planning candidates promoted out of the total number of critical roles. 9. Establish a measurement Strategy : Establish key metrics at the onset of the process and calibrate the effectiveness of the succession management against those measures regularly. 10. Recognize That Technology Is a Tool and Not a Solution The process should drive the technology and not the other way around; the purpose of technology is to increase data integrity, boost the accessibility of data for business leaders and improve talent-based decision-making.

Conclusion
Succession management has evolved from an exercise of job replacement planning to a dynamic internal process for moving talent from role to role at the leadership, professional and operational levels. For companies to be most effective at succession management, they have to be aware of their most important roles and plan well ahead of an expected vacancy to ensure coverage for those positions. High impact succession management enables a company to assess talent, recognize potential, develop critical skills and respond to change quickly. The ability to move talent to where it is needed and by when it is needed will be essential for building an adaptable and enduring organization.