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Talent Management

The Common Flaws of Competency Frameworks

The Common Flaws of Competency Frameworks

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There are benefits and limitations of Competency Models that are often not understood in their implementation. The top companies like Bank of America, General Electric, IBM, Lufthansa, PepsiCo, Pfizer, Royal Dutch Shell share one thing in Common – identifying and developing leaders through the use of competency frameworks.  They highlight the one key insight, which is that these companies do not assume competency frameworks alone will shape the perfect leader, but that they play a critical role. The Benefits And Concerns Of Competencies

Some thinking by Conger and Ready is slightly limiting.  They define 3 C’s.  “Clarity” the competencies provide clear expectations too the employees.  “Consistency” the same competency applies regardless of where in the organisation you work. However, the employee may exhibit the right competency for the culture in that region, but it would be inconsistent from the global competencies. “Connectivity” it is a common tool that binds together recruitment, development, reward and recognition.

What I have seen in that some companies have too many competencies, which can be too “Complicated.”  “Conceptual” the development of the competencies is often based on longitudinal studies of a range of leaders that identifies the ultimate mix or recipe.  In some competency frameworks it does not recognise the subtle differences that are needed to lead in different cultures.  The result is a fictional “what great looks like” leader, but in reality very few can meet all competencies.  Other commentators criticise Competency Frameworks as unrealistic role models (Lester 1994) (Bell 2002) (Brundett 2000) (Bolden 2005).

So What Do We Do? 

We need to address the application of frameworks in organisations.  The application needs to take into account that we are reviewing: humans, in different cultures, contexts and situations.  This problem is how to better understand the variation of competencies in different cultures away from the norm.  For example, how important is the ability to influence downwards in a very autocratic culture. Baldon 2005 states “leadership cannot be dissociated from the temporal and situational context…Leadership occurs in a situation and cannot be distilled into a number of constituent elements.  It is in a constant state of flux and hence can never be captured with a static framework.” As Organisation Development specialists we need to customise our frameworks to be able to perform in the different cultural nuances, and we need to regularly review and update frameworks to deliver the desired organisation.

The major weakness of Leadership Competency Frameworks is the focus on ‘evidence based’ performance to construe competencies ignores the subtler, but necessary dimensions of a leader, like relational, ethical, and emotional.

Finally competencies focus on individuals and ignore the social surroundings and connections, which play a part in the success of a leader, for example, the role of followers.  Baldon analysed 29 competency frameworks and cross-referenced it with what leaders identify as important.  8 of the competency frameworks mentioned the ability to listen and none referenced the role of the “follower.” Contingency and Situational leadership are not considered barriers to an individuals ability to lead in different circumstances.  Baldon compared the 29 Frameworks to the Windsor Leadership Trust to identify: personal values and vision are absent in one third of frameworks.  Trust, ethics, inspiration, adaptability, and resilience are absent form two thirds of frameworks.  Personal beliefs, moral courage, humility, emotional intelligence, coping with complexity, personal reflection and work life balance are not mentioned in 80% of frameworks.  Baldon suggests that the gap in the moral and emotional concerns is down to the inability to predict these qualities.  “Making reference to the less 'rational' concepts of morality and emotions might be seen to undermine their ability to predict and prescribe managerial behaviour. Yet, at the same time, their failure to do so greatly undermines their utility in the real world.”  Baldon concludes metaphorically a competency framework is a two-dimensional map, and that the user needs to know how to read it.

The implementation and use of competency frameworks appears to be a common flaw.  Competencies despite the benefits and concerns clearly have a value.   However they are just one way of looking at and developing leadership.  The Organisation Development Expert needs to ensure that they are designed, implemented and applied correctly in the organisation.  It is important to regularly review them as fit for what the organisation requires, and that other tools for Talent Management are utilised in the company’s toolbox.

