DECEMBER 2006

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Putrajaya Committee on GLC High Performance (PCG)
Transformation Management Office,
Level 37, Tower 2, Petronas Twin Towers,
Kuala Lumpur City Centre,
50088 Kuala Lumpur, Malaysia
Tel: +(603) 2034 0000 Fax: +(603) 2034 0008
Email: pcg@treasury.gov.my Website: www.pcg.gov.my
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STRENGTHENING LEADERSHIP DEVELOPMENT
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CHAPTER TITLE
2
The leaders of our Government-Linked Companies (GLCs) are entrusted with the stewardship of Malaysia’s greatest
resource—our people. As I have often said, the CEO is the Chief Human Resource Offcer. Your role as the chief
human resource developer is just as important as your role as business manager and leader.
Our leaders have a personal duty to nurture the character and capability of our people, to inspire them personally
and professionally, and to make sure that their knowledge, gifts and talents are used and developed to their fullest
potential.
Our leaders have a corporate duty to grow other leaders who will drive the sustainable performance of GLCs to
create outstanding shareholder and stakeholder value.
Our leaders have a national duty to develop exceptional Malaysians who can move our country towards achieving
the aspirations set by the National Mission and Vision 2020, underpinned by the principles of the Federal
Constitution and the Rukunegara.
These three duties are critical to achieving the objectives and the underlying principles of our whole GLC
Transformation agenda.
When we speak of leaders—at any level—we speak of those individuals who can meet extraordinary challenges
and put in place the actions required to create breakthrough performance and results. They are entrusted in
their positions because we believe that they have the necessary knowledge, integrity, passion, sense of duty,
motivational skills and resilience.
These characteristics are beyond what we expect of our managers in their day-to-day roles. Make no mistake:
managers are a vital and important part of how we deliver consistent business results. However, we are an
ambitious nation with high aspirations and a rapid development agenda. We can only achieve this agenda with
the right leaders.
This GLC Transformation initiative on ‘Strengthening Leadership Development’ will help you, with the support of
your Boards, Human Resources (HR) functions and line managers, to fully understand and put into practice your
personal, corporate and national duties. It will help you drive the transformation agenda. It should also serve as
a source of inspiration for those that want to play a leadership role in the development of our country and our
corporations.

YAB DATO’ SERI ABDULLAH BIN HAJI AHMAD BADAWI
PRIME MINISTER OF MALAYSIA
3
PREFACE: MESSAGE TO CEO
The Putrajaya Committee on GLC High Performance (PCG) would like to thank the following for their support and
input into the development of this initiative.
Bank Islam Malaysia Berhad
Commerce International Merchant Bankers Berhad
Employees Provident Fund
General Electric
Hay Group
Hewitt Associates
HSBC Group Head Offce
Khazanah Nasional Berhad
Lembaga Tabung Angkatan Tentera
Lembaga Tabung Haji
Malayan Banking Berhad
Malaysia Building Society Berhad
Malaysian Airline System Berhad
McKinsey & Company
Ministry of Finance
Petroliam Nasional Berhad
Permodalan Nasional Berhad
Prime Minister’s Offce
Securities Commission
Sime Darby Berhad
Telekom Malaysia Berhad
Tenaga Nasional Berhad
Towers Perrin
UEM World Berhad
Watson Wyatt
4
ACKNOWLEDGEMENTS
INTRODUCTION
7
Much is expected of GLCs in terms of high performance. Malaysia’s National Mission, Vision 2020 aspirations and
the Ninth Malaysia Plan require GLCs to be one of the growth engines of the national economy and to create real
shareholder returns. GLCs will need to increase the proftability of their domestic operations and successfully drive
proftable growth in new geographies and sectors. This requires leaders.
TODAY THERE IS A LEADERSHIP GAP ACROSS GLCs
It is the responsibility of CEOs and Boards of all GLCs to ensure they have enough of the right leaders to help them
meet their business targets—indeed it is their corporate duty. The purpose of this Orange Book is to help CEOs
fulfl that duty. It offers practical guidance about what they can personally do to meet this challenge and what they
need to do to institutionalise good leadership development practices in their companies.
Today, it is estimated that GLCs face a gap of between 1,500—2,000 leaders who can deliver and sustain
breakthrough performance.
Malaysia requires more leaders who can truly transform an organisation and deliver breakthrough performance.
While there are a good number of leaders who can drive fnancial restructuring and infrastructure development,
for particular types of leaders such as those in the functions of marketing, operations, procurement and business
development, the shortage is acute.
ExhIbIT 0.A
GLC LEADERSHIP GAP
Managers & Leaders:
a coMparison
Managers deliver reliable
year-on-year improvements
for their area
Typically: 1–5% p.a.
Leaders deliver
improvement and sustain
breakthrough performance
Typically: 20–30%+ p.a.









y l p p u s p i h s r e d a e L
p i h s r e d a e L
s n o i t i s o p
s r e g a n a M
d n a m e d p i h s r e d a e L
p i h s r e d a e L
p a g
l a t o T s r e d a e L
- r e d a e l
p i h s
s n o i t i s o p
- n a c a V
d n a s e i c
- n o n
l a t o v i p
s n o i t i s o p
l a t o v i P
s n o i t i s o p
l a i c e p S
s e v i t a i t i n i
d n a
h t w o r g
p i h s r e d a e L
d n a m e d
- 0 0 5 1
0 0 0 2
s r e d a e l
s i s y l a n A JWT : e c r u o S
s t r e p x E h t i w w e i v r e t n I ; 0 2 - G o t s C L G t c e l e s t a e c n e i r e p x e f o n o i t a l o p a r t x E *
E T A M I T S E
INTRODUCTION
INTRODUCTION
8
The practical guidance offered in this Orange Book to close
the leadership gap is underpinned by the three underlying
principles of the GLC Transformation Programme:
National Development. • The GLC Transformation
Programme is a subset of the broader national
development strategies that include the development of
Malaysian talent and the Bumiputera community.
Performance Focus. • The underlying rationale for the
GLC Transformation Programme is to create economic
value through improved performance at GLCs, within
the broader national development focus.
Governance, shareholder value and stakeholder •
management. The GLC Transformation Programme fully
observes the rights and governance of shareholders
and stakeholders.

GLCs SHOULD CLOSE THEIR LEADERSHIP GAP WITH A
‘DEVELOPMENT, EQUITY AND PERFORMANCE’ APPROACH

The developmental agenda of the GLCT programme is refected
in the need to ensure full participation of all Malaysians
including Bumiputeras in the development of GLC leaders. The
three underlying principles of the GLCT programme translate
to GLCs applying a ‘development, equity and performance’
approach to leadership development. This includes National
Development, which supports Bumiputera development as
well as building the local talent agenda for all Malaysians,
premised on principles of performance, shareholder value
and stakeholder management. This approach has three
implications for GLCs:
1. Ensure equity and development potential recognised on
entrance
Recruitment especially at entry level should be done, not only
on the basis of their achievements, but also their development
potential.
2. Provide ongoing support and development contingent on
performance
Leadership development will accelerate where progress and
rewards are based on proven performance and potential. In the
context of development and performance, employees should
THE LEADERSHIP DEVELOPMENT
STOCkTAkE
1. Do you spend 30% of your time
developing leaders?
2. Do you know what your most signifcant
intervention will be in the next 3 months
to fundamentally improve the leadership
capability of your organisation?
3. Do you know three leaders outside
your company who could transform
its performance? If so, do you have a
personal plan for how and when you
could recruit them?
4. Do you play a role in every senior
leadership development programme
for your company?
5. Do you spend at least 1 hour with each
of your direct reports every quarter
giving them personal feedback and
coaching about how they can be more
effective leaders?
6. In the last 12 months, have you taken a
risk with any high potentials and moved
them into challenging leadership roles
that prompted people across the
organisation to talk positively about it?
7. Do you have a clear point of view on
what the next role should be for each
executive reporting to your direct
reports to maximise their development
and the performance of the business?
8. Do you know who among your key
leaders are most at risk of leaving, what
their issues are and what you are going
to do to ensure they do not leave?
9. In major strategy sessions do you
always involve the HR head to ensure
you will have the leadership with the
requisite skills to successfully deliver
your business plans?
10. Have you appointed any of your top line
performers to head your HR function or
to one of HR’s most senior roles?
9
INTRODUCTION
be developed and supported to realise their full potential. This support must be contingent on performance.
GLCs will need to take frm action on individuals, if despite the support, the potential does not translate into
performance.
3. Develop leaders from within
GLCs should aim to close their leadership gap primarily by developing their own leaders rather than by recruiting
them. However, GLCs might have to recruit when they have to close some critical leadership gaps at senior levels
or when they face strong competition internationally or domestically from multinationals. When this happens,
leaders should be brought in with a specifc performance goal of developing a cadre of Malaysian leaders with the
required capabilities within the organisation.
Malaysia is not short of exceptional people with the innate qualities required for leadership, nor are its GLCs.
We can expect to fnd potential leaders among 5—10% of managerial staff but these leaders are often ‘hidden’.
These are people who have potential but are in the wrong roles. High performers ‘stuck in the queue’ behind more
senior average performers, or people who took a risk that did not pay off and have been ‘written off’. These sorts
of people need to be found and be given a chance to develop and bloom.
m .
A TIME TO BUILD ON STRENGTHS AND RISE TO THE CHALLENGE
GLCs can draw upon uniquely Malaysian assets to develop leaders and close the leadership gap. Malaysia’s CEOs
should capitalise on these strengths to position their companies to overcome present and future challenges.
OUR STRENGTHS
Throughout the book specifc ways to build on these strengths are highlighted, which include:
VALUES AND CULTURE
Boards and CEOs can call upon national values and culture to help strengthen leadership development. There are
four values, some of them uniquely Malaysian, that are acknowledged in the Orange Book, as particularly helpful.
A sense of national pride and duty can be used to attract talented leaders to work for GLCs •
The personal obligation of leaders to care for their people can be called upon to ensure they devote suffcient •
time to nurturing new leaders
The honouring of age and wisdom and the sense of obligation to pass on knowledge will accelerate the •
mentorship of leaders
The value of living harmoniously with others and working for the good of the whole community can be used •
to retain leaders and motivate them.
MALAYSIA’S NATIONAL DEVELOPMENT AGENDA
Malaysia’s ambitious development agenda means that there are many opportunities for leaders. High potential
individuals will be able to take on challenging assignments that stretch them—and help them to develop quickly.
Because of this, Malaysia and the GLCs have a unique opportunity to be an ‘incubator’ for leadership talent.
INTRODUCTION
10
MALAYSIA’S CURRENT LEADERS
Malaysia has grown by successfully developing the institutions and leaders that were required at each stage of
the nation’s development. Current leaders need to continue to develop and learn new skills.
OUR CHALLENGES
Throughout the book specifc actions to overcome the challenges are addressed, which include:
COMPETITION FROM NON-GLCs FOR MALAYSIAN TALENT
The leadership shortage is not restricted to GLCs, nor to Malaysia or the region. GLCs will need to compete
aggressively with multinationals and private Malaysian companies—and not only for customers, but also for
leaders.
INSUFFICIENTLY COMPETITIVE EMPLOYEE VALUE PROPOSITIONS
To date, GLCs have used a compelling purpose such as nation building to infuence recruitment. Some talented
leaders respond well to the call of national service, others less so. GLCs must be able to offer different compelling
benefts to attract a broader range of potential leaders. GLCs which also compete in the global leadership talent
market, will also need to pay and offer benefts at around the 50th percentile against global peer industry
benchmarks.
SOCIAL AND CULTURAL CONVENTIONS
Some social and cultural conventions can constrain otherwise powerful leadership development practices. Tight
reciprocal loyalties can constrain the practice of regularly moving leaders into new roles. The social discomfort
of singling people out can limit practices of very rapid advancement of young leaders who might be potential
CEOs. Conventions of politeness and ‘saving face’ can limit effective developmental feedback conversations.
Strengthening leadership development will require all these conventions to be challenged.
INCONSISTENT CAPABILITIES AND COMMITMENT TO LEADERSHIP DEVELOPMENT
While some GLCs have begun to focus on leadership development, more can be done. All levels of line management
could exercise greater ownership of the leadership development agenda. Equally, HR functions can play a stronger
role. They need to be staffed with commercially savvy professionals with the approriate knowledge, skills and
passion to develop leaders that drive the performance of the business.

WHERE THE ORANGE BOOk FITS IN THE GLC TRANSFORMATION PROGRAMME
In 2005, the Putrajaya Committee on GLC High Performance (PCG) launched the GLC Transformation Programme to
help GLCs perform better. As part of the Programme, ten initiatives were launched, ranging from enhancing Board
effectiveness to improving operational effciency. The Orange Book on Strengthening Leadership Development is
designed to help develop the human capital that will drive the transformation. It complements the Green Book,
which sets out the Board’s role in exercising governance over the leadership development process, and the Blue
Book, which established the performance management framework that is an important part of a leadership
development programme.
11
INTRODUCTION
The GLC Transformation Programme is now moving into Phase 3 where tangible results will need to be delivered.
Delivering sustainable and tangible results requires rapid progression in closing the leadership gap. CEOs will be
expected to implement the guidelines in this book within the next three years. To achieve this goal will require
high quality HR functions working in partnership with line management. For many GLCs, achieving this level of
excellence within three years will no doubt be challenging and will require renewed HR leadership, a move closer
to HR best practices, support from colleagues in other GLC HR functions or external help.
The importance of closing the leadership gap means the Orange Book focuses on leaders, and talent with the
potential to become leaders. It deals with upgrading the leadership development process and the processes, like
recruitment and the identifcation of hidden talent, that feed it. This does not mean that the development of the
rest of human capital in GLCs is any less important. On the contrary, the general development of human capital
will accelerate under leaders who instinctively make people development a priority.
While the Orange Book does tackle the challenge of developing senior leaders to head functional or technical
areas, like marketing or risk management, it does not deal with the issues of fnding talent to fll specifc expertise
gaps because the strategies for doing so are highly dependent on a particular type of gap to be flled.
The Orange Book also sets out a framework to assess and strengthen company wide leadership development. The
framework is anchored to a CEO mandated ‘Leadership Development Audit’ and an actionable implementation
plan to address identifed gaps. Integral to the philosophy of this framework is the need to institutionalise a process
that enables ongoing review of the Leadership Development Dashboard by the CEO and the Senior Leadership
team on regular and periodical basis.
Whilst this Orange Book focuses on what individual GLCs can do to develop leaders, much also can be done
at a pan-GLC and national level—from creating a new level of excellence in Malaysian corporate leadership
training programmes to the active movement of high potential individuals across GLCs to provide development
experiences not available in a single company. These initiatives are beyond the scope of this book. However, the
PCG is pursuing these initiatives to support GLCs and help them to meet this important challenge to develop great
leaders for Malaysia.
ExhIbIT 0.b
GLC TRANSFORMATION TIMELINE
5 1 0 2 0 1 0 2 7 0 0 2 6 0 0 2 5 0 0 2 4 0 0 2 / 5
1 e s a h P
, n o i t a s i l i b o M
d n a s i s o n g a i d
g n i n n a l p
2 e s a h P
m u t n e m o m e t a r e n e G
3 e s a h P
s t l u s e r e l b i g n a T
4 e s a h P
l a n o i t a n l l u F
t i f e n e b
s h t n o m 5 1 s h t n o m 7 1 – 2 1
s r a e y 5 – 2
s r a e y 0 1 – 5
s d r a w n o
INTRODUCTION
12
APPROACH TO DEVELOPING THE ORANGE BOOk
The Orange Book contains approaches to leadership development that draw on global best practices and the
experiences of companies in Malaysia. Valuable input was obtained through consultation with CEOs and the
Malaysian HR community, including HR consultants. The consultation included interviews and a workshop where
the tools in the Orange Book
1
were piloted. The output of the workshop and interviews helped direct the topics
addressed in the Orange Book.
1 See Appendix 4: Leadership Development Audit.
13
INTRODUCTION
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
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1
7
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4
The Orange Book sets out practical guidelines to institutionalise good leadership development practices using a
simple framework.
kEY FEATURES
Leadership development must fow from business strategy. 1.
All aspects of leadership development need to focus on creating those leaders with the experiences
and capabilities required for that unique business to be successful.
Leadership development is institutionalised as a system, not just a process. 2.
Every aspect of leadership development feeds into the leadership pool and links to every other
aspect—all of which increases the quality and size of the pool. Leadership development is not—and
cannot be—dependent on particular leaders who happen to be good at it or passionate about it. It
must be embedded in the way the company works.
The partnership between HR and line management frames all leadership development. 3.
The task of identifying and developing leaders cannot be outsourced to HR. The CEO and all line
managers must lead it. The HR-Line partnership is built upon a talent mindset. CEOs and senior
leaders with a true talent mindset devote a minimum of 30% of their time to leadership development
because they believe that high performers create disproportionate value.
The framework has three key features:
FRAMEWORK AND GUIDELINES
1
The CEO is also the Chief Human Resource
Offcer: creating the leadership engine that
powers business performance.
2
The war for leadership talent is won when
Boards and CEOs get personally involved.
3
Great leaders energise their organisation
by holding people to higher standards of
performance and celebrating those individuals
and teams that embody excellence.
4
CEOs need to skilfully match their best people
to their most important roles, delivering higher
performance and accelerating leadership
development.
5
Great organisations become ‘leadership
factories’, working at all levels to build
leadership capability. Great CEOs know that
this personal activity is best led by them.
6
Today’s war for leadership talent is as much
about retaining leaders as it is about engaging
them.
7
The winning combination in leadership
development is a committed Board and an
active CEO, backed by a powerful partnership
of HR and line management.
INTRODUCTION
14
GUIDELINES
The book is intended to be read as a whole but readers may want to focus on chapters they fnd particularly
relevant. Below are key guidelines to help direct readers to the most relevant sections.
CHAPTER 1: TAkE CHARGE OF LEADERSHIP DEVELOPMENT
1.1 Merge leadership development actions with the business strategy
1.2 Determine the number of leaders needed to hit targets
1.3 Create a leadership model to get the leaders who will drive performance
CHAPTER 2: RECRUIT FUTURE LEADERS
2.1 Bring marketing techniques to the employee value proposition
2.2 Develop an innovative sourcing strategy
2.3 Apply sales disciplines to the recruitment process
2.4 Use the skills, contacts and experience of Boards and CEOs to source leaders
CHAPTER 3: REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE
3.1 Prioritise individual performance reviews to identify leadership potential
3.2 Make individual performance improvement plans relevant for leaders
3.3 Reward high performance and manage underperformance
CHAPTER 4: DEPLOY STRATEGICALLY TO DEVELOP LEADERS
4.1 Institutionalise an effective strategic deployment process
4.2 Take bold but measured risks to gain maximum beneft from the deployment process

CHAPTER 5: DEvELoP LEADERSHiP AnD HiGH PoTEnTiAL TALEnT
5.1 Invest in a high impact leadership development programme
5.2 Coach and develop direct reports at every opportunity
5.3 Prioritise the development of CEO successors
5.4 Cascade the development commitment deep into the organisation

CHAPTER 6: ENGAGE AND RETAIN LEADERS
6.1 Build an organisation that is a work community, not just a company
6.2 Hold on to the most valuable leaders
6.3 Keep the door open to leaders who leave
CHAPTER 7: BUILD HR CAPABILITIES AND LINE OWNERSHIP
7.1 Make all line managers personally responsible for leadership development
7.2 Enhance the HR function rapidly to meet the business needs and to provide focused support
for leadership development
CHAPTER 8: GETTING STARTED
8.1 Conduct a Leadership Development Audit to strengthen company-wide leadership development
8.2 Intensify Board governance on leadership development
8.3 Shift CEO actions and behaviours
TAbLE OF CONTENTS
CHAPTER 1: 21
Take charge of leadership development
CHAPTER 2: 29
Recruit future leaders
CHAPTER 3: 39
Review performance and publicly honour excellence
CHAPTER 4: 45
Deploy strategically to develop leaders
CHAPTER 5: 53
Develop leadership and high potential talent
CHAPTER 6: 61
Engage and retain leaders
CHAPTER 7: 67
Build HR capabilities and line ownership
CHAPTER 8: 73
Getting started
APPENDICES:
1: The Leadership Development Stocktake 81
2: Leadership Development Dashboard 85
3: Detailed Metrics 89
4: Leadership Development Audit 99
RESOURCES:
Exhibit list 138
Glossary 141
Where GLCs can obtain assistance 142
ChAPTER 1
TAkE CHARGE OF LEADERSHIP DEVELOPMENT
ChAPTER 1: TAkE CHARGE OF LEADERSHIP DEVELOPMENT

The CeO is alsO The ChieF human resOurCe OFFiCer: CreaTing The
leadership engine ThaT pOwers business perFOrmanCe.
By attracting and developing those who stand out as leaders, GLCs will succeed in
meeting their business targets and open new opportunities for high performance and
growth.
Merge leadership development actions with the business strategy 1.
Determine the number of leaders needed to hit targets 2.
Create a leadership model to get the leaders who will drive performance. 3.
1.1 MERGE LEADERSHiP DEvELoPMEnT ACTionS WiTH THE BuSinESS STRATEGy
Organisations with great leadership development
strategies—and no shortage of leaders—have all taken
this frst step: to ensure their leadership strategy was
linked to their overall business strategy. They do this by
breaking down the business strategy into leadership
requirements and integrating business and leadership
development planning.
Break down the business strategy into what •
it means for leadership requirements. The
leadership development strategy is tied to
business objectives to ensure it will contain the
specifc actions needed to meet targets (see
Exhibit 1.A).
The actions to achieve the objectives can be a combination of any one of a number of approaches, •
depending on the company’s strategy. Examples include:
HSBC’s ‘grow your own timber’ approach that spends signifcantly on training and development, including •
in Malaysia
National Australia Bank’s ‘cherry-picking’ approach that actively recruits top talent from other •
organisations to boost its turnaround leadership cadre.
21
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
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“BUSINESS STRATEGY ALONE IS NOT
ENOUGH. AT PETRONAS WE HAVE MERGED
THE BUSINESS STRATEGY AND THE
HUMAN DEVELOPMENT STRATEGY. WE SPEND
EQUAL, IF NOT MORE, TIME AND EFFORT
ON HUMAN DEVELOPMENT STRATEGIES
THAN WE DO ON BUSINESS STRATEGIES.”
— TAN SRI DATO SRI MOHD HASSAN MARICAN
CEO OF PETRONAS GROUP
Integrate the business and HR planning processes. • The business strategy and the leadership development
strategy can only be truly linked when the two planning processes—business and HR—are integrated. This
means aligning the planning cycles and having the right people involved at the right time.
STRENGTHENING LEADERSHIP DEVELOPMENT
22
ExhIbIT 1.A
ALL LEADERSHIP ACTIONS ARE DRIVEN BY THE BUSINESS STRATEGY
n o i t i s o p o r P e u l a V e e y o l p m E n g i s e d e R
s t e k r a m l a n o i t i d a r t r o f
s t n e m g e s e e y o l p m e l a n o i t i d a r t - n o n t e g r a T
s e e r i t e r . g . e
o r b a s n a i s y a l a M t e g r a T h t w o r g l a n o i g e r r o f d a
e p x e a m g i s - x i s d n a n a e l e r i H t n e l a t l a b o l g m o r f s t r
i t a r e p o d a e l o t t e k r a m d n a n o i t a m r o f s n a r t nal o
s r e d a e l s n o i t a r e p o l a c o l e t a e r c
l u f s s e c c u s y l h g i h m o r f e l p o e p y e k e v o M
e d i w - y n a p m o c d a e l o t m a e t t n e m e r u c o r p
t n e m e r u c o r p
e t a r o p r o C
y g e t a r t S
h t w o r G e u n e v e R
• c i t s e m o d n i % 5 y b e u n e v e r w o r G
t e k r a m
• l a n o i g e r n i % 5 1 > y b e u n e v e r w o r G
s t e k r a m
s n o i t c u d e R t s o C
• y b y c n e i c i f f e l a n o i t a r e p o e v o r p m I
% 0 1 >
• % 5 1 y b s t s o c t n e m e r u c o r p e c u d e R
t c a r t x e ( y g e t a r t s e t a r o p r o C p i h s r e d a e l r o f s n o i t a c i l p m I )
E L P M A X E
ExhIbIT 1.b
LEADERSHIP STRATEGY MUST BE AN INTEGRAL PART OF THE ANNUAL HR AND BUSINESS
PLANNING CYCLE
g n i p o l e v e D
c i g e t a r t s
n o i t c e r i d
g n i n g i l A
s e c r u o s e r
c i g e t a r t s o t
n o i t c e r i d
g n i r u s n E
- n e m e l p m i
d n a n o i t a t
n o i t u c e x e
c e D v o N t c O p e S g u A l u J n u J y a M r p A r a M b e F n a J r e n w O
y g e t a r t s e t a r o p r o C
t n e m p o l e v e d
p u o r g e v i t u c e x E
c i g e t a r t s f o n o i t u c e x E
s e v i t a i t i n i
c i g e t a r t S
/ g n i n n a l p
p u o r g e v i t u c e x E
d n a g n i n n a l p l a i c n a n i F
g n i t e g d u b
O F C
s e c r u o s e r n a m u H
t n e m y o l p e d
R H
l a n r e t x e d n a l a n r e t n I
n o i t a c i n u m m o c
/ p u o r g e v i t u c e x E
r o t s e v n I
s n o i t a l e r
e v i t u c e x E / R H
e c n a n i F / p u o r g
t n e m e r u s a e m e c n a m r o f r e P
t n e m e g a n a m d n a
y g e t a r t s p i h s r e d a e L
t n e m p o l e v e d
e v i t u c e x E / R H
p u o r g
p i h s r e d a e l f o n o i t u c e x E
y g e t a r t s
e v i t u c e x E / R H
p u o r g
s e i t i r o i r p c i g e t a r t S
E L P M A X E
The CEO must understand current leadership strength and know the number of leaders needed for the company
to deliver its targets and meet its key performance indicators.
To be able to do this, the CEO needs to know the size of the gap, and the specifc number of leaders required—
whether functional or company-wide. If the leadership gap is too large to close, the CEO would need to revisit the
strategy or contain the pace and aspirations of the company.
The HR function is responsible for providing the CEO with this information and must:
Make clear the size of the gap •
Break down the gap to identify specifc numbers and shortages of leaders (e.g. business developers, •
marketers, and turnaround specialists).
TAkE CHARGE OF LEADERSHIP DEVELOPMENT
23
ExhIbIT 1.C
HOW TO MEASURE THE SIzE OF THE LEADERSHIP GAP
r e p % 5
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y a d o t y l p p u s p i h s r e d a e L s r a e y e e r h t n i d n a m e d p i h s r e d a e L
E L P M A X E
1.2 DETERMinE THE nuMBER of LEADERS nEEDED To HiT TARGETS
1.3 CREATE A LEADERSHiP MoDEL To GET THE LEADERS WHo WiLL DRivE PERfoRMAnCE
The organisation needs its own tailored leadership model to articulate the types of leaders it requires to close the
gap. The leadership model will set out a specifc set of leadership behaviours that together will create maximum
value for, and embed the desired leadership culture in, the company. For GLCs, their leadership models should
have a clear values component to ensure a culture of integrity. The model needs to create leaders who can meet
both their corporate duty to drive sustainable performance and their personal duty to nurture the character and
capability of their people.
ExhIbIT 1.D
LEADERSHIP MODEL: AN ExAMPLE
• Has a long-term vision of the business
• Defines and supports road map for
change
• Integrates best practices and questions
actual way of working
• Faces difficult decisions and
chooses optimal courses
• Motivates team
• Delegates substantial
responsibilities
• Gives clear guidance and
direction
• Ensures even spread of
workload
• Supports people development
and invest time for coaching
• Ensures adequate follow-up of
performance problems
• Develops clear and efficient
communication
• Displays respect and listens
• Takes into
account
interests of
domains and
identifies
interfaces
• Creates
partnerships
with colleagues
throughout the
business
• Acts in the
interest of the
Group
• Focuses on client-added value
• Aspires to be the best
• Sets and reaches ambitious targets


S
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a
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s

t
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f
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a
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B
u
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l
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g
r
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a
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s
Acts as a
passionate owner
• Understands and accepts
ambitions related to position
• Feels personally responsible
and strives to reach
objectives
• Is a passionate advocate and
inspires trust
• Humility and a willingness to
share achievements with all
• Shows integrity and
possesses a sense of
positive values
• Integrates
Group
dimension in
objectives
and actions
• Collaborates
with peers in
the Group
• Acts in the
interest of
the Group
STRENGTHENING LEADERSHIP DEVELOPMENT
24
Getting the leadership model right for the company is a critical part of how the CEO shapes and drives leadership
development. The CEO must ensure that the model:
Refects the organisation’s unique values, strategy and priorities—it cannot be a generic model •
Is concrete and actionable—it should describe what the organisation wants and expects from its leaders, •
using no more than 3 to 6 qualities
Balances the different ways leaders create value—it should address both business acumen and people •
skills.
A good leadership model supports a high performance culture. It makes the required leadership behaviours
transparent to all because it is linked to performance reviews, rewards and personal development plans.
Do you know the number of leaDers you neeD to ensure you Deliver your targets anD your
growth plans?
25
TAkE CHARGE OF LEADERSHIP DEVELOPMENT
ExhIbIT 1.E
THE MODEL DRIVES OTHER ELEMENTS OF THE LEADERSHIP SYSTEM
1
l 5 4 3 2
l
2
3
4
5
s e m o c t u O
e c n e d i v L
s d e e n t v e D s h t g n e r t S
s e l o r e l b a t i u S r a e y s i h t d e t c e p x e s n o i t c A
s n o i t a r i p s a m r e t - r e g n o L
• e r u t u f e h t s e p a h S
• r a b e h t s e s i a R
• s m a e t t a e r g s d l i u B
• e d i w - s s e n i s u b s e t a r o b a l l o C
• n e z i t i c p u o r g a s a s e v a h e B
• r e n w o e t a n o i s s a p a s a s t c A
l
s n o i t c A s | P K t h g i e w
5 3
% x % 5

y t e f a s w e n t n e m e l p m I . 1
t a s d r a d n a t s
e n r o N
n o i t a s i n a g r o w e n t n e m e l p m I . 2
2 U B n i e r u t c u r t s
s e u l a v y n a p m o c t n e m e l p m I . 1
h c a o r p p a p i h s r e d a e l d n a
) e g n a h c e v i r d o t e v o m (
. 2

s t e e M
r w A
% 0 1 - 0
% 0 0 1 - 0 9 % 0 6 - 0 4
% 0 1
% 0 2 n i s e r a h s t e k r a m e s a e r c n I
e c n a r F
e c n a r F n i s e r a h s t e k r a m e s a e r c n I •
h j ø e k a l ø j k l ø a e r c n I •
e c n a r F n i s e r a h s t e k r a m e s •
h j ø e k a l ø j k l ø a e r c n I •
e c n a r F n i s e r a h s t e k r a m e s •
% 0 1
% 0 2
h k j l Ø
k l h a j k
% 0 1
% 0 2
h j k h k j l Ø
h j k l h a j k l
k l h a j k
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g e R
r w j a K
h r w a k L
t s l i a F
h p u o
d l o
h j k h e a j k
j k l r h e k a
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0 2
n o i g e P U 8 e l t i T n o i t i s o P . o N p m L e m a N g n i t a r l l a r e v O
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G
• g n i t r a t S
s s e n i s u b
• g n i t i u r c e R
• e g r a l g n i k a M
s l a e d
• C C
e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e 8
l 5 4 3 2
l
2
3
4
5
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l
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
2
1
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w e n m o r f e u n e v e r % . 1
s t c u d o r p
Leadership model Performance contract
Behaviour
P
e
r
f
o
r
m
a
n
c
e
Leadership
performance review
Compensation scheme
Personal development plan
Leader profile and deployment
A set of leadership
behaviours based on
business needs...
Performance
• Concrete
deliverables
Behaviours
• Collaborates
business-wide
• Behave as a group
citizen
• Acts as a
passionate owner
...incorporated into concrete
expectations and plans
...all dimensions of which
are evaluated in the
performance review...
...the outcome of which drives
compensation and forms the basis
of the individual’s development
plans and leader profile...
e.g. matrix position results
in bonus 50%
Key strengths that contributed to performance
1. Target non-traditional employee segments
e.g. employees
2. Redesign EVP for traditional markets
Summary of development needs
Overall performance comments
CASE STUDY: IBM
In the 1990s, IBM’s leadership model drove
the development of a cadre of leaders who
transformed the company from an $8.1
billion loss in 1993 to over $36 billion in
gross proft on revenues of $91 billion in
2005—and reached the highest ever proft
margin since 1996.
In 2002, new CEO Sam Palmisano, realised
that the business environment had
changed and IBM needed an ‘on demand’
culture and leadership style. He responded
by updating the IBM leadership model to
ensure his team would be equipped for
the challenges of the new era. The IBM
‘leadership factory’ continues to be powered
by four principles:
1. A clearly defned Leadership Model.
IBM’s senior leaders are now being
trained in the new leadership qualities
as rigorously as they had been under the
previous model—4,000 executives are
held accountable to them already and are
assessed against them on an annual basis.
The assessments feed the company’s
succession planning process.
2. Senior leadership commitment to talent development. IBM believes that leadership development starts at
the top. The Senior Leadership Group of 300 people is actively involved in training programmes, including 360-
degree assessments, and simulations for programme participants. This group also commits to grooming talent.
The CEO holds annual leadership development meetings with each of the company’s 18 business units during
which potential leaders are nominated and reviewed. He also makes it a point to share his experiences during
various classes and education sessions at IBM’s learning centres.
3. Potential leaders are developed systematically. An Executive Assistant programme ensures senior leaders
actively mentor high potential individuals systematically. Executive Assistants are considered right-hand staff for
IBM’s 60 most senior executives. They are hand picked and given broad exposure and challenging assignments,
rotating roles every 9–12 months. Executive Assistants are expected to grow into senior management roles. To
facilitate this, they are assigned a coach and a programme manager to guide development goals. Current CEO
Sam Palmisano was the Executive Assistant to former CEO, John Akers.
4. Coaching and mentoring is cascaded deep into the organisation. In addition to their talent development
programme, the Senior Leadership Group identifed almost 300 talented individuals with less than 10 years
experience. Each was given a sponsor and career coach or mentor. The career coaches help these individuals to
perform in their current job and progress to take on higher levels of responsibility.
ExhIbIT 1.F
IBM LEADERSHIP MODEL
o t n o i t a c i d e D
s ’ t n e i l c y r e v e
s s e c c u s
t a h t n o i t a v o n n I
r u o r o f s r e t t a m
d n a y n a p m o c
d l r o w e h t r o f
g n i k n i h T
y l l a t n o z i r o h
w e N s ’ M B I
p i h s r e d a e L
l e d o M
r e d a e l a e r e w u o y f I
t a h w s ’ e r e h , M B I t a
d e d a r g e b d l u o w u o y
n o
d n a t s u r T
l a n o s r e p
y t i l i b i s n o p s e r
l l a n i
s p i h s n o i t a l e r
t n e i l c g n i d l i u B
s p i h s r e n t r a p
t n e m g d u j d e m r o f n I
e v i t a r o b a l l o C
e c n e u l f n i
g n i c a r b m E
e g n e l l a h c
g n i k a t k s i r c i g e t a r t S
g n i n r a E
t s u r t
h t w o r g g n i l b a n E
s ’ M B I r o f n o i s s a P
e r u t u f
e l p o e p M B I g n i p o l e v e D
y t i n u m m o c d n a
Source: Fast Company 2005, Hay Group
26
STRENGTHENING LEADERSHIP DEVELOPMENT
RECRUIT FUTURE LEADERS
ChAPTER 2

The war for leadership TalenT is won when Boards and Ceos geT
personally involved.
GLCs, with their mission to grow their own leaders, are likely to focus on entry-level
recruitment of future leaders. This will be supplemented by a smaller number of
senior level recruits for immediate needs that cannot be met by internal candidates
and particularly for critical functions that are typically not as strong in GLCs, for
example, marketing.
Recruitment should set the right tone to ensure equity and appropriate diversity of employment at entry levels.
This means that recruits should be chosen based on achievement and development potential. It also means
making the company’s high performance culture clear and transparent to recruits from day one. To make this
happen, the CEO should lead the company in applying principles of marketing and operations to the recruitment
process. Specifcally the CEO must:
Bring marketing techniques to the employee value proposition 1.
Develop an innovative sourcing strategy 2.
Apply sales disciplines to the recruitment process 3.
Use the skills, contacts and experience of Boards and CEOs to source leaders. 4.
The employee value proposition (EVP) is the company’s
offering of fnancial and non-fnancial benefts to its
recruits. It must be competitive, distinctive, and it should
leverage the company’s overall brand in the marketplace.
It must be designed to attract the specifc types of
individuals dictated by the company’s unique leadership
model.
Research shows that the company must demonstrate
attractiveness in four main areas to have a compelling
EVP: the company’s leaders, jobs, compensation, and
reputation and standing.
29
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
H
R
/
L
i
n
e

