Talent Management Workshop

Robert WoodMelbourne Business School

8th IOP ConferenceSydney, June 2009

The NarrativeTalent Management - Why bother?Talent Management- Best PracticesSources of competitive advantage - how to achieve?Amcor Case Study

Talent Management - Why bother

1. Supply and demand

2. Changing skill requirements

3. Culture change

4. ???

Talent Management - Best Practices

1. Attraction, recruitment, induction

2. Development

3. Retention

Source of competitive advantage?

1. Internal Alignment

2. Embedded in organization culture

3. Links to business strategy

4. Global (organizational?) coordination

Amcor Case Study

1. Overview

2. Component of the programs

3. Accelerated learning

4. Risks

Overview of the Amcor talent management process - Commercial Leadership Development Program (CLDP)

Timeline for the CLDP2007

1st Cohort begins

2009

3rd Cohort begins1st cohort completes program to become senior management

2008

2nd Cohort begins

2010

2nd cohort completes program to become senior management

Program Objective: Develop senior managers within 2 years for key accountsParticipants of each cohort meet for 5 days 3 times over 2 years, once in Chicago and twice in MelbourneIn the interim participants are responsible for completing monthly assignmentsLab provides deep assessments and feedback throughout the programAt the end of the program cohort members become senior managementAim to retain participants by locking them into relationships through social capital & embedded-ness

2011

3rd cohort completes program to become senior management

Amcor CLDP - Five key elements

1. The CLDP is based on the work of the Amcor strategy

2. The CLDP is owned by Sales and Marketing executives

3. Entry to the CLDP is by rigorous selection

4. Non performers are removed from the program

5. Development and promotion are accelerated

Element 1. Strategic context for the CLD is global trends in packaging - industry consolidation, emerging markets and global footprints

Trends in the Packaging Industry

Globalisation of customers– Large customers with overseas operations want to

do business with fewer suppliers– Require that their global brands have consistent

packaging– Demand rapid delivery at lowest costNorth American and Western European markets are at maturity with saturated demand and heightened competitionThreat of commoditisation Increasing raw material and non raw material (e.g. energy and transportation) costsConsolidation of industries further along in the value chain (fast moving consumer goods and retailers) caused:– a downward spiral of profit margins in the packaging

industry– the equity market to give up on packaging sector-

P/E ratio at 7

Responses from Key Players

Industry concentration and consolidation through mergers & acquisitions– In pursuit of economies of scale– To enable global service agreementsEntry into emerging markets, e.g. – Eastern Europe– Latin America– Asia PacificGlobal scale of operations, e.g.– Relocation of manufacturing– Local packagingProduct innovation to differentiate and enhance brand

Source: Erkan izat et. al MGSM Strategic Management Group Assignment- 10 March 2005; John Murray, Amcor CLDP Onboarding 24 July 2008

Amcor’s strategic responses to industry trends included expansion of its product range and creation of a global footprint

Source: 2007 Annual Report; Amcor Limited Annual General Meeting

Amcor has sought to achieve broad differentiation through strong global presence and value-added products and services

Through acquisition (being a consolidator) Amcor expanded its product portfolio from paper-based packaging to include:– PET bottles and jars for beverage and food applications– Specialty printed cartons for tobacco, confectionary and health and beauty markets– Flexible packaging for the food, beverage, healthcare and industrial markets

Meanwhile Amcor divested its non-core fine paper assets

Following creation of the global corporation, Amcor changed structure and strategy to create a market oriented organization

Old Model: Holding Company

Strategic decisions made by senior executive team based in Amcor’s headquarters

New Model: Global Executive Team

Strategic decisions made on a day-to-day basis throughout the businessGlobal executive team develop agenda collaboratively– Set metrics and targets– Build prioritised initiatives into incentive

program– Embed into the organisation– Monitor progress

Strategy Initiatives1. Market segmentation

2. Value plus analysis

3. A ‘customer first’ model

4. A long-term view

Element 2. The CLDP is owned by sales and marketing executives, who share common goals and measures of success for the program

Goals

Participants are change agentsParticipants resolve some of the major strategic issues facing Amcor (e.g. market segmentation) through their business assignments and rolesParticipants lead growth in emerging marketsPrompt rapid influx of people who:– are more aligned to the contemporary sales

and marketing model; and– have great analytical, investigative, and

project-based skillsSales and marketing succession depth achievedCLDP is able to be applied to other functionsSilo mindset changed to a global/ mobile mindset

Measurement of Success

Retention of participantsDeployment of participants into key sales and marketing roles– Key account managers– Sales managers– Marketing segment directors– Brand managers Participants are top quartile performers in these rolesParticipants begin appearing on 3-year succession depth plansParticipants challenge the executive team, e.g. challenge to separate the sales and marketing functionsParticipants deliver revenue, profit, and sustainable growth

Element 3. Recruitment is strategic…Recruits drawn from a global pool to bring diversity

Targets talent in emerging markets, where traditionally– Sourcing is difficult– Talent is mobile– Loyalty is low– It is difficult to infuse Amcor’s culture

