Speaker A The Internet's only all business and financial radio network, Voice America business.

Speaker B Welcome to the new Management Network with your hosts, Don and Bonie Folk. This program will help you get the competitive upper hand in your organization. Now here are your hosts, Don and Bonie folk.

Speaker C Hello, my name is Don Folk. I'm a management consultant in Toronto, and I'm here with my professional and life partner, Bonnie Folk.

Speaker D Hi, I'm Bonnie Folk. Welcome to the show. Today I'll be interviewing my co host, Don Folk, who is a member of the new Management Network. And we will explore how a talent management program ensures companies have succession in place to support growth strategies and how it assists employees to achieve career ambitions. Don has a bachelor of mechanical engineering from the University of Saskatchewan and a master of Science in industrial management from MIT Sloan School. He's a professional engineer and a fellow of the Institute of Management Consultants. Our show today will be a conversation in three segments covering three main things. First of all, what is it? I'll be asking Don to tell us how he came to be consulting in talent management and to tell us what talent management is about and why it's important to both companies and employees. Second, the components. We'll explore the components of a good talent management program. And lastly, results. We will ask Don about the kind of results he gets for clients with talent management programs. So, Don, would you tell our listeners about your background a little bit about how you came to be interested in talent management?

Speaker C I started out as an engineer, and I went to the Sloan school to do graduate work, and that's a pretty technical place, but at the time I was there, it was the last years of Douglas McGregor and the human side of enterprise. And he had around him people like Ed Shine and Warren Bennett, and they were doing experimental work in terms of teaching us ways of getting at the human side of enterprise and the importance of psychology. And while most of the students in the group were engineers like me, we were intrigued by this aspect of management. And then later, back in Canada, I was working with two or three different consulting companies where we had registered psychologists as colleagues, and they brought a different slant to the processes of management than the technical, accounting and engineering people like myself. And during this time period, we were doing a lot of organization design work with companies who were focusing their strategy, realigning it to take advantage of changing markets, and then asking us to help them redesign their organizations so that they'd be able to follow through on the strategy and get the job done in execution. Well, these were companies in a variety of industries. We had engineering companies. We had manufacturing firms, heavy equipment suppliers, integrated oil companies, power utilities, insurance companies, trust companies, government departments, transit authorities, you name it. It was a cross section right across the economy. And what we were trying to deal with is that structure follows strategy. And we worked hard to get good organization design that would drive these strategy ideas through. But I can recall one client saying to me, I really like what you're doing here, but how do I fit my people into this? Well, it was a question that we weren't used to answering, and we had, in a sense, to go back to the drawing board and find a way of assessing whether the talent that an organization had, particularly at senior levels, could adapt to a change in the organization, a change that was driven by a change in strategy. And, Bonnie, I recall that you and partner we had at the time, Dr. Mary McEwen, who was a distinguished psychiatrist from Scotland, brought insight into the issues of personal style. And this seemed to be an important aspect of whether people could be realigned and refocused about the same time. My recollection has it that you identified Dr. Echadesis, then at the UCLA, and his approach to identifying the styles of management or the functions of management. And he talked about the PaI profile of leaders, that there were these four driving functions of management, the producer, the administrator, the entrepreneur, the integrator, and that to have an effective team, you needed all four of those firing on all cylinders. And usually people, it seemed, had a couple of those functions, and that you really had to balance them with others. So one of the things we learned from that is that we needed to be able to identify the PAEI profile of existing managers and senior executives. And so, for example, if we were trying to drive change in a function, we needed to make sure that the executive we put in that spot had very strong p and very strong e, that is, producer entrepreneur, who could drive through the change. And that if we staffed the function with somebody who was a strong administrator but lacked that entrepreneurial drive, it just wasn't going to happen.

Speaker D I remember those days and how rewarding it was for us to be able to bring a structure to our clients that gave them language to talk about, really, what they already were aware of and what they already knew. It was a wonderful integrating step for us in our process.

