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Three Mechanisms for Grooming Leaders

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Three Mechanisms for Grooming Leaders

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IBM's human capital management program systematically sifts its talent pool, shores up the skills that leadership candidates lack, and prepares a comprehensive succession plan. What lessons can Taiwan's companies learn?

Three Mechanisms for Grooming Leaders

By Hsiao-wen Wang
From CommonWealth Magazine (vol. 431 )

Paul Liu, executive of Global Business Services IBM Taiwan, starts his busy workday like any other Big Blue employee around the globe – by switching on his computer and checking his e-mail. Among the flood of messages, one labeled "private" sticks out on the computer screen. The e-mail is from a Japanese colleague of Liu's and reads as follows:

"This is my history: After joining IBM I served as sales representative for more than 10 years. Then I was in charge of channel management at the Asia-Pacific headquarters for half a year before doing a two-and-a-half-year internship in New York. During my stay in the United States, I spent six months studying strategies and marketing in the petrochemical industry, one year studying marketing and operations in the electronics industry and one year learning how I could support the global supply chain management from the position of general manager for a single country. Subsequently, I returned to Japan, where I was in charge of the zSeries server brand..."

At IBM such examples of steady career growth are not the exception. Each of the company's roughly 360,000 employees around the world has his or her individual training and career plan. Every supervisor has the promotion plans for the top 20 percent of his department's staff on computer. The same goes for the department's leadership succession plan. So it should not come as a surprise that Taiwan's corporate giants such as China Steel, MediaTek, Hon Hai Precision Industry, and Sinyi Realty are knocking on the doors of IBM Taiwan to learn how the high-tech company has managed to build such a rich talent pool.

IBM simultaneously uses three mechanisms to select, use, train and retain personnel with potential, and to groom them into future leaders.

Mechanism 1: Integrated Performance and Training Plans

IBM's human capital management differs most from other companies in that it combines performance plans with programs to mentor talent development.

The company assesses employee potential based on nine basic competencies: adaptability, drive to achieve, creative problem-solving, trustworthiness, teamwork and collaboration, communication, responsibility, client focus, and passion for the business.

While the average company conducts regular written performance assessments that only require employees to check preset choices in a questionnaire, IBM first determines what kind of position a certain manager is supposed to assume in the future to help the company build its talent pool and meet its organizational growth needs. Then assessments focus on pinpointing which expertise or leadership skills the manager in question still needs to develop to fit the job description.

First, employees undergo a competence analysis developed by IBM's Thomas J. Watson Research Center that uses mathematical models to quantify each individual's competence gap. The company can then prescribe the training remedy best suited to close the gap.

A while ago Liu himself had problems handling his workload. Although he stayed at his office until after 8 p.m. every day, he usually had more than 200 unread or unanswered English e-mails sitting on his computer at the end of the day. His performance assessment showed that he most needed to work on time management. Therefore, Liu was assigned a mentor to coach him one-on-one every Monday morning to find and eliminate the flaws in his time management. All in all, Liu needed six weeks of coaching. "The objective of assessments is to bring about a major change in attitude and conduct, while also helping talent to grow in the direction that the organization needs," Liu says.

Mechanism 2: Top Talent Management

IBM's talent management follows the principles of selecting, using, cultivating and retaining staff. Based on performance, key competencies and leadership skills, the top 20 percent at each level of the company hierarchy are sifted out and receive individual career development coaching.

As can be seen from IBM's leadership development structure, the company manages its top talent in a never-ending circular process (see table 1).

Its most important first step is identifying and selecting talent. Only in the second step will the company decide who is assigned to which position and how this talent is managed. In step three staff are given training and opportunities to prove themselves, while step four focuses on motivating and retaining talent.

Mechanism 3: Successor System

IBM's third mechanism is its corporate succession system, which grooms talent for the march to the top of the pyramid. Such succession planning is what Taiwanese enterprises lack most.

Jack Welch, the former CEO of General Electric, often told the media that his foremost task is to identify and train a successor.

Welch handpicked his successor in a well-planned manner. First, he promoted the three GE executives that he had selected as successor candidates to top positions and then he promoted three others into the posts vacated by the three potential successors. Welch was also prepared that once a successor had been named (Jeff Immelt eventually prevailed), the two other candidates would leave the company. 

In IBM's corporate succession system, managers and key specialists at all levels are required to train successors whose names are listed in a successor list (see table 2).

"I'm just joking here, but if I got hit by a car this morning, the company would know who could take my place right away," Liu says with a smile.

Empty leadership pipelines are ultimately the biggest threat to an organization's growth. And investors are likely to panic if there are too many blanks on the list of potential successors for key positions within a company. Taiwan's corporate founders, general managers, and departmental supervisors need to get their act together and fill out a successor form. The fewer blanks they leave, the better they can prove that their companies' talent pools are well stocked.

Translated from the Chinese by Susanne Ganz


Chinese Version: 三大機制 找到IBM領導人

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