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225

C H A P T E R

12 PORTER NOVELLI

GREG WALDRON

Applying the Drotter “ results - based ” Leadership Pipeline approach to create a per- formance management system in a professional service fi rm.

Introduction

Business Diagnosis and Assessment

Feedback

Program Design Considerations

Program Implementation

Design Considerations

Chosen Approach, Format Development, and Introduction

Performance Management System Development

Tailored Leadership Pipeline Development

Evaluation

Business Results

Employee Climate Survey Results

Turnover Results

Anecdotal Evidence

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EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 11/24/2019 8:51 PM via STRAYER UNIVERSITY AN: 305508 ; Carter, Louis, Goldsmith, Marshall.; Best Practices in Talent Management : How the World's Leading Corporations Manage, Develop, and Retain Top Talent Account: strayer

226 Best Practices in Talent Management

INTRODUCTION

The Drotter results - based approach is tailored to a professional services fi rm structure

and applied in the development of a performance management system aligned with the

business ’ s strategy. Drotter ’ s Leadership Pipeline approach is implemented, with

the full performance defi nitions for each leadership level in the tailored pipeline

becoming the basis for a new organization - wide performance management applica-

tion. The Drotter full performance defi nitions subsequently become the “ source code ”

for selection, talent management, and training planning applications. The focus of this

paper is the fi rst application, performance management.

Business Diagnosis and Assessment In 2004, Porter Novelli, a leading global marketing communications fi rm, undertook a

fundamental strategic assessment and visioning process to guide it through the next

fi ve years. The fi rm ’ s CEO, president, and chief strategy offi cer led this process. The

vision focused on a new approach to client account planning, a more client - centric

structure, and a greater emphasis on operating interdependence between the globally

dispersed offi ces in the service of multinational clients. It was felt that these three ini-

tiatives would dramatically increase the fi rm ’ s capacity to win and grow large, com-

plex, and geographically dispersed client accounts — the fi rm ’ s strategic market target.

The senior management group identifi ed the need to upgrade and align human

resources management processes to successfully communicate and implement the new

business strategy. The fi rm proceeded to hire a chief talent offi cer (CTO) to assist in

the strategy implementation effort by designing and installing a more systematic,

business - focused human resources management process.

In the CTO ’ s opinion, the vision implementation challenge centered on creating

the highest possible level of employee engagement with the vision in the short term —

by providing people throughout the fi rm with a clear, specifi c understanding of what

the business strategy meant for them.

His metaphor for engagement was specifying the “ four entitlements of all employ-

ees. ” The CTO ’ s experience with corporate change efforts had led him to the conclu-

sion that specifi c answers to four fundamental questions were a reasonable baseline

expectation for every employee, regardless of level or function:

1. What specifi cally do you expect of me?

2. How will you defi ne success (and measure me)?

3. What ’ s in it for me if I deliver the results you expect?

4. Will you provide me the resources I need/eliminate the barriers I face to achieve

these results?

Individual role clarity and clear performance expectations are absolute require-

ments for these questions to be addressed. It was clear that the fi rm ’ s current approaches,

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Porter Novelli 227

although based on current practice and invested with signifi cant effort, were not meet-

ing these requirements.

The CTO had previously become familiar with Stephen Drotter ’ s Leadership

Pipeline work, both as a client and as a consultant working with Drotter Human

Resources. Drotter ’ s primary focus has been executive succession and the related proc-

esses: executive assessment; organization and job design; succession planning; and

tailored individual development plans. However, his core concepts add signifi cant

value in broader application, particularly for performance management, selection, and

development planning at all levels. The emphasis on specifi c results required, as well

as the positioning of management and leadership results as measurable business out-

comes, aligned well with the needs of the fi rm.

Performance management practice was spotty at best, as the fi rm ’ s current system —

based on generic competencies — was complex and process - heavy. A leadership com-

petency model upon which to base the system was missing. Professional development

was considered important, and a full curriculum of professional training was offered.

In the absence of a common “ source code, ” the various HR processes did not align

well, and therefore opportunities for mutual reinforcement were being missed.

Clearly, there were opportunities for human resources to make a business impact

through better practice application.