Speaker C And part of the key to this was simplicity. That is, many of our clients were using our psychological colleagues to do in depth profiles of individuals and so on. But this didn't lend itself as easily to picking out the key personality variables here that we were identifying with. And it was very rewarding to work with boards of directors or senior executive committees and be able to say, look, what we've got here is basically too much administration, too much integration, but we're short of the producer entrepreneur driving thing that would take it forward. So that was the first step. And then following that, we got more sophisticated about personality, and we discovered the enneagram, the personality profile of nine different types. And I won't go into the detail on that one here today because Bonnie's going to be doing a program down the road in this series on the Enneagram and how it works at the leadership level. But just let me say that this gave us tools for being much more sophisticated about personality, and personality that operates outside of awareness, that is, the unconscious patterns and motivations that people have. And this was a key to being able to feedback information to individuals, that they could come to a higher awareness of their own capability, and gave them a key to think about how they develop their capabilities going forward. But the last piece here was whether individuals had the cognitive capability or the intellectual ability to manage the complexity at different levels of management. And we discovered Elliot Jack's work, his work with human capability. And he talks about the time span of discretion as a proxy for the ability to manage complexity, and that at higher levels of complexity, you need a longer time span of discretion in order to manage the variables that they come together properly. So the frontline work in an organization is level one work, where the time span of discretion doesn't need to be any more than about three months. And then frontline management. This is the first level of supervision. We call that a level two. And that's where the time span of discretion is three months to twelve months. And level three, or the middle management level, where the time span of discretion is one to two years. This is the first level where we have managers of managers, and then above that at level four, the general manager, who's dealing in a time span of discretion of two to five years, and a business unit CEO at level five, is operating with a time span of discretion of five to ten years. And each of those time spans is a proxy for a higher level of complexity. And there's a fair bit of science behind this construct, both in terms of how to build organizations with the right level, number of bands organizationally, and how to recognize individual capabilities in terms of their ability to handle complexity, and then the likely path of development for individuals through these different bands. And as we came to understand this construct in more detail, it became clear that this was the missing piece. We were able to put together the personality and style management function profiles with the levels of capability, and that became the basis for answering the question, how do I fit my people into this organization structure?

Speaker D That's good background, don. We're going to take a break soon. My memory of that time is that it was a pivot point. And when we come back, we'll talk. We have two minutes till break, so you could maybe finish up on that point.

Speaker C Well, the point here is we're dealing with objective definitions and measures of style and of capability. And these are definitions that can be understood by managers. They're not sort of abstract and difficult to understand concepts, but they communicate well with what managers actually know about people and the inherently or naturally skilled man. Managers tend to know this kind of thing very clearly. And what we've got are objective definitions that are good predictors of ability and good predictors of behavior. And if we're able to pin these things down in a measurement sense, then we're able to give executives who are managing organizations through change better predictability in terms of what they can achieve and.

Speaker D Put the tools in the hands of management.

Speaker C That's right.

Speaker D I think we're about to go to break now, so when we come back, we'll talk a little bit more about why the clients call you in and why talent management is important to both the client organization and their employees. Thanks you.

Speaker C Money.

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Speaker B You're listening to the new management network, bringing you practical insight into problem solving in a variety of business settings and management situations. Now back to your hosts, Don and Bonnie folk.

Speaker D Welcome back, Don. Why do clients call you in? And why is talent management important to both the client organization and, you know.

Speaker C It'S partly a function of the times that some years ago McKinsey did a study on the demographics of western business and pointed out that we were heading into periods where we were going to be genuinely short of the kinds of skills and capabilities that can run organizations at the top. They used the phrase the war on talent and the war for talent. And the idea here is that something more than lip service to the old notion that human resources are your most important assets, but you really got to get serious about how you deal with them and how you measure them and how you think about them going forward. And so I find that our clients in the last ten or 15 years have been looking at this issue directly. They're very often organizations that are facing very rapid growth, and they have expansion plans and they see market opportunities and so on, that they expect to be able to move ahead and grow their businesses very substantially. And it becomes fairly clear to them early on that talent will be on the critical path, their ability to put people in place to get the jobs done that they need doing at a point in time. Sometimes it's a case of companies reorganizing to focus in different directions, and the talent management work becomes an offshoot of the reorganization processes. And I was talking a bit about this before the break, that when you get a new structure, you've got to have a different sense of how your talent is going to handle it. And then growing companies, even if they're small or medium sized or large, are very often going through a process of getting to the next level. That is, they're breaking out of being a small business into a medium sized business, or they're breaking out of a medium sized business into being a large medium sized business or a major company. And these transitions mean that they have to have the ability to operate at the top with a much higher level of complexity, and then at each level down, there has to be much stronger backup than there was before. And so the ability of the organizations to grow is limited by their ability to staff this expansion at higher levels of complexity. And so these are the kinds of reasons that we're called in to deal with this, and those are the main points about that.