Review your Employee Value Proposition in a Bear Market

Review your Employee Value Proposition in a Bear Market

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In a bear market some employers are too comfortable with retaining their employees.  Sure some people are aiming for Job Security.  The UK only just narrowly missed a triple dip recession with growth figures of 0.3% in the 1st quarter 2013.  Although the US economy has expanded 2.5% in the 1st quarter of 2013. Economic uncertainty has in many cases damaged the employment value proposition (EVP). The question used to be are you comfortable with change, and many would say yes.  Today, in a rapid changing world some organisations are constantly redefining structures, programmes and people as they scramble in what is for them unchartered territory.  There is the question of course if they have the right leadership, because the constant change has created a fatigued workforce.

What Organisations Development professional needs to do is look at what is the EVP after the desired organisation is in place to navigate successfully in the changed economy.  What capabilities are required, who are the key Talents, and what can we realistically offer those people now and in the future.

  • Package: Understand our total offering in compensation.  Money is no the only factor.  When prospective employees see the total EVP as attractive there is less emphasis on the financial remuneration.
  • Development Opportunities: What opportunities does the new EVP offer?  What development would you have, is their reduced time to market so candidates get to work in Highly Effective Collaboration Teams.  Is there a high growth rate in emerging markets, so there are international experience and exposure opportunities?  Or is there organisational stability?  All of these factors can be positive to different people what is important is to not over promise.
  • Heart: What is your organisation’s heart made up of?  Do you live and breath entrepreneurship, are you industrial, are you leading environmental change or technological innovation.  Ask your employees and be clear on that to attract those who also have it as a passion, and at the heart of what they do.
  • Life: What is the work that is being offered?  Think about the total package: work-life balance or flexibility, family friendly, location, alignment with job interests, what difference the organisation makes, business travel.  We do not exist in separate components, we need to understand how work will combine with our life.
  • Mind Set: What is the culture? Is it homely? Is it like coming in to play everyday, challenging, collaborative, great quality people, inspiring leadership.  Again ask you employees and also your new recruits.

All of these things will help you to define a better EVP in a Bear market where you can reach those people who are not necessarily looking to move jobs, retain your current employees and be ready for when the market does turn.

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Globalisation – The East Re-financing the West Some Thoughts for OD

Globalisation – The East Re-financing the West Some Thoughts for OD

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Back when I was consulting it was all about the BRIC economies.   We outsourced like hell to get economies of scale.  Business Process Outsourcing continues to attempt to make things seemingly cheaper.  There has been mixed success with some of these business models.  Where the models flopped the key flaw was the integration of people into the process, and misunderstanding of culture.  To realise the ROI many companies have to tackle this issue. Companies like Nespresso have bucked the trend with manufacturing in Switzerland.  Switzerland is not a cheap place to base manufacturing, but the quality, consistency and productivity has been factored into the business case. Those tiny little capsules of premium coffee lock the customer in, and they are happy to pay £4.80 a pack.  In 2010 they sold 6.5bn capsules according to Bloomberg.  The luxury at home coffee market is estimated to be worth £8bn, and Nespresso is still in double-digit growth but now competition is fierce.

Before we speculate on some implications for OD professional, it is important to note the new trend.  Those countries that the West naively outsourced to do the manufacturing of the whole product (eeek) or components, and non-strategic fulfilment of the processes, are quickly becoming serious technological contenders.  For example, take Tata Steel and Mittal Steel who bought Corus and Arcelor two of the EU’s biggest steel companies.  Our political leaders like David Cameron are going cap in hand to the Chinese for help.  The west is losing dominance of its own markets.  At the same time China and India have the two biggest markets of their own.  China sold a million cars per month in January and February 2010!  There is yet again a seismic shift.

This is a game changer, for those companies and countries that want to continue to be global players.

It is Europe who is dependent on the IMF for funds, as apposed to emerging economies.  It is China who has been the major investor in Africa £7billion in 2006, which is not yet tapped for its natural resources!   Sub –Saharan Africa is growing with a GDP of 5% or more between 1995 and 2005.  The recession cut growth, but the world bank expects it to return to 4.5% in 2010.  The projected GDP for Africa 2020 is 2.6 trillion and 18.6 trillion in 2050!  If China is the backer here then much like Britain built its empire, these are the foundations for the future wealth.