Management Interviews Discussions with the CEO, president, chief strategy offi cer, and other senior managers both before and after the CTO commenced employment

confi rmed the need for a set of management processes that strongly reinforced individ-

ual accountability as well as the increasingly interconnected nature of the company ’ s

operations. Senior managers in all offi ces around the world would be asked to place

global priorities over individual offi ce considerations as multi - offi ce and multi - region

client accounts became the strategic imperative for growth.

The “ Vision ” Process “ Vision 2004 ” was a combined business planning and senior management team - building exercise that involved detailed reviews of internal and

competitive analysis, discussion of strategic alternatives, and development of the new

client account planning approach for the company. A small internal team facilitated the

process, which involved a global management meeting outside New York City, as well

as a number of regional follow - up sessions. It provided the starting point for the strat-

egy implementation effort. There were several signifi cant outputs:

Agreement on a new core client account planning perspective — that is, a new

method for assessing a client ’ s business situation and challenges and for develop-

ing solutions for the client;

Management training in this new methodology;

Confi rmation of an emphasis on acquiring and growing large, complex client

relationships;

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228 Best Practices in Talent Management

Commitment to a closely coordinated “ interdependent ” operating approach across

the global network; and

A project management structure to move these initiatives forward.

This set the stage for the communication and implementation effort. The chief tal-

ent offi cer joined the organization shortly after the fi rst implementation projects had

begun and moved quickly to review and recast the talent management portion of the

overall plan.

Business Results A key assumption underlying the visioning logic was robust busi- ness growth over the strategic plan period. The company was solidly profi table, and

the business was growing. The senior management group was confi dent that the

enhanced focus on larger, more complex client relationships would take revenue and

margin growth to new, sustainable levels. The bar was set higher.

Climate Measurement The company administers a biannual staff climate survey that measures operating culture along thirteen dimensions: teamwork; organizational cul-

ture; strategic planning; leadership; long - term focus; stake in the outcome; quality; cli-

ent satisfaction; learning orientation; empowerment; communication; morale and

loyalty; and survey results implementation. Scores in 2004 were on track with parent

organization averages, but management wished to improve these scores on both a

trend and relative basis. This would be an important metric for the effectiveness of the

leadership and human resource management interventions being developed.

Feedback As a member of the senior leadership team, the chief talent offi cer had abundant access

to the other members of the group — the CEO, president, and the chief fi nancial

offi cer — to discuss his ongoing fi ndings and developing recommendations. After the

fi rst ninety days, he had effectively presented his fi ndings and made overall recom-

mendations regarding priority areas to address and an agenda for the HR and knowl-

edge development and learning functions.

The group ’ s frequent and informal open discussion format facilitated processing

of the feedback and gaining consensus on how to move forward. The feedback and

recommendations were

The business strategy was timely and sound, but it required better aligned human

resources processes to successfully implement.

Important requirements of the business strategy — higher levels of sustained col-

laboration between senior managers across offi ces and geographies; a greater

emphasis on leadership and management work; more explicit defi nition of role

expectations and required performance at all levels; and stronger link between

individual performance and reward outcomes — would be best achieved through

revised role and performance defi nitions.

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Porter Novelli 229

The revised role and performance defi nitions could be best defi ned and delivered

through an application of the Leadership Pipeline approach to work defi nition and

performance standards development.

Pipeline - based defi nitions of senior roles would more explicitly defi ne manage-

ment and leadership accountabilities for reinforcement with coaching, perfor-

mance management, and revised incentive compensation plans. This would be

effectively the fi rst application of the Pipeline approach.

The second application of the Pipeline approach would be a complete revision of

the fi rm ’ s performance management system. This was required to buttress rein-

forcement of individual accountability as well as support the updated performance -

based pay and reward programs to be installed.

The third Pipeline application would be selection practice, as an opportunity

would be created with the new work defi nitions to introduce a more structured and

consistent interviewing process.

Another opportunity for Pipeline application would be to better organize and

align the substantial existing training offerings with the company ’ s career struc-

ture, as well as guide the prioritization of investments in new and revised

offerings.

The general fi ndings and recommendations were also communicated and dis-

cussed with the senior manager group over a number of regularly scheduled confer-

ence calls. There was broad acceptance of the conclusions and proposed direction, so

program work was commenced.