Attracts people and infuses them with Amcor’s culture, develops emotional commitment, and builds an emerging market pool (i.e. ‘sleepers’ can be pulled back into the markets from which they came)

Fosters the mindset in that individuals must use their talent to innovate and drive strategies that provide real commercial benefits for the business

and rigorous…

Amcor targets and hires candidates internally and externally

Selection criteria include:– Minimum of 2 higher education degrees– Fluency in at least 2 languages, including English– Demonstrated cognitive ability

Cohort 1 – 8 nationalities (Turkish, Australian, Colombian, Italian, Swedish, American, Spanish, British)– Spanish is dominant second language, and 3 participants speak Japanese– 7 have MBA degrees

Cohort 2– 6 nationalities (Lebanese, Chinese, American, Russian, German, and Chilean)– 7 have MBA degrees

Element 4. Two participants judged to be false positives (non performers have been removed, none have quit

Case example 1

Case example 2

Retention Risk factors

Element 5. Development and promotion are accelerated…

Examples

Performance and Career Risk factors

Back to the NarrativeTalent Management - Why bother?Amcor’s CLDP - Five key elementsAccelerated Learning - What and how?Ongoing challenges Discussion

WHAT the core components of the ALL program aim to develop is key leadership capabilities for sales and marketing roles in Amcor

What you SAY… the words

What you DO… behaviour

Processes & Systems… the enablers

Keys to Successful Leadership

Source: Meeting with Prof. Robert Wood- 27 June 2008

Team/ Community

Process &

Systems

Personal

Capabilities Developed

Strategic Thinking

Self Management

Commun-ication Flexibility

Execution Skills

The ability to look at problems as part of a broader system and examine the cause and effect dynamics of events or circumstances

The ability to manage emotions. Attention and energy at the appropriate levels for effective and sustained performance of tasks

The ability to deliver clear, engaging, and influential messages that mobilise people towards the achievements of goal

The ability to apply knowledge in the analysis and solution of dynamic, complex and novel problems that may require the application of multiple bodies of knowledge

ProjectsLaboratory

ProjectsLaboratory

The HOW is through participation in ALL’s modular program, supported by formal mentoring and project components

Components of the ALL Program3 5-day workshops + monthly assignmentsLearning methodology includes:– role-playing– coaching– on-the-job application through learning

diaries and work experience samples– simulationsLaboratory assessments of participant progress that are translated into development plans3 different modules– Networks & social capital, e.g. team

leadership and change management– Sales and Marketing, e.g. market

segmentation, key account management, targeted marketing,

– Participants develop at least 50% of their 3rd module (“the scaffolding is coming down”)

Participants plan, present, and implement 3 business assignments during course of programBusiness assignments are high profile, address a critical business need, and are strategically aligned to Amcor’s growth directionProjects selected by Amcor executives, not participants

Social Capital +

Mentoring+

Buddy System

Social Capital: participants network within the global Amcor network and document experiencesMentoring: Knowledge transfer process through formalised mentoring system– All mentors are internal to Amcor– Mentors assigned to participants– Supervisors and mentors from

Sales & Marketing Leadership Council, which meets 3-4 times each year

– No formalised requirements for frequency of conversations/ meetings

Buddy System: each member of the 2nd cohort is assigned a ‘buddy’ from 1st cohort

Source: Meetings with Prof. Robert Wood- 27 June 2008 and 14th July 2008

Ongoing:

Back to the NarrativeTalent Management - Why bother?Amcor’s CLDP - Five key elementsAccelerated Learning - What and how?Risks and Ongoing challengesDiscussion

Participants do not have opportunity to gain management experience– Upon entering senior management roles participants will have to manage medium-large teams of sales staff

responsible for key accounts with little or no management experience– Major consequences for errors/failure when managing large key accountsParticipants do not have opportunity to go through the entire sale cycle

Risks and challenges of the CLDP, or any talent management program include…

Selection of the ‘Wrong’ Participants

Program Transition

Participants might not ‘fit’ with Amcor’s cultureParticipants might not have the ability to prioritise tasks when faced with multiple demands– Upon promotion to senior management levels, uncertainty whether participants will have the capability to distinguish

and prioritise what is most urgent and important– Major consequences for errors/failure when managing large key accounts

Transition from “project” to “whole of business” process might encounter cultural roadblocksAmcor might not be able to provide opportunities for participants, leading to retention problems– New senior managers might leave if not challenged by a dynamic work environment that provides opportunities for to

apply and continue developing functional and leadership skills

Risks Description

Source: Meeting with Prof. Robert Wood- 27 June 2008

Risks of an Accelerated Program

Managing Expectations

Amcor sets expectations that it cannot deliver on– Participants expect to be deployed to great senior management opportunities within Amcor– If expectations not delivered on, disappointment and low morale could lead to attrition

Retention

Losing people before achieving a return on investmentAttrition could compromise reputation of the program and employee morale across the programAttrition could compromise the Value Plus program if a global sales and marketing talent pool is not created

Identified by Amcor executives

Identified externally

Talent Management & the CLDP

Discussion