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*IF72*
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MKTCPBK02-0706 # #
 THE CEO’S GUIDE TO:

TALENT
MANAGEMENT
Building a Global Leadership Pipeline

By

Richard S. Wellins, Ph.D.

Audrey B. Smith, Ph.D.

Robert W. Rogers

© Development Dimensions International, Inc., MMVI. All rights reserved.

 CONTENTS

1 What is Talent Management?

2 Why is Talent Management a CEO Priority?

3 Ten Traps and How to Avoid Them

4 Seven Steps to High ROI Talent Management,

and Your Contribution

1 : Starting with the end in mind

2 : What kind of talent does the business need?
3 : What and where are the gaps?
4 : Identifying high potentials
5 : Assessing readiness for leadership transitions
6 : Accelerating development
7 : Focusing and driving performance

Author Biographies

About Development Dimensions International (DDI)

Appendix A

Footnotes

# 1
 Penetrating the organization wider and deeper than succession
SECTION : ONE planning, an effective talent management system builds a
winning organization by:

• Connecting corporate strategy with the quantity and quality

What is Talent Management? of leadership required to execute it.
A CEO we talked to recently told us that while he couldn’t
• Driving leaders’ accountability for the cultural strategies that
provide statistics linking talent management to performance, support business goals.
he partially attributed his company’s growth from $6.4 billion to
more than $10 billion over four years to the exceptional quality • Identifying those individuals with the highest leadership
of his people. The company, a leading provider of medical potential across the organization early in their careers.
devices, has seized opportunities ahead of some of its competi- • Assessing high-potential talent against a holistic and future-
tors. One of the crucial elements of this company’s success: facing definition of leadership.
This CEO spends about half his time on talent management.
• Accelerating the development of high-potential talent and
Yet we still talk to senior VPs of human resources every day improving the quality of executive leadership.
who complain that their CEOs still treat talent strategy as an
• Enhancing the focus on growing better leaders at all levels,
afterthought, failing to grasp both how it supports their plans for from first line upwards.
the business and their role in steering its course. And while we
talk to CEOs who know talent management needs to be a per-
sonal strategic priority, they seem unsure about best practices
and the best path for their own company. What we want to
demonstrate in these pages is how talent management can
become the most critical process in meeting your strategic
goals and taking your company to the next level.

So what is talent management? We’re sure you’ve seen

many definitions. In simplest terms, it’s the recruitment, devel-
opment, promotion, and retention of people, planned and
executed in line with your organization’s current and future
business goals. Because it is aimed at building leadership
strength in depth, it creates flexibility to meet rapidly changing
market conditions. A structured talent management process will
systematically close the gap between the human capital an
organization currently has and the leadership talent it will
eventually need to respond to tomorrow’s business challenges. Figure 1 DDI’s Comprehensive Talent Management Model

2 3
 SECTION : TWO

Why is Talent Management

a CEO Priority?
In your career to date, you’ll doubtless have seen management
theories come and go. In the ’80s, marketing reigned supreme
as Porter’s insights on competitive forces made strategists of
“I would say on a long-term basis, us all. In the ’90s competitive edge was to be had through
reengineering and ‘lean.’ As we’ve exhausted the differential
as the CEO, I have primary advantage these afford, off-shored the production they support,
and added value through how, not what, we deliver, attention
responsibility for. . .ensuring that has come to rest on the quality of leadership as a driver of busi-
ness performance.
the management team remains
Unfortunately, this realization hits at a time when demand
vital, relevant and refreshed, and exceeds supply. The demographic factors underlying this have
been well-rehearsed: From 1998 to 2008, while the workforce
that we create a process to nurture is expected to grow by 12 percent, the number of 25–44
year-olds (the age cohort from which tomorrow’s leaders must
and facilitate our own succession. emerge) is expected to decline by 6 percent .1 This is not only
a North American concern; Europe and parts of Asia face
That is one of the two or three similar challenges.

most important things that a History, too, plays its part. The ’70s saw dramatic reductions
in investment in talent development, and the de-layered organ-
CEO must do.” izations of the ’90s provided less opportunity for incremental
development in a variety of progressively more responsible
John Swainson, CEO roles. New Economy companies were voracious consumers of
CA Inc. (United States) high quality people in entrepreneurial roles who, ten years
before, would have ascended on more structured career ladders,
acquiring leadership skills along the way.

In the past 5 years, economic growth, new market expansion

and globalization have kick-started many organizations’ needs
for job-ready leaders of a different caliber—mobile, adaptable,

4 5
“Very specifically [my responsibility] is to be working with the senior
team in developing their capabilities but also to assist them in coming
up with ideas, concepts, procedures, policies to develop their workforce Figure 3
all the way through the organization. It is one of the most important Industry-adjusted
things I do.” Profit Margin
and Leadership
Thierry Porte, CEO, Shinsei Bank (Japan) Development
Strength Index

culturally aware and technologically literate. Consider Trend

Micro—headquartered in Japan, with its R&D function in China
and its worldwide sales operations in California. When we ask
the custodians of resourcing plans across the globe how they
In a recent DDI survey with the Economist Intelligence Unit,5 20
frame the challenge, two-thirds of human resource (HR) profes-
CEOs interviewed for the study said that talent management
sionals believe it will be significantly more difficult to find middle
was their responsibility, taking as much as 50% of their working
and senior leaders in the future .2
time—a very large amount when one considers a top execu-
It’s tempting to regard the solutions to your own pipeline deficits tive’s crowded agenda.
as the province of human resources specialists and a good
It’s axiomatic that it pays to leverage the resource on which
headhunter. However, in both the 2003 and 2004 CEO
companies spend, on average, one third of their revenues. But
Challenge Reports 3 issues of leadership talent and employee
beyond this simple truth, there’s a plethora of research that
engagement were identified to be among primary CEO concerns.
underscores the quantifiable connection between talent and
In DDI’s 2005–2006 Global Leadership Forecast , meanwhile, business performance, and explains the increasing investor
over 4,500 leaders from around the world cited improving scrutiny this attracts:
and leveraging talent as their second business priority (on
• DDI’s Leadership Forecast 2005–2006 (Wellins, R. and
a list of 14), preceded only by improving customer service
Bernthal, P., 2005, DDI), showed that companies with
relationships.4
stronger leadership development systems enjoy higher
returns on equity and profit when compared to their competitors.
(See Figures 2 and 3)
Figure 2 A 1999 study by Sibson & Company and McKinsey6 showed
•
Industry-adjusted a direct link between quality of succession management
Return on Equity
programs and shareholder return.
and Leadership
Development
Strength Index
• Hewitt Associates reports that the vast majority of top
financial performing companies (85 percent of the top 20 in
a field of 373 companies) hold their leaders accountable for
developing talent, compared to just 46 percent of leaders
from the other organizations.7

6 7
“The competitive advantage of any company comes from excellent execu-
tion. The execution of strategy is driven by the behavior of leaders.”
Maarten Hulshoff, CEO, Rodamco Europe N.V. (The Netherlands)

