Foreword by Jac Fitz-enz
Foreword: by Dr. Jac Fitz-enz
Chapter 1: What is Stealth Leadership?
Chapter 2: The Stealth Fighter Needs a Target: The Importance of Competencies
Chapter 3: The Leadership WHEEL OF SUCCESS ™: The Outer-Core
Chapter 4: The Leadership WHEEL OF SUCCESS ™: The Inner-Core and Coaching from the Inside-Out
Chapter 5: The “Nuts and Bolts” of Positive Performance Management (PPM)
Chapter 6: Succession Planning: Using Assessment to Calibrate Performance, Potential and Readiness
Chapter 7: Psychodynamic Model of Executive Maturity—TheEnneagram
Chapter 8: Understanding the Heart Leader Triad: Helpers, Entertainers, and Artists
Chapter 9: Understanding the Head Leader Triad: Thinkers, Disciples and Activists
Who they Are
Tips and Strategies for Coaching Each Style
Coaching Suggestions for Each Style
Chapter 10: Understanding the Gut Leader Triad: Drivers, Arbitrators and Perfectionists
Who they Are
Tips and Strategies for Coaching Each Style
Coaching Suggestions for Each Style
Chapter 11: Integrating Assessment Results and Executive Coaching—“Development”
Appendix A: The Stealth Fighter Index (SFI)
Appendix B: Succession Management Index (SMI)
Appendix C: The Mattone Leadership Enneagram Index
I always approach a new book from three standpoints: One, is the premise valid? Two, does it add value to the field of human capital management? Three, is it practical and useable? John Mattone’s book passes all three tests.
Talent management has become such a widely used word that it is difficult to ascribe any unequivocal meaning to it. In this case John focuses his argument on two of the most fundamental practices of talent management: assessment and coaching.
Assessment was a very popular practice in the 1970s but slowly lost its way when attempts to measure its value were weak to nonexistent. Fortunately, with the advances in analytics over the past decade, assessment is finding new life. This is very important because of the shortage of technical talent in the marketplace, shifts in preferred work/life balance and the unceasing changes in all aspects of management. This confluence of forces demands the best methodology and tools for an organization wishing to gain or maintain competitive advantage. It also applies to government. Given the massive budgets and deficits citizens are screaming for efficient and effective delivery of services.
Perhaps the greatest value to be found in John’s book is the way he brings together assessment and coaching around leadership development. Too many organizations spend tens of missions of dollars on leadership and management development without a clear end game. One CAO from a major bank told me they spend a quarter of a billion dollars annually and have no way of knowing what difference, if any it is making. Hopefully they will buy this book by the thousands and apply its principles.
Dr. Jac Fitz-enz
In today’s challenging economy, leaders at all levels are facing enormous challenges when it comes to achieving and sustaining breakthrough operating results. Globalization, economic change, more stringent regulation and tougher governance make realizing shareholder value increasingly difficult. By extension, leaders at all levels are challenging the leaders of HR and Talent Management to become more strategic, stronger operating partners, and prove their value.
Talent Leadership: A Proven Method for Assessing and Developing High-Potential Employeesis written for leaders of HR, Talent Management, and OD/MD professionals who are striving to become stronger operating partners, more strategic and, who are energized and passionate about getting and keeping their seat in the boardroom. As pilots of their respective organizations (i.e., stealth fighters), this book is also intended for CEOs and senior operating executives. Talent Leadership is a research and empirically-based book that uses my “Stealth Fighter” Model as the foundation for explaining the predictive relationships that exist between an organization’s leadership assessment and development practices and their achieving ultimate operating success.
As you read this book you will learn about organizations that excel in:
(1) Using assessments to benchmark current and future executive talent;
(2) Leveraging accurate assessment data in the form of targeted development—through the use of coaching and other means; and
(3) Understanding the difference between performance and potential—and can accurately demarcate talent on both—achieve significantly greater operating results as measured by EBITDA, net profit and other critical operating metrics.
This book contains the best of what I have learned in my 30 years as a human capital consultant, executive coach and industrial psychologist. I have included a number of best practices, case study examples, authoritative research, practical assessments, as well as a variety of practical tools and models to equip you the reader with the knowledge, skills and passion to become superior HR leaders who are acknowledged and respected by their operating peers as critical drivers of operating excellence.
The Essence of Stealth Leadership
Organizations that excel in leadership assessment and development create a culture in which current and future leaders continuously develop:
Great leaders, in turn, by virtue of their Capability—create a culture for their employees and teams in which they become more Capable, Committed, and Aligned. These three magical elements are called “leading indicators”—they predict operating results. Therefore, it is vital that organizations measure, calibrate, and recalibrate their current and future leaders on these “leading indicators”—and, as critical, they leverage this calibrated data and information using executive coaching and development.
