Post on 17-Aug-2015
Talent Management and Succession Planning Best Practices
August 4th, 2015Health Forum WebinarSponsored by Cornerstone OnDemand
Kevin S. Groves, Ph.D.Associate Professor, Pepperdine University
President, Groves Consulting Group
Assessing Impact on Financial, Workforce, and Value-Based Purchasing Metrics
Brief Introduction
Associate Professor of ManagementGraziadio School of Business and Management, Pepperdine University
– MBA courses in organization design/development, and leadership– Denney Chair Professor (2013-2015)
PresidentGroves Consulting Group
– Succession planning and talent management solutions– Leadership assessment, development, and retention systems
Webinar Preview
• Brief background of research program• Healthcare Talent Management Best Practices model • Best Practices utilization and ROI across performance metrics• Case studies of exemplary health systems• Recommendations for healthcare organizations
What’s Driving the Need for Talent Management Investment?
• Demographic, marketplace, legislative, & financial challenges– ‘5/75 crisis’– Comparatively short hospital CEO median
tenure (4 years)– Lack of sustained investment in talent
management– Rapidly increasing costs and pressure on
HR to demonstrate value– Healthcare reform, reimbursement
degradation, and ACOs– Increasing emphasis on value- versus
volume-based performance metrics
Healthcare Talent Management Research Program
Phase I: Model
Development
• Interviews with hospital/health system CEOs• Qualitative studies of health systems with
exemplary TM outcomes• Development of Healthcare Talent
Management Best Practices model
Phase II: Model
Validation
• Validation of Best Practices model• National studies of clinical, financial, and
workforce performance outcomes
Phase III: Model
Application
• Application of Best Practices model via case studies & client engagements
Phase I: Healthcare Talent Management Best Practices Model*
1. Top Management Team Support2. Talent Assessment & Succession Planning Practices3. Performance Appraisal Practices4. Incentive Pay Practices5. Leadership Development Culture6. Role-based Leadership Development7. Selection & Onboarding Practices8. Talent Management ROI
*American Society for Health Care Human Resources Administration (Groves, 2013); Healthcare Talent Management Survey 2012 (Groves, 2013); Health Care Management Review (Groves, 2011); Journal of Management Development (Groves, 2007).
Phase II: Validating the Best Practices Model
Healthcare Talent Management Survey 2014*
Survey Goals:1. Assess utilization of Best Practices2. Assess impact of Best Practices on multiple performance
metrics: Value-based Purchasing Workforce Performance Leadership Development Leadership Diversity
*Groves, K. (2015). Impact of Talent Management Practices on Financial, Workforce, and Value-Based Purchasing Metrics.
Sample Characteristics
38.3%
31.6%
18.0%
9.8%
Community HospitalHealth SystemAcademic Medical CenterSpecialty Hospital
VARIABLE MEAN
FTEs 16,741
Net Patient Revenue $2.58B
Number of Medical Centers 10.35
Number of Licensed Beds 2,410
29%
20%
7%5%
16%
5%
4%2% 12% CHRO/SVP of HR
VP of HRVP of Talent Mgmt/AcquisitionDirector of HRChief Administrative OfficerChief Operations Officer (COO)Chief Executive Officer (CEO)Chief Financial Officer (CFO)Other Positions
Utilization of Best Practices Overall
Talent Mgmt. ROI
Selection & Onboarding Practices
Role-Based Development
Leadership Development Culture