More than this, talent is a rapidly increasing source of value

creation. In 1982, The Brookings Institution found that 62
“The way in which I give myself
percent of an average company’s value could be attributed
to its physical assets (e.g., equipment, facilities), with only
the emotional strength to [make
38 percent attributed to intangible assets (e.g., patents, intellec- tough talent decisions] is to tell
tual property, brand, and, most of all, people). Yet just one
generation later in 2003, these percentages more than myself that for the good of the
reversed themselves, with 80 percent of value attributable to
intangible assets and just 20 percent related to tangible assets.8 organization we need the best
Finally, for some companies, the most urgent driver to
engage with the talent agenda is CEO succession. CEO
leaders in place and that if I’m not
turnover has exceeded 300 percent over the past five years, willing to make it uncomfortable
with no let up in sight. Boards and investors are putting senior
leaders under a microscope with scrutiny most intense at the for somebody who just is doing an
CEO level. Inspiring shareholder confidence in business conti-
nuity requires that there is a ‘Plan B’ should emergency surgery all right job but just isn’t going to
be required.
take it to the promised land, then
But smart companies are getting wise to talent as a differentiator,
and this same pressure to demonstrate both consistency and I’m doing the rest of those people
agility is permeating up and down the org chart—not just at the
C level, but at all levels. Every CEO we talk to tells us that a disservice. You have to do
demand for leaders exceeds supply from first line leaders up.
The pressing question, then, is how to accelerate the process what’s good for the team.”
of nurturing and maturing leaders so that absence of talent is
never an impediment to your business goals. As with all change
Tom Wilson, COO
initiatives, it’s only when you, the CEO, invest your time and The Allstate Corp. (United States)
energy that they are internalized by the entire organization and
truly shape your company for the better.

8 9
 “Companies that have strong management development and success
SECTION : THREE processes in place tend to have smoother transitions. When executives
move on to other roles or leave the business altogether, that ultimately
has a cost...The fact that people are prepared to move into positions
Ten Traps and How to Avoid Them rapidly and can assume those positions is an important thing.”
In most companies, the processes and tools around identifying John Swainson, CEO, CA Inc. (United States)
potential and accelerating the development of top leadership
talent are facilitated by HR. In the best companies, however, a
strong sense of personal responsibility to spot, nurture and TRAP 1
retain talent is deeply embedded in every leader’s approach to PAYING LIP SERVICE TO A TALENT
their role, and is evident in how they spend their time. This MANAGEMENT STRATEGY.
stems from a perception that the CEO sees talent as a strate-
‘CEO support, CEO support, CEO support. Without it, you might
gic priority, and is the constant champion of those initiatives that
as well not bother’ according to the SVP of HR at Panasonic.
drive it.
That organization has it, and uses this to ensure that the supply
On the following pages, we list some of the snares we of talent within this globally expanding business keeps pace with
commonly see in the design and execution of talent its growth. A whopping 96% of Chairmen in a recent survey
management strategies. Each is followed by a component, which, ranked talent management as highly important to the success of
with your personal commitment, will help you realize genuine their organization, yet one third of organizational succession
business impact. plans are ineffective and showing no signs of improvement.9

YOUR ROLE
Ensure that you and your team can provide unified answers to
the following fundamental questions:
“We don’t sit down each year and justify our spending on leadership
management. It’s a given that it’s beneficial and that it’s a good • What are the pressing business drivers for growing our talent?

investment. We see when we put a new person into the job who’s • What business value should we expect if we’re successful at
good or better, the business results get better.” talent management?

Michael Critelli, CEO, Pitney Bowes (United States) • What will impact leadership success and failure in our
organization?

• Are we prepared to differentiate focus and investment in our

employees based on their leadership potential?

• What actions are taken as a team and individually to improve

our talent?

10 11
Use all the support a strategic HR leader can offer in designing TRAP 3
a strategy, synchronize the timing and focus of the people plans CONFUSING TALENT MANAGEMENT
with your business planning process and outcomes, and retain WITH SUCCESSION PLANNING.
personal ownership of the execution. Above all, stay involved.
Many companies claim a talent management strategy when
The beauty of a strategy in this, as in other matters, is that once
what they have is a contingency plan for replacing those
it’s devised and launched, it provides momentum and meaning
occupying the top slots. Successful organizations make three
to the separate steps of the process, and is easier to measure
key distinctions:
than a series of isolated initiatives.
• They balance the focus on ‘linch-pin’ positions and key
players with broader strategies to support leadership transi-
TRAP 2 tions at every level—from contributor to leader, to leader
NO CLEAR DEFINITION OF ‘LEADERSHIP.’ of leaders and so on. They segment their talent base.

Start with the end in mind. Based on your business strategy, • Their energy is directed at building a ‘pipeline’ or ready sup-
ply of leaders, rather than matching individuals with a specific
looking to the future, what challenges will leaders need to
future role. Companies which do this well designate ‘talent
address? What knowledge, experience, skills and personal pools’ of those whose growth they want to accelerate, whose
attributes will be critical to their success in doing this? members are the subject of differential development focus.
(Organizations tend to focus on skills and knowledge, forgetting
• They are careful not to treat all roles alike. They plan for the
that inappropriate personal characteristics or experience are future security of those roles, which both add the most value
more likely causes of failure.) Further, the prescription for and where there is the highest variability of performance.
success differs for different roles and challenges; our experi-
ence is that there may be a greater disparity between roles than YOUR ROLE:
between organizations. For example, the success profile for a
Champion a ‘learning culture’ that prepares people to handle
leader expected to drive double-digit growth may differ from
each major transition, assignment and career move. This
one required to institutionalize lean manufacturing.
requires that all leaders:

• Become talent scouts, responsible for unearthing early

YOUR ROLE potential, and are celebrated as such.
Work with HR and your senior team to articulate with absolute • Actively support and track their people’s development,
clarity what characterizes successful future leaders across as well as modeling personal growth themselves.
senior, middle and first levels of your organization. Ensure
• Are held accountable through the performance management
these profiles reflect what leaders need to do to drive strategy system for measurable objectives in growing leadership talent.
execution, and keep them current as your organizational goals
• Have incentives to support talent processes, for example,
change. bonus linkages to their talent-related achievements.
Work with your senior team and strategic HR to define the
major value-creating roles in your organization. These will be
those on which the execution of your business strategy hinges.

