"FIRST WHO THEN WHAT" - Getting 'right people' in 'right seat'

In the above video Mr. Jim Collins (Author - Good to Great 2001) highlights the importance of "who" before "what".

If we think about this in line with strategic management perspective, we may have to amend the typical strategy development process. It usually begins with defining or re-defining Vision & Mission statement of an organization - precisely 'where to go' - the "what".

Now, in case we have to begin with "who", an organization may have to opt for Resource Based View (RBV) of available human capital for 'Internal Analysis'. And make sure that we have right people on the bus. Normally this process (RBV) involves defining various resources the organization possesses and examine them to gauge which resources truly have strategic value. It is important for two reasons, 1) to know whether we have right people on the bus & 2) to remove wrong people from the bus. However, make sure not to throw out the baby with the bath water.

Dick Cooley and David Maxwell both exemplified a classic Level 5 style when they said, “I don’t know where we should take this company, but I do know that if I start with the right people, ask them the right questions, and engage them in vigorous debate, we will find a way to make this company great.” However, it’s not an easy task to get right people at the right time, very well said by Richard Florida, "Access to talented and creative people is to modern business what access to coal and iron ore was to steel-making."

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(Image Source: Google Images)

What is "RIGHT PEOPLE”?

Let’s see what Jim Collins say about right people.  He says, "In determining 'the right people', the Good to Great companies placed greater weight on character attributes than on the specific educational background, practical skills, specialized knowledge or work experience. Not that specific knowledge or skills are unimportant, but they viewed these traits as more teachable (or at least Learnable) Whereas they believed dimensions like character, work ethic, basic intelligence, dedication to fulfilling commitments, and values are more ingrained".

Now the question for HR Professionals is how do we know we have right people on the bus? And which tools HR professionals can use to get such right people? I must mention an important quote from Robert Half, that "There is something that is much more scarce, something rarer than ability. It is the ability to recognize ability."

There has been a lot of research carried out so far on this, and now we are turning to Analytics, Big data & algorithms for it. (In Hiring, Algorithms Beat Instinct by Kuncel, Klieger, and Ones - HBR - May 2014) The history of talent spotting is very well narrated in four different eras by Claudio Fernández-Aráoz in the article 'The Big Idea: 21st-Century Talent Spotting' HBR June 2014.

Claudio says, "I am convinced that organizations and their leaders must transition to what I think of as a new era of talent spotting—one in which our evaluations of one another are based not on brawn, brains, experience, or competencies, but on potential."

These are very pragmatic views, however, we will see which options, tools, & methods can be used for employee assessment and finding “right people” and get rid of ‘wrong people’.

Tools available to HR Professionals:

Ability Tests: 

Many companies use cognitive ability tests for selecting employees. Using these tests we can match skills to job requirements in a way that is objective and fair to all candidates. These are paper and pencil tests, however, nowadays they are also available on a smartphone, tablet, and web-based format. We may use them to test Verbal ability, Numerical Ability, Inductive Reasoning, Critical Reasoning, Mechanical Reasoning, Problem Solving, Managerial Judgment, Idea Generation etc. Example: SHL - CEB Ability Tests, Talent Q (Element) - Hay group.

Personality Tests: 

Many companies use personality tests along with other options. Such tests normally require an applicant to answer 200 or more (yes/no) questions. These questions attempt to get to the core of the personality, values and the things that make one successful. Unlike a job interview, everyone gets the same questions since they are standardized. These tests assist HR professionals to accurately predict whether a candidate will be successful, instead of solely relying on a face-to-face interview. Usually, candidates can't charm a personality test. Examples: Hogan Personality Inventory (HPI); California Psychological Inventory.

Interviews:

An Interview is one of the most widely used methods for recruiting employees. Typically these interviews are ‘Unstructured’, however, experts suggest using ‘Structured’ interviews for better results.

