Best Practices in Developing and Attracting Key Employees

1. Best Practices in Developing and Attracting Key Employees Robert Parent, Ph.D. Professor of Strategy Michel Delorme Professor of Human Resources Faculty of Administration University of Sherbrooke

2. What Do We Mean By Best Practices? • Best practices are a form of Benchmarking that identifies the means by which leading organizations have achieved top performance.

3. Why Are Best Practices Important To My Organization? • The fact is, that answer may be different for every business. Every organization has unique goals, opportunities, and obstacles. • Best practices must be evaluated in the context of your company's business strategy, its position on the technology curve, on the growth curve, and finally, the importance of the particular business process to the overall corporate goal.

4. Does This Practice Make Sense For My Company? • Therefore, best practices function more as a source of creative insight, rather than the one irrefutable answer to a business problem.

5. Three types of Best Practices • Internal best practices • Competitive best practices • Universal best practices

6. "Hiring, retaining, and developing great people is the biggest challenge and single greatest key to the success of any business" --Scott McNealy, CEO, Sun Microsystems

7. Roadblocks to Success • Few business leaders would disagree with McNealy. • Many companies, however, consciously or unconsciously create roadblocks that prevent them from accomplishing this important goal.

8. Companies to Learn From • Some companies, on the other hand, truly believe that finding, developing and keeping great employees is their primary challenge, and their actions support the commitment to that challenge. In our opinion these “world class” organizations are the companies we can all learn from.

9. Aligning with Strategy and Culture • Some of these world-class companies are large, some are small, some of them are well known, and some are unfamiliar to most business leaders. Although different, all of these organizations have one thing in common: They focus on aligning their attracting, training, and management development activities to their strategy and culture.They realize that their strategy drives what gets done and their culture drives how things get done in their organization.

10. Aligning With Strategy & Culture Management Preferences Strategy Culture Attracting & Development Activities Competencies

11. Overall Best Practice • Align attracting and developing activities to the organization's strategy and culture.

12. Strategy • What's your strategy? • What competencies do you need to implement it?

13. Types of Competencies Generally Required to Implement a Strategy • Routine competencies (exploit the organization effectively and efficiently to continue to make money now), and • Innovative competencies(explore new possibilities to satisfy changing client needs and surprise competitors to allow the company to make more money in the future)

14. Exploitation Know the company: History Code Rules (follow) Procedures (follow) Past success Accountability Strong teams Minimal risks Exploration Break from the past See old things in new ways Enhance variance (increase diversity) Future opportunities Focus on learning Break-up teams High risk Some Attributes Behind the Competencies Required to Implement Strategy

15. Competency Needs ForKruger's Future? Explore (new competencies required) Growth Projected success . Status quo Exploit (competencies required = continue to do what has brought us our success) Past success Time 2002

16. The Role of Culture "The relationship we have with our people and the culture of our company is our most sustainable competitive advantage". Howard Schultz, the founder of Starbucks "Our culture is our competitive advantage". Mike Smith, CEO Lands' End

17. According to the Fuqua Report, the top two reasons people join a company are the opportunity for personal growth and the culture; core culture is seen as the key driver to individual growth.

18. Means Available to CEO's to Ensure Alignment Placing leaders who enthusiastically embrace the strategy and culture into key positions; Communicating the need for this strategy and culture in every possible way; Establishing measures and rewards that reflect and reinforce the strategy and culture; Using management development as a tool to create understanding and deepen the commitment to the strategy and culture throughout the organization.

19. Management & Leadership Development • In addition to competing on price, or product quality and innovation, high-performing companies engage in an implicit competition for the most capable employees • This competition goes far beyond simply hiring the best people • It also involves the use of effective management & leadership development programs to develop the new competencies required to succeed

20. Best Practices in Aligning Management Development to Strategy and Culture 1) Develop a Competency Approach to Managing Human Assets 2) Create a Culture of Learning (Become a Learning organization) 3) Create a Leadership Development Program 4) Create a Culture of Coaching 5) Partner with a Local University 6) Build a Corporate University 7) Treat Management Education as a Business

21. Development Best Practice # 1 Develop a Competency Approach to Managing Human Assets

22. The Competency Approach:Some suggested competencies Focus on results Technical competence Sense of urgency People skills Cross-functional behavior COMPETENCIES (skills, knowledge and abilities) Trust integrity External and internal customer responsiveness Knowledge management Conflict resolution Focus on developing leaders Coaching/mentoring

23. Kruger's Competencies • Determine your current set of competencies • Select those you wish to reinforce • And those you wish to downplay • Identify any new competencies you will need in the future to align employee skills to your strategy and culture • i.e. Coaching? • Benchmarking • Knowledge Management • Innovation • Personal qualities

24. Build a Great Employee Profile You can't develop or find what you’re not looking for. Define the ideal employee and build your staffing and development programs to support finding or developing to that profile. Here are a few examples:

25. EMC's Seven Factor Great Employee Profile • Technical competence • Goal orientation • A sense of urgency • Accountability • External and internal customer responsiveness • Cross-functional behavior • Integrity

26. Yahoo's 4 Attributes of Great Employees • People skills • Spheres of influence • Zoom in, zoom out • Passion for life

27. Advantages Clarifies where you are and where you need to be as an organization Creates a shared understanding of competency needs Crystallizes your culture Inconveniences Takes a bit of time Development Best Practice # 1Build A Competency Approach

