How To Turn Wasted Talent Into Killer Leadership

Presented by: Carmine DomanicoHR Principal

Atticus Human Resourcewww.atticuscanada.com

Reduce Business Risk. Right Now.™

Talent Management (TM) & Mergers

Didn’t you get the APP?

Hurdles to Success

• Lack of accountability• Gaps in talent development capabilities• Lack of alignment between human capital and business strategy• Inconsistent execution of talent programs • Limited use of meaningful analytics

Why do 74%* of Mergers FAIL?• Returns for the parent company don’t achieve expectations – paid too

much?• Implementation fails to effectively deal with people and cultural issues • Significant differences between the attitudes and values of the two

companies • A merger or acquisition is an extremely stressful process for those involved• Research shows that a firm's productivity can drop by between 25 and 50

percent while undergoing such a large-scale change• Undue attention to the short-term legal and financial considerations and

neglect the implications for corporate identity and communication, • Managers and key contributors, suddenly deprived of authority and

promotion opportunities, one survey found that nearly 50% of executives in acquired firms seek other jobs within one year.

• Personality clashes between executives in the two companies.

Source: Heidrick & Struggles – January 2010

Failure to strategically address the Talent Management implications in the transaction:

“Many organizations fail to realize that their leadership team may not be up to the job of

leading a larger and more complex organization”*

Source: Heidrick & Struggles – January 2010 – Thomas Kell

Talent Management

• Talent management is a complex set of processes designed to manage a company’s greatest asset: People

• The applications needed to support these processes include: recruitment, performance management, competency management, succession management, career development and compensation.

Talent Management

• Talent management as a strategy requires an organizational commitment to:– Attract, Acquire, Manage, and Measure the talent needed to

achieve a company’ business objectives.

• Yet the reality is that most companies are unprepared for the challenge of finding, motivating and retaining capable workers.

Talent Strategies by Industry

Source: Bersin & Associates: Talent Management: Benchmarks, Trends,& Best Practices June 2010

7 Obstacles to Good Talent Mgmt

2007

War for Talent – Yes it is still here!

• Years after McKinsey conducted its War for Talent research, the 1997 study drawing attention to an imminent shortage of executives, the problem remains acute— and if anything has become worse – at all levels.

• Companies face a demographic landscape dominated by the looming retirement of baby boomers in the developed world and by a scarcity of young people entering the workforce.

• Meanwhile, question marks remain over the appropriateness of the talent in many emerging markets.

Driving Business Goals with TM

• Top talent drives superior performance• Talent and Business management are more and more

integrated today• Investors and board members are more interested in

how their companies are developing the talent pool• Managers must ensure their people are aligned to

business goals and objectives

Why care about retention?• Retention is a business issue and losing one or

two key people can have a significant impact on the success of your acquisition– this applies to your both new and existing employees

COLT ©

WeightingsOperational

StaffManagerial

LevelSenior Level

Employee Weighting

1.0 1.8 1.85

# of weeks of vacancy

10 weeks 14.5 weeks 19 weeks

Cost of Losing Talent© (COLT©)

Employee EBITDA * Employee Weighing/52 * Number of weeks of vacancy = COLT

Lessons worth learning

• Understand who is valuable and who isn’t • Don’t underestimate the need for processes and tools• It is challenging to retain and motivate the survivors• Decisions must be made quickly • Processes must be humane and risk must be mitigated• Resources are limited

How do you know who to keep and who to lose?

• A critical analysis must be undertaken• Principle: everyone cannot be treated in the same way• All people not equal when it comes to skills and ability to

create a competitive advantage for you

Differentiating Human Capital

Professional Partners Strategic CapabilitiesUnique Skills but can be sourced externally firm through specialty firms.

Unique skills and/or intellectual knowledge critical to your business

Contract Candidates Operational PartnersHighly specialized skills, but not unique to your business. Can be outsourced.

Skills are less unique but who are critical to running your business operations.U

niqu

enes

s of

Hum

an C

apita

l

Competitive Advantage of Human Capital

Low

High

Source: Trinet White Paper: Employee Retention June 2010

Performance Potential

Evaluates leadership potential: the potential to take on larger responsibilities..

Who must we keep/lose?

Likely Potential Current Performance

Bottom 10% Middle 70% Top 20%

Top: 20% Turn 4 2 1

Meet: 70% Growth 7 5 3

Low : 10% Mastery 9 8 1

Source: Trinet White Paper: Employee Retention June 2010

Risk Analysis

Who’s at Risk?

Value to Business Risk of Leaving

Low Medium High

Low

Medium

High

Results then lead to appropriate strategies to deal with identified risks.

Bottom Line: Business leaders think about these factors – uniqueness, performance, potential and value – because understanding them leads to the desired actions necessary to properly retain people and increase the success of the merger .

Source: Trinet White Paper: Employee Retention June 2010

Impact of a Fully Integrated TM System• Half the rate of turnover• Twice the rate of promotions• 80% better at developing great leaders• 92% better at creating a pipeline of ready successors• 71% higher scores on employee engagement• 68% greater ability to plan for future talent needs• 62% higher scores on developing employees

Source: Bersin & Associates: Talent Management: Benchmarks, Trends,& Best Practices June 2010

Some TM Successes

Organizations that are making significant strides in managing talent are differentiating themselves in the following ways:•Depth and consistency of practices•Higher commitment for talent development•Progressive and innovative practices•Embed their talent strategy into the overall strategic planning process•Start by acknowledging challenges

The Beginning: Creating a Talent Strategy

• Talent planning• Integration strategy• Change management strategy• Measurement approach

10 best practices for companies that want to adopt and progress their talent management strategy

1. Facilitate Process-Driven Succession Management

2. Promote a Transparent Process and Data

3. Align Capabilities with the Business Strategy

4. Hold Leaders Accountable

5. Broaden the View of Talent

6. Implement the Same Process at All Organizational Levels

7. Create a Culture of Sharing Talent

8. Integrate with Talent Management

9. Establish a Measurement Strategy

10. Recognize That Technology Is a Tool and Not a Solution

Atticus Canada Inc.1 First Canadian Place, Suite 3700

100 King Street WestToronto, ON

M5X 1C9

Carmine Domanico: 416 520 5448 cdomanico@atticuscanada.com

Reduce Business Risk. Right Now.™