Take Me Out to the Ball Game - Competency Based Talent Management

Take Me Out to the Ball Game
Competency Based Talent Management

Next Practices, Not Best Practices!

Dalip K. Raheja
President & CEO

Take Me Out to the Ball Game
Moneyball - What Did Brad Do?
He Redefined the Definition of a Baseball Player.

Performance
Creative Evaluations
Reward System
Management

Strong Recruiting

Competency
Focus Winning Culture

Coaching/
Mentoring Training/
Player Value Conditioning

© 2012 The Mpower Group, Inc. All Rights Reserved.
Unauthorized Duplication, Storage or Transmission Strictly Prohibited. 2

Agenda

Business Challenges
Current Thinking
TMG’s Thinking
About TMG


Business Challenges
Strategic Sourcing / Supply Chain Results have Fallen Far
Short of Expectations…….

Do not have a “voice” in the Boardroom – no “C” level executive

Focus on short term results – often at the expense of long term “value”
creation
Sourcing process often leads to conflict with internal functions and
suppliers

Cost focus stifles innovation and value creation with suppliers

Metrics reinforce “the old way” of doing business

Training, when done, is not providing the desired result

Risk Management is a significant concern


Business Challenges
Because Our People Lack World Class Competencies:

• Results have not gone beyond “low hanging fruit”
• “Value” is left on the table with suppliers
• We are constantly under pressure to improve results
• We can’t meet internal and external customers’ needs
• We don’t leverage our experience and learning
• Suppliers stay at marginal performance levels
• We are NOT a competitive advantage for the company
• We spend too much of our time expediting and fixing

Talent Management is consistently one of the top three
concerns in surveys of Sourcing & Supply Chain leaders


Agenda

Business Challenges
Current Thinking
TMG’s Thinking
About TMG


Current Thinking
The Return On Investment (ROI)
ROI per $1 Million Spent on Procurement Operations
8

6 $6.3 Million
Millions

4

2 $2.7 Million

0
Peer Group World Class

TOP TALENT MANAGEMENT PERFORMERS GENERATED:
$247 Million annually via a 22% improvement in NET PROFIT MARGIN
$992 Million annually via a 49% improvement in RETURN ON ASSETS
$340 Million annually via a 27% improvement in RETURN ON EQUITY
They spend 6% less overall on HR than typical companies
133% greater return on the cost of procurement operations then typical companies (see
graph)
Leading Benchmarking Firm

Current Thinking
Optimizing your Procurement Organization
There is a strong correlation between improved financial performance
and top-quartile performance in four key talent management areas:

1. Strategic Workforce Planning (gap
analysis) Generated EBITDA Across 4
2. Staffing Services (staffing, recruitment, Standard Financial Metrics
exit management) 17%

3. Workforce Development Services (training
16%
and career planning) 16.2%
4. Overall Organizational Effectiveness 15%
(employee relations and performance

% EBITDA
14%
management) 14.1%
13%

12%
For a typical Fortune 500
company, this equates to an 11%

additional $399 Million annually. 10%

Agenda

Business Challenges
Current Thinking
TMG’s Thinking
About TMG


TMG’s Thinking
TMG’s History of Competency Based Talent Management
Model pioneered by Digital Equipment Corporation, (late 1980’s) Enfield, CT
• One of the first competency based organizations
• High Performance Work System
• Employees rewarded / promoted based on competencies developed
• Became the standard for many cross-industry best practices

TMG has years of experience supporting Competency Based Talent
Management
programs across multiple industries

• Bank One – Developed organizational vision and implementation plan to identify high-potential
candidates to be retained in the organization. Identified skill gaps and created and executed a
development program to close the gaps.
• Nicor – Determined Functional and Strategic competencies for open positions. Three high-level
Sourcing professionals were added to their team.
• FMC Technologies – Created a world-class Strategic Sourcing competency model. Prioritized gap
closures strategies and created an actionable plan. Executed a training curriculum and adoption
model.
• Volvo Construction Equipment – Assessed VCE’s individual and organization competencies in
Strategic Sourcing and Supply Chain Management. Created and executed a roadmap to close
competency gaps.