P
a
r
t
n
e
r
s
h
i
p



HR/Lin
e
P
a
r
t
n
e
r
s
h
i
p






H
R
/
L
i
n
e

P
a
r
t
n
e
r s h i p
ChAPTER 2: RECRUIT FUTURE LEADERS
“Jack Welch’s vieW Was: our managers
have to focus on people ... if We don’t
get great people into the key Jobs in
this company, then it doesn’t matter
hoW hard We Work on the other
stuff.”
— GENERAL ELECTRIC SVP of HR
CHuCk okoSky
2.1 BRinG MARkETinG TECHniQuES To THE EMPLoyEE vALuE PRoPoSiTion
30
CASE STUDY: SOUTHWEST AIRLINES
Southwest Airlines is recognised as an organisation with a strong employee value proposition. It is regularly
voted as one of the top companies to work for based on a proposition that includes good internal opportunities,
an open leadership style and a fun, collaborative working environment.
Southwest Airlines also leveraged its customer
brand of ‘A Symbol of Freedom’ to create a strong
employee value proposition with real impact.
The brand was applied to billboards, graduate
recruitment brochures, catalogues of employee
benefits—linking internal and external
communication messages.
ExhIbIT 2.A
SOUTHWEST AIRLINES — A GOOD PRACTICE EMPLOYEE VALUE PROPOSITION
ExhIbIT 2.b
1
The Freedom to Fly External Brand
Freedom Value Proposition
Freedom begins with me Employee Brand
0
n o i t a s n e p m o c e v i t c a r t t A
• n a l p g n i r a h s t i f o r P
• s e e y o l p m e l l a o t s t h g i l f e e r F
• d n a l a t n e d , l a c i d e m . g . e , s t i f e n e b h t l a e H
s n a l p e c n a r u s n i e f i l
s r e d a e l t a e r G
• e n i l t n o r f h t i w s t c a r e t n i y l t c e r i d O E C
e r u t l u c l a c i h c r a r e i h - n o n – s e e y o l p m e
• l a m r o f n i d n a n o i t a c i n u m m o c t n e u q e r F
s g n i t e e m
y n a p m o c t a e r G
• , s e i t r a p t n e u q e r f : ’ k r o w t a n u f e v a H ‘
’ d r a w A r u o m u H ‘
• ’ e l p o e P t h g i R ‘ e h t g n i r i H
g n i r u d a i r e t i r c r o j a m a s a d e t s e t r u o m u H –
s w e i v r e t n i
d e t s e t y t i l a n o s r e p : n o i t c e l e s d e t e g r a T –
• s t o l i p . g . e n o i t a r o b a l l o c f o e s n e s g n o r t S
s g a b h t i w p l e h y l i r a t n u l o v
• . g . e , s r e m r o f r e p w o l f o n r e c n o c l u f e r a C
n o i t a n i m r e t e r o f e b d e r r e f s n a r t d n a d e l l e s n u o c
t u c y r a l a s r o
b o j t a e r G
• . g . e , s e i t i n u t r o p p o d n a y t i l i b i x e l f h g i H
n o i t a t o r b o j t n e u q e r f
• s f f o y a l o n . g . e , y t i r u c e s b o j f o l e v e l h g i H
n e v e ) d e t a l e r - e c n a m r o f r e p n a h t r e h t o ( y c i l o p
r o j a m r e h t o l l a ( 1 0 0 2 , 1 1 r e b m e t p e S r e t f a
d a h s e n i l r i A a k s a l A t p e c x e s r e i r r a c S U
) s f f o y a l t n a c i f i n g i s
n o i t n e t e r / n o i t c a f s i t a s e e y o l p m E
• e n i n r o f y n a p m o c ’ e n i l r i a t s e B ‘
t s i l e n u t r o F n i s r a e y e v i t u c e s n o c
• h g u o r h T e c n a m r o f r e P t s e B 4 0 0 2
d r a w A e l p o e P
• s v ) 2 0 0 2 ( e t a r r e v o n r u t % 9 n a h t s s e L
e g a r e v a y r t s u d n i % 7 1
s e t a i c o s s A t t i w e H , s i s y l a n a e r u t a r e t i L : e c r u o S
0
STRENGTHENING LEADERSHIP DEVELOPMENT
As the CEO assesses the EVP they should bear in mind that while remuneration is unlikely to be the cornerstone
of a GLC’s EVP, it is important. If the company doesn’t pay in the top 50 percentile then they will struggle to make
other benefts attractive enough to secure future leaders. Intangible benefts such as organisational culture and
stimulating roles are also important to leaders.
Above all, the CEO must ensure that his or her particular GLC has an EVP that distinguishes it from other companies
in the eyes of their target market.
HR must actively support the CEO in the quest for a distinctive EVP and prepare it for CEO approval. This preparation
will include the following information and insights:
The talent market segments and what appeals to each segment. In particular, it should set out a distinctive •
offering for future leaders—whether at entry level or senior level, who will look for benefts such as career
opportunities, rapid advancement, talented peers and public recognition
How major competitors appeal to the various segments •
A summary of how the EVP appeals to the target segments and how it differs from competitor offerings. •
RECRUIT FUTURE LEADERS
31
ExhIbIT 2.C
SEGMENT TARGET AUDIENCES FOR EMPLOYEE VALUE PROPOSITIONS
s d e e n t n e m g e S n o i t i s o p o r p e u l a v e v i t c n i t s i D t n e m g e s t e g r a T
n a c u o y d n a s u n i o J “ f o r e b m e m a e m o c e b
e r o m o t n i k r o w e m i t - t r a p s n r u t t I . b u l C t u b e D
g n i v a s e r a e r e h T . d e t c e p x e r e v e u o y n a h t
t n u o c s i d d n a s e m e h c s r u o y t s o o b o t s
l e u f o t s a e d i , s e c n a n i f d n a s d n e k e e w r u o y
” r e e r a c e r u t u f r u o y t r a t s - k c i k o t g n i n i a r t
Young professionals
with strong tertiary
education (and
experience in
hi-tech or
telecommunication
industries)
Semi-skilled workers
(with an interest in
aviation sector)
Casual work
flexibility
and a basic
income
Students
d n a g n i n i a r T
e r u c e s
t n e m y o l p m e
e t t i m m o c r e v e e r a e W “ e r o m p o l e v e d o t d
y b , s t o l i p n w o r g e m o h g n i v a h d n a g n i t s e v n i
n w o y r e v r u o d e t r a t s g n i n i a r t t o l i p t e d a c
y l n o t o n t a h t e m m a r g o r p , y t i n u t r o p p o s e d i v o r p
i s y a l a M s e r u t r u n o s l a t u b o t n e e k e r a o h w s n a
t a n e h t o t e t u b i r t n o c ” r o t c e s n o i t a i v a s ’ n o i
s e r i p s a t a h t y n a p m o c A “ s i d n a , t s e b e h t e b o t
t a h t s e u l a v y b n e v i r d h g i h a g n i t a e r c e d u l c n i
t l u c e c n a m r o f r e p n o i t a v o n n i , e r u n o i s s a p a d n a
” n o i t c a f s i t a s r e m o t s u c r o f
d n a c i m a n y D
g n i t i c x e
t a h t t n e m n o r i v n e
d n a s e g a r u o c n e
s d r a w e r
n o i t a v o n n i
32
CEOs can ensure the EVP draws on the inherent strengths of GLCs to appeal to the strong community and ethical
values of talented Malaysians as well as to their national pride. Consider:
The importance of being a vital part of providing national infrastructure •
The value of helping to fulfl the nation’s social development goals •
The attractiveness of achieving the status of national champions. •
2.2 DEvELoP An innovATivE SouRCinG STRATEGy
As well as a compelling EVP, CEOs need to lead their
GLCs in creating innovative approaches to sourcing
their future leaders. Companies renowned for winning
the war for talent have stories of CEOs who go to
extraordinary lengths to get the leaders they need—
and these stories often inspire line managers to do the
same.
There is no prescribed way of sourcing leaders but
approaches that GLCs can consider include:
Get in touch with successful Malaysian leaders abroad—not only to bring them home but to head up local •
operations where they are now based
Create secondment arrangements with international companies recognised as ‘leadership factories’ •
Target the growing number of international executives who wish to play consulting roles to fll critical functional •
or technical leadership posts for defned periods while they develop a cadre of Malaysian successors
Revamp the scholarship programme to ensure the best and brightest scholars become the brightest, most •
practical and relevant Malaysian leaders. To do this, GLCs should consider making the scholarships more
fexible, allowing recipients to work offshore for periods or work across other GLCs. Consideration should
also be given to assigning them to corporate projects or as special offcers to senior leaders to develop
them quickly.
“BE HIGHLY DISCRIMINATORY IN SPOTTING
TOP TALENT BECAUSE THERE ARE NOT MANY.
SO WHEN YOU START LOOKING FOR REAL TOP
TALENT YOU REALLY MUST TELL YOURSELF TO
BE VERY BRAVE IN SPOTTING IT ...
THAT’S THE CEO’s ROLE.”
— iDRiS JALA
CEO OF MALAYSiAN AiRLiNES
STRENGTHENING LEADERSHIP DEVELOPMENT
RECRUIT FUTURE LEADERS
33
Recruiting is most successful when it is managed with operational rigour both in its execution and in its
commitment to continuous improvement. A robust recruitment process increases the quality and quantity of the
pool of newcomers from which potential leaders can be drawn.
ExhIbIT 2.D
RECRUITING CAN BE MAPPED AS AN OPERATING PROCESS
Key
activities
Lead generation
and maintenance
Assessment ‘Closing the deal’
On-boarding and
deployment
• Maintain network
with key recruiters,
universities etc
• Conduct recruitment
visits, e.g. career
fairs, campus visits
• Maintain database
of candidates
• Screen resumes
• Interview
candidates
• Final assessment
of candidates
(based on inter-
views and
resumes)
• Timely turnaround of
offer letters
• Negotiate terms with
accepted candidates
• Cultivate accepted
candidates
• Oversee and assist
with relocation
logistics,
e.g. immigration,
housing, children’s
schooling
• Prepare for job,
eg training, buddy
systems
Recruiting, hiring and on-boarding operation
• Maximise number
of quality candi-
dates in the
recruitment
database
• Ensure best
candidates are
accepted
• Ensure accepted
candidates join
organisation
• Ensure smooth
transition of new
joiners
Main
objective
2.3 APPLy SALES DiSCiPLinES To THE RECRuiTMEnT PRoCESS
34
In addition, the most successful businesses have a clearly mapped ‘recruitment funnel’ and use rigorous metrics
to measure the rate at which initial contacts convert to job offers and then to new recruits.
Each quarter, the CEO reviews ‘recruitment funnel’ metrics with the Head of HR. It is in these reviews, that the CEO
can push the process, fnding those areas that can really drive improved recruitment yields. Some of the ways that
the CEO can do this include:
Addressing the root causes of missed targets and reviewing process improvement actions •
Identifying line managers not playing a strong role in recruiting •
Exploring areas where he or she can personally contribute—for example, meeting with candidates, •
giving presentations at recruitment events, or giving interviews to a widely-read newspaper to raise the
organisation’s profle at a strategic time in the recruitment cycle.
ExhIbIT 2.E
MEASURE THE RATE OF CONVERSIONS TO NEW RECRUITS
s n o i t a c i l p p A
d e v i e c e r
o t s n o i t a t i v n I
n o i t c e l e s - e r p
g n i t e e m
s n o i t a t i v n I
t s 1 o t
w e i v r e t n i
s n o i t a t i v n I
d n 2 o t
w e i v r e t n i
s r e f f O
e d a m
s r e f f O
d e t p e c c a
6 5 7 6 5 5 8 ~ 2 7 4 0 2
s d n o p s e r r o c (
% 9 . 0 o t
) s n o i t a c i l p p a f o
s e u s s I
t a h t
e s i r a
% 2 1 % 7 2 % 2 4 % 5 8 % 8 7
n o i t a r e n e g d a e L
e c n a n e t n i a m d n a ’ l a e d e h t g n i s o l C ‘ t n e m s s e s s A
• e t e l p m o c n I
n o i t a m r o f n i
• c i f i c e p s y l r e v O
g n i n e e r c s
• t n e l a t h g i h o o T
r a b
• e l t t i l o o T
t n e m e g a n a m
r o f e m i t
g n i n e e r c s
• r e w e i v r e t n I
y t i l i b a l i a v a
• e t a d i d n a C
y t i l i b a l i a v a
• w e i v r e t n i r o o P
e u q i n h c e t
• P V E t n e i c i f f e n I
n o i t a c i n u m m o c
• e l b i x e l f n I
n o i t a i t o g e n
• b o j r a e l c n U
n o i t p i r c s e d
• f o g n i t e g r a t r o o P
s e i t i s r e v i n u y e k
d a e L
n o i t a r e n e g
% 0 3 % 0 4 % 5 5 % 5 8 % 0 9
: s d l e i y l a u t c A
: s d l e i y t e g r a T
E L P M A X E
- e v o r p m I
t n e m
s e v i t a i t i n i
• s m r o f r e r a e l C
• d e v o r p m I
g n i n e e r c s
s s e c o r p
• y t r a p d r 3
s r e n e e r c s
• e t a r b i l a c e R
t n e m s s e s s a
a i r e t i r c
• r o i n e s e s U
r o f t n e m e g a n a m
l e n a p w e i v r e t n i
• r e h t o e r o l p x E
f o s n a e m
. g . e g n i w e i v r e t n i
s w e i v r e t n i e n o h p
• n i - y l f e s U
n o i t p o
• e r o m e d i v o r P
r o f g n i n i a r t
s r e w e i v r e t n i
• e l b i x e l f e r o M
s g n i m i t w e i v r e t n i
• P V E d e c n a h n E
• t n e i c i f f e e r o M
f o n o i t a r t s i n i m d a
s r e f f o
• t n i r p f o e s U
- e s i t r e v d a
s t n e m
5 6 2 , 6
STRENGTHENING LEADERSHIP DEVELOPMENT
RECRUIT FUTURE LEADERS
35
Do you know three leaDers outsiDe your company who coulD transform its performance?
if so, Do you have a personal plan for how anD when you coulD recruit them?

The CEO should play a personal role in supporting HR and line recruitment efforts to hire talented individuals
with leadership potential. Companies renowned for winning the war for talent have stories of CEOs who go to
extraordinary lengths to get the leaders they need: these stories often inspire line managers to do the same. When
it comes to the most senior roles, Board members should also get involved. The CEO should be ready to call on the
Chairperson and other Board members to meet with a recruit and help secure them.
2.4 uSE THE SkiLLS, ConTACTS AnD EXPERiEnCE of BoARDS AnD CEoS To SouRCE LEADERS
ChAPTER 3
REVIEW PERFORMANCE
AND PUBLICLY HONOUR ExCELLENCE

Great leaders enerGise their orGanisation by holdinG people to
hiGher standards of performance and rewardinG those individuals
and teams that embody excellence.
The hallmarks of high performing organisations are robust performance reviews,
transparent standards and recognising great performance at all levels.
Performance reviews are opportunities for GLCs to uncover ‘hidden gems’—exceptional
people with the qualities required for real leadership. Finding these people is central
to GLCs developing leaders from within.
Publicly honouring excellence and consistency in performance reviews is also critical to GLCs moving towards
being performance-orientated organisations.
In the context of the GLC Transformation Programme, the Blue Book on Intensifying Performance Management
sets out the requirements for reviewing business and individual performance. This chapter of the Orange Book
builds on the Blue Book: it emphasises the CEO’s important role in identifying leadership potential and improving
the individual performance of leaders.
The CEO should make the following three steps a key part of his or her role:
Prioritise individual performance reviews to identify leadership potential 1.
Make individual performance improvement plans relevant for leaders 2.
Reward high performance and manage underperformance. 3.
3.1 PRioRiTiSE inDiviDuAL PERfoRMAnCE REviEWS To iDEnTify LEADERSHiP PoTEnTiAL
Individual performance review meetings are critical—they ensure potential leaders can be identifed early and
that current leaders at all levels are equipped to deliver the relevant business goals and targets. These meetings
should be held separately from the business performance review and conducted every 6 months.
To set the standard for reviews throughout the organisation, the CEO should abide by three principles:
Involve the entire senior leadership team: •
Demonstrate the importance of individual performance reviews by personally chairing the evaluation of •
senior leaders.
Spend time with direct reports, or visit every business unit, to work through the reviews of the top three •
levels in the organisation.
39
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
H
R
/
L
i
n
e

P
a
r
t
n
e
r
s
h
i
p



HR/Lin
e
P
a
r
t
n
e
r
s
h
i
p






H
R
/
L
i
n
e

P
a
r
t
n
e
r s h i p
ChAPTER 3: REVIEW PERFORMANCE
AND PUBLICLY HONOUR ExCELLENCE
Make the reviews robust to test leadership performance. • Avoid superfcial assessments by ensuring
evaluations are calibrated with input from multiple sources, including personal knowledge and 360-degree
assessments. Encourage a full discussion to deepen leaders’ understanding of ‘what good looks like’ in
the company.
Ensure review process focuses on potential as well as performance to identify ‘hidden gems’ at all •
levels of the organisation. Reviews should look at performance and potential. Particular attention should
be paid to fnding good performers with high potential. Finding these ‘hidden gems’ is not easy but it can
be done (see How to: Uncover ‘Hidden Gems’ at the end of this chapter). Once ‘hidden gems’ are found, a
plan should be created to move them into a role where they can perform. When deployment decisions are
made, moving them should be a priority.
It is important to note that it can often take several performance review cycles before an organisation achieves
consistency in reviewing performance and potential against their leadership model.
3.2 MAkE inDiviDuAL PERfoRMAnCE iMPRovEMEnT PLAnS RELEvAnT foR LEADERS
An important end product from the performance review is a performance improvement plan—a plan that will help
the leader meet his or her targets in the next reporting cycle.
The purpose of the performance improvement plan is to codify specifc actions the leader must take to continue
to develop and improve in the immediate future.
Best practices to adopt to ensure the performance improvement plan is most effective, are:
Make plans specifc. • Improvement plans should contain specifc recommendations—for example, ‘improve
fnancial literacy by reviewing fnancial plans with the Finance Director’ or ‘develop an entrepreneurial
approach by working with the marketing team on a new product launch’.
Give feedback immediately. • Too many personal reviews suffer from incomplete or unhelpful feedback.
The CEO needs to have one-to-one conversations with direct reports and provide feedback that meets the
following criteria:
Is honest and actionable •
Incorporates calibrated observations •
Acknowledges strengths and successes as well as improvement recommendations. •
Agree to provide personal support. • The CEO should agree with top leaders the level of personal assistance
they will give, such as frequent project reviews with an individual with tight deadlines or introducing an
infuential connection to someone trying to bring in a major sale but who has limited personal networks.
Make sure the responsibility to improve performance is cascaded through direct reports. • All leaders at
all levels of the organisation should have a performance improvement plan and the CEO should monitor
whether this practice is in place and effective. The CEO can test this by asking questions about leaders’
improvement plans in the performance reviews of his or her direct reports.
40
STRENGTHENING LEADERSHIP DEVELOPMENT
REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE
41
HOW TO: UNCOVERING POTENTIAL LEADERS
ExhIbIT 3.b
WHAT TO LOOk FOR TO IDENTIFY ‘HIDDEN GEMS’
Negatively
branded
individuals
Maliciously
rated
individuals
Cultural misfits
Forgotten
individuals
• Employees who might have had a poor review in the past or have been
sidelined in the organisation
• Employees who might have made a mistake or been given a low ranking
because of personal conflicts rather than for actual performance issues
• Employees who might not have been given the opportunity to shine
because they don’t easily ‘fit’ with the culture
• Employees who might have fallen through the cracks because of a poor
staffing match or an introverted personality
• Employees who are out of sight because of their remote location and
distance from the management group
Invisible
individuals
Deliberately
hidden
individuals
Too new
individuals
• Employees who might be hidden by a manager who does not want the
person ‘poached’ by other departments
• Employees who might have only recently joined the company or who
have entered the management tiers for the first time
ExhIbIT 3.A
CONDUCT EFFECTIVE PERFORMANCE REVIEWS THAT INVOLVE SENIOR LEADERS
Senior leaders
• Prepare and present individual
cases
• Challenge and probe each others’
presentations
• Help provide business context and
opportunities
• Commit to ‘owning’, and following
through with, outcomes
Meeting details
• 15 minutes per candidate
• Off-site location (1–2 days)
• Occurs before financial planning
process
End products
• Agreed action steps for individual
cases
• Promotions and recognition
• Consequences
• Investigates cases to look
for ‘hidden gems’
• Holds senior leaders
accountable for
leadership development
CEO
Facilitator
• Ensures pre-meeting
preparation is executed and
supports presenters in the
process
• Captures group’s thoughts on
individuals’ development
1.
3.3 REWARD HiGH PERfoRMAnCE AnD MAnAGE unDERPERfoRMAnCE
CEOs can promote positive role models and raise company-wide performance standards by honouring excellence
and rewarding high performance. A critical but often overlooked aspect of this practice is also to deal courageously
with underperformance. Specifcally, the CEO must be able and prepared to:
Publicly acknowledge high performance. • Acknowledge high performance in the individual’s review session
and outside of it. This helps to reinforce and set clear benchmarks to the entire organisation for ‘what good
looks like’. Ensure that different aspects of performance are recognised to further bring the leadership
model to life.
Link high rewards to high performance in a clear and transparent manner. • Have a highly differentiated
scheme that sets out very clearly what high performance is, and what the rewards for achieving it are.
Courageously deal with underperformance at senior levels. • Underperformers, particularly at senior levels,
affect results and create dissatisfaction among high performers. Great CEOs address underperformance
with clear actions: they give honest feedback and provide development support. If an individual has two
consecutive poor performance reviews, he or she should be placed in another role where they can contribute
in a more meaningful way. But if these steps fail to achieve a positive outcome, action should be taken to
move the individual out of the organisation. Whilst diffcult in a culture where loyalty and community is highly
valued, this approach is consistent with a developmental meritocracy, is consistent with a high performance
culture, and is consistent with an organisation that makes its performance criteria clear from the outset.
42
DO YOU SPEND AT LEAST 1 HOUR WITH EACH OF YOUR DIRECT REPORTS EVERY QUARTER GIVING THEM
PERSONAL FEEDBACk AND COACHING ABOUT HOW THEY CAN BE MORE EFFECTIVE LEADERS?
CASE STUDY: FEDEx MALAYSIA—HONOURING HIGH PERFORMERS
fedEx Malaysia places high emphasis on recognising and honouring high performers.
It structures its compensation and reward scheme to drive individual effort, promote teamwork, stimu-
late new ideas and encourage outstanding performance. in addition, it gives special awards to publicly
honour employees and celebrate their success among their peers:
Bravo Zulu—award for outstanding performance beyond normal job expectations
Purple Promise Award—for exceptional customer service
Humanitarian Award—recognition for human welfare above and
beyond work or community standards
Five Star Award—highest award for enhancing service, proft-
ability and the spirit of teamwork
FedEx was named one of Malaysia’s top ten best employers in a
‘Best Employers in Malaysia’ study for 2001, 2003 and 2005.
STRENGTHENING LEADERSHIP DEVELOPMENT
1.
ChAPTER 4
DEPLOY STRATEGICALLY TO DEVELOP LEADERS

GLCs can deliver better business results and broaden the skills, experiences and
satisfaction of talented leaders through strategic deployment—a critical tool for
organisations focused on ‘growing their own’ leaders.
To deploy their talent strategically, the CEO must take two important steps:
Institutionalise an effective strategic deployment process 1.
Take bold but measured risks to gain maximum beneft from the deployment process. 2.
4.1 inSTiTuTionALiSE An EffECTivE STRATEGiC DEPLoyMEnT PRoCESS
The CEO must lead the deployment process, but it is vital that the HR function provides essential support.
Specifcally, the CEO needs to:
Identify positions that create value in the company. • Positions with the potential to create or destroy the most
value for the company are considered to be ‘pivotal positions’. These positions include, but are not limited
to, the CEO’s direct reports. The number of pivotal positions in any company will vary. A single-line domestic
manufacturing business might have 10 to 15 pivotal positions whereas a fnancial services business of a
similar scale could have 20 to 30 pivotal positions. At the other end of the spectrum, a multi-line global
manufacturing business might have 100 pivotal positions.
45
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
H
R
/
L
i
n
e

P
a
r
t
n
e
r
s
h
i
p




HR/Lin
e
P
a
r
t
n
e
r
s
h
i
p






H
R
/
L
i
n
e

P
a
r
t
n
e
r s h i p
ExhIbIT 4.A
TEST THAT PIVOTAL POSITIONS ARE FILLED BY TOP LEADERS
n o i t a c i f i t n e d I
l a t o v i p f o
s n o i t i s o p
• f o e e r g e d h g i H
t c a p m i s s e n i s u b
t s o C –
h t w o r G –
l a t i p a C –
• c i g e t a r t s l l a r e v O
t c a p m i
t e k r a m l a i c e p S –
t h g i s n i
r o y r o t a l u g e R –
l a c i g o l o n h c e t
e g d e l w o n k
t e k r a m h g i H –
y t i c r a c s
d r a d n a t s d l o G
l a i t n e t o p h g i H
l a i t n e t o p w o L
l a i t n e t o p e e y o l p m E
l a t o v i P
n o i t i s o P
l a t o v i p n o N
O E C
r e c i f f O l a i c e p S
k s i R f e i h C
r e c i f f O
f o d a e H
g n i t e k r a M
f o d a e H
k r o w t e n n r e h t r o N
w o N
r a e y 1 n I
s r a e y 2 n I
s s e n i d a e r d n a s r o s s e c c u S
O F C
r e r u s a e r T
R H f o d a e H s s e n i s u B f o d a e H
s e h c n a r B
l i a t e R f o d a e H
e l i b o M f o d a e H
e g a g t r o M
s r e g a n a M
l l a C f o d a e H
s e r t n e C
f o d a e H
n r e h t u o S
k r o w t e N
e r o h s f f O f o d a e H
k r o w t e N
s e l a S s n o i t a r e p O e c n a n i F s s e n i s u B R H
d a e H t i n U
E L P M A X E
l a i c n a n i F
r e l l o r t n o C
CEOs NEED TO skilfully maTCh ThEir lEaDErs TO ThEir mOsT
impOrTaNT rOlEs, DElivEriNg highEr pErfOrmaNCE aND aCCElEraTiNg
DEvElOpmENT.
ChAPTER 4: DEPLOY STRATEGICALLY TO DEVELOP LEADERS
Decide on the size of the ‘pool’ to be actively •
managed. To ensure equity and employment
diversity, include equal numbers of high potentials
and high performers. ‘Hidden gems’ discovered in
the performance review process should feature in
this pool as priority candidates for redeployment. The
CEO should ‘own’ this pool and for each individual
in the pool, the CEO must have access to current
and accurate career history data and development
plans.
Create broad leadership career paths that are •
clear to the whole organisation. Rather than
be prescriptive, the career paths should make
transparent the breadth of experiences and expertise
that talented individuals must acquire before they
will be promoted to senior leadership.
Chair the job matching forum where deployment decisions will be made. • This forum should be held as
close to the business planning session as possible so that it refects the needs of the business.
46
What Leaders do
One international resources group published
a document for potential leaders that listed
nine mandatory experiences, including
‘operating in more than one business within
the group’ and ‘having an infuential corporate
role with exposure to the Board and Executive
Committee’. The document also listed the types
of knowledge required of potential leaders
and included the mastery of a professional
discipline and regular external learning such as
MBA-level education.
ExhIbIT 4.b
LEADERS ARE MATCHED TO JOBS IN A DEPLOYMENT DISCUSSION THAT ACHIEVES SOLUTIONS IN
THE INTERESTS OF INDIVIDUALS, THE BUSINESS UNIT AND SUCCESSION PLANNING
r e t n e s e r P e t a d i d n a C
) R H f o d a e H r o r e d a e l l a n o i s i v i D (
• s e t a d i d n a c d e s o p o r p s t n e s e r P
• s ’ e t a d i d n a c h t i w t i f s r e d i s n o C
d n a n a l p t n e m p o l e v e d l a n o s r e p
n o i t i s o p e h t n i t s e r e t n i
1
r o t a t i l i c a F
• e h t s l o r t n o c d n a s e d i u G
s n o i s s u c s i d
• h c i r s e g a r u o c n E
g n i k e e s y b s n o i s s u c s i d
t h g i l h g i h , s w e i v t n e r e f f i d
g n i t s e g g u s d n a , s f f o - e d a r t
r o f s e t a d i d n a c e v i t a n r e t l a
s e i t i n u t r o p p o c i f i c e p s
5
r e s i n a g r O
• d n a n o i s s u c s i d s d r o c e R
d e e r g a s n o i t c a s e i f i r a l c
• r o t a t i l i c a F s t r o p p u S
6
s b o J s r e d a e L g n i h c t a M
r e t n e s e r P b o J
) r e d a e l l a n o i s i v i D (
s t i d n a b o j e h t s t n e s e r P
s t n e m e r i u q e r y e k
3
) O E C ( r e k a m n o i s i c e D
) s t i m i l d n a ( s e d u l c n o C
s n o i s s u c s i d
2
s r e d a e l l a n o i s i v i d r e h t O
e t a b e d e h t n i e g n e l l a h c ts n e s e r P
4
STRENGTHENING LEADERSHIP DEVELOPMENT
DEPLOY STRATEGICALLY TO DEVELOP LEADERS
47
Design processes to streamline employee transitions to new roles. • Good intentions can come undone in
many companies because their supporting processes are ad hoc or non-existent. As a result, what should
be the positive acknowledgement of a top employee’s value becomes a negative experience. Successful
transitions require processes that can ensure:
Coordinated communications—to provide consistent and unambiguous information about the move or •
relocation and changes to pay and conditions
Just-in-time training for the role—to address any critical skill or knowledge gaps. This could include •
learning a new language or attending short best practice courses in a specifc functional area
New leader assimilation—to provide a facilitated session that encourages questions and allows the •
leadership team to share perspectives on what the new leader should focus on as a priority
Transitional support—to provide information and support that will lessen the impact on the leader’s •
family, for example home relocation, schooling and spouse employment.
There will always be risks in making bold deployment
moves. But with the right process in place, these risks
can be managed by ensuring that when individuals
move into new roles, their team members have
complementary skills and that additional senior
coaching is provided.
Bold but measured deployment moves, based on
a clear view of a person’s potential, can be used
to rectify imbalances in employment diversity and
equity throughout a GLC.
The CEO can and should take four kinds of risks that
will signifcantly impact the quality of the business
outcomes and the company’s future health:
Move leaders into more challenging roles. • For example, promote the most exceptional high potential
leaders two levels up in the organisation instead of one — to stretch, challenge and test them ‘at the deep
end’.
Encourage cross-company experience. • Cross-company moves broaden leadership capabilities, break
down otherwise strong organisational silos and increase the spread of good practices. Organisations such
as Shell demand their senior leaders have a rich spread of such experiences and expose them to different
operational contexts, such as a turnaround or merger—different functions, different businesses and different
countries. GE in Malaysia ensures its leaders rotate across geographies and industries. When GLCs make
geographic moves they should give careful attention to the leader’s family circumstances. For example,
GLCs should be ready to help their spouses fnd equivalent jobs and their children school placements.
“Leadership as an organisation is the sum
totaL of each act of each person. Leadership
is behaviour and action, not position and
personaLity. the accoLades for wipro’s
Leadership are accoLades for each wipro-
ite’s contribution to what the company is
today.”
— azim premji
chairman of wipro
4.2 TAkE BoLD BuT MEASuRED RiSkS To GAin MAXiMuM BEnEfiT fRoM THE DEPLoyMEnT PRoCESS
48
STRENGTHENING LEADERSHIP DEVELOPMENT
Do you have a clear point of view on what the next role shoulD be for each executive
reporting to your Direct reports, to maximise their Development anD the performance
of the business?
Move people who have reached their potential, out of pivotal roles. • The CEO must ensure that no pivotal
position is blocked by an employee who has reached the limit of their potential. When individuals reach
a plateau, use the deployment forum to identify less critical roles where these people can be gainfully
employed and potentially re-energised.
Promote on potential but make this contingent on performance. • Maintaining a developmental meritocracy
is dependent on promoting people based on potential but moving them down or into less critical roles if they
do not perform to expectations within 1 year. This is never easy but it is vital.
ExhIbIT 4.C
THE JOB MATCHING FORUM USES INFORMATION FROM
PERFORMANCE REVIEWS TO IDENTIFY THE SUPPLY OF
LEADERS...
2 2 3 s h t n o m 4 2 r e g a n a M f o d a e H n a m z A . C
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r e d a e L
X t c e j o r P
s e l a S
r e g a n a m
2 U B
r e g a n a M
Y t e s s a
t s a P
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n o i t a s i t i r o i r P
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t n e m e v o r p m i
n o i t a u t i s
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l a n o i t a n r e t n i
t n e m n o r i v n e
g n i n i a t n i a M
l a n o i s s e f o r p
p i h s r e d a e l
r u o i v a h e b
s s e r t s r e d n u
t n e m p o l e v e D
s d e e n
r e d l o h e k a t S
p i h s n o i t a l e r
t n e m e g a n a m
g n i h c a o C
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s n o i t a r e p O
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n a w i R B
g n i v l o s - m e l b o r P 4 3 4 7 1
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s h t n o m
f o d a e H
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d e i f i t n e d I
s h t g n e r t s
: g n i t a R
l a i t n e t o P
: g n i t a R
r o i v a h e B
: g n i t a R
y r e v i l e D
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t n e r r u c
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3 l e v e l - s r e d a e l e l b a y o l p e d f o w e i v r e v o e t a r o p r o C
0 2
n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N g n i t a r l l a r e v O
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G• g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
0 2
n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N g n i t a r l l a r e v O
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G• g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
0 2
g n i t a r l l a r e v O n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G• g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
0 2
n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N g n i t a r l l a r e v O
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G• g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
0 2
n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N g n i t a r l l a r e v O
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G• g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N g n i t a r l l a r e v O
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P
e t a i r p o r p p a
s r a e y 3 - 2 n i
: s p a G• g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Delivery
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
) s ( r o t n e M
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
5 1 4 3 2
1
2
3
4
5
P
e
r
f
o
r
m
a
n
c
e
t n e m n g i l A
5 1 4 3 2
1
2
3
4
5
P
e
r
f
o
r
m
a
n
c
e
t n e m n g i l A
5 1 4 3 2
1
2
3
4
5
P
e
r
f
o
r
m
a
n
c
e
t n e m n g i l A
5 1 4 3 2
1
2
3
4
5
P
e
r
f
o
r
m
a
n
c
e
l a i t n e t o P
1 U B
2 U B
3 U B
4 U B
g n i t a r l l a r e v O n o i g e R U B e l t i T n o i t i s o P . o N p m E e m a N
d e t e l p m o C e t a D
y b d e t e l p m o c &
e l i f o r p e c n e i r e p x e e t a d i d n a C
• s s e n i s u b a d e t r a t S
• s s e n i s u b e g r a l n w o r G
• s t n e i l c r o i n e s d e t a v i t l u C
• s r a t s d e t i u r c e R
• n o i t a s i n a g r o t l i u B
• y t i l i b i s n o p s e r l a i c n a n i F
• s n a l p s s e n i s u B
• s l a e d e g r a l n o d e k r o W
• C C f o t s o m h t i w d e k r o W
• : l a i t n e t o P 3
• n o i s s e r g o r P e t a i r p o r p p a
2 n i s r a e y 3 -
: s p a G • g n i t r a t S s s e n i s u b • g n i t i u r c e R • e g r a l g n i k a M s l a e d • C C e r u s o p x e
0 0 0 2 , y a M 3 7 e p o r u E S F B r o s i v d A l a b o l G 1 1 9 6 0 1 e l p m a S M
Performance
s r u o i v a h e B
1 5 4 3 2
1
2
3
4
5
2
1
r o i n e S P
s h t g n e r t S
s d e e n t n e m p o l e v e D
s ( r o t n e M )
) e l o r n i e m i t d e n n a l p . s v ( e l o r t n e r r u c n i e m i T
e c n e i r e p x e s u o i v e r P
d e t e l p m o c t r o p p u s t n e m p o l e v e d / s e s r u o C
Leadership supply Leadership opportunities Matching
ExhIbIT 4.D
... AnD MATCHES THEM To PivoTAL RoLES
s e i t i n u t r o p p O d e i f i t n e d i
m o r f
l a t o v i p w e n f o n o i t a e r C . 1
s e l o r p i h s r e d a e l . g . e ,
• s n o i t i s o p t n e m e g a n a m e n i L
• s t c e j o r p w e n f o s r e d a e L
• e r o m t a s e l o r l a t o v i p r e h t O
s l e v e l r o i n u j
f o w e i v e r e c n a m r o f r e P . 2
g n i t s i x e n i s l a u d i v i d n i
s e l o r l a t o v i p . g . e ,
• t n e r r u c f o n o i t a t o r r o f d e e N
p o l e v e d o t g e r e d l o h b o j
e h t h s e r f e r o t r o s l l i k s
s s e n i s u b
• b o j t n e r r u c f o n o i t o m o r P
r e d l o h
• l l i k s n i e g n a h C
b o j f o s t n e m e r i u q e r
y t i n u t r o p p o e l b a l i a v a / n e p O
s h t n o m 3 t x e n n i
e l b a l i a v a y t i n u t r o p p O
s r y 2 – 1 n i h t i w
r e d a e l g n i p p a m t r a h c l a n o i t a s i n a g r O s e i t i n u t r o p p o p i h s s e l o r l a t o v i p n i
N N
y 5 . 1
] 5 , 5 , 4 [
: r e d a e l g n i t s i x e f o e m a N
n o i t i s o p n i s r a e Y
/ r u o i v a h e b / y r e v i l e D [
s g n i t a r ] l a i t n e t o p
+
N N
y 4
] 3 , 4 , 3 [
N N
y 5 . 1
] 5 , 5 , 4 [
N N
y 5 . 2
] 2 , 5 , 3 [
N N
y 1
] 2 , 5 , 3 [
N N
y 5 . 0
] 3 , 4 , 2 [
N N
y 2
] 3 , 3 , 3 [
N N
y 5
] 2 , 5 , 3 [
N N
y 5
] 2 , 5 , 3 [
• i n u t r o p p o t n e m p o l e v e D .g. e , d e d i v o r p s e i t
e r u s o p x e l a n o i t a n r e t n I –
e g n e l l a h c d n u o r a n r u T –
• .g. e , s n o i t i s o p e l b a l i a v a r o f s t n e m e r i u q e R
s l l i k s n o i t a c i n u m m o c g n o r t S –
e c n e i r e p x e l a n o i t a r e p O –
y l l a n o i t a n r e t n i e t a c o l e r o t s s e n g n i l l i W –
N N
y 2
] 3 , 3 , 3 [
d a e L y l p p u s p i h s r e d a e L s e i t i n u t r o p p o p i h s r e g n i h c t a M
49
DEPLOY STRATEGICALLY TO DEVELOP LEADERS
HOW TO: GOOD PRACTICE IN JOB MATCHING

Job matching forums are most effective when:
All decision makers are •
present:
The CEO, who will chair the •
meeting and endorse all moves
Senior executives — including •
those who will be accountable
for accepting leaders into their
business or function as well
as those who are the current
stewards of leaders and who will
advise candidates of their next
post
HR leaders, who will support •
the transfer of people from one
business role to another.
The format is highly visual and interactive • —for example, have participants physically move the names
of people around an organisation chart and problem solve how they will back-fll the gaps to avoid the
common misconception that decisions about career moves are made by the HR function in back rooms.
The CEO and senior executives •
personally know the people
being matched and are not
just relying on HR data—the
individual’s passions and views
are genuinely factored into the
decision making and people are
not just placed in roles ‘for the
good of the company’.
In all decisions made, ensure •
a balance is achieved between
putting people in a role
because it will drive immediate
performance, and because it
will advance their development.
ChAPTER 5
DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT

Great orGanisations become ‘leadership factories’, workinG at all
levels to build leadership capability. Great ceos know that this
personal activity is best led by them.
GLCs can unlock leadership potential and build the capabilities needed to ensure
they can meet their business goals and national objectives. To do this, CEOs and their
senior executive teams must invest time and effort to connect with their potential
leaders. They must be role models demonstrating the company’s most highly valued
leadership qualities—the qualities set out in their unique leadership model.
The CEO can add value in four ways:
Invest in a high impact leadership development 1.
programme
Coach and develop direct reports at every 2.
opportunity
Prioritise the development of CEO successors 3.
Cascade the development commitment deep 4.
into the organisation.
5.1 invEST in A HiGH iMPACT LEADERSHiP DEvELoPMEnT PRoGRAMME
For such a programme to be successful, the CEO must make a substantial corporate and personal investment.
A substantial corporate investment. • The CEO, together with the Board, must ensure there is substantial
corporate investment in their leadership development programme. They should test that the investment
delivers results and they should expect to see year-on-year improvement in the quality of the programme.
After a pilot course, have HR check the feedback to test for impact.
A personal investment. • The CEO must invest the time required to shape the leadership programme’s
design and delivery. This role cannot be outsourced to the HR function. Specifcally, the CEO needs to:
Spend time to ensure HR understands the strategic issues for leaders, which might include, for example, •
the growth agenda or the challenges of operating in the global market
53
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
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ChAPTER 5: DEVELOP LEADERSHIP AND HIGH POTENTIAL
TALENT
“We attract and recruit the finest
people in the World. We build our
organisation from Within, promoting and
reWarding people Without regard to any
difference unrelated to performance.
We act on the conviction that the men
and Women of procter & gamble Will
alWays be our most important asset.”
— procter & gamble
Ensure HR tests the fnal curriculum to •
address the major skill, knowledge or
behavioural gaps, that leaders have relative
to the requirements of the GLC’s specifc
business plan. Above all, make sure it is
not all in the classroom—good leadership
programmes turn leaders’ actual jobs into
their feld work. Learnings should be applied
‘on-the-job’ for sustainable impact
Involve current leaders to pass on valuable knowledge from one generation to the next. Design exercises •
that draw on the unique experiences of other leaders, for example surviving the Asian fnancial crisis
Just be there. The leadership development programme will not be effective if the organisation cannot •
see that the CEO personally sponsors the programme. GE’s Jack Welch famously presided over every
leadership course at Crotonville other than when he was in hospital having a heart operation.
The CEO must take every opportunity to build individual capabilities in his or her direct reports and successors.
This means providing regular, informal feedback and following it up with structured discussions:
Build capability through immediate feedback. • Develop the habit of giving immediate coaching to direct
reports whenever the opportunity arises. Senior management workshops, employee briefng sessions and
customer meetings all provide opportunities for the CEO to observe leaders in action and to coach for
higher performance.
Follow-up with structured discussions. • Every six months, meet with each individual for at least 1 hour
to review progress against their personal development plan and develop new actionable and measurable
personal development goals. The HR function can prepare up-to-date material for these meetings, including
recent appraisal information and development actions, to make the coaching relevant and structured.
5.3 PRioRiTiSE THE DEvELoPMEnT of CEo SuCCESSoRS
The Board will select the successor to the CEO and decide which model will be used to groom that successor.
There are, broadly, three main types of CEO succession models. The frst model, a ‘relay race’ involves the Board
selecting one successor and ensuring that the current CEO gradually grooms the heir to ensure that he or she will
have the necessary knowledge and skills to take over successfully.
The other two models involve competition between several candidates. In the second model, the ‘horse race’,
several candidates from within the organisation compete and the Board selects the most successful candidate
based on agreed criteria.
54
“the sign of a good leader is someone
who knows how to retreat into the
background while encouraging their
successor to become more successful in
their job. you have to sacrifice yourself
first for a big cause before you can ask
others to do the same ”
— narayana murthy
chairman of infosys
5.2 CoACH AnD DEvELoP DiRECT REPoRTS AT EvERy oPPoRTuniTy
STRENGTHENING LEADERSHIP DEVELOPMENT
In the third model, the ‘greyhound race’, the pool from which candidates are selected is wider and will include
external candidates in addition to internal ones. This model is typically only used when there is a distinct leadership
gap within the company or when the company’s performance or strategy has changed dramatically, requiring a
different style of leader.
Having selected the succession model, and identifed potential internal successors, the CEO can help to develop
these individuals in two ways:
Prioritise successors in the development system. • For example, ensure potential CEOs are deployed
appropriately, receive formal development and training and are exposed to Board members.
Ensure development is uniquely tailored to prepare successors for the role. • CEO successors should
receive special support to address any unique personal development needs that could hamper their ability
to carry out the role.
DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT
55
Exhibit 5.A
CEO SUCCESSION MODELS
One candidate from internal
organisation, handpicked
by Board
Candidate selected from
several contenders within
the organisation
Candidate selected from larger
pool within and outside the
organisation, typically with more
formal selection process
Daft ‘Passing the baton’ Isdell
Welch ‘Contenders’ Immelt
Morrison ‘Hound and hare’ Conant
ಫRelay raceಬ
ಫHorse raceಬ
ಫGreyhound raceಬ
56
Because of the personal nature of development, the CEO must enlist other senior leaders and line managers to
share the responsibility.
To do this, CEOs can take two practical actions:
Be systematic about mentoring high potential individuals. • Develop a method of mentoring future leaders
found throughout the organisation:
Have the top team identify talented individuals with less than 10 years experience. Assign each individual •
to a senior leader sponsor who will help them chart a path within the organisation
Establish a special offcers programme. Assign high potential employees to 12–18 month development •
roles alongside senior leaders.
Test the depth of coaching and mentoring in the organisation. • Have the HR function review upward
appraisals and employee opinion surveys to determine how far coaching is being cascaded into the
organisation. Statements such as the following can be used in surveys to test the depth of coaching:
My manager provides constructive feedback that helps me to do my job better •
Coaching is a regular part of the day-to-day activity within the organisation •
Managers are recognised and rewarded for their commitment to developing others •
Ask the HR function to highlight which CEO’s direct reports are rated ‘above average’ and ‘below average’
in developing others. Publicly acknowledge leaders who successfully develop others.
Do you play a role in every senior leaDership Development programme for your
company?
What Leaders do
HSBC has formalised immediate feedback and coaching for its leaders. Teams hold a number of ‘post mortem’
sessions after key meetings to assess whether commercial objectives were met, and how individuals performed
in their designated roles.
The ‘post mortem’ debriefs are essentially a real-time 360-degree
feedback process, allowing people to refect on their actual experiences.
They evaluate multiple aspects, often in complex situations, and help to
uncover potential leaders.
5.4 CASCADE THE DEvELoPMEnT CoMMiTMEnT DEEP inTo THE oRGAniSATion
STRENGTHENING LEADERSHIP DEVELOPMENT
57
CASE STUDY: GE
Companies such as GE use multi-level leadership development to embed a leadership culture. This style
allows the Company to refect the challenges faced, and styles required, at different leadership levels.
GE developed formal programmes for all levels of the organisation—entry-level executives, experienced junior
executives, middle managers and senior executives.
At every level, the formal programmes focused on issues that could best equip GE employees with skills and
expertise applicable to their respective positions. All leaders in GE participate—including Malaysian leaders.
The CEO is actively involved in these training programmes, joining evening debates with junior executives at the
Corporate Entry Leadership Conference.
ExhIbIT 5.b
GE FOCUSES HEAVILY ON FORMAL TRAINING PROGRAMMES—MANY OF WHICH ARE OFFERED AT
CROTONVILLE
3
2
• Corporate
Officer
Workshops
• Executive
Development
• Business
Development
• Management
Development
• Experienced
Managers
Development
• New
Managers
Development
• Corporate
Entry
Leadership
Conference
• Impact
Programme
Participants
• Senior
middle
managers
• Experienced
junior
executives
• Fast-track
junior
executives
(pro-motions
within
1 year of
hiring)
• 2000 entry-
level junior
executives
Focus
• GE’s global strategy
• Company values
• Markets, competitors
• Functional expert executive skills
• Benchmarking project
• Initiating and facilitating change
• Leadership concepts
• Creating high performance
teams
• GE business in a regional
context
Delivery
• (Potential)
Top
executives
• Resolution of challenging,
open issues
• 20–30 officers
• Irregular schedule
• Open ‘work-out’ style
discussion
• Mixed on-/off-site
• Formal
training/discussions
• Industry experts as faculty
• Competitor benchmarking
visits
• Mixed functional teams
• Senior
executives
• Management in a multifunctional
company
• Tangible end-
products/decisions
• Strong global outlook
• Potential
Top senior
executives
• Managing the multifunctional
firm
• Business and leadership under
global competition
• 4–week programmes
• Strong action orientation
• Significant, real-life issues
• Potential
General
Managers
• Business and leadership in a
global competitive environment
• On-site
education/discussions
• Off-site business projects
• On-site courses
• Regional differentiation
• Mainly peer discussions
• 3-day on-site; groups of
100
• Presentations from
businesses
• Evening ‘work-out’ debate
with CEO
• On-site courses
• Regional differentiation
• Strong focus on open
discussion
Source: Corporate University Review, Control your Destiny (Tichy/Sherman)
Programme
1
4
DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT
DEVELOP LEADERSHIP
59
ChAPTER 6
ENGAGE AND RETAIN LEADERS

Today’s war for leadership TalenT is as much abouT reTaining
leaders as iT is abouT engaging Them.
Having put time and effort into developing their leaders, CEOs need to be able to retain
them to reap the benefts. For GLCs this is particularly important—private companies
and multinationals will be waiting in the wings to capitalise on the investment.
But the GLC Board and CEO can foster loyalty in their talented leaders—and ensure a
high level of professionalism and goodwill in the event that an individual decides to move on. This involves three
interrelated steps:
Build an organisation that is a work community, not just a company 1.
Hold on to the most valuable leaders 2.
Keep the door open to leaders who leave. 3.
6.1 BuiLD An oRGAniSATion THAT iS A WoRk CoMMuniTy, noT juST A CoMPAny
Malaysian leaders care for their community, are loyal to it, and wish to serve it to the best of their ability. Boards
and CEOs can create an organisation that is a vital part of every leader’s personal community.
Encourage networking within the company: • particularly in areas of interest to talented individuals and that
beneft the company.
61
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
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ChAPTER 6: ENGAGE AND RETAIN LEADERS
ExhIbIT 6.A
HOW COMPANIES INCREASE THEIR SENSE OF COMMUNITY
Coffee-talk (Kopitiam) sessions are held where employees of all levels are
selected randomly to interact with the CEO
Companies use various methods to build a sense of community within the organisation
Creates a strong cadre of international managers who develop formal and
informal networks during exclusive training programmes and events
Knowledge workers publish documents on an internal knowledge platform
and are rewarded for doing so
Exclusive ‘interchange’ conference where high performing employees
present ideas and learnings
All employees encouraged to launch and lead a project with like-minded
colleagues who volunteer to participate during their free time
‘Make a friend @ Cisco’ scheme develops links between current and
potential employees who share mutual interests
Encourages employees to leverage their informal networks to find their
next job role
Make leadership roles more than ‘just a job’. •
Get leaders involved in activities that appeal to
their wider interests and link their job to their
passions and a higher sense of purpose. This
works at three levels:
Personal: such as working with a young team •
and developing high potential local talent
or teaching at the leadership development
programme
Corporate: such as saving jobs by turning around a non-performing business or generating work by •
winning over a diffcult client
National: such as improving critical infrastructure or building the company’s or country’s global •
reputation.
Proactively engineer opportunities for leaders to engage with senior executives, including the Board. •
For example, pair leaders with senior executives whom they respect for special projects, ask them to present
material at Board meetings, or invite them to social events where Board members or senior executives are
present.
Strategically match leaders with the right mentors to develop relationships based on mutual commitment. •
To make this work, ‘chemistry’ matters and if the chemistry is not there, change the coach or mentor.
6.2 HoLD on To THE MoST vALuABLE LEADERS
Despite all efforts, there will be times when talented leaders consider leaving. And while there is merit in the ‘go
in order to grow’ philosophy, unplanned attrition of leaders means the organisation loses out on its development
investment and can be exposed to business risk.
The CEO’s role in managing this is to:
Detect early signs of dissatisfaction. • Draw on personal relationships and the coaching and mentoring
network to pick up signs of dissatisfaction. The HR function can support this by training executives to
identify the signs and to know what steps to take to turn the situation around. If a high performing leader
slips through the net and leaves without warning, speak to their manager and mentor and fnd out why they
did not see it coming.
Intervene early to keep the best leaders. • It is worth getting to the heart of the best leaders’ dissatisfaction
and then creatively shape a solution to allow them to stay. Consider for example crafting their role differently,
changing reporting lines, or being fexible in working conditions or benefts. (See Exhibit 6.B)

62
“ ... in today’s successful organisation
connectedness and openness have taken
over from empire building and secrecy.”
— John Browne
Ceo of British Petroleum (BP)
STRENGTHENING LEADERSHIP DEVELOPMENT
ENGAGE AND RETAIN LEADERS
63
6.3 kEEP THE DooR oPEn To LEADERS WHo LEAvE
If, after all avenues have been exhausted, a top leader still wants to leave, ensure the leaving experience is
positive and smooth and that they know they would be welcomed back should they wish to return. They should
leave as ambassadors for the company.
An excellent way to maintain contact with high performers is to develop an alumni programme. Get personally
involved in the development of such a programme and include high performing retirees as alumni: they could be
used to assist as coaches, consultants, interim managers or, if appropriate, even Board members. For example,
Ernst & Young’s alumni network reportedly generated 20% of their new recruits recently.

