The CEO's role in talent management - DDI
The CEO's role in talent management - DDI
The CEO's role in talent management - DDI
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<strong>The</strong> CEO’s <strong>role</strong> <strong>in</strong> <strong>talent</strong> <strong>management</strong><br />
How top executives from ten countries are nurtur<strong>in</strong>g the leaders of tomorrow<br />
A company’s needs will change with time, too, as<br />
bus<strong>in</strong>ess strategy shifts. One of Mr Glass’s<br />
predecessors excelled at formulat<strong>in</strong>g strategy but<br />
another was better on the people side. Mr Glass had<br />
more of a f<strong>in</strong>ancial background. “Every leader takes<br />
that leadership position at a different po<strong>in</strong>t <strong>in</strong> time <strong>in</strong><br />
a company’s development and so different qualities<br />
are needed,” he says.<br />
Mr Zesbaugh says Allianz Life’s parent company, the<br />
Allianz Group, has been mak<strong>in</strong>g a more concerted<br />
effort to have an <strong>in</strong>ternationally diverse group of<br />
executives. Allianz Group has companies and offices <strong>in</strong><br />
70 countries. Some firms have been try<strong>in</strong>g harder to<br />
<strong>in</strong>corporate more women and m<strong>in</strong>orities <strong>in</strong>to their<br />
leadership ranks <strong>in</strong> order to service <strong>in</strong>creas<strong>in</strong>gly<br />
diverse customers. Nevertheless, as shown by this<br />
collection of <strong>in</strong>terviews, organisations have a long way<br />
to go <strong>in</strong> this area. <strong>The</strong> glass ceil<strong>in</strong>g may have some<br />
cracks, but it is not yet shattered.<br />
<strong>The</strong> importance of succession<br />
All of the executives <strong>in</strong>terviewed say that succession<br />
plann<strong>in</strong>g is a crucial part of <strong>talent</strong> <strong>management</strong> and<br />
that transparency <strong>in</strong> this regard motivates employees<br />
to perform at a high level, thereby foster<strong>in</strong>g stability.<br />
“You need to be able to justify and<br />
“Empower<strong>in</strong>g is someth<strong>in</strong>g we do communicate to people why they<br />
very well. I see my <strong>role</strong> as how do I are on a list or not on a list. If you<br />
create multiple CEOs with<strong>in</strong> the articulate why you have the views<br />
organisation.”<br />
that you do, you lose fewer<br />
Shiv Nadar, the CEO of HCL Technologies. people,’’ responds Mr Care.<br />
Accord<strong>in</strong>g to most of the<br />
<strong>in</strong>terviewees, firms that allow workers to languish<br />
without hope of advancement could lose them. About<br />
four <strong>in</strong> five of the Co-operative Group’s senior<br />
executives were recruited from other organisations. Mr<br />
Beaumont found that ratio unacceptable when he<br />
became CEO <strong>in</strong> 2002 and has overhauled the<br />
company’s <strong>talent</strong> <strong>management</strong> approach. Bob Rogers,<br />
the president of <strong>DDI</strong>, says companies are focus<strong>in</strong>g<br />
more on succession partly because of pressure from<br />
<strong>in</strong>vestors. “You don’t want the <strong>in</strong>vestment community<br />
to th<strong>in</strong>k there’s a lack of potential successors.”<br />
Consequently, all the firms had multiple succession<br />
plans to address different levels of leadership. All but<br />
one could identify their potential successors now and<br />
several years <strong>in</strong>to the future. All could name potential<br />
replacements at other key positions. “Empower<strong>in</strong>g is<br />
someth<strong>in</strong>g we do very well. I see my <strong>role</strong> as how do I<br />
create multiple CEOs with<strong>in</strong> the organisation,” says Mr<br />
Nadar of HCL Technologies.<br />
A strategic <strong>role</strong> for HR<br />
As <strong>talent</strong> <strong>management</strong> has grown <strong>in</strong> importance <strong>in</strong><br />
recent years, so has the <strong>role</strong> of HR departments. This is<br />
positive news for senior HR professionals who have<br />
long been seek<strong>in</strong>g greater <strong>in</strong>volvement <strong>in</strong> matters of<br />
strategic importance. All of the <strong>in</strong>terviewees say that<br />
HR departments are responsible for execut<strong>in</strong>g <strong>talent</strong><br />
<strong>management</strong> strategy, be<strong>in</strong>g custodians of the <strong>talent</strong><br />
<strong>management</strong> process and often provide guidance and<br />
fresh th<strong>in</strong>k<strong>in</strong>g about <strong>talent</strong> <strong>management</strong> programmes.<br />
<strong>The</strong>y coord<strong>in</strong>ate recruit<strong>in</strong>g, help set job goals and<br />
compensation, <strong>in</strong>troduce new development<br />
programmes, as well as monitor and report on<br />
<strong>in</strong>dividuals’ progress. Allstate’s head of HR vets<br />
candidates for lead<strong>in</strong>g executive positions and has a<br />
voice <strong>in</strong> selection.<br />
Mr Zesbaugh expects HR to track <strong>talent</strong><br />
<strong>management</strong> trends and programm<strong>in</strong>g at other<br />
companies. “I don’t always have the luxury of see<strong>in</strong>g<br />
everyth<strong>in</strong>g. What I look to them to do is come up with<br />
<strong>in</strong>novative ways to move our leadership to the next<br />
level.” At Arup Australasia, HR serves as a sound<strong>in</strong>g<br />
board for employees about development and their<br />
careers. Sh<strong>in</strong>sei Bank works with a chief learn<strong>in</strong>g<br />
officer.<br />
All but one <strong>in</strong>terviewee say their director of HR is<br />
part of their <strong>in</strong>ner circle, along with C-level executives.<br />
At YRC Worldwide, the head of HR is “my consigliere,”<br />
says Mr Zollars.<br />
8 © <strong>The</strong> Economist Intelligence Unit 2006