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Solid Science…Better Results
Unlocking the ScienceScience of Talent Management
Predictive Performance
Analytics
Solid Science…Better Results 2
How Do We Apply
Total Quality Management (TQM) and Six Sigma Standards
To Create
Talent Quality Sales Management (TQSalesM)?
Solid Science…Better Results
We Need A Change in Mind Set
Beyond Benchmarking & Competency Studies to
Actuarial Standards
Predictive Analytics for Talent Management:
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Solid Science…Better Results
The “C” Suite Relies on Predictive Analytics
TQM focuses on finding sources of error and eliminating them
• ISO and Six Sigma are modern refinements of TQM
• The Six Sigma error rate is 3.4 times in every 1 Million
Actuarial Science focuses on the “Law of Large Numbers”
• It is critical for measuring and predicting highly complex issues:
• Actuarial Research is based on:– Very large samples (100,000+)
– Over long periods of time (10-50 years)
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Solid Science…Better Results 5
Sales Example: Applying TQM to Sales: TQSalesMTM
Consultants Recommend:Study the techniques of the top 20% and train the middle 60%
ABC Company: 200 Salespeople and $200M in Sales*
$90 Million$750K/person
$104 Million$2.6M/person
*Performance averages based on over 900 sales forces evaluated by Chally over 35 years
The Traditional Approach to Sales “Benchmarking”
Solid Science…Better Results 6
The Result
ABC Company: 200 sales people and $200M in Sales
$90 Million$750k/person
$104 Million$2.6M/person
Improving their performance by a typical 5% each...
only produces 2.25% improvement in sales
$94.5 Million = $204.5 Million Total Sales
ABC Company: 200 Salespeople and $200M in Sales
$104 Million$2.6M/person
Solid Science…Better Results 7
$90 Million $104 Million$4M/person
$90 Million $104 Million = $200 MillionTotal Sales
Reassigning or replacing the bottom 20% with just “average”
Applying TQSalesMTM to Selection & Alignment
competency levels
= $218 Million Total Sales
$114 Million
will increase production by a minimum of 9%will increase production by a minimum of 9%
ABC Company: 200 Salespeople and $200M in Sales
If we nownow train the rest of the sales force and get a 5% gain, we we get an additional $5.7 Million get an additional $5.7 Million
$119.7 Million = $223.7 MillionTotal Sales
Solid Science…Better Results
Applied TQSalesMTM to ABC Company
Process and tools used: Statistical failure analysis of poor performers Identification of minimum salesperson and manager skill
requirements Predictive selection and alignment system installed Talent Audit and inventory of potential for all performers
across all key skills Targeted training and manager monitoring and coaching
process Annual gap analysis of actual performance versus potential
• Process adjustment Annual statistical and qualitative turnover analysis
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Solid Science…Better Results
What's Different About This New Approach?
Today’s Descriptive Analysis The Future’s Predictive AnalyticsDescribes the present Predicts the future
Accuracy standard: “Confidence limits” - 5 errors in 100
Accuracy standard: “six sigma” - 3 errors in 10 Million
Contaminated by the “placebo effect” Must greatly exceed the “placebo effect”
Short timeframe: 1- 2 years Long timeframe: 10-50 years
Deductive: Theory - Hypothesis - Experiment Empirical: Data-based - Continuous
Small sample Law of very large numbers
Simple (often single) dependent variable Complex comprehensive variables
Broad (gross) categories/factors (4-20) Specific precise categories/factors (155)
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Solid Science…Better Results 11
Assessment Predictive Accuracy above Chance
ROI Efficiency and ease of use
Chally‘s Actuarial Predictive System
30% Average 1000+%
High and Easy
Assessment Centers & Simulation
Slight but real Very low Low and Very complex
Personality or “Style” Test
Minimal Very low Low but Easy
Comparison of Descriptive versus Predictive Talent Management Assessment Metrics
Solid Science…Better Results
TQM Increases Selection Effectiveness and Reducing Turnover
Key requirements:1. Limited focus on identifying and describing
successful employees (the logical part)
2. Maximum focus on eliminating sources for selection or promotion failures (the profitable part)
3. Separating “qualifying” criteria from “selection” criteria (another profitable part)
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Using a TQSalesMTM Statistical Check versus
Traditional Descriptive “Competency” Benchmarking
Solid Science…Better Results
False Leader “Criteria” Found with TQSalesMTM
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P & L Conscious
Detail Oriented
XGood Written Communication Skills
Politically Astute
Organized & Methodical
Decision Making Efficiency
Practical IQ & Analytic Ability
Initiative
Willingness to Accept Responsibility
Ability to Direct and Control Others
Willingness to Learn the Business
GoodPredictors
Present in Many Weak Performers
Missing in Many Top PerformersJob Requirement
X
X
X
X
Describing and Finding Winners Feels Logical
Identifying & Eliminating Failure is Profitable
Solid Science…Better Results
The Science: Standardizing Talent MetricsSample Enterprise Wide Talent Audit
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Solid Science…Better Results
Can include as many people across as many skills or
positions that are considered critic
al to manage
Can include as many people across as many skills or
positions that are considered critic
al to manage
Any Position can be expanded to
analyze individual skills in depth
Any Position can be expanded to
analyze individual skills in depth
Solid Science…Better Results
Talent Audit Applications1. Identification of high potentials2. Assessing individual promotability3. Prioritizing group training needs4. Succession planning5. Reorganization6. Right sizing re-alignment7. Merger and acquisition planning8. Training and development investment analysis9. Team building and development
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Solid Science…Better Results
Talent Audit – Lessons Learned
Over 400 sales force audits conducted with organizations representing 65,000+ sales force incumbents• Only 19% of effective new business developers are
effective at maintaining long-term customers • Less than 15% of farmers are comfortable hunting• Nearly 65% of salespeople who fail could have succeeded
in the right type of sales position for their skills• 60% of sales position failures are related to individuals
with the wrong skills for the position • Less than 15% of superstar salespeople succeed in
management• Nearly 70% of strong inside service people are effective
at maintaining customer relationships
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