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The political forces are aware of this change.  For example, the US congress blocked the $18.5 billion purchase of Unocal by the 70% state-owned China National Offshore Oil Corporation.  China has liquidity.  Its cash reserves are the equivalent of 40% GDP an estimated £3.3 trillion! Watch this space!

So what does this mean for OD professionals?

  • We need local leaders, and local talent for the game changers in BRIC but with the new countries, Russia and Africa.  Goldman Sachs and economist Jim O’Neil defined the next 11 (N11) emerging countries and CIVETS outlined by Robert Ward: Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa.  To overcome the cultural issues, understand and innovate in that market.
  • Global leaders may need a different skillset, flexibility and awareness.  Check out a post on learning Chinese.
  • Do not just think about efficiencies of outsourcing to the East, we now need to think in reverse, and in-between.  We need people that can understand and leverage the benefits of Re-financing.  What can Corus gain from Tata and visa versa to be a more effective global player?  Are their parts of the process that are now better suited in the West?

11 Factors for Successful Talent Management

11 Factors for Successful Talent Management

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  1. Get the foundations right.  What does success require in your organisation now.  Too often I see competency frameworks that are over complicated, not updated, or not flexible enough to be able to adjust to different cultural needs.  Talent is a mixture of performance and potential, so have a strong foundation to reflect on that.
  2. Regular reflection.  Forget just having an annual process.  We have always talked about regular feedback, but we drag managers through a yearly and often laborious process.  There is so much technology to hand like Rypple that allows for regular feedback.
  3. Think about what leadership you require.  What is your capability gap, what are your success factors?  There is no one right way to successful leadership.  Different companies require different things, some need to navigate in a mature environment and some need a tribe of leaders throughout the business to innovate.
  4. When you understand what you need think about where can I source that Talent.  In sourcing Talent don’t just stick to the same industry.  Your organisation might be going through points of pain now that another industry has faced in the past, or a different customer groups you want to attract.  For example, the maturity and decrease of subsidisation faced in the wind industry now could be compared to issues that ship builders or aviation manufacturers   Homogeneous mind-sets can come back to bite you.
  5. Where are your points of pain?  You will have different points of pain where it will hurt the delivery of your business goals.  A lot will depend on your budget.   It may not be possible to provide for the needs of all talent, you may have or want to differentiate your offering.  Do you need new talent for the future, or bench strength now because you have an executive board that will need successors in the near future?
  6. Do not undervalue experience and exposure.  Once you have identified the gaps think about what you have available that can expose your Talent to the required skills and capabilities to fill the gap.  There is great value in mentoring, coaching, the right projects and regular feedback.
  7. Owned by the CEO and the executive team.  Question the CEO and executive team on what are their business challenges?  Some may or may not translate into Talent problems, and some may be burning platforms.  In my experience there are often burning platforms, which give you the engagement of the right people.  Get sponsors on the executive board to own and define the problem, the outputs and the process of designing, building, implementing and maintaining the program.
  8. Built by the business.  The middle managers and team leaders should be involved in the design and build of the programme.  They will know what will work for them, what is practical and the collaboration increases the success of the program.  You can also engage employees in a pilot, which brings valuable feedback on language and cultural differences that need to be taken into account.
  9. Business Continuity.  The responsibility of the program should remain with the business.  HR should not take ownership, it will simply be seen as something that HR will manage we nominate the Talent, and then hand over to HR.  This will only give a short-term success to the program.

10. HR Facilitation.  HR needs to continually facilitate the process, inspiring leaders and having corridor conversations.  For example, if a leader is visiting APAC they could meet up with some of those on the Talent Pool so that they have a view of their people.

11. Measure.  Define the measures of success with the executive team.  Measures I have implemented before are bench-strength, time to recruit, cost of attrition and numbers at risk.  This facilitates regular conversations, actions and business continuity.

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