Speaker D I think, Bonnie, I can appreciate it, and I understand how helpful it is to clients having been involved, but I think maybe our listeners would be interested in hearing more about talent management and its components and how these components help them.

Speaker C Well, a talent pool or a talent management structure is an inventory of profiles of manager in a company, from high potential first line managers to the very top executives. And we're talking here about either the managers that are driving the company forward now, or that are the likely replacements for them, or the people who will be growing and being developed into future leaders in the company. Now, each profile is basic information on the work history of the individual, on their education and track record. Performance and effectiveness. Measures from history are important here for understanding how a person has done in other jobs. Sense of their detail on their education and other training, ratings of their managerial effectiveness strengths in the various managerial functions, that is, as producers, administrators, entrepreneurs and integrators. A sense of their Enneagram style, a measure of what their current potential, that is, what level the individual is capable of working on at this point in time and the likely path of development. And all of these things are put together in a record in software, which forms the core of the data set that supports the talent management system. Now, I use talent management system here not to describe the records or the software, but the whole process of which the organization identifies coaches, mentors and develops talent going forward. And while we need a robust database to provide the collect the information, make sure it stays reliable and accurate and makes it accessible to others in the organization, it's the total system of how the organization develops its future talent that that talent management process is about.

Speaker D Can I just clarify a couple of things here? Any system that the client might have a performance system would be integrated into this?

Speaker C Yes, and there are some tricky things here to do with the way organizations keep their HR databases. And we're measuring different things than are typical in most payroll based systems, for example. And so there are some tricky interface things, but we're always working as we implement these systems and organizations to drive the basic data from the client's existing it system.

Speaker D And the individual is involved in collecting this data?

Speaker C Well, we're always interested in improving managers ability to make the kind of assessments that we're making. But the truth of the matter is that our experience has been that you need an outside kickstart to the process and you need professional help to get an organization started.

Speaker D Moving forward. Then maybe you could say a little bit about how the management uses the system and how it benefits your clients.

Speaker C Well, the thing here is that it's got to operate at a lot of levels. And my experience, the most important level is the individual involved, because I think it's really important that individuals take responsibility for their own development, basically, so that they need all the information they can get about themselves and about their potential and their strengths and weaknesses, so that they're in a position of working on their weaknesses, building on their strengths, and getting the skill, knowledge and experience that they need to actualize their potential. And so the first and the most important user of the talent management information is the individual himself. And then the information needs to be made available to managers who are in the position of coaching the individual day to day, week to week, month to month, throughout the year. And it's the manager's job here to make sure that the development takes place close range. The manager needs information from the talent management system on the individual, covering the kind of variables that we've been talking about. Then also there's the manager once removed. Now this is the boss's boss, and this is the person who's one step away, who needs to ensure that the individual gets the break that they need to get the skilled knowledge and experience that they must have going forward. And this in some sense is the most important managerial aspect of this, that the feedback to the manager once removed, and then the manager, once removed, taking this information, working with his subordinate, who's the individual's manager, and also the individual in a coaching mentoring way, is a real key for the organization to make sure that the inherent talent in the organization is developed properly. Now, the talent management system is also a key to planning for the future. Management and executive levels need to have access to this sort of data for planning in aggregate terms about what the organization is going to be capable of doing and in what sort of time frame, and also for selecting individuals who are at a point in their career where they need and would value and would benefit from specific training, specific educational opportunities, or really more importantly, specific career assignments that would round out their skilled knowledge and experience and develop their inherent capability. And then of course, the whole issue of succession planning needs to be built on the talent management process here. In some companies this turns out to be the single most important aspect of it in the short, medium term, where executives are retiring or people are moving on, and there needs to be replacements brought into staff, very key senior executive roles. And so the succession planning aspect, often involving the board of directors and its human resources committee, is involved in the use of this data. And then the human resource function also needs to use the data to develop training programs that really fit the needs of the individuals in the organization and their developmental efforts. And some of that, of course, is inside training, and some of it is assignments that take individuals into new aspects of their work, and sometimes it takes them to outside educational opportunities. So those are the ways the organization uses the talent management system, and that's the sort of ongoing, organic aspect of it, that it's working at every level.

