CLC the Effectiveness of HIPO Development Programs at Medium Sized Companies

Issue Overview: The Need for Effective Development Programs

Medium-sized companies aim to fill a talent pipeline to prepare for the future… Research suggests that companies face a shortage of future leaders. As profiled in 2003 Council research, less than 24 percent of companies’ leaders maintain strong confidence that they will be able to find successors to top leadership in the coming years. With an above average leadership bench, Council research suggests that companies are four times as likely to maintain above average industry growth. Companies will need to compete with each other for top talent and leadership through strong development programs to foster continued growth and organizational improvement. High potential (HIPO) programs help develop the necessary talent to fill the succession pipeline.1,2

…while seeking effective development opportunities for all employees… Traditionally development efforts focused solely on HIPOs, but recently debate around “B players” suggests that, in order to fill the pipeline, companies need to develop all employees and raise the bar of performance across the company. Research from a June 2003 Harvard Business Review article suggests an expanded and renewed interest in managing the “middle-performer” employee segment. The authors suggest that middle performers sustain the long-term performance and survival of a business. Managing tactics may include greater recognition and increased access to development opportunities.3

…therefore, companies strive for efficient HIPO and other development programs. To foster effective succession planning and to support all employees, thus improving current and future business results, many companies focus extensive resources on development activities. This brief will discuss methods five profiled companies use to develop high-potential employees and to deliver development interventions of a broader scope. In addition, the brief analyzes companies’ stakes in the presumed success of these opportunities.

Profiled Institution Industry Employees Revenues

A Media/ Communications

10,000 – 50,000 $2 billion – $10 billion

B Electronics 10,000 – 50,000 $2 billion – $10 billion

C Hospitality 10,000 – 50,000 Less than $2 billion

D Insurance 10,000 – 50,000 More than $10 billion

E Computer Services 10,000 – 50,000 $2 billion – $10 billion

Fact Brief

The Effectiveness of HIPO Development Programs at Medium-Sized Companies

Key Questions: What types of HIPO development programs do companies have in place? Do companies maintain other development intervention programs? What is the effectiveness of the HIPO development programs relative to alternative interventions?

Table of Contents

Executive Summary 2

HIPO Programs 3

Alternative Programs 11

Program Effectiveness 15

Appendix 18

Research Methodology 20

Effective Development Opportunities for All Employees

Focusing not only on top talent, but

also on the consistent middle performers of an organization fosters

inclusiveness across a company:

“Managers who bring out the best in B-players are tapping into a

wonderful and often well-hidden resource. Organizations–and

individuals–are much better for it.”

Thomas Delong, Harvard Business School Professor

(June 2003)

CORPORATE LEADERSHIP COUNCIL JANUARY 2004

This project was researched and written to fulfill the specific research request of a single member of the Corporate Leadership Council and as a result may not satisfy the information needs of other members. In its short-answer research, the Corporate Leadership Council refrains from endorsing or recommending a particular product, service or program in any respect. Sources are contacted at random within the parameters set by the requesting member, and the resulting sample is rarely of statistically significant size. That said, it is the goal of the Corporate Leadership Council to provide a balanced review of the study topic within the parameters of this project. The Corporate Leadership Council encourages members who have additional questions about this topic to assign short-answer research projects of their own design.

Catalog No. CLC11JZVBM

2004 Corporate Executive Board

THE EFFECTIVENESS OF HIPO DEVELOPMENT PROGRAMS AT MEDIUM-SIZED COMPANIES PAGE 2 JANUARY 2004


EXECUTIVE SUMMARY Interviews with HR professionals at five medium-sized companies provide insight into the structure and processes of development programs, as well as the effectiveness of HIPO development and alternative interventions.

HIPO PROGRAMS

PROGRAM GOALS AND IDENTIFICATION

All profiled companies aim to fill a talent pipeline and drive individuals up the management levels of a company through their HIPO programs. Identification methods—Methods for identifying HIPOs include the following:

! Assessing performance and potential

! Business unit designation ! Executive committee approval ! Recruitment of HIPOs for

specific programs ! Talent management grid

PROGRAM COMPONENTS

Profiled companies either structure development through on-the-job activities or through the following development activities:

! Classroom-based learning ! Individualized development

plans ! Mentoring, coaching, or

sponsoring relationships ! Rotational/stretch assignments

PROGRAM ADMINISTRATION

Most companies centralize the coordination of their top HIPO program within HR, but require the business unit to assume all costs specific to that unit.

