dr martin factor - meeting tomorrow’s business challenges: global leadership forecast 2014/2015

© Development Dimensions Int’l, Inc., MMXIV. All rights reserved. 1

Global Leadership Forecast 2014|2015

Ready-Now Leaders: Meeting Tomorrow’s Business Challenges

Why Are We In the Dark?

Going Nowhere Fast


$50 Billion/ year Spent on Leadership Development

Worldwide


Africa Middle East 2%

7th and Largest Study so Far Since 1999


Keeping CEOs Up at Night

Human Capital Customer Relationships

Innovation Operational Excellence


Leaders who are very prepared to meet these challenges.

27% HR 9%

45%

26% 33%

CEOs Rank Top Four Challenges1

Sources: 1The Conference Board, 2014; 2 Self-reported leader readiness to address these challenges; Global Leadership Forecast 2014|2015

Quality of Leadership


40% 2014

Leader Rating

38% 2011 37%

2009

25% 2014

25% 2011

HR Rating

46%

Critical Positions That Can Be Immediately Filled


18% 2011 15%

2014

Ready-Now Leaders for the Future

10 © Development Dimensions Int’l, Inc., MMXIV. All rights reserved.

Why the Leadership Quality Deficit? 1.  Business Context is Volatile, Uncertain, Ambiguous &Complex2.  Frenetic Pace with Attention Deficit and overstimulation (not to

mention caffeine) in an universe of information overload3.  Wrong people identified to lead4.  Development content not relevant to Business Context5.  HiPo Pools don’t have right focus, correct size, resources, and

support to ensure their success6.  Learning is not blended and in the correct ratio for it to be

integrated and seamless7.  Managers don’t provide dev. Support during skill acquisition

and Practice8.  Insufficient time for application, reflection, and feedback

(harvesting eggs without taking care of the chicken!)

Outcomes That Count


Leader Perceptions of Effectiveness/Quality of leadership development programs

Leader level of engagement and retention

Current quality, future bench strength

Composite financials: profitability, earnings per share, 5-year rate of return to investors, and stockholder equity

SO WHAT ?

What Happens When You Get It Right?


+ 4x


Financial Impact

4.4x

11x

2014 2014 SO WHAT ?

+ 6x


Financial Impact

7.4x

8.8x

2011 2014 SO WHAT ?


5 Key Insights

1

HOW LEADERS DEVELOP

2

ENGENDERING DIVERSITY

3

THE HI-PO TALENT POOL

4 5

SOFT SKILLS EQUAL

HARD IMPACT

THE {new} ROLE OF HR

THE {new} ROLE OF HR


What Role Do HR Think They Play? Ratings by those in HR:


•  Develops and administrates policy

•  Ensures compliance •  Source of HR expertise

when asked

Reactor Partner

•  Embedded in business •  Resolves talent issues •  Supports rollout of talent

management initiatives

22% 60%

HR

Partner

•  Embedded in business •  Resolves talent issues •  Supports rollout of talent

management initiatives

60%

What Role Does HR Play?


•  Develops and administrates policy

•  Ensures compliance •  Source of HR expertise

when asked

Reactor 22% Anticipator

•  Align talent capabilities with business strategy

•  End-to-end talent management architecture

•  Interpret talent trends and translate into opportunities

18%

HR

Talent Planning Intersection with Strategic Planning


STRATEGIC PLANNING PROCESS

Early/Strong Connection

Moderate/Late Connection

Weak/No Connection

5% Reactor 26% Partner 43% Anticipator

HR

Talent early links to Strategy Boosts Financial Performance


Bottom 20%

6.2x

Top 20%

SO WHAT ?

Then We Asked Senior Leaders What They Thought of HR…

22%

18%

43%

37%

20%

…While Most Partners Over-Estimated, Anticipators Were Much More Accurate in Rating Themselves as Senior

Leaders Did

60%

Reactor

Partner

Anticipator

Reactor

Partner

Anticipator “Relevant”

Key Attributes of Anticipators

1. Possess strong Strategic Business Acumen; Students of the Business

2. Creativity and innovation as top skills 3. View Learning as a journey 4. Ensure Managers accountable for developing leaders 5. Advanced analytics 6. Accommodate geographical and cultural differences


NOW WHAT !

HR

As a Result: More ready to meet CEO human capital challenge!!!

How Leaders Develop


70 : 20 : 10 Myth Meets Reality


70 : 20 : 10 On-the-Job Learning

(developmental assignments, special projects, task forces)

Learning from Others

(coaching by managers/mentors, shadowing others,

networking)

Formal Learning

(training courses, books/articles,

diagnostic assessments)


Leadership Development Mix




WHAT NOW #



SO WHAT ? Isolated companies whose leaders rated their LD programs as having highest quality

Top Barriers to Learning Make the Job more like the course and the course more like the job!!!!!