28. Development Best Practice # 2Create a Learning Organization The definition of a learning organization is one that is skilled in creating, acquiring, interpreting, transferring and retaining knowledge, and at purposefully modifying its behavior to reflect new information and insights. • Xerox, IBM, L.L. Bean

29. Advantages Creates a culture of learning and change management Stimulates innovation Symbol of a world-class organizations – the type people want to work or Encourages cross-functional cooperation Inconveniences Time consuming Hard to do - without expertise Development Best Practice # 2Create a Learning organization

30. Development Best Practice # 3Create A Leadership Development Program • GE provides a good example of a company that makes the most of the attribute approach for building and deploying better leaders • GE uses the concept of competencies to improve leaders and has become renowned among the best at developing industry leaders

31. Building Better Leaders at GE • GE bases its approach on four essential tasks: 1- the organization recognizes the importance of leadership to its business success. • Senior managers strongly commit to doing what is needed to build the next generation of leaders. • Former CEO Jack Welch, for example, claimed he spent 40 % of his time on people issues, much of it on leadership development

32. Building Better Leaders at GE 2- GE has a specific process for developing leadership talent (30-year-old succession planning system): • annual review by the CEO, top executives participate in activities aimed at improving their abilities and increasing career opportunities

33. Building Better Leaders at GE 3- GE defines leadership behaviorally. All GE leaders are held accountable both for "making the numbers" and for "living the values". • GE leaders designed and deployed a pragmatic, measurable tool known as the Leadership Effectiveness Survey (LES). • This survey synthesizes GE values and stipulates specific behaviors consistent with each value.

34. Making the numbers: Annual cash contributions Earnings Market share gains Living the values: Vision Customer/ quality focus Integrity Accountability/commitment Team builder Initiative/ speed Global mind-set Building Better Leaders at GE

35. Building Better Leaders at GE 4- GE uses the the leadership competencies to integrate a number of management practices with the purpose of building quality of leadership. These include: • considering a candidate's abilities on the LES categories when making hiring or promotion decision • using annual 360° feedback to rate the leaders (this score often affects annual and long-term compensation decisions) • LES concepts also guide the portfolio of training courses delivered throughout GE

36. Advantages Reinforces the alignment of leadership activities to the strategy and culture Symbol of commitment to leadership and learning Develop the reputation of building leaders Reinforces cross functional cooperation Inconveniences Time consuming Costly Risk of loosing good leaders developed by your organization Development Best Practice # 3Create A Leadership Development Program

37. Development Best Practice # 4Create A Culture of Coaching • Hold leaders at all levels accountable for coaching and mentoring future organizational leaders • Bombardier Aeronautics makes coaching a core competency for all of its leaders. It requires all first level supervisors to have a coach within the organization

38. Advantages Reinforces commitment to developing leaders Reinforces commitment to cross functional cooperation Reinforces commitment to knowledge management Inconveniences Time consuming Requires some coordination Danger of creating an elitist mentality Development Best Practice # 4Develop A Culture of Coaching

39. Development Best Practice # 5 Partner with a Local University

40. Partners with the University of Sherbrooke Executive Education Center at U de S Between 1998 and 2001 corporate students enrolled in custom corporate programs have increased by 340% Corporate MBA's: 2 Cascades IPL 2 International MBA's Executive MBA (First executive MBA in Canada) DBA geared toward practitioners

41. Leadership Programs at U de SLong Tradition of Partnering With Business Leadership programs: Standard Life (offered 30 times) Bombardier Aerospace (Combination coaching and leadership) Prévost Car - Volvo Domtar Johnson & Johnson

42. Advantages Speed Flexibility International affil. Accreditation Qualified faculty Symbol of commitment Inconveniences Coordination University's values must align with yours Development Best Practice # 5Partner with a Local University

43. Development Best Practice # 6Create a Corporate University Corporate Universities in the U.S. & Canada 1990 200 2001 1800 2005 (projected) 2000 (Budgets ranging from 20 to 60 million US)

44. General Electric Grottonville, New York (The Grandfather of Corporate Education Centers). Entry-Level Level Leadership Programs Masters-Level Level Leadership Programs HR Leadership Program Risk Management Leadership Program Global Leadership Development Program Marketing Leadership Development Program Etc.

45. Advantages 100% controlled by you Fully adapted to your needs Symbol of corporate commitment to development and learning Inconveniences Costly Time consuming Administration Not invented here syndrome Development Best Practice # 6Create a Corporate University

46. Development Best Practice # 7Treat Management Education as a Value Added Business Identify objectives: Employee results Organization results Customer results Investor results Measure against objectives Fund the activity as a business

47. Leadership Development With Results in Mind • Results diagnosis: define the results we need to produce: • employee results • organization results • customer results • investor results

48. Leadership Development With Results in Mind • employee results: • collect data on employee competencies • define expectations for employees • evaluate employee skills • provide employees with opportunities to enhance intellectual capital

49. Leadership Development With Results in Mind • Organization results: • diagnose current capabilities and define desired capabilities needed to win • could come from examining how successful and unsuccessful firms build capabilities, using action learning projects and case studies, and having participants use their units as living cases

50. Leadership Development With Results in Mind • Customer results: • assess and anticipate customer needs • partner with customers • share management practices with customers