Critical Business Success Factor

Many experts feel that even though every company is different, it is important for each to develop a succession plan that includes hiring from within, conducting a developmental opportunity or audition, providing a defined plan with time lines for anyone to assume a leadership responsibility, and disclosing the process or succession plan to the shareholders.

Most succession plans do not take into consideration that different environments require different leadership competencies or skills. So, if we narrow our development process than we may never have the right person ready to assume the leadership role in any company. Companies need to consider what most professional sports teams do as a major component for success and that is a strong bench. Most championship teams, whether it be in basketball, baseball, or even football have a great bench or understudy for their key positions. Companies, like professional sports teams, must have a strong bench of candidates who can lead or “step up to the plate” under a variety of scenarios.

Many companies use different forms of people development processes. Some companies call them Leadership Academies or Institutes, and/or High Potential Candidate Schools. Despite the different names, the end result is the same: development of people toward a higher level. As a business owner, you need to provide a constant flow of internal talent but you also must be aware that when people don’t get the higher position, they do have a tendency to leave the organization so the funnel better continue to be adequately filled at all times.

It is also important for companies to deliver some kind of transparency to their shareholders, customers, and internal personnel. The ideal succession plan should minimize uncertainty, which is not a bad thing in this economic climate, and continue to promote the “real” culture of the company. The depth of the company’s disclosure should be predicated by the need at the time and situational circumstances.

Also, many experts believe that the succession plan must take into consideration the corporate culture to the extent that every company should have a corporate culture that transcends the exit of any leader or person. Most companies do not really know what they smell, taste, and feel like to their internal and external customers. The best way to determine the current culture and the culture employees want is to conduct an Organizational Needs Inventory (ONI) assessment but most companies don’t do them.

So, succession planning is just a more formalized name that can be defined as a process to help companies develop their people to meet their future needs.It certainly sounds like it is time for a Leadership Program! Let's get started!

Is anyone still listening?

The confidence from the C-suite to the employee is down in most companies. The conversation is focused on cost containment and expense reductions. Budgets again are being slashed and people are being asked to “do more with less”.

Many companies are discarding the talent that took them to the top. Experts today note that Talent Management is more important than ever but it appears to be falling on deaf ears.

Are you listening?

Changes in the economy are often precursors to changes in the ways we do business. Why are we still focused on everything except what we need to do? We need to retain top talent and develop the future talent for our company needs. The ASTD just published a major report titled, “Mission Critical – Keep Learning. This publication demonstrates “How to Communicate the Value of Learning in Difficult Economic Times”. Their publication is calling for all learning professionals to get in involved and make sure they contribute to a successful talent management strategy. The author feels that the ability to get the right people with the right skills into the right jobs in a cost-effective way makes it possible for a company to respond strategically. The publication also goes on to say that the entire organization must make the learning function support the organizations goals. The key decision makers in the organization must see a meaningful relationship between learning initiatives and results. Now there is a thought! Be more effective than just focusing of efficiencies. Isn’t it time to make sure that all programs focused on people development are directly linked to business goals?

Are you still listening?

The next thing is for everyone to realize that our middle management is the “glue that holds the company together”. I just recently read an article in HR Daily Advisor titled, “Top Five Mistakes Leaders Make in Tough Times”. In her opinion, Ellen McDargh,CSP, CPAE, felt that in tough times, leaders become reactive and reactionary, huddle with only the corporate folks, subscribe to the “cut…cut…cut” philosophy, target new clients and customers, and subscribe to the “do more with less”. Middle management is the leader of the majority of the staff. They must focus on being effective and producing the desired results in areas that have been bludgeoned to death by cost containment measures and layoffs.

A recent survey of the American workers demonstrated that “Good Management” is the most important thing that employees want in the workplace. Things that finished far behind “Good Management” included respect of colleagues, money and benefits, learning new skills, and having a fun environment.

Is anyone listening?

