DDI’s Talent Management Intelligence

Is Your Organization Better Than The NFL at Assessing Potential? (You might be surprised…)

By Mike Hoban

What if your company’s rigorous, high profile and well funded talent management system had only a 50% success rate in predicting whether your top five managers—the VERY best in the company—would perform well at the next level up? Well, whoever was in charge of such a system, where predictability is no better than the flip of a coin, would probably be looking for another line of work. Yet, that’s the success rate for one of the most followed and most vaunted talent management systems in the public eye: the NFL draft.

Last June, in this very blogspace, I wrote a piece about the high failure rate of highly drafted college basketball players and the difficulty the professional scouts have in accurately assessing potential for success at the next level up (the pros). Because of some new academic research, we now know that the performance vs. potential conundrum in athletics is not limited to the world of basketball.

Last week, the National Football League held its annual draft drama, where college football players are selected by teams according to their talents. It would seem to be the pinnacle of meritocracy and like in basketball, literally millions of dollars are spent by the professional teams in analyzing and scrutinizing the talent at the collegiate level. Some of the top players have been under the talent scouts’ microscopes since they were in high school.

Yet, all of that due diligence apparently doesn’t pay off for teams. An article in the Wall Street Journal last week described a study conducted by a Yale University School of Management professor which concluded that in the period 1991 – 2004, fully half of the top five drafts (70 players) were either disappointments or actual flops in the professional league. And we’re talking about big money and big stakes here - last year’s top five players in the draft got $168 million in guaranteed money. The shape of the balls might be different in the NBA and the NFL, but the success patterns for star players are nearly the same.

Interesting statistics, but what’s the learning point for those of us not in the world of professional athletics? That replacement planning or succession management doesn’t work and is therefore not worth doing, since the professional talent scouts with their data bases, game films and personal observations don’t get it right any more than random chance?

No, good readers, that is definitely not the leaning point about this news story. While there are several reasons why the “can’t miss” college players often do “miss” at the next level up, I think there are some important differences in the organizational world which explain why corporate efforts at succession management have a higher success rate.

Let’s say “Mary” is a senior executive who is considered a potential successor to the CEO position. Mary’s development plan to make her more “ready” likely includes activities and assignments which give her exposure and experience in CEO-like situations. An important board presentation. A key role in leading the strategic planning session for all of the senior leaders. Leading a high profile turnaround situation. An interview with a national business magazine, perhaps.

Experiences and exposure like that provide the current CEO and the board with information and insights about whether Mary does indeed have the right stuff to become CEO at some point. But there is no equivalent of those “CEO work samples” which can be applied to professional athletics. A hotshot college quarterback can’t play a few sets of downs in the NFL to prove he’s got the goods. And there’s no flight simulator equivalent to indicate how he would perform at the professional level.

All the collegiate all-stars can do for the scouts and the owners is to demonstrate their skills at the same (collegiate) level, again and again. That provides information but it’s not the same as playing in professional game conditions against professional competition, something that aspiring CEO Mary can better approximate in her performance trials. And that means athletes will continue to be judged more on performance (same level) rather than on potential (next level up), because that’s all the data that can be obtained. That makes it more difficult to gauge talent trajectory.

So that’s why the NFL and NBA will continue to rely as much on serendipity as on data-driven judgment: They make draft decisions based more on performance than on potential. And as a result they’ll continue to drop the ball often with regards to talent.

Make sure your organization works the performance/potential issue effectively in order to minimize your talent fumbles.

Mike Hoban is a senior consultant for Development Dimensions International (DDI).

The Truth About Performance Reviews

By Bob Rogers

If you’ve read the business news in the last few days, it’s likely you’ve seen something about UCLA professor of management Samuel Culbert’s book "Get Rid of the Performance Review!” The Wall Street Journal even published a piece by Culbert titled “Yes, Everyone Really Does Hate Performance Reviews”.

