The Leadership Pipeline at BNL

1. The Leadership Pipeline at BNL Presented By Stephen J. Drotter Drotter Human Resources, Inc. sjdrotter@aol.com

2. Agenda I. Key Concepts • Understanding Performance As Results Achieved • Understanding the Architecture of Leadership Work • UnderstandingPotential II. Your Tailored Leadership Pipeline A. Some Observations B. Standards by Layer III. Conducting Performance Discussions A. Guiding Principles B. Process

3. Introduction • My Frame of Reference • Sample of Companies Now Using the Leadership Pipeline Model to Grow Leaders

4. My Frame of Reference • Twenty-one years in GE, CIGNA, Chase – seven years on Policy Committees • Twenty-one years consulting on organization and succession • In-depth work with eighty-eight companies • Discussions with forty others about the book • 1300 in-depth executive assessments • Detailed analysis of achievement in every position • Evaluation of critical skills acquired and applied

5. Marriott International Johnson & Johnson IBM Hewlett-Packard Blue Cross Blue Shield of MA Bristol-Myers Squibb ING Novartis Level 3 Communications Southern Company British American tobacco NOL/APL De Beers Schneider National Microsoft Deutsche Bank Southern California Edison Gold Fields IGE Anheuser-Busch Bank of America Clearfield energy Stratus Technologies Citigroup Statoil KeyCorp Goodyear Tire and Rubber Company Aker Kvaerner The Gap Coca-Cola HBC Lucent Technologies Genentech Telesure NIKE Royal Bank of Canada Ecolab Sample of Companies Now Using the Leadership Pipeline Model to Grow Leaders Note: There are many more that I don’t know about.

6. End Game – How We Measure Effectiveness • Two critical requirements for sustained business success in any business: • Every job filled with a fully performing individual now and in the future no matter how much the work requirements change. • Every position is absolutely necessary and adds appropriate value. WHY?

7. WHY? • To satisfy the Enterprise End Game, which is: • Perpetuation of the Enterprise by adding appropriate value for the DOE, BSA, the Scientific Community, our associates, and other key stakeholders now and in the future no matter how much their needs change. HOW?

8. HOW? First, we must truly understand performance. • Results not activity. • Clear definition and differentiation. • Performance vs. potential. Second, a comprehensive, flexible architecture is needed to achieve sustainable cumulative results. Third, we need a better tools for evaluating performance and potential.

9. Some Observations from the Work Interviews Eighteen managers representing all levels were interviewed about the content of their job. • Leadership work and management work are well recognized as key parts of the job. • The responses are the same as those from similar layers in “for profit” organizations • The real difference is the absence of customer activity • Sufficiency of resources is a challenge at every level. • This too is similar to “for profit” organizations • The difference is the amount of “complaining” is higher at BNL • Activities that would help the resource problem – productivity improvement, cost reduction, work elimination – are rarely mentioned. • There may be some good opportunities for reallocation of money and other resources • Tighter resource management would be appropriate • Time allocation for “people” matters is significant. • 20% to 30% or more are common • This is somewhat higher than in “for profit” companies • Some very important subjects – innovation, quality, growth – received little or no mention. • Problem solving is a major focus and may be driving out other things Redirecting some leadership energy is a must!

10. I. Key Concepts

11. Key Concepts A. How Leaders Get Results

12. Set Direction: Vision/mission Standards Identity Positioning Goals (long-term) Engage the Workforce: Communicate direction Listen to concerns Gain commitment Adjust the direction Enable Success: Coaching and development Removing obstacles Resource allocation Capital spending (Emotional) Plan: Goals (short-term) Budget Operating plan People plans Priorities Organize: Structure Roles Processes Power allocation Staffing Culture/change Measure: Financial and Non-Financial Rate of Progress Customer, partner and shareholder value Employee value proposition (Physical) How Leaders Get Results Let’s be clear about how leaders make results happen. Where are your opportunities for improvement?

13. Key Concepts B. Understanding Performance As Results Achieved

14. Understanding Performance – Conceptual Model The purpose of development = Growth Potential(Exceptional) Full Performance Gap Not Yet Full Performance Inappropriate Performance What performance should we expect?

15. What Do The Lines Stand For? • Commonly Used • Operational/financial results • Customer results • Leadership results • Management results • Relationship results • Personal Development results • Social responsibility • Brookhaven • Advance Frontiers of Science • Attracting and Sustaining Top Talent • Improve Infrastructure, Quality, and Reduce Cost • Stakeholder Relations • Excellence is ESSH • Brookhaven's categories are the strategic focus areas. • We use the standards to define accountability for delivering the strategy.

16. Critical Considerations • The primary role of leaders is to enable the success of those who report to them. • When performance is less than full the leader is usually one major reason. • Performance shortfalls are business problems and should be treated as such.

17. Key Concepts C. Understanding The Architecture of Leadership Work

18. The Leadership Pipeline(A Results-Based Model) • Original version developed by Walt Mahler. • The foundation of GE’s manpower system, started in early 1970s. • Tested from SVP – HR position at INA (now CIGNA) and Chase • Applied through consulting at over 80 companies on CEO succession and organization. • Enriched from over 1300 in-depth assessments of candidates for CEO, CFO, COO, Group Executive, Business General Manager and about 20 CEO succession plans. It is an empirically developed model based on differentiation or required output.