12 13
 every step of the process. Make sure, also, that all stakeholders
“You need to be able to justify and communicate to people why they are understand what the process is NOT—for instance, a guarantee
on a list or not on a list. If you articulate why you have the views that of future promotion. CEOs need to insist that top talent is the
you do, you lose fewer people.” property of the organization as a whole, and provide adequate
funding for organization-wide initiatives as evidence of this.
Robert Care, CEO, Arup Australasia (Australia)

TRAP 5
TRAP 4 WAITING FOR THE CREAM TO RISE.
SHROUDING THE PROCESS Your senior managers may argue that they know who their
AND GROUND RULES IN MYSTERY. successors are when they look at the next layer down in the
organization, but strength in depth comes from spotting talented
Some organizations are wary of de-motivating their steady
people currently 5, or even 10, years away from senior roles
but unexceptional performers, but transparency in your talent
and accelerating their readiness for bigger challenges, sooner.
management processes is generally a better policy. In some
For example, ICI looks for leadership potential in their new
companies it is widely known that there is a high potential talent
graduate recruits.
pool, and members know they will receive differential develop-
ment focus and support. Others are less overt about
the process, and many organizations prefer discretion around YOUR ROLE
individual names. Either way, clear nomination and selection Your role is as chief talent scout, looking beyond the usual
criteria, consistently applied, help generate energy and engage- suspects, getting out to the field and onto the floor, looking and
ment in line managers around the strategy and stimulate listening for standout performers. Make it clear to your entire
aspirations in those seen as having the most growth promise. senior management team that this is their job too, and provide
Once the process is clear, create essential ground rules, clear criteria. Don’t confuse this with decisions about readiness
foremost of which is: ‘No one department or manager owns the for bigger jobs, which should be based on some form of
talent.’ We know of exceptional leaders who reluctantly leave assessment—it’s simply the first step in narrowing the funnel
great companies just because their managers won’t counte- for a differential focus on key players.
nance a move to another operating unit, although there’s
no bigger job ready within the existing team.
“Because the total (Johnson & Johnson) strategy focuses on growth
and innovation, the HR strategy has to tie in to how can we grow
YOUR ROLE
faster. So the strategy includes how we can expand the pool of talent
You need to help frame the process and criteria, then commu- from recruitment, how can we expand the competency of existing
nicate them. Give those nominated clear expectations about
talent, the third is the retention of talent.”
what commitment they’re making and what the organization
Cindy Lau, Managing Director, Johnson & Johnson China (China)
expects of them, and in turn, what the organization intends with

14 15
 TRAP 6 TRAP 7
USING SUBJECTIVE DATA TO MAKE IGNORING QUIRKS OF PERSONALITY
CRUCIAL DECISIONS ABOUT TALENT. IN PROMOTION DECISIONS.
Most critical business decisions are founded on in-depth infor- It’s a common mistake to overlook potential personality
mation and careful analysis. Sadly, the same due diligence is ‘derailers.’ Derailers become obvious during times of stress,
not as often applied to leadership promotion, placement and increased visibility or challenging transitions, and include styles
development decisions. Companies such as Citigroup, GKN and traits, which may have been helpful at earlier career
and Nissan perform robust diagnoses of specific, individual stages. For example, confidence may veer into arrogance (i.e.,
development needs in relation to the target level they may over-estimating one’s own importance), passion may slide into
eventually occupy. Such analysis should take account of the volatility, and highly sociable individuals may become self-pro-
whole person, including personality traits, and lead to a tailored moting. Derailers can have significant consequences when
personal development plan. Generic training programs for your senior leaders are allowed to display them unrestrained by self
high potentials need to be viewed with caution unless there or others. They should be uncovered at the diagnostic stage
are obvious needs in common, such as understanding your (TRAP 6), and individuals made aware of them.
business strategy.
YOUR ROLE
YOUR ROLE The best CEOs remain mindful of potential derailers when
Learn about the wide array of objective assessment options planning placements and promotions and are not seduced by
available to support accurate evaluation of—or ‘due diligence’ candidates’ intellect or results to date into believing ‘derailers’
on—your talent. Check for business focus—what do the out- won’t have an impact.
puts of the process look like, and how will they help you make
difficult and high-risk placement decisions relative to desired
business outcomes? Often, specialist HR consulting firms can
help in this area, providing (more visible) objectivity and scalability.

“You may get somebody onboard and discover that they are not really
as good as you thought. That can strain growth. In a business like
ours, there is such an incredible interdependency that the lack of an
effective leader in one part of the organization can actually strain
another.”
John Swainson, CEO, CA Inc. (United States)

16 17
 TRAP 9
“The best kind of development of development is putting someone in a
IGNORING THE TEAM MOSAIC.
job that tests them where they haven't been tested before.”
As with any business decision, the broader context within
Michael Critelli, CEO, Pitney Bowes (United States)
which promotion or selection decisions take place has a major
bearing. Too often, the ‘best player for the play’ is chosen for
a job, without regard to whether this is also the ‘best player for
TRAP 8 the team’—and this isn’t necessarily the same person. It can
LAZY THINKING ABOUT be hard enough finding someone with the right blend of attrib-
DEVELOPMENT SOLUTIONS. utes for the role, without adding the filter of how their personal
If your IT manager has a future as a strategic leader, give him characteristics, strengths and weaknesses will compliment the
the corporate e-procurement strategy to develop and imple- group they’re joining, but failure to assess and explore this
ment, so that he’s exposed to every area of the business, rather dimension is at the root of much sub-optimal team and individ-
than sending him to a business school for a month. If this new ual performance. Most organizations we know also want to
accountability pays off, you’ll have a way of measuring the suc- build diversity when they appoint people to a team, so seeking
cess of your talent management strategy that goes right to the differences as well as obvious ‘matches’ is advised.
heart of the business. The magic is in the mix of classroom
training, action learning projects, special assignments, new YOUR ROLE
challenges, manager support, reading, etc. But the trick is to Ask yourself both questions—is this the right fit for the
ensure that people know what they’re expected to gain from a role? AND is this the best person for the team? Remember
job experience, and have the resources to help them reflect and that if the answer to the second question is ‘no,’ then this is also
distill the learning. likely to become the eventual answer to the first. It’s essential,
also, that you keep others honest and hold them to the same
YOUR ROLE questions in decisions in which you’re less directly involved. Of
As CEO, you are uniquely placed to see what’s occurring course, this requires that you know the individuals involved, or
in your business that might represent a development opportu- can rely on the advice of those who do. If you have inadequate
nity. Determine the outcomes you want by way of measure- data, seek the support of HR who will be able to provide a
ment and ensure creative thinking about development options range of tools to bring some rigor to your thinking.
as well as the organizational support the individual might need
for success.
“It’s understanding not only the individual nature of the candidate
or the potential colleague but the culture into which he’s going to
be operating and whether that fits.”
Peter Johnson, CEO, Inchcape plc (United Kingdom)

18 19
 TRAP 10
ASSUMING YOUR MANAGERS AT ALL LEVELS
ARE ‘TALENT LEADERS.’
Our data on over 1,000 senior leaders shows that developing
and championing talent is one of their weakest areas. In fact,
the reality is that many mid-level managers upward struggle
with the idea of development as being anything but remedial.
They may have by-passed key career transitions, which have
left important leadership skill deficits, yet fail to prioritize—or are “[Talent management] is about
dismissive of—training opportunities. They tend to focus on
correcting ‘weaknesses’ rather than capitalizing on each
making sure that you have the right
person’s unique talents. But if every people leader has the
skills to scout for ‘high potentials,’ have meaningful perform-
people in the right places for both
ance discussions and coach for success, build creative devel- themselves and the organization,
opment plans and make effective hiring/promotion decisions,
talent management processes will have momentum of their and needing to make sure that you
own. For this, managers need enlightened role models.
as chief executive are taking
YOUR ROLE responsibility for the development
As CEO, insist that HR has a system in place to develop talent
management skills in leaders at all levels. Beyond this, your of your leadership talent. It’s one
personal investment will have the most significant impact:
of the best legacies that you can
• Use every opportunity to participate in off-sites and learning
sessions with your leaders of the future leave any organization.”
• Make time to introduce and contribute to these events with
Michael Wilkins, CEO
your knowledge of the business and stories of pivotal points
in your own career Promina Group (Australia)
• Engage your Board in these activities

• Ensure that you hone your own coaching skills and prioritize
time to evaluate the performance of and coach your immedi-
ate team

• Demonstrate your own commitment by getting involved as

a mentor with a handful of stars from further down the
organization. You will learn as much as your mentees!

