[Electronic resources] نسخه متنی

The Near FutureSix Sigma and Leadership Supply

by Alejandro Reyes and Carey Dassatti

Two years ago, Motorola forecasted severe shortages in the number of leaders needed to both backfill positions opening up due to retirements and support anticipated growth. Aware of the growing complexity of our competitive landscape, we faced the daunting task of finding the right people to lead in this challenging environment. Motorola proactively addressed this situation through Leadership Supply, an entirely new and integrated process for managing senior executives. To create this program properly, we followed the principles of Define, Measure, Analyze, Improve, and Control (DMAIC)the cornerstone of Six Sigma.

Defining the GapThe Demand Problem

First, we reviewed data on the future environment Motorola would face when sourcing new leaders. A variety of government sources suggest that, by 2010, the global pool of business leaders between the ages of 35 and 45 will decrease by 15 percent. At the same time, economic growth projections indicate that corporate demand for those future leaders will increase by more than 25 percent. These statistics show that companies must focus on their leadership pipelines now to ensure that they attract and retain a disproportionate share of this talent pool in the future.

Motorola hired Bain & Company to test this finding, and Bain's study estimated that the average corporation already faced a 25 percent shortage of employees who show the potential to develop into executives. Bain concluded that such a leadership shortfall could cost a business as much as a 10 percent return on the cost of capital employed.

Further, 75 percent of 13,000 executives surveyed by McKinsey & Co. indicated that they are chronically short of leadership talent. The same study found that companies that did a better job of attracting, developing, and retaining highly talented managers earned 22 percentage points higher return to shareholders.

In this context, Motorola launched its project to assess and project demand for leaders. First, we compared the number of leaders required to run Motorola with the numbers of leaders expected to retire, be recruited away, and leave voluntarily, as well as the volume who would fail to perform and leave involuntarily. At the same time, we added the speed of development of the next-generation leaders to the supply side of our estimates. Our forecasts suggested that in 2004 Motorola would face a shortfall of approximately 200 general managers or leaders of critical functions.

Measuring and Analyzing the Gap

Next, we studied Motorola's existing processes for managing leaders and contrasted them with the leadership supply processes used by other successful firms. An important aspect of the diagnosis was how we framed the problem. We decided to think about the problem in the same manner as an order-to-cash processwe followed leaders' careers from before they joined Motorola until they exited, just as an order-to-cash process follows from the time customers place an order until payment is received. This holistic, lifecycle approach to defining the processes allowed us to identify leadership supply subsystems to measure and analyze individually in an integrated end-to-end leadership supply process. Key interrelated subprocesses include the following:

External recruitment and selection

Training

Career planning and development

Performance management

Compensation and benefits

Succession planning/talent management

Retention

Internal selection/placement and promotion

Outplacement

Bain helped us complete our diagnosis, including external benchmarking, and weave together best-practice leadership processes. We directed Bain to select the benchmarking companies very carefully, with a preference for companies that consistently create unique shareholder value rather than those known for great leadership development. It was important to focus this initiative on producing business results, not just on solving the leadership gap.

We identified several critical elements consistently present in the sample of world-class leadership supply processes we studied:

Leadership and performance criteria specific to the position drove the performance evaluation and management process.

An objective, balanced performance evaluation and management process is the cornerstone of the entire leadership supply system.

Performance management data provide a rigorous, ongoing fact base to support differential investments in top performers.

Leaders manage their human talent as aggressively as they do their P&Ls.

Talent is managed as a portfolio and segmented by performance, behaviors and potential.

Top companies consider talent a corporate-wide resource, not one to be hoarded/managed by individual business units.

In addition to our benchmarking exercise, we looked inside Motorola for lessons about current processes that worked well and those that didn't. Eighty representatives of Motorola's global businesses contributed interviews, processes, and tools that we analyzed to assess current capabilities. In the end, we incorporated the best practices we uncovered into Leadership Supply, an end-to-end process redesign (Figure 3.1).

The establishment of a corporate-wide definition of leadership served as one of Leadership Supply's earliest successes. Previously, judging leadership capability had been confusingthere were as many definitions of the term as managers in the world. We clearly needed a common language to get started. Based on General Electric's leadership values, the Motorola Office of Leadership, led by Sandy Ogg, introduced the "4e's + Always 1 Leadership" standards:

eNVISION
Generates the vision, strategies, and viable plans to achieve it. Identifies meaningful and innovative change that produces profitable growth.

eNERGIZE
Excites employees, customers, and partners around winning ideas. Brings extraordinarily high personal energy to all work. Creates an environment where team members find opportunities to contribute and feel the passion to excel.

eDGE
Cuts to the essence of what is important. Makes bold, timely decisions. Insists that the organization must outperform expectations. Brings a healthy dissatisfaction with the way things are. Makes tough calls when the business or individuals fail to perform.

eXECUTE
Achieves significantly better and faster results than competitors by employing innovative, proven, and rigorous management practices. Personally meets commitments and keeps promises.

eTHICS
Conducts business ethically always and everywhere. Treats all people and all cultures with respect and dignity. Keeps personal ambitions and emotional reactions from interfering.

Our leadership standards provide a common language for explaining what is considered a great leader at Motorola. We describe our leadership standards in terms of 17 observable behaviors. These standards help us move Motorola through the cultural transformations needed to survive and win in the marketplace today and in the future.

