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ASSESSING SENIOR PEOPLE A Prudential Case Study

ASSESSING SENIOR PEOPLE A Prudential Case Study. Prepared for CRF by Priscilla Vacassin 12 th May 2011. CONTENTS. Prudential Prudential’s People Strategy Philosophy behind our leadership and assessment work Our Assessment Model

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ASSESSING SENIOR PEOPLE A Prudential Case Study

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  1. ASSESSING SENIOR PEOPLEA Prudential Case Study Prepared for CRF by Priscilla Vacassin 12th May 2011

  2. CONTENTS • Prudential • Prudential’s People Strategy • Philosophy behind our leadership and assessment work • Our Assessment Model • How we integrate assessment into our performance and development agenda

  3. 1. Prudential

  4. Prudential plc is a leading international retirement solutions provider • A leading European Fund Manager with total assets under management of £198 billion as at 31/12/2010 • Record profits of £246 million in 2010 • External net fund inflows of £9.1billion • A leading UK Life Insurance & Pensions provider with 7million customers • Retail new business margin increased from 31% to 35% • IFRS total operating profits up 9% to £719 million • A leading Asian Life Insurance and Fund Manager with 15 million customers across 12 markets • Over 340,000 staff, distributors and agents • APE sales up 24% to £1,501 million • New business profit up 24% to £902 million • IFRS operating profit up 29% to £536 million • One of the largest Life Insurance companies in the US • Top three provider of variable annuities in US • Total APE retail sales of £1,164 million – highest level in Jackson’s history • 2.8 million customers 20% EEV operating profit growth in 2010 from long term business 25% EEV new business profit in 2010

  5. Prudential’s Strategy FAST-FORWARD US TURBO-CHARGE Asia OPTIMISE Asset Management FOCUS UK

  6. Prudential’s Operating Model BU Profit & Loss 1. Group strategy 2. Cash, Capital & Risk 3. Leadership & Succession 4. Brand & Reputation 5. Internal Audit 6. IT Infrastructure £ £ £ £

  7. 2. Prudential’s People Strategy

  8. Purpose Our fundamental reason for being Vision Where we will be in 3 years STRATEGIC INTENT DEVELOPMENT Strategy How we will get there Structure & Infrastructure Capability & Talent Processes & Systems THE CHANGE AGENDA Leadership & Culture Our organisation effectiveness model Performance Management is a key driver in execution of the vision and strategy and underlies all the people processes and systems…

  9. What is our purpose? Our Purpose: To deliver the leaders and leadership that Prudential Group needs now and into the future • So we can: • Deliver current operating requirements, and • Fulfil a range of future strategic options

  10. What is the work we need to do? Grow a strong Talent Pipeline Make sure we have the right people in the right numbers at the right time Build & reward performance Ensure the skills/ capability and focus to deliver in current role Get the right people in…. Ensure we select the best people and maintain a high benchmark Develop credible successors Test succession hypotheses and action development needs Develop an organisation that works Make sure we have the right structure and climate, and the capability to manage change well

  11. Who are we interested in and why? We focus on business critical populations……

  12. What are the risks of not getting this right? The success of our business now and into the future is dependent on our ability to manage five key people risks Selection Risk The risk of suboptimal selection decisions Transition Risk The risk of individuals not transitioning well into new roles Portfolio Risk The risk of poor deployment of talent against business goals Vacancy Risk The risk of critical leadership positions being vacant Readiness Risk The risk of underdeveloped successors

  13. Philosophy behind our leadership and assessment work

  14. “Flow” • “Conversion”

  15. Flow Our goal is to help Individuals stay in ‘flow’; the state where the challenges they face match the capabilities they have. Boredom Anxiety Underperformance • Impacting…… • Wellbeing • Decision making Capability Flow Stress Anxiety Underperformance Challenge Decisions made out of ‘flow’ will be less effective and may have significant organisational and individual consequences Adapted from Csikszentmihalyi (1975)

  16. What we are capable of….. INNATE CAPABILITY How we make what is possible, real….. CONVERSION What we actually do….. PERFORMANCE Conversion of Capability • Innate Capability • (What we are capable of) • The traits we are born with as well as capabilities we have developed over time through learning and experience • Conversion • (Turning capability into real performance) • Internal factors such as self-insight and the ability/orientation to learn and adapt • External factors such as the individuals background, work experiences, their manager. • Performance • (The performance we actually see) • Our effectiveness in delivering the things that are expected of us.