ExhIbIT 6.b
LEADERS SHOULD BE TRAINED TO ‘SAVE STARS’—RETENTION CONVERSATIONS
y a l p e l o r ’ k s i r t A ‘
n o d e s a b d e p o l e v e d s e s a C
h g i h l a u t c a h t i w s n o i s s u c s i d
s e e y o l p m e l a i t n e t o p
+
E D I U G G N I N I A R T E L P M A X E
n o i t a r a p e r p f o s t i f e n e B
• r e d a e L
e c n e d i f n o c d e s a e r c n I –
s w e i v r e t n i t c u d n o c o t
y d a e r l a n o d e s a b
e e y o l p m e g n i w o n k
d n a s e d u t i t t a
s e u s s i o t s e s n o p s e r
d e n i a t b o s l i a t e d e r o M –
s w e i v r e t n i m o r f
n o i t c a r e t n i r e t a e r G –
s e e y o l p m e y e k h t i w
• e e y o l p m E
e r o m s r e g a n a M –
s e u s s i o t e v i t p e c e r
o t n e k a t s n o i t c A –
s m e l b o r p t c e r r o c
s l a i t n e t o p h g i h ’ k s i r t a ‘ r o f e d i u g n o i t a s r e v n o C
t u o t n r u B : n o i t a u t i s e l b i s s o P
n o i t c u d o r t n I
e h t r o f n o s a e r e h t e c u d o r t n i d n a n o i t a u t i s e h t m r i f n o C
f l e s r u o y e t i u q e b o t m e e s t ’ n o d u o Y . g . e , n o i t a s r e v n o c
? p l e h o t o d n a c I g n i h t y n a e r e h t s I . y l e t a l
r e v o c o t s t c e j b u S
• s t n e v e t n e c e r y n A
• d a o l k r o w n i s e g n a h C
• d a o l k r o w e c u d e r o t w o H
• n e k a t e v a e l t n e c e R
• g n i e b f o d e r i t m a I
l a u t c a e h t w o l e b d e d a r g
n o i t a c i f i s s a l c b o j
• k a e r b a e k a t o t d e e n I
e v a e l l l i w I r o
• r e e r a c y m e e s t o n n a c I
t n e m p o l e v e d
• R H o t n o t e g o t d e e n I
t i e s u a c e b t a h t t u o b a
r i a f y r e v r a e p p a t ’ n s e o d
• . t a h t o d y l n i a t r e c n a c e W
d l u o w t a h w e r o l p x e s ’ t e L
r u o y g n i r b e b y a m – k r o w
a r o , d r a w r o f y a d i l o h
? s p a h r e p l a c i t a b b a s
• u o y e r e h w t u o b a k l a t s ’ t e L
e r e h m o r f o g d l u o c
r e v r e s b O
n o s t n i o p k c e h c
g n i l d n a h n o i t s e u q
Issues employees could
raise and ... good answers to give
• d e t n e l a t t u p o t w o h n r a e L
e s a e t a s l a u d i v i d n i
• d n a l a b r e v d n a t s r e d n U
s n o i t a c i n u m m o c l a b r e v - n o n
r e d a e L
Do you know who among your key leaDers are most at risk of leaving, what their issues
are anD what you are going to Do to ensure they Do not leave?
ChAPTER 7
BUILD HR CAPABILITIES AND LINE OWNERSHIP
67

The winning combinaTion in leadership developmenT is a commiTTed
board and an acTive ceo, backed by a powerful parTnership of hr
and line managemenT.
The high standard for leadership development set by this book will require more than
the actions of the GLC Board and CEO: it must also be underpinned by HR and line
managers working as partners to develop leaders.
A CEO can ensure this partnership is in place and functioning well by doing the following:
Make all 1. line managers personally responsible for leadership development
Enhance the 2. HR function rapidly to meet business needs and to provide focused support for leadership
development.
7.1 MAkE ALL LINE MANAGERS PERSONALLY RESPONSIBLE FOR LEADERSHIP DEVELOPMENT
Day-to-day, much of the responsibility for leadership development should be exercised by line managers. To
support line managers to take up this responsibility CEOs should do the following:
Communicate a clear expectation that 30% of line managers’ time should be spent on leadership •
development. CEOs should regularly talk about this 30% target and reinforce a management approach
that encourages leaders to develop the people below them so that they can spend more of their time on
leading, not just managing.
Be known as a role model for leadership development. • CEOs need to be visible role models. As discussed
in the earlier chapters, CEOs need to be known for their leadership development activities such as coaching
direct reports and playing a prominent role in leadership development programmes.
Upgrade line managers’ leadership development skills. • Ensure HR has put in place a program to improve
managers’ skills and confdence in activities such as interviewing, constructive and objective coaching and
mentoring, and performance improvement conversations.
Use performance management to reinforce line managers’ development responsibility. • CEOs should
ensure that KPIs for developing others are cascaded to all line managers—KPIs such as ‘improvement in
employee opinion survey scores relating to coaching and development’. Equally, in performance reviews,
CEOs should quiz direct reports for tangible examples of their leadership development activities and impact.
If the answers are not impressive, CEOs should downgrade their overall performance rating.
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
H
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/
L
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n
e

P
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ChAPTER 7: BUILD HR CAPABILITIES AND LINE OWNERSHIP
68
7.2 EnHAnCE THE HR funCTion RAPiDLy To MEET BuSinESS nEEDS AnD To PRoviDE foCuSED
SUPPORT FOR LEADERSHIP DEVELOPMENT
The CEO should enhance the HR function so that it can support leadership development activities and the broader
people management agenda. This will be true for the organisation when:
HR leadership can demonstrate the foundations for a good partnership with the line. 1.
HR needs to be consistently well-rated by line managers on all these dimensions for it to be a credible
partner:
An understanding of business issues and challenges •
Highly valued expertise in specialist HR tasks like remuneration, training and talent management •
Execution skills to ensure reliable responses. •
2. HR provides effective support for leadership development.
HR provides this support when:
Leadership and business-focused professionals work in HR. • Two types of HR professionals are key to a
successful partnership to develop leaders:
Skilled in-the-line HR professionals who provide seamless support. • HR functions should be organised
so that there are highly capable HR professionals in line management teams. These professionals, who
should be a mix of people from HR backgrounds and line managers trained to play HR roles, need to
understand how the business really works, what it takes for leaders to drive that business’ performance
and have trusting relationships with the key leaders.
ExhIbIT 7.A
HR NEEDS TO HAVE BUSINESS UNDERSTANDING, ExPERTISE AND ExECUTION TO BE
SUCCESSFUL
Business Understanding Expertise Execution
Important
capability
levers
Training
Knowledge management
Line rotations
Mindsets coaching
IT systems
Data integrity
HR process and policy
development teams led by
mid-level line managers to
increase buy-in
Common global and high
standard training curriculum
for all HR processes
Mandatory HR Service Centre
ensures service quality
‘High human touch’ and
centralisation is driven by
employees who are demanding and
expect efficiency and availability at
all times
Goldman’s focus on its people
means training, recruiting, and the
review system (98.5% completion
organisation-wide) is common and
mandatory across businesses
Goal is ‘One Firm, one point of contact’
for HR with a highly centralised
system; transactional work has been
outsourced with a view of getting best
expertise rather than low cost
Strong tradition of HR and
business working
interchangeably
Regional business partners
and HR specialists (10% of
corporate staff) ensure
competent advice
Strong and reasonably lean
centre with good execution
STRENGTHENING LEADERSHIP DEVELOPMENT
69
BUILD HR CAPABILITIES AND LINE OWNERSHIP
Practically, they need to ensure that line managers are trained to fulfl their leadership development tasks •
and that all processes surrounding leadership development—from the scheduling of training programmes
through to running deployment sessions—are streamlined and integrated into the business calendar.
These HR professionals should play an active role in leadership development by ensuring that the •
recruiting, training and deployment processes are delivering the leaders that the business needs. When
the business is not getting what it needs, they should be known as practical problem solvers who get to
the root causes of problems and fx them. They should also be close to the business so that they can help
spot key leaders at risk of leaving.
Expert HR professionals focused on developing simple and effective leadership development processes •
and programmes. An HR function needs people with specifc technical expertise in the different aspects
of leadership development, especially the design of leadership development programmes, performance
management systems and leadership deployment processes.
Leadership development processes and programmes are streamlined and owned by the line. • True line
ownership of HR processes and programmes makes the line far more effective. This can be achieved if HR
develops them in close consultation with line managers and subjects them to thorough, periodic reviews
such as by a panel of line managers who review and provide advice on HR processes.
3. HR has distinctive leadership.
To guarantee distinctive leadership, the CEO should appoint high performing line managers to HR so that
at least 1 in 3 of the senior HR team comes from the line. CEOs should expect moves such as this to be
met with some resistance but radical steps are required to build capability and strengthen the function.
Having considered the three requirements for HR to fulfl their side of their partnership with the line, a CEO needs
to decide whether to get the head of HR to upgrade the leadership development dimensions of the function or
whether the issues are broad-based and require an overhaul of the HR function. The Leadership Development
Audit will help CEOs make this decision.

Have you appointed any of your top line performers to Head your Hr function or to one
of Hr’s most senior roles?
ChAPTER 8
GETTING STARTED
73

An honest ApprAisAl of the compAny is An importAnt stArting position And will mAke it
eAsier for the compAny to get the number And types of leAders it reAlly needs.
To lift leadership development standards to enable GLCs to consistently perform and deliver sustainable tangible
results, will demand an immediate change. This chapter addresses the three big change initiatives required for
GLCs to get started:
Conduct a Leadership Development Audit to strengthen company-wide leadership development 1.
Intensify Board governance on leadership development 2.
Shift CEO actions and behaviours. 3.
8.1 ConDuCT A LEADERSHiP DEvELoPMEnT AuDiT To STREnGTHEn CoMPAny-WiDE
LEADERSHIP DEVELOPMENT
The CEO should mandate a comprehensive audit of the current leadership development approach using the
Leadership Development Audit (LDA), then ensure that an actionable improvement program is in place and that
implementation begins quickly.
ChAPTER 8: GETTING STARTED
ExhIbIT 8.A
HOW TO STRENGTHEN LEADERSHIP DEVELOPMENT
1 p e t S 3 p e t S 2 p e t S
h c n u a l d n a p o l e v e D
e l b a n o i t c a
n a l p n o i t a t n e m e l p m i
• e t a d n a m o t O E C
• n o i t p o e h t s a h O E C
l a n r e t x e r o R H e s u o t
e t a t i l i c a f o t t r o p p u s
s s e c o r p e h t
• m a e T e v i t u c e x E d n a O E C
d e s o l c e b o t s p a g e s i t i r o i r p
s n o i t c a e h t e e r g a d n a
d e r i u q e r
• m a e T e v i t u c e x E d n a O E C
r a e l c a f f o n g i s d l u o h s
n a l p n o i t c a
• m a e T e v i t u c e x E d n a O E C
y l l a n o s r e p e b o t d e e n
, s e v i t a i t i n i y e k n i d e v l o v n i
p i h s r e d a e l p m a v e r . g . e
P V E d n a l e d o m
• d n a O E C s h t n o m 6 y r e v E
w e i v e r m a e T e v i t u c e x E
t n e m p o l e v e D p i h s r e d a e L
s e i t i r o i r p t s u j d a d n a d r a o b h s a D
t n e i c i f f u s n i s s e r g o r p f i n a l p r o
p i h s r e d a e L w e i v e R
t n e m p o l e v e D
d r a o b h s a D
g n i o g n O
p i h s r e d a e L t c u d n o C
t i d u A t n e m p o l e v e D
) A D L (
s p a g e s i t i r o i r P
s n o i t c a d n a
74
OPTIONS FOR COMPLETING THE LDA
The CEO is responsible for leading this effort. GLCs can choose to conduct the assessment themselves or seek
external support to facilitate the process.
GLC conducts the LDA. • All senior executives are required to participate, and the CEO should lead the
process. HR should be responsible for preparing materials to facilitate the discussion. The discussion
can form part of an executive meeting to be held as a separate session. Once the CEO and management
team have agreed current strengths and weaknesses, a follow-up session should be held to develop an
improvement programme with specifc initiatives, milestones and timelines.
External consultants assist GLCs in completing the LDA. • There are a number of ways in which external
consultants can assist GLCs in completing this assessment. Each GLC should tailor the approach to
their current context, and determine the external consultant that is best suited to assist them. To obtain
suggestions of potential consultants and potential options on how to structure the necessary support, GLCs
can contact the Transformation Management Offce (TMO).
1
STEP 1: CONDUCT LEADERSHIP DEVELOPMENT AUDIT
The LDA is a simple-to-use tool that covers all the areas addressed in the Orange Book and will enable the
assessment of a company’s performance against best practice. The tool and details on its use are provided in the
fnal section of the Orange Book.
ExhIbIT 8.b
AUDIT SUMMARY
p i h s r e d a e L g n i n e h t g n e r t S
t n e m p o l e v e D
f o e g r a h c s e k a T
t n e m p o l e v e d p i h s r e d a e l
s r e d a e l e r u t u f s t i u r c e R
e c n a m r o f r e p s w e i v e R
s r u o n o h y l c i l b u p d n a
e c n e l l e c x e
o t y l l a c i g e t a r t s s y o l p e D
s r e d a e l p o l e v e d
s n i a t e r d n a s e g a g n E
s r e d a e l
s e i t i l i b a p a c R H s d l i u B
p i h s r e n w o e n i l d n a
g n i t a r e g a r e v A
4 3 2 1
s h t g n e r t S
• n i s i s s e c o r p g n i t i u r c e r r a e l c A
s t e g r a t y n a p m o c e h t d n a e c a l p
b o j e v i s s a p d n a e v i t c a h t o b
t a s n o i t i s o p l l i f - o t - d r a h r o f s r e k e e s
s l e v e l r o i n e s e h t
X
X
X
X
X
X
s p a G
• p i h s r e d a e l l a m r o f o n s i e r e h T
o t d e i t y g e t a r t s t n e m p o l e v e d
y g e t a r t s s s e n i s u b
• e h t f o n o i t a l u c i t r a r a e l c o N
o t d e r i u q e r s e i t i l a u q p i h s r e d a e l
s t l u s e r s s e n i s u b r e v i l e d
• p i h s r e d a e l w e i v s r e g a n a m e n i L
y t i r o i r p w o l a s a t n e m p o l e v e d
• d n a c o h d a y l n o s e d i v o r p R H
p i h s r e d a e l o t t r o p p u s e v i t c a e r
t n e m p o l e v e d
Develops leadership and
high potential talent
X
1 See Resources: Where GLCs can obtain assistance.
STRENGTHENING LEADERSHIP DEVELOPMENT
STEP 3: DEVELOP AND LAUNCH AN ACTIONABLE IMPROVEMENT PLAN
The improvement plan should set out clear actions, the timeline for those actions and who is responsible. Review
points with the CEo, Executive Team and Board should be established to ensure high-level involvement.
75
ExhIbIT 8.C
IMPROVEMENT PLAN
Gaps identified Priority Proposed actions
1. No formal leadership
development strategy tied to
business strategy
• Hold people and business planning session
• Measure gap in leadership (number and types) required
to deliver business results
• Agree strategy to close the gap
High
2. No clear articulation of the
leadership qualities required to
deliver business results
• Interview top performing leaders to determine which
behaviours and competencies are essential to success
• Hold meeting with management team to agree
leadership model
• Pressure test the model with the Board
High
3. Line managers view
leadership development as a
low priority
• Clarify roles of line managers and HR in leadership
development
• CEO and management team communication strategy to
lift profile of leadership development across organisation
• Targetted training and coaching programs to upskill line
managers
• Set KPIs for line managers
Medium
4. HR provides ad hoc and
reactive support to leadership
development
• Move top performing line managers into HR positions
• Review HR function—people, processes, structure and
size—to decide optimum requirements for delivering
overall people strategy
• Agree KPIs for HR effectiveness
Medium
GETTING STARTED
ExhIbIT 8.D
MILESTONES FOR AN IMPROVEMENT PLAN
d e s o p o r P
y t i l i b i s n o p s e R 0 1 / 1 0 9 0 / 7 0 9 0 / 1 0 8 0 / 7 0 8 0 / 1 0 7 0 / 7 0 7 0 / 1 0 s n o i t c a
p o l e v e D
p i h s r e d a e L
y g e t a r t s
1
e t a l u c i t r A
p i h s r e d a e l
l e d o m
2
w e i v r e t n I
p o t
g n i m r o f r e p
s r e d a e l
d a e H , O E C
d a e H , R H f o
y g e t a r t S f o
d n a s s u c s i d o t g n i t e e M
l e d o m p i h s r e d a e l e e r g a
R H p m a v e R
y t i l i b a p a c
3
g n i m r o f r e p p o t e v o M
R H o t n i s r e g a n a m
n o i t c n u f w e i v e R
s I P K t e s d n a l l i k s p U
R H g n i s u s n o i t c a r o t i n o M
s c i r t e m
d e r i u q e r s a s n a l p e s i v e R
, O E C
e v i t u c e x E
m a e T
d a e H , O E C
R H f o
e n i l e s a e r c n I
t n e m e g a n a m
t n e m e v l o v n i
4
f o s e l o r c i f i c e p s y f i r a l C
s r e g a n a m e n i l
s n o i t a c i n u m m o c h c n u a L
s I P K t e S
s e m m a r g o r p g n i n i a r T
d n a s I P K w e i v e R . n i g e b
s n o i t a c i n u m m o c t s u j d a
y l g n i d r o c c a g n i n i a r t d n a
, O E C
e v i t u c e x E
m a e T
d r a o B h t i w w e i v e R s s e r g o r p s w e i v e r d r a o B
d r a o B h t i w t s e T
e l p o e p d l o H
s s e n i s u b d n a
g n i n n a l p
s n o i s s e s
STEP 2: PRIORITISE GAPS AND ACTIONS
Once gaps are identifed the CEO and Executive Team should prioritise them and agree a clear set of proposed
actions.
2
2 See Appendix 4 for template.
76
ONGOING: REVIEW LEADERSHIP DEVELOPMENT DASHBOARD
There are eight metrics that together provide a comprehensive view of how the organisation is moving towards its
goal of strengthened leadership development. Every 6 months the CEO and Executive Team should review these
metrics and adjust the priorities or the plan if there is insuffcient progress.

The Board must fulfl its fundamental role and responsibility to oversee the development of the company’s future
leaders and human capital.
3
Specifcally, the Board must:
Select and proactively plan for CEO succession •
Review the performance management philosophy •
Evaluate the CEO •
Endorse the performance and development plans of those in ‘pivotal positions’ •
Understand the pool of future leaders. •
In addition, the Board should support the CEO in delivering against the company-wide improvement agenda. This
will mean playing a governance, but not management, role in the key elements outlined in this book, such as:
The leadership model for the CEO •
Providing assistance to the CEO in recruiting and retaining senior leaders •
Ensuring adequate levels of investment in leadership development programmes •
Coaching and mentoring high performing leaders, particularly the CEO and CEO successors. •
3 As outlined in the Green Book on ‘Enhancing Board Effectiveness’.
ExhIbIT 8.E
MONITOR METRICS TO CHECk PLAN IS DELIVERING IMPROVED PERFORMANCE
% of talent on
development
scholarships
(planned)
% of unplanned
attrition
% of talent seconded
to other companies
for development purposes
(planned)
% of talent that
leaves the
workforce
e.g. retirees
Total number of top talent departed = 40
Higher pay
Career
progression
International
opportunity
Poor team
dynamics
• Industry average of unplanned attrition for top talent and high potentials = 3%
• Company target in 2006 = reduce from 10% to 5%
Reasons for Leaving
8.2 inTEnSify BoARD GovERnAnCE on LEADERSHiP DEvELoPMEnT
STRENGTHENING LEADERSHIP DEVELOPMENT
r e p % 5
m u n n a
h t i w e l p o e P
d n a g n i t a R D
f o % 0 5
h t i w e l p o e p
g n i t a R C
f o % 0 2 - 0 1
l a t o v i p
e n i l
s n o i t i s o p
f o % 5 1
l a t o v i p
e n i l
s n o i t i s o p
f o % 0 6
l a i t n e t o p
s r e d a e l
- p m u s s A
s n o i t
2 5 > e g A
y a d o t
1 8
8 3
3 7
0 5
3 2 1
1 6 1
2 4
2 4 2
n i e l p o e P
p i h s r e d a e l
s n o i t i s o p
y a d o t
d n a s P V (
) e v o b a
e l p o e P
g n i r i t e r
n i h t i w
t x e n
e e r h t
s r a e y
e l p o e P
t o n
g n i t e e m
- r o f r e p
e c n a m
a i r e t i r c
l a i t n e t o P
s r e d a e l
s r e d a e L s r e g a n a M
, . e . i (
- n o m e d
g n i t a r t s
- k a e r b
h g u o r h t
- r o f r e p
) e c n a m
8
n r u h C
r e v o
s r a e y 3
s r e d a e L
g n i n i a m e r
e e r h t n i
s r a e y
6 3
8 4
6 0 2
2 4 2
l a t o v i P
e n i l
s n o i t i s o p
s r e d a e L
d e r i u q e r
r e v i l e d o t
l a n o i t i d d a
c i g e t a r t s
s e v i t a i t i n i
s r e d a e L
d e r i u q e r
t e e m o t
s s e n i s u b
h t w o r g
d n a m e D
s r e d a e l r o f
e e r h t n i
s r a e y
f o p a G
0 6 1 ~
y a d o t y l p p u s p i h s r e d a e L s r a e y e e r h t n i d n a m e d p i h s r e d a e L
E L P M A X E
Least effective
(act decisively)
Best
(invest heavily)
5-10% 5-10% 80-90%
Core (affirm and grow)
ILLUSTRATIVE
Applications
received
Invitations to
pre-selection
meeting
Invitations
to 1st
interview
Invitations
to 2nd
interview
Offers
made
Offers
accepted
6,265 756 56 ~ 85 72 204
(corresponds
to 0.9%
of applications)
Issues
that
arise
12% 27% 42% 85% 78%
Lead generation
and maintenance Assessment ‘Closing the deal’
• Incomplete
information
• Overly specific
screening
• Too high talent
bar
• Too little
management
time for
screening
• Interviewer
availability
• Candidate
availability
• Poor interview
technique
• Inefficient EVP
communication
• Inflexible
negotiation
• Unclear job
description
• Poor targeting of
key universities
Lead
generation
30% 40% 55% 85% 90%
Actual yields:
Target yields:
EXAMPLE
Improve-
ment
initiatives
• Clearer forms
• Improved
screening
process
• 3rd party
screeners
• Recalibrate
assessment
criteria
• Use senior
management for
interview panel
• Explore other
means of
interviewing eg
phone interviews
• Use fly-in
option
• Provide more
training for
interviewers
• More flexible
interview timings
• Enhanced EVP
• More efficient
administration of
offers
• Use of print
advertise-
ments
5 6
5 1
0 1
0 4
0 8
5 2 5 2
0 3
r e e r a c - d i M s e t a u d a r g w e N
s l a n o i s s e f o r p
s n a i s y a l a M
d a o r b a
d e t i u r c e r l a t o T
l a u t c A
t e g r a T
e e y o l p m E
s t n e m g e S
d e t i u r c e r e l p o e p f o r e b m u N E V I T A R T S U L L I y a p e s a b f o t n e c r e p s a n o i t a s n e p m o c e l b a i r a V
e c n a m r o f r e P
e l b a i r a v l a e d I
n o i t a s n e p m o c
e e y o l p m e r e p
e l b a i r a v l a u t c A
n o i t a s n e p m o c
e e y o l p m e r e p
% 5 2
% 0 5
% 5 7
% 0 0 1
% 5 2 1
0 0 1 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0
E V I T A R T S U L L I
s d l i u B
s m a e t t a e r g
s e t a r o b a l l o C
e d i w - s s e n i s u b
e h t s e p a h S
e r u t u f
e h t s e s i a R
r a b
3
a s a s e v a h e B
n e z i t i C p u o r G
a s a s t c A
e t a n o i s s a p
r e n w o
t e g r a T
5 4 2 1 0
s p u o r g p i h s r e d a e l 0 5 2 p o t f o s w e i v e r = n
s y e v r u S n o i n i p O e e y o l p m E : e c r u o S
s e t u b i r t t A p i h s r e d a e L
e t a g e r g g A
s e r o c S
s t l u s e r 4 0 0 2
s t l u s e r 5 0 0 2
E V I T A R T S U L L I
n o i t a c i f i t n e d I
l a t o v i p f o
s n o i t i s o p
• f o e e r g e d h g i H
t c a p m i s s e n i s u b
t s o C –
h t w o r G –
l a t i p a C –
• c i g e t a r t s l l a r e v O
t c a p m i
t e k r a m l a i c e p S –
t h g i s n i
r o y r o t a l u g e R –
l a c i g o l o n h c e t
e g d e l w o n k
t e k r a m h g i H –
y t i c r a c s
d r a d n a t s d l o G
l a i t n e t o p h g i H
l a i t n e t o p w o L
l a i t n e t o p e e y o l p m E
l a t o v i P
n o i t i s o P
l a t o v i p n o N
O E C
r e c i f f O l a i c e p S
k s i R f e i h C
r e c i f f O
f o d a e H
g n i t e k r a M
f o d a e H
k r o w t e n n r e h t r o N
w o N
r a e y 1 n I
s r a e y 2 n I
s s e n i d a e r d n a s r o s s e c c u S
O F C
r e r u s a e r T
R H f o d a e H s s e n i s u B f o d a e H
s e h c n a r B
l i a t e R f o d a e H
e l i b o M f o d a e H
e g a g t r o M
s r e g a n a M
l l a C f o d a e H
s e r t n e C
f o d a e H
n r e h t u o S
k r o w t e N
e r o h s f f O f o d a e H
k r o w t e N
s e l a S s n o i t a r e p O e c n a n i F s s e n i s u B R H
d a e H t i n U
E L P M A X E
l a i c n a n i F
r e l l o r t n o C
See Appendix 2 for dashboard, and Appendix 3 for more details on metrics and monitoring.
77
8.3 SHifT CEo ACTionS AnD BEHAviouRS
For many CEOs, prioritising leadership development will require changes in the way they lead. This personal
change is more than warranted, however, given the challenge to develop a generation of leaders who can deliver
sustainable performance. The change also provides the CEO with opportunities to defne his or her legacy.
To navigate through this period of change and transition, the CEO might undertake a personal stocktake of their
own leadership development activity using the ten questions in this book.
5
For a more comprehensive review the
CEO can also:
Elicit feedback from others or have HR run a 360-degree assessment of their current actions and •
behaviours
Get a third-party perspective on the stocktake and use this perspective to set and achieve •
stretching goals. A coach can provide tremendous support in sustainable change, and at this
level, can provide tactical support to build leadership skills for specifc situations as well as offer
strategic help in allocating time effectively to commit to the leadership development challenge.

Choosing a coach is a personal decision. Some will draw from the ranks of international executive coaches;
others will prefer a trusted adviser or consultant, or a respected colleague or mentor who has achieved
success in developing leaders in their own organisation
Use the insights gained from the personal stocktake to articulate necessary changes and then set a few •
simple, measurable goals for personal development.
5 See Appendix 1: The Leadership Development Stocktake.
GETTING STARTED
THE LEADERSHIP DEVELOPMENT STOCkTAkE
APPENDIx 1
CHAPTER TITLE
80
81
APPENDIx 1: ThE LEADERShIP DEvELOPMENT STOCKTAKE
Ask yourself
Yes No
1. Do you spend 30% of your time developing leaders?
2. Do you know what your most signifcant intervention will be in the next
3 months to fundamentally improve the leadership capability of your
organisation?
3. Do you know three leaders outside your company who could transform
its performance? If so, do you have a personal plan for how and when
you could recruit them?
4. Do you play a role in every senior leadership development programme
for your company?
5. Do you spend at least 1 hour with each of your direct reports every
quarter giving them personal feedback and coaching about how they
can be more effective leaders?
6. In the last 12 months, have you taken a risk with any high potentials
and moved them into challenging leadership roles that prompted
people across the organisation to talk positively about it?
7. Do you have a clear point of view on what the next role should be
for each executive reporting to your direct reports to maximise their
development and the performance of the business?
8. Do you know who among your key leaders are most at risk of leaving,
what their issues are and what you are going to do to ensure they do
not leave?
9. In major strategy sessions, do you always involve the HR head to ensure
you will have the leadership with the requisite skills to successfully
deliver your business plans?
10. Have you appointed any of your top line performers to head your HR
function or to one of HR’s most senior roles?
LEADERSHIP DEVELOPMENT DASHBOARD
APPENDIx 2
APPENDIx 2: LEADERShIP DEvELOPMENT DAShbOARD
CHAPTER 1: SIzING THE GAP – HOW IT CAN BE DONE CHAPTER 2: MEASURE RECRUITMENT RESULTS BY
EMPLOYEE SEGMENTS
CHAPTER 2: MEASURE THE RATE OF CONVERSIONS
TO NEW RECRUITS
CHAPTER 3: IMPLEMENT COMPENSATION SCHEMES
THAT REWARD HIGH PERFORMANCE
CHAPTER 3: REVIEW PERFORMANCE DISTRIBUTION
OF LEADERS
CHAPTER 4: TEST THAT PIVOTAL POSITIONS ARE
FILLED BY TOP TALENT
CHAPTER 5: MEASuRE THE AGGREGATE of
LEADERSHIP SCORES AGAINST LEADERSHIP MODEL
CHAPTER 6: MONITOR UNPLANNED ATTRITION RATES
OF HIGH PERFORMERS AND HIGH POTENTIALS
% of talent on
development
scholarships
(planned)
% of unplanned
attrition
% of talent seconded
to other companies
for development purposes
(planned)
% of talent that
leaves the
workforce
e.g. retirees
Total number of top talent departed = 40
Higher pay
Career
progression
International
opportunity
Poor team
dynamics
• Industry average of unplanned attrition for top talent and high potentials = 3%
• Company target in 2006 = reduce from 10% to 5%
Reasons for Leaving
CEOs and HR heads should monitor the performance of the overall leadership development system. Every 6 months
they should review whether the leadership gap is increasing or diminishing and use the leadership development
dashboard to help determine what is driving the result.
85
5 6
5 1
0 1
0 4
0 8
5 2 5 2
0 3
r e e r a c - d i M s e t a u d a r g w e N
s l a n o i s s e f o r p
s n a i s y a l a M
d a o r b a
d e t i u r c e r l a t o T
l a u t c A
t e g r a T
e e y o l p m E
s t n e m g e S
d e t i u r c e r e l p o e p f o r e b m u N E V I T A R T S U L L I
r e p % 5
m u n n a
h t i w e l p o e P
d n a g n i t a R D
f o % 0 5
h t i w e l p o e p
g n i t a R C
f o % 0 2 - 0 1
l a t o v i p
e n i l
s n o i t i s o p
f o % 5 1
l a t o v i p
e n i l
s n o i t i s o p
f o % 0 6
l a i t n e t o p
s r e d a e l
- p m u s s A
s n o i t
2 5 > e g A
y a d o t
1 8
8 3
3 7
0 5
3 2 1
1 6 1
2 4
2 4 2
n i e l p o e P
p i h s r e d a e l
s n o i t i s o p
y a d o t
d n a s P V (
) e v o b a
e l p o e P
g n i r i t e r
n i h t i w
t x e n
e e r h t
s r a e y
e l p o e P
t o n
g n i t e e m
- r o f r e p
e c n a m
a i r e t i r c
l a i t n e t o P
s r e d a e l
s r e d a e L s r e g a n a M
, . e . i (
- n o m e d
g n i t a r t s
- k a e r b
h g u o r h t
- r o f r e p
) e c n a m
8
n r u h C
r e v o
s r a e y 3
s r e d a e L
g n i n i a m e r
e e r h t n i
s r a e y
6 3
8 4
6 0 2
2 4 2
l a t o v i P
e n i l
s n o i t i s o p
s r e d a e L
d e r i u q e r
r e v i l e d o t
l a n o i t i d d a
c i g e t a r t s
s e v i t a i t i n i
s r e d a e L
d e r i u q e r
t e e m o t
s s e n i s u b
h t w o r g
d n a m e D
s r e d a e l r o f
e e r h t n i
s r a e y
f o p a G
0 6 1 ~
y a d o t y l p p u s p i h s r e d a e L s r a e y e e r h t n i d n a m e d p i h s r e d a e L
E L P M A X E
s n o i t a c i l p p A
d e v i e c e r
o t s n o i t a t i v n I
n o i t c e l e s - e r p
g n i t e e m
s n o i t a t i v n I
t s 1 o t
w e i v r e t n i
s n o i t a t i v n I
d n 2 o t
w e i v r e t n i
s r e f f O
e d a m
s r e f f O
d e t p e c c a
6 5 7 6 5 5 8 ~ 2 7 4 0 2
s d n o p s e r r o c (
% 9 . 0 o t
) s n o i t a c i l p p a f o
s e u s s I
t a h t
e s i r a
% 2 1 % 7 2 % 2 4 % 5 8 % 8 7
n o i t a r e n e g d a e L
e c n a n e t n i a m d n a ’ l a e d e h t g n i s o l C ‘ t n e m s s e s s A
• e t e l p m o c n I
n o i t a m r o f n i
• c i f i c e p s y l r e v O
g n i n e e r c s
• t n e l a t h g i h o o T
r a b
• e l t t i l o o T
t n e m e g a n a m
r o f e m i t
g n i n e e r c s
• r e w e i v r e t n I
y t i l i b a l i a v a
• e t a d i d n a C
y t i l i b a l i a v a
• w e i v r e t n i r o o P
e u q i n h c e t
• P V E t n e i c i f f e n I
n o i t a c i n u m m o c
• e l b i x e l f n I
n o i t a i t o g e n
• b o j r a e l c n U
n o i t p i r c s e d
• f o g n i t e g r a t r o o P
s e i t i s r e v i n u y e k
d a e L
n o i t a r e n e g
% 0 3 % 0 4 % 5 5 % 5 8 % 0 9
: s d l e i y l a u t c A
: s d l e i y t e g r a T
E L P M A X E
- e v o r p m I
t n e m
s e v i t a i t i n i
• s m r o f r e r a e l C
• d e v o r p m I
g n i n e e r c s
s s e c o r p
• y t r a p d r 3
s r e n e e r c s
• e t a r b i l a c e R
t n e m s s e s s a
a i r e t i r c
• r o i n e s e s U
r o f t n e m e g a n a m
l e n a p w e i v r e t n i
• r e h t o e r o l p x E
f o s n a e m
. g . e g n i w e i v r e t n i
s w e i v r e t n i e n o h p
• n i - y l f e s U
n o i t p o
• e r o m e d i v o r P
r o f g n i n i a r t
s r e w e i v r e t n i
• e l b i x e l f e r o M
s g n i m i t w e i v r e t n i
• P V E d e c n a h n E
• t n e i c i f f e e r o M
f o n o i t a r t s i n i m d a
s r e f f o
• t n i r p f o e s U
- e s i t r e v d a
s t n e m
5 6 2 , 6
y a p e s a b f o t n e c r e p s a n o i t a s n e p m o c e l b a i r a V
e c n a m r o f r e P
e l b a i r a v l a e d I
n o i t a s n e p m o c
e e y o l p m e r e p
e l b a i r a v l a u t c A
n o i t a s n e p m o c
e e y o l p m e r e p
% 5 2
% 0 5
% 5 7
% 0 0 1
% 5 2 1
0 0 1 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0
E V I T A R T S U L L I
Least effective
(act decisively)
Best
(invest heavily)
5-10% 5-10% 80-90%
Core (affirm and grow)
ILLUSTRATIVE
n o i t a c i f i t n e d I
l a t o v i p f o
s n o i t i s o p
• f o e e r g e d h g i H
t c a p m i s s e n i s u b
t s o C –
h t w o r G –
l a t i p a C –
• c i g e t a r t s l l a r e v O
t c a p m i
t e k r a m l a i c e p S –
t h g i s n i
r o y r o t a l u g e R –
l a c i g o l o n h c e t
e g d e l w o n k
t e k r a m h g i H –
y t i c r a c s
d r a d n a t s d l o G
l a i t n e t o p h g i H
l a i t n e t o p w o L
l a i t n e t o p e e y o l p m E
l a t o v i P
n o i t i s o P
l a t o v i p n o N
O E C
r e c i f f O l a i c e p S
k s i R f e i h C
r e c i f f O
f o d a e H
g n i t e k r a M
f o d a e H
k r o w t e n n r e h t r o N
w o N
r a e y 1 n I
s r a e y 2 n I
s s e n i d a e r d n a s r o s s e c c u S
O F C
r e r u s a e r T
R H f o d a e H s s e n i s u B f o d a e H
s e h c n a r B
l i a t e R f o d a e H
e l i b o M f o d a e H
e g a g t r o M
s r e g a n a M
l l a C f o d a e H
s e r t n e C
f o d a e H
n r e h t u o S
k r o w t e N
e r o h s f f O f o d a e H
k r o w t e N
s e l a S s n o i t a r e p O e c n a n i F s s e n i s u B R H
d a e H t i n U
E L P M A X E
l a i c n a n i F
r e l l o r t n o C
s d l i u B
s m a e t t a e r g
s e t a r o b a l l o C
e d i w - s s e n i s u b
e h t s e p a h S
e r u t u f
e h t s e s i a R
r a b
3
a s a s e v a h e B
n e z i t i C p u o r G
a s a s t c A
e t a n o i s s a p
r e n w o
t e g r a T
5 4 2 1 0
s p u o r g p i h s r e d a e l 0 5 2 p o t f o s w e i v e r = n
s y e v r u S n o i n i p O e e y o l p m E : e c r u o S
s e t u b i r t t A p i h s r e d a e L
e t a g e r g g A
s e r o c S
s t l u s e r 4 0 0 2
s t l u s e r 5 0 0 2
E V I T A R T S U L L I
DETAILED METRICS
APPENDIx 3
APPENDIx 3: DETAILED METRICS
ExhIbIT A.1
CHAPTER 1: SIzING THE GAP – HOW IT CAN BE DONE
r e p % 5
m u n n a
h t i w e l p o e P
d n a g n i t a R D
f o % 0 5
h t i w e l p o e p
g n i t a R C
f o % 0 2 - 0 1
l a t o v i p
e n i l
s n o i t i s o p
f o % 5 1
l a t o v i p
e n i l
s n o i t i s o p
f o % 0 6
l a i t n e t o p
s r e d a e l
- p m u s s A
s n o i t
2 5 > e g A
y a d o t
1 8
8 3
3 7
0 5
3 2 1
1 6 1
2 4
2 4 2
n i e l p o e P
p i h s r e d a e l
s n o i t i s o p
y a d o t
d n a s P V (
) e v o b a
e l p o e P
g n i r i t e r
n i h t i w
t x e n
e e r h t
s r a e y
e l p o e P
t o n
g n i t e e m
- r o f r e p
e c n a m
a i r e t i r c
l a i t n e t o P
s r e d a e l
s r e d a e L s r e g a n a M
, . e . i (
- n o m e d
g n i t a r t s
- k a e r b
h g u o r h t
- r o f r e p
) e c n a m
8
n r u h C
r e v o
s r a e y 3
s r e d a e L
g n i n i a m e r
e e r h t n i
s r a e y
6 3
8 4
6 0 2
2 4 2
l a t o v i P
e n i l
s n o i t i s o p
s r e d a e L
d e r i u q e r
r e v i l e d o t
l a n o i t i d d a
c i g e t a r t s
s e v i t a i t i n i
s r e d a e L
d e r i u q e r
t e e m o t
s s e n i s u b
h t w o r g
d n a m e D
s r e d a e l r o f
e e r h t n i
s r a e y
f o p a G
0 6 1 ~
y a d o t y l p p u s p i h s r e d a e L s r a e y e e r h t n i d n a m e d p i h s r e d a e L
E L P M A X E
Determine the number of leaders needed
What should be measured
The company’s surplus or defcit of leaders. This number is calculated by comparing leadership supply against
leadership demand. Leadership demand is calculated by determining pivotal line positions and how many
leaders will be needed to deliver new strategic initiatives and business growth. Leadership supply is calculated
by assessing the organisation’s current talent pool and subtracting retirees, underperformers and attrition. It
assesses how many people the company has that can actually deliver the breakthrough results that qualify them
as leaders. While these calculations will not be 100% accurate, they will give a good overall estimate of leadership
requirements and a clear sense about whether the gap is growing or narrowing. This metric should be monitored
on a 6-monthly basis to check the current surplus or defcit of leaders.
Why this metric is useful
It enables the Board and CEO to know the number of leaders needed to deliver the company’s headline KPIs and
growth plans. The CEO can then be held accountable for year-on-year improvement.
Questions the Board and CEO should probe
Am I confdent that we understand both the number and the type of leaders needed to deliver business •
results?
Am I confdent that we have a plan to deliver these leaders? •
Do variations from the previous year reveal particular risks, for example a sudden spike in attrition over the •
next three years could signal ‘a generation’ of senior executives about to retire?
89
ExhIbIT A.2
MEASURE RECRUITMENT RESULTS BY EMPLOYEE SEGMENTS
5 6
5 1
0 1
0 4
0 8
5 2 5 2
0 3
r e e r a c - d i M s e t a u d a r g w e N
s l a n o i s s e f o r p
s n a i s y a l a M
d a o r b a
d e t i u r c e r l a t o T
l a u t c A
t e g r a T
e e y o l p m E
s t n e m g e S
d e t i u r c e r e l p o e p f o r e b m u N
E V I T A R T S U L L I
Recruitment results by employee segments
What should be measured
The number of people successfully recruited for each employee segment identifed by the organisation. It should
be monitored after every recruitment drive to see if targets are met.
Why this metric is useful
The CEO can clearly identify which segments are not being targeted well. The CEO can then closely analyse the
root causes of failure for each segment if necessary (see Exhibit A.3).
Questions the CEO should probe
For segments that fail to reach the target, what is the root cause for failure? Are we monitoring it? (use •
Exhibit A.3 if necessary)
Is the EVP distinctively marketed to that segment? •
Is our marketing strategy for that segment right? •
90
STRENGTHENING LEADERSHIP DEVELOPMENT
ExhIbIT A.3
MEASURE THE RATE OF CONVERSIONS TO NEW RECRUITS
s n o i t a c i l p p A
d e v i e c e r
o t s n o i t a t i v n I
n o i t c e l e s - e r p
g n i t e e m
s n o i t a t i v n I
t s 1 o t
w e i v r e t n i
s n o i t a t i v n I
d n 2 o t
w e i v r e t n i
s r e f f O
e d a m
s r e f f O
d e t p e c c a
6 5 7 6 5 5 8 ~ 2 7 4 0 2
s d n o p s e r r o c (
% 9 . 0 o t
) s n o i t a c i l p p a f o
s e u s s I
t a h t
e s i r a
% 2 1 % 7 2 % 2 4 % 5 8 % 8 7
n o i t a r e n e g d a e L
e c n a n e t n i a m d n a ’ l a e d e h t g n i s o l C ‘ t n e m s s e s s A
• e t e l p m o c n I
n o i t a m r o f n i
• c i f i c e p s y l r e v O
g n i n e e r c s
• t n e l a t h g i h o o T
r a b
• e l t t i l o o T
t n e m e g a n a m
r o f e m i t
g n i n e e r c s
• r e w e i v r e t n I
y t i l i b a l i a v a
• e t a d i d n a C
y t i l i b a l i a v a
• w e i v r e t n i r o o P
e u q i n h c e t
• P V E t n e i c i f f e n I
n o i t a c i n u m m o c
• e l b i x e l f n I
n o i t a i t o g e n
• b o j r a e l c n U
n o i t p i r c s e d
• f o g n i t e g r a t r o o P
s e i t i s r e v i n u y e k
d a e L
n o i t a r e n e g
% 0 3 % 0 4 % 5 5 % 5 8 % 0 9
: s d l e i y l a u t c A
: s d l e i y t e g r a T
E L P M A X E
- e v o r p m I
t n e m
s e v i t a i t i n i
• s m r o f r e r a e l C
• d e v o r p m I
g n i n e e r c s
s s e c o r p
• y t r a p d r 3
s r e n e e r c s
• e t a r b i l a c e R
t n e m s s e s s a
a i r e t i r c
• r o i n e s e s U
r o f t n e m e g a n a m
l e n a p w e i v r e t n i
• r e h t o e r o l p x E
f o s n a e m
. g . e g n i w e i v r e t n i
s w e i v r e t n i e n o h p
• n i - y l f e s U
n o i t p o
• e r o m e d i v o r P
r o f g n i n i a r t
s r e w e i v r e t n i
• e l b i x e l f e r o M
s g n i m i t w e i v r e t n i
• P V E d e c n a h n E
• t n e i c i f f e e r o M
f o n o i t a r t s i n i m d a
s r e f f o
• t n i r p f o e s U
- e s i t r e v d a
s t n e m
5 6 2 , 6
Recruitment yields
What should be measured
The effciency of the recruitment process by applying a class operations approach that identifes yields at every
stage of the recruitment process. The CEO should monitor this metric after every recruitment drive. HR should use
this metric regularly, especially during the recruiting season to quickly solve ‘leaks’ in the process.
Why this metric is useful
The CEO can clearly identify ineffciencies in the recruitment process and apply operational discipline throughout.
This metric can be used by HR for in-depth analysis to address problematic employee segments.
Questions the CEO should probe
Are the root causes for poor yields being identifed and acted upon? •
Are there areas where I can contribute to make a signifcant difference? •
91
DETAILED METRICS
Review performance and pay correlation
What should be measured
The correlation between pay and performance. This can be measured by correlating the variable pay people are
awarded as a percentage of their total compensation and their performance. While HR should keep track of this
data for different parts of the organisation CEOs should focus their attention on the executive ranks where the
leaders critical to performance are based. Performance should be measured based on employee performance
reviews. This metric should be reviewed annually.
Why this metric is useful
The CEO and Board can check that rewards for truly high performers are appropriately differentiated but also
that suffcient incentive exists at all levels to boost performance. The CEO can also determine whether the
remuneration scheme for senior executives—which usually has a range of elements: base pay, cash bonuses,
shares, options—is actually rewarding high performers. This is a check worth doing because anomalies regularly
arise in these schemes.
Questions the CEO should probe
Is there a close correlation between performance and total compensation? •
Is the criteria for high compensation transparent to everyone? •
Is the proportion of fxed to variable pay effective to create a real incentive to deliver breakthrough •
performance among leaders?
Is our marketing strategy for that segment right? •
92
STRENGTHENING LEADERSHIP DEVELOPMENT
Exhibit A.4
Implement compensatIon schemes that reward hIgh performance
y a p e s a b f o t n e c r e p s a n o i t a s n e p m o c e l b a i r a V
e c n a m r o f r e P
e l b a i r a v l a e d I
n o i t a s n e p m o c
e e y o l p m e r e p
e l b a i r a v l a u t c A
n o i t a s n e p m o c
e e y o l p m e r e p
% 5 2
% 0 5
% 5 7
% 0 0 1
% 5 2 1
0 0 1 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0
E V I T A R T S U L L I
ExhIbIT A.5
REVIEW PERFORMANCE DISTRIBUTION OF EMPLOYEES
Least effective
(act decisively)
Best
(invest heavily)
5-10% 5-10% 80-90%
Core (affirm and grow)
ILLUSTRATIVE
Review performance ratings
What should be measured
The distribution of employee performance ratings that results from the evaluation process. The Board and CEO
should review this annually.
Why this metric is useful
The CEO can ensure that the performance rating shows true dispersion across each level in the organisation. The
evaluation process should also rate people on a suffciently broad scale so that a wide distribution of ratings can
be achieved.
Questions the CEO should probe
Does the distribution of people performance correlate with the distribution of business performance? •
Is the distribution an appropriate one? Is the right percentage of employees being identifed as top talent •
(e.g. top 5% or top 10%)?
93
DETAILED METRICS
Review pivotal positions
What should be measured
What type of performers occupy pivotal positions.
Why this metric is useful
The CEO can ensure that the right positions are being identifed in the different levels of the organisation, and that
the right types of employees are being identifed as top talent. HR can use this metric to check for effectiveness
of the job-matching process. For pivotal positions in the top 2–3 levels, the CEO should take responsibility for
deployment decisions. Talent-matching forums should use this metric extensively.
Questions the CEO should probe
Do we have our best talent in pivotal positions? (90% of pivotal positions should be flled by top talent) •
Do we have robust succession plans for the pivotal positions (e.g. each position should have 2–3 candidates •
identifed and being developed)?
ExhIbIT A.6
TEST THAT PIVOTAL POSITIONS ARE FILLED BY TOP TALENT
94
STRENGTHENING LEADERSHIP DEVELOPMENT
n o i t a c i f i t n e d I
l a t o v i p f o
s n o i t i s o p
• f o e e r g e d h g i H
t c a p m i s s e n i s u b
t s o C –
h t w o r G –
l a t i p a C –
• c i g e t a r t s l l a r e v O
t c a p m i
t e k r a m l a i c e p S –
t h g i s n i
r o y r o t a l u g e R –
l a c i g o l o n h c e t
e g d e l w o n k
t e k r a m h g i H –
y t i c r a c s
d r a d n a t s d l o G
l a i t n e t o p h g i H
l a i t n e t o p w o L
l a i t n e t o p e e y o l p m E
l a t o v i P
n o i t i s o P
l a t o v i p n o N
O E C
r e c i f f O l a i c e p S
k s i R f e i h C
r e c i f f O
f o d a e H
g n i t e k r a M
f o d a e H
k r o w t e n n r e h t r o N
w o N
r a e y 1 n I
s r a e y 2 n I
s s e n i d a e r d n a s r o s s e c c u S
O F C
r e r u s a e r T
R H f o d a e H
s s e n i s u B f o d a e H
s e h c n a r B
l i a t e R f o d a e H
e l i b o M f o d a e H
e g a g t r o M
s r e g a n a M
l l a C f o d a e H
s e r t n e C
f o d a e H
n r e h t u o S
k r o w t e N
e r o h s f f O f o d a e H
k r o w t e N
s e l a S s n o i t a r e p O e c n a n i F s s e n i s u B R H
d a e H t i n U
E L P M A X E
l a i c n a n i F
r e l l o r t n o C
DETAILED METRICS
ExhIbIT A.7
MEASURE THE AGGREGATE OF LEADERSHIP SCORES AGAINST LEADERSHIP MODEL
s d l i u B
s m a e t t a e r g
s e t a r o b a l l o C
e d i w - s s e n i s u b
e h t s e p a h S
e r u t u f
e h t s e s i a R
r a b
3
a s a s e v a h e B
n e z i t i C p u o r G
a s a s t c A
e t a n o i s s a p
r e n w o
t e g r a T
5 4 2 1 0
s p u o r g p i h s r e d a e l 0 5 2 p o t f o s w e i v e r = n
s y e v r u S n o i n i p O e e y o l p m E : e c r u o S
s e t u b i r t t A p i h s r e d a e L
e t a g e r g g A
s e r o c S
s t l u s e r 4 0 0 2
s t l u s e r 5 0 0 2
E V I T A R T S U L L I
Leadership development against model
What should be measured
Level of ft between the attributes leaders currently have and the qualities that they need to have to deliver results.
If the CEO needs a robust measure they should use an assessment centre process where individual executives
are put through a set of tests to determine the level of their competencies and behaviours. A less elaborate
approach that provides a useful approximation is to use aggregate results from Employee Opinion Surveys (EOS).
This requires the EOS to incorporate questions to test whether employees are seeing their leaders exhibit the
qualities that the company is looking for.
Why this metric is useful
The CEO can check that leaders are being developed in line with the competency model. HR can check the
effectiveness of leadership development programmes.
Questions the CEO should probe
Are our development actions working to deliver a strong cadre of leaders with the attributes required to •
deliver the business results?
What steps must we take to rectify any emerging defciencies? •
95
Unplanned attrition rates
What should be measured
The percentage of talent that leaves due to unplanned attrition and their reasons for leaving. This should be
monitored every 6 months.
Why this metric is useful
The CEO can check for marked increases in unplanned attrition rates. The organisation should take all efforts to
retain talent and reasons for leaving should be mainly unavoidable ones. The CEO can also see if his or her level
of commitment to retaining talent is adequate, and if he or she is taking the right steps to address the issue.
Questions the CEO should probe
Are there sudden increases in the percentage of unplanned departures of top talent? If so, why? •
Is there a clear understanding of the reasons for departure? •
What steps are being taken to stop further attrition? •
Is one part of the business more susceptible to unplanned attrition than others? If so, why? •
Why does top talent still leave despite existing measures to retain them? What are the lessons learned? •
96
STRENGTHENING LEADERSHIP DEVELOPMENT
ExhIbIT A.8
MONITOR UNPLANNED ATTRITION RATES OF HIGH PERFORMERS AND HIGH POTENTIALS
% of talent on
development
scholarships
(planned)
% of unplanned
attrition
% of talent seconded
to other companies
for development purposes
(planned)
% of talent that
leaves the
workforce
e.g. retirees
Total number of top talent departed = 40
Higher pay
Career
progression
International
opportunity
Poor team
dynamics
• Industry average of unplanned attrition for top talent and high potentials = 3%
• Company target in 2006 = reduce from 10% to 5%
Reasons for Leaving
LEADERSHIP DEVELOPMENT AUDIT
APPENDIx 4
99
LEADERShIP DEvELOPMENT AUDIT
INSTRUCTIONS
AUDIT
The following is an audit that will help GLCs to map their performance against the leadership development
elements discussed in the Orange Book. This assessment is designed to be completed by senior leaders, line
managers and HR. Once completed they will have an understanding of the strengths and development needs of
their current approach to leadership development which can be used as the basis of developing an action plan to
improve leadership development within the organisation.
HOW TO USE THE AUDIT
The audit consists of a range of topics that underlie each aspect of the leadership development framework. It can
be used to understand best practice and to assess practice within the organisation. For each topic companies
are asked to evaluate the status of each area as it currently stands. For each status level (under development,
adequate, good practice and best practice) a range of descriptions is provided that will help to make an accurate
assessment. Companies are also asked to rate the level of importance the organisation gives to each topic on a
1–3 scale (where 1 = not a priority and 3 = high priority). For each item they should circle the description that
best fts the organisation as it is today. The results will allow GLCs to agree priorities across their leadership
development system.
HOW THE AUDIT IS STRUCTURED
The audit covers each element of the leadership development framework outlined in the Orange Book.
Recruit
Develop
Engage
and Retain