The truth is that everyone doesn’t hate performance reviews. It’s all about how managers and employees handle the review—never the tool. In my 32 years in business, I believe about 20% of companies get performance management right. In the other 80% of companies, everyone hates performance reviews because of the poor implementation and skills of leaders. But the 20% that get it right all consistently follow the same steps that eliminate most complaints identified in Culbert’s article. Not surprisingly, they are almost always the best performing companies.

In my book, Realizing the Promise of Performance Management, I outline the steps that make performance management an effective process. Once adopted by leaders and employees they give companies a huge advantage in performance, morale, retention, engagement—all the things that can make any company an employer of choice.

The best performance management approach includes:

• Linking individual performance metrics to the business priorities of the company
• Training managers in how to coach and provide feedback fairly and with impact
• Giving the employee more ownership of their performance plan
• Changing the mindset of the leader from evaluator to coach
• Focusing on both the whats (accountabilities) and the hows (competencies)
• Making the discussions and reviews more developmental and forward looking

Another way to avoid pain around performance management and reviews is to have the manager and employee create the plan jointly and have mid-year and end-of-year reviews. Employees will feel ownership of the plan and great satisfaction in meeting their goals, particularly if they can see a clear line of sight to their contribution to the success of the business. 

Do companies need a performance management system? You bet they do, but for the right reasons—clear expectations, alignment of work to company objectives, developing communication and trust between leaders and employees and higher employee engagement.

If you still aren’t convinced, how about these two examples—Texas Children’s Hospital System was voted Best Place to Work in Houston and DDI was voted Best Place to Work in Pittsburgh. Both companies have very effective performance management systems and I think these awards speak volumes about how the employees feel about their organizations. What do you think?

Bob Rogers is the President of Development Dimensions International (DDI)

Dancing Waters and Fossilized Cranes

By Barry Stern, Ph.D.

I’m sitting alone in an outdoor café in Dubai next to the water show at the foot of the worlds tallest building, the half mile high Burj Khalifa. What a wonderful sensory and professional experience here! Working with executives with cultural sensibilities different from mine requires me to amp up my interpersonal antennae. Perhaps I can take this trans-cultural mindset back to the US, one in which my interpersonal assumptions are more limited and my ears more tuned to others’ frequencies.

I leave with a profound appreciation for Dubai and a strong desire to return. Here’s just a taste of east meets west, religious meeting secular:

• I’m in the world’s largest mall (largest, tallest, and most, as in “most cranes” are phrases I hear a lot here).  Although it’s 85 degrees outside, I’m looking through a glass window, where men in dishdashas and women in habayas are skiing, snowboarding, and tobogganing. Yes there really is an indoor ski slope in the Mall of the Emirates.
• I roam amongst the stores, smelling an exotic mish-mosh of gold, spices, Cartier, and Persian rugs. As one of the 5 daily Islamic calls to prayer echoes through the loudspeakers, my eyes light on a nearby Coldstone Creamery.
• I’m in a taxi crossing over to the “Palm,” a man made island built in the shape of a massive palm leaf.  Hotels and restaurants abound, each palm frond budding with condos of various sizes and shapes. The Burj Al Arab hotel built in the shape of a sailboat by the shore of the Gulf is within close eyeshot. 
• I travel to the old Gold “Souk” and here I have the sense of an older, but not ancient, Dubai, as the smells, teeming people, traffic and mosques create the gritty, earthy experience that I find myself gravitating towards as I travel. 

But the promise of the juggernaut that built Dubai appears somewhat unrealized. The magnitude and creativity of the new construction everywhere has reached beyond its grasp.  A countless number of unfinished buildings with motionless cranes adorn the skyline. I’m told that before our global financial crisis this Emirate had the largest single concentration of cranes on our planet. It’s easy to believe.

And, Dubai has only partially delivered to the talent that arrived here. Some Dubai expats abandoned their corporate apartments, drove their company-leased vehicles to the airport, left their keys and jetted out, their lives and their futures probably in tatters. How many were left on their own to pick up the pieces? What are our responsibilities to employees when massively disruptive events leave lives and careers hanging in the balance? These questions stand in high relief as I leave this land of dancing waters and fossilized cranes.