20 21
 STEP 1: STARTING WITH THE END
SECTION : FOUR IN MIND—YOUR CURRENT AND
FUTURE BUSINESS NEEDS.
Talent management delivers real competitive advantage when
What Best-in-class, Excellence your business goals and strategies are the starting point for
in Talent Management Looks determining the quality and quantity of the talent you need.
Like and Your Contribution Proctor & Gamble, for example, considers business decisions
For over three decades, DDI has helped thousands of organi- and talent decisions as one. Reflect on the different talent
zations around the world achieve superior business results needs of these organizations:
through selecting, developing, and retaining exceptional talent.
• “We are a global automobile manufacturer that has steadily
Over the course of this time, through both experience and
lost market share. What sort of talent are we going to need
extensive research, we have developed a process which incor-
to shake up the status quo, rejuvenate our brand, and drive
porates best practices and serves as the foundation for a talent
the lean manufacturing initiative needed to turn things
management system. Addressing each of these components,
around?”
in turn, will help you build a strategy for managing talent, which
truly supports what you’re trying to achieve as a business. • “We are a utility in the midst of deregulation. Consumers will
have choices. On top of that, we are getting into whole new
businesses. How will the skills of the talent we currently
have fit with our new entrepreneurial business model?”

• “We are acquiring one of our biggest competitors in the med-

ical diagnostic arena. Who will oversee the integration?
What is the right management team for our new company?
“What we want to do is force managers out of managing people and into Who will help us focus on quality and cost containment,
while pursuing new markets? How will we ensure we retain
leading people. They have to have good quality people in the next level.
the best?”
And those people...have to know what the strategy is, know how to
execute it and have to be capable to execute it.” These real scenarios are vivid illustrations of the need to inter-
Scott Mac Meekin, CEO, Bossard Trans Pacific (Singapore) twine talent requirements with business needs—which means
that the business and talent planning processes need to
happen in synch.
At the same time as strategic plans and forecasts are prepared
for business units or functions, address the questions of who
will execute each piece of the plan and what skills they pos-
sess (and need to develop) to enable them to be successful.

22 23
The first challenge organizations often wrestle with at this point YOUR ROLE
is getting the senior team on the same page to prioritize strategic
While your organization may have articulated strategies and a
goals and the desired culture in terms of expected leadership
core set of values, be sure that they are fully operationalized
behavior. Building consensus about how to mobilize the energy
into a few concrete and measurable priorities that can drive com-
of the organization in a common direction and clarifying
petitive advantage. It’s also important to go one step further and
accountabilities are often the starting points for translating a
agree on the leadership imperatives required for successful exe-
talent strategy into action. This can be accomplished through a
cution. These elements define what you should expect from
focused, well-facilitated session with your senior executive
your leadership team, and connect your key strategies and the
team. The outcome of this session should be a clear definition
‘type’ of leadership talent you will require.
of the following elements:
You’ll need to facilitate consensus and keep relentless focus on
1. Key strategic priorities (the Whats): These are the handful
the prize (your organization’s vision) to guide decisions that
of highest impact priorities, which provide focus for people’s
drive these three elements across your business. It is impor-
energy and drive key business initiatives that will expand
tant to look at both the bigger picture (i.e., common ‘end game’)
business, increase market share, or improve profitability—in
as well as unique leadership imperatives specific to different
short, propel your organization ahead of the competition.
businesses. Use the realities of external business drivers and
Creating ‘lead’ and ‘lag’ measures brings these to life in your ‘best bet’ market opportunities as your yardstick.
organization. Beware of becoming overly reliant on the ‘lag’
Further, selection, promotion and placement decisions take
measures (e.g., revenue achieved) as opposed to the ‘lead’
on added significance in the context of a talent management
(e.g., sales funnel), since it’s the latter which allows for
strategy. Tempting as it is to reward a stellar track record of
course correction when threats to strategy achievement
results alone, bringing someone in to the leadership team who
emerge. (See Appendix A for sample measures.)
is not seen to live the company values sends the strongest
2. Cultural priorities (the Hows): These are the core organi- possible message that the quality of leadership is unimportant
zational values, beliefs, and expected behaviors that define in your organization.
how work is to be accomplished, and how employees interact
One of the chief advantages of a well executed talent manage-
with one another and customers. You will likely have these
ment strategy is that you’re obliged less often to take such
in place—but are they tightly aligned with strategic priorities?
risks on an unknown quantity because you have many more,
3. Leadership imperatives: These are the broad challenges better-informed options to promote from within.
to which leaders must step up, to drive the successful exe-
cution of the strategic and cultural priorities (e.g., driving
change, penetrating new markets, controlling cost, etc.).
They may be common across levels and units; alternatively
they may be different in different markets or segments.

24 25
“I actively encourage the board to spend time in the bank meeting
with various groups of people—without my presence—to see what
they can pick up and understand. And then we sit down and talk
about what’s been observed and what's been learned and what
things we need to focus on.”
Thierry Porte, CEO, Shinsei Bank (Japan)

STEP 2: WHAT KIND OF TALENT

DOES THE BUSINESS NEED?
SPECIFYING THE QUALITY OF TALENT NEEDED TO WIN. Figure 4 DDI’s approach to defining required leadership capabilities.
This involves translating your unique requirements into
Many companies attempt to define one consistent leadership
concrete descriptions of the type and quality of talent you need.
profile for all types and levels of leader. In reality, success
This means determining the ‘success profile’ for key organiza-
profiles need to differ based on level (e.g., strategic, opera-
tional roles or levels, and sizing up both the quantity and
tional or front-line leader), role and, critically, changing leader-
quality of your leadership bench in relation to current and future
ship imperatives so that they represent the ‘wiring’ to execute
business needs.
effectively. Include technical or functionally-specific skills where
It may appear at first to be tactical HR activity, but your experience relevant.
of the differing roles within and your intimate knowledge of your This ‘profile’ also provides the information needed to drive sub-
organization are critical to this step’s effectiveness. You are also sequent steps in the talent management process, and other HR
uniquely placed to forecast the implications for talent of emerg- systems such as on-boarding and performance management.
ing business strategies, and can help ensure that your ‘success
profiles’ are really future-proof.
EXECUTIVE DERAILERS
DDI’s analysis over the last decades of why leaders succeed
WHEN DERAILERS BECOME Most Common Examples
and fail has led us to believe that performance at any level is DEVELOPMENT NEEDS - Impulsive
linked to four categories of capability: – A strength no longer matters
- Low tolerance for ambiguity
- Arrogant
1. Organizational Knowledge—What I know. - Micromanaging
– A strength becomes a weakness - Self-promoting
2. Experiences/ Job Challenges—What I have done in the past. - Volatile
3. Competencies—What I am capable of. – An untested area becomes a weakness - Risk averse
- Defensive
4. Personal Attributes—Who I am. – A flaw now matters - Imperceptive
- Approval dependent
– A blind spot becomes a flaw - Eccentric