TMG’s Thinking
What is Competence?

Performance that Consistently Achieves a Standard
• A set of behaviors that encompasses skills, knowledge,
abilities, and personal attributes that, taken together, are
critical to successful work accomplishment
• Requires application of knowledge and skill within a specific
context
• Often requires demonstrable performance over an extended
period of time
• MUST be focused on organizational competencies –
CANNOT be limited to “individuals”


TMG’s Thinking

Recruit/Select

Succession
Planning
Competency Performance
Evaluation
Based Talent
Competency
Management =
Based Talent
Management
Exceptional
= EBR
Business
Results

Career Training /
Management Development


TMG’s Thinking
Why the Competency Model is Important to CBTM Strategy?

• Creates a common language within a “system”

• Provides consistent expectations among employees

• Provides employees a line-of-sight into the future

• Defines the “context” under which work is performed

• Ensures the right fit of an individual for a specific job

• Can ensure training is targeted to increase ROI


TMG’s Thinking
Sourcing/Supply Chain Competency Model

Competencies
Supply Chain Management
Purchasing Management
Strategic Sourcing
Negotiations & Contracting
Supplier Relationship Management
Demand Management
Material Requirements Planning
Capacity Planning
Inventory Control
Risk Management
Lean Management
Sustainability


TMG’s Thinking
Competency Model Framework
Client Example

Change
Business, Industry, & Enterprise Knowledge

Management
Supply Chain
& Purchasing
Consulting & Management
Operational Management

Facilitation
Strategic
Sourcing Competency Exceptional
Information Based Business
Technology Talent Results
Negotiations Management
& Contracting
Project
Management
Supplier
Relationship
Management Business Context /
Organizational
Teamwork
Competencies
Strategic
Competencies
Functional
Competencies

TMG’s Thinking
Competency Model Framework
Client Example

Business & Enterprise Knowledge

Collaboration

Supply Chain Management
Project Management

Problem Solving
Strategic Supplier
Sourcing Development

Negotiations & Contracting

Supplier
Relationship Management

Change Management


TMG’s Thinking
Execution Gap vs. Skill Gap – Job Family 1
Client Example
Skill Key (Blue Solid Line) Frequency Key (Dotted Line)
0=Very Low 0=Never
CONSULTING &
1=Low 1=Rarely
FACILITATION (ADV)
2=Moderate FR: 3.86 | SK: 3.71 2=Occasionally
3=High 3=Often
SUPPLY CHAIN CHANGE MANAGEMENT
4=Very High 4=Always
OPERATIONS (ADV) (ADV)
FR: 1.71 | SK: 1.57 FR: 3.89 | SK: 3.56

PROCUREMENT PROCESS ENTERPRISE SYSTEMS &
(ADV) SOFTWARE (FND)
FR: 3.75 | SK: 3.50 FR: 2.80 | SK: 2.40

PURCHASE ORDER
INVENTORY
PLACEMENT AND
MANAGEMENT (FND)
MANAGEMENT (ADV)
FR: 0.90 | SK: 1.00
FR: 3.33 | SK: 3.50

PROJECT MANAGEMENT INFORMATION
(ADV) TECHNOLOGY (INTER)
FR: 3.29 | SK: 3.00 FR: 3.50 | SK: 2.83

OPERATIONS
SURVEYS IN SAMPLE: 1 NEGOTIATIONS (ADV)
MANAGEMENT (ADV)
FR: 4.00 | SK: 4.00
JF01:PROCUREMENT LEADER FR: 2.50 | SK: 3.17