Speaker D And there comes a time where you transfer it to the company where the company is wholly managing the system.

Speaker C That's the idea. But as I say, it's been our experience that companies need and certainly benefit from getting a professional kickstart to the process.

Speaker D I understand that. And the intention is it would be an ongoing program for them to manage with into the future.

Speaker C That's right.

Speaker D We are coming up on a break and when we come back we'll explore a little further the benefits to clients on the talent management program we've been talking about this afternoon.

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Speaker B You'Re listening to the new management network, bringing you practical insight into problem solving in a variety of business settings and management situations. Now back to your hosts, Don and Bonie folk.

Speaker D Don, I'm interested in some of the examples, some of the actual specifics, and I wonder if I've heard you use the phrase managing the turns, and I wonder if that would be helpful in bringing some specifics to bear on this subject.

Speaker C Sure. The phrase managing the turns comes from Sharan, Drader and Knowles book the leadership pipeline and describes talent management processes that are used in many of the larger companies. I think they reflect in some degree the very excellent work that General Electric has done with talent management in their very large organization. But the notion is that moving from each one of these levels to the next, that is, going from frontline management to manager of managers is a turn. And going from manager of managers to the first general management position is a turn. And it's extremely important that these turns be managed and that the organization doesn't let people drift from one level to another without getting the skilled knowledge and experience that they need in order to have mastered what's needed at that level. Now, very often in technical organizations, engineers come in and operate at level two technical roles. That's their starting position, and they tend to miss out on managerial skills. That is, their work is level two complexity technically, but they are not picking up the managerial skills they need, and many of them never catch up because they miss that first step. And when they go from level two to three, that is from frontline manager or technical level to the manager of managers, they need proficiency in these managerial skills. For example, in setting context, in recruiting in team development, in assigning tasks, and in coaching subordinates and evaluating performance, developing subordinates and recommending deselection. And that latter, which is a euphemism for saying, this person who's working for me isn't making it and we've got to find another job for him, is often the toughest one, particularly for technical people who aren't used to confrontation and don't really like it and don't understand that, being able to be clear with subordinates about what they want them to do and evaluating their performance, and then taking them out of their roles if they aren't doing it, that those are skills that they absolutely have to have. And then of course, the next step, moving from level three to level four, from the manager of managers role, the typical middle management job, to the general management role, also needs skills in assessing the potential of subordinates once removed. Now we're talking about the employees of the frontline manager who reports to the individual. And we need to be sure that before that move from three to four takes place, that the individual has developed the skills in assessing the potential of subordinates once removed. Monitoring subordinates once removed, and the career development of subordinates once removed. It's important that these things, the skilled knowledge and experience in these managerial skills, be caught and developed before each of these turns is made.

Speaker D So, in other words, my boss as a boss, is the one that you need to focus on. In this particular instance.

Speaker C I think that's the case. Now, the job of the manager is clear, is making sure that the individual does his day to day well. But developing these skills often is missed. And so the manager, once removed, is really the key very often to getting this to happen in an organization. Another aspect of this, practical aspect of this, is that it's important to get assessments early if you've got high potential. People who are capable of being a general manager, a plant manager, or a general sales manager, say at level four in their early 40s, they need to make the turn from frontline manager to manager of managers by age 27. That's when it needs to happen. And so leaving talent management assessments until people are in their thirty s, or sometimes is the case in their forty s, is waiting far too long to make sure that these turns are handled properly. A future top executive, he will go from level three, that's manager of manager, to a general manager at four by age 34, and to a business unit president going from four to five by age 47. So you need to get these assessments, especially for a high potential people, early.

Speaker D So how about all this information that we need to get to help the client. Can you talk about how you get the information and how that helps the.