Program Design Considerations The appeal of the Pipeline model as the foundation for the new human resources sys-

tems was based on several opinions shaped by the chief talent offi cer ’ s experience:

Drotter ’ s thinking takes us fi rst to work, role, and organization analysis before

classic human resource applications such as assessment/performance manage-

ment, selection, development planning, and training are considered — moving

from the “ supply side ” to the “ demand side ” for talent. People are ultimately

treated better and more engaged if these role defi nition and organization design

issues are addressed fi rst. The approach constituted an ideal basis for specifying

and communicating the new personal accountabilities required by the new

strategy.

The Pipeline model does not rely on competencies, but rather required work

results by level for its core “ source code. ” These required work results are actually

the fi rst element of a classic competency model development; the key notion

is that focus is maintained on actual work results rather than abstracting one level

to the associated knowledge, skills, and personal values/attributes. The CTO felt

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230 Best Practices in Talent Management

this was fundamentally sounder for specifi c role and full performance defi nition

purposes. Performance management and selection applications would be built on

foundation of work results defi nitions.

The model focuses on the vertical distribution of work in the organization. Verti-

cal organization and process considerations have frequently been overlooked as

organizations have “ fl attened. ” The process of de - layering actually places a greater

requirement on thoughtful vertical task distribution, communication, and coordi-

nation across the enterprise. While recent organization design thinking has been

around selecting the optimal horizontal structure (organizing by product, customer

set, geography, process, function, or matrix), vertical considerations have been

overlooked.

Drotter requires the same explicit defi nitions of management and leadership

results by level as fi nancial and customer results, making these accountabilities

far more specifi c, measurable, and therefore understandable to employees. The

down - to - earth, application - based approach demystifi es leadership in particular

and facilitates the introduction of simple models to describe and explain both

activities.

The core Leadership Pipeline concept of a job is well suited to the fl uid, fast -

changing business environment of a professional services fi rm. A job is consid-

ered a collection of results to be delivered, many of which are shared with other

employees and therefore requiring cooperation and collaboration to achieve.

Required results change as business conditions change, giving the model great

dynamism and fl exibility. It is a particularly relevant approach for reinforcing an

internal collaboration - based strategy.

Core Leadership Pipeline level, performance dimension, and full performance

defi nitions can be used as the core work architecture — the “ source code ” — upon

which all talent management and development applications are based. As a result

of this common basis, the various programs would better align and mutually rein-

force each other.

These last two points are contrary to the belief held by some that the Leadership

Pipeline model is infl exible and geared primarily to large industrial company applica-

tions. The thinking has universal applicability, and the model is actually quite fl exible.

Frustration has resulted in some cases in which practitioners have attempted to liter-

ally apply the generic large company examples in The Leadership Pipeline (Charan, Drotter, & Noel, 2001). Drotter has actually been quite explicit in requiring that tai-

lored pipeline level, performance dimension, and full performance defi nitions be

developed for every company application. This development involves structured work

content interviewing, analysis, and comparison with a large database of work results

defi nitions across scores of companies.

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Porter Novelli 231

Therefore, the chief talent offi cer committed to building a tailored leadership

pipeline and installing it by creating results - based role defi nitions, performance man-

agement process, selection and training structure based on its “ source code. ”

PROGRAM IMPLEMENTATION

Tailored leadership pipelines are based on the specifi c work requirements of the com-

pany. Typically, an implementation project plan includes the creation of a trained team

of human resource professionals and line managers who conduct structured work con-

tent interviews with a sample of full performing employees at different levels across

all functions in the organization.

Tailored Leadership Pipeline Development The generic work content interview format must be reviewed and customized as

needed to fi t the individual company ’ s operating culture and language — the goal being

to make the questions as understandable and familiar as possible to employees unac-

customed to this type of information - gathering method. The customized work inter-

view format was tested with several staff members before being used for project team

training and actual information gathering. Several small language adjustments were

recommended by the test subjects and subsequently implemented.

A core project team of two senior human resource managers and a senior line

operating manager was trained in conducting structured work interviews and record-

ing and analyzing the input data. This training took the form of a session explaining

the interview format, question by question, and covering important interviewing tech-

niques. The workshop was followed by two two - on - one interviews per team member

with the CTO to practice interviewing and data recording skills and to receive

coaching.