Figure 5

26 27
 A capacity analysis of this sort would be designed to address
Our experience is that for aspiring and incumbent senior leaders,
these questions:
knowledge, experience, and competencies are all critical for
success—but it is the personal attributes, especially potential • What are your most significant business challenges?
‘leadership derailers’ that are most likely to predict failure. This
means it’s essential to measure a leadership candidate’s
• Have you a sufficient pipeline of talent to address these?

prospective derailers, and other personal attributes (including • What may be happening three to five years out that might
values and motivation) for selection into critical jobs. impact the number and type of leaders you will need to drive
success?
YOUR ROLE
• Where are your most significant leadership gaps (e.g., you
The language of derailers is so helpful for discussing the impact may have a sufficient number of potential leaders to drive
of personality on leadership style and team effectiveness that innovation and product development, but may fall short on
you may value diagnosing and understanding your own and those required to work on global assignments)?
those of your team. Your HR team should be able to facilitate
this. • How are such regular audits integrated into your business
and strategic planning process?

STEP 3: WHAT AND WHERE

ARE THE GAPS? YOUR ROLE
SPECIFYING THE QUANTITY OF TALENT NEEDED TO WIN. Insist that HR works with your senior team (and usually, the next
level as well) to define success profiles specific to your leader-
Once you’ve determined what kind of leadership talent you
ship imperatives. Similarly, insist that business units provide a
need for a target level—say tomorrow’s executives—you need to
sound leadership/talent forecast as part of their business plan,
quantify how much talent will be required to meet future business
visibly supporting its demands. (Many companies have leaders
needs. Since the answer is usually “we need more than what we
collaborate with HR business partners to do this.) A key next
have today,” this analysis often shapes the business case for
step is to discuss and challenge your team members’ projec-
investment in talent management.
tions and help them to think creatively around solutions to
issues. We’ll talk later (Step 4) about the ‘Talent Audit’ as a
more exact approach to gauging the readiness of your com-
pany’s leadership to deliver on strategy.
“When you’re thinking about leadership, it’s important to think about
everybody in the organization, not just succession planning starting at
the most senior role.”
Tom Wilson, COO, The Allstate Corp. (United States)

28 29
STEP 4: IDENTIFYING DDI sees three components as key to spotting and optimizing
HIGH POTENTIALS. high potential talent:
UNEARTHING THE DIAMONDS.
As we’ve said, talent management is not about mapping an 4.1 EVALUATING CURRENT
able candidate to a specific future job, but enhancing organiza- PERFORMANCE.
tional leadership capability on a broader scale. This important This means assessing the effectiveness of a person’s perform-
step acts as a screening mechanism for those most likely to ance and behavior in their current role, which should be done
become tomorrow’s leaders, providing a basis for a flexible before evaluating potential. We believe that sustained high per-
‘pool’, which individuals—for any number of good reasons— formance in the current position is a pre-requisite for potential.
might move in and out of as years go by.

Unfortunately, just 34 percent of companies feel that they are YOUR ROLE
effective at identifying those with potential to lead early in their Of course, current performance is best assessed by managers
careers, yet those that do, perform better.10 Common mistakes and coworkers (through a sound performance management
include: process). Your role is to model and champion management
focus on:
• Focus on current performance alone.

• Inconsistent criteria. • Defining clear performance expectations and measures

which can be easily cascaded down.
• Unchallenged perspectives and opinions.
• Committing time to managing performance (observing,
• Provincialism—“promote your own” strategies.
coaching, giving feedback) such that this data is current and
• Singular focus on strengths (no consideration readily accessible across the organization.
of leadership derailers).
• Balancing consideration of results with behavior, using
• Identification without subsequent diagnosis the values of your organization as a unifying code, which sets
of development needs. expectations of leader behavior.

“Figuring out how to manage where you put that individual and
where you make room for the people under them that truly do have
the potential to get to the next level is by far the biggest [talent
management] challenge we have.”
Michael Critelli, CEO, Pitney Bowes (United States)

30 31
 4.2 IDENTIFYING POTENTIAL. Many organizations create a snapshot of organizational
capability by plotting their top—say—100 on a performance/
In other words, this means determining which individuals have
the most growth promise. Who will take best advantage of and potential matrix, or this may happen at a divisional or functional
respond positively to differential development opportunities? level. These analyses are often the output of talent review
Who will support the organization’s values, as well as being discussions. You need to be an active contributor to these and
able to apply what is learned productively within the organization? promote rigor and challenge so that selections into the ‘pool’
truly represent your company’s best bets.
If you can identify potential effectively, you can focus your
investment on those individuals who will generate the highest
ROI in terms of their ability to grow quickly and broadly. Based 4.3 CREATING AN
on our experience, the factors that comprise potential are very ‘ACCELERATION POOL.’
difficult to develop. Figure 6 on page 34 shows the ten factors. Once you have screened for leadership potential, those
meeting the criteria are admitted into a ‘talent pool,’ or, more
“A lot of people have the same strategies as we have but we do better in accurately—since the point is that they will be the target of
some businesses than our competition because our managers are very more focused and rapid development—an ‘acceleration pool.’
good at execution.” The beauty of such a ‘pool’ is that it provides flexibility and,
Ken Glass, CEO, First Horizon National Corporation (United States) eventually, greater organizational self-sufficiency around your
current and future talent needs. It becomes the first port of call
when high-value roles need to be filled and special assign-
YOUR ROLE
ments emerge. It also provides a forum for emerging leaders
The judgments of managers who are familiar with the perform-
to share experiences and learning as well as group develop-
ance and behaviors of leaders are your best source of this
ment focused on the business.
information. You need to endorse and support processes by
which they rate and discuss those patterns with other senior Larger companies operate such a pool at several levels. It is
leaders in the organization. Senior members of your HR team not, however, an elite club; sustained performance is the only
can help you communicate common criteria such as those continued pass in, and participants need to understand and
listed in Figure 6, and facilitate divisional/functional discussions. reciprocate the commitment the organization is making. As
such, it is a powerful retention tool.
When identifying high-potential leaders, most organizations
consider a broad population across various business units and
aim to identify the top 10 percent of employees as high poten- “I tell people that I wouldn’t be in my job today if I hadn’t been the
tials. The more exposure you have to individuals beyond your beneficiary of a process that was conscientious in helping to develop
immediate team, the better positioned you’ll be to contribute me to get me the right experiences, to help me to develop as a person
meaningfully to the process. This lends a whole new impor- and as a leader. So I’ve become very passionate about making sure
tance to walkabouts, company- or division-wide meetings, lead- that in an organization as big as we are, we have visibility and
ership breakfasts, Q&A forums of various kinds, skip-level transparency to people at all levels.”
meetings and so on, all of which can help you spot potential in William Hawkins, COO, Medtronic Inc. (United States)
unexpected corners of the business.