We need to make leaders out of every employee but the most important ingredient for business success is the development of the middle manager. Middle management must elevate morale in poor economic times, retain and motivate the high achieving employee, their team is expected to comprehend the “bigger picture” in terms of strategy and recommended plans of action. It is more important for the middle manager to break down the strategy into goals that can be comprehended and implemented by the action of the staff. They need to give direction, monitor performance, discipline the staff, and demonstrate organizational effectiveness by getting results. In addition to all of this, they have to understand that their actions may put them in the same legal liability position as that of their company. That’s quite the responsibility! Shouldn’t they continue to learn how to manage their employees as well as themselves?

I have read article after article on the Benchmarks involved with Human Resources Departments and have not found Mid-level management development as one of the major benchmarks for success. I have heard about the metrics associated with organizational performance, HR service and delivery, employee engagement, voluntary turnover, HR practices, budget management, technology assessment, and more. What is HR and the C-Level doing to continue their company’s success??

Here at Innovative Leadership, we have focused our company on the development of middle level managers and our programs compliment all of the metrics ever associated with a strategically oriented HR Department:

1. Tools that qualify potential management candidates from the date of hire.
2. Training and Development Courses that highlight goal-orientation and business results
3. Provides an organization with the ROI prior to the start of the program
4. Offers a variety of cost effective platforms including online application.
5. Course evaluation processes measure the changes in the behaviors and skill-sets associated with high achieving mid-level managers

We do things differently and our results demonstrate just that. Please tell me just one thing . . . Is anybody still listening?

Evaluate Talent from Day One

Where is Your Focus? on Your People or on Your Process?

In a recent article in the Investor’s Business Daily, Kevin Harlin points out that Employment consulting firms say it is vital to track and nurture promising leadership candidates even though the economy is sluggish. Steve Krupp, partner and leader of the executive talent management practice at Delta Organization & Leadership, asserts that if a company fails to engage and communicate its top performers, they might be inclined to depart.

Rather than focusing on your processes, focus on your people. They are your biggest asset. Remember that turnover can cost you double of just one employee’s salary. A survey from Delta found that most U.S. companies fail to monitor their best performers, even fewer communicate with these employees, and few top executives support such initiatives.

PPG Industries, a global glass, paint, and chemical firm, has been tracking its best employees for about a decade. Roughly 30 percent of workers are regarded as top talent, and just 1 percent is deemed suitable for the CEO position. Identified employees get first priority for training, special projects, and responsibilities. Executives also meet with these employees from time to time at informal settings like breakfast or lunch. Global business software firm SAP provides potential leaders with six-month fellowships in another division, typically in a different location, to ensure that these employees have adequate insight into the company.

The above synopsis of the article that appeared in Investor’s Business Daily demonstrates the need to evaluate talent from the first day of hire in terms of recognizing potential and people development as the priority for any organization. I really question whether companies today are focused on their future leadership and understand the need to develop people’s potential.
Innovative Leadership offers an Assessment Process called the Achiever Series that can assist you with people development and also compliment certain aspects of succession planning, downsizing or transformation.

We are a company that is focused on helping companies develop their potential of their people that will result in organizational effectiveness. Please call us at your convenience to discuss our Assessment Processes that can make the difference in the future of your company at 609.390.2830.

Hiring Blamed for Poor Performance

A consulting firm in California confirmed that nearly one third of CEO’s say that as many as half of their new employees haven’t been meeting expectations. A principle of the firm noted that most CEO’s have no faith in their hiring processes.

That is the first problem for the CEO. Don’t call it a process. Most companies don’t have a process. I work with small companies and companies with over 5000 employees and none exhibit a real “Hiring and Selection” Process. All expect their hiring or recruitment personnel to just find the right people. Those people are the ones with the skills and training combined with the right attitude and excellent work ethic just waiting to be interviewed. Wrong!