In reading this book, you will learn to:
This book originated from four sources: constant travel over the last 30 years; research; consulting with over 250 organizations; and personal experiences. My speaking, consulting and executive coaching work has put me in contact with all types of organizations and people all over the world. I listened, observed, and gave assistance when/where needed. This book reflects the essence of what I learned about how organizations can strengthen their leadership assessment and development practices and realize impressive operating results. As an industrial psychologist I have long respected assessment and measurement. From a pure measurement standpoint I have learned that there are strong predictive relationships that exist between the strength of an organization’s leadership assessment and coaching practices and such operating metrics like EBITDA and Net Income. As an executive coach and consultant—I also have enormous respect for the qualitative aspects of helping leaders and organizations achieve breakthrough performance—I have learned that many organizations are neither prepared nor equipped to leverage calibrated assessment data to drive better development and succession decisions.
Unfortunately, there is a proliferation of coach training and certification programs out there that often fail to meet either the organizations’ or the coaches’ expectations. In my experience—here are some of the reasons why this occurs: (1) they don’t emphasize the proper use of a variety of diagnostic assessments to calibrate performance, potential and readiness; (2) they don’t provide sufficient depth regarding the proper interpretation of individual assessments; (3) they don’t emphasize the critical “art and science” of properly integrating and interpreting perception and objective assessments; and (4) most importantly—they don’t teach the “how to’s” of integrating assessment results into a simple, practical Individual Development Plan. Given this state of affairs, my objective in writing this book is to help you become a stronger HR representative in the boardroom, a stronger assessment guru, and a stronger executive coach. I want you to practice as a professional in this arena with a healthy respect for the predictive nature of what it is we do and the pure quantitative value we can bring to organizations—but, also, practice with a healthy respect for the qualitative and “softer” nature of what we do and the value we can bring through personal touch, respect for others and character.
What Is Stealth Leadership?
In today’s global economy, it is critically important that organizations optimize their investment in human capital. Only the human capital asset can provide an organization with any real hope for meaningful market differentiation, positive branding, superior execution and ultimate operating success. Business strategies which are overly weighted towards developing new technologies or cost controls—for example, without the proper weighting of the human capital assets required to execute strategy, will result in a disastrous, short-lived plan that will lead to doom. All assets, except the human capital asset, eventually become commodities. Beyond this, a host of external factors—an aging baby boomer population, job market instability, declining birthrates, and worker “migration”—are combining to make it extremely challenging for organizations to optimize their investment in human capital. For most organizations, it is just plain difficult to find and keep good talent. Shifting world demographics, the aging workforce, and global mobility, as well as a myriad of internal challenges (i.e., limited resources, skill gaps, insufficient leadership skills, etc.) are forcing organizations to re-think their human capital management strategy. Talent shortages at the leader level are exacting a heavy toll on growth and costs. Some organizations are literally sitting on capital, unable to expand into new markets or make critical acquisitions, due to a lack of leadership talent. Other organizations are spending millions on recruitment as they scramble to fill key positions. The cost of training new managers and executives is equally taxing. Of greatest concern are the costs of poor decision making as organizations are forced to place less qualified individuals into leadership positions. Poor leadership can translate into millions in lost profits and missed opportunities.
The Search for Solutions [H1]
What can be done to reverse these trends? Clearly, organizations need outstanding high potential identification and development programs. Every process from succession planning to leadership development must be world class. The market is too competitive for anything less. More than anything else, however, an organization’s ability to successfully reverse these trends is in direct proportion to the health and vibrancy of their talent management systems (i.e., Deployment—selecting and promoting talent; Diagnosis—continuously assessing leader, individual contributor and team capability; Development—continuously developing leader, individual contributor and team capability; and Demarcation—rewarding performance. None of this will occur, however, unless organizations and their leaders demonstrate Talent Leadership:
Elements of a Winning Human Capital Mindset [H1]
At the core of creating a winning “mindset” and strategy is a core belief: accurate information drives effective strategies. This is good news for most organizations because they already have a great appreciation for accurate information. Operating metrics, financial ratios and a variety of other analytic tools receive intense attention by Boards and senior leadership, unfortunately most are “lagging” indicators—after-the-fact metrics that tell a story of what happened (e.g., cost per hire and turnover). They are important because they can lead to course correction as the organization strategizes for the future; however, they are not as important as “leading” indicators—like leader capability and quality of hire/promotion—which are proven predictors of operating results. Early measurement of “leading” indicators enables an organization to course correct much earlier if necessary to ensure operating goals are met.