32 33
 YOUR ROLE: STEP 5: ASSESSING READINESS
The strongest contributions you can make here are: FOR LEADERSHIP TRANSITIONS.
How do you minimize the risk of promotions when the pace
• Take personal ownership of the ‘C’ level acceleration
of business means that you often need to test people in
pool (those who have the potential to succeed to your
untried roles with new responsibilities? How do you determine
senior team). Demand realistic assessment of readiness and
whether a proven leader from another company is the best
focused development for pool members. Drive thoughtful
choice for your organization?
communication about the purpose of this pool (what it is, as
Accurate assessment information is indispensable in these
well as what it is not—that is, a guarantee of promotion).
critical selection decisions.
• Know who’s in other pools, and why. Meet as many as
you can personally. If members choose to opt out, don’t let
them go lightly. If they breach the values of the company,
5.1 INDIVIDUAL READINESS.
remove them as swiftly as possible. The vast array of assessment tools available have different
strengths and need to be applied discerningly to help you and
other stakeholders make better talent decisions. Of course,
L E A D E R S H I P P O T E N T I A L FA C T O R S past performance appraisals can be a good starting point but
they provide insight in relation to current, rather than future,
o
SUSTAINED PERFORMANCE + roles. Likewise, a 360 survey focusing on others’ perceptions
of performance in a current role is a powerful diagnostic for
Leadership Promise Balance of Values and Results development but isn’t predictive in selection decisions. Here,
- Propensity to Lead (Org. specific, future focused) simulations work better because they allow more objective
- Brings Out the Best in People - Culture
- Authenticity - Passion for Results
observation and evaluation of promotional candidates as they
‘test drive’ a stretch (future) role that they have not previously
Personal Development Orientation Mastery of Complexity
- Receptivity to Feedback - Adaptability
held. A ‘day-in-the-life’ behavioral assessment, giving candi-
- Learning Agility - Conceptual Thinking dates opportunities to interact in a variety of scenarios and
- Navigates Ambiguity
make decisions under pressure, is one such example.

= CONTINUED GROWTH
“My role is to motivate people to take on [talent management]
initiatives, make sure that we allocate sufficient time to think about
Figure 6 DDI identifies hard-to-develop attributes, most predictive of the culture of the company, to create an A1 culture, to spend time
leadership potential. setting goals and targets and do a proper performance evaluation,
to think and work and talk about management development.”
Maarten Hulshoff, CEO, Rodamco Europe N.V. (The Netherlands)

34 35
For senior leadership assessment, personality inventories Critically, don’t make placement or development-related deci-
complement behavioral data because they help predict whether sions in the absence of robust and objective diagnostic data,
an individual has the orientation to make certain types of role gathered against the success profile. This ensures that the
shifts, for example, from an operational to a strategic role. processes for selection and promotion are transparent, credi-
ble and reliable AND that you are seen to apply the same rigor
DDI’s approach to assessment uses a range of heavily
to talent decisions as to financial matters.
researched and validated tools that can be configured into a
system that suits the purpose. The assessment center Finally, if you’re willing to invest your business’s money in the
approach is the most predictive. Here, a leader ‘tries on’ a sim- process, then be willing to invest your time and that of other
ulated leadership role and faces highly realistic and complex senior decision makers in understanding the results. DDI, for
challenges designed to reflect the challenges the organization example, presents individual and group level findings in Strategic
is facing—for example, building strategic alliances and deter- Talent Reviews as a basis for discussions about what next
mining market direction. This way, they can actually demon- for whom, and how. With the involvement of the right line
strate their readiness for transition to another level. Personality managers you can then triangulate the data obtained on an
o
inventories, interviews, and/or 360 data often supplement this, individual through formal assessment with anecdotal evidence
yielding rich insights about the individual and his or her greatest so that the picture has real depth and substance for you and
strengths and potential derailers—especially in relation to future others involved in decisions about their future. The group data
leadership imperatives. should also reveal to you organizational capability gaps and
potential quick wins in terms of group development opportuni-
Interviews which explore candidates’ motivations and strengths
ties as well as any cultural barriers to effectiveness.
in-depth, and multi-perspective or ‘reference’ interviews also
provide robust data around an individual’s capabilities and
motivations, particularly in the hands of trained assessors and 5.2 ORGANIZATIONAL READINESS,
psychologists. OR ‘TALENT AUDIT.’
Increasingly, decisions about strategic direction and organiza-
YOUR ROLE tional structure (or restructuring), mean decisions about talent.
Which talent “you want on the bus” (ala Collins’ Good to Great)
Leverage the expertise of HR to create the right mix of tools for
impacts not only your ability to execute but also your stakeholders’
your purpose and budget. Where senior people are being
confidence in that ability, which can amount to the same thing.
assessed, whatever the tools used, external support is usually
A thorough analysis of what you’ve got and how far it’s likely
helpful as it removes the embarrassment and potential
to be able to take you in your chosen direction—the talent
perceived subjectivity involved in HR’s interactions with
audit brings some visible assurance to all stakeholders. It’s
colleagues. Specialist firms like DDI help give the process face
particularly helpful in the context of major strategy shifts and/or
validity and their consultants are trained in giving feedback
M&A when there may be a number of unknowns in your man-
effectively to even the most recalcitrant senior leader. Beware
agement, relative to your organization’s future direction.
the hard-to-avoid conflict of interest inherent in headhunters
undertaking this work for you.

36 37
Talent audits typically involve assessment of significant groups or
whole strata within the organization (e.g., the top two senior lead-
Individual “Readiness Snapshot”
ership levels), to give a robust evaluation of an organization’s GENERAL BACKGROUND COMPETENCIES PERSONALITY PROFILES

capability to execute desired strategy, as well as individual readi- Interpersonal Skills

Owen
ness to step up to various leader imperatives (e.g., new market Johnson
Dev Strategic Rels P
penetration, drive horizontal integration). They provide a solid Start Date:
Customer Orientation S
04/16/01 Comm. w/impact S
basis for decisions on restructuring or redeployment initiatives,
Leadership Skills
and may lead you to change your thinking about a strategy’s via- Current Role:
- Space Robotics Plant Building Org Talent P
bility and timing (e.g. developing alternate sales channels). Of Manager, Peterstown Change Leadership D
course, the data they yield is also an invaluable basis for develop- Previous Role w/in Org: D
Empow/Delegation
- Supply Chain Manager
ment, what ever decisions around placement might ensue. Organizational Knowledge: Bus./Mgt. Skills
- Design, Engineering, Est. Strat. Direction D
Safety
Op. Decision Making S
YOUR ROLE Key Experience Areas:
- Managed geographically Business Acumen P
Make sure that your team and your HR partners fully disperse team Personal Skills
- Designed cost control
understand the magnitude of the ‘big questions’ you are strategy
Executive Disposition S
asking about talent and strategy alignment. Throughout the
Valuing Diversity P
process, champion thoughtful focus on both business out- Figure 7 Outputs of in-depth assessment give you the critical data needed
comes and cultural impact since they are ultimately interwoven. to make successful talent decisions.

