Hay Group with BAE Systems
BAE Systems is a large and successful organisation, employing more than 100,000 people. But, to date, much of its growth has been achieved through significant acquisitions rather than organically. The group's senior leaders have had to spend a great deal of time integrating new businesses. But those same leaders knew that what had made BAE successful in the past was no guarantee to success in the future.
So BAE wanted to put in place a succession planning system that would enable senior management to spot and develop the people with the greatest potential to lead the company in 2011 and beyond - not only to drive business performance but to bring about a much-needed change in culture and values.
Specifically, they were seeking a process of external validation, driven by data, that could accurately measure the quality of their senior executives and give them confidence that their succession plans were future-proof.
But BAE also considered this part to be of a major cultural change: ensuring not only that business output was high, but that things were done in the right way.
Hay Group began by asking senior directors within BAE to think about both organisation design and the key roles that they would need within it in three to five years' time.
Combining these interviews with Hay's own global research on leadership, the consultancy identified a set of necessary criteria for successful BAE leaders. Then, using some of its proprietary diagnostic tools, Hay assessed the leadership effectiveness of the company's top 100 executives, and also how these people measured up against specific leadership roles.
BAE's executives and board were handed reports on readiness for these roles, a risk assessment of possible moves and suggestions on how to prepare individuals for success.
Hay joined corporate HR and line managers to provide advice to BAE's executives on how they could improve their own performance.
Working with HR and the executive board, Hay then developed a robust succession-planning cycle that allowed all this assessment data to be used in a way that would give BAE a clear picture of the overall strengths and vulnerabilities of its leaders, provide recommendations on how to empower leaders to deliver on strategic goals and help place the best person in each job.
Hay developed a succession-planning index - a regular snapshot of how people were progressing up through the organisation and into executive roles. Into the succession-planning cycle was built a re-measurement every two years of each leader's effectiveness - which was fed into their individual development plans.
Among middle managers, Hay assessed managerial capability but also measured them against Hay's 'growth factors' - a set of competencies that the consultancy believes have been proved to predict long-term potential for leadership roles. Values such as ethical working and integrity, developing others and embracing diversity were deemed important criteria for assessment. Future leaders of BAE had to reflect and live the new face and values of the organisation.
As a result of Hay's work, BAE reports that it now has a clear understanding of the number and type of leaders it will need to deliver business performance in the future, and a structured talent management process to quickly spot and develop the right people. 'We have now become much more confident in our succession management processes,' agrees John Whelan, human resources director for BAE.
The proof so far? Seven out of the 11 current executive committee members have progressed into their roles since going through the Hay assessment process. The company is also selecting potential talent further down the organisation, so that development for senior roles can begin at middle-manager level.
But the effort doesn't stop there. Hay Group and BAE continue to work in partnership to update and refine the process. As Sherief Hammady, a consultant from Hay Group who leads the work with BAE Systems, stresses: 'We both need to question what we are doing and to keep questioning the validity of the process and its fit to the needs of the future.'
When BAE Systems turned to Hay Group for succession-planning advice, the consultancy talked to senior directors to identify the criteria for successful leadership at the firm, and assessed how executives were measuring up - all in the interests of clarifying the kind of leaders BAE needs to deliver business performance. A purpose-designed index helps BAE keep tabs on executive progress, and its insights are now being applied among middle management, too.
- Be flexible - HR systems, especially those that apply to the more senior management layers, need to be able to respond quickly to changes in the business environment.
- Sell the career benefits hard - individual managers are more likely to respond well if they can see what's in it for them.
- Spread the word - people can be sceptical about a new initiative, so win them over with plenty of evidence that this one really works.
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