NOW WHAT !

Informal Learning Formal

Learning


Organizations Using Learning Journeys Are:


Bottom 20%

2.5x

Top 20%

3.4X 2.9X

SO WHAT ?

How Leaders Develop Engendering Diversity



•  Women in senior management: 24% in 2007, 24% in 2013*

•  Women in Fortune 500 CEO positions: 14.4 percent in 2010, 14.6 percent in 2013*

•  Wage gap has not closed in 15 years; Women expect to make less

*Sources: 1Grant Thornton International Business Report; 2*Catalyst Statistical Overview of Women in the Workplace

Skill Gap Fallacy


Skill Gap Fallacy


WHAT NOW #

•  More International Assignments

Where Are the Gaps?

•  More Confident


WHAT NOW #


SO WHAT ?


The Hi-Po Talent Pool

66% HAVE HI-PO PROGRAMS

74% NOT VERY EFFECTIVE

WHAT NOW #


Drivers of Hi-Po Program Quality Rank Ordered

1.  Objective assessment data on hi-po’s capability/potential

2.  Mentoring/coaching program for hi-pos

3.  Performance in developmental assignments is carefully evaluated

4.  Measure hi-po program effectiveness

5.  Identities of hi-pos revealed to organization

6.  Includes all levels of leadership for hi-po programs not just senior managers


High-Potential Management


We measure the effectiveness of programs for developing high-potential leaders.

We have a mentoring/coaching program for high-potential leaders.

We collect objective assessment data on high-potentials’ capabilities, potential, and readiness.

Senior management is held accountable for identifying and developing high-potential leaders.

Percentage of Organizations Responding “TRUE”

IMPACT on Development

Viewed by High Potentials

47%

55%

77%

84% WHAT NOW #

HR

Most common practices are not the ones where HI PO’s see the most value

Organizations With Hi-Po Programs Are:


4.4X 4.9X

Bottom 20%

3.6x

Top 20%

SO WHAT ?

Analytics: From Sight to Foresight


Human Capital Analytics

19 out of 22 CEO Talent Strategies,

Conference Board 2013

#1 CEO HOT Button BIG DATA


Analytics Use and Effectiveness

Benchmarking externally

Gathering business impact metrics

Data to design/optimize TM programs

Using data to forecast future talent needs

Gathering results metrics

Benchmarking internally

Gathering efficiency/reactions metrics

Not done at all Done effectively

66% 13%

49% 21%

46% 22%

45% 23%

44% 24%

43% 27%

38% 30%

47% DO

NOTHING/ INEFFECTIVE

5% DO IT

ALL WELL

WHAT NOW #

51 HR © Development Dimensions Int’l, Inc., MMXIV. All rights reserved.

Analytics Use and Effectiveness

Benchmarking externally

Gathering business impact metrics

Data to design/optimize TM programs

Using data to forecast future talent needs

Gathering results metrics

Benchmarking internally

Gathering efficiency/reactions metrics

Not done at all Done effectively

WHAT NOW #

66% 13%

49% 21%

46% 22%

45% 23%

44% 24%

43% 27%

38% 30%

© Development Dimensions Int’l, Inc., MMXIV. All rights reserved. 52 HR

Impact of Leadership Analytics


NOW WHAT !

HR

30%

27%

SOFT SKILLS EQUAL HARD IMPACT


Time Spent Interacting vs. Managing


Preferred Time Interacting vs. Managing


WHAT NOW #

Asked Leaders What their Organizations Value


WHAT NOW #

“Managing is a big part of my time—

coaching and team development needs

equal attention”


“Provide more time for one-on-one

interaction versus just focusing on daily tasks”

“Decrease focus on managing

tasks and increase importance placed

on managing people”

Organizations That Value Interacting Benefit


2.0X 3.5X

Bottom 20%

2.0x

Top 20%

SO WHAT ? It’s impossible to increase Employee

Engagement without ENGAGING!

Key Takeaways �  Anticipate where your organization is going�  Identify the right people to lead�  If developing HiPo Pools, ensure you have focus, correct

size, resources, and nurture these seeds�  Ensure the Relevance of the development content to the

Business Context�  Blend learning in the correct ratio so its integrated and

seamless�  Ensure Managers provide dev. Support during skill

acquisition and Practice�  Provide time for application, reflection, and feedback�  Measure the right things in the right measure

dr martin factor - meeting tomorrow’s business challenges: global leadership forecast 2014/2015

Business

x development dimensions

development content

hr rating

leadership quality deficit

leader rating

financial impact

reported leader readiness

business context5