Ensure that the way in which you use the data gathered in such
a process does not undermine the trust and commitment of Owen Johnson
those involved. Your clear positioning of purpose, and manage-
Strengths to Process Focus: Strong focus on meeting business needs
ment of expectations up front and throughout is critical. If this is Leverage through processes, improving the bottom line through process
seen more as due diligence for execution capability than an improvement, and aligning systems with goals.

attempt to rate and rank, and leveraged as a basis for targeted Growth Areas Filtering The Message: Statements were occationally too frank,
and lacked the requisite tact necessary for the audience or situation.
deployment and development, it will energize your best people Sometimes shared complete information with either inappropriate
people or did not seem to recognize potential negative impacts.
and keep the average on their toes.
Performance Likely to excel in: Aligning people and processes to meet
Implications objectives. Achieving bottom-line results by driving efficiency.
Likely to struggle with: Connecting quickly with people on a
personal basis. Sharing decision-making authority with reports.
Conceptual thinking.

READINESS: BUSINESS DRIVERS DRAFT DEVELOPMENT SUGGESTIONS

Driving Operational Excellence - Assume responsibility for a significant change
or intervention
Penetrating New Markets - Craft and execute a plan for building employee
engagement, involvement, and collaboration in
Driving Horizontal Integration making the initiative a success

Figure 8 Assessment data also helps to determine development priorities

and support crucial placement decisions.

38 39
STEP 6: ACCELERATING
“This mentoring is what I do as an important part of my job. I’ve
DEVELOPMENT.
created other CEOs. I want to help people reach their potential, and
After any kind of assessment, it’s essential that the participant
if someone’s not reaching it, I want that person to know what’s
is given thoughtful feedback and has the opportunity to fully
preventing him from reaching it.”
accept the implications of this for his or her current situation and
future aspirations. It’s much easier to buy into what can be Shiv Nadar, CEO, HCL Technologies Limited (India)
tough messages if your incentive for hearing them is greater
career success. support, the individual will always struggle to maintain any kind
of developmental momentum. The manager:
It’s then important to agree on development priorities that focus
the individual on growth areas or strengths that match what the • Needs to meet with the individual after he has received
business needs of its leaders, their own role requirements, and assessment feedback and identified development priorities,
their personal goals and objectives. Ideally, feedback and and agree and document development activities and timing.
development planning will offer insight and focused strategies The support of development specialists from the HR team to
that target all three facets. maximize creativity in design and implementation of these
plans is invaluable.

DEVELOPMENT PRIORITIES • Is responsible for building accountability into the plan,

with milestone dates and clear measurement criteria for
each. This process tension means that the individual is far
more likely to take a reflective and self-aware approach to
the development activities, knowing they will have to
account for the experience.

• Should ensure that the individual understands that

they’re not expected to be in full possession of all they need
to be successful going into the developmental assignment.
Asking for support (difficult for high performers at the best
of times) should be rewarded, whether in the form of
practical skills coaching or guidance in how to navigate the
organization.

Figure 9 High ROI development activities sit at the intersection of

• Is accountable for reporting on the success of the devel-
business, role, and individual needs. opment process to superiors, and lobbying for support
where they believe it’s warranted. If leadership is to become
The intended outcome is measurable performance improve- a core competence of your organization, managers need to
ment in the individual, and the single greatest determinant of be measured on their effectiveness at developing organiza-
this is line manager involvement. Without his or her sustained tional talent, and their results given senior level visibility.

40 41
Development may be in the context of a new job assignment 5. Effective development requires a blend of activities
(i.e., on-boarding after a selection has been made), in prepara- including mentoring, classroom learning, coaching, job
tion for a possible promotion or new assignment (i.e., in assignments, action learning, etc. Combine these
the case of future succession or in-place development), or in activities to best fit specific development goals and accom-
structured training for fundamental leadership skills as leaders modate individual learning styles
reach new career passages. Executive development will likely
6. Do not underestimate the role of management support.
be more individualized than at lower levels, where group
It’s not just about leaders modeling the same behaviors
leadership programs—classroom-based or action learning—
they expect to see from their people. It also requires
can meet common needs.
managers to spend time planning, reviewing and re-focus-
In any context, though, you need rigor in how development ing the development of their people, and recognizing their
is executed if it is truly to become part of the ethos of your achievements.
organization. This is especially true of the acceleration of
7. Creating learning tension will maximize your return.
high-potential leaders, where development progress is a key
Is there a tight link between learning a new skill (or new
measure of the success of your talent management system.
knowledge) and applying and measuring it on the job?
Experience and research into how best to create measurable
8. Developing others becomes a measurable management
results from development have led us to 8 principles for success;
performance objective. What’s key here is creating process
1. Accurate diagnosis is the first step in effective develop- tension. Mentors and leaders need to be held publicly account-
ment. It builds commitment to change and enables you to able for development progress. This open comparison of
target development activities to high priority individual or results ensures that championing development becomes apart
group needs. of the ‘day job’ at all levels of leadership.

2. Ensure development is tied to where your business is

going—now and in the future. The ‘sweet spot’ is where YOUR ROLE
this aligns with an individual’s job role and career aspirations. You are ‘chief coach and teacher.’ You would expect to coach
3. Developing talent needs to represent a balance between your direct reports, of course, but leading a talent management
fixing weaknesses and leveraging strengths. Changes strategy means getting involved with leaders further down the
in leadership style are hard to come by. Give leaders the organization as a scout, a mentor and a model for your vision
opportunity to shine in what they do best while working on of leadership. Create opportunities to listen to your managers,
just a few development needs. share your experiences and pass on what you know. Prioritize
a two-hour slot at every leadership retreat to share your vision
4. Prioritize potential. While everyone in your organization and strategy. Dine with the upcoming talent at the end of a
should have opportunities to build their skills/knowledge, session. These represent possibly the greatest challenge in
precious resources must be concentrated on those in value- terms of your time commitment because they mean being
creator positions with the highest potential. accessible to many, for little evident short-term return.