TMG’s Thinking

Best Practice Next Practice
• Describe the duties and Recruit/
Recruit/Select
• Acknowledge that you are
tasks to be performed Select in a war for talent.
• Recruit to fill past Differentiation is key
requirements • Create a plan for marketing
• Select based on duties and jobs, creating the right
activities “sizzle” that attracts the
• Trust that there is growth
Succession best candidates
Performance
Planning Evaluation
potential • Determine organizational
Competency competency gaps to
Based Talent develop decision criteria
Management • Focus recruitment on 3-5
= EBR year competency needs
• Test, select, interview,
reference check
candidates based on
actual demonstrated
competencies
Career Training /• Ensure candidate can grow
Management Development
with the organization


TMG’s Thinking

Best Practice Performance Next Practice
Performance
Evaluation •
• Typically annual “one off” Required competencies
event Evaluation drive performance
• Generic evaluation form management
• Focus on activities • Evaluation tied directly to
• Focus on ability to perform job competencies
• General feedback • Focus on demonstrated
emphasizing procedures Training /
application of skills
Recruit/Select
Development
and personality • Mutually agreed to
Competency development plan
Based Talent • Metrics included in
Management leaderships’ evaluation
= EBR

Succession Career
Planning Management


TMG’s Thinking

Best Practice Career Next Practice
• Time and title driven
Career
Management • Competency driven
• Progress often unclear Management • Progress measureable and
• Career progression visible
disjointed and haphazard • Career progression smooth
• “What/who you know” and tied to competency
• Difficult to address cross- growth
functionally Training / • Succession you do with what
“What
Development Planning
• Focus is on climbing layers you know ”
Competency • Linked across functions by
Based Talent competencies
Management • Career development is
= EBR owned by employees
• Focus on broader
experience and growth

Performance
Recruit/Select
Evaluation


TMG’s Thinking

Best Practice Succession Next Practice
Succession
Planning
• Frequently separate from • Integrated with other talent
talent management system Planning management activities
• Annual naming exercise • Ongoing, continuous
• Tied to functional process
assignments • Tied to competencies for
• Seldom looks beyond one each position
Career
organizational level or •Recruit/Select
Integrates organizational
Management
function needs horizontally and
Competency vertically
Based Talent • Talent is managed as a
Management critical asset
= EBR

Training / Performance
Development Evaluation


TMG’s Thinking

Best Practice Training / Next Practice
Training /
Development •
• Task focused Tailored to address
• “One size fits all” Development competency gaps
• Focus on training hours • Focus on organizational
• Focus on individual needs needs while fulfilling
• Level 3 evaluation at best individual needs
• Assumption: training • Level 4 evaluation intrinsic
events drive resultsPerformance • Career
Application activities
Evaluation Management
ensure knowledge capture
Competency • ADOPTION “bridge”
Based Talent intrinsic part of training
Management methodology
= EBR

Succession
Recruit/Select
Planning


TMG’s Thinking
Talent Development Generates Bottom Line Results

8
Annual Training
6 Hours Differential
$6.3 Million 75
Millions

4 60

2 $2.7 Million
45
74 %

0 30

World-class procurement organizations 15
invest aggressively in talent-management
strategies designed to retain and develop 0
their staff. Increased competency levels Peer Group World Class
translates into improved business results in
the key skills required to undertake
processes such as pricing and cost analysis,
sourcing and supplier management.


TMG’s Thinking
Competency Based Talent Management or Training?
Training Competency Development

Focuses on functional skill building Focuses on developing new behavior
– skill, knowledge AND ability
Point in time knowledge transfer
Requires application within context

Develops individual skills Creates organizational competency

Success is measured by a quiz or survey Success is measured through
demonstrable performance over time
Practice ends in the classroom Adoption begins in the classroom

Course work is modularized Course work is integrated

Full curriculum can be delivered Some courses can be delivered
on-line on-line

Would you rather be here? Or here?