Implement and Institutionalize

Based on the data gathered in the diagnostic phase of the project, we launched a global process redesign effort. We formed 10 redesign teams with seven to eight people on each team, including line executives and Human Resources experts, and we knew that to ensure the effectiveness of the final process, it was important that this redesign effort involve the people who were ultimately going to have to use the system. Ogg gave the teams 120 days to redesign their subprocess; additionally, he assigned one "master" team the task of integrating the systems and providing support to all the processes. It soon became clear that the subprocesses could be simplified into the following six interdependent processes:

Performance management
Measure results to expectations and goals, and assess behaviors against the 4 e's + Always 1 standards, calibrated relative to peers. Apply consequences to drive improved business results.

Talent management
Use a systematic approach that proactively identifies, tracks, develops, and manages global and diverse critical internal talent.

Recruit and select
Use processes to attract world-class external talent and skill sets to enhance business performance and drive superior results.

Career planning and development
Provide tools that allow individuals to develop and improve the skill sets that drive improved business outcomes.

Transition assistance
Provide alternative career opportunities, both externally and internally, for individuals whose skill sets are misaligned with the requirements of their positions.

Rewards
Link executive rewards and benefit administration to support and reinforce the Leadership Supply process such that it enables differential investment decisions.

The redesign teams came back with initial implementation recommendations in each of these areas, as well as detailed process maps.

Leadership Supply Web

Motorola's Web-based system for talent management is the engine behind the Leadership Supply processes. It is a repository for experience, performance, and career information on Motorola leaders, as well as a collection of applications central to the process including the following modules:

Online talent profiles
Essentially a structured online resume, the talent profile is a shared space on the Talent Web where Motorola and the individual leader can record and display capabilities that can be applied to various roles. In addition to factual information about the executive's past, it also contains facts about the current role and future aspirations.

Online leadership assessments
Motorola uses Web-enabled assessments to measure each individual leader against the 4e's + Always 1 Leadership standards.

Online calibration of ratings and rankings
The collective identification of the most- and least-effective leadership talent, the calibration is used for summarizing the facts on a group of leaders and then ranking them relative to one another. The data sources include leadership assessments, how well the leaders accomplished their goals from the performance management system, and other considerations like job scope, complexity, difficulty of goals, time in position, and breadth of experience.

Online position profiles
Position profiles are developed for all job families within Motorola. Each profile summarizes the knowledge, experience, and skill requirements for a particular position; it also includes the market value of this position and a one-page summary, with the ability to provide details when needed. We call positions critical to Motorola's business success "most leveraged positions."

In addition to these "high-tech" applications, the Leadership Supply process features a number of "high-touch" processes:

Quarterly performance-management feedback and career-planning dialogues with each executive

Semi-annual talent management meetings where individuals and organizations are discussed, and moves planned

Annual calibration meetings at all levels to ensure fair and consistent ratings and rankings of individuals

General management training outsourced to Kellogg Graduate School of Management at Northwestern University

Personalized recruitment and assimilation of key talent from outside and inside Motorola

The Office of Leadership

Several teams emphasized that new Leadership Supply process, as a critical business issue, would not succeed without dedicated resources reporting to Motorola's CEO, Chris Galvin. In the past, each subsystem had been managed by different Human Resources organizations, but the teams felt that Galvin should now act as the "Chief Human Resources Officer for Top Talent." Galvin approved the recommendation and named Ogg, the project's lead executive, to run the Office of Leadership. Galvin further committed to spending a third of his time on this new role during the first year of operation.

Control-Sustaining Leadership Supply

Today, each Motorola business sector is required to use Leadership Supply tools and processes to identify the most effective leaders and compare this list with the list of most-leveraged positions. The resulting grid spotlights gaps between the need for top talent (most-leveraged positions) and the performance of existing talent. Further, it enables fact-based discussion about talent gaps, talent moves, diversity, and career progression. A key benefit to our Leadership Supply process is that Motorola can very quickly replace critical positions left open by unexpected moves.

Six Sigma and Leadership Development

Embedding Six Sigma techniques into systematic leadership development programs serves as an important part of the Leadership Supply process. Like our colleagues at GE, we believe that by making the Six Sigma business improvement model a teachable experience we are building a fast, money-making leadership-development engineby creating leaders with Green Belts and Black Belts, we are creating an adaptive, evolving organization that creates its own future.

At Motorola, the synchronization of process steps throughout the Leadership Supply process and particularly in the performance management, rewards, and compensation systems ensures that the right assignments are given to the right people. In particular, we carefully make sure to formally assign the most important business problems to the most talented individuals. Next, we give the high-potential leaders great support structures to increase their probability of successsponsors, mentors, Six Sigma Champions, and Black Belts support leaders in getting their Green Belts while solving a business problem.

In addition, we have our senior executives coach for these managers. Motorola views these efforts as solving many problems with one great program: Six Sigma. We're increasing our chances of solving important business problems and, at the same time, we're differentially investing in the skills of our high-potential leaders, a great strategy for showing top leaders that we value them and don't want to loose them.

Accomplishments

The Motorola Office of Leadership has been operating since February 2000. The most relevant outcomes can be classified in these categories:

Organizational strength
63 new leaders in the 100 most important jobs during 2001 and 2002, covering 75% of those positions with internal talent.

Leadership renewal
Talent in critical positions: The COO and CFO were renewed in first 100 days of 2002one of those within hours. In addition, the total number of officers was reduced 25% in 2002.

Retention of critical talent
Retained 98% of our most effective executives during 2001 and 2002.

The new Leadership Supply system, institutionalized
An objective and rigorous ranking of all senior executives is established in Motorola and recognized as reliable data source for performance management and talent management purposes.