! Participants and costs range widely

! Staff controlling the HIPO program ranges between one and five FTEs

PROGRAM COMPLETION

Companies use an annual review or a stated duration of one to two years to determine the amount of time employees remain in HIPO programs. In addition, companies may choose to dismiss participants from the program in individual cases. FUTURE CHANGES TO HIPO PROGRAMS

Profiled companies envision the following changes to their HIPO development programs:

! Increasing/tighter management of new programs

! Supplementing the programs with additional components

ALTERNATIVE PROGRAMS

DRIVER FOR BROAD-BASED INTERVENTIONS

Employing alternate, broad-based interventions provide profiled companies with the following positive outcomes:

! Alignment—Aligns the corporate message and development to all employees across the company

! Improving performance—Raises the bar of performance through functional competence

! Inclusiveness of all employees—Supports inclusiveness of all employees by offering varied training opportunities

ALTERNATIVE DEVELOPMENT PROGRAMS

The implementation of alternative, broad-based development programs involve the following opportunities:

! Function-specific development ! Individualized development

plans ! Management level training ! Movement across the

company

FUTURE IMPLEMENTATION OF ALTERNATIVE PROGRAMS

Managers have a significant impact in employee experiences at all profiled companies; interviewed individuals at profiled companies recognize this relationship and aim to increase development of all managers, therefore augmenting the experiences of each employee. Future changes—Profiled companies advocate the following additions to their broad-based alternative development programs:

! Increasing management training

! Offering executive forums

PROGRAM EFFECTIVENESS

MEASURING SUCCESS OF HIPO PROGRAMS

Due to difficulties in measurement, many companies have limited metrics to support HIPO program effectiveness. However, tightly managed processes at profiled companies allow tracking of the following results:

! Assessing succession management

! Monitoring individual development

! Tracking retention rates of HIPO employees

MEASURING SUCCESS OF ALTERNATIVE PROGRAMS

Companies do not manage their alternative development programs as tightly as their HIPO programs, making measurement on a broad scale more difficult. Profiled companies aim to measure the success of alternate programs corresponding to the impact of the interventions on the following company characteristics:

! Company-wide effectiveness ! Impact on business unit ! Individual performance

advancements

EFFECTIVE DEVELOPMENT PROGRAMS

Due to the personalized attention of HIPO programs, interviewed individuals at profiled companies suggest that these provide significant value to the participants. That said, other developmental interventions also deliver effective results, including the following:

! Challenging/stretch roles ! Management training ! On-the-job training



HIPO Program Goals and Identification

Many HIPO programs aim to develop candidates classified as high potential in order to fill the talent pipeline aspect of succession planning efforts. In the 2003 Hewitt Associates study of 125 large U.S. companies entitled “Developing High-Potential Leaders,” all companies performing in or above the 75th percentile in total shareholder return consistently use a formal approach to identify and develop high potential leaders.4

HIPO Program Goals Literature suggests that the most important aim of a HIPO program is building a company’s leadership talent and strength.5 The objectives of profiled companies’ HIPO programs directly correspond to this aim as well. The cross-company objectives and additional aims of profiled companies’ programs are detailed below. Cross–Company Objectives—Although interviewed individuals cite many objectives in the HIPO development process, the following four goals are prevalent across all profiled companies:

! Increase the leadership bench strength of the organization ! Move employee up through the company ranks ! Offer development opportunities (involving job-specific activities, rotational

assignments, or cross-functional work) ! Provide networking opportunities to all HIPO employees

Additional HIPO Program Goals—Other goals of the HIPO programs include the items in the following list:

! Allow visibility to senior management ! Bring together global participants ! Enforce and motivate HIPOs ! Expose HIPOs to strategic business objectives ! Increase internal marketability ! Prepare for promotion ! Provide action-learning management opportunities

HIPO Criteria and Identification Methods Research suggests that companies should identify high potential employees utilizing the following tactics:6 7

! Documentation of past performance and current competencies ! Effective management consensus review techniques ! Support by objective data ! Well-designed tools for gaining multiple evaluations ! Well-trained internal and external interviewers and facilitators

The identification of high-potential employees at profiled companies primarily depends upon individual employees’ business results and leadership potential. Company C allows business unit autonomy in identifying individuals as HIPO while Company D recruits outside for these HIPO candidates. Since Company D’s recruiting department looks for the characteristics of HIPO employees and the procedure varies at Company C, these tactics will not be profiled on the following page.