Barry Stern is vice president, Consulting Services and Delivery for Development Dimensions International (DDI). Follow him on Twitter.

It’s a VUCA World: Better Glocalize!

By Mark Dembo

It seems there’s a new buzzword for our recessionary aftermath, as we return from the miasma, and step back from the precipice: VUCA.  I came across this term just the other day, and literally stopped what I was doing to research this exotic sounding, yet surely important new word to enter the lexicon.  

As Wikipdia tells it, VUCA is an acronym used to describe or reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations. The underlying idea is more than just the words that make up the acronym; it’s about the process, thinking and strategy that go into assessing and dealing with each of the VUCA elements – think of it as a post-modern SWOT analysis.

Which brings me to the other term I keep hearing bandied about these days: “glocalization.” Where global meets local: the “portmanteau” of global and local. It’s more than just “think global, act local” – it’s about organizations striking the right balance between tight central management, and decentralized local autonomy.

While we can get fatigued on the fad words of the day, there is some real truth behind needing to glocalize in our current VUCA world! With the great recession showing signs of defeat, we cannot be complacent to the destruction and changes left in its wake. As the Economist newspaper points out, in the US: “…the economy emerging from recession on not the same as the one that went in.” They further point out – and here’s the real kicker - “With consumers forced to live within their means, American firms will have to sell more to the rest of the world."

This last point is profound; ignore its implications at your own peril! For US multi-nationals, looking for growth in emerging markets is certainly not new. But now, it’s more than just a growth strategy, it’s a do-or-die strategy. We cannot rely on domestic spending to shore up the coffers.

For true growth to come from the “rest of the world,” organizations must truly be a part of that world. Simply exporting talent will not provide the in-depth cultural and local knowledge that is needed. To innovate in India or China or Brazil or Thailand – organizations must be seen as a part of the fabric of local life.

To succeed in the new VUCA world, organizations must be able to define their culture, create the “leadership brand” they stand for on a global basis, while providing the latitude for local interpretation and adaptation. It’s a fine line, and not necessarily an easy one to draw – those who achieve long-term “glocal”success will be the ones that can achieve this balance.

How prepared are your leaders to take on these new challenges VUCA challenges in a glocal world?

Mark Dembo is a manager for Development Dimensions International (DDI).

How Tying Your Shoes is the Key to Your Long Term Talent Strategy

By Ryan Heinl 

The other day around lunch time I was getting ready to go for quick run on the treadmill and I started to really tune into how I was tying my shoes. It sounds odd, but when was the last time you really focused on tying your shoes (Now that I’ve mentioned it, you will)?  As I watched my fingers dance around the snake-like laces I became keenly aware of how fast and automatically I was doing it.  This made me think of a recent blog post from Mike Hoban on the buildup of research on of the idea of deliberate practice. Books like Outliers, Talent is Overrated, and Talent Code hold up some pretty compelling research pointing to the importance of lots of practice over innate abilities as the critical ingredient for truly talented people. Another key insight from this research seems to be that practice on its own is not enough—you need feedback on your performance which you should improve the next time you practice. I think all of this surfaces some interesting opportunities to consider for talent management strategy.

We need to start finding people very early in their careers that have the ambition, learning agility and discipline to commit to a long-term leadership development program. This program would span over potentially 10 years (or more), which seems to be the length of time that gets you to the magic 10,000 hours of practice, putting you significantly ahead of most other leaders in skill level.  They would also have to submit to constant self-examination and feedback from others in the pursuit of improving interpersonal, leadership, and business skills. As these elite leaders become more and more expert, they would need to be continually confronted with new and more difficult leadership scenarios to overcome—requiring moving geographically and organizationally. As a participant you’d have to be committed…We are talking Chinese gymnastics team committed!