Business
Strategy and
Leadership Model
Review and
Honour
Pool of leadership
who will deliver for
the Company and
Country
Deploy
H
R
/
L
i
n
e

P
a
r
t
n
e
r
s
h
i
p












HR
/L
i
n
e

P
a
r
t
n
e
r
s
h
i
p






H
R
/
L
i
n
e

P
a
r
t
n
e
r
s
h
i p
100
For each element GLCs will assess current organisational performance on a range of components. These
components include the policies, processes and practices the organisation uses to drive performance for each
element (ie quality of appraisal tools, succession planning), and the mindsets that underlie people’s attitudes to
this topic (ie attitude towards honouring outstanding performance, attitude towards external hires).
The combination of policies, processes and practices along with mindsets (attitudes) help to drive the outcomes
(ie success in the talent market, identifying talent) that currently exist within any organisation.
By assessing the components in this order the audit will help GLCs to identify whether improvement opportunities
are due to inadequate processes and policies, or attitudinal barriers, or both.
Policies, processes
and practices
Mindsets Outcomes + =
STRENGTHENING LEADERSHIP DEVELOPMENT
101
LEADERShIP DEvELOPMENT AT A GLANCE
Strengthening
Leadership Development Strengths Gaps Best Practices to adopt
Takes charge of
leadership development
Recruits future leaders
Reviews performance and
publicly honours excellence
Deploys strategically
to develop leaders
Engages and retains leaders
Builds HR capabilities
and line ownership
U
n
d
e
r

d
e
v
e
l
o
p
m
e
n
t
A
d
e
q
u
a
t
e
G
o
o
d

p
r
a
c
t
i
c
e
B
e
s
t

p
r
a
c
t
i
c
e
TAKE ChARGE OF LEADERShIP DEvELOPMENT
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Priority Leadership •
develop-
ment is seen
only as HR’s
responsibility
and is not a
priority for our
leadership
Short-term •
thinking pre-
dominates
Leadership •
develop-
ment viewed
as a prior-
ity for senior
leaders only
during critical
performance
periods eg
aggressive
activity by
competitors
Senior •
leaders
communi-
cate that
leadership
develop-
ment is a
priority
Leadership •
develop-
ment is on
the senior
leader
agenda
occasion-
ally
CEO and leaders •
commit a mini-
mum of 30%
of their time
to leadership
development–a
combination of
specifc develop-
ment activities
such as attend-
ing programmes,
and informal
coaching and
feedback
Top leaders •
convene bi-an-
nually to discuss
leadership
development
for short-term
and long-term
performance
CEO and leaders •
use organisa-
tional events
and communica-
tions to promote
their commit-
ment to leader-
ship develop-
ment
Link between
business
strategy and
leadership
development
strategy
People needs •
are driven
from the
‘bottom up’—
managers
identify their
own people
requirements
Business unit •
leaders use
their strategy
as a guide to
defning their
recruitment
needs
The •
company
business
strategy
is used to
guide de-
velopment
require-
ments for
each busi-
ness unit
and area
The company •
business strat-
egy is directly
translated into
capability re-
quirements that
drive develop-
ment needs
The business •
strategy and
leadership strat-
egy are used to
guide deploy-
ment decisions
across the
organisation
1 2 3
TAkE CHARGE OF LEADERSHIP DEVELOPMENT
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Assessment
of current
leadership
development
There is no •
formal policy
on organ-
isation’s
expectations
and criteria
of leadership
development
A formal •
policy exists
and is ap-
plied on an
ad hoc basis
Leadership •
development
policy is
consistently
used in all
assess-
ments of
development
activities for
all levels of
the organisa-
tion
The policy is •
widely pro-
moted and
accessible to
all staff
The policy is •
also consis-
tently imple-
mented
The policy •
is regularly
updated based
on feedback
regarding its
effectiveness
The policy is •
compared to
other people-
related prac-
tices to ensure
consistency of
message
Plan for future
leadership
requirements
HR provides •
ad hoc and
reactive
support to
leadership
development
No specifc •
plan regard-
ing capability
needs
HR works •
with line to
understand
line needs
HR develops •
plans speci-
fying number
of people
and their
development
needs for
each area
individually
A formal or- •
ganisational
plan is in
place
The plan •
is used for
guidance on
meeting the
capability
needs of line
manager
A formal three •
year plan on
recruiting and
capability
requirements
established
and distributed
throughout the
business
All business •
leaders are
committed to
developing
against the
plan with HR
support
Development •
and recruit-
ing resources
are allocated
based on the
plan
Metrics are col- •
lected for end
of year evalu-
ation against
plan objectives
1 2 3
102
STRENGTHENING LEADERSHIP DEVELOPMENT
TAKE ChARGE OF LEADERShIP DEvELOPMENT
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Priority Leadership •
develop-
ment is seen
only as HR’s
responsibility
and is not a
priority for our
leadership
Short-term •
thinking pre-
dominates
Leadership •
develop-
ment viewed
as a prior-
ity for senior
leaders only
during critical
performance
periods eg
aggressive
activity by
competitors
Senior •
leaders
communi-
cate that
leadership
develop-
ment is a
priority
Leadership •
develop-
ment is on
the senior
leader
agenda
occasion-
ally
CEO and leaders •
commit a mini-
mum of 30%
of their time
to leadership
development–a
combination of
specifc develop-
ment activities
such as attend-
ing programmes,
and informal
coaching and
feedback
Top leaders •
convene bi-an-
nually to discuss
leadership
development
for short-term
and long-term
performance
CEO and leaders •
use organisa-
tional events
and communica-
tions to promote
their commit-
ment to leader-
ship develop-
ment
Link between
business
strategy and
leadership
development
strategy
People needs •
are driven
from the
‘bottom up’—
managers
identify their
own people
requirements
Business unit •
leaders use
their strategy
as a guide to
defning their
recruitment
needs
The •
company
business
strategy
is used to
guide de-
velopment
require-
ments for
each busi-
ness unit
and area
The company •
business strat-
egy is directly
translated into
capability re-
quirements that
drive develop-
ment needs
The business •
strategy and
leadership strat-
egy are used to
guide deploy-
ment decisions
across the
organisation
1 2 3
TAkE CHARGE OF LEADERSHIP DEVELOPMENT
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Assessment
of current
leadership
development
There is no •
formal policy
on organ-
isation’s
expectations
and criteria
of leadership
development
A formal •
policy exists
and is ap-
plied on an
ad hoc basis
Leadership •
development
policy is
consistently
used in all
assess-
ments of
development
activities for
all levels of
the organisa-
tion
The policy is •
widely pro-
moted and
accessible to
all staff
The policy is •
also consis-
tently imple-
mented
The policy •
is regularly
updated based
on feedback
regarding its
effectiveness
The policy is •
compared to
other people-
related prac-
tices to ensure
consistency of
message
Plan for future
leadership
requirements
HR provides •
ad hoc and
reactive
support to
leadership
development
No specifc •
plan regard-
ing capability
needs
HR works •
with line to
understand
line needs
HR develops •
plans speci-
fying number
of people
and their
development
needs for
each area
individually
A formal or- •
ganisational
plan is in
place
The plan •
is used for
guidance on
meeting the
capability
needs of line
manager
A formal three •
year plan on
recruiting and
capability
requirements
established
and distributed
throughout the
business
All business •
leaders are
committed to
developing
against the
plan with HR
support
Development •
and recruit-
ing resources
are allocated
based on the
plan
Metrics are col- •
lected for end
of year evalu-
ation against
plan objectives
1 2 3
103
STRENGTHENING LEADERSHIP DEVELOPMENT
1 2 3
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Mindsets Importance
of leadership
development
Leaders are •
born not
made
Leadership •
development
is impor-
tant for the
organisation
to meet its
current goals
Leadership •
development
has a role to
play in our
on-going per-
formance
Leadership •
development is
our number 1
priority
Role of
leaders
As long as we •
have good
people we
will be able
to meet our
short-term
goals
It is important •
we develop
our people
to complete
their tasks
and to insure
us against
an uncertain
future
Our leaders •
make the
difference
between
meeting our
goals and
beating them
Our business •
will fail without
leaders who
drive perfor-
mance
Accountability Senior •
leaders
believe that
leadership
development
is HR’s
responsibility
Some senior •
leaders drive
and own
leadership
development
but mainly it
is HR-driven
with a focus
on a small,
elite group of
leaders
Senior lead- •
ers believe in
the impor-
tance of
leadership
development
and drive
and own it
with HR sup-
port in their
own areas
Our senior •
leaders drive
the leadership
process for the
organisation
as a whole and
recognise that
developing
leaders is criti-
cal to business
success
Outcomes Leadership
and talent
pool
The organi- •
sation does
not have a
methodol-
ogy to identify
people as
leaders or
talent
Leaders and •
potential
leaders are
identifed
There are •
gaps in
leadership
capabilities
Levels of •
leadership
capability are
monitored
There are •
only lim-
ited gaps
between
the leader-
ship pool
and current
requirements
as identifed
through the
business
plan
The number •
and quality of
leaders is as-
sessed using
stringent crite-
ria and against
a defned lead-
ership model
Few capability •
gaps exist in
meeting cur-
rent business
needs
Leaders con- •
tinually gener-
ate a need for
more leaders
in the future
because they
excel at identi-
fying opportuni-
ties beyond the
current strategy
104
105
RECRUIT FUTURE LEADERS
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Recruiting
policy
No policy for •
recruiting
exists, or the
existing policy
is not related
to business
needs
A recruiting •
policy exists
and actual
recruiting
practices
generally
comply with
the recruiting
policy
There is a •
recruiting
policy tied to
the business
strategy that:
Is refreshed –
annually
Supports –
most re-
cruiting sub-
processes
A recruiting •
policy based
on business
strategy is
well under-
stood, is
refected in
actual recruit-
ing behaviour
and:
Guides all –
steps of the
recruiting
process
Is aligned –
with strate-
gic goals
Is modifed –
to refect
changing
needs
Employee
value
proposition
There is •
no clearly
articulated
employee
value proposi-
tion (EVP)
The company •
is promoted
to potential
recruits using
1 or 2 EVP
features only
Salaries and/ •
or benefts
are below
industry aver-
age
The company •
is generally
considered
an attractive
employer
by potential
recruits
Salaries, ben- •
efts, perks
are at or
above indus-
try average
A clear, dis- •
tinctive value
proposition is
in place that:
Focuses on –
key talent
sources
Is tailored –
to target
audiences
Articulates –
stand-out
company
features in
comparison
with local
and global
competitors
Leverages –
a strong
external
company
brand
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
106
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Sourcing
strategy
Little re- •
search is
done to
identify talent
sources/
pools from
which to
recruit
Recruiting ef- •
forts are little
more than
exercises
in soliciting
and fltering
resumes and
then sched-
uling inter-
views
Little or no •
follow-up to
check ef-
fectiveness of
new hires
There is •
limited
research to
identify alter-
native talent
sources
Leaders are •
recruited in
a similar way
to all job ap-
plicants
Applicants’ •
details are
not shared
across busi-
ness units or
areas
The organisa- •
tion targets
both active
and passive
job seekers
Targeted •
candidates
are pre-
sented with a
lucrative and
persuasive
job offer
HR some- •
times uses
feedback
about new
recruit ft/
effectiveness
to refne the
strategy
Unique and ef- •
fective recruiting
strategies are
developed to
target untapped
sources
The company •
has a Partner-of-
choice position
with leading
schools and
university cam-
puses for recruit-
ment drives and
offer scholarship
programmes to
target potential
leaders
Recruiters •
and recruiting
processes are
informative and
persuasive
There is an ac- •
ceptance rate
approaching
90%
HR gathers data •
about new re-
cruits and uses
this to refne the
sourcing strategy
The Board and •
CEO are used to
speak to poten-
tial recruits when
appropriate (eg
at senior level)
There is a •
continual search
for good people
at all levels, to
meet current
and future needs
1 2 3
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Approach
to external
hires
There are •
no explicit
targets for hir-
ing external
candidates
External can- •
didates are
only sought
when a quali-
fed person is
not present
internally
External can- •
didates are
considered,
but typically
passed over
if there is
an internal
alternative
External •
appoint-
ments are
considered
for hard-to-fll
positions and
scarce techni-
cal skills
Generally, •
organisational
experience
is valued
over external
knowledge
and skills
There are •
explicit targets
by role for hiring
external candi-
dates based on
predicted need
External top •
talent is not nec-
essarily turned
away to favour a
company incum-
bent
Metrics for
conversion
There is no •
process to
record the
number of job
applications
made and
accepted
within
organisation
Each •
business
area tracks
some basic
recruitment
metrics:
–Number of
applicants
per job
–Number of
acceptances
per offer
A coherent •
system of
metrics
monitors
performance
at each
stage of the
recruiting
process
Outcomes •
of metrics
identify
blockages in
the recruiting
process that
need to be
addressed
The organisation •
sets clear
benchmarks for
each stage of
the recruiting
process e.g.
number of
applicants per
job opening,
then monitors
performance
against these
Use of robust •
monitoring and
review process
means that
forecasts can
be made of the
required number
of job seekers
to ensure
organisation
needs are met
Performance •
against
benchmarks
is reviewed
and updated
regularly
Problems in •
the process
are identifed
early and solved
to improve
recruitment
yields
RECRUIT FUTURE LEADERS
107
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
108
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Role of
managers in
recruiting
Line manag- •
ers are not
committed to
recruiting and
interviewing
Line and •
senior man-
agers attend
only fnal
interviews for
direct reports
HR managers •
take the lead
on selection
and hiring
decisions
Line manag- •
ers attend
second round
interviews for
all external
hires
Line manag- •
ers and HR
managers
sometimes
co-lead selec-
tion activities
Line manag- •
ers spend
signifcant
time on
recruitment
and selec-
tion activities
including
attending
recruitment
events
Line manag- •
ers and HR
managers co-
lead selection
activities then
calibrate their
rankings
Senior man- •
agers person-
ally interview
all candidates
for the top
three levels in
the organisa-
tion
Senior man- •
agers attend
at least one
major recruit-
ment fair or
event per
year
1 2 3
RECRUIT FUTURE LEADERS
109
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
On-boarding
new recruits
No induction •
programme
exists
There is a sin- •
gle standard
orientation
and induction
programme
offered
This occurs at •
set times dur-
ing the year
The pro- •
gramme
mainly
consists of or-
ganisational
information
with little
tailoring for
specifc roles
or business
units
On-board- •
ing faculty
consists of
HR and some
support ser-
vices
Business •
units own
and tailor
induction
programme
within their
area
Relocation •
and assimila-
tion support
provided for
recruits and
their families
if required
New recruits •
who are identi-
fed as high po-
tential are given
a mentor as well
as networking
opportunities
with other recent
recruits to help
them integrate
Senior manage- •
ment drive the
on-boarding of
new leaders
All new leaders •
are provided
with a tailored
programme cov-
ering organisa-
tional, technical
and job role
information
On-boarding •
faculty is largely
made up of
senior organi-
sational leaders
who emphasise
company values
and culture
On-boarding is •
staggered over
several weeks to
provide just-in-
time information
as well as stan-
dard organisa-
tional content
Mindsets Attitude to
search for
leaders
We need to •
focus on re-
cruiting solid
performers
We attract •
enough
talented
individuals for
our business
needs
When we are •
approached
by talented
individuals
we need to do
everything to
recruit them
We need to pro- •
actively search
for and source
talented individ-
uals regardless
of the size of our
current pool
1 2 3
110 110
STRENGTHENING LEADERSHIP DEVELOPMENT
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Responsibility
for making the
company an
employer of
choice
The work •
environment
is what you
make of it
We are a •
good
Malaysian
company—if
one person
leaves we can
always get
more
To be an •
attractive
employer to a
range of peo-
ple we need
to ensure the
work environ-
ment has
many positive
features
We need to •
continually
evaluate and
modify our
work envi-
ronment to
ensure the
organisation
is an employ-
er of choice
against local
and global
competitors
Outcomes Success in
leadership
market
The com- •
pany is not
viewed as a
frst choice
employer for
potential
leaders
The com- •
pany rarely
manages to
recruit the
best
There is a low •
offer
acceptance
rate com-
pared to
competitors
The com- •
pany is able
to attract
qualifed tal-
ent in some
professions
and business
units only
The com- •
pany is able
to compete
successfully
for talented
individu-
als against
smaller com-
petitors
Sometimes •
the company
loses out to
larger com-
petitors and
multination-
als
The company •
is ranked as
an employer
of choice
(eg in top 10
list of best
companies
to work for
across in-
dustries and
professions)
Recruit- •
ing results
demonstrate
an ability to
attract tal-
ented leaders
against com-
petitors (local
and global)
1 2 3
111 111
REvIEW PERFORMANCE AND PUbLICLy hONOUR
ExCELLENCE
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Performance
goals
Formal roles •
and perfor-
mance goals
are not con-
sistently com-
municated
No individual •
KPIs are in
place
Job de- •
scriptions
and formal
performance
objectives are
in place, but
do not always
capture the
most impor-
tant aspects
of the work,
are some-
times vague,
unclear or
unrealistic
Formal job •
roles are
clear and
specifc; each
individual
has a few
quantitative,
measurable,
results-orient-
ed goals that
are linked
to business
goals
Details on all •
job roles are
collated and
easily available
to leaders
Job roles are •
clearly linked to
value creation
objectives
New objectives •
are set and
discussed with
direct reports
within 10 days
of the start of
a new perfor-
mance cycle
Criteria to
identify high
performers
No clear crite- •
ria exists for
what consti-
tutes a high
performer or
a high poten-
tial manager
There is some •
criteria for
what consti-
tutes high
performance
Criteria can •
vary by busi-
ness area
The organisa- •
tion promotes
a clear view
of what con-
stitutes high
performance
at an organi-
sational and
business unit
level
The annual •
performance
review cycle is
used to reca-
librate metrics
to identify high
performance
Both perfor- •
mance and po-
tential are used
as criteria
Benchmarks •
for outstanding
performance
are articulated
in clear, quantif-
able measures
Performance •
feedback pro-
vided in context
of high perfor-
mance criteria
Performance •
review criteria
are assessed
annually to en-
sure they help
identify ‘hidden
gems’ in each
review cycle
1 2 3
112
STRENGTHENING LEADERSHIP DEVELOPMENT
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Process to
identify high
performers
Potential •
talent is iden-
tifed on an
ad hoc basis,
primarily on
seniority, ten-
ure and direct
experience
criteria
Potential •
talent identi-
fed based on
performance
apprais-
als linked
to required
competencies
for position
Each operat- •
ing area con-
ducts its own
performance
review and
identifcation
process
Performance •
appraisal
data is linked
to job role
competencies
Potential •
talent and
‘hidden
gems’ are
identifed dur-
ing a formal
performance
review pro-
cess across
business
units
Performance •
and potential
are the key
criteria for
assessing
candidates
Calibration •
across divi-
sions takes
place to en-
sure fairness
Link between
pay and
performance
Financial and •
other rewards
refect fac-
tors such
as seniority
and tenure
and are not
performance
based
Less than 5% •
of compensa-
tion is tied to
performance
Performance •
appraisals
fail to sepa-
rate people
based on
performance
measures
The majority •
of employees
receive the
same bonus
A signifcant •
bonus pool is
available and
each person
receives a
different
percent-
age based
on their
calibration
through the
performance
appraisal
process
Particu- •
larly for high
performers,
a signifcant
percentage
of base pay is
variable com-
pensation
that is based
on individual
performance
High perform- •
ers can earn
signifcantly
more than
average
perform-
ers through
bonuses and
incentives
1 2 3
113
REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Nature of
recognition
Bonus and •
pay are the
main vehicles
through
which people
are rewarded
for high per-
formance
Non-fnancial •
rewards,
including
promotions,
recognition
and perks,
are used
inconsistently
or not at all
Managers •
have the
discretion to
provide some
non-fnancial
incentives to
high perform-
ers
Annual •
performance
evaluation
used as a
vehicle to
communicate
to leaders
that they are
outstanding
performers
Manag- •
ers able to
provide lim-
ited fnancial
rewards to
outstanding
performers at
critical junc-
tures e.g. at
end of project
reviews
Provision •
within manag-
er budgets for
group events
and rewards
(e.g. parties,
dinners)
Line •
managers
empowered to
deliver on-the-
spot discretion-
ary rewards for
outstanding
contributions
CEO and •
senior leaders
regularly host a
range of
symbolic
rewards (e.g.
reward ceremo-
nies, special
events and
dinners) to
thank out-
standing
performers
Leaders are •
able to choose
from a range of
incentives
Top performers •
are consistent-
ly and publicly
recognised for
outstanding
contribution
Quality of
appraisal
tools
The purpose, •
scope and
objectives
of various
performance
evaluation
tools and
systems are
unclear
Specifc ob- •
jectives of the
performance
evaluation
tools are
implicit
There are •
few efforts to
assess the
robustness of
tools
Tools are •
designed and
implemented
by an external
provider
There is •
some as-
sessment of
effectiveness
of tools in
understand-
ing individual
performance
within the or-
ganisational
context
The purpose, •
scope and
objectives of
evaluation
tools have
been clearly
and formally
articulated
Tools are •
designed to
achieve these
goals
Tools are test- •
ed annually to
ensure validity
and reliability
Tools incorpo- •
rate feedback
from multiple
sources includ-
ing personal
knowledge and
360° feedback
1 2 3
114
STRENGTHENING LEADERSHIP DEVELOPMENT
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Feedback on
performance
People do •
not typically
get timely
feedback
about their
work and
they often
don’t know
how others
think they
perform
Feedback is •
provided on
an ad hoc
basis
Little infor- •
mation is
available on
how leaders
are track-
ing against
performance
goals
People get •
informal indi-
vidual feed-
back from a
supervisor or
project spon-
sor as part
of a broader
review of
project or
business
performance
(e.g. project
progress
reviews,
reviews of
operational
or fnancial
metrics)
Individuals •
and their
managers
discuss
performance
against goals
Leaders consis- •
tently receive in-
formal feedback
about their on-go-
ing performance
from colleagues
Feedback •
acknowledges
strengths and
weaknesses as
well as improve-
ment recommen-
dations
Leaders receive •
immediate con-
structive feed-
back following
specifc perfor-
mance instances
or events
Leaders are •
formally trained
in the process of
holding construc-
tive feedback
conversations
Formal perfor- •
mance feedback
is provided within
10 days of a
business perfor-
mance review
Mindsets Attitude to
honouring
high
performers
It is impor- •
tant that
we treat
everyone the
same
People •
should get
thanked for
a job well
done
We need to •
acknowledge
outstanding
performance
We take collec- •
tive pride in hon-
ouring those who
represent the
best of who we
are and what we
are capable of
Attitude to
feedback
It is not ap- •
propriate to
give people
feedback on
their work
During •
performance
reviews
leaders
should tell
people their
strengths
and weak-
nesses
Leaders •
should give
their people
regular
feedback on
whether they
are meeting
performance
expectations
Feedback is a •
gift that we pro-
vide to help each
other daily to
grow and develop
1 2 3
115
REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Outcomes Identifying
leaders
The organi- •
sation can
not assess
leadership
performance
and potential
in a meaning-
ful way
Performance •
criteria is
set for entry
into talent
pool but the
criteria is not
widely known
or understood
and so does
not affect be-
haviour to a
great degree
Criteria for •
initial iden-
tifcation of
talent and
standards
for continued
inclusion in
the pool are
available,
clear, and
drive a high
performance
culture
Leadership •
clearly com-
municate
criteria and
on-going ex-
pectations of
new leaders
Criteria are •
updated
regularly to
refect chang-
ing business
needs and
expectations
The CEO is •
personally
involved in
performance
reviews by
chairing the
evaluation
of all senior
leaders
A high •
performance
culture is
institution-
alised
1 2 3
116
DEPLOy STRATEGICALLy TO DEvELOP LEADERS
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Identifying
pivotal
positions
Pivotal posi- •
tions are not
identifed
within the
organisation
A few piv- •
otal positions
have been
identifed
Roles are •
defned as
most senior
organisation-
al positions
Senior lead- •
ers are aware
of the pivotal
roles in the
organisation
Talent review •
processes
include
discussion
of potential
incumbents
for roles
Clear criteria •
are used to
identify piv-
otal positions
Pivotal roles •
are a mixture
of key busi-
ness, and
hard-to-fll,
positions
Senior lead- •
ers meet
regularly to
assess ap-
pointments
and succes-
sion plans
for pivotal
positions
Using
deployment
for leadership
development
Positions are •
staffed based
entirely on
a leader’s
qualifcations
against busi-
ness needs
Job rotation •
is rarely used
as a develop-
mental tool
Positions •
are staffed
with some
consideration
for leader’s
develop-
ment needs
vs business
needs
Deployment •
assignments
are treated as
one of the pri-
mary means
of developing
leaders
Development •
needs are
considered
when staff-
ing, even if
it means the
most quali-
fed person
with low
growth poten-
tial might be
passed over
to give an
opportunity to
a candidate
with a higher
potential for
growth
Business •
leaders are
rewarded
for sharing
their talented
individuals
across the
organisation
Deployment •
decisions are
based equally
on immedi-
ate busi-
ness needs,
individual
development
and long-term
succession
planning
HR continu- •
ally supports,
monitors and
evaluates the
success of
placements
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
117
DEPLOY STRATEGICALLY TO DEVELOP LEADERS
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Preparation for
new positions
Little or no •
preparation
of leaders
for positions,
with ‘hit or
miss’ coach-
ing provided
Informal prep- •
aration of
leaders after
confrmation
of position
Preparation •
of leaders
before start
of job through
position-spe-
cifc training
and weekly
leader-to-
leader con-
versations
Incumbent •
plays large
role in hand-
over to suc-
cessor par-
ticularly for
relationship
and knowl-
edge man-
agement
Preparation •
for each
position is
well provided
through a
mixture of
just-in-time
preparation
with long-term
development
to fll any ca-
pability gaps
Formal •
coaching
and mentor-
ship for new
roles always
provided
Support con- •
tinues once
incumbent
is in place
to facilitate
successful
adjustment to
the role
Information •
about the
new role and
changes
to pay and
conditions
are readily
available
Support and •
information
for the family
of leaders is
given
1 2 3
118
1 2 3
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Succession
planning
There is no •
succession
planning
process
There is an •
informal suc-
cession plan-
ning process
that identifes
succession
candidates for
most senior
positions
There is a •
succession
plan for all
senior posi-
tions
The plan •
is updated
when a criti-
cal position
becomes
vacant
There is a •
succession
plan for all
senior posi-
tions
The plan •
is updated
annu-
ally or more
frequently if
required
The existence •
of a pool of
qualifed suc-
cessors is a
factor in the
performance
evaluation of
managers
‘Successors •
for succes-
sors’ are in
place with a
deep leader-
ship pipeline
for pivotal
roles
Mindsets Attitude to
rotation
Employees •
should stay
within their
own depart-
ments
Potential •
leaders
should have
the opportu-
nity to work
in a different
area if a clear
organisational
need exists
All poten- •
tial leaders
should un-
dertake one
job rotation to
broaden their
organisation-
al knowledge
and networks
The opportu- •
nity to be a
great leader
in this organi-
sation is en-
hanced if you
have worked
in multiple
areas
Attitude to
‘who owns
members of
the leadership
pool’
Talented •
individuals
belong to the
manager they
work for
The talented •
individuals in
any business
unit should be
shared within
the work area
to meet stra-
tegic goals
If there is a •
critical need
managers
should share
their most
talented
individuals
with another
business unit
Talented •
individuals
belong to the
organisation
and should
be deployed
to ensure the
best or-
ganisational
outcomes
STRENGTHENING LEADERSHIP DEVELOPMENT
119
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Outcomes Deployment Leaders are •
not moved in
a coherent,
co-ordinated
manner
Deployment •
plans exist at
the business
unit level only
Deployment •
decisions are
based solely
on business
needs
Deployment •
is choreo-
graphed for
the most
senior and
hard-to-fll
roles across
the organi-
sation and
contributes
to business
success and
individual
development
Deployment •
viewed as
a critical
process to
achieve or-
ganisational
goals
There are •
regular qual-
ity evalua-
tions and
monitoring
of success of
deployment
decisions
Deployment •
is viewed by
individuals as
important to
their personal
development
and career
aspirations
1 2 3
DEPLOY STRATEGICALLY TO DEVELOP LEADERS
120
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Leadership
development
programmes
Few sys- •
tematic
leadership
development
programmes
provided
Generic •
leadership
skill training
programmes
for groups
of leaders in
each level
Programmes •
are focused
on leader-
ship skills
and behav-
iours
Programmes •
are tailored
and delivered
at appropri-
ate times in
a leader’s
career
Leadership de- •
velopment pro-
grammes are
rigorous, timely
and, tailored to
the business
needs
CEOs invest •
time to shape
the leadership
programme
design and
delivery
Leadership pro- •
grammes occur
at a few major
transition points
in a leader’s
career advance-
ment
They involve •
senior lead-
ers in training
as teachers/
coaches
Metrics are in •
place to mea-
sure the impact
of development
programmes
ie individual
performance
in role after at-
tendance
1 2 3
DEvELOP LEADERShIP AND hIGh POTENTIAL TALENT
STRENGTHENING LEADERSHIP DEVELOPMENT
121
DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Coaching Coaching •
and feedback
are rarely
provided
Feedback is •
provided at
milestone
moments
only e.g. as
part of post
project review
or at critical
junctures
All leaders •
and manag-
ers provide
regular feed-
back to direct
reports
Feedback •
is formally
recorded as
development
needs and
strengths for
individual to
refer to later
CEO provides •
all direct
reports with
feedback dur-
ing and after
every critical
experience
or signifcant
interaction
Every leader •
holds regular
review meet-
ings with
each indi-
vidual direct
report
HR is re- •
sponsible
for collating
important
information
for formal
reviews e.g.
individual’s
appraisal
outcomes
Meetings are •
formalised
and cover
individuals
progress
against their
development
plans
Actions are •
taken to
address feed-
back points
Individual •
development
plans are up-
dated based
on formal
reviews
1 2 3
122
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Mentoring Formal •
mentoring is
not offered
or valued
Mentorship •
is offered in
exceptional
circumstanc-
es, e.g.
For out- –
standing
performers
Those –
entering a
critical role
Those –
failing to
meet per-
formance
expecta-
tions
Mentors are •
trained to a
basic level
There is an •
expectation
that leaders
commit to
at least one
term of men-
torship
Training is •
provided to all
mentors
HR facilitates •
the matching
of mentees
with available
of mentors
with the fnal
decision on
compatibility
being made by
mentors and
mentees
Involvement in •
mentoring is
expected to con-
tinue through-
out a persons
career
Mentorship is •
a key perfor-
mance criterion
for senior lead-
ers
The success of •
relationships
is monitored
and assessed
regularly with
mentors being
replaced quickly
if there is no
chemistry
Personal
development
plans
There is •
no formal
process for
producing
develop-
ment plans
Each individ- •
ual is able to
discuss their
development
with their
manager
Development •
plans are
informal and
ad hoc
Individuals •
are identifed
by develop-
ment need
and are given
relevant re-
sources
Individual •
plans are
used in
deployment
decisions
within each
business area
Individuals are •
categorised
and tracked to
ensure develop-
ment occurs
Development •
outcomes are
used as part of
organisational
leadership
reviews
Everyone in the •
company has an
agreed personal
development
plan that they
update and
regularly dis-
cuss with their
manager
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
123
DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Mindsets Attitude to
developing
others
Leadership •
development
is not a prior-
ity
Developing •
leaders is
HR’s respon-
sibility
Managers •
are respon-
sible for the
development
of their direct
reports
All senior •
leaders have
a role to play
in nurtur-
ing the next
generation
of leaders
across the
organisation
Attitude to
developing self
As long as •
we can do
our jobs we
do not need
to develop
ourselves
further
It is important •
to keep your
job skills up
to date and
develop new
expertise in
your role
Development •
involves the
whole person
– we need to
fnd chal-
lenges that
help us grow
beyond our
job roles
It is my •
primary re-
sponsibility to
manage my
own career
and seek out
personal and
professional
growth
I believe that •
senior lead-
ers are avail-
able to help
me develop
should I need
them
1 2 3
124
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Outcomes Nurturing
growth
There is no •
systematic
approach to
developing
the capa-
bilities and
attributes
needed to
meet our fu-
ture strategic
aspirations
There are •
a range
of generic
leadership
development
programmes
offered to all
our leaders
A hierarchy •
of leader-
ship training
programmes
exist
Leaders can •
participate in
programmes
designed for
their level
within the
organisation
There are clear •
training and
experiential
milestones for
all leaders
Attendance •
at leadership
programmes is
high
Leaders have •
access to and
take advantage
of a range
of additional
development
opportuni-
ties beyond
formal training
programmes
such as special
projects, team
work, post
graduate study
and mentor-
ship
Senior leaders •
champion the
development
programmes
for leaders
by acting as
faculty during
all sessions
New leaders •
have visible,
high quality
role models
who help to
clarify and
bring to life
the leadeship
model in a rel-
evant manner
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
125
ENGAGE AND RETAIN LEADERS
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Professional
networks
No encour- •
agement
is given to
develop net-
works across
the organisa-
tion
Professional •
networking
is limited to
some profes-
sional groups
e.g. IT work
together on
mandated
organisation-
wide initia-
tives
Interest •
groups and
professional
networks are
endorsed by
the organisa-
tion
Limited cen- •
tral funding
is provided
Activities are •
limited to
after work
time
Professional, •
and inter-
est groups
are funded
by the com-
pany. Support is
given to develop
networking
events such as
conferences
where leaders
engage with
senior execu-
tives including
the Board
Resources are •
provided to pool
and share ex-
pertise through
knowledge
management
initiatives such
as communi-
ties of practice,
road shows and
databases
Opportunities •
for networking
are built into all
HR programmes
(e.g. training,
on-boarding)
Funding for •
special projects
is available to
technical or
professional
interest groups
Activities that •
add value
are honoured
through award
ceremonies
1 2 3
126
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Community
involvement
Involvement •
in the or-
ganisation’s
community is
not valued
There is an •
expectation
that lead-
ers attend
events such
as award
ceremonies
or the open-
ing of new
premises
Leaders are •
expected
to organise
community
events
All leaders •
visit different
sites in the
organisation
and spend
time ‘on the
shop foor’
Funding is pro- •
vided for social
and commu-
nity groups and
activities
Time is avail- •
able during
work hours to
organise and
support com-
munity events
and activities
There is an •
expectation
that leaders
participate and
attend a wide
range of work-
community
functions
Retain talent All managers •
are treated
equally, no
special atten-
tion or oppor-
tunities are
provided on
the basis of
performance
or potential
Efforts to •
reward and
retain high
performers
are depen-
dent on the
discretion of
each busi-
ness unit
High-poten- •
tial managers
tend to get
special at-
tention with
respect to
development
opportunities
The organisa- •
tion tells high
performers that
they are valued
The organisa- •
tion can be fex-
ible regarding
incentives and
work tasks if
required
There are a •
range of tools
and training
for managers
to identify and
retain ‘at risk’
employees
The organi- •
sation uses
methods such
as an alumni
programme to
maintain con-
tact with former
employees who
act as ‘ambas-
sadors’ for the
company
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
127
ENGAGE AND RETAIN LEADERS
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Managing
attrition
Exit interview •
and attrition
rate data is
collected,
however, this
is not used to
inform reten-
tion programs
Annual •
performance
reviews are
used as an
opportunity
to discuss
future career
plans with
leaders
Exit interview •
and attrition
rate data is
monitored
and used
during
recruitment
process to try
and identify
those who
are a good
organisa-
tional ft
Managers •
and men-
tors are used
to monitor
satisfaction of
leaders and
understand
their future
aspirations
A broad range •
of metrics are
used (e.g. ten-
ure, job role,
business unit)
to understand
hot spots for
attrition and
to identify po-
tentially at-risk
employees
Early interven- •
tions are used
to prevent
leaders
from leaving
through reten-
tion conversa-
tions
There is con- •
tinual dialogue
about, and
measurement
of, leadership
satisfaction
and both short-
and long-term
aspirations
Colleagues •
of recently
departed
employees are
supported to
discourage
their attrition
Sophisticated •
retention pro-
grams includ-
ing awards,
benefts and
personal and
professional
development
opportuni-
ties to foster
satisfaction
and loyalty are
provided
The CEO draws •
on personal re-
lationships and
the coaching
and mentor-
ing network to
retain leaders
1 2 3
128
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Mindsets Attitude to
retention
If people •
want to leave
they do not
deserve to be
here
The organisa- •
tion is attrac-
tive enough
to replace
any leaders
who leave
– we do not
need to keep
the ones who
want to go
Managers •
are respon-
sible for
trying to
retain their
people who
are ‘at risk’
of leaving by
letting them
know they
are valued
It is critical •
that we retain
our leaders
– we should do
all that we can
to keep them
with us
Attitude
towards
fexible
incentives
Everyone •
should
receive the
same rewards
and incen-
tives
To keep our •
leaders we
need to pro-
vide fnancial
incentives to
retain people
over the short
and longer
term
We know the •
incentives
that keep our
people here
If we are to •
retain our
leaders we
need to be fex-
ible and match
our incentives
(both fnancial
and non-fnan-
cial) with their
desires
Attitude
towards
fexible
community
Work and •
personal
interests
should be
separate
It is important •
to like the
people you
work with
We should •
encourage
people to
have fun at
work
Organisational •
life is about far
more than do-
ing your job, it
is about being
part of a work
community
Attitude
towards
alumni
We have no •
obligation to
people who
choose to
leave us
It is nice for •
people to
leave with
positive
memories of
the organisa-
tion
We should •
make sure
that we stay
in touch with
outstanding
employees
who leave,
we may be
able to at-
tract them
back in the
future
Alumni are •
still part of our
family, they are
our represen-
tatives outside
our organisa-
tion
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
129
ENGAGE AND RETAIN LEADERS
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Outcomes Inspiring work
environment
There are few •
opportunities
to create a
more inter-
esting and
inspiring work
environment
The extent •
of fexibility
in work life
balance and
benefts is
dependent on
each leader’s
attitudes
Senior lead- •
ers are given
the fexibility
to signifcant-
ly shape their
roles and
rewards
Senior lead- •
ers strive
to foster a
creative and
engaging
work environ-
ment for all
Employees •
are able to
put forward
suggestions
on how to en-
gage people
further with
their roles
and environ-
ment
Flexible work •
practices are
encouraged
Creating
community to
embed leaders
People in our •
organisation
are siloed,
they only
know those in
their immedi-
ate work area
For those who •
are motivated
there are
ways to devel-
op informal
relationships
across the
organisation
The organisa- •
tion encour-
ages and fos-
ters a sense
of family and
belonging
A range of •
networking
activities
are provided
including
social events,
conference
and job rota-
tions
People enjoy, •
and are
expected to
contribute
to the social
fabric of the
organisation
through or-
ganising and
participating
in cross-com-
pany events,
projects and
activities
1 2 3
130
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Targeted
programme
for high risk
employees
No coordi- •
nated efforts
to retain
employees
Leaders and •
HR attempt to
identify and
retain those
at risk of
leaving
Efforts are ad •
hoc and un-
coordinated
Leaders and •
mentors infor-
mally monitor
satisfaction
levels
There is a •
standard
approach to
responding to
resignations
Business •
leaders
identify po-
tential at-risk
employees
within their
own area
All leaders •
are respon-
sible for
continual as-
sessment of
satisfaction
and career
aspirations of
direct reports
Career •
intentions are
discussed
openly and
without judg-
ment
Retention ef- •
forts consist
of proactive
moves to
make the
environment
attractive,
and provide
fexible
incentives to
attempt to
retain leaders
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
131
bUILD hR CAPAbILITIES AND LINE OWNERShIP
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Policies,
processes
and practices
Role of
human
resources
HR provides •
ad hoc and
reactive
support to
leadership
development
HR works •
with line to
understand
line needs
and helps
to imple-
ment local
recruiting and
development
initiatives
HR helps •
business
leaders to
translate
people
requirements
into talent
development
and recruit-
ment initia-
tives
HR is re- •
sponsible for
formulating
policy e.g. for
safety and
discrimina-
tion
HR has key role •
in organisational
strategy develop-
ment with HR
head present at
all major strategy
sessions
Examination of •
existing people
capabilities, with
HR guidance,
forms essential
part of strategy
setting process
HR facilitates •
translation of
business plans
into people
requirements
Source
of best
practice
HR manag- •
ers do not
know best
practices for
people issues
e.g. organi-
sation and
job design,
recruiting and
selection, ap-
praisals and
training
HR is able •
to access
best practice
information
from external
sources upon
request
There can be •
a time delay
in receiving
information
from HR
Some HR •
managers
are viewed as
having exper-
tise in people
practices
Credibility of •
HR varies by
business unit
and by the
people issue
under consid-
eration
HR managers are •
viewed as having
comprehensive
and up-to-date
knowledge
across all people
issues
HR coaches all •
executives and
line managers on
how to manage
the development
and performance
of their people
HR managers are •
all seconded to
the line to ensure
that HR expertise
tightly fts with
business needs
and context
1 2 3
132
Current status Importance
Under
development Adequate
Good
practice Best practice
Priority:
1=Low, 3=Top
Effective
processes
HR de- •
signs and
implements
processes
that make the
organisation
less effective
HR designs •
and imple-
ments pro-
cesses that
basically do
not change
the effective-
ness of the
organisation
HR pro- •
cesses are in
place but are
not always
consistently
applied or
mutually
reinforcing
HR designs and •
implements eff-
cient processes
that make the
organisation
more effective
HR provides •
key metrics
to assess the
‘value-add’ of
people-related
processes
Role of line
managers
Line man- •
agers view
leadership
development
as a low
priority
Line manag- •
ers do not
collaborate
with each
other or HR
to implement
a systematic
approach to
development
Line manag- •
ers drive
leadership
development
HR involve- •
ment only on
an ad hoc
basis
Line manag- •
ers and HR
have a clear
understand-
ing of their
roles within
leadership
development
process
Line man- •
agers call
on HR for
specifc help
for issue
resolution
Line and HR co- •
own leadership
development:
Explicit roles –
of each are
defned and
articulated
At least one –
of the top
line perform-
ers has been
appointed to
one of HR’s
most senior
roles
HR coaches –
line managers
to build capa-
bility across
all aspects of
development
process
Line managers •
regularly attend
programmes
designed by
HR to upgrade
their skills and
capabilities
Line manag- •
ers spend 30%
of their time
on leadership
development
1 2 3
STRENGTHENING LEADERSHIP DEVELOPMENT
133
BUILD HR CAPABILITIES AND LINE OWNERSHIP
Current status Importance
Under
development Adequate Good practice Best practice
Priority:
1=Low, 3=Top
Mindsets Attitude
towards the
role of HR
People man- •
agement is HR
work
The role of •
HR is that
of a library,
if you know
what you
want they
can give you
some good
information
HR are effec- •
tive internal
consultants,
they provide
advice and
expertise
across all
stages of the
leadership
development
process
HR are •
thought part-
ners across
all people
issues, we
cannot make
sustained
change un-
less they are
truly integrat-
ed within the
business
Attitude
towards HR
expertise
Knowledge •
and expertise
within HR is
outdated
HR are good •
at helping
with practical
issues at the
frontline
Expertise •
within HR
is inconsis-
tent, there
are some
outstand-
ing people
and others
who under
perform
The depth •
and breadth
of skills
within HR is
outstanding,
they play a
central role
in driving
our people
agenda
Attitude
towards HR
effectiveness
HR do not •
understand
the practicali-
ties of running
the organisa-
tion, their
ideas are im-
practical and
bureaucratic
HR have •
great ideas
but they can-
not translate
them into
processes
that have
a positive
impact on the
organisation
HR are able •
to develop
individual
processes,
however
they cannot
take a big-
picture view
and build a
comprehen-
sive people
management
system
HR are es- •
sential to
our suc-
cess—nothing
happens with-
out people
making it
happen and
HR are there
to ensure we
do the best
we can
Outcomes Credibility for
partnership
HR viewed as •
adding little
value to build-
ing leadership
Leaders •
view HR as
a knowledge
source
Leaders •
contact HR
to help ad-
dress specifc
people issues
HR proac- •
tively offers
guidance
and support
to busi-
ness areas
and senior
management
regarding
developing
leadership
within the
organisation
HR viewed as •
partner with
clear role and
responsibili-
ties for devel-
oping and
supporting
leadership
development
mechanisms
1 2 3
134
ACTIONS TO RESOLvE GAPS IDENTIFIED
Gaps identifed Priority Proposed actions Timing/sequence
1.
2.
3.
4.
5.
6.
7.
STRENGTHENING LEADERSHIP DEVELOPMENT
135
KEy MILESTONES OF ThE ACTIONAbLE IMPROvEMENT
PROGRAMME
Proposed
Activity Timeline Responsibility
1.
2.
3.
4.
5.
RESOURCES
138
ExhIbIT LIST
INTRODUCTION
0.A GLC leadership gap
0.B GLC transformation timeline
CHAPTER 1: TAkE CHARGE OF LEADERSHIP DEVELOPMENT
1.A All leadership actions are driven by the business strategy
1.B Leadership strategy must be an integral part of the annual HR and business planning cycle
1.C How to measure the size of the leadership gap
1.D Leadership model: an example
1.E The model drives other elements of the leadership system
1.F IBM leadership model
CHAPTER 2: RECRUIT FUTURE LEADERS