As the fi rm ’ s history was the combination of acquired offi ces and companies, it

was felt important to get a work interview sampling that ensured geography and leg-

acy fi rm representation as well as level and work function coverage. This resulted in

the completion of seventy - fi ve interviews in ten of the fi rm ’ s twenty - three offi ces

across North America and Europe, with staff members ranging from entry - level pro-

fessionals and administrative support people to senior partners. Every major legacy

company location was covered.

An interesting and quite positive side - effect of the work interview process was the

new insight gained by a number of staff members concerning the purpose of their work.

When facilitated to fi rst describe the actual results they were responsible for delivering,

rather than work activities, tasks, or required competencies, interviewees gained a

clearer understanding of their roles ’ key business purpose. For a number of managers,

this produced not only a better understanding of their own work requirements, but also

a clearer basis for determining account team capacity requirements by level.

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232 Best Practices in Talent Management

Upon the completion of the interviews, the resulting data was analyzed and inte-

grated by the project in a series of meetings facilitated by the CTO. The CTO then

developed a draft work architecture for the fi rm, specifying both leadership levels and

company - specifi c contribution dimensions that aligned with the business strategy

and operating process. Full performance standards were created for each contribution

dimension at each leadership level. The fi rst determination was that the tailored lead-

ership pipeline structure for the fi rm was constituted of fi ve leadership levels, shown

in Figure 12.1 .

This structure appears to be typical of professional services fi rms, with the man-

ager of managers level populated by the critically important client account directors

who manage the fi rm ’ s revenue - producing activities on an ongoing basis. The busi-

ness manager level incorporates functional managers as well as classic P & L owners,

and there are no true group managers in what is essentially a one - business model.

This structure works well in capturing both the client service and the support func-

tions of professional services businesses. The client - facing function is supported by

the specialty and support functions (research; planning; marketing; fi nance; human

resources; information technology), and this simple two - function structure is repre-

sented by this architecture.

The work content analysis involved in the development of the essential pipeline

“ skeleton ” provides the analyst with many rich opportunities for organizational diag-

nosis and enhancement. The fi rst such opportunity occurred for the CTO when popu-

lating the new leadership levels with job titles. An operating complication for the

various offi ces when attempting to create cross - offi ce, cross - geography client teams

was understanding and integrating the various title structures that existed in each

FIGURE 12.1. Leadership Pipeline for a Professional Services Firm

Lead enterprise

Manage cluster

Manage business

Manage function

Manage managers

Manage others

Manage self professional

Manage self technical

Manage self operational

Manage enterprise function

Manage self expert

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Porter Novelli 233

country and in different legacy fi rm offi ces in the United States. The mapping of titles

onto the enterprise - wide leadership layer architecture created a title rationalization

grid that was distributed to all offi ces providing a global organization translation for

team managers, as shown in Table 12.1 .

The contribution dimensions identifi ed for the fi rm were based on a literal analy-

sis of the work content interviews, but also vetted against and aligned with the new

client - centric strategy. The contribution dimensions are of critical importance, as they

outline the “ source code ” to be used in developing performance appraisal, assessment,

selection, and career development applications. Close alignment with the business

strategy facilitates full line of sight for every staff member and powerful process rein-

forcement of the key strategic and operating cultural elements. The contribution

dimensions were:

Client Results

Leadership Results

Management Results

Relationship Results

Innovation/Creativity Results

Business/Financial Results

The order in which the contribution dimensions are displayed and communicated

was of primary importance in conveying the fi rm ’ s full strategic message to its staff at

all levels.

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TABLE 12.1. Job Title Rationalization Using the Leadership Pipeline Levels

Leadership Level Job Titles

Enterprise Manager CEO; president; CFO; CTO; other C - level executive committee

members

Business Manager Subsidiary president/CEO; regional director; offi ce managing

director; global account director; director

Manager of Managers EVP; SVP; account director; director; functional/specialty director

Manager of Others VP; account manager; associate/deputy director; senior

consultant; project manager; account supervisor; function/

specialty manager

Manages Self Senior account executive; account executive; assistant account

executive; consultant; junior consultant; coordinator; functional/

specialty professional

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234 Best Practices in Talent Management

Clearly, a “ client - centric ” strategy must place the client as the fi rst strategic prior-

ity, so this factor was listed fi rst.

Leadership and management had been the great “ wild cards ” in strategy and per-

formance discussions; everyone realized they were critically important, but every-

one struggled to operationalize this importance as neither term was particularly

well defi ned, and therefore not well articulated or measured. Now these dimen-

sions took their appropriate places.