Being accurate (only as a result of assessment) must begin with the end in mind. Organizations and their leaders need to define the desired future state along with the competencies required to execute both the current and future strategy. Organizations that excel in human capital/talent management practices are passionately and diligently focused on operational targets as well as the knowledge, skills, abilities (i.e., competencies) required to meet those targets for every position—CEO, senior leaders, leaders, managers, individual contributors and teams. And that’s just the beginning. From there, it is critical to be calibrated on the competencies both incumbents (from CEO to individual contributor) and external candidates possess (only as a result of assessment). Ultimately, it is only through accurate targets and talent/team diagnostics that will enable an organization to make the best selection and promotion decisions, training decisions, succession planning decisions, and reward decisions.
All assessment—whether directed at isolating competencies, determining CEO and senior leader readiness, determining potential, or determining team effectiveness and engagement levels—needs to be focused on providing better information, “leading” indicator information as a basis for improved decision-making. Not unlike the field of medicine, in the field of talent management, it is not too far from the truth to state: prescription before diagnosis is malpractice. If leaders can lead their managers and teams on a rewarding journey—characterized by a passionate and diligent focus on assessment and the power that assessment information yields—such a journey will provide a solid foundation for other critical beliefs and practices to emerge. These beliefs and practices are shared by organizations with superior human capital/talent management processes:
All of these beliefs should be the catalyst for action—positive action. According to McKinsey’s War for Talent Research, however, the actual percentage of organizations engaged in positive human capital practices is very startling—and is easily traceable to a relative weak human capital “mindset” and poor execution. Here are the percentages of senior leaders who strongly agreed their own organization did the following:
External and Internal Challenges [H1]
Aging baby boomers, declining birthrates, and volatility in the job market are combining to raise the stakes in the human capital market. Global competition for talent, especially leadership talent is intense. Leadership shortages are more pronounced in growing markets such as India and China. Finding leaders in these markets with experience in western corporate culture is proving difficult, with many organizations competing for the same small population of individuals. On the flipside, finding U.S. leaders with global experience is proving almost as challenging. In one recent study conducted by Executive Development Associates, globalization was rated fourth as a cause for today’s leadership shortages. The first? A lack of needed skills. By extension, it is clear that talent shortages exist at every level of an organization—both in quantity and quality. Beyond the external factors, there are significant internal challenges that make it extremely difficult for CEO’s, the senior team, managers, individual contributors and human resources to believe in and execute a winning human capital/talent management system. As stated earlier, these challenges are tied to the 4 D’s of your human capital/talent management processes: Deployment; Diagnosis; Development; and Demarcation. If unsolved, these challenges will exact a significant toll on your organization’s performance. That said, an organization’s ability to successfully combat these issues is in direct proportion to the strength of their human capital/talent management processes.
Deployment Challenges [H2]
Diagnostic Challenges [H2]
Development Challenges [H2]
The “Stealth Fighter” Model[H1]
The “Stealth Fighter” Model offers a compelling, symbolic way to understand the predictive relationships that exist between critical human capital/talent management processes (the 4 D’s), the “leading indicators” (capability, commitment and alignment—more on these later), intermediate outcomes, and ultimate outcomes. The 4 D’s essentially act as the 4 turbo-charged engines that propel the “Stealth Fighter” (the company) towards its target—defined as an organization’s “Future Desired State” and the required competencies to execute both the current and future business strategy. By way of analogy—if the 4 engines are “well oiled” and functioning at a high level (i.e., optimized) and working together (i.e., integrated), they will propel the “Stealth Fighter” towards its’ goal.
In practical terms, an organization’s Human Capital Value Proposition (HCVP) is the holistic sum of the following practices: (1) Deployment—Selection and Promotion;(2) Diagnostic—Assessing Leaders, Individual Contributors and Teams;(3) Development; and (4) Demarcation—Performance Management;and their relative impact on multiple levels of business outcome—such as capability, commitment and alignment (leading indicators), intermediate outcomes such as individual and team performance (lagging indicators), and ultimate outcomes such as organizational revenue, profits and operating ratios. Regardless of the exact words used to capture a given organization’s HCVP, one thing is sure, the elements identified in the “Stealth Fighter” model need to be well thought out, believed in, communicated, executed, and measured (assessed)—continuously.
