Leadership Development: Investing by Chance or Choice

1. Leadership Development: Investing by Chance or Choice Tracy Bosch, Senior Consultant, Hay Group Tracy.Bosch@haygroup.com

2. Capability Assessment Organizational EffectivenessEmployee SurveysPerformance ManagementExecutive Reward Reward Information ServicesJob Evaluation Reward StrategiesLeadership Transformation Talent Management www.haygroup.ca www.haygroup.ca Hay Group helps organizations workby turning their strategies into reality.

3. A massive leadership and talent shortage … an issue we are all experiencing • 75 million US employees eligible to retire in the next 5-10 years. Only 45 million people will replace them. • US Census Bureau • 50% to 75% of current senior management will be eligible for retirement by 2010. • Forrester Research • 97% of organizations report significant leadership gaps – more than 40% say the gaps are “acute.” • Corporate Leadership Council • 46% of the Executive category indicate they plan to retire in the next 5 years • 2005 Federal Public Service Employee Survey • “The UK is running out of head teachers.” • National College of School Leaders and Hay Group

4. Defining, identifying, and developing leadership talent • Reflect for a moment … and share with your neighbours … • Where would you place your bets when it comes to the practices that have the biggest impact on developing “more, better leaders, faster”?

5. The Top Practices that predict “more better leaders” • Having leaders at all levels who focus on creating a work climate that motivates employees to perform at their best • Ensuring that the company makes leadership development a top priority • Providing training and coaching to help intact leadership teams, as well as the individual leaders, work together more effectively • Rotational job assignments for high potentials

6. The Top Practices that predict “more better leaders” • External leadership development programs for mid-level managers • Web-based self study leadership modules for mid-level managers • Executive MBA programs for mid-level managers

7. Timing matters - what NOT to invest in when it comes to developing quality leaders • Outdoor activity-based programs at all levels of management • Paper-based self-study leadership modules at all levels of management • Job-shadowing for Senior Managers • Web-based self-study for Senior Managers • Executive MBA for Senior Managers

8. Actively manage the careers of high-potentials Have a formal process for identifying individuals whoare likely to assume leadership roles in the future Have career tracks for high-potential professionalsor individual contributors that are separate Have formal programs that are designed toaccelerate leadership development Included marketing as an organizational functionfrom which they get their high-potentials Mid-level manager positions are filled from within Senior-level manager positions are filled from within CEOs are promoted from within What differentiates the 20 Best Companies for Leaders? Percentage Shown Top 20 companies Rest of the companies

9. Potential – for what? Insights into selecting the right leaders to secure your competitive future.

10. In small groups, spend 5 minutes discussing the following question: What growth factors best predict high potential? • Where does your organization spend its leadership development budget? What is your ROI? • Now, ask yourselves: • If you had a limited leadership development budget, what measurable characteristics would predict the best return on investment?

11. The “Growth Factors” • Thinking beyond the boundaries • Curiosity and eagerness to learn • Social understanding and empathy • Emotional balance

12. Growth Factors Derailers FutureRoleRequire-ments Person’s CurrentAbilities Potential = X The “Potential Equation” • Most organizations can assess if candidates are ready and willing to do a certain role, our approach focuses on whether they are in fact also Able • Potential is the fit between a person’s current capabilities and possible future roles, taking into account the person’s longer term capacity for personal growth and possible derailers.

13. Five key steps to identifying and managing potential • Know what you need from people • Identify long-term potential through the growth factors – not just job specific abilities, or past performance • Potential – for what? • Fulfillment of potential • Create enabling systems to effective talent management

14. Know what you need from people To manage risks and evaluate potential, you must understand: Strategy, business model, structure and culture – the environment in which work gets done BusinessContext Risks/ Benefits Jobs in context of the business, and implications for role requirements The capacity of your people in relation to role demands Work People

15. Potential – for what?Manage Stretch to Avoid Talent “Snaps” Role Profile Collaborative Roles Operations Roles Advisory Roles High Complexity of Strategic Challenges Medium ModerateRisk Extreme Risk Low

16. Interim Job Fulfillment of Potential: Stretch vs. Transition CEO CEO CEO Job Size & Complexity J. Kramer SVPs/VPs RVPs/Directors

17. Create Enabling Systems for Effective Talent Management • Increase your odds of success: • Ensure your talent investment … • Inject objective data into your decision making processes supporting the best deployment of talent • Create on-boarding plans for moving individuals into key positions • Provide necessary coaching, development,and support to ensure their promise is fulfilled

18. Questions, comments, and discussion

19. Leadership Development: Investing by Chance or Choice Tracy Bosch, Senior Consultant, Hay Group Tracy.Bosch@haygroup.com