Relationships with clients had always been recognized as critical; the new strat-

egy mandated a closer, more selfl ess “ interdependence ” between partners and

senior managers than ever before, and this dimension captured the new

emphasis.

Creative thinking and its business - focused application in the development of cli-

ent strategies had a similarly traditional importance; the new dimension of inno-

vation was added as new approaches to both client business solutions and growing

the fi rm aggressively were viewed as critical for success.

Financial results were intentionally placed last. They had previously been so heav-

ily emphasized that they had become the primary strategic goal, to the detriment

of factors such as client satisfaction and professional work quality. This percep-

tion was confi rmed in staff climate surveys that asked respondents to prioritize the

importance of a number of key operating factors. Financial results had come in

fi rst. The CTO found this a particularly disturbing fi nding in the case of junior

professionals at the fi rm — people who had no direct impact on the overall fi nan-

cial performance of the enterprise. So fi nancial results were characterized as liter-

ally the “ bottom line ” — the result of excellence in delivering the fi rst fi ve

dimensions. The message was that above expectation growth and fi nancial returns

would occur if clients, people, and the work were the primary leadership focus.

Finally, the work interview data and strategy input were analyzed against a data-

base of other companies ’ standards to draft full performance defi nitions for each lead-

ership level, for both client - facing and specialty/support functions. As the fi rm had

been struggling with the fundamentals of good performance management practice —

again, a rather typical professional services situation — it was decided that the fi rst iter-

ation of the performance model would follow the work architecture ’ s simplicity.

Therefore, only the full performance benchmarks would be detailed, with consider-

ation of adding exceptional performance defi nitions left for later versions.

The draft performance standard defi nitions were presented and discussed with sev-

eral focus groups of managers and professionals in the New York and London offi ces, as

it was felt these large, central operations would most effi ciently capture the full range of

client and functional populations. Also, the U.K. groups were a critical test of the porta-

bility of the language, and in fact it was necessary to make signifi cant modifi cations in

the text to better refl ect proper British English in this major operating location.

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Porter Novelli 235

The architectural foundation was now established, and application development

could commence. The CTO felt that the approach was suffi ciently different that man-

agers would fi rst need an introduction and orientation to the core pipeline concepts.

A three - hour overview of key concepts, as well as an introduction to the new model of

management and leadership the CTO wished to apply, was developed. The title was

“ Achieving Excellence Through Your People ” to reinforce both the business focus as

well as the leadership emphasis of the new approach. A four- to fi ve-hour version of the

content with some added introductory skill building in goal setting and coaching was

also developed for manager and staff member groups across the offi ces.

The concept orientation for management covered the following topics in an inter-

active discussion format:

A New Talent Management Focus: Starting from the demand (work and organiza- tion design) side rather than from the supply (people acquisition and develop-

ment) side to build the core architecture for talent management.

Understanding Performance as Results Achieved: As opposed to activities or competencies alone, the key business requirements are every job being necessary

and adding appropriate value, and every staff member being a full performer.

Understanding Development and Potential: Potential is no longer defi ned as “ high, ” “ moderate, ” or “ low, ” but rather is expressed as the assessed ability and

readiness to do different work within the planning period.

Understanding the Work of Leaders: A simple defi nition of leadership and man- agement and how they interact and together create full capability.

Understanding the Pipeline Model: People had to know its origins, its core defi ni- tion as an application model based on differentiation of required output, and how

each business ’ s pipeline was unique (that is, the book cannot literally be applied).

The fi rm ’ s tailored pipeline model was introduced, along with the performance

dimensions, and coverage included the defi nition of each layer as well as the tran-

sition points and associated changes in required skills, time applications, and work

values.

The New Defi nition of a Job: Understanding the new dynamic and interdependent defi nition of roles at the fi rm and their placement within the pipeline architecture.

Jobs were seen as collections of results to be delivered, many of which required

close collaboration with other staff members for achievement.

Three Key Skill Sets for Leaders of Other Professionals: Assessment for selection, performance planning, and assessment for developmental appraisal; coaching for

current improvement and future development.

Sessions were held in the major offi ces, and the reception the concepts received

was uniformly positive. While human resources people in particular found the emphasis

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