The difference in processes can vary from using a simple HRIS system for only resume retrieval to a type written job description that includes suggested behavioral interviewing questions. I just can’t believe that it’s taking a rocket-scientist to realize that people are failing in the workplace because employers don’t have the proper “hiring and selection” process. Most companies today have yet to realize that finding the “right” person for the right job or just hiring the right person with the right attitude, skill, training, and work ethic takes more than just leaving the front door open.

We have now found the culprit for poor performance. The process that must determine whether someone has or is lacking the skill, training, attitude, and ethics is failing not because of lack of process, but a lack of commitment within that CEO’s company. The tools, methodology, technology, format, and human components are all available but no one appears to have the energy or commitment to put it all together.

Since we can’t find the people to integrate the tools, technology, format, and people to provide a well-rounded “hiring and selection” process, we must take three steps back and again blame it on the process….or is it the people?

If companies don’t take their hiring practices seriously, they will eliminating any opportunity of finding the person with the right attitude, skill, training and ethics that can make a difference!

Bah Humbug - Talent Management

It has been over ten years since McKinsey & Co. coined the phrase, “War for Talent”. We certainly have had the opportunity to research the subject, develop a plan of action, implement the plan and now reap the rewards of our actions. Wrong! We have said, “Bah humbug” to the program and done nothing.

A new a survey offered these key findings:

• Talent acquisition planning is sorely lacking – less than 18% of the respondents report to have a plan implemented.
• Talent management will have an impact on all levels within every organization.
  Identifying and developing leaders within organizations is as important as attracting new, top-flight talent.
• 71 percent of the respondents list retention as a major challenge for 2008
  Other countries are better prepared than we are in the United States.
  
  These findings are based on the “Talent Shortage Survey” conducted by Equation Research on behalf of Stanton Chase International and Birkman, International during the 3rd quarter of 2007.
  
  Maybe it’s frustration or just the timing of the Holidays, but I have contacted over 1000 HR Professionals and no one appears interested in focusing on the development of a Process that can help their organizations with this talent management concern. Is it reality or perception? Are we just saying that we are willing to let our successors worry about solving that problem?
  
  The winning formula is very simple:
• Engage the top level for attracting and hiring talent from all age groups as a routine and ongoing process
• Make a company wide commitment starting at the top to:
• Attract new talent ahead of the crisis of exits
• Retain valuable talent already in the company
• Rapidly develop processes for recognizing and developing leaders within the organization
• Utilize an assessment instrument(s) to aid in both leadership identification and development coupled with coaching/mentoring programs
  
  Bah! Humbug! Nobody’s listening, if you are listening are you acting on it?

…twas the night before…

The Call from the Family

Several years ago, I attended a certification program for coaches titled, “Coaching the Small Business Owner”. The course was designed to provide how to coach a small business owner through the “rough waters” of small business ownership. The course demonstrated how superior coaching competencies could compliment the achievement of the small business owner. It was apparent that from the start, the small business owner wanted both a sounding board and a resource that would he or she could now call, “Coach”. Coaching is different than consulting and most consultants claim that there is no difference but that is an argument for a different day. Coaching skills coupled with strong business acumen are certainly the competencies needed to work with any business owner. The majority of small business owners are about to transition their business to other family members within the next ten years and most have not designed an “exit” plan or succession plan. It is really discouraging that most financially successful business owners don’t have a plan for transitioning themselves out and the family members into the decision – making roles.

The following facts are presented in The Pricewaterhouse Coopers Family Business Survey for 2007/08:

• One –quarter of the family firms in the survey are due to change hands within the next five years


• Half of those companies are expected to remain in the family
  Yet almost half of all responding companies have no succession plan, and the percentage is even higher in small firms or those that have been in business for fewer than twenty years.


• Eighty – four percent of the respondents aim to pass their companies on to their descendants compared to less than half of that in Europe and other areas of the world.


• Two –thirds of family businesses have no defined criteria for choosing which family members who want to take an active role in the company should be allowed to do.


• More than half also employ relatives without requiring them to compete for their jobs on the open market.