2.A Southwest Airlines—A Good Practice Employee Value Proposition
2.B Southwest Airlines case study
2.C Segment target audiences for employee value propositions
2.D Recruiting can be mapped as an operating process
2.E Measure the rate of conversions to new recruits
CHAPTER 3: REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE

3.A Conduct effective performance reviews that involve senior leaders
3.B What to look for to identify ‘hidden gems’
STRENGTHENING LEADERSHIP DEVELOPMENT
139

CHAPTER 4: DEPLOY STRATEGICALLY TO DEVELOP LEADERS

4.A Test that pivotal positions are flled by top leaders
4.B Leaders are matched to jobs in a deployment discussion that achieves solutions in the
interests of individuals, the business unit and succession planning
4.C The job matching forum uses information from performance reviews to identify the supply of leaders
4.D And matches them to pivotal roles
CHAPTER 5: DEvELoP LEADERSHiP AnD HiGH PoTEnTiAL TALEnT
5.A CEO succession models
5.B GE focuses heavily on formal training programmes—many of which are offered at Crotonville
CHAPTER 6: ENGAGE AND RETAIN LEADERS
6.A How companies increase their sense of community
6.B Leaders should be trained to ‘save stars’—retention conversations
CHAPTER 7: BUILD HR CAPABILITIES AND LINE OWNERSHIP

7.A HR needs to have business understanding, expertise and execution to be successful
CHAPTER 8: GETTING STARTED

8.A How to strengthen leadership development
8.B Audit summary
8.C Improvement plan
8.D Milestones for an improvement plan
8.E Monitor metrics to check plan is delivering improved performance
ExHIBIT LIST
140

APPENDIx 3: DETAILED METRICS
A.1 SIzING THE GAP – HOW IT CAN BE DONE
A.2 MEASuRE RECRuiTMEnT RESuLTS By EMPLoyEE SEGMEnTS
A.3 MEASuRE THE RATE of ConvERSionS To nEW RECRuiTS
A.4 iMPLEMEnT CoMPEnSATion SCHEMES THAT REWARD HiGH PERfoRMAnCE
A.5 REviEW PERfoRMAnCE DiSTRiBuTion of EMPLoyEES
A.6 TEST THAT PivoTAL PoSiTionS ARE fiLLED By ToP TALEnT
A.7 MEASuRE THE AGGREGATE of LEADERSHiP SCoRES AGAinST LEADERSHiP MoDEL
A.8 MoniToR unPLAnnED ATTRiTion RATES of HiGH PERfoRMERS AnD HiGH PoTEnTiALS
STRENGTHENING LEADERSHIP DEVELOPMENT
141
GLOSSARy
BU Business Unit
CEO Chief Executive Offcer
EVP Employee Value Proposition
GLC Government-linked Company
GLIC Government-linked Investment Company
HCM Human Capital Management
HR Human Resources
KPI Key Performance Indicators
PCG Putrajaya Committee on GLC High Performance
SVP Senior Vice President
TOR Terms of Reference
TMO Transformation Management Offce
The Transformation Management Offce (TMO), as Secretariat to the PCG, is the central point of contact for any
questions and for all implementation assistance.
Phone +(603) 2034 0000
Email pcg@treasury.gov.my
Website www.pcg.gov.my
The level of support and assistance needed by GLCs will vary. The TMO may be able to provide GLCs with more
information and assistance depending on their situation and context, including:
Assistance on how to use the tools illustrated in this Orange Book •
Suggestions of potential external consultants who can facilitate the Leadership Development Audit. •
WhERE GLCs CAN ObTAIN ASSISTANCE
142
STRENGTHENING LEADERSHIP DEVELOPMENT
DECEMBER 2006




















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Putrajaya Committee on GLC High Performance (PCG)
Transformation Management Office,
Level 37, Tower 2, Petronas Twin Towers,
Kuala Lumpur City Centre,
50088 Kuala Lumpur, Malaysia
Tel: +(603) 2034 0000 Fax: +(603) 2034 0008
Email: pcg@treasury.gov.my Website: www.pcg.gov.my
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STRENGTHENING LEADERSHIP DEVELOPMENT
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CHAPTER TITLE

2

PREFACE: MESSAGE TO CEO
The leaders of our Government-Linked Companies (GLCs) are entrusted with the stewardship of Malaysia’s greatest resource—our people. As I have often said, the CEO is the Chief Human Resource Officer. Your role as the chief human resource developer is just as important as your role as business manager and leader. Our leaders have a personal duty to nurture the character and capability of our people, to inspire them personally and professionally, and to make sure that their knowledge, gifts and talents are used and developed to their fullest potential. Our leaders have a corporate duty to grow other leaders who will drive the sustainable performance of GLCs to create outstanding shareholder and stakeholder value. Our leaders have a national duty to develop exceptional Malaysians who can move our country towards achieving the aspirations set by the National Mission and Vision 2020, underpinned by the principles of the Federal Constitution and the Rukunegara. These three duties are critical to achieving the objectives and the underlying principles of our whole GLC Transformation agenda. When we speak of leaders—at any level—we speak of those individuals who can meet extraordinary challenges and put in place the actions required to create breakthrough performance and results. They are entrusted in their positions because we believe that they have the necessary knowledge, integrity, passion, sense of duty, motivational skills and resilience. These characteristics are beyond what we expect of our managers in their day-to-day roles. Make no mistake: managers are a vital and important part of how we deliver consistent business results. However, we are an ambitious nation with high aspirations and a rapid development agenda. We can only achieve this agenda with the right leaders. This GLC Transformation initiative on ‘Strengthening Leadership Development’ will help you, with the support of your Boards, Human Resources (HR) functions and line managers, to fully understand and put into practice your personal, corporate and national duties. It will help you drive the transformation agenda. It should also serve as a source of inspiration for those that want to play a leadership role in the development of our country and our corporations.

YAB DATO’ SERI ABDULLAH BIN HAJI AHMAD BADAWI PRIME MINISTER OF MALAYSIA

3

Bank Islam Malaysia Berhad Commerce International Merchant Bankers Berhad Employees Provident Fund General Electric Hay Group Hewitt Associates HSBC Group Head Office Khazanah Nasional Berhad Lembaga Tabung Angkatan Tentera Lembaga Tabung Haji Malayan Banking Berhad Malaysia Building Society Berhad Malaysian Airline System Berhad McKinsey & Company Ministry of Finance Petroliam Nasional Berhad Permodalan Nasional Berhad Prime Minister’s Office Securities Commission Sime Darby Berhad Telekom Malaysia Berhad Tenaga Nasional Berhad Towers Perrin UEM World Berhad Watson Wyatt 4 .ACKNOWLEDGEMENTS The Putrajaya Committee on GLC High Performance (PCG) would like to thank the following for their support and input into the development of this initiative.

INTRODUCTION .

.

procurement and business development. ExhIbIT 0. The purpose of this Orange Book is to help CEOs fulfil that duty.a.000 leaders who can deliver and sustain breakthrough performance. it is estimated that GLCs face a gap of between 1. Leaders deliver Leadership Managers positions Leaders Total leadership positions Vacancies and n on pivotal positions Pivotal positions Special initiatives and growth Leadership demand improvement and sustain breakthrough performance Typically: 20–30%+ p. While there are a good number of leaders who can drive financial restructuring and infrastructure development.500—2.INTRODUCTION Much is expected of GLCs in terms of high performance. Source : JWT Analysis * Extrapolation of experience at select GLCs to G-20. GLCs will need to increase the profitability of their domestic operations and successfully drive profitable growth in new geographies and sectors. the shortage is acute. Malaysia’s National Mission. TODAY THERE IS A LEADERSHIP GAP ACROSS GLCs It is the responsibility of CEOs and Boards of all GLCs to ensure they have enough of the right leaders to help them meet their business targets—indeed it is their corporate duty. for particular types of leaders such as those in the functions of marketing. Interview with Experts Malaysia requires more leaders who can truly transform an organisation and deliver breakthrough performance.a. operations. Vision 2020 aspirations and the Ninth Malaysia Plan require GLCs to be one of the growth engines of the national economy and to create real shareholder returns. This requires leaders. It offers practical guidance about what they can personally do to meet this challenge and what they need to do to institutionalise good leadership development practices in their companies.A GLC LEADERSHIP GAP ESTIMATE Lead ership su pply Leadership demand Lead ership gap Managers & Leaders: a coMparison Managers deliver reliable year-on-year improvements 15002000 leaders for their area Typically: 1–5% p. 7 . Today.

In the context of development and performance. Do you know what your most significant intervention will be in the next 3 months to fundamentally improve the leadership capability of your organisation? 3. The GLC Transformation Programme is a subset of the broader national development strategies that include the development of Malaysian talent and the Bumiputera community. GLCs SHOULD CLOSE THEIR LEADERSHIP GAP WITH A ‘DEVELOPMENT. Provide ongoing support and development contingent on performance Leadership development will accelerate where progress and rewards are based on proven performance and potential. The GLC Transformation Programme fully observes the rights and governance of shareholders and stakeholders. • Performance Focus. Do you know three leaders outside your company who could transform its performance? If so. Do you spend 30% of your time developing leaders? 2. • Governance. Do you play a role in every senior leadership development programme for your company? 5. The underlying rationale for the GLC Transformation Programme is to create economic value through improved performance at GLCs. within the broader national development focus. shareholder value and stakeholder management. In major strategy sessions do you always involve the HR head to ensure you will have the leadership with the requisite skills to successfully deliver your business plans? 10. Do you spend at least 1 hour with each of your direct reports every quarter giving them personal feedback and coaching about how they can be more effective leaders? 6. Ensure equity and development potential recognised on entrance Recruitment especially at entry level should be done. In the last 12 months. what their issues are and what you are going to do to ensure they do not leave? 9. which supports Bumiputera development as well as building the local talent agenda for all Malaysians. not only on the basis of their achievements. 2. This approach has three implications for GLCs: 1. premised on principles of performance. equity and performance’ approach to leadership development. Do you have a clear point of view on what the next role should be for each executive reporting to your direct reports to maximise their development and the performance of the business? 8. The three underlying principles of the GLCT programme translate to GLCs applying a ‘development. shareholder value and stakeholder management. Do you know who among your key leaders are most at risk of leaving. but also their development potential.INTRODUCTION The practical guidance offered in this Orange Book to close the leadership gap is underpinned by the three underlying principles of the GLC Transformation Programme: THE LEADERSHIP DEVELOPMENT STOCkTAkE 1. Have you appointed any of your top line performers to head your HR function or to one of HR’s most senior roles? • National Development. EQUITY AND PERFORMANCE’ APPROACH The developmental agenda of the GLCT programme is reflected in the need to ensure full participation of all Malaysians including Bumiputeras in the development of GLC leaders. do you have a personal plan for how and when you could recruit them? 4. This includes National Development. employees should 8 . have you taken a risk with any high potentials and moved them into challenging leadership roles that prompted people across the organisation to talk positively about it? 7.

if despite the support. Malaysia’s CEOs should capitalise on these strengths to position their companies to overcome present and future challenges. MALAYSIA’S NATIONAL DEVELOPMENT AGENDA Malaysia’s ambitious development agenda means that there are many opportunities for leaders. These are people who have potential but are in the wrong roles. leaders should be brought in with a specific performance goal of developing a cadre of Malaysian leaders with the required capabilities within the organisation. High potential individuals will be able to take on challenging assignments that stretch them—and help them to develop quickly. • • • • A sense of national pride and duty can be used to attract talented leaders to work for GLCs The personal obligation of leaders to care for their people can be called upon to ensure they devote sufficient time to nurturing new leaders The honouring of age and wisdom and the sense of obligation to pass on knowledge will accelerate the mentorship of leaders The value of living harmoniously with others and working for the good of the whole community can be used to retain leaders and motivate them. There are four values. Because of this. which include: VALUES AND CULTURE Boards and CEOs can call upon national values and culture to help strengthen leadership development. GLCs can draw upon uniquely Malaysian assets to develop leaders and close the leadership gap. some of them uniquely Malaysian. as particularly helpful. or people who took a risk that did not pay off and have been ‘written off’. GLCs might have to recruit when they have to close some critical leadership gaps at senior levels or when they face strong competition internationally or domestically from multinationals. Malaysia is not short of exceptional people with the innate qualities required for leadership. When this happens. This support must be contingent on performance. Develop leaders from within GLCs should aim to close their leadership gap primarily by developing their own leaders rather than by recruiting them. Malaysia and the GLCs have a unique opportunity to be an ‘incubator’ for leadership talent. OUR STRENGTHS Throughout the book specific ways to build on these strengths are highlighted. We can expect to find potential leaders among 5—10% of managerial staff but these leaders are often ‘hidden’. High performers ‘stuck in the queue’ behind more senior average performers. These sorts of people need to be found and be given a chance to develop and bloom. 3. that are acknowledged in the Orange Book. nor are its GLCs. 9 . GLCs will need to take firm action on individuals. the potential does not translate into performance. However.INTRODUCTION be developed and supported to realise their full potential. m A TIME TO BUILD ON STRENGTHS AND RISE TO THE CHALLENGE .

more can be done. WHERE THE ORANGE BOOk FITS IN THE GLC TRANSFORMATION PROGRAMME In 2005. Some talented leaders respond well to the call of national service.INTRODUCTION MALAYSIA’S CURRENT LEADERS Malaysia has grown by successfully developing the institutions and leaders that were required at each stage of the nation’s development. will also need to pay and offer benefits at around the 50th percentile against global peer industry benchmarks. All levels of line management could exercise greater ownership of the leadership development agenda. ranging from enhancing Board effectiveness to improving operational efficiency. INCONSISTENT CAPABILITIES AND COMMITMENT TO LEADERSHIP DEVELOPMENT While some GLCs have begun to focus on leadership development. The social discomfort of singling people out can limit practices of very rapid advancement of young leaders who might be potential CEOs. SOCIAL AND CULTURAL CONVENTIONS Some social and cultural conventions can constrain otherwise powerful leadership development practices. HR functions can play a stronger role. which include: COMPETITION FROM NON-GLCs FOR MALAYSIAN TALENT The leadership shortage is not restricted to GLCs. skills and passion to develop leaders that drive the performance of the business. Conventions of politeness and ‘saving face’ can limit effective developmental feedback conversations. ten initiatives were launched. They need to be staffed with commercially savvy professionals with the approriate knowledge. The Orange Book on Strengthening Leadership Development is designed to help develop the human capital that will drive the transformation. nor to Malaysia or the region. GLCs have used a compelling purpose such as nation building to influence recruitment. which established the performance management framework that is an important part of a leadership development programme. It complements the Green Book. OUR CHALLENGES Throughout the book specific actions to overcome the challenges are addressed. Tight reciprocal loyalties can constrain the practice of regularly moving leaders into new roles. others less so. As part of the Programme. but also for leaders. Strengthening leadership development will require all these conventions to be challenged. GLCs which also compete in the global leadership talent market. Equally. GLCs will need to compete aggressively with multinationals and private Malaysian companies—and not only for customers. INSUFFICIENTLY COMPETITIVE EMPLOYEE VALUE PROPOSITIONS To date. and the Blue Book. the Putrajaya Committee on GLC High Performance (PCG) launched the GLC Transformation Programme to help GLCs perform better. Current leaders need to continue to develop and learn new skills. which sets out the Board’s role in exercising governance over the leadership development process. GLCs must be able to offer different compelling benefits to attract a broader range of potential leaders. 10 .

CEOs will be expected to implement the guidelines in this book within the next three years. like recruitment and the identification of hidden talent. However. achieving this level of excellence within three years will no doubt be challenging and will require renewed HR leadership. It deals with upgrading the leadership development process and the processes. The framework is anchored to a CEO mandated ‘Leadership Development Audit’ and an actionable implementation plan to address identified gaps. the PCG is pursuing these initiatives to support GLCs and help them to meet this important challenge to develop great leaders for Malaysia. support from colleagues in other GLC HR functions or external help. On the contrary. The Orange Book also sets out a framework to assess and strengthen company wide leadership development. it does not deal with the issues of finding talent to fill specific expertise gaps because the strategies for doing so are highly dependent on a particular type of gap to be filled. The importance of closing the leadership gap means the Orange Book focuses on leaders. Integral to the philosophy of this framework is the need to institutionalise a process that enables ongoing review of the Leadership Development Dashboard by the CEO and the Senior Leadership team on regular and periodical basis. Delivering sustainable and tangible results requires rapid progression in closing the leadership gap.b GLC TRANSFORMATION TIMELINE 5/2004 Pha se 1 Mobilisation. a move closer to HR best practices. To achieve this goal will require high quality HR functions working in partnership with line management. For many GLCs. the general development of human capital will accelerate under leaders who instinctively make people development a priority. These initiatives are beyond the scope of this book. like marketing or risk management. diagnosis and planning 15 months 2005 2006 P ha se 2 Generate momentum 2007 P ha s e 3 Tangible results 2010 2015 Phase 4 Full national benefit 5–10 years onwards 12–17 months 2–5 years The GLC Transformation Programme is now moving into Phase 3 where tangible results will need to be delivered.INTRODUCTION ExhIbIT 0. 11 . Whilst this Orange Book focuses on what individual GLCs can do to develop leaders. that feed it. and talent with the potential to become leaders. much also can be done at a pan-GLC and national level—from creating a new level of excellence in Malaysian corporate leadership training programmes to the active movement of high potential individuals across GLCs to provide development experiences not available in a single company. While the Orange Book does tackle the challenge of developing senior leaders to head functional or technical areas. This does not mean that the development of the rest of human capital in GLCs is any less important.

1 See Appendix 4: Leadership Development Audit. The consultation included interviews and a workshop where the tools in the Orange Book1 were piloted. Valuable input was obtained through consultation with CEOs and the Malaysian HR community. 12 . including HR consultants. The output of the workshop and interviews helped direct the topics addressed in the Orange Book.INTRODUCTION APPROACH TO DEVELOPING THE ORANGE BOOk The Orange Book contains approaches to leadership development that draw on global best practices and the experiences of companies in Malaysia.

Leadership development must flow from business strategy. Great organisations become ‘leadership factories’. kEY FEATURES The framework has three key features: 1. 1 Business Strategy and Leadership Model 2 The war for leadership talent is won when Boards and CEOs get personally involved. Every aspect of leadership development feeds into the leadership pool and links to every other aspect—all of which increases the quality and size of the pool. The CEO and all line managers must lead it. The partnership between HR and line management frames all leadership development. ip 5 r tn 5 Pa Develop 4 Deploy e 13 ers h . Great leaders energise their organisation by holding people to higher standards of performance and celebrating those individuals and teams that embody excellence.INTRODUCTION FRAMEWORK AND GUIDELINES The Orange Book sets out practical guidelines to institutionalise good leadership development practices using a simple framework. CEOs need to skilfully match their best people to their most important roles. 3. 7 7 H R/ Li n 2 Recruit eP ip ar tn 3 sh e rs e P a r t n er 3 Review and Honour h ip 6 Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L in in R /L 4 H 6 The winning combination in leadership development is a committed Board and an active CEO. not just a process. Leadership development is not—and cannot be—dependent on particular leaders who happen to be good at it or passionate about it. The HR-Line partnership is built upon a talent mindset. All aspects of leadership development need to focus on creating those leaders with the experiences and capabilities required for that unique business to be successful. It must be embedded in the way the company works. The task of identifying and developing leaders cannot be outsourced to HR. Great CEOs know that this personal activity is best led by them. CEOs and senior leaders with a true talent mindset devote a minimum of 30% of their time to leadership development because they believe that high performers create disproportionate value. delivering higher performance and accelerating leadership development. Leadership development is institutionalised as a system. backed by a powerful partnership of HR and line management. Today’s war for leadership talent is as much about retaining leaders as it is about engaging them. working at all levels to build leadership capability. 2. 1 The CEO is also the Chief Human Resource Officer: creating the leadership engine that powers business performance.

2 Institutionalise an effective strategic deployment process Take bold but measured risks to gain maximum benefit from the deployment process CHAPTER 5: DEvELoP LEADERSHiP AnD HiGH PoTEnTiAL TALEnT 5.4 Bring marketing techniques to the employee value proposition Develop an innovative sourcing strategy Apply sales disciplines to the recruitment process Use the skills.3 Prioritise individual performance reviews to identify leadership potential Make individual performance improvement plans relevant for leaders Reward high performance and manage underperformance CHAPTER 4: DEPLOY STRATEGICALLY TO DEVELOP LEADERS 4.3 2. contacts and experience of Boards and CEOs to source leaders CHAPTER 3: REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE 3.1 2.1 6.3 5.1 7.2 8.1 1.2 Make all line managers personally responsible for leadership development Enhance the HR function rapidly to meet the business needs and to provide focused support for leadership development CHAPTER 8: GETTING STARTED 8.2 3. not just a company Hold on to the most valuable leaders Keep the door open to leaders who leave CHAPTER 7: BUILD HR CAPABILITIES AND LINE OWNERSHIP 7. Below are key guidelines to help direct readers to the most relevant sections.3 Build an organisation that is a work community.INTRODUCTION GUIDELINES The book is intended to be read as a whole but readers may want to focus on chapters they find particularly relevant.4 Invest in a high impact leadership development programme Coach and develop direct reports at every opportunity Prioritise the development of CEO successors Cascade the development commitment deep into the organisation CHAPTER 6: ENGAGE AND RETAIN LEADERS 6.3 Merge leadership development actions with the business strategy Determine the number of leaders needed to hit targets Create a leadership model to get the leaders who will drive performance CHAPTER 2: RECRUIT FUTURE LEADERS 2.2 6.2 5.1 8.3 Conduct a Leadership Development Audit to strengthen company-wide leadership development Intensify Board governance on leadership development Shift CEO actions and behaviours 14 .2 2.1 3.1 5.2 1. CHAPTER 1: TAkE CHARGE OF LEADERSHIP DEVELOPMENT 1.1 4.

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TAbLE OF CONTENTS CHAPTER 1: Take charge of leadership development CHAPTER 2: Recruit future leaders CHAPTER 3: Review performance and publicly honour excellence CHAPTER 4: Deploy strategically to develop leaders CHAPTER 5: Develop leadership and high potential talent CHAPTER 6: Engage and retain leaders CHAPTER 7: Build HR capabilities and line ownership CHAPTER 8: Getting started APPENDICES: 1: The Leadership Development Stocktake 2: Leadership Development Dashboard 3: Detailed Metrics 4: Leadership Development Audit RESOURCES: Exhibit list Glossary Where GLCs can obtain assistance 21 29 39 45 53 61 67 73 81 85 89 99 138 141 142 .

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ChAPTER 1 TAkE CHARGE OF LEADERSHIP DEVELOPMENT .

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Pa Develop r tn ers h ip 21 . Determine the number of leaders needed to hit targets 3.A). Merge leadership development actions with the business strategy 2. IF NOT MORE. Create a leadership model to get the leaders who will drive performance. GLCs will succeed in meeting their business targets and open new opportunities for high performance and growth. AT PETRONAS WE HAVE MERGED THE BUSINESS STRATEGY AND THE HUMAN DEVELOPMENT STRATEGY. including in Malaysia • National Australia Bank’s ‘cherry-picking’ approach that actively recruits top talent from other organisations to boost its turnaround leadership cadre.1 MERGE LEADERSHiP DEvELoPMEnT ACTionS WiTH THE BuSinESS STRATEGy Organisations with great leadership development strategies—and no shortage of leaders—have all taken this first step: to ensure their leadership strategy was linked to their overall business strategy. TIME AND EFFORT ON HUMAN DEVELOPMENT STRATEGIES THAN WE DO ON BUSINESS STRATEGIES. WE SPEND EQUAL. “BUSINESS STRATEGY ALONE IS NOT ENOUGH. eP ip Recruit ar tn e rs e P a r t n er Review and Honour h ip /L i n Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L HR Deploy i ne 1.” — TAN SRI DATO SRI MOHD HASSAN MARICAN CEO OF PETRONAS GROUP • Break down the business strategy into what it means for leadership requirements. H R/ Li n sh By attracting and developing those who stand out as leaders. 1. • The actions to achieve the objectives can be a combination of any one of a number of approaches. The leadership development strategy is tied to business objectives to ensure it will contain the specific actions needed to meet targets (see Exhibit 1. Examples include: • HSBC’s ‘grow your own timber’ approach that spends significantly on training and development.ChAPTER 1: TAkE CHARGE OF LEADERSHIP DEVELOPMENT Business Strategy and Leadership Model The CeO is alsO The ChieF human resOurCe OFFiCer: CreaTing The leadership engine ThaT pOwers business perFOrmanCe. depending on the company’s strategy. They do this by breaking down the business strategy into leadership requirements and integrating business and leadership development planning.

STRENGTHENING LEADERSHIP DEVELOPMENT ExhIbIT 1.b LEADERSHIP STRATEGY MUST BE AN INTEGRAL PART OF THE ANNUAL HR AND BUSINESS PLANNING CYCLE EXAMPLE Strategic priorities De veloping strategic direction Corp orate strateg y development Leadership strategy development Financial planning and bu dgeting Human resources deployment Execution of strategic initiatives Exec ution of leadership strategy Internal and external communication Performance measurement and manag ement Owner Executive group HR/Executive group CFO Jan Feb Mar A pr Ma y Jun Jul A u g Se p Oct N ov De c Aligning resources to strategic direction En suring implementation and execution HR Strategic plann ing/ Executive group HR/Executive group Executive group/ Investor relations HR/Executive group/Finance 22 . This means aligning the planning cycles and having the right people involved at the right time.g. ExhIbIT 1. The business strategy and the leadership development strategy can only be truly linked when the two planning processes—business and HR—are integrated. retirees Target Malaysians abroad for regional growth • Grow revenue by 5% in domestic • Grow revenue by >15% in regional markets Corporate Strategy market Revenue Growth Cost Reductions • Improve operational efficiency by >10% • Reduce procurement costs by 15% Hire lean and six-sigma experts from global talent market to lead operational transformation and create local operations leaders Move key people from highly successful procurement team to lead company-wide procur em ent • Integrate the business and HR planning processes.A ALL LEADERSHIP ACTIONS ARE DRIVEN BY THE BUSINESS STRATEGY EXAMPLE Corporate strategy (extract) Implications for leadership Redesign Employee Value Proposition for traditio nal markets Target non-traditional employee segments e.

If the leadership gap is too large to close. ExhIbIT 1. The HR function is responsible for providing the CEO with this information and must: • • Make clear the size of the gap Break down the gap to identify specific numbers and shortages of leaders (e. marketers.2 DETERMinE THE nuMBER of LEADERS nEEDED To HiT TARGETS The CEO must understand current leadership strength and know the number of leaders needed for the company to deliver its targets and meet its key performance indicators.. the CEO needs to know the size of the gap.TAkE CHARGE OF LEADERSHIP DEVELOPMENT 1. and turnaround specialists). and the specific number of leaders required— whether functional or company-wide. demonstrating breakthrough performance) 60% of potential leaders Le ader s remaining in three years Pivotal L eader s line required p osi t io ns to deliver additiona l strategic initiati ves Lead er s required to meet business growth Demand for leaders in three years As sumptions Age >52 today Peop le with D Rating and 50% of p e op l e w i th C Rating 5% per annum 15% of pivotal line p osi t io ns 10-20% of pivot al line po si t ion s 23 . business developers. the CEO would need to revisit the strategy or contain the pace and aspirations of the company.C HOW TO MEASURE THE SIzE OF THE LEADERSHIP GAP EXAMPLE Leaders hip suppl y toda y Leadership demand in three years 242 81 161 38 123 73 242 36 48 206 Gap of ~160 50 8 Churn over 3 years 42 People in leadership pos it ions today (VPs and above) Peop le retiring within next three years Peop le not meeting performance criteria Potential Managers Leaders leaders (i.e.g. To be able to do this.

ExhIbIT 1. The model needs to create leaders who can meet both their corporate duty to drive sustainable performance and their personal duty to nurture the character and capability of their people. For GLCs.3 CREATE A LEADERSHiP MoDEL To GET THE LEADERS WHo WiLL DRivE PERfoRMAnCE The organisation needs its own tailored leadership model to articulate the types of leaders it requires to close the gap. the company. The leadership model will set out a specific set of leadership behaviours that together will create maximum value for. their leadership models should have a clear values component to ensure a culture of integrity.STRENGTHENING LEADERSHIP DEVELOPMENT 1.D LEADERSHIP MODEL: AN ExAMPLE • • • • Has a long-term vision of the business Defines and supports road map for change Integrates best practices and questions actual way of working Faces difficult decisions and re chooses optimal courses futu • • • Focuses on client-added value Aspires to be the best Sets and reaches ambitious targets Sh a pe he st Rai ses • • • Bu Integrates Group dimension in objectives and actions Collaborates with peers in the Group Acts in the interest of the Group Acts as a passionate owner Understands and accepts ambitions related to position Feels personally responsible and strives to reach objectives Is a passionate advocate and inspires trust Humility and a willingness to share achievements with all Shows integrity and possesses a sense of positive values th e ba r • • • • • • • • n • • • • Motivates team Delegates substantial responsibilities Gives clear guidance and direction Ensures even spread of workload de -wi s Coll aborates busines • • • • Takes into account interests of domains and identifies interfaces Creates partnerships with colleagues throughout the business Acts in the interest of the Group Behave s a group sa iz cit e Supports people development and invest time for coaching Ensures adequate follow-up of performance problems Develops clear and efficient communication Displays respect and listens 24 ilds great teams . and embed the desired leadership culture in.