Incentive Pay Practices
Talent Assessment Practices
Performance Appraisal Practices
TMT Support
Best Practices Overall
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
17%
4%
15%
20%
21%
12%
6%
0%
4%
7%
11%
18%
19%
19%
13%
19%
6%
12%
39%
30%
47%
37%
30%
31%
39%
35%
47%
24%
30%
11%
13%
13%
25%
32%
45%
29%
13%
24%
9%
11%
17%
19%
4%
14%
8%
AlwaysUsuallySometimesRarelyNot at All
Highest Scores
Lowest Scores
PERFORMANCE METRIC High SuccessFactors Utilization
Low SuccessFactors Utilization Primary Drivers
Total VBP Performance Score 42.46 34.54 Talent Assessment
Selection & Onboarding
Efficiency Domain (Medicare Spending Per Episode) $17,493 $20,706 Talent Assessment
Performance Appraisal
Experience of Care Domain (HCAHPS) 71% 64% Talent Assessment
Performance Appraisal
Nursing Turnover 8.74% 13.61% Selection & Onboarding Performance Appraisal
Executive Turnover 3.33% 19.95% Talent Assessment Performance Appraisal
Employee Productivity $173,484/FTE $110,748/FTE Incentive Pay Performance Appraisal
ROI of Best Practices: Value-Based Purchasing & Workforce Performance Metrics
Best Practices & Annual Nursing Turnover
Overa
ll
TMT Su
pport
Perform
ance Appra
isal P
roce
sses
Talent Asse
ssment P
racti
ces
Incentive
Pay Pra
ctice
s
Leadersh
ip Deve
lopment Cultu
re
Role-Base
d Deve
lopment
Selecti
on & O
nboarding Pra
ctice
s
Talent Mgmt. R
OI0%
3%
6%
9%
12%
15%
18%
13.6%
15.6%14.6%
13.7% 13.6%12.7% 12.3%
13.2%11.6%
8.7%
12.2%10.6%
12.3% 12.2%
9.4%
12.5%
8.4%
11.2%
LowHigh
36% TO Reduction$5.13M/year
Best Practices & Value-Based Purchasing Metrics
Process
of Care
Domain
Experie
nce of C
are Domain
Outcome Domain
Efficie
ncy Domain
Total
Perform
ance
Score
05
1015202530354045
9.60 9.15 10.74
3.47
34.54
12.34 13.73 14.56
6.61
42.46
LowHigh
50.1% Improvement
90.5% Improvement
Experience of Care Domain:HCAHPS Scores
Overal
l
TMT S
upport
Perform
ance
Appraisa
l Pro
cesse
s
Talent A
ssessm
ent Prac
tices
Incentive
Pay Practi
ces
Leadersh
ip Development Cultu
re
Role-Bas
ed Development
Selecti
on & O
nboarding P
ractice
s
Talent M
gmt. R
OI56%
58%
60%
62%
64%
66%
68%
70%
72%
64%65%
62%63%
62%
66%65% 64%
65%
71%
68%69% 70%
69% 69% 69%70% 70%
LowHigh
10.9% Improvement
Efficiency Domain:Mean Spending Per Beneficiary Episode
Overal
l
TMT S
upport
Perform
ance
Appraisa
l Pro
cesse
s
Talent A
ssessm
ent Prac
tices
Incentive
Pay Practi
ces
Leadersh
ip Development Cultu
re
Role-Bas
ed Development
Selecti
on & O
nboarding P
ractice
s
Talent M
gmt. R
OI$0
$5,000
$10,000
$15,000
$20,000
$25,000
$20,706 $20,537 $20,917 $20,781 $21,093 $20,865 $19,968 $20,359 $19,906$17,493 $17,638 $17,944 $17,618 $18,288 $17,457 $18,202 $18,053 $18,119
LowHigh
18.4% Difference$3,213/Episode
Talent Assessment & Succession Planning Practices
System-view of Leadership
Talent
Strategic Talent Pools
Rigorous Talent Review Sessions
Formal Assessment Tools
Succession Plans
Talent Assessment & Succession Planning Practices
Formal assessments (e.g., nine-box tools) are utilized to plot employees in key positions according to job performance and leadership potential
Talent review sessions consist of cooperative and collaborative decision-making
Talent review sessions are characterized by authentic, non-politicized dialogue
High potential employees are identified in the context of our organization's strategic priorities
High potential employees are formally assessed at front-line levels of management (e.g., supervisor, shift leader, etc.).