• More than two –thirds of companies in the survey had no procedures in place for dealing with disputes between family members
  
  
  Remember, an effective succession plan assesses the company’s leadership needs, determines the positions needed to continue the achievement, and identifies the core competencies needed for those positions. In other words, who is going to assume the roles of the family members starting to leave through the back door?
  
  The fact of the matter is that the small business owner is not a good planner. Most owners are great tacticians and manage the business on a day-to-day basis very, very well. After all, this is why most started the business. They were the best technician, and no one asked them if they were a good manager, or visionary. Now suddenly, they are asking their family members to be much more than they were. Many business owners have commented that they don’t have a high confidence level that the next generation can make it as successful as they did. The younger family member wants to know why their ideas and recommendations are not being readily accepted. Most wonder why the other is not listening to the other and why communication is becoming more difficult than ever. My listening skills have never been more tested. Both sides claim that they are not being listened to by the other nor do they feel that either is exhibiting any compassion, so communication has come to a standstill.
  
  It’s seems to me that it is now time to call the “Coach”. Most businesses have their professional advisors like their lawyer, accountant and possibly a business consultant. Most family members have their own financial advisor, stock broker, counselor or whatever. The coach is now being asked to be the conduit between all of the above focusing on the new members of the family and the exiting family members. It becomes the role of the coach to assume the following responsibilities:
  
  · Provide a communication channel for all parties
  · Make sure effective and open communication is present
  · Provide a fair assessment of the talent at the table
  · Make sure everyone listens to “what” is being said and not “how” it is being said
  · Confirm understanding and expectations
  · Encourage participation
  · Hold people accountable
  · Monitor the implementation of ideas, policies, procedures, etc.
  · Measure the results
  · Celebrate successes
  
  
  The above certainly looks like a Results-oriented model that I like to use in the coaching environment. I know that Business Coaching can provide an integral component to the transition or transformation of any small business between family members. Most family disputes are focused on the skills, competencies, behaviors, and knowledge demonstrated by the younger family members while the younger members are wondering when the elders will finally let go. The experienced ones are questioning their fortitude, knowledge, ambition, and energy while the younger ones are wondering if the experienced ones will ever let go of ways they have been doing business. It certainly appears to reflect the Definition of Business Insanity, “doing the same thing over an over, yet expecting different results”.
  
  Sounds like we have to let the experienced owners transfer the positional authority to the younger generation and be willing to accept mistakes and just file them as a learning experience. It might also behoove the younger generation to ask questions and include the experienced ones in the problem-solving process. In reality, maybe the coach should focus the family more on how to better understand generational diversity and make the workplace an environment satisfactory to all. Good luck….and good coaching.
  
  Richard Hohmann
  
  For more information of succession planning (Exit Strategies) and Business Coaching, please call us for a complimentary Coaching Session or contact us

What Do Workers Need?

We are starting to focus on the “bottom of the barrel”. In the majority of companies, we have not integrated our business strategies into the culture of our workforce and are not challenging people to learn the skills that will enable them to lead our company long after the disappearance of the baby boomers.

Globally, we are struggling to acquire the employees we need. The demand for workers in the emerging markets like China is outpacing the supply of talent in those areas. The exodus of the “boomers” in the US coupled with the downsizing that occurred in the last fifteen years has left us with a void in talent that is now needed to fill key management positions.

We have not developed the talent that will provide the skills that we will need to achieve our business goals. Linking talent to strategy is something that we must focus on now, not in the future. Companies must focus on their best employees and make sure we give them what they want. We can no longer afford to spend the majority of our time bringing up the “bottom of the barrel”. The top performers in most companies want opportunities for personal development, feedback and positive discipline, and the ability to work with a mentor/coach in a non-threatening environment.

We have to re-energize the “boomers” to become the best teachers of experience and get the younger workers to become the teachers of technology so that the end product will be a high achieving workforce. We have focus on changing behaviors and learn to measure the change…..isn’t that what Human Resources all about?