A company that wanted to seriously consider something like this would have to be willing to commit certain resources to each participant over a long period of time and the participants would have to essentially sign over their freedom to the company for a period of time. Sound a bit extreme? Maybe, but it’s really not that extreme or new for that matter. Consider the apprenticeship structure in Florence during the Renaissance where apprentices were committed to master craftsman for many years spawning one of the most creative and productive periods in history. 

With a generation of people entering the workforce and constantly crying out for structured career development and the opportunity for constantly increasing challenges combined with varied experiences, you could quickly use a program like this to make your company THE employer of choice.  I can see it now:  Come work for ABC company can get a chance to be a part of our acclaimed Elite Leadership Development 10 Year Program!

Ryan Heinl is a senior consultant for Development Dimensions International (DDI).

Where Did the Forest Go?

By Scott Erker, Ph.D.

At the risk of referencing the much overused analogy – don’t lose site of the forest for the trees – I think it can be used to describe a classic pattern that is emerging in staffing today.  For many organizations, the light is at the end of the tunnel. Job growth could be on the horizon. But there are many reasons to believe that the convergence of factors we typically see just before job growth will be compounded by the severity of the recent recession. Do you see this pattern emerging?

• Recruiting resources are lean due to staff cuts.
• Placement and management of contractors is taking a lot of time.
• Turnover of full-time associates is taking a slight upturn as the incumbent population grows restless and sees opportunity elsewhere.
• Some areas of the business are starting to create jobs and the demand for new hires is taking more and more time.
• Hiring managers are especially demanding as they’re nervous about hiring the wrong person (exacerbating to poor business unit performance).

I could go on. At times like this, we should remind ourselves of the foundational elements that lead to successful staffing systems – in good times and bad. While these items won’t help you in the short term they may help you to prioritize (or shape) your week-to-week activities which in turn leads to sanity and hopefully, longer–term improvement. Think about:

• Linking business goals and drivers to talent selection
• Utilizing diagnostic tools to gather accurate information
• Driving development and engagement on the first day in the new job

Read the entire solution in Scott’s post on RecruitingTrends.com.

Scott Erker, Ph.D., is the Senior Vice President of Selection Solutions for Development Dimensions International.

2.0 or not 2.0 – That is the Question.

By Verity Bissett-Powell

A voicemail from my Dad earlier today: “OK, I have finally succumbed and signed up for Facebook. It seems that it is the only way I can keep in touch and find out what you’re doing”. I have lived in America for two years and while I try my best to send my parents photos and call regularly with updates, my Dad still recognized that to truly understand what I was experiencing, he needed to get a Facebook account.

But what does this mean to the world of Talent Management? Just as Facebook has become a natural way of social life, similarly such modern media is going to become part of professional learning and development (note I say “is” and not “might”). The Kirkpatrick level 3 behavior change goal is going to get a V8 boost as various technological options propel development initiatives from concept into practice.

For example, if an organization wants to drive acceptance of change then they can blend instructor-led learning with a vodcast from the CEO on the benefits of continuous improvement, maybe a senior leader could write a one-week blog on the topic, and post-classroom the learners can share ideas through discussion boards, maybe even skill practice through Skype sessions organized via a LinkedIn group. Now, I’m not a betting person, but even I’d put money on such a varied learning model delivering the desired culture of change.

Of course, this 2.0 inclusion isn’t going to happen overnight. And what’s really interesting about using 2.0 capabilities in learning and development, is that for once the “top down” approach might not be the best bet. With the comfortable acceptance of social media by X and Y generations, this evolution is likely to move up the Leadership Pipeline, from the Tweeters to the Boomers.

Like Hamlet, I sought the perspective of my father on the question - 2.0 or not 2.0? Dad said he’s “sold” on it, but couldn’t talk long because he was having an IM conversation with an ex-colleague he’d found on Facebook.

Verity Bissett-Powell is a Consultant with Development Dimensions International (DDI).