Talent Management:

High performance vs.

high potential

29 October 2013
Presenters
Deb Lockwood
Partner, Accounting Industry Services
McGladrey LLP
888-537-7115
deb.lockwood@mcgladrey.com

Tony Szczepaniak
Business Line Leader, Accounting Industry Services
McGladrey LLP
866-309-9292
tony.szczepaniak@mcgladrey.com
Session Agenda
The business case for talent management

Qualities of high potentials

Assessing your talent pool

Introduction to development tools

Assess and discuss your firms talent management processes

Learning Objectives
After completing this program, you should be able to:
Realize the need for talent management and development

Recognize the key attributes of high potentials

Identify and review a talent management processes

Identify barriers to successful talent management

Become familiar with tools to help institutionalize the process

Assess your firms ability to identify and develop high potentials

The Function of Leadership Is to Produce
More Leaders, Not More Followers.
- Ralph Nader
Talent Development in a Changing World
Generations in the workplace
Multi-cultural workplace
Two of the top 5 reasons new talent joins a firm Growth
opportunities and interesting and challenging projects (AICPA
PCPS)
Career Development - it is the reason employees stay!
Succession Planning:
Whats the big deal?
Stewardship role as a partner/owner
Large number of baby boomer partners in the US and Europe
retiring in the next 10 years, younger populations in Asia and other
countries
As of 2012, 71% of AICPA members were over 40 years of age
It takes 3-5 years to implement changes and ensure the smooth
transition of clients and staff
Continuity of your firm depends on it
Talent Development in a Changing World
No one knows the specific challenges we will face in 2020
We have a strong idea of what the leaders who can meet those
challenges will look like and how they will get to be that way
Michael M. Lombardo and Robert W. Eichinger,
The Leadership Machine
 Talent Management =
Overall Approach/Process To
Create An Environment
That Engages and Develops
Leaders
 High Potential Employees Engagement
Engagement consists of four
Ability elements:
A combination of the innate Emotional CommitmentThe
characteristics and learned extent to which employees value,
skills that an employee uses enjoy, and believe in your firm
to carry out his/her day-to-day Rational CommitmentThe
work
extent to which employees believe
Innate Characteristics that staying with your firm is in their
self-interest
Learning agility
Discretionary EffortEmployee
Emotional intelligence
willingness to go above and
Learned Skills beyond the call of duty.
Technical/functional skills Intent to StayEmployee desire
to stay with your firm
Interpersonal skills
Aspiration
The extent to which an employee wants or desires:
Prestige and recognition in the organization
Advancement and influence
Financial rewards
Work-life balance
Overall job enjoyment
* The Corporate Leadership Councils
Model of Employee Potential
Talent Development Potential vs. Performance
Startling statistics
93% of high potentials are high performers
29% of high performers are high potentials

Are we measuring the right criteria as we promote into leadership

positions?

Are we recruiting and promoting people who can succeed in our

changing industry?
Engaged Dreamers
Unengaged Stars
Misaligned Stars
Talent Development the 85% rule
85% of common skills leading to effective management and
leadership are known
They fall into 6 categories

Strategic Skills Organizational Positioning Skills

Operating Skills Personal and Interpersonal Skills
Courage Energy and Drive
Talent Development the 85% rule
What do the competencies important to performance and/or
potential look like throughout career?
Competencies are important across all levels (yet very few are
highly skilled at them)

Creativity Dealing with Ambiguity

Planning Managing Vision and Purpose
Strategic Agility
The Key Competency: Learning Agility
Continuously learning to do what you dont know how to do

Learning to learn has little to do with IQ

Many high learners likely work for you

To some extent, learning to learn is a developable skill

What do learners look like?
1. Critical thinkers who examine problems carefully and make
fresh connections
2. Know themselves well and able to handle tough situations

3. Like to experiment and can deal with discomfort surrounding

change
4. Deliver results in first-time situations through team building and
personal drive
Other Key Characteristics
Self Awareness They know what they are good at and not so good
at and actively address the not so good
Mental Agility Curious, get to root causes, comfortable with
complexity and ambiguity, question conventional wisdom, find
solutions to tough problems
Results Agility Build high performing teams, have drive and
personal presence, flexible and adaptable
People Agility Open minded, self aware, can play many roles,
understand others, deal with conflict constructively, skilled
communicator
Change Agility Tinkerer, can take the heat, introduce new slants
Talent Development What if
During the first years on the job, a team member
Worked on a task force where he/she is not an expert
Taught a skill he/she knows well
Led an ad hoc group on a work project
Picked a new technical area and become expert enough to share
with others
A Long-term Process
To add to the collective judgment, knowledge, experience and
ability of its members there must be an ongoing, continual effort
at all levels.
David Maister, Managing the Professional Services Firm

The issue is not so much what to do, its doing it consistently

.over a long period of time
Michale M. Lombardo & Robert W. Eichinger, The Leadership Machine
Conceptually Simple
1. Hire the best you can at entry level
2. Supplement entry hiring with experienced hiring
3. Give people good jobs early
4. ID high potentials for future partners
5. Design and execute a process for them
6. Take ownership of process and allot time and resources
necessary
What makes it hard to implement?
1. Elitism
Dont be hung up on parity!