Behavioral Event Interview:

It was developed by David McClelland and frequently used by many organizations to recruit employees based on specific competencies relevant to the organization. In such interviews, the candidates are questioned to think of various job-related experiences that turned out well or poorly and then describe these situations in extensive detail. (White paper "Competency-Based Pay" by Tucker and Cofsky – ACA Journal 1994 [pdf]) Hence, such information gathered from the candidate is more predictive of their behavior and performance for specific competencies. As a result we find out:

1. Whether candidate possess the required competency.

2. His / Her level on specific competency.    

3. Concrete basis for predicting future success for that competency.

The Assessment Center:

It facilitates gathering critical data on an individual's competencies and his / her potential match for the executive position. It measures the required attributes that enable the candidate to succeed in the specific position. The candidates are expected to complete a series of activities and instruments designed to elicit the demonstration of executive behaviors. The Assessment Center includes simulations such as In-basket Exercises, Group Discussions, Management Games, and Analysis Exercises. Since more than one assessment instrument used for measuring particular competency, it provides robust, consistent and more reliable results. Consultancies: DDI, Haygroup, Kornferry

360 - Degree Competency Feedback: 

Many organizations now use 360 - degree competency feedback surveys, primarily for providing development feedback to individuals, although there is still debate going on among professionals around using these tools for development only versus using them for selection decision making.  It provides potentially accurate and diverse information on where employees stand in relation to where they should be in terms of skills and behaviors.

Although many consulting firms have their own well - established frameworks,  the best approach for using 360 - feedback ratings for internal development  of high potentials is for organizations to develop their own customized  leadership competency model that is carefully developed and specific to the organization’s culture and strategies. These models should be built to incorporate the organization’s values, reflect the business strategy, and either reinforce the current culture or outline through behavioral examples what the new culture should look like. ("Strategy-driven Talent Management" by Silzer and Dowell - 2010) Consultancies: CCL, Haygroup ,Lominger

Workforce Intelligence: 

In the advent of Big-data & HR Analytics many organizations are now equipped with vast amount of data which they leverage for taking important people decisions. As claimed by the vendors; it gives organizations the ability to predict the success and tenure of potential candidates before they even walk through the door. Predict which high performers were at risk of leaving six months before they walked out of the door. Workforce Intelligence assists various HR processes such as: Workforce Planning & Optimization; Workforce Transitions; Recruitment Analytics; Retention Risk Analytics; and Leadership Development. Examples: Smarter Workforce (Kenexa) & Workforce Intelligence (Deloitte)

Assessment Trends for – 2014:

According to the - 2014 Global Assessment Trends Report (pdf) by Tracy M. Kantrowitz  (CEB) following image reflect the important trends.

(Image Source: Taken from 2014 Global Assessment Trends Report)

These assessments are used for a variety of HR Functions, led by External Hiring (76%), Internal Hiring (65%), Leadership Development (56%) and Career Development (44%).  There are numerous options available to HR Professionals; hence selecting appropriate assessment is important. However, according to the report it’s essential to consider following factors before taking this decision.

- How well the test measures critical competencies?

- Duration of the assessment.

- Legal issues surrounding the job relevance of the assessment.

- Assessment delivery mode - onsite, remotely or via mobile devices.

- We cannot assume that all assessments are equally effective.

- Assessment that is well-designed.

- Assessment proven to be valid.

- And its direct link to job and organizational performance.

Other relevant findings in the report are as follows:

• Identifying high-potential (HiPo) talent is a new global top priority and use of assessments.

• Only half use talent metrics to prove ROI or to inform business decisions.

• Integration of assessment data with HRIS seen as critical, but integration capabilities fall short.

• 61% of respondents use HRIS for external hiring but only 34% report integrating assessments into that process.

•  Use assessments for hiring 73%, for development and promotion decisions 40%.

• Pre-hire 62% & Post-hire 34%

• Social media searches are top future hiring tool, despite only a quarter of respondents having formal policies on its use.

• Companies allow recruiters to use social media information for hiring decision – 24%

• Using information on professional networking sites – 42%

• There is growing interest in mobile assessment for recruitment, with clear geographic differences.

• When in doubt, don’t hire – keep looking.

• When you know you need to make people change, act.

• Put your best people on your biggest opportunities, not your biggest problems. 

The research carried out by Jim Collins was based on concrete data and hence cannot be ignored.  He outlined three practical disciplines:

Hence selecting appropriate assessment tool is significantly important for hiring ‘Right People’. If we use these tools, which are validated and are reliable according to industry experts, it will certainly assist in developing robust hiring processes in the organization to get ‘Right People’. It will obviously increase the probability of success and our decisions are supported by proven methods. However retaining employees and subsequently developing them using appropriate T&D strategies would remain an important task for HR Professionals. Please provide your valuable suggestions and recommendations (including options not covered above) in the comments.