At its core, a great HCVP encompasses everything employees experience and receive as they are employed by the organization—including the degree of engagement they experience, their comfort and “fit” within the culture, the quality of leadership, the rewards they experience, etc. A great HCVP always encompasses the ways in which an organization fulfills the needs, expectations, and dreams of both incumbents and applicants and should be the reason—everyday—for why leaders, individual contributors and teams should recommit to give their absolute best. More than anything, a great HCVP clearly connects winning human capital practices to business and operating metrics. As was discussed earlier, there exists no better way to create the belief in the value of the human capital asset, than by demonstrating the connectedness between winning human capital practices and operational success. The research is clear and compelling. The Hackett Group’s 2009 Talent Management Performance Study involving hundreds of Fortune 500 Companies—gathered both qualitative and quantitative data showing enterprise financial, operational and process payoff’s from talent management. Companies with the most mature talent management capabilities (i.e., the 4 D’s) had significantly greater EBITDA, net profit, return on assets and return on equity results than those companies who were immature in their talent management processes. Additionally, mature talent management companies had leaders who believed in the value of the human capital asset, were passionate about investing in building and growing talent, were relentless in their assessment of leaders, individuals and teams, and shared their human capital responsibilities with line managers and the Human Resources function.
It is clear those organizations that excel operationally do so initially with their human capital practices. They select and promote only those leaders and individual contributors who demonstrate (as a result of performance and objective assessments) they have the highest probability of being successful; they benchmark and essentially “certify” (as a result of assessments) that leaders, individual contributors and teams have the capability, commitment and alignment required to execute strategy; they provide a rich, compelling, engaging and dynamic learning and performance support environment in which leaders, individual contributors and teams are motivated to become the best they can be; and they reward and recognize those who truly execute.
A strong HCVP foundation leads to: (1) Capability-“Can Do”; (2) Commitment-“Will Do”; and (3) Alignment-“Must Do”. Great organizations excel in creating the belief that their leaders, individual contributors and teams have the “can do” (i.e., the skills, the talents, the behaviors) to execute; the “will do” (i.e., passion, motivation, drive) to execute; and “must do” (i.e., an overwhelming sense of connectedness to the culture, mission, strategy and values of the organization) to execute. To put in different words, a strong HCVP is the foundation for an organization to build and sustain a culture in which leaders, individual contributors and teams become continuously more capable, committed and aligned. In fact, organizations that excel in selecting and developing talent—with a focus and unwavering commitment to optimizing these “leading” indicators—as indicated earlier—achieve impressive operating results.
Assessment and Structure
According to the Society for Human Resources Talent Management Survey Report, the number one challenge for organizations today is building a deeper reservoir of successors at every level. Predictably then, most organizations are likely not utilizing predictive assessments and/or a structured process to help with high potential identification and promotion/succession decisions. In fact, according to PreVisor’s 2009 Assessment Trends Report, only 50% of the organizations surveyed indicated that assessments were a critical part of their succession planning processes and only 33% indicated that they used a structured promotion process for all leaders within their organizations. How do organizations overcome this challenge? The answer is clear—there needs to be a passionate and diligent focus on assessment and structure.
The obstacle is that most organizations extract leadership talent from within the ranks of their individual contributor population; if there is a lack of focus on assessments and structure, subjective views of capability, commitment and alignment are weighted more. This leads to promotion and high potential decisions often with little or no substantive evaluation of their real capacity to lead others and execute consistent with the mission of the organization. The advancement rationale seems to be that individuals who are skilled and have excelled on one area will also be likely to excel in other areas, but of course this is not a reliable assumption. As indicated throughout this book—a better basis, a much better basis for making high potential and promotion decisions lies in the passionate and deliberate assessment and alignment of skills, motivation and personality required for leadership positions. The notion that the best predictor of future behavior is past behavior—simply, is not correct. The absolute best predictor of future behavior is past behavior plus “overlaying objective assessments” plus “integrating objective assessment results with perceptions of behavior” plus “leveraging the integrated results” will equal predictable and sustainable performance in leaders, individual contributors and teams (see formula below).
FSSP—future superior and sustainable performance
OOA—Overlay Objective Assessments
IAP—Integrate Assessments w/Perceptions
LIR—Leveraging Integrated Results
The Discrepancy Model below clearly shows the value of overlaying objective assessments on “perceptions” as there will always be corroborative information that generates—which is good, however, the real value of assessment lies in the inevitable “discrepant” results that generate—where “talent inflation” and “talent deflation” is uncovered (without assessment would never have been uncovered). These two quadrants represent the “secret” to coaching, developing and helping individuals become the best they can be.
[AUTHOR: HAVE YOU SENT US THE DISCREPANCY MODEL?]