0% 10% 20% 30% 40% 50%
23%
6%
6%
11%
13%
23%
12%
7%
13%
30%
8%
19%
21%
22%
21%
23%
42%
47%
36%
21%
23%
21%
19%
18%
15%
AlwaysUsuallySometimesRarelyNot at All
Lowest (46%)
Lowest (43%)
Phase III: Best Practice Illustrations at Exemplary Organizations
Sutter Health– Talent Assessment and Succession
Management System
Hospital Corporation of America– Executive Development Program (EDP)
Cleveland Clinic Health System– Executive Onboarding Program (EOP)
Sutter Health at a GlanceSutter Health
– Community-based, not-for-profit , non-denominational system in Northern California
– Integrated delivery network comprised of affiliated hospitals, physician organizations, foundations, and home health services
2014 Financials & Size– 50,000 employees and 5,000 physicians– $10.2 billion revenue ($402 million income)– 24 hospitals; 28 ambulatory surgery centers
Sutter Health’s Talent Assessment & Succession Management Practices
• Succession planning objectives– Enhance leadership capabilities via diverse talent pool– Cultivate strong succession plans for critical positions– Create a central, searchable repository of leadership talent– Develop system-wide approach to talent management
• Talent review processes– Standardized, annual, data-driven process across affiliates and
management levels (affiliate, region, and system)– Leadership talent reviewed sequentially; data rolled-up to
successive levels (March-July)
Talent Assessment & Succession Management: Best Practices at Sutter Health
Clear Hi-Po Definition
Strong Assessment-Development Link
System-wide View of Talent
Disciplined Use of Performance
Mgmt. Platform
Performance vs. Potential Ratings
Staggered
Post-talent Review Actions
Succession Planning Performance MetricsWhat is the evidence that these talent assessment practices are effective?
1. Leadership Development Metrics 68% internal/external executive placement ratio (2011-2014)
79% (2014); Six of seven affiliate CEO positions filled internally (2014) 10% of mgmt. population identified as high potential/high performing leaders (n = 536) 22% annual growth rate (2007-2014) of ready now candidates for leadership roles (n = 419)
2. Leadership Diversity Metrics 62% female successors for all executive positions 52% female successors for critical roles (CEO, CAO, COO CNE)
3. Workforce Performance Metrics 86% retention rate for Leadership Academy alumni (175 active alumni) 14% of Leadership Academy graduates are now CEOs 57% promotions/transfers to higher level roles Over $5 million in recruitment costs savings since inception (2004-2014)
Sutter Health’s CEO Succession
Our nationally recognized talent review and succession planning program allows us to cultivate leaders from within, and the Sutter Health Board and I identified Sarah early on to one day assume my role. I encourage other organizations to invest in their teams and to take time to mentor and plan for succession, so they experience smooth transitions in leadership. – Pat Fry (May 19, 2015)
Pat Fry, CEO Sarah Krevans, COO
PERFORMANCE METRIC High SuccessFactors Utilization
Low SuccessFactors Utilization Primary Drivers
Leadership Benchstrength 52% 7% Selection & Onboarding Talent Assessment
Internal/External Executive Placement Rate 67.7% 21% Selection & Onboarding
Role-based Development
Annual Executive Search Costs/Medical Center $13,696 $129,333 Selection & Onboarding
Performance Appraisal
C-Suite Gender Diversity 52% 24% Selection & Onboarding Performance Appraisal
C-Suite Ethnic Diversity 43% 12% TMT Support Performance Appraisal
ROI of Best Practices: Leadership Development & Leadership Diversity Metrics
Selection & Onboarding Practices
High Engagement,
Productivity, & Retention
Leadership Competency Behavioral Interviews
Formal Onboarding for Internal & External
Leaders
New Leader Assimilation
Stakeholder Analysis
Selection & Onboarding Practices
Managers hired from outside our organization complete a formal on-boarding program (a systematic learning and socialization process lasting at least three months).
Employees promoted into managerial positions or roles that are new to our organization complete a formal onboarding program.
The distinctiveness of our organization is made clear to external candidates for key positions.
The selection process for managerial positions involves behaviorally-based interviews linked to leadership competencies.