In conclusion Jim Collins says it’s possible to build a great company and also build a great life. He says, “Adherence to the idea of “first who” might be the closest link between a great company and a great life. …If we spend the vast majority of our time with the people we love and respect - people we really enjoy being on the bus with and who will never disappoint us – then we will almost certainly have a great life, no matter where the bus goes.”  

COMPETENCY BASED INTERVIEW - ASSESSMENT

[Image source: Google Image]

While going through SHL - "2013 Global Assessment Trends Report", trends reflected that 'Creating / implementing Competency Model (s) was ranking at number eleven (11) in list of 'HR Priorities - 2013'. And only one-third of respondents indicated that Competency Models are used effectively in their organizations.  Now, that was an unexpected finding, considering the fact that Competency Development and Management is an integral part of strategic HR initiatives. In fact mission critical for successful strategy implementation for any organization. ( 'The Execution Premium' by Robert S. Kaplan, David P. Norton )

It also reminded me of a well-known quote, "Most of us spend too much time on what is urgent and not enough time on what is important" by Stephen R. Covey.

As a matter of fact it was Hay Group that assisted Mr. Lou Gerstner Jr. Chairman & CEO, IBM (1993-2002) in developing eleven "IBM Leadership Competencies"  ( Leadership Run Amok, HBR - June 2006 ).  Importance of this initiative is underlined by the fact that it was part of the largest turnaround strategy of corporate history, successfully headed by Mr. Gerstner.

I would like to refer to his remarkable comments in the book ( Who Says Elephants Can't Dance? 2002 )

" Specifically, people wanted to know how they could make it into the SLG (Senior Leadership Group) one day. Our answer was to create a set of common attributes that we wanted all of our leaders to have, and to formalize them as ' IBM Leadership Competencies'." ( p. 210 List of 11 competencies) (Details of these competencies available in the book Management and Organizational Behavior by Laurie J. Mullins 2005)

Leadership performance within IBM was assessed in line with these eleven competencies. As stated by him,  "The competencies became the basis for evaluating every executive in the company. It did not take long for people to realize that this was going to be how you got ahead in the new IBM."

It is important to note that he personally advocated and promoted this initiative. He spent three days in the training session for this initiative along with his team of 300 selected Executives within IBM. He wanted his Executives to adopt and display behavior in line with his turnaround strategy. And he successfully implemented this change management process. He further states that " Although I actively promulgated the principles and built our management training and evaluation around the Leadership Competencies, the new ways of doing things were much less codified than what they had replaced. That was how I wanted it to be and it did produce a marked change in our leadership's behavior and focus".

The competency-based methodology was pioneered in late 1960's by Dr. David McClelland, Founder of Hay McBer Company, also Psychologist at Harvard University. Subsequently many others had also contributed for the development of Competency-based HRM. It was primarily focused on an assessment of employees, not just on the basis of intelligence, but on the basis of a set of competencies. Competencies are the knowledge, skills, behaviors, and attitudes that lead to high performance.

TYPES OF COMPETENCIES:

Three types of competencies are specified by Korn Ferry Institute in the white paper, 'The Art & Science of Competency Modeling' (2010) 1) Core Competencies 2) Position Level Competencies & 3) Functional Competencies.

1) Core Competencies: These are set of critical competencies that result in shaping organizational capabilities and required culture to achieve strategic objectives.

2) Position Level Competencies: These are competencies which are critical for success in relevant position i.e. Individual Contributor, Manager or Executive.

3) Functional Area Competencies: These are competencies which are most critical for different functions within an organization. For e.g. Creativity - more important for Marketing and less important for Finance.

[ Image source: "The Art and Science of Competency Modeling" 2010 The Korn/Ferry Institute ]

Some authors have also defined other types of competencies, such as Organizational Competencies, Technical Competencies, Behavioral Competencies, and Management Competencies etc.

COMPETENCY LIBRARY:

There are many institutions which have already designed set of universally applicable competencies; for e.g. Hay Group, Center for Creative Leadership ( CCL) , Lominger / PDI ( Kornferry) , DDI, SHL - CEB, Kenexa. Different experts may call the competencies by different names or differentiate them on the basis of different levels. However, the content and essence of these competencies is essentially the same. These Competency Libraries are updated and validated periodically, and hence are the better option than developing our own library. In addition certified professionals bring in value-added assistance and support throughout the implementation process. The success of the Competency Model and the entire initiative hinges on competency  library, in terms of quality of its contents. Hence, it deserves special attention and care in the decision-making process.