Speaker C You know, ideally, you want your managers in the organization to have the skills and the competence to be able to make these assessments. Elliot Jacks, who I mentioned earlier, was the author of these clarity on these different levels in organizations was very clear about this point, that really skilled managers have the ability to make these assessments about complexity. And what you really need to do is to pull the different levels of organization together at different strata together, so that they make judgments systematically on subordinates. General electric is very good at this and they have developed the capability to do it. But in my experience, most organizations are not capable of doing. It's the chicken and egg problem in a way. We want to get them capable, we need to get them capable. I'm talking about their managers and their managerial judgments, but they don't understand the problem well enough. They don't know what they're trying to measure, and they really don't know how to calibrate in a way so that they are seeing consistently what other people are seeing. So this is why I think that our experience has been that companies need the first pass to be done by independent professionals. And this is where we've come in over the years, not just me, of course, but others working with me. And we've gone in and done the first pass of assessments for organization. For that, I'm saying maybe for a large billion dollar plus company, we're talking, I don't know, 200, 300 assessments that go into the talent pool first off. And then the thing that needs to happen here is that we get feedback to the individuals first. I think it's really important that individuals know what's in their file organization, that they're not be secrets. And so I always insist that the individual gets to look at his profile before it goes anywhere else to see if they're comfortable what's in the file. And sometimes they object to what's there. And if that's the case, then I think it's important that there be a third party that takes another look at the individual, or there be some other ways that we get independent assessment so that we've got as objective a sense of the individual and the profile in the file as possible. Then, of course, the information needs to go to managers and managers, once removed, for coaching, mentoring and development, and talked a bit about that and how important that that aspect happens, and happens regularly and happens routinely and becomes a built in part of the way the organization works, and access to the data is absolutely vital on this. And then in parallel with this, the top HR staff need to access the information to support executives in succession planning, et cetera, so that executives have got a clear sense going forward of what the data is. And ideally, try and get groups of managers together for gearing sessions so that judgments can be made and validated. And so this should happen annually, and so that managers learn to measure the same things in the same way. And the point here is that it's not just about building competence in individuals, but it's also about building competence in the managerial organization to make the HR human talent judgments that are essential to the organization going forward. If that competence can be improved, then the whole thing moves much better.

Speaker D I could see that would be the case. You have a minute left till break. Would you like to complete this section, or would you like to mention how you collect the data, how the software?

Speaker C Well, I think I just close off by saying you got to have good software to hold all this information together. There's a lot of data. It needs to be reliable and accessible. We have a thing called the global Talent Management system software, which works on a database in everybody's computer. And we also have a web based version of this that companies use that are global or geographically spread.

Speaker D Good. Thank you. We'll take a break, and we'll be back to talk about more about talent management, where you have it done and what kind of results you where you've done it and what kind of results you get.

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Speaker B The new Management Network is a distinctive peer group of independent management consultants who share common professional ideas, understand creative innovation, and are dedicated to releasing the human spirit in organizations. Members of the network serve clients on issues of corporate purpose, strategic clarity, company wide alignment with direction, teamwork and organizational culture. We support executives to act quickly, directly and profitably on what needs to be done for success. Members practice throughout the world from offices in Beijing, Boulder, Cape Town, Cleveland, Costa Rica, Helsinki, Ottawa, Penticton, St. John's, Surrey, Sydney, Toronto and Vancouver. For details on services and members, and articles and newsletters on management topics, visit newmanagementnetwork.com. That web address again for the new management network is www.newmanagementwork.com.

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Speaker B You'Re listening to the new management network, bringing you practical insight into problem solving in a variety of business settings and management situations. Now back to your hosts, Don and Bonie folk.

Speaker D What about where you've done implemented the talent management, Don and what kind of results have you been getting?