.all dimensions of which are evaluated in the performance review.. 2000 P Senior Key strengths that contributed to performance • 3 • Progression Summary of development needs Overall performance comments • • • • • • • • • Started a business Grown l arge business appropriate in 2-3 years Cultivated senior clients Recruited stars Built organisation Financial responsibility Business plans W orked on large deals W orked with most of CC Gaps: • Starting • Recruiting • Making large • CC deal s exposure business 20 Do you know the number of leaDers you neeD to ensure you Deliver your targets anD your growth plans? 25 . It makes the required leadership behaviours transparent to all because it is linked to performance reviews....g. Implement company values and leadership approach (move to drive change) 2. ExhIbIT 1. Target non-traditional employee segments e... 10% 20% • Øljkhkjh • lkjahlkj h kjahlk Increaølkj ølakeøj h se market shares in France Fails t o uph old kjaehkjh akehrlkj Reg Kaj wr Lkawrh Reg Kaj wr Lkawrh • • • • • • Shapes the future Raises the bar Builds great teams Collaborates business-wide Behaves as a group citizen Acts as a passionate owner 1. Personal development plan Leader profile and deployment . % revenue from new products 10% 20% 10% 20% Increase market shares in France Meets Awr 0-10% 40-60% 90-100% Performance Performance • Concrete deliverables Behaviours • Collaborates business-wide • Behave as a group citizen • Acts as a passionate owner 5% x% ─ ─ e.the outcome of which drives compensation and forms the basis of the individual’s development plans and leader profile.. using no more than 3 to 6 qualities Balances the different ways leaders create value—it should address both business acumen and people skills. Implement new safety standards at Norne 2. The CEO must ensure that the model: • • • Reflects the organisation’s unique values. A good leadership model supports a high performance culture. 1 1. employees Redesign EVP for traditional markets 1 2 Behaviour M Sa mple 106911 Global Advisor BFS Europe 7 3 May... 2..TAkE CHARGE OF LEADERSHIP DEVELOPMENT Getting the leadership model right for the company is a critical part of how the CEO shapes and drives leadership development.incorporated into concrete expectations and plans Leadership performance review . rewards and personal development plans. strategy and priorities—it cannot be a generic model Is concrete and actionable—it should describe what the organisation wants and expects from its leaders.E THE MODEL DRIVES OTHER ELEMENTS OF THE LEADERSHIP SYSTEM Compensation scheme Leadership model A set of leadership behaviours based on business needs. Performance contract . matrix position results in bonus 50% Strengths Devt needs 1. Implement new organisation structure in BU 2 10% 20% Øl•jkh • kjahlk • Increase market shares in France Increaølkj ølakeøj h se market shares in France Fails to Regu Klahl Kjalwr Regu Klahl Kjalwr 2 1.g..

Executive Assistants are expected to grow into senior management roles. realised that the business environment had changed and IBM needed an ‘on demand’ culture and leadership style. they are assigned a coach and a programme manager to guide development goals. here’s what you wou l d be graded on IBM’s New Leadership Model Thinking horiz onta lly Informed judgment Embracing challenge Innovation that matters for our company and for the world Dedicatio n to ev ery c lien t ’s suc ces s Trust and personal responsibility in all relationships Strategic risktaking Earning trust Developing IBM people and community Enabling growth Passion for IBM’s future Source: Fast Company 2005. An Executive Assistant programme ensures senior leaders actively mentor high potential individuals systematically. Potential leaders are developed systematically. A clearly defined Leadership Model. 3. new CEO Sam Palmisano. The Senior Leadership Group of 300 people is actively involved in training programmes. He also makes it a point to share his experiences during various classes and education sessions at IBM’s learning centres.000 executives are held accountable to them already and are assessed against them on an annual basis. In addition to their talent development programme. Executive Assistants are considered right-hand staff for IBM’s 60 most senior executives. This group also commits to grooming talent. The IBM ‘leadership factory’ continues to be powered by four principles: 1. ExhIbIT 1. Current CEO Sam Palmisano was the Executive Assistant to former CEO. IBM believes that leadership development starts at the top. Hay Group 2.1 billion loss in 1993 to over $36 billion in gross profit on revenues of $91 billion in 2005—and reached the highest ever profit margin since 1996. rotating roles every 9–12 months. They are hand picked and given broad exposure and challenging assignments. The career coaches help these individuals to perform in their current job and progress to take on higher levels of responsibility. the Senior Leadership Group identified almost 300 talented individuals with less than 10 years experience. IBM’s senior leaders are now being trained in the new leadership qualities as rigorously as they had been under the previous model—4. In 2002.STRENGTHENING LEADERSHIP DEVELOPMENT CASE STUDY: IBM In the 1990s. Senior leadership commitment to talent development. The assessments feed the company’s succession planning process. Coaching and mentoring is cascaded deep into the organisation. including 360degree assessments. and simulations for programme participants. John Akers. 26 . IBM’s leadership model drove the development of a cadre of leaders who transformed the company from an $8. He responded by updating the IBM leadership model to ensure his team would be equipped for the challenges of the new era. To facilitate this. Each was given a sponsor and career coach or mentor.F IBM LEADERSHIP MODEL Building clien t partnerships Collaborative influence If you were a leader at IBM. The CEO holds annual leadership development meetings with each of the company’s 18 business units during which potential leaders are nominated and reviewed. 4.

ChAPTER 2 RECRUIT FUTURE LEADERS .

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and reputation and standing. then it doesn’t matter hoW hard We Work on the other stuff. Use the skills. Recruitment should set the right tone to ensure equity and appropriate diversity of employment at entry levels. This means that recruits should be chosen based on achievement and development potential. Bring marketing techniques to the employee value proposition 2. H R/ Li n Recruit eP ar tn sh e rs e P a r t n er Review and Honour h ip /L i n Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L senior level recruits for immediate needs that cannot be met by internal candidates and particularly for critical functions that are typically not as strong in GLCs. compensation. Apply sales disciplines to the recruitment process 4.. It must be competitive. and it should leverage the company’s overall brand in the marketplace. are likely to focus on entry-level HR Deploy Develop i ne r tn 29 . Develop an innovative sourcing strategy 3. 2. This will be supplemented by a smaller number of Pa GLCs.ChAPTER 2: RECRUIT FUTURE LEADERS Business Strategy and Leadership Model ip The war for leadership TalenT is won when Boards and Ceos geT personally involved. “Jack Welch’s vieW Was: our managers have to focus on people .” — GENERAL ELECTRIC SVP of HR CHuCk okoSky ers h ip recruitment of future leaders. To make this happen. contacts and experience of Boards and CEOs to source leaders. if We don’t get great people into the key Jobs in this company. with their mission to grow their own leaders. jobs. for example. Research shows that the company must demonstrate attractiveness in four main areas to have a compelling EVP: the company’s leaders.1 BRinG MARkETinG TECHniQuES To THE EMPLoyEE vALuE PRoPoSiTion The employee value proposition (EVP) is the company’s offering of financial and non-financial benefits to its recruits. distinctive. Specifically the CEO must: 1. It must be designed to attract the specific types of individuals dictated by the company’s unique leadership model. the CEO should lead the company in applying principles of marketing and operations to the recruitment process. marketing. It also means making the company’s high performance culture clear and transparent to recruits from day one..

counselled and transferred before termination or salary cut 0 Employee satisfaction/retention • ‘Best airline’ company for nine • 2004 Best Performanc e Throug h consecutive years in Fortune list Great job • High flexibility and opportunities. graduate recruitment brochures. 2001 (all other major US carriers except Alaska Airlines had significant layoffs) Attractive compensation • Profit sharing plan • Free flights to all employees • Health benefits. It is regularly voted as one of the top companies to work for based on a proposition that includes good internal opportunities.g. no layoffs policy (other than performance-related) even after September 11. e. ‘Humour Award’ • H iri ng the ‘ Ri ght Peo ple ’ – Humour tested as a major criteria during interviews – Targeted selection: personality tested • Strong sense of collaboration e. an open leadership style and a fun.A SOUTHWEST AIRLINES — A GOOD PRACTICE EMPLOYEE VALUE PROPOSITION Great leaders • CEO directly interacts with frontline employees–non-hierarchical culture • Frequent communication and informal meetings Great compan y • ‘Have fun at work’: frequent parties. frequent job rotation People Award • Less than 9% turnover rate (2002) vs 17 % i n d u st r y a v er a g e • High level of job security. ExhIbIT 2. collaborative working environment. catalogues of employee benefits—linking internal and external communication messages. e.b 0 External Brand The Freedom to Fly Value Proposition Freedom Employee Brand Freedom begins with me 1 30 . The brand was applied to billboards.g.g.STRENGTHENING LEADERSHIP DEVELOPMENT CASE STUDY: SOUTHWEST AIRLINES Southwest Airlines is recognised as an organisation with a strong employee value proposition. e.g. pilots voluntarily help with bags • Careful concern of low performers. e.g. dental and life insurance plans Source: Literature analysis. Hewitt Associates Southwest Airlines also leveraged its customer brand of ‘A Symbol of Freedom’ to create a strong employee value proposition with real impact. medical. ExhIbIT 2.

the CEO must ensure that his or her particular GLC has an EVP that distinguishes it from other companies in the eyes of their target market. but also nurtures Malaysians who are keen to contribute to the nation’s aviation sector” Young professionals with strong tertiary education (and experience in hi-tech or telecommunication industries) Dynamic and exciting environment that encourages and rewards innovation “A company that aspires to be the best.C SEGMENT TARGET AUDIENCES FOR EMPLOYEE VALUE PROPOSITIONS Target segment Students Segment needs Casual work flexibility and a basic income Distinctive value proposition “Join us and you can become a member of Debut Club. It turns part-time work into more than you ever expected. Above all. talented peers and public recognition • • How major competitors appeal to the various segments A summary of how the EVP appeals to the target segments and how it differs from competitor offerings. rapid advancement. innovation and a passion for customer satisfaction” 31 . This preparation will include the following information and insights: • The talent market segments and what appeals to each segment. who will look for benefits such as career opportunities. Intangible benefits such as organisational culture and stimulating roles are also important to leaders. There are saving schemes and discounts to boost your finances. and is driven by values that include creating a high performance cult ure. If the company doesn’t pay in the top 50 percentile then they will struggle to make other benefits attractive enough to secure future leaders. it is important. In particular.RECRUIT FUTURE LEADERS As the CEO assesses the EVP they should bear in mind that while remuneration is unlikely to be the cornerstone of a GLC’s EVP. by investing and having started our very own cadet pilot training programme that not only provides opportunity. ideas to fuel your weekends and training to kick-start your future career” Semi-skilled workers (with an interest in aviation sector) Training and secure employment “We are ever committed to develop more homegrown pilots. HR must actively support the CEO in the quest for a distinctive EVP and prepare it for CEO approval. ExhIbIT 2. it should set out a distinctive offering for future leaders—whether at entry level or senior level.

To do this.” — iDRiS JALA CEO OF MALAYSiAN AiRLiNES • • • • Get in touch with successful Malaysian leaders abroad—not only to bring them home but to head up local operations where they are now based Create secondment arrangements with international companies recognised as ‘leadership factories’ Target the growing number of international executives who wish to play consulting roles to fill critical functional or technical leadership posts for defined periods while they develop a cadre of Malaysian successors Revamp the scholarship programme to ensure the best and brightest scholars become the brightest. SO WHEN YOU START LOOKING FOR REAL TOP TALENT YOU REALLY MUST TELL YOURSELF TO BE VERY BRAVE IN SPOTTING IT . Companies renowned for winning the war for talent have stories of CEOs who go to extraordinary lengths to get the leaders they need— and these stories often inspire line managers to do the same. There is no prescribed way of sourcing leaders but approaches that GLCs can consider include: “BE HIGHLY DISCRIMINATORY IN SPOTTING TOP TALENT BECAUSE THERE ARE NOT MANY.. allowing recipients to work offshore for periods or work across other GLCs. 32 . 2.STRENGTHENING LEADERSHIP DEVELOPMENT CEOs can ensure the EVP draws on the inherent strengths of GLCs to appeal to the strong community and ethical values of talented Malaysians as well as to their national pride. THAT’S THE CEO’s ROLE. Consider: • • • The importance of being a vital part of providing national infrastructure The value of helping to fulfil the nation’s social development goals The attractiveness of achieving the status of national champions. Consideration should also be given to assigning them to corporate projects or as special officers to senior leaders to develop them quickly.2 DEvELoP An innovATivE SouRCinG STRATEGy As well as a compelling EVP. CEOs need to lead their GLCs in creating innovative approaches to sourcing their future leaders. most practical and relevant Malaysian leaders.. GLCs should consider making the scholarships more flexible.

universities etc visits. housing. e.g. Main objective • Maximise number of quality candidates in the recruitment database • Ensure best candidates are accepted • Ensure accepted candidates join organisation • Ensure smooth transition of new joiners 33 .RECRUIT FUTURE LEADERS 2. children’s schooling eg training. e.g. buddy systems • Maintain network with key recruiters. A robust recruitment process increases the quality and quantity of the pool of newcomers from which potential leaders can be drawn.D RECRUITING CAN BE MAPPED AS AN OPERATING PROCESS Recruiting.3 APPLy SALES DiSCiPLinES To THE RECRuiTMEnT PRoCESS Recruiting is most successful when it is managed with operational rigour both in its execution and in its commitment to continuous improvement. campus visits of candidates • Screen resumes • Interview candidates of candidates (based on interviews and resumes) • Timely turnaround of • Oversee and assist offer letters • Conduct recruitment • Maintain database • Negotiate terms with • Cultivate accepted candidates • Final assessment accepted candidates • Prepare for job. ExhIbIT 2. career fairs. hiring and on-boarding operation Lead generation and maintenance Key activities Assessment ‘Closing the deal’ On-boarding and deployment with relocation logistics. immigration.

interviewers phone interviews • More flexible interview timings • Use fly-in option • Enhanced EVP • More efficient administration of offers In addition. 34 .9% o f a ppl i cat i on s ) Issues that arise • Poor targeting of • Incomplete key universities • Too high talent information bar • Overly specific • Too little s cree nin g management time for scr eeni ng • Reca l i brate assessment criteria • Use senior management for intervie w panel • Interviewer a v a il a b i l it y • Ca ndidate a v a i l a b i li t y • Poor interview technique • Inefficient EVP • Inflexible negotiation communication • Unc l ear job d e sc r ip t ion Improvement initiatives • Use of print advertisements • Clearer forms • Improved sc reen ing proc ess • 3rd party screeners • Explore other • Provide more training for means of interviewing e. It is in these reviews.g. Some of the ways that the CEO can do this include: • • • Addressing the root causes of missed targets and reviewing process improvement actions Identifying line managers not playing a strong role in recruiting Exploring areas where he or she can personally contribute—for example. giving presentations at recruitment events.STRENGTHENING LEADERSHIP DEVELOPMENT ExhIbIT 2. that the CEO can push the process.E MEASURE THE RATE OF CONVERSIONS TO NEW RECRUITS Lead generation and maintenance A p pl i c a t i on s received Invitations to pre-selection meeting EXAMPLE Assessment Invitations to 1st interview Invitations to 2nd interview ‘Closing the deal’ Offers made Offers accepted Lead generation 6. finding those areas that can really drive improved recruitment yields. the CEO reviews ‘recruitment funnel’ metrics with the Head of HR. Each quarter. the most successful businesses have a clearly mapped ‘recruitment funnel’ and use rigorous metrics to measure the rate at which initial contacts convert to job offers and then to new recruits.265 756 204 ~ 85 72 56 Target yields: Actual yields: 30% 12% 40% 27% 55% 42% 85% 85% 90% 78% (corresponds to 0. meeting with candidates. or giving interviews to a widely-read newspaper to raise the organisation’s profile at a strategic time in the recruitment cycle.

When it comes to the most senior roles. Companies renowned for winning the war for talent have stories of CEOs who go to extraordinary lengths to get the leaders they need: these stories often inspire line managers to do the same. Board members should also get involved. Do you have a personal plan for how anD when you coulD recruit them? 35 .RECRUIT FUTURE LEADERS 2. The CEO should be ready to call on the Chairperson and other Board members to meet with a recruit and help secure them. Do you know three leaDers outsiDe your company who coulD transform its performance? if so. ConTACTS AnD EXPERiEnCE of BoARDS AnD CEoS To SouRCE LEADERS The CEO should play a personal role in supporting HR and line recruitment efforts to hire talented individuals with leadership potential.4 uSE THE SkiLLS.

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ChAPTER 3 REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE .

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• Spend time with direct reports. 3.1 PRioRiTiSE inDiviDuAL PERfoRMAnCE REviEWS To iDEnTify LEADERSHiP PoTEnTiAL Individual performance review meetings are critical—they ensure potential leaders can be identified early and that current leaders at all levels are equipped to deliver the relevant business goals and targets. H R/ Li n eP ip Recruit ar tn sh e rs Review and Honour h ip /L i n Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L HR Deploy i ne Publicly honouring excellence and consistency in performance reviews is also critical to GLCs moving towards being performance-orientated organisations. Prioritise individual performance reviews to identify leadership potential 2. Make individual performance improvement plans relevant for leaders 3. Performance reviews are opportunities for GLCs to uncover ‘hidden gems’—exceptional people with the qualities required for real leadership. The hallmarks of high performing organisations are robust performance reviews. the Blue Book on Intensifying Performance Management sets out the requirements for reviewing business and individual performance. This chapter of the Orange Book builds on the Blue Book: it emphasises the CEO’s important role in identifying leadership potential and improving the individual performance of leaders. transparent standards and recognising great performance at all levels. Reward high performance and manage underperformance.ChAPTER 3: REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE Business Strategy and Leadership Model e P a r t n er Great leaders enerGise their orGanisation by holdinG people to hiGher standards of performance and rewardinG those individuals and teams that embody excellence. These meetings should be held separately from the business performance review and conducted every 6 months. Finding these people is central to GLCs developing leaders from within. or visit every business unit. Pa Develop r tn ers h ip 39 . To set the standard for reviews throughout the organisation. In the context of the GLC Transformation Programme. The CEO should make the following three steps a key part of his or her role: 1. the CEO should abide by three principles: • Involve the entire senior leadership team: • Demonstrate the importance of individual performance reviews by personally chairing the evaluation of senior leaders. to work through the reviews of the top three levels in the organisation.

including personal knowledge and 360-degree assessments. Reviews should look at performance and potential. Once ‘hidden gems’ are found. 40 . Encourage a full discussion to deepen leaders’ understanding of ‘what good looks like’ in the company. All leaders at all levels of the organisation should have a performance improvement plan and the CEO should monitor whether this practice is in place and effective. Too many personal reviews suffer from incomplete or unhelpful feedback.2 MAkE inDiviDuAL PERfoRMAnCE iMPRovEMEnT PLAnS RELEvAnT foR LEADERS An important end product from the performance review is a performance improvement plan—a plan that will help the leader meet his or her targets in the next reporting cycle.STRENGTHENING LEADERSHIP DEVELOPMENT • Make the reviews robust to test leadership performance. When deployment decisions are made. • Ensure review process focuses on potential as well as performance to identify ‘hidden gems’ at all levels of the organisation. Finding these ‘hidden gems’ is not easy but it can be done (see How to: Uncover ‘Hidden Gems’ at the end of this chapter). Avoid superficial assessments by ensuring evaluations are calibrated with input from multiple sources. • Give feedback immediately. • Make sure the responsibility to improve performance is cascaded through direct reports. ‘improve financial literacy by reviewing financial plans with the Finance Director’ or ‘develop an entrepreneurial approach by working with the marketing team on a new product launch’. The CEO can test this by asking questions about leaders’ improvement plans in the performance reviews of his or her direct reports. The purpose of the performance improvement plan is to codify specific actions the leader must take to continue to develop and improve in the immediate future. Improvement plans should contain specific recommendations—for example. • Agree to provide personal support. It is important to note that it can often take several performance review cycles before an organisation achieves consistency in reviewing performance and potential against their leadership model. are: • Make plans specific. moving them should be a priority. Best practices to adopt to ensure the performance improvement plan is most effective. 3. The CEO should agree with top leaders the level of personal assistance they will give. such as frequent project reviews with an individual with tight deadlines or introducing an influential connection to someone trying to bring in a major sale but who has limited personal networks. a plan should be created to move them into a role where they can perform. The CEO needs to have one-to-one conversations with direct reports and provide feedback that meets the following criteria: • Is honest and actionable • Incorporates calibrated observations • Acknowledges strengths and successes as well as improvement recommendations. Particular attention should be paid to finding good performers with high potential.

and following through with.b WHAT TO LOOk FOR TO IDENTIFY ‘HIDDEN GEMS’ Invisible individuals Deliberately hidden individuals Too new individuals Negatively branded individuals Maliciously rated individuals Cultural misfits • Employees who are out of sight because of their remote location and distance from the management group • Employees who might be hidden by a manager who does not want the person ‘poached’ by other departments • Employees who might have only recently joined the company or who have entered the management tiers for the first time • Employees who might have had a poor review in the past or have been sidelined in the organisation • Employees who might have made a mistake or been given a low ranking because of personal conflicts rather than for actual performance issues • Employees who might not have been given the opportunity to shine because they don’t easily ‘fit’ with the culture Forgotten individuals • Employees who might have fallen through the cracks because of a poor staffing match or an introverted personality 41 .A CONDUCT EFFECTIVE PERFORMANCE REVIEWS THAT INVOLVE SENIOR LEADERS Facilitator CEO • Investigates cases to look • for ‘hidden gems’ Holds senior leaders accountable for leadership development • Ensures pre-meeting • preparation is executed and supports presenters in the process Captures group’s thoughts on individuals’ development Senior leaders • Prepare and present individual • Challenge and probe each others’ • Help provide business context and • opportunities Commit to ‘owning’. outcomes presentations cases Meeting details • 15 minutes per candidate • Off-site location (1–2 days) • Occurs before financial planning process End products • Agreed action steps for individual cases • Promotions and recognition • Consequences ExhIbIT 3.REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE HOW TO: UNCOVERING POTENTIAL LEADERS ExhIbIT 3.

Whilst difficult in a culture where loyalty and community is highly valued. in addition. It structures its compensation and reward scheme to drive individual effort. action should be taken to move the individual out of the organisation. is consistent with a high performance culture. This helps to reinforce and set clear benchmarks to the entire organisation for ‘what good looks like’. But if these steps fail to achieve a positive outcome. Acknowledge high performance in the individual’s review session and outside of it. Courageously deal with underperformance at senior levels. A critical but often overlooked aspect of this practice is also to deal courageously with underperformance. promote teamwork. 2003 and 2005. CASE STUDY: FEDEx MALAYSIA—HONOURING HIGH PERFORMERS fedEx Malaysia places high emphasis on recognising and honouring high performers. Great CEOs address underperformance with clear actions: they give honest feedback and provide development support. this approach is consistent with a developmental meritocracy. profitability and the spirit of teamwork FedEx was named one of Malaysia’s top ten best employers in a ‘Best Employers in Malaysia’ study for 2001. affect results and create dissatisfaction among high performers. Specifically.STRENGTHENING LEADERSHIP DEVELOPMENT 3. and is consistent with an organisation that makes its performance criteria clear from the outset. Ensure that different aspects of performance are recognised to further bring the leadership model to life. particularly at senior levels. Underperformers. Have a highly differentiated scheme that sets out very clearly what high performance is. If an individual has two consecutive poor performance reviews. • • Link high rewards to high performance in a clear and transparent manner. he or she should be placed in another role where they can contribute in a more meaningful way. stimulate new ideas and encourage outstanding performance. and what the rewards for achieving it are.3 REWARD HiGH PERfoRMAnCE AnD MAnAGE unDERPERfoRMAnCE CEOs can promote positive role models and raise company-wide performance standards by honouring excellence and rewarding high performance. it gives special awards to publicly honour employees and celebrate their success among their peers: Bravo Zulu—award for outstanding performance beyond normal job expectations Purple Promise Award—for exceptional customer service Humanitarian Award—recognition for human welfare above and beyond work or community standards Five Star Award—highest award for enhancing service. the CEO must be able and prepared to: • Publicly acknowledge high performance. DO YOU SPEND AT LEAST 1 HOUR WITH EACH OF YOUR DIRECT REPORTS EVERY QUARTER GIVING THEM PERSONAL FEEDBACk AND COACHING ABOUT HOW THEY CAN BE MORE EFFECTIVE LEADERS? 42 .

ChAPTER 4 DEPLOY STRATEGICALLY TO DEVELOP LEADERS .

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Institutionalise an effective strategic deployment process H R/ Li n eP ip Recruit ar e Part ne Review and Honour tn er shi p /L in Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L HR Deploy Develop i ne P 2. DElivEriNg highEr pErfOrmaNCE aND aCCElEraTiNg DEvElOpmENT. the CEO’s direct reports.A TEST THAT PIVOTAL POSITIONS ARE FILLED BY TOP LEADERS EXAMPLE Identification of pivotal positions CEO S p ecial Officer • High degree of business impact – Cost – Growth – Capital CFO Chie f Risk Officer Head of HR Head of Retail Head of Business Branches • Overall strategic F in a n ci a l Controller Treasurer Sales Op er ati o ns Finance HR Business Unit Head impact – Special market insight – Regulatory or technological knowledge – High market scarcity Head of Marketi n g Head of Northern network Employee potential Gold standard Position Pivotal Non pivotal Successors and readiness Now In 1 year In 2 years Head of Mobile Mortgage Managers Head of Southern Network High potential Low potential Head of Call Centres Head of Offshore Network ar tn e rs h i p 45 . GLCs can deliver better business results and broaden the skills. a multi-line global manufacturing business might have 100 pivotal positions.ChAPTER 4: DEPLOY STRATEGICALLY TO DEVELOP LEADERS Business Strategy and Leadership Model rsh CEOs NEED TO skilfully maTCh ThEir lEaDErs TO ThEir mOsT impOrTaNT rOlEs. 4. Take bold but measured risks to gain maximum benefit from the deployment process. the CEO must take two important steps: 1. ExhIbIT 4. but it is vital that the HR function provides essential support. but are not limited to. To deploy their talent strategically. At the other end of the spectrum. Specifically. The number of pivotal positions in any company will vary. experiences and satisfaction of talented leaders through strategic deployment—a critical tool for organisations focused on ‘growing their own’ leaders.1 inSTiTuTionALiSE An EffECTivE STRATEGiC DEPLoyMEnT PRoCESS The CEO must lead the deployment process. A single-line domestic manufacturing business might have 10 to 15 pivotal positions whereas a financial services business of a similar scale could have 20 to 30 pivotal positions. Positions with the potential to create or destroy the most value for the company are considered to be ‘pivotal positions’. the CEO needs to: • Identify positions that create value in the company. These positions include.

• Create broad leadership career paths that are clear to the whole organisation. Rather than be prescriptive. THE BUSINESS UNIT AND SUCCESSION PLANNING Leaders Matching Jobs 2 Decision maker (CEO) Concludes (and limits) discussions 3 J o b P r e s e n te r (Divisional leader) Presents the job and its key requirements 4 Other divisional leaders Presents challenge in the debate 1 Facilitator • Guides and controls the discussions • Encourages rich d i sc u s s i on s b y s e e k i n g different views. ‘Hidden gems’ discovered in the performance review process should feature in this pool as priority candidates for redeployment. the CEO must have access to current and accurate career history data and development plans. To ensure equity and employment diversity. The CEO should ‘own’ this pool and for each individual in the pool. • Chair the job matching forum where deployment decisions will be made. and suggesting alternative candidates for specific opportunities 5 Ca ndidate Prese nter (Divisional leader or Head of HR) • Presents proposed candidates • Co nsiders fit with candidate’s personal development plan and interest in the position 6 Organiser • Records discussion and clarifies actions agreed • Supports Facilitator 46 . include equal numbers of high potentials and high performers. ExhIbIT 4.STRENGTHENING LEADERSHIP DEVELOPMENT • Decide on the size of the ‘pool’ to be actively managed. including ‘operating in more than one business within the group’ and ‘having an influential corporate role with exposure to the Board and Executive Committee’. This forum should be held as close to the business planning session as possible so that it reflects the needs of the business.b LEADERS ARE MATCHED TO JOBS IN A DEPLOYMENT DISCUSSION THAT ACHIEVES SOLUTIONS IN THE INTERESTS OF INDIVIDUALS. the career paths should make transparent the breadth of experiences and expertise that talented individuals must acquire before they will be promoted to senior leadership. What Leaders do One international resources group published a document for potential leaders that listed nine mandatory experiences. highlight trade-offs. The document also listed the types of knowledge required of potential leaders and included the mastery of a professional discipline and regular external learning such as MBA-level education.

break down otherwise strong organisational silos and increase the spread of good practices. these risks can be managed by ensuring that when individuals move into new roles. what should be the positive acknowledgement of a top employee’s value becomes a negative experience. for example home relocation. But with the right process in place. Bold but measured deployment moves. based on a clear view of a person’s potential. can be used to rectify imbalances in employment diversity and equity throughout a GLC. When GLCs make geographic moves they should give careful attention to the leader’s family circumstances. 4. challenge and test them ‘at the deep end’. schooling and spouse employment. Successful transitions require processes that can ensure: • Coordinated communications—to provide consistent and unambiguous information about the move or relocation and changes to pay and conditions • Just-in-time training for the role—to address any critical skill or knowledge gaps. promote the most exceptional high potential leaders two levels up in the organisation instead of one — to stretch. GE in Malaysia ensures its leaders rotate across geographies and industries. As a result. Cross-company moves broaden leadership capabilities. such as a turnaround or merger—different functions.DEPLOY STRATEGICALLY TO DEVELOP LEADERS • Design processes to streamline employee transitions to new roles. This could include learning a new language or attending short best practice courses in a specific functional area • New leader assimilation—to provide a facilitated session that encourages questions and allows the leadership team to share perspectives on what the new leader should focus on as a priority • Transitional support—to provide information and support that will lessen the impact on the leader’s family. Organisations such as Shell demand their senior leaders have a rich spread of such experiences and expose them to different operational contexts. Good intentions can come undone in many companies because their supporting processes are ad hoc or non-existent.2 TAkE BoLD BuT MEASuRED RiSkS To GAin MAXiMuM BEnEfiT fRoM THE DEPLoyMEnT PRoCESS There will always be risks in making bold deployment moves. 47 . • Encourage cross-company experience. For example. different businesses and different countries. Leadership is behaviour and action. The CEO can and should take four kinds of risks that will significantly impact the quality of the business outcomes and the company’s future health: “Leadership as an organisation is the sum totaL of each act of each person. GLCs should be ready to help their spouses find equivalent jobs and their children school placements. their team members have complementary skills and that additional senior coaching is provided. the accoLades for wipro’s Leadership are accoLades for each wiproite’s contribution to what the company is today. not position and personaLity. For example.” — azim premji chairman of wipro • Move leaders into more challenging roles.

use the deployment forum to identify less critical roles where these people can be gainfully employed and potentially re-energised.STRENGTHENING LEADERSHIP DEVELOPMENT • Move people who have reached their potential. Do you have a clear point of view on what the next role shoulD be for each executive reporting to your Direct reports. Maintaining a developmental meritocracy is dependent on promoting people based on potential but moving them down or into less critical roles if they do not perform to expectations within 1 year. The CEO must ensure that no pivotal position is blocked by an employee who has reached the limit of their potential. out of pivotal roles. • Promote on potential but make this contingent on performance. When individuals reach a plateau. This is never easy but it is vital. to maximise their Development anD the performance of the business? 48 .

esannedopment rolpport completed rs pl /devel time in su e) T ime in current role C ourses/dev elopment support completed (v deals busi ness Mentor(s) • Fina• cialcrre•itporns•aSilttarrgedaa siidane ss perience rpiriofile: n Re u G own lsa t e bu dnei ts exCC • Rec u Gaps s ed stbr y C n bus s e • i i t ng • Starting Previoumexperurncet role (vs.D .5y [4.5y [3.le Progression 1 • ea 1 P Sy. and because it will advance their development. who will chair the meeting and endorse all moves • Senior executives — including those who will be accountable for accepting leaders into their business or function as well as those who are the current stewards of leaders and who will advise candidates of their next post • HR leaders. ti Overall rating si i Region & completed by Name StrengtBs hU P SeniorDate Completed • Progression 5 10691 s r EuropeRegion 7 3 y. e. 2000 • 106enEmp 3GlobalPodvtson Title Pot911 al: No.3] NN 0. – Strong communication skills – Operational experience – Willingness to relocate internationally 49 .5y [4. 9 GloDaon Topsor nStreedsBs S bevel itleme t n ength F Europe 7 Overall rating 3 May. A si i i o r BFS BU EuropRegion e 7 0 Overall rating 3 May.5. In all decisions made. Creation of new pivotal leadership roles. who will support the transfer of people from one business role to another.2] NN 2y [3.g.3.5] [Delivery/behaviour/ potential] ratings The CEO and senior executives personally know the people being matched and are not just relying on HR data—the individual’s passions and views are genuinely factored into the decision making and people are not just placed in roles ‘for the good of the company’. ExhIbIT 4. Position Title BU Region S co or 106911 Global Advi sor BFS Europe 7 3 MaDa2e 00ompleted y.3] NN 5y [3.3] NN 1. NN 1y [3. planned time in role) i in ri e c t t t • C s v Geo neni er c i i us n T • W ork• d on ncige rdealoul•ti•balGry wsnlalraoge lsensis• eCC • Making largenGssps:: Previousimxpecuernnte ole (vs. • Line management positions • Leaders of new projects • Other pivotal roles at more junior levels 2. 2000 M Sampleme propriate 1EmpGlobal Adviitoon T itle BFS BU Overall rating Ma& completed by Na ap • Potential: 3 No..5y [2. 2000 n 2.5. 2tmC oetpleteby Nam r & co00plm ed d Da e 5 3 appropriatte t al e P Seniompleted by r • N me Emp 1 Positi l Advi BU R egion & co 1 2 3 4 5 2 4 MaSiamp3 yPors n1i06: 3No. Pos eivelopment needs D P SeniorDate Completed 4 in 2-3 years Strengths • M SamplePeogression 1Emp NoobalPodvtson Title 1069 1 Gl .2] • • Development opportunities provided. t 0 C hU & ni or Emp No.4.5.C THE JOB MATCHING FORUM USES INFORMATION FROM PERFORMANCE REVIEWS TO IDENTIFY THE SUPPLY OF LEADERS. planned time in role) e Finalar al esp snsi i itrow gr bu bne s ss a busi eGaps • Buil t organisatied ars exposure • s c t on r • ntaa i g g Prevvous exxprernee ce Pr e i iou e pe ie i c n • W ork• d wstih esosplofRe• ruiCullttiistaeed eneor iclir ntlsents deals • Rec• uitiSStrtritnng e Bu i n m s t anCC • C u vatt d s s i n o e c i • Financialuriesponsiibiaty li l us nns • CC • Makingbaruiseeess bgi ga • W orked on •arge•t•oRlecnusieeidtnrtars l B l derR ecrrut td s a s a s i t os d exposure eal•s RRcruuiting • e ecr it ng 20 • Busin• ssnaanis res e F pl nc • CC • • MMkikiggaagge a a n n l lr r e u a a ni a • W orked wi th miost• oBaliilCorgpoinasbnlion C • fBu ltt orgn s stiioitity d exposudeaals re els • W orked on ilnege pleals d • Bus •ar snanc inlsespsps inistiy ility • • CC FFs anai alr re on ob li b i in ca CC 20 • W orked wi•rh edoon easCe nseals f p exoss r r • W ot • musiitn ossg Cld ns expp ouuee B s • k B us nle r s la a p M Sample Name Delivery Delivery Delivery Delivery Performance C.2] NN 4y [3. have participants physically move the names of people around an organisation chart and problem solve how they will back-fill the gaps to avoid the common misconception that decisions about career moves are made by the HR function in back rooms. Leadership supply Matching Leadership opportunities Performance Performance Performance BU 1 5 BU 2 5 4 BU3 3 4 BU 4 5 1 2 1 1 4 3 5 22 3 3 4 Alignment 11 2 2 3 4 5 Alignment 11 2 3 4 5 Alignment 1 3 4 2 Potential Position Title BU Region Overall rating Date Completed & completed by Corporate overview of deployable leaders . planned time in role) T i s e in c ietrer(s) • Busi• essilplornsuntii• attieown nioge lbusis eexposureakls g largeness n Bu t • ga l s a od se lar r c ient n ss • M in busi a C v Gr n Men o n tedndid ts nessi eac en ofi profile • StarCana ibaatiexexrdenrie prcele Gaps: C a d du e e pe pe a ruial d i • W or• edinanlciRlercdetonssbatiey senior clients• CC • RecruitiStg rting k F on •argeesp estii talrtsd • na T i ex i eeeunrres) e Previousme pnMinttor(s )t role (vs. e.4.. 2 or 7 3 Maeni000 106911 Global A dvis or BFS Eur ope M S ample 2 1 ehaviours 5 B 3 Strengths appr• protte tial: 3 o P i a en P S eni or o 1 2 3 4 5 5 4 Dlop lopm support c 2 in 2-• PeogsessiCn urses/deveevement ent needsompleted 3 y r ar r o 1 Strengths • Poe 3 appropriattential: 3 2 Behaviours 4 1 Strengt hs 2 3 4 55 in 2-3•yPars•resoton tise: 3 eveevement ent needs ompleted erog P si en r al s/d D lop lopm support c Cou 1rie2 ce pr3 file 5 1 Candidate expe n o appropriate 4 Pot ential: 3 B o 2 1 ehavi2 urs 4 Development needs e tr rrr in M-• nyoo(sessi on 2•3 Peags) 4 n • Started a business 11 21 3 33 5 p ogr p s ote • aPrproesriiaCourses/development support completed Candidate experience profile a p crae T imi npn-3pyrrarst role (vs.2] NN 5y [3.. ExhIbIT 4.5. planned time in role) 4 5 1 • Gr o sn l s Courses/development support completed • Recruited wtararge business •2 Re3 ru taps: c G i ur Mentor(s) 2 Behaviiong s S d s ed d d e n e • B M v our a e Previous experience rganisationtenio b la e s xp 2 • e e k ng fls r r i • Buil t•oCultiv•atetarCanaricuistintess erienchapiroSitlagteng Cous.level 3 Name Current role Past roles Yr s in Rating: current Delivery position/ total planned 17 4 mon t hs/ 2 4.t200ompleted 106911 Global Advi sor BFS Europe 7 Overall rating P& enimpleted by Emp No. • Need for rotation of current job holder eg to develop skills or to refresh the business • Promotion of current job holder • Change in skill requirements of job Organisational chart mapping leadership opportunities in pivotal roles NN 2. planned time in ro le) • Cul v M rce r c (n no ess • M • B l n gaC • Grown large businexposure aking large ss • W or• eduwinessopttaorfsecriuiatid n tarSttarrttedd aubiussness deals busineGaps: k B s th muisl•oR Cn s te o • • S a e a b s nei s s d • Recrui•inStarting t g T ime e n currrenr role (vs.3. Azm a n Head of Manager 2 4 mo nt hs 3 2 2 • W or• ed orikhddon n tlgorfgCaldeals Wo t • k W wrke mo lsr a de C e oa e e s •• W orked with most of CC W orked with most of CC 20 20 20 • The format is highly visual and interactive—for example. Performance review of individuals in existing pivotal roles. Position Title StrengtBs Region Overall rating P Secompleted by Date Completed M Sample A i or BFS Europe 7 3 May.3 6 mon t hs Rating: Identified Rating: Behavior Potential strengths Development Move now/ 6m/1 yr/ needs later 6 mo nt hs1year Performance 2 3 4 5 A Mei Yee Head of Sales.g.2 entyer(s) M 3 o ars 1 1 Courses/development support completed e Previous experience • Culti• attartseaa diusientss perieBehav•oSitlrsting v Sed ednn b clane s x 2 nce pr of ar 1 i u3 C i or d i t e e s 1 2 busine4s 5 T ime in current role (vs. BU1 Leader Proj ect X Sales manager BU2 Manager asset Y 3 4 Problem-solving Exposure to international environment Maintaining professional leadership behaviour under stress Stakeholder relationship management Coaching Prioritisation Working in a turnaround/ performance improveme n t situation Name M Sample Name Emp No.. planned vielopmeoleneeds e i2 ro uiete n De t me in r nt ) 2 a o 3 4 5 • Grown large business Beh1 vi22urs Gaps: 2 Development needs in.g.5.DEPLOY STRATEGICALLY TO DEVELOP LEADERS HOW TO: GOOD PRACTICE IN JOB MATCHING Job matching forums are most effective when: • All decision makers are present: • The CEO. e.5] Open/available opportunity in next 3 months Opportunity available within 1–2 yrs Name of existing leader: NN Years in position 1. AnD MATCHES THEM To PivoTAL RoLES Leadership supply Matching Leadership opportunities • O p p o rt u ni t i es i d e n t i f i e d from 1. – International exposure – T urnaround challenge + • Requirements for available positions.3 hire – led 36 months similar unit at OtherCo 4 4 Later 1 Delivery Delivery 5 4 3 2 1 Da e C 0 3 May.5. 5 B Riwa n Head of Op er ati o ns BU1 External 5 mo nt hs / 2 4.g. e. ensure a balance is achieved between putting people in a role because it will drive immediate performance.3] NN 2y [3.

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ChAPTER 5 DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT .

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• A substantial corporate investment. H R/ Li n sh ip Recruit eP a Review and Honour r tn e rs h ip Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L /L i n Deploy Develop HR i ne “We attract and recruit the finest people in the World. have HR check the feedback to test for impact. After a pilot course. Cascade the development commitment deep into the organisation. which might include. To do this. must ensure there is substantial corporate investment in their leadership development programme.ChAPTER 5: DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT Business Strategy and Leadership Model e P a r t ner Great orGanisations become ‘leadership factories’. the CEO must make a substantial corporate and personal investment. The CEO must invest the time required to shape the leadership programme’s design and delivery. Prioritise the development of CEO successors 4. They should test that the investment delivers results and they should expect to see year-on-year improvement in the quality of the programme. The CEO. • A personal investment. the growth agenda or the challenges of operating in the global market Pa r tn e rsh ip 53 . Great ceos know that this personal activity is best led by them. The CEO can add value in four ways: 1. They must be role models demonstrating the company’s most highly valued leadership qualities—the qualities set out in their unique leadership model. CEOs and their senior executive teams must invest time and effort to connect with their potential leaders.” — procter & gamble 5. Coach and develop direct reports at every opportunity 3. the CEO needs to: • Spend time to ensure HR understands the strategic issues for leaders. promoting and reWarding people Without regard to any difference unrelated to performance. This role cannot be outsourced to the HR function.1 invEST in A HiGH iMPACT LEADERSHiP DEvELoPMEnT PRoGRAMME For such a programme to be successful. together with the Board. We act on the conviction that the men and Women of procter & gamble Will alWays be our most important asset. for example. Invest in a high impact leadership development programme 2. We build our organisation from Within. Specifically. workinG at all levels to build leadership capability. GLCs can unlock leadership potential and build the capabilities needed to ensure they can meet their business goals and national objectives.

