The Perfect StormSucceeding in a Difficult Market

Bill CarpitellaPresident

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A Gathering Storm

Retiring Baby Boomers

Inexperienced New Talent

Market Downturn

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Fewer Leaders with Less Down-Market Experience

US Census Department

Today’s retiring leaders

Their successors

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Tomorrow’s Leadership

• Your new leaders and leaders’ successors came of age in a strong market

• These leaders number nearly 15 million fewer than those they replace

• Experienced leaders are retiring in droves

• They take with them survival skills and lessons learned from the 80s

’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04 ’06 ‘07

NAHB’s Home Builders IndexSeasonally adjusted80

60

40

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What Are Today’s Leaders Good At?

Drive for Results

Ethics and Values

Problem Solving

Decision Quality

ApproachabilityAction

Oriented

Customer FocusPerseverance

What’sMissing?

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Establishes clear directions; distributes appropriate workload; brings out the best in people

Cope w/ change; shift gears comfortably; decide & act without having the total picture; handle risk

Launch creative ideas of others; facilitate brainstorming; project how ideas will play out

Future-oriented; accurately anticipate future consequences/trends; broad knowledge & perspective

Communicates an inspiring vision/sense of purpose; optimistic; rallies support; inspires and motivates

Blends people into teams; creates strong morale; fosters open dialogue; lets people be responsible for their work

Create climate where people want to do their best; empowers; invites input

Difficult Markets Demand Different Skills

Dealing with Ambiguity*

Innovation Management*

Strategic Agility*

Managing Vision & Purpose*

Building Effective Teams*

* One of the Top 8 Skills: most critical AND most rare

Motivating Others

Directing Others

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Gallup says don’t waste your time — focus on selection

Lominger says it depends. Not all behaviors are equally difficult to learn

We say…use both

Can You Develop Behavioral Skills?

Action oriented Easy

Motivating others Moderate

Patience Harder

Understanding others Hardest

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Do Behavioral Skills Drive Performance?

• Drive for Results

• Customer Focus

• Motivating Others

• Conflict Management

• Perseverance

Yes

• Listening

• Compassion

• Approachability

• Ethics & Values

• Humor

No

Answer: Some do and some don’t

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Implications

• Hire for behavioral skills that:

– Are hardest to learn

– Correlate to performance

• Develop behavioral skills that:

– Are easiest to learn

– Correlate to performance

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“Weather-proof” Critical Roles

Utilize star retirees or outside consultants to coach leaders and supplement their skills

Create a mentoring program to transfer knowledge before retirement

Use retiring stars as a template for new hires

Coaching

Mentoring

Success Profiles

Whether new hires or developing leaders, there are ways to ensure success:

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Addressing Skill Gaps: Create “Success Profiles”

• Define combination of behaviors and skills observed in your key high performing retirees

• Model after your best

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Foundation for Excellence

Use Success Profiles to:

• Interview

• Manage Performance

• Train and Develop

• Promote

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Hiring a Sea-Worthy

Crew

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Innovative Sources for New Talent

• Internal network

• New hires

• Build a database

• Become a known quantity of excellence

• Use Monster/Career Builder as network opportunity

• Mandate a sphere of influence

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Recruiting for the Business, Not Just the Position

• Define business competencies

• Translate into functional competencies

• Utilize Interview Architect to match candidate with required competencies

• Test for additional validation

• Define culture and correlate with candidate persona and values

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Know What You’re Looking For

• Avoid generic job descriptions that focus on price-of-entry skills

– Often based on last employee (successful or not)

• Tie strategy and culture to job description

• Consider what kind of person suits the culture

– What qualities do high performers share?

– What will it take to meet short term objectives? (6mo–1yr)

– What would excellence in this position look like?

• Build on success profiles

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Implications for Hiring

• Once you know who you’re looking for, how do you select them?

– “Gut feel” is only 2% better than flipping a coin

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Why Not Hire For Experience

• May have learned wrong attitude/behavior from an inferior competitor. Retraining is more difficult.

• Harder to change behavior than train for experience.

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Why Not Hire For IQ

• Intelligence doesn’t predict long-term success

• IQ is the “price of entry”

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Hiring the Right People

question

What makes the difference in high performance people?

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Hiring the Right People

Common sense is twice as predictive of success as IQ

answer

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IT IS NOT

• Experience

• Technical/functional Skills

• IQ

IT IS

• Attitude/Behavior

• EQ (common sense)

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Hiring the Right People

Why Hire For Attitude

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• Attitude & behaviors get employees in trouble – not technical/functional skills

• Behavior is harder to change/train in most cases

• Can you name a company that hires for attitude?

conclusion

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Assessing Behavioral Skills in Hiring

Research Shows:

Casual, 1-on-1 interview .20

Reference checks .26

Assessment centers .36

Panel interviews .37

Ability testing .53

Behavioral structured interviews .70

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Behavioral-Event Interviewing

Sample question, Dealing with Ambiguity:

• Tell me about a time when everything was up in the air…

• Tell me about a time when you took a significant personal risk…

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Developing the Skills Your Strategy

Demands

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of adult learning is through experience

of performance success correlates directly to behavioral skills

70%

40-60%

What Have We Learned About Developing Adults?*

Behavioral skills get people in trouble

*Center for Creative Learning studies

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How to Develop Behavioral Skills

• Focus first on honest feedback and improved self-awareness

• Adults learn by doing (experience). They must be coached to try new behaviors during daily interactions.

– The best way is stretch assignments (reaching out of comfort zone)

• Simply imparting new knowledge changes nothing

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Challenges for Supervisors

• Tend to hold on to marginal talent too long

– Don’t like confronting direct reports or giving tough feedback

• 30% of employees are blocked learners (resist all change)

• Out of 67 leadership skills, developing direct reports is dead last in skill level

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Developing the Individual Isn’t Enough

• Organizational processes are needed to hold leaders accountable for upgrading their talent

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Solutions For Upgrading Your Talent

• Create “success profiles” modeled after your best people

• Create an annual talent review process that requires you to force rank your talent on both performance and potential

• Hire for behavioral skills, not just functional/technical skills

• Include behavioral skills in performance management

• Consider a 360° confidential feedback process for high potentials. Require written plans targeting individual development.

• Provide coaching, mentoring and follow-up for high potentials

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Conclusions

• The tactical, strategic and economic impact of people systems can be significant

• Focusing on your staff’s performance can be profitable and drive revenue

– Excellence as an expectation

• Aligned people systems add to the bottom line

• Hire for attitude – train for skill