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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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”

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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

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$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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Results in Millions 30%

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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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

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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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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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Solid Science…Better Results

Thank You For Your K

ind Attentio

n

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