2 CoACH AnD DEvELoP DiRECT REPoRTS AT EvERy oPPoRTuniTy The CEO must take every opportunity to build individual capabilities in his or her direct reports and successors. knowledge or behavioural gaps. Every six months. In the second model. Above all. that leaders have relative to the requirements of the GLC’s specific business plan. Design exercises that draw on the unique experiences of other leaders. the ‘horse race’. Develop the habit of giving immediate coaching to direct reports whenever the opportunity arises. This means providing regular. employee briefing sessions and customer meetings all provide opportunities for the CEO to observe leaders in action and to coach for higher performance. you have to sacrifice yourself first for a big cause before you can ask others to do the same ” — narayana murthy chairman of infosys • Involve current leaders to pass on valuable knowledge from one generation to the next. a ‘relay race’ involves the Board selecting one successor and ensuring that the current CEO gradually grooms the heir to ensure that he or she will have the necessary knowledge and skills to take over successfully. The leadership development programme will not be effective if the organisation cannot see that the CEO personally sponsors the programme. • Follow-up with structured discussions. 5.STRENGTHENING LEADERSHIP DEVELOPMENT • Ensure HR tests the final curriculum to address the major skill. broadly.3 PRioRiTiSE THE DEvELoPMEnT of CEo SuCCESSoRS The Board will select the successor to the CEO and decide which model will be used to groom that successor. to make the coaching relevant and structured. meet with each individual for at least 1 hour to review progress against their personal development plan and develop new actionable and measurable personal development goals. There are. several candidates from within the organisation compete and the Board selects the most successful candidate based on agreed criteria. including recent appraisal information and development actions. GE’s Jack Welch famously presided over every leadership course at Crotonville other than when he was in hospital having a heart operation. The other two models involve competition between several candidates. 54 . The HR function can prepare up-to-date material for these meetings. make sure it is not all in the classroom—good leadership programmes turn leaders’ actual jobs into their field work. three main types of CEO succession models. The first model. Learnings should be applied ‘on-the-job’ for sustainable impact “the sign of a good leader is someone who knows how to retreat into the background while encouraging their successor to become more successful in their job. Senior management workshops. informal feedback and following it up with structured discussions: • Build capability through immediate feedback. for example surviving the Asian financial crisis • Just be there. 5.

Ensure development is uniquely tailored to prepare successors for the role. handpicked by Board Welch ‘Contenders’ Immelt Candidate selected from several contenders within the organisation Morrison ‘Hound and hare’ Conant Candidate selected from larger pool within and outside the organisation. the ‘greyhound race’. the pool from which candidates are selected is wider and will include external candidates in addition to internal ones. the CEO can help to develop these individuals in two ways: • • Prioritise successors in the development system. and identified potential internal successors. Exhibit 5. requiring a different style of leader.DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT In the third model. This model is typically only used when there is a distinct leadership gap within the company or when the company’s performance or strategy has changed dramatically. ensure potential CEOs are deployed appropriately.A CEO SUCCESSION MODELS Daft ‘Passing the baton’ Isdell One candidate from internal organisation. typically with more formal selection process Having selected the succession model. CEO successors should receive special support to address any unique personal development needs that could hamper their ability to carry out the role. receive formal development and training and are exposed to Board members. For example. 55 .

Do you play a role in every senior leaDership Development programme for your company? 56 . Publicly acknowledge leaders who successfully develop others. Statements such as the following can be used in surveys to test the depth of coaching: • My manager provides constructive feedback that helps me to do my job better • Coaching is a regular part of the day-to-day activity within the organisation • Managers are recognised and rewarded for their commitment to developing others Ask the HR function to highlight which CEO’s direct reports are rated ‘above average’ and ‘below average’ in developing others. the CEO must enlist other senior leaders and line managers to share the responsibility. Teams hold a number of ‘post mortem’ sessions after key meetings to assess whether commercial objectives were met. Develop a method of mentoring future leaders found throughout the organisation: • Have the top team identify talented individuals with less than 10 years experience. and how individuals performed in their designated roles. and help to uncover potential leaders. allowing people to reflect on their actual experiences. Have the HR function review upward appraisals and employee opinion surveys to determine how far coaching is being cascaded into the organisation. They evaluate multiple aspects.4 CASCADE THE DEvELoPMEnT CoMMiTMEnT DEEP inTo THE oRGAniSATion Because of the personal nature of development. The ‘post mortem’ debriefs are essentially a real-time 360-degree feedback process. CEOs can take two practical actions: • Be systematic about mentoring high potential individuals. often in complex situations.STRENGTHENING LEADERSHIP DEVELOPMENT 5. Assign high potential employees to 12–18 month development roles alongside senior leaders. What Leaders do HSBC has formalised immediate feedback and coaching for its leaders. To do this. • Test the depth of coaching and mentoring in the organisation. Assign each individual to a senior leader sponsor who will help them chart a path within the organisation • Establish a special officers programme.

middle managers and senior executives. Control your Destiny (Tichy/Sherman) 57 .DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT CASE STUDY: GE Companies such as GE use multi-level leadership development to embed a leadership culture. At every level. at different leadership levels. real-life issues • On-site • Potential General Managers executives • Business and leadership in a global competitive environment • Off-site business projects • Tangible endproducts/decisions education/discussions • Senior • Management in a multifunctional company • Strong global outlook 3 • Impact • Senior Programme middle managers • Functional expert executive skills • Mixed on-/off-site • Formal • Benchmarking project • Industry experts as faculty • Competitor benchmarking • Mixed functional teams visits training/discussions 2 • Experienced Managers Development • Experienced junior executives • Initiating and facilitating change • On-site courses • Regional differentiation • Mainly peer discussions • On-site courses • Regional differentiation • Strong focus on open discussion • New Managers Development • Fast-track junior executives (pro-motions within 1 year of hiring) level junior executives • Leadership concepts • Creating high performance • GE business in a regional context teams 1 • Corporate Entry Leadership Conference • 2000 entry- • GE’s global strategy • Company values • Markets. joining evening debates with junior executives at the Corporate Entry Leadership Conference.b GE FOCUSES HEAVILY ON FORMAL TRAINING PROGRAMMES—MANY OF WHICH ARE OFFERED AT CROTONVILLE Programme Participants Focus Delivery 4 • Corporate • (Potential) Officer Top Workshops executives • Executive Development • Potential • Business Top senior Development • Management executives Development • Resolution of challenging. ExhIbIT 5. This style allows the Company to reflect the challenges faced. All leaders in GE participate—including Malaysian leaders. open issues • 20–30 officers • Irregular schedule • Open ‘work-out’ style discussion • Managing the multifunctional • Business and leadership under global competition firm • 4–week programmes • Strong action orientation • Significant. experienced junior executives. and styles required. the formal programmes focused on issues that could best equip GE employees with skills and expertise applicable to their respective positions. GE developed formal programmes for all levels of the organisation—entry-level executives. The CEO is actively involved in these training programmes. groups of • Presentations from • Evening ‘work-out’ debate with CEO businesses 100 Source: Corporate University Review. competitors • 3-day on-site.

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DEVELOP LEADERSHIP ChAPTER 6 ENGAGE AND RETAIN LEADERS 59 .

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For GLCs this is particularly important—private companies and multinationals will be waiting in the wings to capitalise on the investment. 6. Build an organisation that is a work community. CEOs need to be able to retain them to reap the benefits. noT juST A CoMPAny Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L /L i n Deploy Develop HR i ne high level of professionalism and goodwill in the event that an individual decides to move on. This involves three Malaysian leaders care for their community. not just a company 2. sh ip H R/ Li n Recruit eP a e P a r t ner Review and Honour r tn e rs h ip Having put time and effort into developing their leaders. Keep the door open to leaders who leave. Hold on to the most valuable leaders 3. • Encourage networking within the company: particularly in areas of interest to talented individuals and that benefit the company. But the GLC Board and CEO can foster loyalty in their talented leaders—and ensure a interrelated steps: 1. Boards and CEOs can create an organisation that is a vital part of every leader’s personal community. ExhIbIT 6.1 BuiLD An oRGAniSATion THAT iS A WoRk CoMMuniTy. are loyal to it.ChAPTER 6: ENGAGE AND RETAIN LEADERS Business Strategy and Leadership Model Today’s war for leadership TalenT is as much abouT reTaining leaders as iT is abouT engaging Them. and wish to serve it to the best of their ability.A HOW COMPANIES INCREASE THEIR SENSE OF COMMUNITY Companies use various methods to build a sense of community within the organisation Coffee-talk (Kopitiam) sessions are held where employees of all levels are selected randomly to interact with the CEO Creates a strong cadre of international managers who develop formal and informal networks during exclusive training programmes and events Knowledge workers publish documents on an internal knowledge platform and are rewarded for doing so Exclusive ‘interchange’ conference where high performing employees present ideas and learnings All employees encouraged to launch and lead a project with like-minded colleagues who volunteer to participate during their free time ‘Make a friend @ Cisco’ scheme develops links between current and potential employees who share mutual interests Encourages employees to leverage their informal networks to find their next job role Pa r tn e rsh ip 61 .

The CEO’s role in managing this is to: • Detect early signs of dissatisfaction. The HR function can support this by training executives to identify the signs and to know what steps to take to turn the situation around. For example. change the coach or mentor. there will be times when talented leaders consider leaving. • Intervene early to keep the best leaders.. or being flexible in working conditions or benefits. It is worth getting to the heart of the best leaders’ dissatisfaction and then creatively shape a solution to allow them to stay. • Strategically match leaders with the right mentors to develop relationships based on mutual commitment. (See Exhibit 6. To make this work. changing reporting lines. ask them to present material at Board meetings.STRENGTHENING LEADERSHIP DEVELOPMENT • Make leadership roles more than ‘just a job’. including the Board. Draw on personal relationships and the coaching and mentoring network to pick up signs of dissatisfaction. speak to their manager and mentor and find out why they did not see it coming. ‘chemistry’ matters and if the chemistry is not there. Get leaders involved in activities that appeal to their wider interests and link their job to their passions and a higher sense of purpose.B) 62 . 6..” — John Browne Ceo of British Petroleum (BP) • Proactively engineer opportunities for leaders to engage with senior executives. in today’s successful organisation connectedness and openness have taken over from empire building and secrecy. And while there is merit in the ‘go in order to grow’ philosophy. or invite them to social events where Board members or senior executives are present. pair leaders with senior executives whom they respect for special projects. “ . If a high performing leader slips through the net and leaves without warning.2 HoLD on To THE MoST vALuABLE LEADERS Despite all efforts. Consider for example crafting their role differently. This works at three levels: • Personal: such as working with a young team and developing high potential local talent or teaching at the leadership development programme • Corporate: such as saving jobs by turning around a non-performing business or generating work by winning over a difficult client • National: such as improving critical infrastructure or building the company’s or country’s global reputation. unplanned attrition of leaders means the organisation loses out on its development investment and can be exposed to business risk.

Is there anything I can do to help? Benefits of preparation Subjects to cover • Any recent events • Changes in workload • Leader • How to reduce workload • Recent leave taken Leader – Increased confidence to conduct interviews based on already knowing employee attitudes and responses to issues – More details obtained from interviews Observer check points on question handling – Greater interaction with key employees • Learn how to put talented individuals at ease Issues employees could . They should leave as ambassadors for the company. if appropriate. ensure the leaving experience is positive and smooth and that they know they would be welcomed back should they wish to return. Do you know who among your key leaDers are most at risk of leaving. Let’s explore what would work–maybe bring your holiday forward. An excellent way to maintain contact with high performers is to develop an alumni programme.b LEADERS SHOULD BE TRAINED TO ‘SAVE STARS’—RETENTION CONVERSATIONS EXAMPLE TRAINING GUIDE Conversation guide for ‘at risk’ high potentials Possible situation: Burnt out Introduction Confirm the situation and introduce the reason for the conversation. what their issues are anD what you are going to Do to ensure they Do not leave? 63 . interim managers or. For example.3 kEEP THE DooR oPEn To LEADERS WHo LEAvE If.. or a sabbatical perhaps? could go from here • Employee – Managers more receptive to issues – Actions taken to correct problems • I cannot see my career development • Let’s talk about where you ‘At risk’ role play Cases developed based on discussions with actual high potential employees 6. Ernst & Young’s alumni network reportedly generated 20% of their new recruits recently.ENGAGE AND RETAIN LEADERS ExhIbIT 6. Get personally involved in the development of such a programme and include high performing retirees as alumni: they could be used to assist as coaches. consultants. even Board members. e..g. a top leader still wants to leave. after all avenues have been exhausted. good answers to give raise and + • Understand verbal and non-verbal communications • I am tired of being graded below the actual job classification • I need to get onto HR about that because it doesn’t appear very fair • I need to take a break or I will leave • We can certainly do that. You don’t seem to be quite yourself lately.

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ChAPTER 7 BUILD HR CAPABILITIES AND LINE OWNERSHIP .

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Ensure HR has put in place a program to improve managers’ skills and confidence in activities such as interviewing. A CEO can ensure this partnership is in place and functioning well by doing the following: 1. constructive and objective coaching and mentoring. Pa r tn e rsh ip 67 . To support line managers to take up this responsibility CEOs should do the following: • Communicate a clear expectation that 30% of line managers’ time should be spent on leadership development. As discussed in the earlier chapters. Make all line managers personally responsible for leadership development H R/ Li n ip Recruit eP a e P a r t ner Review and Honour r tn e rs h ip Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L /L i n Deploy Develop HR i ne 2. CEOs need to be visible role models. and performance improvement conversations. CEOs should downgrade their overall performance rating. If the answers are not impressive. CEOs need to be known for their leadership development activities such as coaching direct reports and playing a prominent role in leadership development programmes. not just managing. CEOs should quiz direct reports for tangible examples of their leadership development activities and impact. much of the responsibility for leadership development should be exercised by line managers. • Upgrade line managers’ leadership development skills. in performance reviews. backed by a powerful parTnership of hr and line managemenT. The high standard for leadership development set by this book will require more than the actions of the GLC Board and CEO: it must also be underpinned by HR and line managers working as partners to develop leaders.ChAPTER 7: BUILD HR CAPABILITIES AND LINE OWNERSHIP Business Strategy and Leadership Model sh The winning combinaTion in leadership developmenT is a commiTTed board and an acTive ceo.1 MAkE ALL LINE MANAGERS PERSONALLY RESPONSIBLE FOR LEADERSHIP DEVELOPMENT Day-to-day. 7. Enhance the HR function rapidly to meet business needs and to provide focused support for leadership development. CEOs should ensure that KPIs for developing others are cascaded to all line managers—KPIs such as ‘improvement in employee opinion survey scores relating to coaching and development’. • Be known as a role model for leadership development. • Use performance management to reinforce line managers’ development responsibility. CEOs should regularly talk about this 30% target and reinforce a management approach that encourages leaders to develop the people below them so that they can spend more of their time on leading. Equally.

training and talent management Execution skills to ensure reliable responses. transactional work has been outsourced with a view of getting best expertise rather than low cost Strong and reasonably lean centre with good execution Important capability levers Training Knowledge management Line rotations Mindsets coaching IT systems Data integrity 2. HR leadership can demonstrate the foundations for a good partnership with the line. HR needs to be consistently well-rated by line managers on all these dimensions for it to be a credible partner: • • • An understanding of business issues and challenges Highly valued expertise in specialist HR tasks like remuneration. Two types of HR professionals are key to a successful partnership to develop leaders: • Skilled in-the-line HR professionals who provide seamless support.STRENGTHENING LEADERSHIP DEVELOPMENT 7.2 EnHAnCE THE HR funCTion RAPiDLy To MEET BuSinESS nEEDS AnD To PRoviDE foCuSED SUPPORT FOR LEADERSHIP DEVELOPMENT The CEO should enhance the HR function so that it can support leadership development activities and the broader people management agenda.5% completion organisation-wide) is common and mandatory across businesses Regional business partners and HR specialists (10% of corporate staff) ensure competent advice Execution Mandatory HR Service Centre ensures service quality Goal is ‘One Firm. ExhIbIT 7. need to understand how the business really works. ExPERTISE AND ExECUTION TO BE SUCCESSFUL Business Understanding HR process and policy development teams led by mid-level line managers to increase buy-in ‘High human touch’ and centralisation is driven by employees who are demanding and expect efficiency and availability at all times Strong tradition of HR and business working interchangeably Expertise Common global and high standard training curriculum for all HR processes Goldman’s focus on its people means training. recruiting. 68 . HR provides this support when: • Leadership and business-focused professionals work in HR. HR functions should be organised so that there are highly capable HR professionals in line management teams. what it takes for leaders to drive that business’ performance and have trusting relationships with the key leaders. who should be a mix of people from HR backgrounds and line managers trained to play HR roles. HR provides effective support for leadership development. This will be true for the organisation when: 1. These professionals.A HR NEEDS TO HAVE BUSINESS UNDERSTANDING. and the review system (98. one point of contact’ for HR with a highly centralised system.

They should also be close to the business so that they can help spot key leaders at risk of leaving. HR has distinctive leadership. Having considered the three requirements for HR to fulfil their side of their partnership with the line. • These HR professionals should play an active role in leadership development by ensuring that the recruiting. especially the design of leadership development programmes. they should be known as practical problem solvers who get to the root causes of problems and fix them. training and deployment processes are delivering the leaders that the business needs. • Leadership development processes and programmes are streamlined and owned by the line. To guarantee distinctive leadership. When the business is not getting what it needs. CEOs should expect moves such as this to be met with some resistance but radical steps are required to build capability and strengthen the function. An HR function needs people with specific technical expertise in the different aspects of leadership development. periodic reviews such as by a panel of line managers who review and provide advice on HR processes. 3. The Leadership Development Audit will help CEOs make this decision.BUILD HR CAPABILITIES AND LINE OWNERSHIP • Practically. This can be achieved if HR develops them in close consultation with line managers and subjects them to thorough. True line ownership of HR processes and programmes makes the line far more effective. performance management systems and leadership deployment processes. Have you appointed any of your top line performers to Head your Hr function or to one of Hr’s most senior roles? 69 . the CEO should appoint high performing line managers to HR so that at least 1 in 3 of the senior HR team comes from the line. • Expert HR professionals focused on developing simple and effective leadership development processes and programmes. a CEO needs to decide whether to get the head of HR to upgrade the leadership development dimensions of the function or whether the issues are broad-based and require an overhaul of the HR function. they need to ensure that line managers are trained to fulfil their leadership development tasks and that all processes surrounding leadership development—from the scheduling of training programmes through to running deployment sessions—are streamlined and integrated into the business calendar.

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ChAPTER 8 GETTING STARTED .

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To lift leadership development standards to enable GLCs to consistently perform and deliver sustainable tangible results.ChAPTER 8: GETTING STARTED An honest ApprAisAl of the compAny is An importAnt stArting position And will mAke it eAsier for the compAny to get the number And types of leAders it reAlly needs. then ensure that an actionable improvement program is in place and that implementation begins quickly. Shift CEO actions and behaviours.1 ConDuCT A LEADERSHiP DEvELoPMEnT AuDiT To STREnGTHEn CoMPAny-WiDE LEADERSHIP DEVELOPMENT The CEO should mandate a comprehensive audit of the current leadership development approach using the Leadership Development Audit (LDA). e. Conduct a Leadership Development Audit to strengthen company-wide leadership development 2. Intensify Board governance on leadership development 3. ExhIbIT 8. 8. This chapter addresses the three big change initiatives required for GLCs to get started: 1.g. revamp leadership model and EVP • Every 6 months CEO and Executive Team review Leadership Development Dashboard and adjust priorities or plan if progress insufficient 73 .A HOW TO STRENGTHEN LEADERSHIP DEVELOPMENT Step 1 Conduct Leadership Development Audit (LDA) Step 2 Prioritise gaps and actions Step 3 Develop and launch actionable implementation plan • CEO to mandate • CEO has the option • CEO and Executive Team to use HR or external support to facilitate the process prioritise gaps to be closed and agree the actions required • CEO and Executive Team Ongoing Review Leadership Development Dashboard should sign off a clear action plan • CEO and Executive Team need to be personally involved in key initiatives. will demand an immediate change.

GLCs can contact the Transformation Management Office (TMO). and the CEO should lead the process. All senior executives are required to participate. 74 . HR should be responsible for preparing materials to facilitate the discussion. a follow-up session should be held to develop an improvement programme with specific initiatives. and determine the external consultant that is best suited to assist them. • External consultants assist GLCs in completing the LDA. GLCs can choose to conduct the assessment themselves or seek external support to facilitate the process.1 STEP 1: CONDUCT LEADERSHIP DEVELOPMENT AUDIT The LDA is a simple-to-use tool that covers all the areas addressed in the Orange Book and will enable the assessment of a company’s performance against best practice. There are a number of ways in which external consultants can assist GLCs in completing this assessment. The discussion can form part of an executive meeting to be held as a separate session. milestones and timelines. Once the CEO and management team have agreed current strengths and weaknesses. • GLC conducts the LDA. To obtain suggestions of potential consultants and potential options on how to structure the necessary support. ExhIbIT 8.b AUDIT SUMMARY Strengthening Leadership Development Takes charge of leadership development Recruits future leaders Reviews performance and publicly honours excellence Deploys strategically to develop leaders Develops leadership and high potential talent Engages and retains leaders Builds HR capabilities and line ownership X Average rating 1 X X Strengths • A clear recruiting process i s in place and the company targets both active and passive job seekers for hard-to-fill positions at the seni or levels Gaps • There is no formal leadership development strategy tied to business strategy • No clear articulation of the leadership qualities required to del i ver business results • Line managers view leadership development as a low priority • HR provides only ad hoc and reactive support to leadership development 2 3 4 X X X X 1 See Resources: Where GLCs can obtain assistance.STRENGTHENING LEADERSHIP DEVELOPMENT OPTIONS FOR COMPLETING THE LDA The CEO is responsible for leading this effort. The tool and details on its use are provided in the final section of the Orange Book. Each GLC should tailor the approach to their current context.

Review points with the CEo. Executive Team 3 Revamp HR c ap a b i li t y Move top performing managers into HR Review function Upskill and set KPIs Monitor actions using HR metrics Revise plans as required CEO. structure and • size—to decide optimum requirements for delivering overall people strategy Agree KPIs for HR effectiveness STEP 3: DEVELOP AND LAUNCH AN ACTIONABLE IMPROVEMENT PLAN The improvement plan should set out clear actions. HR provides ad hoc and reactive support to leadership development Medium • Move top performing line managers into HR positions • Review HR function—people. Executive Team and Board should be established to ensure high-level involvement. ExhIbIT 8. High • Interview top performing leaders to determine which • Hold meeting with management team to agree • Pressure test the model with the Board leadership model behaviours and competencies are essential to success 3.D MILESTONES FOR AN IMPROVEMENT PLAN Proposed actions 1 Develop Leadership strategy 2 Articulate leadership mo de l 01/07 Hold people and business planning sessions 07/07 01/08 07/08 01/09 07/09 01/10 Responsibility CEO. Head of HR.GETTING STARTED STEP 2: PRIORITISE GAPS AND ACTIONS Once gaps are identified the CEO and Executive Team should prioritise them and agree a clear set of proposed actions.2 ExhIbIT 8. Review KPIs and adjust communications and training accordingly CEO.C IMPROVEMENT PLAN Gaps identified 1. Head of Strategy Re vie w with Board Board reviews progress Interview top performing leaders Meeting to discuss and agree leadership model Test with Board CEO. processes. the timeline for those actions and who is responsible. 75 . Head of HR 4 Increase line management involvement Clarify specific roles of line managers Launch communications Set KPIs Training programmes begin. Line managers view leadership development as a low priority Medium • Clarify roles of line managers and HR in leadership • CEO and management team communication strategy to • Targetted training and coaching programs to upskill line • Set KPIs for line managers managers development lift profile of leadership development across organisation 4. Executive Team 2 See Appendix 4 for template. No formal leadership development strategy tied to business strategy No clear articulation of the leadership qualities required to deliver business results Priority High Proposed actions • Hold people and business planning session • Measure gap in leadership (number and types) required • Agree strategy to close the gap to deliver business results 2.

Age >52 tions today Peop le with D Rating and 50% of p e op l e w i th C Rating 5% per annum 10-20% of 15% of pivot al pivotal line line p osi t io ns po si t ion s 0 10 20 30 40 50 60 70 80 90 100 Head of Call Centres Head of Offshore Network Performance Lead generation and maintenance Applications received Invitations to pre-selection meeting EXAMPLE Assessment Invitations to 1st interview Invitations to 2nd interview ‘Closing the deal’ Offers made Offers accepted ILLUSTRATIVE Leadership Attributes Shapes the future Raises the bar Target ILLUSTRATIVE Total number of top talent departed = 40 2004 results 2005 results Reasons for Leaving Poor team dynamics Higher pay 5-10% 80-90% 5-10% % of talent that leaves the workforce e. and Appendix 3 for more details on metrics and monitoring. 76 . Every 6 months the CEO and Executive Team should review these metrics and adjust the priorities or the plan if there is insufficient progress. As outlined in the Green Book on ‘Enhancing Board Effectiveness’..3 Specifically.9% of applications) Issues that arise • Poor targeting of • Incomplete key universities information • Overly specific screening • Too high talent bar • Too little management time for screening • Interviewer availability • Candidate availability • Poor interview technique • Inefficient EVP Career progression communication • Inflexible negotiation • Unclear job description Improvement initiatives • Use of print advertisements • Clearer forms • Improved • 3rd party screening process • Recalibrate • Use senior assessment criteria management for interview panel • Explore other screeners • Use fly-in • Provide more • Enhanced EVP • More efficient means of training for administration of interviewing eg interviewers offers phone interviews • More flexible interview timings option Least effective (act decisively) Core (affirm and grow) Best (invest heavily) 0 1 2 3 4 5 Aggregate Scores • Industry average of unplanned attrition for top talent and high potentials = 3% • Company target in 2006 = reduce from 10% to 5% n = reviews of top 250 leadership groups Source : Employee Opini on Surveys See Appendix 2 for dashboard. role in the key elements outlined in this book. the Board must: • • • • • Select and proactively plan for CEO succession Review the performance management philosophy Evaluate the CEO Endorse the performance and development plans of those in ‘pivotal positions’ Understand the pool of future leaders.E MONITOR METRICS TO CHECk PLAN IS DELIVERING IMPROVED PERFORMANCE EXAMPLE Number of people recruited ILLUSTRATIVE Actual Target 242 81 242 36 161 38 123 73 48 EXAMPLE Leaders hip suppl y toda y Leadership demand in three years Variable compensation as percent of base pay 125% ILLUSTRATIVE Identification of pivotal positions CEO S p ecial Officer 206 100% 80 65 Ideal variable compensation per employee • High degree of Gap of ~160 50 75% 8 Churn over 3 years 42 business impact – Cost – Growth – Capital CFO Chie f Risk Officer Head of HR Head of Retail Head of Business Branches 40 30 10 New graduates Mid-career professionals 25 15 25 P e o p l e i n Peop le leadership retiring pos it ions w i t h i n today next (VPs and three above) years Peop le not meeting performance criteria Potential Managers Leaders leaders (i. particularly the CEO and CEO successors. ExhIbIT 8.2 inTEnSify BoARD GovERnAnCE on LEADERSHiP DEvELoPMEnT The Board must fulfil its fundamental role and responsibility to oversee the development of the company’s future leaders and human capital. In addition. This will mean playing a governance.STRENGTHENING LEADERSHIP DEVELOPMENT ONGOING: REVIEW LEADERSHIP DEVELOPMENT DASHBOARD There are eight metrics that together provide a comprehensive view of how the organisation is moving towards its goal of strengthened leadership development.e. the Board should support the CEO in delivering against the company-wide improvement agenda.g. but not management. retirees % of talent on development scholarships (planned) Lead generation 6. 8.265 756 204 ~ 85 72 56 Builds great teams Collaborates business-wide Behaves as a Group Citizen Acts as a passionate owner % of talent seconded to other companies for development purposes (planned) International opportunity % of unplanned attrition Target yields: Actual yields: 30% 12% 40% 27% 55% 42% 85% 85% 90% 78% (corresponds to 0. demonstrating breakthrough performance) 60% of potential leaders Le ader s remaining in three years Pivotal Leaders Leaders Demand line required required for leaders positions to deliver to meet in three additional business years strategic growth initiati ves 50% Actual variable compensation per employee • Overall strategic F in a n ci a l Controller Treasurer Sales Op er ati o ns Finance HR Business Unit Head 25% impact – Special market insight – Regulatory or technological knowledge – High market scarcity Head of Marketi n g Head of Northern network Employee potential Gold standard Position Pivotal Non pivotal Successors and readiness Now In 1 year In 2 years Head of Mobile Mortgage Managers Head of Southern Network High potential Low potential Malaysians abroad Total recruited Employee Segments As sump. such as: • • • • 3 The leadership model for the CEO Providing assistance to the CEO in recruiting and retaining senior leaders Ensuring adequate levels of investment in leadership development programmes Coaching and mentoring high performing leaders.

A coach can provide tremendous support in sustainable change. measurable goals for personal development.GETTING STARTED 8. 77 . can provide tactical support to build leadership skills for specific situations as well as offer strategic help in allocating time effectively to commit to the leadership development challenge. Some will draw from the ranks of international executive coaches. given the challenge to develop a generation of leaders who can deliver sustainable performance. the CEO might undertake a personal stocktake of their own leadership development activity using the ten questions in this book. and at this level. To navigate through this period of change and transition. 5 See Appendix 1: The Leadership Development Stocktake. This personal change is more than warranted.3 SHifT CEo ACTionS AnD BEHAviouRS For many CEOs.5 For a more comprehensive review the CEO can also: • • Elicit feedback from others or have HR run a 360-degree assessment of their current actions and behaviours Get a third-party perspective on the stocktake and use this perspective to set and achieve stretching goals. others will prefer a trusted adviser or consultant. The change also provides the CEO with opportunities to define his or her legacy. or a respected colleague or mentor who has achieved success in developing leaders in their own organisation • Use the insights gained from the personal stocktake to articulate necessary changes and then set a few simple. prioritising leadership development will require changes in the way they lead. Choosing a coach is a personal decision. however.

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APPENDIx 1 THE LEADERSHIP DEVELOPMENT STOCkTAkE .

CHAPTER TITLE 80 .

Do you play a role in every senior leadership development programme for your company? Do you spend at least 1 hour with each of your direct reports every quarter giving them personal feedback and coaching about how they can be more effective leaders? 6. Have you appointed any of your top line performers to head your HR function or to one of HR’s most senior roles? No 81 . Do you know who among your key leaders are most at risk of leaving. Do you know three leaders outside your company who could transform its performance? If so. Do you spend 30% of your time developing leaders? Do you know what your most significant intervention will be in the next 3 months to fundamentally improve the leadership capability of your organisation? 3. In major strategy sessions. Do you have a clear point of view on what the next role should be for each executive reporting to your direct reports to maximise their development and the performance of the business? 8. do you always involve the HR head to ensure you will have the leadership with the requisite skills to successfully deliver your business plans? 10. 5. In the last 12 months.APPENDIx 1: ThE LEADERShIP DEvELOPMENT STOCKTAKE Ask yourself Yes 1. do you have a personal plan for how and when you could recruit them? 4. 2. have you taken a risk with any high potentials and moved them into challenging leadership roles that prompted people across the organisation to talk positively about it? 7. what their issues are and what you are going to do to ensure they do not leave? 9.

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APPENDIx 2 LEADERSHIP DEVELOPMENT DASHBOARD .

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.e.g. demonstrating breakthrough performance) 60% of potential leaders Le ader s remaining in three years Pivotal L eader s line required p osi t io ns to deliver additiona l strategic initiati ves Leaders Demand required for leaders to meet in three business years growth 40 30 10 New graduates Mid-career professionals 25 15 25 As sump.265 756 204 ~ 85 72 56 100% Ideal variable compensation per employee 75% Target yields: Actual yields: 30% 12% 40% 27% 55% 42% 85% 85% 90% 78% (corresponds to 0. Every 6 months they should review whether the leadership gap is increasing or diminishing and use the leadership development dashboard to help determine what is driving the result.g. interviewers phone interviews • More flexible interview timings option • Enhanced EVP • More efficient administration of offers 0 10 20 30 40 50 60 70 80 90 100 Performance CHAPTER 3: REVIEW PERFORMANCE DISTRIBUTION OF LEADERS ILLUSTRATIVE CHAPTER 4: TEST THAT PIVOTAL POSITIONS ARE FILLED BY TOP TALENT Identification of pivotal positions CEO S p ecial Officer EXAMPLE 5-10% 80-90% 5-10% • High degree of business impact – Cost – Growth – Capital CFO Chie f Risk Officer Head of HR Head of Retail He a d o f B us i n es s Branches • Overall strategic F in a n ci a l Controller Treasurer Sales Op er ati o ns Finance H R B us i n e s s Unit Head impact – Special market insight – Regulatory or technological knowledge – High market scarcity Head of Marketi n g He a d o f Northern network Employee potential Gold standard Position Pivotal Non pivotal Successors and readiness No w In 1 year In 2 years Head of Mobile Mortgage Managers He a d o f Southern Network High potential Low potential Least effective (act decisively) Core (affirm and grow) Best (invest heavily) Head of Call Centres He a d o f O f f s h or e Network CHAPTER 5: MEASuRE THE AGGREGATE of LEADERSHIP SCORES AGAINST LEADERSHIP MODEL Leadership Attributes Shapes the future Raises the bar Builds great teams Collaborates business-wide Behaves as a Group Citizen Acts as a passionate owner CHAPTER 6: MONITOR UNPLANNED ATTRITION RATES OF HIGH PERFORMERS AND HIGH POTENTIALS Total number of top talent departed = 40 % of talent that leaves the workforce e.APPENDIx 2: LEADERShIP DEvELOPMENT DAShbOARD CEOs and HR heads should monitor the performance of the overall leadership development system. CHAPTER 1: SIzING THE GAP – HOW IT CAN BE DONE EXAMPLE Leaders hip suppl y toda y Leadership demand in three years CHAPTER 2: MEASURE RECRUITMENT RESULTS BY EMPLOYEE SEGMENTS Number of people recruited ILLUSTRATIVE Actual 242 81 161 38 123 73 242 36 48 206 Target Gap of ~160 50 80 65 8 Churn over 3 years 42 People in leadership pos it ions today (VPs and above) Peop le retiring within next three years Peop le not meeting performance criteria Potential Managers Leaders leaders (i.9% o f a ppl i cat i on s ) 50% Actual variable compensation per employee Issues that arise • Poor targeting of • Incomplete key universities s cree nin g • Overly specific • Too little information • Too high talent bar management time for scr eeni ng • Interviewer • Ca ndidate a v a il a b i l it y a v a i l a b i li t y • Poor interview technique • Inefficient EVP • Inflexible negotiation communication 25% • Unc l ear job d e sc rip t ion Improvement initiatives • Use of print advertisements • Clearer forms • Improved • 3rd party sc reen ing proc ess • Reca l i brate • Use senior assessment criteria • Explore other screeners management for intervie w panel • Use fly-in • Provide more means of training for interviewing e. retirees % of talent on development scholarships (planned) Target ILLUSTRATIVE 2004 results 2005 results Reasons for Leaving Poor team dynamics Higher pay International opportunity % of unplanned attrition % of talent seconded to other companies for development purposes (planned) Career progression 0 1 2 3 4 5 Aggregate Scores • Industry average of unplanned attrition for top talent and high potentials = 3% • Company target in 2006 = reduce from 10% to 5% n = reviews of top 250 leadership groups Source : Employee Opini on Surveys 85 .Age >52 tions today Peop le with D Rating and 50% of p e op l e w i th C Rating 5% per annum 10-20% of 15% of pivot al pivotal line line p osi t io ns po si t ion s Malaysians abroad Total recruited Employee Segments CHAPTER 2: MEASURE THE RATE OF CONVERSIONS TO NEW RECRUITS Lead generation and maintenance A p pl i c a t i on s received Invitations to pre-selection meeting EXAMPLE CHAPTER 3: IMPLEMENT COMPENSATION SCHEMES THAT REWARD HIGH PERFORMANCE Variable compensation as percent of base pay 125% ILLUSTRATIVE Assessment Invitations to 1st interview Invitations to 2nd interview ‘Closing the deal’ Offers made Offers accepted Lead generation 6.

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APPENDIx 3 DETAILED METRICS .

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1 CHAPTER 1: SIzING THE GAP – HOW IT CAN BE DONE EXAMPLE Leaders hip suppl y toda y Leadership demand in three years 242 81 161 38 123 73 242 36 48 206 Gap of ~160 50 8 Churn over 3 years 42 People in leadership pos it ions today (VPs and above) Peop le retiring within next three years Peop le not meeting performance criteria Potential Managers Leaders leaders (i.e. for example a sudden spike in attrition over the next three years could signal ‘a generation’ of senior executives about to retire? ExhIbIT A. This number is calculated by comparing leadership supply against leadership demand. The CEO can then be held accountable for year-on-year improvement. Questions the Board and CEO should probe • • • Am I confident that we understand both the number and the type of leaders needed to deliver business results? Am I confident that we have a plan to deliver these leaders? Do variations from the previous year reveal particular risks. It assesses how many people the company has that can actually deliver the breakthrough results that qualify them as leaders.. they will give a good overall estimate of leadership requirements and a clear sense about whether the gap is growing or narrowing. Why this metric is useful It enables the Board and CEO to know the number of leaders needed to deliver the company’s headline KPIs and growth plans.APPENDIx 3: DETAILED METRICS Determine the number of leaders needed What should be measured The company’s surplus or deficit of leaders. demonstrating breakthrough performance) 60% of potential leaders Le ader s remaining in three years Pivotal L eader s line required p osi t io ns to deliver additiona l strategic initiati ves Lead er s required to meet business growth Demand for leaders in three years As sumptions Age >52 today Peop le with D Rating and 50% of p e op l e w i th C Rating 5% per annum 15% of pivotal line p osi t io ns 10-20% of pivot al line po si t ion s 89 . underperformers and attrition. While these calculations will not be 100% accurate. Leadership supply is calculated by assessing the organisation’s current talent pool and subtracting retirees. This metric should be monitored on a 6-monthly basis to check the current surplus or deficit of leaders. Leadership demand is calculated by determining pivotal line positions and how many leaders will be needed to deliver new strategic initiatives and business growth.

Questions the CEO should probe • • • For segments that fail to reach the target. Why this metric is useful The CEO can clearly identify which segments are not being targeted well.3 if necessary) Is the EVP distinctively marketed to that segment? Is our marketing strategy for that segment right? ExhIbIT A. It should be monitored after every recruitment drive to see if targets are met. The CEO can then closely analyse the root causes of failure for each segment if necessary (see Exhibit A.3).STRENGTHENING LEADERSHIP DEVELOPMENT Recruitment results by employee segments What should be measured The number of people successfully recruited for each employee segment identified by the organisation.2 MEASURE RECRUITMENT RESULTS BY EMPLOYEE SEGMENTS Number of people recruited ILLUSTRATIVE Actual Target 80 65 40 30 10 New graduates Mid-career professionals 25 15 25 Malaysians abroad Total recruited Employee Segments 90 . what is the root cause for failure? Are we monitoring it? (use Exhibit A.

DETAILED METRICS Recruitment yields What should be measured The efficiency of the recruitment process by applying a class operations approach that identifies yields at every stage of the recruitment process. especially during the recruiting season to quickly solve ‘leaks’ in the process. HR should use this metric regularly. This metric can be used by HR for in-depth analysis to address problematic employee segments. The CEO should monitor this metric after every recruitment drive.g. Questions the CEO should probe • • Are the root causes for poor yields being identified and acted upon? Are there areas where I can contribute to make a significant difference? ExhIbIT A. interviewers phone interviews • More flexible interview timings • Use fly-in option • Enhanced EVP • More efficient administration of offers 91 .265 756 204 ~ 85 72 56 Target yields: Actual yields: 30% 12% 40% 27% 55% 42% 85% 85% 90% 78% (corresponds to 0.9% o f a ppl i cat i on s ) Issues that arise • Poor targeting of • Incomplete key universities • Too high talent information bar • Overly specific • Too little s cree nin g management time for scr eeni ng • Reca l i brate assessment criteria • Use senior management for intervie w panel • Interviewer a v a il a b i l it y • Ca ndidate a v a i l a b i li t y • Poor interview technique • Inefficient EVP • Inflexible negotiation communication • Unc l ear job d e sc r ip t ion Improvement initiatives • Use of print advertisements • Clearer forms • Improved sc reen ing proc ess • 3rd party screeners • Explore other • Provide more training for means of interviewing e. Why this metric is useful The CEO can clearly identify inefficiencies in the recruitment process and apply operational discipline throughout.3 MEASURE THE RATE OF CONVERSIONS TO NEW RECRUITS Lead generation and maintenance A p pl i c a t i on s received Invitations to pre-selection meeting EXAMPLE Assessment Invitations to 1st interview Invitations to 2nd interview ‘Closing the deal’ Offers made Offers accepted Lead generation 6.

The CEO can also determine whether the remuneration scheme for senior executives—which usually has a range of elements: base pay. This can be measured by correlating the variable pay people are awarded as a percentage of their total compensation and their performance. Performance should be measured based on employee performance reviews. Why this metric is useful The CEO and Board can check that rewards for truly high performers are appropriately differentiated but also that sufficient incentive exists at all levels to boost performance. Questions the CEO should probe • • • • Is there a close correlation between performance and total compensation? Is the criteria for high compensation transparent to everyone? Is the proportion of fixed to variable pay effective to create a real incentive to deliver breakthrough performance among leaders? Is our marketing strategy for that segment right? Exhibit A. This is a check worth doing because anomalies regularly arise in these schemes. This metric should be reviewed annually.4 Implement compensatIon schemes that reward hIgh performance Variable compensation as percent of base pay 125% ILLUSTRATIVE 100% Ideal variable compensation per employee 75% 50% Actual variable compensation per employee 25% 0 10 20 30 40 50 60 70 80 90 100 Performance 92 . While HR should keep track of this data for different parts of the organisation CEOs should focus their attention on the executive ranks where the leaders critical to performance are based.STRENGTHENING LEADERSHIP DEVELOPMENT Review performance and pay correlation What should be measured The correlation between pay and performance. shares. options—is actually rewarding high performers. cash bonuses.

5 REVIEW PERFORMANCE DISTRIBUTION OF EMPLOYEES ILLUSTRATIVE 5-10% 80-90% 5-10% Least effective (act decisively) Core (affirm and grow) Best (invest heavily) 93 .DETAILED METRICS Review performance ratings What should be measured The distribution of employee performance ratings that results from the evaluation process. The Board and CEO should review this annually. The evaluation process should also rate people on a sufficiently broad scale so that a wide distribution of ratings can be achieved.g. top 5% or top 10%)? ExhIbIT A. Why this metric is useful The CEO can ensure that the performance rating shows true dispersion across each level in the organisation. Questions the CEO should probe • • Does the distribution of people performance correlate with the distribution of business performance? Is the distribution an appropriate one? Is the right percentage of employees being identified as top talent (e.

HR can use this metric to check for effectiveness of the job-matching process.g. Talent-matching forums should use this metric extensively. the CEO should take responsibility for deployment decisions. and that the right types of employees are being identified as top talent. each position should have 2–3 candidates identified and being developed)? ExhIbIT A. For pivotal positions in the top 2–3 levels.6 TEST THAT PIVOTAL POSITIONS ARE FILLED BY TOP TALENT Identification of pivotal positions CEO EXAMPLE S p ecial Officer • High degree of business impact – Cost – Growth – Capital CFO Chie f Risk Officer Head of HR Head of Retail Head of Business Branches • Overall strategic F in a n ci a l Controller Treasurer Sales Op er ati o ns Finance HR Business Unit Head impact – Special market insight – Regulatory or technological knowledge – High market scarcity Head of Marketi n g Head of Northern network Employee potential Gold standard Position Pivotal Non pivotal Successors and readiness Now In 1 year In 2 years Head of Mobile Mortgage Managers Head of Southern Network High potential Low potential Head of Call Centres Head of Offshore Network 94 . Questions the CEO should probe • • Do we have our best talent in pivotal positions? (90% of pivotal positions should be filled by top talent) Do we have robust succession plans for the pivotal positions (e.STRENGTHENING LEADERSHIP DEVELOPMENT Review pivotal positions What should be measured What type of performers occupy pivotal positions. Why this metric is useful The CEO can ensure that the right positions are being identified in the different levels of the organisation.