TMG’s Thinking
Different Learning Approaches Yield Dramatically Different Results

Expert On-the-Job
Experience

Fully Proficient
Level of Competency

Experiential
Simulations Learning
Mostly Effective
Case Studies

Group Exercises
Basic Lectures

On-Line Training

Readings

Learning Approaches

TMG’s Thinking
Training - Focus on Application / Adoption Client Example
Launching the
Workshop • Discussion of relevant topics Application Architecture
(Integrates • Working sessions with
Functional and deliverables and report outs Teams Individuals
Strategic • Assignments to be completed
after Pilot Week 1 =
Competencies)
Two formal meetings, 2 Two formal meetings,
Hrs. each + ongoing 1 Hr. each + ongoing
contact contact

Day 1 Week 2 – 4 =
Post-Training Application Contract Two calls, 2 Hrs. each + Two calls, 1 Hr. each +
• Change Management ongoing contact ongoing contact
Day 2
• Team / Work Group Week 5 =
Governance One formal meeting, 2 One formal meeting, 1

Day 3 • Acceptance of Coaching Hrs + One call, 2 Hrs. + Hr + One call, 1 Hr. +
ongoing contact ongoing contact
• Engagement with
Participants’ Supervisors Weeks 6 – 8 =
• Status Reports on progress Two calls, 2 Hrs. each + Two calls, 1 Hr. each +
ongoing contact ongoing contact

Weeks 9 – 12 =
One weekly 1 Hr. Call + One weekly 1 Hr. Call
ongoing contact + ongoing contact

TMG’s Thinking
CBTM Drives Exceptional Business Results
More Effective
Recruiting
• Right People/
Right Job
• Quicker
Decisions
Return On
Investment Clear Performance
• Increased For Expectations
Talent • Focused
Management Evaluations
Effort
• Continuous
• Demonstrable Improvement
Over Time

Competency
Based Talent
Better Knowledge Management Direct Training
Management Impact
(CBTM)
• Capture / Share • Bottom Line
Experience Impact
• Maintain • Demonstrable
Competitive Edge ROI

More Satisfied Clear Career Growth
Employees
• More Staffing
• Greater Flexibility
Productivity • Improved
• Reduced Succession
Turnover Planning

Agenda

Business Challenges
Current Thinking
TMG’s Thinking
About TMG


About The Mpower Group

The Mpower Group is in the business of Mpowering our clients to accelerate
exceptional business results by unleashing the full potential of their Strategic
Sourcing / Supply Chain organizations. We are a global consulting firm dedicated
to serving the needs of Fortune 500 Strategic Sourcing & Supply Chain
organizations. We help our clients by:

– Accelerating Strategic Transformation: Rapidly move client organizations along The
Mpower Group’s Strategic Sourcing & Supply Chain Maturity Model to peak performance
levels.

– Building Exceptional Talent: Advance the competencies of our clients’ Sourcing and
Supply Chain professionals to World-Class performance levels.

– Maximizing Deal Value: Help clients realize the full value from large and/or complex deals
by focusing on A) Total Cost of Ownership before and during negotiations, and B) a
sustainable implementation once the deal has been reached.

The Mpower Group is a World Class Strategic Sourcing & Supply Chain consultancy that
delivers big results with a boutique feel. We are Woman and Minority owned.



Differentiators

Maximum Value Extractors – The tools, processes, and infrastructure to help you
realize the highest possible return on Strategic Sourcing & Supply Chain efforts.

Accelerators – Best Practices Change Management techniques to address
“predictable and inevitable” speed bumps that slow implementation.

Wisdom – We sat in your seat as industry executives. Our consultants are senior
level resources, not kids with MBAs. We leverage rigorous benchmark studies and
research to capture World-Class “Next” Practices.

Transfer of Competencies - Ensure successful, sustainable engagements by
Mpowering your people to develop and apply World-Class competencies.


TMG Selected Clients

Enhance Med


The Ball is in Your Court!
We have plenty of information to share with you!

• Jobs
• Self Assessments
• Blog Posts
• Research Studies
• White Papers
• Articles
• Industry Trends
Crystal Jones
630-268-8963
crystalj@thempowergroup.com

or visit our blog at
blog.thempowergroup.com

Take Me Out to the Ball Game - Competency Based Talent Management

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