0% 10% 20% 30% 40% 50% 60%
20%
13%
2%
2%
13%
11%
7%
2%
20%
24%
18%
15%
32%
28%
31%
33%
15%
24%
42%
48%
AlwaysUsuallySometimesRarelyNot at All
Highest (81%)
Lowest (33%)
Cleveland Clinic at a GlanceCleveland Clinic Health System
– Internationally renowned academic health system– Numerous distinctions and awards
• America’s Top Hospital for cardiology and radiology; top three rankings for orthopedics, gastroenterology and GI surgery, etc. (US News & World Report 2015)
– Physician-led, multi-specialty group practice integrating clinical and hospital healthcare services with research and education
– 70 accredited residence training programs; $168M grant/contract revenue
2014 Financials & Size– 43,000 employees– $6.2 billion revenue– 12 hospitals; 16 family health and ambulatory surgery centers
Cleveland Clinic’s Onboarding Phases
• Includes all activities from acceptance of offer to Day 1 (welcome letter, forms, benefits package, company info, etc.)
Preboarding
• Program designed to provide all new caregivers with standard information about the organization (strategy, history, operations, culture, etc.).
Orientations
• Long-term process to transition new caregivers into the organization.
• Includes welcome and integration (introductions, lunch, building tour, etc.), detailed work plan (job responsibilities, initial assignments, etc.), and peer sponsor.
Onboarding
Timeline
Pre-Day 1
1st Week
1st 90 Days
Responsibility
Human Resources
Hiring Manager
Human Resources
Cleveland Clinic’s Onboarding Framework
Cleveland Clinic’s Executive Onboarding Practices
Executive Book of Knowledge
Stakeholder Analysis & Interviews
90-Day Transition Plan
New Leader Assimilation
• Facilitated
Thumb drive of CC leadership data Strategic plan, org charts, budgeting processes, strategic initiatives Administrative systems
Hiring executive analysis of critical stakeholders Scheduling one-on-one interviews
Learning priorities Work activities and deliverables Focus on ‘early wins’
Facilitated team-building sessions
Strong communication & leader/staff relationships
Executive Onboarding: Best Practices at Cleveland Clinic
Strong Hiring Executive-OLPD
Alliance
Comprehensive & Personalized
Integration Activities
Hiring Executive Prioritization of Onboarding
Socialization to Culture & Leadership Role Rapid Assimilation to
New Team
Opportunities for Early Wins
Cross-level & Cross-Unit Relationship
Building
Executive Onboarding Performance Metrics
What is the evidence that Cleveland Clinic’s executive onboarding practices are highly effective?
1. Executive Job Performance
2. Executive Engagement
3. Executive Productivity
Executive Job Performance
Exceptional Performance Fully Meets Expectations Meets Most Expectations0%
10%
20%
30%
40%
50%
60%
70%
36.1%
60.8%
3.1%
31.8%
59.1%
9.1%
EOP Participants (n = 194) EOP Non-Participants (n = 22)
Executive Engagement
I would recommend this organization to family and friends who need care.
I am proud to tell people I work for this organization.
I would stay with this organization if offered a similar job elsewhere.
I would like to be working at this organization three years from now.
I would recommend this organization as a good place to work.
Overall, I am a satisfied caregiver.
Employee Engagement Overall
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00
4.63
4.63
3.81
4.38
4.19
4.25
4.31
4.71
4.59
4.13
4.48
4.40
4.31
4.44
EOP Participants (n = 124) EOP Non-Participants (n = 16)
Executive Leadership Support
I am involved in decisions that affect my work.
The person I report to treats me with respect.
I like the work I do.
I respect the abilities of the person to whom I report.
The person I report to is a good communicator.
The person I report to gives me useful feedback.
Leadership Support Overall
3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70 4.80
4.25
4.38
4.38
4.50
4.19
4.25
4.32
4.46
4.67
4.54
4.69
4.36
4.39
4.52
EOP Participants (n = 124) EOP Non-Participants (n = 16)
Executive Productivity
Disagree
Agree
Disagree
Agree
Nec
essa
ry E
xecu
tive
Trai
ning
90-D
ay T
rans
ition
Pla
n
0% 10% 20% 30% 40% 50% 60% 70%
25%
46%
27%
50%
21%
60%
24%
54%
20152013
Executive Productivity
< 30 Days 30-60 Days 60-90 Days 90-180 Days Still Discovering Areas that I Need
to Understand
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
8.1% 9.5% 10.9%
26.5%
46.9%
7.1% 7.9%
17.3%
33.8%37.2%
2013 2015
Best Practice Recommendations
1. Audit your organization’s talent management system Which Talent Management Best Practices are consistently executed across your
organization? Identify those Best Practices that are executed sparingly or inconsistently. Interview senior leaders across facilities and functional units to assess the quality and
consistency of talent management practices.