19. The Concept There is a natural hierarchy of leadership work in any business organization. The required results change dramatically at key breakpoints in the hierarchy. So when you are promoted past one of those breakpoints a transition is required in: • Skills • Time application • Work values In addition, all the transition points require aletting go of things that made you successfulat one layer and adopting entirely new ones in order to: • succeed at the new layer and • make those around you successful.

20. Enterprise Manager Passage # 6 Group Manager Passage # 5 Business Manager Passage # 4 Functional Manager Passage # 3 Manage of Manager Passage # 2 Manage Others Passage # 1 Manage Self The Leadership Pipeline Model

21. Leadership Pipeline - Managing Self Skills:primary technical or professional skills, meet required standards Time:focuses on completing own tasks on time Values:accepts company culture and practices; exhibits professional pride; makes prudent use of company resources

22. Leadership Pipeline – Managing Others Skills: management skills including planning, assigning work, coaching and counseling, and measuring work of others, hiring and firing Time:work in an annual cycle not just project cycle; make time available for others Values: managerial work; helping others to accept company values; getting results through others

23. Leadership Pipeline – Managing Managers Skills: coaching managers, delegation, choosing first-line managers, resource allocation Time:annual plans connected to functional strategy; spend time integrating across boundaries Values: helping others acquire management skills; free flow of information between units laterally; getting results through managers

24. Leadership Pipeline – Managing a Function Skills: new communication skills to penetrate additional layers; understanding and managing work outside of one’s own skill area; developing functional strategy; leading a function Time:focuses on communicating with other functional managers; securing resources, participating in business team meetings; day-to-day operations are delegated to subordinate managers Values: values work that is new and different from one’s own experience; functional leadership (vs. functional membership); getting results through a function

25. Leadership Pipeline – Business Manager (P&L) Skills: develop business strategy; business acumen; make trade-off decisions; integrate the plans and actions of diverse functions into one effective business; grow function leaders Time:moves easily from the here and now to five years out and back again; spends time working with functions perhaps not understood or valued in the past Values: changes mindset from a functional perspective (‘can we do it?”) to a profit perspective (“should we do this? e.g., will we make money?”); both short-term business results and long-term business building

26. Leadership Pipeline – Group Manager(Manager of several businesses) Skills: evaluate business strategy to determine who should get the most resources; determine what other business the Group should be in and which to exit; build programs that will enable functional managers to grow to general business managers; must be “maze-bright” and able to effectively interact with Corporate staff, community, industry, government and NGO leaders Time:same as Business Manager but time spans are longer, decisions are bigger, and uncertainties and risks are greater Values: values other’s business success; satisfaction in developing the company beyond businesses; getting results through business managers; growing business managers

27. Leadership Pipeline – Leader of an Enterprise Skills: connects the enterprise with key external stakeholders and with governments, shareholders, Wall Street, customer organization; assures execution capability; builds social architecture Time:makes decision in the context of long-term policy implications; five-to-ten year time horizon Values: few but significant strategic decisions or initiatives; change in self-concept to leader of an enterprise; long-term results

28. Key Concepts C. Understanding Potential

29. Potential /Performance Matrix Turn Potentialable to do the work at the next level in threeto five yrs or sooner P O T E N T I A L Growth Potential-able to do the work of bigger jobs at thesame level in the near term Mastery Potential-able to do the same kind of work, only better Full Performance Not Yet Full Performance Exceptional Performance S U S T A I N E D P E R F O R M A N C E

30. Potential /Performance Matrix Turn Potentialable to do the work at the next level in threeto five yrs or sooner P O T E N T I A L Growth Potential-able to do the work of bigger jobs at thesame level in the near term Mastery Potentialable to do the same kind of work, only better Exceptional Performance Full Performance Not Yet Full Performance S U S T A I N E D P E R F O R M A N C E

31. II. Your Tailored Leadership Pipeline

32. Manage Others (See Handout)

33. Manager of Managers

34. Manager of Managers (cont’d)

35. Scientific and Operational ALDs

36. Scientific and Operational ALDs (Cont’d)

37. BNL Corporate Staff Executives (HR, Finance, CEGPA, Strategic Planning, IT, Legal)

38. BNL Corporate Staff Executives (HR, Finance, CEGPA, Strategic Planning, IT, Legal) (Cont’d)

39. Lab Enterprise Leaders (BNL Director/Deputy Directors)

40. Lab Enterprise Leaders (Cont’d) (BNL Director/Deputy Directors)

41. III. Conducting Performance Discussions

42. A. Guiding Principles • Everything starts with the work (not the person). • Work must be differentiated by layer. • Performance discussions should be developmental. • When judgments must be made, use the “reasonable person” approach.

43. B. Performance Discussion Process • Discuss performance once a month formally. • Draw the person’s circle as you see it. • Ask them to draw their circle and discuss any differences. • Share ideas on how to get the remaining work done on time, within budget and at the right quality. • Encourage, encourage, encourage!