INSERT DISCREPANCY MODEL HERE
The Four Objectives of Deployment [H2]
Inherent in this four-part definition of the goals of deployment is the requirement for “quality of hire/promotion” metrics that provide an early indication that the individual selected or promoted, in fact, is a capable, committed and aligned talent. Waiting for formal performance reviews (which are “lagging” indicators)—is too late. Typical “quality of hire/promotion” metrics include: time to proficiency; surveys of hiring managers, feedback from managers and Board, etc. Leveraging this information early and often and integrating it with previous objective assessment data—will enable early and effective course correction—which benefits the newly promoted talent and the organization.
What about the role of assessments with incumbent leaders, managers, individual contributors and teams? Since all incumbents from the CEO to senior leaders to managers to individual contributors and teams can be assessed on Capability, Commitment and Alignment—the “leading” indicators discussed earlier, it would make strategic human capital sense to calibrate and re-calibrate on these indicators again—to enable early course correction and ensure operating goals are met. It is prudent and, in fact, healthy for an organization to benchmark (i.e., assess “can do”, “will do” and “must do”) senior leaders, managers, individual contributors—salespeople, customer service, etc., and teams and gain valuable insight into individual and collective strengths and gaps. Going back to the Discrepancy Model—where “talent inflation” and “talent deflation” is uncovered regardless of person, role or level—the incredible opportunity that then exists for such individuals to discover the special “keys” to becoming the best they can be.
What’s interesting is when great human capital organizations focus on “leading” indicator assessments—not only do they employ individual capability assessments like multi-rater assessments, communication style assessments, personality assessments, values assessments, simulation assessments and situational judgment tests, etc., as part of their battery of diagnostics—they also utilize assessments that are effective in accurately diagnosing commitmentand alignmentfactors with the use of pulse and engagement surveys. In fact, an organization’s engagement levels are highly predictive of operating results. The Gallup Organization has reported the bleak news on the issue of employee engagement. They reported that 52% of the American workforce is disengaged, while another 17% is “fundamentally disconnected” from the work they are paid to perform. Said differently, only one in three workers extends the necessary effort that moves organizations forward. Some—like Ritz-Carlton, Marriott Vacation Club, The Home Depot, etc., seem to understand the importance of engagement and tend to measure engagement levels more frequently—but most organizations don’t measure enough.
What about the role of the leader? The responsibility leaders and managers have in fostering a work environment built upon rapport, trust and credibility cannot be over or underestimated. An engaged workforce is established by the quality of immediate supervision—as well as the quality, depth and effectiveness of communication by the CEO and senior leadership. All employees—from the senior level to individual contributors must perceive that they are being coached and developed to execute the competencies, skills and behaviors required for success (i.e., “can do”); exercise the passion, drive and motivation required for success (i.e., “will do”); and exhibit the required “fit” and connectedness to the mission. Ultimately, superior operating performance in any organization is the direct result of an unwavering commitment to continuously measure both individual and team capability, commitment and alignment–as indicated earlier, the focus on calibration and re-calibration is the foundation for early course correction and positive individual (i.e., coaching, workshops, summits, institutes, on-line learning and on-the-job development) and organization development planning (i.e., organization design changes, change management initiatives, etc.) execution.
What about Demarcation? [H1]
Few organizations separate employees into performance categories—“A”, “B” and “C” players.
If an organization does not engage in a systematic approach to separate talent, both in terms of performance and potential, then it becomes impossible to make the best strategic human resources decisions (i.e., rewards, promotion, succession planning, and termination decisions). After all, employees who consistently execute at the highest levels should be rewarded more than employees who don’t. Great organizations distribute the investments they make in their people accordingly. They differentiate on things like pay, bonuses, opportunities, shifts, and recognition. They reward their best performers with fast-track growth and pay them substantially more than their average performers. They develop and “affirm” their solid performers who are always trying to raise their game. They also assertively address and remove employees who are underperforming. Their belief, a perceptive and correct one, is that condoning or tolerating poor performance is destructive to high performers’ motivation for greater success and achievement; leadership’s actions always speak louder than words, and few things communicate organizational indifference and apathy more loudly than treating high, average, and low performers exactly the same.
Most organizations, unfortunately, struggle with this concept. Typically, they don’t have a way to identify the A’s, B’s and C’s, nor do they have a systematic approach and process to ensure that appropriate actions are taken. Most organizations, frankly, conduct one-day succession planning exercises at corporate headquarters; however, those exercises are done with little objectivity (i.e., objective assessments) resulting in less than effective development planning and succession decisions.
October 3, 2017
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