42 43
STEP 7: FOCUSING AND
DRIVING PERFORMANCE.
If managers are to value talent management-related activity
and allocate it due time, clear linkages between accountability
for it and compensation systems are a must-have. These are
largely a factor of your performance management processes.
There are other strong arguments for a high-quality process:
When it’s visibly aligned and relevant to business objectives
it will more likely drive the desired leadership behaviors and
performance. When the quality of performance management
data is respected, it’s a powerful basis for talent reviews and “Our ultimate financial results
deployment decisions.
are a reflection of the success or
All constituents in the talent management effort, including the
executive team, should have true accountability and financial lack thereof of our development
incentives to support processes that deliver leaders ready when
needed. Organizations that are effective at optimizing talent
program. At the end of the day,
recognize and reward talent advocates and sanction those who
are blockers.
what differentiates us from some
of our competitors is the quality
YOUR ROLE
Don’t balk at the final fence by failing to hold leaders at all
and capabilities of our people.”
levels accountable for their on-going part in the talent man- William Hawkins, COO
agement process. If their people don’t have development
plans or achieve promotions at the same rate as others; if their Medtronic Inc. (United States)
performance evaluations don’t reveal coaching as a core activity;
if they nominate or sustain less than their share of people in the
high potentials pool; if they can’t talk intelligently about how they
build development opportunities into their teams; if high poten-
tials regard assignments in their team as ‘wilderness
years’—they should not reap the same rewards as others who
build organizational value through the talent legacy they create.

44 45
It’s as Simple as This. Author Biographies
No one in the business is going to remain focused on some- Richard S. Wellins, Ph.D., is a Senior Vice President at DDI.
thing they don’t believe you’re watching. Ensure you attend He leads DDI’s Center for Advanced Behavioral Research and
regular reporting and progress updates, reviewing the key consults with clients worldwide on talent management issues.
metrics associated with the project. You need to be your He is the author of four books on leadership and teamwork.
organization’s Chief Talent Advocate. Audrey B. Smith, Ph.D., is a Senior Vice President in
Your HR team can help you isolate people-related metrics and Executive Solutions at DDI. She spearheads DDI’s global
consolidate tracking information, which is the day-to-day consulting resources to help organizations identify, develop,
responsibility of your managers to gather and report. Other and deploy executive-level talent.
indicators will be tied to existing metrics such as customer Bob Rogers is President of DDI. In addition to overseeing
satisfaction, retention and loyalty, cycle times in manufacturing daily operations, Bob works with senior executives around the
or market share in a service environment. During major change world in the areas of assessment, performance management,
or growth, it’s both simple and face-valid to link measures organizational change and leadership development. Bob is the
of speed-to-outcome to talent management effectiveness. author of Realizing the Promise of Performance Management.
Whatever you do, find and communicate measurement criteria
to your leaders at all levels so that they have a personal stake
in talent management execution. About DDI
Development Dimensions International (DDI) will help you
systematically and creatively close the gap between today’s
talent capability and the people you will need to successfully
execute tomorrow’s business strategy.

We work closely with top organizations who see talent

management as their key competitive advantage.
These companies rely on us to help them identify and execute
appropriate talent strategies, review their talent readiness, put
high potentials on the road to success and optimize executive
performance.

The approach to talent management represented in this book

aligns with DDI’s experience of best practice. The work we do
with our clients is tied to the organization’s strategies and
All quotations cited come from The CEO’s Role in Talent becomes part of its business and culture, to deliver a solution
Management—How Top Executives From 10 Countries Are with long-term sustainability. Equally essential, DDI has the
Nurturing The Leaders of Tomorrow, The Economist Intelligence global resources needed to implement our clients’ talent initia-
Unit with Development Dimensions International, May 2006.
tives effectively and consistently worldwide.

46 47
Take a closer look at www.ddiworld.com/talentmanagement.

LEAD MEASURES LAG MEASURES

• Success profiles completed for • Talent engagement scores
value-creator positions
• Percent of internal vs. external hires
• Early high potential identification
• Decreased labor turnover
process in place
• Time required to fill critical positions
• Regular audit of talent against future
business requirements • Percent of goals completed by
associates and value creators
• Implementation of acceleration pools
for value-creator roles • Cost per hire
• Development plans created and in • Relationship of talent engagement
place for value creators scores to execution
• Selection and promotion systems based • Increased percentage of high-potential
on success profiles in place and used retention
• Retention/engagement discussions • Increased percentage of leadership
held with key value creators diversity
• Strong performance management • Increased performance against strategic
systems in place and used leadership roles
• Manager accountabilities tied to • Decreased percentage of external
effective Talent Management hires for key positions
• Increased job satisfaction and • Decreased percentage of positions
engagement ratings without ready successor
• Increased perception of growth • HR strategic value-creation ratings
opportunities within the company
• Return on investment from action
• Increased percentage of value learning programs
creators/high potentials completing plan
• Executive review board established
with clear roles and responsibilities
• Value creators/high potentials perceived
value of the acceleration pool process
• Percent participation in learning and
development activities
• Positive development impact measures

48 49
Appendix A
Footnotes
1) Michaels, E., Handfield-Jones, H., & Axelrod, B. (2001).
The war for talent. Boston: Harvard Business School Press.
2) Bernthal, P. R., & Wellins, R. S. (2005). Leadership forecast
2005-2006: Best practices for tomorrow’s global leaders.
Pittsburgh, PA: Development Dimensions International.
3) Barrington, L, & Silvert, H. (2004, August). CEO challenge
2004: Top ten challenges (R-1353-04-ES). New York:
The Conference Board. Also: Dell, D. (2002). The CEO
challenge: Top marketplace and management issues–2002
(R-1322-02- RR). New York: The Conference Board.
4) Bernthal, P. R., & Wellins, R. S. (2005). Leadership forecast
2005-2006: Best practices for tomorrow’s global leaders.
Pittsburgh, PA: Development Dimensions International.
5) The CEO’s role in talent management—How top executives
from 10 countries are nurturing the leaders of tomorrow.
(2006, May). The Economist Intelligence Unit with
Development Dimensions International.
6) As referenced in The Point is Better Talent, J.T. Rich and
A. Squnier. A presentation from The Conference Board’s
1999 seminar on succession planning and top talent
development.
7) How the top 20 companies grow great leaders. (2005).
Lincolnshire, IL: Hewitt Associates. See also: Effron, M,
Greenslaide, S., & Salob, M. (2005). Growing great leaders:
Does it really matter? Human Resource Planning, 28(3),
18-23.
8) R.S. Kaplan and P.D. Norton (2000). The strategy-focused
organization. Boston: Harvard Business School Press.
See also: Blair, M. B., (1995). Ownership and control:
Rethinking corporate governance for the twenty-first century
(Chapter 6). Washington, D.C.: Brookings Institution.
9) Barrington, L, & Silvert, H. (2004, August). CEO challenge
2004: Top ten challenges (R-1353-04-ES). New York:
The Conference Board. Also: Dell, D. (2002). The CEO
challenge: Top marketplace and management issues–2002
(R-1322-02- RR). New York: The Conference Board.
10) Bernthal, P. R., & Wellins, R. S. (2005). Leadership forecast
2005-2006: Best practices for tomorrow’s global leaders.
Pittsburgh, PA: Development Dimensions International.