2. Short-term vs. long-term

3. Lack of time and skill

4. Not a priority compared to growth and client service
When does it work?
Targeted high potentials
Want to learn and grow
Have a hand in personal development
Trust the system

Direct boss must assess, give feedback, coach and be

unselfish
Top management leads effort, makes resources available, and
manages the process
HR coordinates the process
Succession Planning System

Periodically assess the talent pool for high

potentials
Solid performance in current assignment, better than most
New behavioral skills acquired
Increase in technical and business savvy
Willingness to take on first-time challenges
Openness to feedback
Handled key assignments different for them
Errors to Watch For
Dont confuse technically proficient people or those who do one
thing extremely well for high potentials
people with potential may be missed
Dont mistake being brilliant with learning agility

Good performance across varied assignments is better than high

performance in repeat assignment
Mission Critical: Managing Assignments
70% of development of critical leadership competencies comes
from placing talented people in challenging jobs
20% comes from others: role models, coaches, and mentors
10% comes from courses
Personal Development includes
Defined goals knowing what the target looks like

Feedback against those goals

Seeing consequence or reason to develop

Having challenging experiences that test you

Hitting the need with every learning method available

Incorporating learning so new behaviors and attitudes become part

of natural repertoire
Seasoned Professionals
Equally important for development of future leaders
Irreplaceable pros, keep the ship running, do most of the work,
manage most of the people, stay in jobs the longest, make the most
profit, train the junior leadership
Prevent green high potentials from ruining the business
High potentials search out, befriend and listen intently to them
Must also be identified and rewarded
Use the Value Matrix
Performance evaluations are overused for succession planning
Must use long-term past performance
Potential is a bet that someone can learn to handle different
challenges in the future
Based on evidence they have done so in the past
Job Performance Operational Definition
Definition
What has been achieved (including goals) and how (skills and
feedback)
Observable job results and behaviors

Guidelines
Use Performance Excellence rating to guide placement re
performance
Needs Immediate Improvement or Emerging would map to low
end of 9-Block
Achiever would map to middle of 9-Block
Role Model or Champion would map to high end of 9-Block
Potential Operational Definition
Definition
Individuals capacity based on performance, aptitude and demonstrated ability and
interest to take on broader responsibilities
Demonstrates attributes that could be applied to bigger roles (learning agility,
leadership capabilities, communication and influence skills)
Guidelines
Potential examples of each level
Low unlikely vertical movement
Medium likely vertical movement of one level
High likely vertical movement of two levels or higher
Potential is not time-bound (being identified as medium or high does not indicate
that individual must have potential to move within the next year)
Geographic mobility an individuals ability or willingness to move does not impact
potential
 Talent Review <insert level here>

High <insert names> <insert names> <insert names>

Highly talented
associate who
can
significantly
grow beyond
current role.

<insert names> <insert names> <insert names>

Potential

<insert names> <insert names> <insert names>

Individual
assessed as
being at
appropriate
organizational
level.

Low High
Performance
Individual who is not handling Individual who completely masters
current responsibilities well. job responsibilities, consistently goes
above and beyond expectations.
Too New to Assess (90 days or less with company)
<insert names here>
Use Value Matrix in Succession Planning

Lowest 1/3 Middle 1/3 Highest 1/3

Highest 1/3 6 8 9
Rough Diamond Future Star Consistent Star
L-T potential

Middle 1/3 3 5 7
Future Utility Utility Player Utility Pro
Lowest 1/3 1 2 4
Take Action Future Pro Deep Pro
Long-term Performance
John Smith, Partner
Next possible role: Managing Partner (successor Jane Jones)
Hasnt been rated yet in role
Retention Risk: Low
Ready 3 to 5 years
Key Strengths
Leadership Competencies
Develops winning strategies
Driving results
Builds and leverages relationships
Demonstrates personal excellence
Focus on client
Other Key Qualities
Flexible
Looks to improve himself
Does not get ruffled
Superb relationship management skills
Regularly involves and informs others
Individual Talent Assessment
Key Development Areas Development Plan/Action
Leadership Competencies Identify opportunity to lead major RSM
Drives innovation and change project or team
Communicates effectively Create opportunities for increased
exposure to Firm Wide leaders
Builds diverse talent
Attend Leadership development training
Other Key Development Areas
Needs to enhance communication skills in
larger and more diverse groups
Talent development will be key
Key Firm Processes
Excellent recruiting

Performance reviews and goal setting

Talent reviews

Candid feedback

Culture of learning (learning from mistakes)

OTJ training with quick feedback

Strategic project assignments

Formal training
Talent Management Is Tied To Organizational Needs
But Is Focused On Individual Enhancement
Sourcing and Selection
Workforce planning; Align to
knowledge needed
Hiring the right fit
Assimilation/On-Boarding
Both Formal & Informal
Development/Assessment:
Performance Management
Career pathing
Leadership development
Succession planning
Recognition and Reward
Financial
Non-financial
Be on the list
Example Actions: Require process consistency
Project people needed Interview for fit
Project skill, knowledge needed Train interviewers
Example Actions: Buddy program
Orientation Train buddies
On-boarding program On-boarding survey
Example Actions: Create development plans
Determine individual potential Measure PA, evaluations
Review current skills, knowledge Design/roll-out training
Example Actions: Bonus tied to specific
Pay-for-performance strategy elements
Market compensation Encourage thank you culture
How does your firm rate?
Diagnostic Assessment

Discussion

Potential Action Plans