2. Sharpen the business case for investing in talent management practices Elevate the strategic priority of talent management by highlighting the impact of Best
Practices on clinical outcomes via CMS’s Value-Based Purchasing program. Compare anticipated retirements with leadership benchstrength (at least one ‘ready
now’ candidate) across executive positions and critical leadership roles. Develop a Talent Management Scorecard that benchmarks your organization’s talent
management and succession planning capabilities.
Best Practice Recommendations3. Align talent management practices with strategic initiatives
(diversity, quality outcomes, LEAN) Create a formal mentoring program for senior leadership teams that integrates
high potential employees identified through talent review sessions. Engage senior leaders in teaching courses as part of leadership development
programs, learning sessions, or other forums. Ensure high potentials’ development plans include participation in system-wide
initiatives.
4. Enhance talent assessment and succession planning practices Adopt or develop a standardized high potential assessment tool. Utilize nine-box tools (or equivalent) that plot employees in critical positions
according to job performance and leadership potential. Create talent profiles and succession plans for critical positions. Assess high potential leadership competencies at the front-line.
Best Practice Recommendations
5. Assess composition, format, and consistency of talent review sessions Conduct annual talent review sessions that target multiple talent pools. Complete annual talent review sessions at least two months following the completion of
the performance appraisal process. Staff annual talent review sessions with an experienced HR/OD facilitator. Ensure that review session agenda addresses high potential leadership development
opportunities that are aligned with strategic initiatives.
6. Implement consistent, multi-rater performance feedback processes Offer employees in managerial roles with standardized, confidential feedback on
their leadership competencies via 360-degree, multi-source feedback processes. Establish formal intervals (at least twice per year) in which high potential employees
meet with their supervisors for formal performance feedback. Incentivize support for talent management practices via managerial performance
appraisal practices, such as goal-setting and incentive pay plans.
Best Practice Recommendations
7. Enhance workforce diversity initiatives Accelerate your organization’s workforce diversity initiative by seeking transparency
with the high potential designation process and outcomes. Formally train managers to clearly communicate high potential status to employees,
such as skills training in ‘crucial conversations’. Identify management incentives that actively promote a culture of adopting an
enterprise-view of talent by ‘releasing’ high potentials to other business units.
8. Develop onboarding programs for managerial promotions and external hires Design and deploy formal onboarding programs for employees promoted into
management positions or new roles, as well as managers hired externally. Design formal onboarding programs to include employee orientation, new leader
assimilation activities, 90-day transition plan, and stakeholder interviews. Develop a leader assimilation program that facilitates new managers’ integration with
their direct reports, peers, and other key organizational stakeholders.
Best Practice Recommendations
9. Develop high potential employees Selectively place high potential employees into experiential development
opportunities that are directly tied to strategic, system-wide initiatives. Engage senior leaders in the design and sponsorship of action-learning projects as
part of ‘leadership academies’. Utilize job rotations whereby high potential leaders are re-assigned on a least a
half-time basis to roles in other functional units or facilities.
10. Evaluate and reinforce the talent management system Develop a Talent Management Scorecard for your organization that comprises
those metrics that are most critical for reporting to the board. Engage management teams in a discussion of the most critical metrics for
evaluating the talent management system’s strategic impact. Mandate annual reporting of your organization’s Talent Management Scorecard
results to multiple stakeholders, including the governing board and management teams across the hospital or health system.
Concluding Comments
• Questions, comments, and feedback are welcome.
• Thank you!
Kevin S. Groves, Ph.D.Associate Professor of ManagementPresident, Groves Consulting GroupGraziadio School of Business and ManagementPepperdine Universitykevin.groves@pepperdine.edu | (310) 568-5729