Speaker C Well, over the past decade we've done this in, I guess probably eight or ten companies, ranging from engineering and construction through packaged goods, through software reselling to publishing into pulp and paper and other forest products. And it's been a very broad cross section, and I should also say in different scale too, that some of these companies are small entrepreneurial companies, some of them are older companies that are retooling and moving in different directions. And some of them are dealing with very rapidly expanding markets. And so it's been a broad cross section. And in terms of the results, I think the important thing here is to understand that individual companies have individual priorities in terms of the use of this kind of system. I remember one company looking at it and saying, when we were talking about doing it and looking at the kind of data structure we had and the individual profiles and saying, we want that. And the reason they wanted that is that they had major top level succession problems coming down the road in the next two or three years, and they needed a database that their board of directors could deal with in terms of assessing not only what the top level succession was going to be, but what other chess moves would take place properly to keep the company in full motion as it went through a major leadership transition so for them, the issue was succession planning, and succession planning at the top. In some other cases, the issue has been down the line. It's been at level three and four. It's had to do with the staffing of projects that are coming and the need to be able to look at a computer screen and say, well, where have we got level three and four capability that has certain kinds of skilled knowledge and experience, and we could move from one part of the country to another and take on certain projects. And so it's become an operational support tool of the highest order. And then in some other cases, it's a matter of looking longer term in terms of developing the next level of leadership that the companies have focused on. Let's identify those 27 year olds who we need to find now, because they got to make certain turns in order to be able to be in place down the road where we need them, at general manager levels, et cetera. There's a paper on the website, on our website, which is newmanagementwork.com, that's on global talent management, and there's a paper there that describes the way this system works in a company. And there's a series of questions there that I thought I'd just run down. And you can get a sense of the kind of questions that are answered.

Speaker D These are questions that ceos and Solana have asked you.

Speaker C Well, that's right. And the first one is the CEO who says, I need to know where my business unit heads are coming from seven years from now. This is a guy running a level six or seven corporation, which has multiple business units at level five. And he needs to know on a kind of a seven year time frame where the talent is going to come to run these individual business units, because that, to him, was his breakpoint in terms of whether he was able to do what he was setting out to do. A vice president at another company said, our young engineers are getting into middle management without the basic skills in people management. And I don't know when I've ever been in an organization that tends to hire a lot of engineers where, in fact, that hasn't been the case, that there's something about engineering training or maybe the kinds of interests that take people into engineering that makes them less able as people managers than they need to be once they get leading groups, projects, divisions, or companies in their later career. And so that's a question that needs to be addressed. And we've talked a bit about how this system gets at that. The general manager said, we need bosses and bosses. Bosses that is, the manager and manager, once removed, come to a meeting of the minds about what young managers and professionals need to develop fully. And it's tough when everybody is moving around the way we do in this company, geographically spread and with people on the move all the time. His concern, the general manager's concern, is that there just really wasn't a good opportunity for people to sit down and come to an agreement on what they had and what they needed to do to develop the young managers and professional. It wasn't good intention that was missing, it was the ability to do it. And somehow our talent management system and its supporting software makes this happen. And then in another company, a young high flyer says, you know, career visibility is important. I need to know that how I'm doing and what I want to do is on the screen of the powers that be. And if it's not, I'll go somewhere else where I'm seen. In other words, the kind of young men and women that you need to move your company ahead in the future. The ambitious ones often need to be assured that they're seen. Now, the VPHR in a company said, our tendency in appointments has been to grab the closest warm body and get on with it. A vacancy comes up, the problem staffing comes up. They look around, see who's available to grab the closest one. Away. They go to have managers consider a broader group, including people they don't know. They need a simple way of getting the information, which should include track record judgments on potential developmental needs. That way you can get a measurable, important incremental improvement in the way appointments are made.

Speaker D That sounds good questions and a good response. And I thank you for describing how talent management program ensures companies have succession in place. And the succession needs to be in place, of course, to support the growth strategies and how employees are going to achieve their career ambitions. I look forward to seeing you and the rest of the gang at the next new management network meeting, and we encourage you, the listener, to explore this subject further with dawn and me. You can reach us by email at folk at Danet, CA or by telephone at 1803 872165.

Speaker C That's folk Fowke at Vanet, CA.

Speaker D And next Tuesday at 11:00 a.m. Pacific or 02:00 p.m.. Eastern Don and I will be in conversation with Ari Lindeman of Kamen Lasco University of Applied Science in Finland, and we will be talking about developing small and medium sized enterprise. We will be exploring ways in which entrepreneurial businesses can be encouraged, supported and grown by a client centered approach to business. Please join us then and goodbye for now.

Speaker B Thank you again for joining us as an important part of the new management network. We hope you picked up some tips and plans to help you improve your management technique. Remember, for more information, visit new hyphenmanagementnetwork.com. Join us again next Tuesday at 11:00 a.m. Pacific Time 02:00 p.m. Eastern time for the new management network on the Voice America Business Network.