The important question here is that whether these competencies are suitable or can be customized according to strategic requirements / cultural norms of our organization. In fact, some experts say that organizations should not “plugin” ready-made competencies from an existing library unless they truly reflect the company’s culture, business strategy and unique market dynamics. Please note what Mr. Dave Ulrich and Mr. Norm Smallwood state in their HBR-July 2007 article 'Building Leadership Brand'. It says, "...vanilla competency models generate vanilla leadership.... Expanding the competency model to include an external focus allow companies to offset that risk, by enabling them to tailor their leadership model to their own requirements".

PROCESS FOR DEVELOPING COMPETENCY MODEL:

1. Establish the performance criteria.
2. Identify people for the criterion samples.
3. Collect data through behavioral event interviews (BEIs) or other assessment methods.
4. Analyze data and define the competencies.
5. Validate the model.
6. Design applications.

These are six stages in the process of developing Competency Model according to working paper, prepared by Hay Group - "Using Competencies to identify High Performers" - 2003. Each consultancy has their own process which is more or less the same.

INTEGRATED APPROACH:

While designing business strategy, Competency Models become a valuable tool for defining critical skills required for achieving success.  Simultaneously it also facilitates the integration of talent Management and other HR processes within an organization. ( e.g. Recruitment & Selection, Career Planning, Succession Planning, Training & Development, Management Development, Performance Management, Compensation & Benefits, and Workforce Planning ) Effectively designed models are capable of delivering expected transformation in organization culture. ( Strategy-driven Talent Management 2010). A transformation that Mr. Gerstner completed successfully, hence he says, " I came to see, in my time at IBM , that culture isn’t just one aspect of the game—it is the game."

Software implementation can be a wise option to ameliorate the burden while simplifying the entire process. There are many software’s available for implementing competency framework while ensuring integration with other Talent Management initiatives. [ERP : Taleo ( Oracle), Success Factors ( SAP), & Workday. Standalone : Saba, CornerstoneonDemand, Halogen Software, Sum Total, Lumesse, & Peoplefluent] They provide an effective solution in association with above-mentioned companies. Especially by capitalizing on their expertise with competency libraries  (e.g. DDI, PDI, Lominger) and latest research & development in the field.

COMPETENCY- BASED ASSESSMENT:

Now the big question is 'where to begin'? Here I would like to refer to remarks made in the white paper 'The Art and Science of competency Modeling' - Kornferry. It says, "Processes that are widespread and well-implemented may be a harder place to start because of the change management involved. Take interviewing and selection, for example. If the current state is decentralized and mostly managed by the individual hiring manager, offering a competency-based selection process not only adds science to the process but it makes it easier for those hiring managers. Identify the greatest need and begin there - other talent management practices will follow."

Besides it makes more sense to recruit or select for the Competencies that are being developed, rather than to train people for them in the short term. A competency-based selection process help organizations by providing a framework to consistently hire, develop and promote top performers. When you employ the process turnover drops, Individual and Group performance improves and your organization builds a strong & agile workforce that can solve problems, change with the times, and meet organization-wide goals. It reminds me of a remarkable quote by David Ogilvy, he summed up the importance of careful hiring when he wrote, “If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But if each of us hires people who are bigger than we are, we shall become a company of giants.”

I have managed to design a Competency-based Interview Assessment Form. There are 78 Competencies based on which we can assess employees for selected 8 competencies relevant to the position. You can download the same using link provided below. Or send an email to vijay.bankar@gmail.com and I will forward it to you immediately. It can be used either for recruitment of employees or it can be used for employee assessment - for selecting employees for Leadership roles / promotion. Please note that the assessment form is being developed based on conceptual understanding. However, so far, it has not been administered on employees. Please do provide your valuable feedback.

As my previous post, I would like to conclude with a quote:

Jack Welch said that the core competency of GE is not making some product or GE's ability to grow at a double-digit rate: "GE's core competency is the development of people. In the end, great people make things happen. Involving all of them is really the answer."

... The Jack Welch Lexicon of Leadership, 2002 - Jeffrey A. Krames