Canadian HR Reporter

CANADIAN HR REPORTER July 13, 2015 12 EXECUTIVE SERIES/NEWS Find these suppliers and more in the HR Vendors Guide – your source for human resources vendors, suppliers, consultants and professional development from across Canada. Visit www.hrreporter.com/hr-vendors-guide HR VENDORS GUIDE HR VENDORS GUIDE Are you looking for help with recruitment? Training and development? Recognition? Information on HR professional development and post- secondary programs? "We do things that are not safe. We'll unemploy 5,000 or 10,000 people and give ourselves big bo- nuses. And that has never ended well," he said. "One of the problems we have right now in the United States (particularly) is the tremendous gap between CEO and labour pay has never been bigger. And this ends in one of three ways — war, revolution or taxes. Always." But, at the same time, some of the rapid changes we've been see- ing may result in more pay equity for workers, said Hyatt. For a very long time, there was no upward wage pressure — but then recently behemoths such as WalMart increased wages for some employees in the United States. "Not because they want to — because they have to," he said. Exponential change If there's one thing organizations need to keep in mind when plan- ning for the future, it's that change is moving at an exponential pace, said Hyatt. "Everything that you know will be disrupted significantly but the reason you don't see it coming… is because you believe it's linear and not exponential. And you believe, and I believe, that it's based on what we've seen in the past — that's not what's going to happen." Change is exceptionally diffi- cult to predict because we can't do so using logic — we can't base future predictions based on what we've seen in the past, because change doesn't unfold in a linear manner, he said. And that means rapid and un- foreseen changes to jobs, hiring, human resources and even the way we think about work, said Hyatt. "e sharing economy is the way we're going to do things and as artificial intelligence rolls in, it's going to happen more and more," he said. "e future will be shockingly different." Rapid changes Who here can drive this bus? Putting a new CEO in the driver's seat of any organization is risky. is one individual has more impact on the employer's suc- cess or failure than anyone else, so picking the right person is critical. David Gibbons of Korn Ferry and Paul Gryglewicz of Global Gov- ernance Advisors describe a few ways to mitigate this risk. e first is to define the organization's destination and its roadmap to get there. In other words, what is its five- to 10-year strategic plan? Having a clear plan in place before switching drivers certainly mini- mizes one of the unknowns in the CEO succession process. Once the strategic plan is de- fined, the next step is to perform a needs analysis, defining the skills and talents required in the next CEO to make sure she aligns as close as possible with the plan. Organizations can then set about finding suitable candidates. ey can be found internally or externally and today, more or- ganizations are implementing talent pipeline programs to iden- tify high-potential employees and start grooming them as early as possible for leadership roles. is program typically extends well beyond the CEO and other C- level executives to include several management tiers. Some include non-managerial candidates as well, conceivably spreading out to every employee. By doing so, they ensure the pipe- line is adequately stocked with capable candidates who can com- fortably fill any vacancies that may crop up — be they anticipated or precipitated. These leadership develop- ment programs vary depend- ing on the level at which the candidate currently resides. For example, a C-level executive is groomed quite differently than his immediate reports, and so on throughout the organization. Each person is trained to assume positions deemed to be immedi- ately ahead of him as well as pro- motions into completely different departments and divisions. is is particularly important for those organizations that are geographi- cally dispersed. Having a leadership program gives an organization a common vocabulary for talking about what it requires in its leaders at all its various levels. It also establishes a consistent discipline for assessing leadership potential and actively managing the talent pipeline for the organization as a whole — thus managing succession for all key positions. It is highly recommended this plan, including the strategic por- tion, be reviewed and recalibrated at least annually in order for it to keep pace with other variables such as industry trends, market dynamics, competition, tech- nology, social media, regulatory changes, workforce diversity and transparency. As these change, so too must the strategic plan and, subsequently, the talents and skills of the leaders. It could be there are no suitable candidates internally, particularly if an organization is in trouble and needs to make a significant change in its leadership platform or its strategic direction. e good news is there are plenty of capa- ble candidates available, and they come with no history with the or- ganization, thus no debts to repay and no baggage — a clean slate. is is useful for organizations where significant changes must be made to get the organization back on the road to success. The potential not-so-good news with hiring outside talent is the candidates are relatively unknown and, therefore, are a higher risk. It's worthwhile keeping an eye on good external candidates though, even during the non- hiring phases, as they can serve as benchmarks for their internal counterparts. And, if the need should arise where no suitable in- ternal candidates are immediately available, this external pool serves as a prime secondary source. Organizations with formal CEO succession processes in place tend to be those that have made leadership development a priority. ey take leadership and employee development seriously, baking it right into the cultural DNA. ey speak it and they do it. ey know success hinges on having the right people in the right positions, all executing on the right strategy. ey know the value of having qualified drivers in each position and they wisely invest to create the best. Morgan Smyth is an SCNetwork thought leader and a change manage- ment consultant who launched his own IT services company which soared to Profit Magazine's 50 Fastest Grow- ing Companies. He is based in Toron- to and can be reached at msmyth@ braegen.com. Morgan Smyth Leadership in Action the CHRO should most definitely seize the opportunity. Extra profit growth "On average, portfolio strategies are twice as impactful as pipeline strategies, leading to an extra two per cent growth in year-over-year revenue and profit," said CEB. I never get too excited about top-line growth but I love it when the bottom line is increasing. Two percentage points from one stra- tegic initiative is not too shabby. From this perspective alone, rein- venting succession management is a worthwhile undertaking. But, there is also the increased scrutiny from the board of direc- tors and the large number of lead- ers who are dissatisfied with the current approach. It's time to turn the statistics around. The CEO, CHRO and head of the HR committee should reach out to each other. In part- nership, they can transform suc- cession management for the new world. Edmond Mellina is a commentator for SCNetwork on organizational ef- fectiveness. He is the president of OR- CHANGO, a Toronto-based learning and consulting firm that specializes in building the change capabilities of organizations while helping them execute strategic change. Edmond contributes monthly to the blog of HR People & Strategy. He is a judge for Canadian HR Reporter's National HR Awards. Follow Edmond on Twitter @ edmondmellina. Increased scrutiny UGLY STATS < pg. 11 DRAGON < pg. 9

• Cover