  17. 4. Our Assessment Model

  18. The level of complexity of the work to be done • Converted capability in the individual to perform

  19. Levels of Complexity Our model recognises seven levels of work and capability, of which the first five are likely to be a focus for senior hiring in Prudential: v v

  20. INNATE CAPABILITY CONVERSION PERFORMANCE Conversion Led Capability Conversion consists of: • Learning Agility: • Demonstrating the ability (over a sustained period) to build insight and learn from experiences • Articulating positive and negative experiences in terms of development opportunities • Intrinsic Factors: • Our own values • Our life choices • Our motivation • Extrinsic Factors: • Our upbringing • Our work experiences • Our environment

  21. Assessing the Individual • Modes • The Tripod

  22. Modes An individual’s judgement develops naturally over time and this growth can be broadly predicted, providing us with an indicator of potential. • ‘MODES’ suggest likely development trajectories • Individuals in each mode share common ways of thinking

  23. The Tripod Temperament Having a sense of purpose, identity & commitment 2 People Focus Task Focus Shaping Understanding & influencing your stakeholders 1 3 Intellect Understanding the context & knowing what to do

  24. IntellectUnderstanding the context & knowing what to do Intellect consists of three sub dimensions Creative Thinking Problem Analysis Judgement Intellect Problem Analysis:The capacity to identify issues or problems and develop solutions in a rigorous way Creative Thinking: The capacity to identify new perspectives within which to understand a situation Judgement:The ability to deploy thinking in ambiguous and increasingly strategic situations

  25. TemperamentHaving a sense of purpose, identity & commitment Drive Resilience Temperament consists of two sub dimensions Creative Thinking Problem Analysis Judgement Temperament Drive:The desire to influence or change your world, leaving behind a ‘footprint’ Resilience:The capacity to work through obstacles and setbacks without losing momentum

  26. ShapingUnderstanding and influencing your stakeholders Drive Resilience Shaping consists of two sub dimensions Creative Thinking Range of influence Problem Analysis Judgement Empathy Shaping Range of Influence:The capacity to operate a range of interpersonal skills, to actively influence others Empathy:The capacity to build insight and appreciation of own and others perspectives

  27. Dynamics of the Tripod Different capability profiles suggest different behavioural dynamics…. Execution Focusing on the personal delivery of objectives Leads by…Role modelling and setting an example for others to follow Mobilisation Focusing on inspiring and motivating others Leads by…Providing an engaging leadership message for people to believe in Mobilisation Execution Consultation Consultation Focusing on building a shared understanding Leads by…Working with others to facilitate an outcome

  28. How have we combined levels of complexities with the Tripod to our capability framework? 5 4 3b 3a 2 1 Temperament Timescales Environment Long term Short term Certainty Ambiguity Exploring possibilities for the future of an organisation Operational decisions (2-5 yrs) Task based decisions (Immediate to 1 yr) Working with well defined tasks and processes Finding solutions to systemic problems Strategic decisions (5 yrs+) Intellect Shaping 1 1 2 2 3a 3a Personal 3b 3b Personal Delivery 4 4 5 5 Delivering through others Reach Delivering through an organisation Organisational

  29. How we integrate assessment into our performance and development agenda

  30. The Integrated Approach 1 * Select for Current & Future Roles • Common approach/toolkit for all senior hires & Raw Talent • Hiring for Performance & Potential Organisation Development 1 • Structural changes • New roles to leverage individual capability • Strategic sourcing of capability Identify Potential Successors & Talent • Groupwide Succession Planning and Talent Review process 2 * Test Succession Hypotheses • Structured three day assessment and development programmes 3 Create targeted development plans • Focusing on individual development & organisational benchstrength • Could include: 4 * Using the Prudential Capability Frameworks

  31. The Integrated Approach 2 Group Leadership Review • We PLAN succession for key roles and identify our longer term talent pipeline • We TEST talent hypotheses and adjust plans accordingly • We TRANSFER CAPABILITY as LDP Participants become MDP and Momentum Assessors Leadership Development Programme Management Development Programme Momentum Assessment Individual Development Plans • We FOCUS DEVELOPMENT on individual ‘high-touch’ plans and activity • We CONNECT Executive Development ‘Cadres’ to build talent networks Executive Development Programmes

  32. Some Further Thoughts, Opinions and Biases……… • It’s about outcomes and outputs, not inputs • It exists at every level of the organisation • There are many ways to lead successfully; we do not endorse a particular style • Effective leaders……… • have willing followers • have a teachable point of view • know which contexts suit them best • have a genuine value for diversity • create leadership teams • build leadership into every level of the organisation • Effective leaders create organisations which are: • Focused on achievement • Curious • Supportive • The Prudential Tripod recognises three fundamental approaches/themes to leadership: • Execution (Read ‘Execution’ by Larry Bossidy) • Mobilisation (Read ‘The Leadership Engine’ by Noel M Tichy) • Consultation (Read ‘Servant Leadership’ by Robert Greenleaf) • All these approaches work……but they bring different advantages and risks depending on: • the dynamics of the Tripod for the individual • the level of complexity facing the institution (look at Elliott Jacques on Levels of Work), and • how they are managed. • As Leaders you need to: • Gather insight into your own preferred style and approach • Understand its strengths and vulnerabilities • Learn to adapt your preferred style to different situations so as to leverage strengths and mitigate risks • Take responsibility to ensure that the organisation is not exposed to the impact of the unmanaged/unmanageable vulnerabilities • At Prudential we are developing an integrated approach to: • Senior Selection • Individual performance • Potential assessment • Leadership, and • Organisational climate

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