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Friday, April 29, 2011

When people planning gets personal - CEO Forum Group

When people planning gets personal - CEO Forum Group

When people planning gets personal
Grahame Maher - Managing Director - Vodafone Sweden
Grahame Maher
Grahame Maher
More and more organisations now see culture and values as important competitive differentiators. Yet, as recently departed Vodafone Australia's Managing Director (and now Managing Director, Vodafone Sweden) Grahame Maher argues, being a values-based organisation counts for little without a rigorous selection process, ongoing assessment of culture fit, a strongly differentiated leadership development program, and a willingness for the CEO to actively plan their own succession. How and why did you go about planning your own succession as CEO?

Grahame Maher: To me the issue of succession was always a key priority, virtually from the time I took up the role three and a half years ago. I'd always thought you needed at least three possible successors for maximum flexibility, so as well as internal candidates, I went looking externally and appointed this potential successor Chief Operating Officer 18 months ago and he did, in fact, become my successor. Would you encourage other CEOs to plan for their succession from early on in their appointment?

GM: Definitely. It forces you to think about the longer-term future of the company, not just the quarter-by-quarter results. It's a very important part of your job, and if you are not doing it, you are failing the company in that regard.

One other thing that I found very useful prior to moving on from my current role this year was to take a five-week holiday late last year, during which I was committed to not getting in contact with the business. The value of this was that it gave me a chance to get really clear about my own future, so that I could hand over to my successor without any of the ambiguity you can sometimes get where the incumbent isn't really sure whether they want to go! That time away certainly helped me let go of the role, and add real value to the handover process. How does being a values-based organisation affect how Vodafone approaches people issues generally within the organisation?

GM: As a values-based organisation, the ability to grow our people is really at the core of what we do. Accordingly, people and leadership development has implications right across our business.

"You simply can’t find out all you need to know during selection to always get it right..."

A good example is how we recruit. We tend to focus more on talent and values, rather than direct experience as such, so that means we have a fairly rigorous selection process. Recently, for instance, we recruited some new people into the executive team. Each candidate would have been through about 24 hours of face-to-face interviews, involving up to ten different people. A large part of this is trying to get a good understanding of whether there is a good culture and values fit between the candidate and the organisation. Having multiple people involved also allows you the benefit of all those different perspectives.

Another part of having a strong emphasis on people development and values is deciding whether people should stay with, or leave, the company. Based on both on-the-job performance and values alignment, we are always looking out for people who don't fit the organisation, and seeing whether they should leave the company. When there is no fit, a person leaving is, I believe, good for both the company and the person involved, although it can be a tough decision and process. If you're serious about values, however, you really need to do it. At the end of the day, if someone is not aligned with what the organisation values, then they can never truly perform. That type of selection process you describe must be fairly demanding of resources. How far down the organisation is that rigorous type of selection process applied?

GM: We currently do it for the top two levels of our organisation, which are the executive and leadership teams, but hope to extend it further down the organisation. One thing we looked at in our call centres, for instance, is a kind of group recruitment process. This is almost a kind of pre-employment induction program where, say, you invite 100 job candidates to a one- or two-day program, from which you will then select twenty. Whether and/or how we would do this, however, is something I will leave the new team to work on. Do you have specific targets for people you want to exit the organisation, as some companies do?

GM: No we don't. Instead, every time we do appraisals and succession planning, we assess people on both their values alignment and their performance. As a result, we have three broad categories: leaders, who are really our high-potential and performing people; core delivery people, who may not have the same ability or attainments but are vital for the company's ongoing success, and those who aren't going to make it, who we really want to leave the organisation.

After the appraisal process, we will sit down with people and give them their feedback, so they can plan their careers accordingly. Sometimes, of course, that feedback can be very direct, such as “Well, we know you wanted to be a senior manager, but we don't think you can achieve that”, or even “We just don't think you are right for this organisation, and we need to help you find another place to go.” That's interesting, as a common complaint many employees have about performance appraisals and development plans is that there isn't that kind of frankness, and instead it's a bit soft and fluffy! Do you think there is tendency to avoid these tough discussions when doing these appraisals?

"We can easily underestimate the ability for long-term employees to think differently..."

GM: Yes - you really have to tell people if they are not right for the organisation – it's essential if you want to have a strongly values-based organisation. That doesn't mean being brutal, of course – one of our values is that we have a duty of care to all our people, so, where it isn't going to work, we have generous separation policies, long notice periods, make outplacement services available, and so on. We had an example where we had to close our call centre in Victoria . We gave all the staff 12 months' notice, gave them access to outplacement services and redeployed many to other areas of our organisation. Interestingly, the call centre actually worked the best it ever had over this last 12 month period. How quickly or slowly do you make the call on culture fit? Ideally, of course, you want to get it right during selection, but presumably this is not always possible.

GM: An old mentor of mine told me that, if you get selection right two out of three times, you are doing really well. I agree with this – you simply can't find out all you need to know during selection to always get it right. It's only when they actually come into your organisation that you can get a closer look.

My own view is that you can usually make the call after the first three months of on-the-job performance. Personally, I've found that, although I can make the assessment after three months, I tend to put off having any needed tough discussions for a few months after that! I think the problem is that, having only recently recruited them, there is a natural inclination to avoid this. I do have a discipline, however, of making sure I do have any needed discussion within the first six months of their employment, and I take responsibility for doing that. Its important I model that behaviour for the rest of the organisation, so that I am seen to be doing what we say we do, not just telling other people to do it! How important are values relative to performance? For example, do employees performing well on the job but missing the values present difficult choices?

GM: The split is at least 50% on values, in the sense that missing the values can cost you your job, even if you are performing well. Dealing with these type of people is a very important decision for the business. To me it is very clear – these are the people you have to hunt down and kill! They can be a cancer in your organisation, as they are often performing at the expense of everyone around them. It's like a sporting team who has one selfish ‘superstar', who makes sure he performs even if the team does not! How do you go about developing leaders internally? Do you have a strongly segmented program around the leadership/core delivery distinction you nominated earlier?

GM: Certainly. We segment our development programs across a range of factors, such as potential, function, experience and geographical/cultural considerations. This last one is about keeping a balance between having a global talent pool, while at the same time recognising that there are advantages in letting local operations develop their own approaches to leadership. Leadership in Japan , for instance, may not be the same as leadership in Sweden , or leadership in the UK .

In all cases you need to be really clear about what you are trying to achieve with your development programs – and they aren't always about leadership. In my case, for instance, I'm a good leader, but a pretty lousy doer, so there are other people who can do things better than I can. These doers, or core delivery people, have the same right to development as anyone else. How easy do you find it to assess people's leadership potential, even if they have been working in the company for some time?

GM: It's enormously complex. People can, and do, change, particularly when they are going through the self-development programs we put them through. One of our key operational executives is a good example. She's been with the company 17years, and I have known her for 10 of those, and she has really emerged as a top leader in recent years. This highlights to me that we can easily underestimate the ability for long-term employees to think differently. It's easy to leave finance people in finance, sales people in sales, and so on. If you move people around internally between functions, you often get great development outcomes.

However, that doesn't mean we can change people – I firmly believe that you can't. Only people can change themselves, and that's the point of our programs. All you can do as an employer is provide people with a resource so they can be the best they can be.