HIPO Programs

Program Effectiveness

Alternative Programs

Companies Using Annual Performance Reviews

Council research surveyed 149 organizations to reveal that 75 percent of respondents require formal reviews on an annual basis while 21 percent require formal reviews on a biannual basis, as shown below.7

Annual review 75%

Bi-Annual review 21%

HIPO Program Objectives

“Our HIPO development programs

aim to provide individualized hands-on chances for employees to

demonstrate management abilities and to enforce that they are

high-potentials. They learn by doing and build competencies as needed.

These programs motivate HIPOs with opportunities to learn.”

Corporate Recruiter and HR Planner,

Company C

" Key Finding: HIPO Program Objectives

Regardless of the specifics of the HIPO identification and program details, all profiled companies aim to fill a talent pipeline and to drive individuals up the management levels of a company through these opportunities.



HIPO Program Goals and Identification (continued)

At Company A, Company B, and Company E, companies select candidates based on specific criteria which then must be approved by an executive committee. Company A and Company E use structured criteria and selection processes for their HIPO programs. At Company B, HIPO employees fall into the highest category of a performance grid. These company examples are detailed in the following figures, and typically take place during an annual performance review.

FIGURE 1: STRUCTURED HIPO SELECTION AT COMPANY A AND COMPANY E

Industry: A–Media/Communications; E–Computer Services Employees: 10,000 – 50,000

Company A Company E

Revenue: $2 billion - $10 billion HIPO Criteria

HIPO employees at Company A must meet the following criteria:

! Demonstrate exceptional business results ! Have the ability to grow, adapt, and take on stretch assignments ! Leadership ability (has the potential to be promoted two levels to an officer level) ! Maintain skills and abilities required by individual job

All HIPOs at Company E must meet the following criteria:

! Director level or above ! Highest potential and performance in the organization ! Maintain leadership characteristics and job skills and abilities

HIPO Selection

Manager Driven—Employees’ direct managers recommend him/her. (Company A) Talent Management Nomination—The internal “University,” or Learning and Development function, recommends employees for the corporate HIPO program while each business and regional unit owns the process for their corresponding programs. (Company E) Executive Approval—All recommendations require executive committee approval.

Individualized HIPO process—Company B uses an individualized HIPO process distinct from the aforementioned, more formal and centralized programs. Company B’s process conducts HIPO employee identification using the grid method below.

FIGURE 2: HIPO PERFORMANCE GRID AT COMPANY B

Industry: Electronics Employees: 10,000 – 50,000 Company B Revenue: $2 billion - $10 billion

HIPO Criteria

The annual individual performance management process follows a grid as shown below to identify the top 10 percent of the population as HIPOs. Individuals receive two ratings, one based on performance in their current position, and one rating on potential corresponding to executive competencies and direct manager’s judgment based on employee actions, eagerness, and desire to assume higher positions.

High Potential Low Performance

High Potential, Medium Performance

High Potential, High Performance

Medium Potential, Low Performance

Medium Potential, Medium Performance

Medium Potential, High Performance

Low Potential, Low Performance

Low Potential, Medium Performance

Low Potential, High Performance

HIPO Selection

The yearly dynamic selection process contains a review of the results of the grid rating by the executive team. As a result, the company manages out the bottom five percent of the employee population and designates the top ten percent as HIPO.

Bottom 5 percent, exit firm

Top 10 percent, HIPO

Talent Management Process at Upper Employee Levels

The talent management process at Company B ranks the performance and potential of employees, and involves the top 350 people in the organization, from the director level up to the VPs and Senior VPs.

HIPO Programs



" Key Finding: Identifying Employees as HIPO

Companies’ methods for designating employees as high potential include the following: ! Assessing performance and

potential ! Business unit designation ! Executive committee approval ! Recruitment of only HIPO for

specific program ! Talent management grid



HIPO Program Components

A variety of program methodologies offer participants individual development opportunities, exposure to senior management, and the opportunity to have an impact on business results. In addition to the specific programs offered at profiled companies, which are detailed in the following section, 2003 Council research identifies a unique HIPO process at Schlumberger involving “non-obvious” cross-business development move opportunities for a selected group of rising high performing leaders. This tactic is detailed to the left.8 9 10

Management-Defined Program Components Company B and Company C provide HIPO opportunities through individualized promotions and on-the-job development. HIPO programs at Company A, Company D and Company E offer participants the tightly managed opportunities detailed in the following table:

Table 1: Common HIPO Program Opportunities Development Opportunity Description

Classroom-based learning

Classroom learning acts as the following (Company A, Company D, Company E):

• An opportunity to provide program overview • Forum for delivery of orientation information • Opportunity to participate in action learning

assignments or simulations

Classroom learning may also take place at local universities or business schools as a part of an individualized development program (Company C, Company E).