7 MEASURE THE AGGREGATE OF LEADERSHIP SCORES AGAINST LEADERSHIP MODEL Leadership Attributes Shapes the future Raises the bar Builds great teams Collaborates business-wide Behaves as a Group Citizen Acts as a passionate owner Target ILLUSTRATIVE 2004 results 2005 results 0 1 2 3 4 5 Aggregate Scores n = reviews of top 250 leadership groups Source : Employee Opini on Surveys 95 . A less elaborate approach that provides a useful approximation is to use aggregate results from Employee Opinion Surveys (EOS).DETAILED METRICS Leadership development against model What should be measured Level of fit between the attributes leaders currently have and the qualities that they need to have to deliver results. This requires the EOS to incorporate questions to test whether employees are seeing their leaders exhibit the qualities that the company is looking for. Why this metric is useful The CEO can check that leaders are being developed in line with the competency model. HR can check the effectiveness of leadership development programmes. Questions the CEO should probe • • Are our development actions working to deliver a strong cadre of leaders with the attributes required to deliver the business results? What steps must we take to rectify any emerging deficiencies? ExhIbIT A. If the CEO needs a robust measure they should use an assessment centre process where individual executives are put through a set of tests to determine the level of their competencies and behaviours.

Why this metric is useful The CEO can check for marked increases in unplanned attrition rates. why? Why does top talent still leave despite existing measures to retain them? What are the lessons learned? ExhIbIT A.g. This should be monitored every 6 months. and if he or she is taking the right steps to address the issue. retirees % of talent on development scholarships (planned) Reasons for Leaving Poor team dynamics Higher pay International opportunity % of unplanned attrition % of talent seconded to other companies for development purposes (planned) Career progression • Industry average of unplanned attrition for top talent and high potentials = 3% • Company target in 2006 = reduce from 10% to 5% 96 .STRENGTHENING LEADERSHIP DEVELOPMENT Unplanned attrition rates What should be measured The percentage of talent that leaves due to unplanned attrition and their reasons for leaving.8 MONITOR UNPLANNED ATTRITION RATES OF HIGH PERFORMERS AND HIGH POTENTIALS Total number of top talent departed = 40 % of talent that leaves the workforce e. why? Is there a clear understanding of the reasons for departure? What steps are being taken to stop further attrition? Is one part of the business more susceptible to unplanned attrition than others? If so. Questions the CEO should probe • • • • • Are there sudden increases in the percentage of unplanned departures of top talent? If so. The CEO can also see if his or her level of commitment to retaining talent is adequate. The organisation should take all efforts to retain talent and reasons for leaving should be mainly unavoidable ones.

APPENDIx 4 LEADERSHIP DEVELOPMENT AUDIT .

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LEADERShIP DEvELOPMENT AUDIT INSTRUCTIONS AUDIT The following is an audit that will help GLCs to map their performance against the leadership development elements discussed in the Orange Book. Companies are also asked to rate the level of importance the organisation gives to each topic on a 1–3 scale (where 1 = not a priority and 3 = high priority). For each status level (under development. line managers and HR. good practice and best practice) a range of descriptions is provided that will help to make an accurate assessment. It can be used to understand best practice and to assess practice within the organisation. adequate. HOW THE AUDIT IS STRUCTURED The audit covers each element of the leadership development framework outlined in the Orange Book. Once completed they will have an understanding of the strengths and development needs of their current approach to leadership development which can be used as the basis of developing an action plan to improve leadership development within the organisation. This assessment is designed to be completed by senior leaders. Business Strategy and Leadership Model H R/ Li n eP ip Recruit ar tn sh e rs e P a r t n er Review and Honour h ip in R /L Engage and Retain Pool of leadership who will deliver for the Company and Country H R/ L Deploy i ne H Pa Develop r tn ers h ip 99 . The results will allow GLCs to agree priorities across their leadership development system. For each item they should circle the description that best fits the organisation as it is today. For each topic companies are asked to evaluate the status of each area as it currently stands. HOW TO USE THE AUDIT The audit consists of a range of topics that underlie each aspect of the leadership development framework.

The combination of policies. By assessing the components in this order the audit will help GLCs to identify whether improvement opportunities are due to inadequate processes and policies. processes and practices + Mindsets = Outcomes 100 .STRENGTHENING LEADERSHIP DEVELOPMENT For each element GLCs will assess current organisational performance on a range of components. identifying talent) that currently exist within any organisation. or both. or attitudinal barriers. succession planning). and the mindsets that underlie people’s attitudes to this topic (ie attitude towards honouring outstanding performance. These components include the policies. attitude towards external hires). Policies. processes and practices the organisation uses to drive performance for each element (ie quality of appraisal tools. processes and practices along with mindsets (attitudes) help to drive the outcomes (ie success in the talent market.

LEADERShIP DEvELOPMENT AT A GLANCE Strengthening Leadership Development Strengths Gaps Best Practices to adopt U de nde ve r lop m en Ad t eq ua te Go od pr ac tic Be e st pr ac tic e Takes charge of leadership development Recruits future leaders Reviews performance and publicly honours excellence Deploys strategically to develop leaders Engages and retains leaders Builds HR capabilities and line ownership 101 .

processes and practices Adequate Good practice • CEO and leaders • Senior • Leadership • Leadership commit a minileaders developdevelopmum of 30% communiment viewed ment is seen of their time cate that as a prioronly as HR’s to leadership leadership ity for senior responsibility development–a developleaders only and is not a combination of ment is a priority for our during critical specific developpriority performance leadership ment activities periods eg • Leadership • Short-term such as attendaggressive developthinking preing programmes. 3=Top Best practice 1 2 3 Under development Priority Policies.STRENGTHENING LEADERSHIP DEVELOPMENT TAKE ChARGE OF LEADERShIP DEvELOPMENT Current status Importance Priority: 1=Low. activity by ment is on dominates and informal competitors the senior coaching and leader feedback agenda • Top leaders occasionconvene bi-anally nually to discuss leadership development for short-term and long-term performance • CEO and leaders use organisational events and communications to promote their commitment to leadership development Link between • People needs • Business unit • The company leaders use are driven business business their strategy from the strategy and strategy as a guide to ‘bottom up’— leadership is used to defining their managers development guide derecruitment identify their strategy velopment needs own people requirerequirements ments for each business unit and area • The company business strategy is directly translated into capability requirements that drive development needs • The business strategy and leadership strategy are used to guide deployment decisions across the organisation 102 .

• The policy is regularly tion updated based on feedback regarding its effectiveness • The policy is compared to other peoplerelated practices to ensure consistency of message Plan for future • HR provides leadership ad hoc and requirements reactive support to leadership development • HR works with line to understand line needs • A formal organisational plan is in place • HR develops • The plan is used for plans specifying number guidance on • No specific meeting the of people plan regardcapability and their ing capability development needs of line • All business needs leaders are manager needs for committed to each area developing individually against the plan with HR support • A formal three year plan on recruiting and capability requirements established and distributed throughout the business • Development and recruiting resources are allocated based on the plan • Metrics are collected for end of year evaluation against plan objectives 103 . 3=Top Best practice 1 2 3 Under development Assessment of current leadership development Adequate Good practice • Leadership • The policy is • A formal • There is no development widely propolicy exists formal policy moted and policy is and is apon organaccessible to consistently plied on an isation’s all staff used in all ad hoc basis expectations assessand criteria • The policy is ments of of leadership also consisdevelopment tently impledevelopment activities for mented all levels of the organisa.TAkE CHARGE OF LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low.

STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low.• Our senior Accountability • Senior ers believe in leaders drive leaders drive leaders the leadership the imporand own believe that process for the tance of leadership leadership organisation leadership development development as a whole and development but mainly it is HR’s recognise that and drive is HR-driven responsibility developing and own it with a focus leaders is critiwith HR supon a small. 3=Top Best practice 1 2 3 Under development Mindsets Importance of leadership development • Leaders are born not made Adequate Good practice • Leadership • Leadership • Leadership development is development development our number 1 has a role to is imporpriority play in our tant for the on-going perorganisation formance to meet its current goals Role of leaders • As long as we • It is important • Our leaders • Our business we develop make the have good will fail without our people difference people we leaders who to complete between will be able drive perfortheir tasks meeting our to meet our mance and to insure goals and short-term us against beating them goals an uncertain future • Some senior • Senior lead. cal to business port in their elite group of success own areas leaders Outcomes Leadership and talent pool • Leaders and • The organipotential sation does leaders are not have a identified methodology to identify • There are people as gaps in leaders or leadership talent capabilities • The number • Levels of and quality of leadership capability are leaders is assessed using monitored stringent crite• There are ria and against only lima defined leadited gaps ership model between • Few capability the leadergaps exist in ship pool meeting curand current requirements rent business needs as identified through the • Leaders conbusiness tinually generplan ate a need for more leaders in the future because they excel at identifying opportunities beyond the current strategy 104 .

RECRUIT FUTURE LEADERS Current status Importance Priority: 1=Low.– Is tailored or benefits efits. perks are below to target are at or industry averaudiences above indusage – Articulates try average stand-out company features in comparison with local and global competitors – Leverages a strong external company brand 105 . 3=Top Adequate Good practice Best practice 1 2 3 Under development Recruiting Policies. ben. or the strategy is the business existing policy recruiting well understrategy that: practices is not related generally to business – Is refreshed stood. dis• There is tinctive value is generally is promoted no clearly proposition is considered to potential articulated in place that: an attractive recruits using employee employer value proposi. policy processes and practices • A recruiting • There is a • No policy for • A recruiting policy based recruiting policy exists recruiting on business policy tied to and actual exists. is reflected in comply with needs annually actual recruitthe recruiting – Supports ing behaviour policy most reand: cruiting sub– Guides all processes steps of the recruiting process – Is aligned with strategic goals – Is modified to reflect changing needs Employee value proposition • The company • The company • A clear.1 or 2 EVP – Focuses on by potential features only tion (EVP) key talent recruits sources • Salaries and/ • Salaries.

• Unique and ef• There is • Little refective recruiting tion targets limited search is strategies are both active research to done to developed to identify talent identify alter. to meet current and future needs 106 . 3=Top Adequate Good practice Best practice 1 2 3 Under development Sourcing strategy • The organisa.STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low.and passive target untapped job seekers native talent sources/ sources sources pools from • Targeted which to • The company candidates • Leaders are recruit has a Partner-ofare prerecruited in choice position a similar way sented with a • Recruiting efwith leading lucrative and to all job apforts are little schools and persuasive plicants more than university camjob offer exercises • Applicants’ puses for recruitin soliciting • HR somedetails are ment drives and and filtering times uses not shared offer scholarship resumes and feedback across busiprogrammes to then schedness units or about new target potential uling interrecruit fit/ areas leaders views effectiveness • Little or no follow-up to check effectiveness of new hires to refine the strategy • Recruiters and recruiting processes are informative and persuasive • There is an acceptance rate approaching 90% • HR gathers data about new recruits and uses this to refine the sourcing strategy • The Board and CEO are used to speak to potential recruits when appropriate (eg at senior level) • There is a continual search for good people at all levels.

RECRUIT FUTURE LEADERS

Current status

Importance Priority: 1=Low, 3=Top Adequate Good practice Best practice
• External • There are appointexplicit targets ments are by role for hiring considered external candifor hard-to-fill dates based on positions and predicted need scarce techni• External top cal skills talent is not nec• Generally, essarily turned organisational away to favour a experience company incumis valued bent over external knowledge and skills • A coherent system of metrics monitors performance at each stage of the recruiting process • The organisation sets clear benchmarks for each stage of the recruiting process e.g. number of applicants per job opening, then monitors performance against these • Use of robust monitoring and review process means that forecasts can be made of the required number of job seekers to ensure organisation needs are met • Performance against benchmarks is reviewed and updated regularly • Problems in the process are identified early and solved to improve recruitment yields
1 2 3

Under development
Approach to external hires

• External can• There are didates are no explicit targets for hir- considered, but typically ing external passed over candidates if there is • External canan internal didates are alternative only sought when a qualified person is not present internally

Metrics for conversion

• Each • There is no business process to area tracks record the number of job some basic recruitment applications metrics: made and accepted –Number of within applicants organisation per job

–Number of • Outcomes of metrics acceptances identify per offer blockages in the recruiting process that need to be addressed

107

STRENGTHENING LEADERSHIP DEVELOPMENT

Current status

Importance Priority: 1=Low, 3=Top Adequate Good practice Best practice
1 2 3

Under development
Role of managers in recruiting

• Line manag- • Line manag- • Line manag- • Senior managers personers spend ers attend ers are not ally interview second round significant committed to all candidates time on recruiting and interviews for for the top recruitment all external interviewing three levels in and selechires • Line and the organisation activities • Line managsenior mantion including ers and HR agers attend attending • Senior manmanagers only final recruitment agers attend sometimes interviews for at least one co-lead selec- events direct reports major recruittion activities • Line manag• HR managers ment fair or ers and HR take the lead event per managers coon selection lead selection year and hiring activities then decisions calibrate their rankings

108

RECRUIT FUTURE LEADERS

Current status

Importance Priority: 1=Low, 3=Top Adequate Good practice Best practice
1 2 3

Under development
On-boarding • No induction new recruits programme exists

• New recruits who are identified as high potential are given a mentor as well as networking opportunities with other recent set times dur- • Relocation recruits to help and assimilaing the year them integrate tion support • The proprovided for • Senior managegramme ment drive the recruits and mainly on-boarding of their families consists of ornew leaders if required ganisational • All new leaders information are provided with little with a tailored tailoring for programme covspecific roles ering organisaor business tional, technical units and job role • On-boardinformation ing faculty • There is a sin- • Business units own gle standard and tailor orientation and induction induction programme programme within their offered • This occurs at area consists of HR and some support services • On-boarding faculty is largely made up of senior organisational leaders who emphasise company values and culture

• On-boarding is staggered over several weeks to provide just-intime information as well as standard organisational content

Mindsets

Attitude to search for leaders

• We need to focus on recruiting solid performers

• When we are • We need to pro• We attract actively search approached enough for and source by talented talented talented individindividuals for individuals we need to do uals regardless our business of the size of our everything to needs current pool recruit them

109

3=Top Adequate Good practice Best practice 1 2 3 Under development Responsibility • The work environment for making the is what you company an make of it employer of choice • We need to • To be an • We are a continually attractive good evaluate and employer to a Malaysian modify our range of peocompany—if work enviple we need one person ronment to leaves we can to ensure the ensure the work environalways get organisation ment has more many positive is an employer of choice features against local and global competitors • The com• The company is able pany is able to compete to attract successfully qualified talfor talented ent in some individuprofessions als against and business smaller comunits only petitors • Sometimes the company loses out to larger competitors and multinationals • The company is ranked as an employer of choice (eg in top 10 list of best companies to work for across industries and professions) • Recruiting results demonstrate an ability to attract talented leaders against competitors (local and global) Outcomes Success in leadership market • The company is not viewed as a first choice employer for potential leaders • The company rarely manages to recruit the best • There is a low offer acceptance rate compared to competitors 110 .STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low.

objectives are individual has a few in place.• The annual Criteria to ria exists for criteria for tion promotes performance identify high what constiwhat constia clear view review cycle is performers tutes a high tutes high of what conused to recaperformer or performance stitutes high librate metrics a high poten. are set and to business are somediscussed with goals times vague. but municated • Job roles are quantitative. job roles are roles are scriptions goals and perforprocesses collated and clear and and formal mance goals and practices easily available specific.• Criteria can performance to identify high tial manager at an organiperformance vary by busisational and • Both perforness area business unit mance and polevel tential are used as criteria • Benchmarks for outstanding performance are articulated in clear. each performance are not conto leaders sistently com. direct reports unclear or within 10 days unrealistic of the start of a new performance cycle • No clear crite.objectives most imporplace ed goals that tant aspects • New objectives are linked of the work.REvIEW PERFORMANCE AND PUbLICLy hONOUR ExCELLENCE Current status Importance Priority: 1=Low. quantifiable measures • Performance feedback provided in context of high performance criteria • Performance review criteria are assessed annually to ensure they help identify ‘hidden gems’ in each review cycle 111 . do not always clearly linked to • No individual measurable. capture the value creation KPIs are in results-orient. 3=Top Adequate Good practice Best practice 1 2 3 Under development • Details on all • Formal job Performance • Formal roles • Job dePolicies.• There is some • The organisa.

• Potential • Potential • Potential talent and ing area contalent identitalent is iden‘hidden ducts its own fied based on tified on an gems’ are performance performance ad hoc basis.STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low. identified durreview and appraisprimarily on ing a formal identification als linked seniority. 3=Top Adequate Good practice Best practice 1 2 3 Under development Process to identify high performers • Each operat. tenperformance process ure and direct to required review procompetencies • Performance experience cess across for position criteria appraisal business data is linked units to job role competencies • Performance and potential are the key criteria for assessing candidates • Calibration across divisions takes place to ensure fairness Link between pay and performance • Financial and • Less than 5% • A significant • Particularly for high bonus pool is other rewards of compensaperformers. available and tion is tied to reflect faca significant each person performance tors such percentage receives a as seniority • Performance of base pay is different and tenure appraisals variable compercentand are not fail to sepapensation age based performance rate people that is based on their based based on on individual calibration performance performance through the measures performance • High perform• The majority appraisal ers can earn of employees process significantly receive the more than same bonus average performers through bonuses and incentives 112 .

parties. at • CEO and • Non-financial • Annual end of project senior leaders rewards.REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE Current status Importance Priority: 1=Low.g. used as a • Provision range of recognition vehicle to within manag. performance reviews including evaluation regularly host a promotions. jectives of the designed and scope and performance implemented objectives of evaluation by an external evaluation tools are provider tools have implicit been clearly • There is and formally • There are some asarticulated few efforts to sessment of assess the effectiveness • Tools are robustness of of tools in designed to tools understandachieve these ing individual goals performance • Tools are testwithin the ored annually to ganisational ensure validity context and reliability • Tools incorporate feedback from multiple sources including personal knowledge and 360° feedback 113 .g. scope and objectives of various performance evaluation tools and systems are unclear • Specific ob• Tools are • The purpose.g. events and performers dinners) dinners) to thank outstanding performers • Leaders are able to choose from a range of incentives • Top performers are consistently and publicly recognised for outstanding contribution Quality of appraisal tools • The purpose. 3=Top Adequate Good practice Best practice 1 2 3 Under development Nature of recognition • Bonus and • Managers • Manag• Line pay are the have the ers able to managers main vehicles discretion to provide limempowered to through provide some ited financial deliver on-thewhich people non-financial rewards to spot discretionare rewarded incentives to outstanding ary rewards for for high perhigh performperformers at outstanding formance ers critical junccontributions tures e. special or not at all outstanding (e. communicate er budgets for rewards (e.symbolic and perks. are used to leaders group events reward ceremoinconsistently that they are and rewards nies.

immediate conreviews of structive feedoperational back following or financial specific performetrics) mance instances • Individuals or events and their • Leaders are managers formally trained discuss in the process of performance holding construcagainst goals tive feedback conversations • Formal performance feedback is provided within 10 days of a business performance review Mindsets Attitude to honouring high performers • It is impor• People tant that should get we treat thanked for everyone the a job well same done • We need to • We take collecacknowledge tive pride in honoutstanding ouring those who performance represent the best of who we are and what we are capable of Attitude to feedback • It is not appropriate to give people feedback on their work • During • Leaders performance should give reviews their people leaders regular should tell feedback on people their whether they strengths are meeting and weakperformance nesses expectations • Feedback is a gift that we provide to help each other daily to grow and develop 114 .g. 3=Top Good practice Best practice 1 2 3 Under development Adequate Feedback on • People do not typically performance get timely feedback about their work and they often don’t know how others think they perform • Feedback is provided on an ad hoc basis • People get • Leaders consisinformal inditently receive invidual feedformal feedback back from a about their on-gosupervisor or ing performance • Little inforproject sponfrom colleagues mation is sor as part available on • Feedback of a broader how leaders acknowledges review of are trackstrengths and project or ing against weaknesses as business performance well as improveperformance goals ment recommen(e.STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low. project dations progress • Leaders receive reviews.

updated not affect beclear.REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE Current status Importance Priority: 1=Low. 3=Top Adequate Good practice Best practice 1 2 3 Under development Outcomes Identifying leaders • The organi• Performance • Criteria for • Leadership sation can criteria is initial idenclearly comnot assess set for entry tification of municate leadership into talent talent and criteria and performance pool but the standards on-going exand potential criteria is not for continued pectations of in a meaningwidely known inclusion in new leaders ful way or understood the pool are • Criteria are and so does available. and regularly to haviour to a drive a high reflect changgreat degree performance ing business culture needs and expectations • The CEO is personally involved in performance reviews by chairing the evaluation of all senior leaders • A high performance culture is institutionalised 115 .

a candidate monitors and with a higher evaluates the potential for success of growth placements 116 . and include organisationhard-to-fill.• Clear criteria • A few pivare used to ers are aware otal positions identify pivof the pivotal have been otal positions roles in the identified organisation • Pivotal roles • Roles are are a mixture • Talent review defined as of key busiprocesses most senior ness. discussion al positions positions of potential incumbents • Senior leadfor roles ers meet regularly to assess appointments and succession plans for pivotal positions Using deployment for leadership development • Deployment • Business • Positions are • Positions leaders are assignments staffed based are staffed are treated as rewarded with some entirely on one of the pri. even if ate busiit means the ness needs. 3=Top Adequate Good practice Best practice 1 2 3 Under development Identifying Policies.STRENGTHENING LEADERSHIP DEVELOPMENT DEPLOy STRATEGICALLy TO DEvELOP LEADERS Current status Importance Priority: 1=Low.for sharing consideration a leader’s their talented mary means for leader’s qualifications individuals of developing developagainst busiacross the leaders ment needs ness needs organisation vs business • Development • Job rotation needs • Deployment needs are is rarely used decisions are considered as a developbased equally when staffmental tool on immediing. pivotal processes and practices positions • Pivotal positions are not identified within the organisation • Senior lead. most qualiindividual fied person development with low and long-term growth potensuccession tial might be planning passed over to give an • HR continuopportunity to ally supports.

3=Top Adequate Good practice Best practice 1 2 3 Under development Preparation for • Little or no new positions preparation of leaders for positions.• Preparation plays large of leaders aration of role in handbefore start leaders after of job through over to succonfirmation cessor parposition-speof position ticularly for cific training relationship and weekly and knowlleader-toedge manleader conagement versations • Preparation for each position is well provided through a mixture of just-in-time preparation with long-term development to fill any capability gaps • Formal coaching and mentorship for new roles always provided • Support continues once incumbent is in place to facilitate successful adjustment to the role • Information about the new role and changes to pay and conditions are readily available • Support and information for the family of leaders is given 117 . with ‘hit or miss’ coaching provided • Incumbent • Informal prep.DEPLOY STRATEGICALLY TO DEVELOP LEADERS Current status Importance Priority: 1=Low.

STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low. 3=Top Adequate Good practice Best practice • There is a succession plan for all senior positions • The plan is updated annually or more frequently if required • The existence of a pool of qualified successors is a factor in the performance evaluation of managers • ‘Successors for successors’ are in place with a deep leadership pipeline for pivotal roles 1 2 3 Under development Succession planning • There is no succession planning process • There is a • There is an succession informal sucplan for all cession plansenior posining process tions that identifies succession • The plan candidates for is updated most senior when a critipositions cal position becomes vacant Mindsets Attitude to rotation • Employees should stay within their own departments • The opportu• All poten• Potential nity to be a tial leaders leaders great leader should unshould have in this organidertake one the opportujob rotation to sation is ennity to work hanced if you broaden their in a different have worked organisationarea if a clear in multiple organisational al knowledge areas and networks need exists Attitude to ‘who owns members of the leadership pool’ • Talented • The talented • If there is a • Talented individuals critical need individuals in individuals belong to the managers any business belong to the organisation manager they unit should be should share and should their most shared within work for be deployed talented the work area to ensure the individuals to meet strabest orwith another tegic goals ganisational business unit outcomes 118 .

3=Top Adequate Good practice Best practice • Deployment viewed as a critical process to achieve organisational goals • There are regular quality evaluations and monitoring of success of deployment decisions • Deployment is viewed by individuals as important to their personal development and career aspirations 1 2 3 Under development Outcomes Deployment • Leaders are not moved in a coherent. co-ordinated manner • Deployment • Deployment is choreoplans exist at graphed for the business the most unit level only senior and • Deployment hard-to-fill decisions are roles across based solely the organion business sation and needs contributes to business success and individual development 119 .DEPLOY STRATEGICALLY TO DEVELOP LEADERS Current status Importance Priority: 1=Low.

timely programmes ship skills and. 3=Top Best practice 1 2 3 Under development Leadership development programmes • Few systematic leadership development programmes provided Adequate Good practice • Generic • Programmes • Leadership deleadership are focused velopment programmes are skill training on leaderrigorous. tailored to for groups and behavthe business of leaders in iours needs each level • Programmes are tailored • CEOs invest and delivered time to shape the leadership at appropriprogramme ate times in design and a leader’s delivery career • Leadership programmes occur at a few major transition points in a leader’s career advancement • They involve senior leaders in training as teachers/ coaches • Metrics are in place to measure the impact of development programmes ie individual performance in role after attendance 120 .STRENGTHENING LEADERSHIP DEVELOPMENT DEvELOP LEADERShIP AND hIGh POTENTIAL TALENT Current status Importance Priority: 1=Low.

g.g. as every critical reports part of post experience project review • Feedback or significant or at critical is formally interaction junctures recorded as development • Every leader holds regular needs and review meetstrengths for ings with individual to each indirefer to later vidual direct report • HR is responsible for collating important information for formal reviews e. individual’s appraisal outcomes • Meetings are formalised and cover individuals progress against their development plans • Actions are taken to address feedback points • Individual development plans are updated based on formal reviews 121 . 3=Top Adequate Good practice Best practice 1 2 3 Under development Coaching • CEO provides • Coaching • Feedback is • All leaders all direct and managand feedback provided at reports with ers provide are rarely milestone feedback durregular feedprovided moments ing and after back to direct only e.DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT Current status Importance Priority: 1=Low.

3=Top Good practice Best practice • HR facilitates the matching of mentees with available of mentors with the final decision on compatibility being made by • Training is provided to all mentors and mentees mentors • There is an expectation that leaders commit to at least one term of mentorship • Involvement in mentoring is expected to continue throughout a persons career • Mentorship is a key performance criterion for senior leaders • The success of relationships is monitored and assessed regularly with mentors being replaced quickly if there is no chemistry 1 2 3 Under development Adequate Mentoring • Formal • Mentorship mentoring is is offered in not offered exceptional or valued circumstances.STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low. – For outstanding performers – Those entering a critical role – Those failing to meet performance expectations • Mentors are trained to a basic level Personal development plans • There is no formal process for producing development plans • Individuals are • Individuals categorised are identified and tracked to by developensure development need ment occurs and are given relevant re• Development sources outcomes are • Development used as part of • Individual plans are organisational plans are informal and leadership used in ad hoc reviews deployment decisions • Everyone in the within each company has an business area agreed personal • Each individual is able to discuss their development with their manager development plan that they update and regularly discuss with their manager 122 .g. e.

DEVELOP LEADERSHIP AND HIGH POTENTIAL TALENT Current status Importance Priority: 1=Low. 3=Top Adequate Good practice Best practice • All senior • Managers leaders have are respona role to play sible for the in nurturdevelopment ing the next of their direct generation reports of leaders across the organisation 1 2 3 Under development Mindsets Attitude to developing others • Leadership • Developing development leaders is is not a priorHR’s responity sibility Attitude to • As long as developing self we can do our jobs we do not need to develop ourselves further • It is important • Development • It is my primary reinvolves the to keep your sponsibility to whole person job skills up manage my – we need to to date and own career find chaldevelop new and seek out lenges that expertise in personal and help us grow your role professional beyond our growth job roles • I believe that senior leaders are available to help me develop should I need them 123 .

STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low. post graduate study and mentorship • Senior leaders champion the development programmes for leaders by acting as faculty during all sessions • New leaders have visible. high quality role models who help to clarify and bring to life the leadeship model in a relevant manner 124 . 3=Top Adequate Good practice Best practice • A hierarchy of leadership training programmes exist • There are clear training and experiential milestones for all leaders 1 2 3 Under development Outcomes Nurturing growth • There are • There is no a range systematic of generic approach to leadership developing development the capaprogrammes bilities and offered to all attributes our leaders needed to meet our future strategic aspirations • Leaders can • Attendance at leadership participate in programmes is programmes high designed for their level • Leaders have within the access to and organisation take advantage of a range of additional development opportunities beyond formal training programmes such as special projects. team work.

road shows and databases • Opportunities for networking are built into all HR programmes (e. 3=Top Best practice 1 2 3 Under development Professional Policies.g. • Professional • Interest • No encourand intergroups and networking agement est groups professional is limited to is given to are funded networks are some profesdevelop netby the comsional groups endorsed by works across pany.g. on-boarding) • Funding for special projects is available to technical or professional interest groups • Activities that add value are honoured through award ceremonies 125 . networks processes and practices Adequate Good practice • Professional. IT work the organisagiven to develop tion together on tion networking mandated • Limited cenevents such as organisationtral funding conferences wide initiais provided where leaders tives engage with • Activities are senior execulimited to tives including after work the Board time • Resources are provided to pool and share expertise through knowledge management initiatives such as communities of practice.ENGAGE AND RETAIN LEADERS Current status Importance Priority: 1=Low. training. Support is the organisae.

STRENGTHENING LEADERSHIP DEVELOPMENT

Current status

Importance Priority: 1=Low, 3=Top Adequate Good practice Best practice
• Leaders are expected to organise community events • Funding is provided for social and community groups and activities
1 2 3

Under development
Community involvement

• Involvement • There is an expectation in the orthat leadganisation’s ers attend community is events such not valued as award ceremonies or the opening of new premises

• Time is avail• All leaders able during visit different work hours to sites in the organise and organisation support comand spend munity events time ‘on the and activities shop floor’ • There is an expectation that leaders participate and attend a wide range of workcommunity functions

Retain talent

• All managers • Efforts to reward and are treated retain high equally, no special atten- performers are depention or oppordent on the tunities are discretion of provided on each busithe basis of ness unit performance or potential

• The organisa• High-potential managers tion tells high performers that tend to get they are valued special attention with • The organisarespect to tion can be flexdevelopment ible regarding opportunities incentives and work tasks if required • There are a range of tools and training for managers to identify and retain ‘at risk’ employees • The organisation uses methods such as an alumni programme to maintain contact with former employees who act as ‘ambassadors’ for the company

126

ENGAGE AND RETAIN LEADERS

Current status

Importance Priority: 1=Low, 3=Top Adequate Good practice Best practice
1 2 3

Under development
Managing attrition

• There is con• Managers • Exit interview • Annual tinual dialogue and menperformance and attrition about, and tors are used reviews are rate data is measurement to monitor used as an collected, of, leadership satisfaction of opportunity however, this satisfaction leaders and is not used to to discuss and both shortunderstand future career inform retenand long-term their future tion programs plans with aspirations aspirations leaders • Exit interview • A broad range • Colleagues of recently of metrics are and attrition departed used (e.g. tenrate data is employees are ure, job role, monitored supported to business unit) and used discourage to understand during their attrition hot spots for recruitment process to try attrition and • Sophisticated to identify poand identify retention protentially at-risk grams includthose who employees are a good ing awards, organisabenefits and • Early interventional fit personal and tions are used professional to prevent development leaders opportunifrom leaving ties to foster through retensatisfaction tion conversaand loyalty are tions provided • The CEO draws on personal relationships and the coaching and mentoring network to retain leaders

127

STRENGTHENING LEADERSHIP DEVELOPMENT

Current status

Importance Priority: 1=Low, 3=Top Best practice
• It is critical that we retain our leaders – we should do all that we can to keep them with us
1 2 3

Under development Mindsets
Attitude to retention

Adequate

Good practice

• The organisa- • Managers • If people are respontion is attracwant to leave sible for tive enough they do not trying to to replace deserve to be retain their any leaders here people who who leave are ‘at risk’ – we do not of leaving by need to keep letting them the ones who know they want to go are valued

Attitude towards flexible incentives

• We know the • If we are to • To keep our • Everyone incentives retain our leaders we should that keep our leaders we need to proreceive the people here need to be flexsame rewards vide financial ible and match incentives to and incenour incentives retain people tives (both financial over the short and non-finanand longer cial) with their term desires

Attitude towards flexible community

• Work and personal interests should be separate

• It is important • We should encourage to like the people to people you have fun at work with work

• Organisational life is about far more than doing your job, it is about being part of a work community

Attitude towards alumni

• We have no obligation to people who choose to leave us

• Alumni are • We should • It is nice for still part of our make sure people to family, they are that we stay leave with our represenin touch with positive tatives outside outstanding memories of our organisaemployees the organisation who leave, tion we may be able to attract them back in the future

128

ters a sense they only to the social of family and know those in op informal fabric of the belonging relationships their immediorganisation across the ate work area • A range of through ororganisation networking ganising and activities participating are provided in cross-comincluding pany events.• People enjoy. 3=Top Adequate Good practice Best practice 1 2 3 Under development Outcomes Inspiring work environment • Senior lead. and are are motivated tion encourorganisation community to expected to ages and fosthere are embed leaders are siloed.ENGAGE AND RETAIN LEADERS Current status Importance Priority: 1=Low. social events. projects and conference activities and job rotations 129 .• Senior lead• There are few • The extent ers strive ers are given of flexibility opportunities to foster a the flexibility in work life to create a creative and to significantbalance and more interengaging ly shape their benefits is esting and work environinspiring work dependent on roles and ment for all rewards each leader’s environment attitudes • Employees are able to put forward suggestions on how to engage people further with their roles and environment • Flexible work practices are encouraged Creating • People in our • For those who • The organisa. contribute ways to devel.

STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low.are responsible for mally monitor identify and continual assatisfaction retain those sessment of levels at risk of satisfaction leaving • There is a and career • Efforts are ad standard aspirations of approach to hoc and unresponding to direct reports coordinated resignations • Career intentions are • Business discussed leaders openly and identify powithout judgtential at-risk ment employees within their own area • Retention efforts consist of proactive moves to make the environment attractive. and provide flexible incentives to attempt to retain leaders 130 . 3=Top Adequate Good practice Best practice 1 2 3 Under development Targeted programme for high risk employees • No coordinated efforts to retain employees • Leaders and • Leaders and • All leaders HR attempt to mentors infor.

organiissues request sation and • Credibility of job design. human processes and practices resources • HR provides ad hoc and reactive support to leadership development • HR has key role • HR helps • HR works in organisational business with line to strategy developleaders to understand ment with HR translate line needs head present at people and helps all major strategy requirements to implesessions into talent ment local recruiting and development • Examination of and recruitdevelopment existing people capabilities. for • HR facilitates translation of safety and business plans discriminainto people tion requirements Source of best practice • HR managers are • Some HR • HR is able • HR managviewed as having managers to access ers do not are viewed as comprehensive best practice know best and up-to-date having experinformation practices for knowledge tise in people people issues from external across all people practices sources upon e. with ment initiainitiatives HR guidance.bUILD hR CAPAbILITIES AND LINE OWNERShIP Current status Importance Priority: 1=Low. tives forms essential • HR is repart of strategy sponsible for setting process formulating policy e. HR varies by • HR coaches all • There can be recruiting and a time delay executives and business unit selection.g. 3=Top Adequate Good practice Best practice 1 2 3 Under development Role of Policies. apline managers on and by the in receiving praisals and how to manage people issue information training the development under considfrom HR and performance eration of their people • HR managers are all seconded to the line to ensure that HR expertise tightly fits with business needs and context 131 .g.

• Line manag.• Line and HR coown leadership ers and HR ers drive development: have a clear leadership understanddevelopment – Explicit roles ing of their of each are • HR involveroles within defined and ment only on leadership articulated an ad hoc • Line managdevelopment basis ers do not – At least one process collaborate of the top • Line manwith each line performagers call other or HR ers has been on HR for to implement appointed to specific help a systematic one of HR’s for issue approach to most senior resolution development roles – HR coaches line managers to build capability across all aspects of development process • Line managers regularly attend programmes designed by HR to upgrade their skills and capabilities • Line managers spend 30% of their time on leadership development Role of line managers 132 .STRENGTHENING LEADERSHIP DEVELOPMENT Current status Importance Priority: 1=Low. 3=Top Best practice 1 2 3 Under development Effective processes Adequate Good practice • HR designs and • HR designs • HR pro• HR deimplements efficesses are in and implesigns and cient processes place but are ments proimplements that make the not always cesses that processes organisation consistently that make the basically do more effective applied or not change organisation mutually the effectiveless effective • HR provides reinforcing ness of the key metrics organisation to assess the ‘value-add’ of people-related processes • Line managers view leadership development as a low priority • Line manag.

if you know what you want they can give you some good information Attitude towards HR expertise • Knowledge and expertise within HR is outdated • HR are good • Expertise within HR at helping is inconsiswith practical tent.BUILD HR CAPABILITIES AND LINE OWNERSHIP Current status Importance Priority: 1=Low. we cannot make sustained change unless they are truly integrated within the business • The depth and breadth of skills within HR is outstanding. there issues at the are some frontline outstanding people and others who under perform Attitude towards HR effectiveness • HR are es• HR are able • HR have • HR do not sential to to develop great ideas understand our sucindividual but they canthe practicalicess—nothing processes. 3=Top Adequate Good practice Best practice • HR are effective internal consultants. their making it take a bigthat have ideas are imhappen and picture view a positive practical and HR are there impact on the and build a bureaucratic to ensure we comprehenorganisation do the best sive people we can management system • HR viewed as • Leaders adding little view HR as value to builda knowledge ing leadership source • HR viewed as • HR proacpartner with tively offers clear role and guidance responsibiliand support ties for develto busi• Leaders oping and ness areas contact HR supporting and senior to help adleadership management dress specific development regarding people issues mechanisms developing leadership within the organisation Outcomes Credibility for partnership 133 . they play a central role in driving our people agenda 1 2 3 Under development Mindsets Attitude towards the role of HR • People man• The role of agement is HR HR is that work of a library. ties of running not translate happens withhowever them into the organisaout people they cannot processes tion. they provide advice and expertise across all stages of the leadership development process • HR are thought partners across all people issues.

6. Priority Proposed actions Timing/sequence 2. 5. 134 . 4. 3.STRENGTHENING LEADERSHIP DEVELOPMENT ACTIONS TO RESOLvE GAPS IDENTIFIED Gaps identified 1. 7.

KEy MILESTONES OF ThE ACTIONAbLE IMPROvEMENT PROGRAMME
Proposed Activity 1. Timeline Responsibility

2.

3.

4.

5.

135

RESOURCES

A 2.E 1.F All leadership actions are driven by the business strategy Leadership strategy must be an integral part of the annual HR and business planning cycle How to measure the size of the leadership gap Leadership model: an example The model drives other elements of the leadership system IBM leadership model CHAPTER 2: RECRUIT FUTURE LEADERS 2.B GLC leadership gap GLC transformation timeline CHAPTER 1: TAkE CHARGE OF LEADERSHIP DEVELOPMENT 1.B 2.C 1.A 3.B Conduct effective performance reviews that involve senior leaders What to look for to identify ‘hidden gems’ 138 .A 1.A 0.B 1.STRENGTHENING LEADERSHIP DEVELOPMENT ExhIbIT LIST INTRODUCTION 0.E Southwest Airlines—A Good Practice Employee Value Proposition Southwest Airlines case study Segment target audiences for employee value propositions Recruiting can be mapped as an operating process Measure the rate of conversions to new recruits CHAPTER 3: REVIEW PERFORMANCE AND PUBLICLY HONOUR ExCELLENCE 3.C 2.D 2.D 1.

B Test that pivotal positions are filled by top leaders Leaders are matched to jobs in a deployment discussion that achieves solutions in the interests of individuals.C 4.B CEO succession models GE focuses heavily on formal training programmes—many of which are offered at Crotonville CHAPTER 6: ENGAGE AND RETAIN LEADERS 6. the business unit and succession planning The job matching forum uses information from performance reviews to identify the supply of leaders And matches them to pivotal roles 4.A 8. expertise and execution to be successful CHAPTER 8: GETTING STARTED 8.D 8.C 8.A HR needs to have business understanding.A 6.A 5.A 4.E How to strengthen leadership development Audit summary Improvement plan Milestones for an improvement plan Monitor metrics to check plan is delivering improved performance 139 .ExHIBIT LIST CHAPTER 4: DEPLOY STRATEGICALLY TO DEVELOP LEADERS 4.D CHAPTER 5: DEvELoP LEADERSHiP AnD HiGH PoTEnTiAL TALEnT 5.B 8.B How companies increase their sense of community Leaders should be trained to ‘save stars’—retention conversations CHAPTER 7: BUILD HR CAPABILITIES AND LINE OWNERSHIP 7.

8 SIzING THE GAP – HOW IT CAN BE DONE MEASuRE RECRuiTMEnT RESuLTS By EMPLoyEE SEGMEnTS MEASuRE THE RATE of ConvERSionS To nEW RECRuiTS iMPLEMEnT CoMPEnSATion SCHEMES THAT REWARD HiGH PERfoRMAnCE REviEW PERfoRMAnCE DiSTRiBuTion of EMPLoyEES TEST THAT PivoTAL PoSiTionS ARE fiLLED By ToP TALEnT MEASuRE THE AGGREGATE of LEADERSHiP SCoRES AGAinST LEADERSHiP MoDEL MoniToR unPLAnnED ATTRiTion RATES of HiGH PERfoRMERS AnD HiGH PoTEnTiALS 140 .1 A.4 A.6 A.7 A.STRENGTHENING LEADERSHIP DEVELOPMENT APPENDIx 3: DETAILED METRICS A.5 A.2 A.3 A.

GLOSSARy BU CEO EVP GLC GLIC HCM HR KPI PCG SVP TOR TMO Business Unit Chief Executive Officer Employee Value Proposition Government-linked Company Government-linked Investment Company Human Capital Management Human Resources Key Performance Indicators Putrajaya Committee on GLC High Performance Senior Vice President Terms of Reference Transformation Management Office 141 .

as Secretariat to the PCG. Phone Email Website +(603) 2034 0000 pcg@treasury. including: • • Assistance on how to use the tools illustrated in this Orange Book Suggestions of potential external consultants who can facilitate the Leadership Development Audit.STRENGTHENING LEADERSHIP DEVELOPMENT WhERE GLCs CAN ObTAIN ASSISTANCE The Transformation Management Office (TMO).pcg. is the central point of contact for any questions and for all implementation assistance.gov.my www. The TMO may be able to provide GLCs with more information and assistance depending on their situation and context.my The level of support and assistance needed by GLCs will vary.gov. 142 .

.

Petronas Twin Towers.my . 50088 Kuala Lumpur.gov. Tower 2.pcg.Putrajaya Committee on GLC High Performance (PCG) Transformation Management Office. Malaysia Tel: +(603) 2034 0000 Fax: +(603) 2034 0008 Email: pcg@treasury.gov. Level 37.my Website: www. Kuala Lumpur City Centre.

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