Individualized development plans

! HIPO participants construct individualized development plans with the assistance of a mentor, executive sponsor, manager, or coach. (Company A, Company C, Company E)

! These plans guide their participation in the program.

Mentoring, coaching, and sponsoring relationships

Mentor or coach assignment—Company A and Company E pair their HIPO program participants with a mentor or coach to provide the following assistance to HIPOs:

• Discuss their goals and focus areas • Engage them in development and networking

opportunities • Guide them through the process

Executive sponsor—Company D assigns each HIPO with an executive sponsor to oversee experience, identify long-term career options, act as a networking facilitator, and develop compensation bonuses.

Rotational or stretch assignments

! Promotion opportunities—HIPOs receive the first opportunity for promotions and international transfers. (Company B)

! Cross-training—HIPOs participate in business unit transitioning and start-up management through new assignments that vary in length. (Company C)

! Rotations—HIPOs receive four six-month stretch rotations in various functional areas and specialties to provide a strategic business focus. (Company D)

! Short-term assignments—HIPOs participate in short-term assignments, job-swaps, or transfers. (Company A, Company E)

Mentoring Programs for High-Potential and All Employees

Research suggests that mentoring relationships may involve both high potential employees and all employees at a certain level.10

! Executive-HIPO pairing—Xerox

Corporation pairs all twelve of its executive committee members with HIPOs from several layers below them to accomplish an established set of developmental objectives.

! Mentoring—Hewlett-Packard offers mentoring to new managers at every level, both new entrants and promotees. The program aims to facilitate a mutual need between the individual and the company and to groom high potential managers for future leadership.

HIPO Programs



Schlumberger’s Non-Obvious Development Moves

Schlumberger systematically encourages business unit managers to take calculated risks in placing leaders in cross-organizational stretch moves for long-term business benefit. This development opportunity involves the following components.9

! HIPO employee promotion into a

non-obvious development opportunity. (e.g., a cross-business or cross-geography move into a higher position)

! Mentoring involving internal coaching and training, facilitated for the HIPO by HR

! Risk assessments and feedback from direct reports

! Delegation of high-risk responsibilities to qualified employees beneath the HIPO

Success rate—Non-obvious stretch moves have a 90 percent success rate at Schlumberger.



HIPO Program Components (continued)

The most detailed and structured HIPO programs occur at Company A, Company D, and Company E. These programs are detailed in the tactic presented at the bottom of this page and the tactic on the next page. Company B and Company C do not offer such structured HIPO development programs, and their practices are summarized below. HIPO Identification and Promotion—Company B identifies HIPO employees to offer them on-the-job development opportunities and promotions. The HIPOs receive these opportunities as the business need arises, rather than as part of a structured development program. Individualized Participation—Company C provides HIPO individuals (six from each functional unit) with opportunities targeted to provide experiential learning through individualized opportunities. Examples of these experiential learning opportunities include starting-up a new business unit, and/or participating in the transitioning or reorganization of another unit. In addition, Company C facilitates HIPOs participation in university courses varying by need. Company A and Company E maintain programs aimed at individual competencies and development through a mix of coaching, classroom training, and projects, as detailed below.11

FIGURE 3: INDIVIDUAL GROWTH AT COMPANY A AND COMPANY E

Industry: A-Media/Communications; E-Computer Services Employees: 10,000 – 50,000

Company A Company E Revenue: $2 billion - $10 billion

Program Elements Aimed at Individual Competency Development

Development programs at Company A and Company D have similar components. Company E’s Corporate Programs require participation in week-long sessions, four to five times per year.

Coaching

! Coaches interact with each participant at both Company A and Company E

! Customized development plans, created by coaches overseeing the process at Company A, provide a personalized program delivering development in key areas (strategic focus, and business perspective)

! Internal coaches at Company A manage 12-16 people and receive certification through external consultants

Training

! All participants receive training activities at both companies

! Leadership education at Company E through a partnership with Wharton Business School (see Appendix B for details)

! Leadership insights class at Company A focuses on emotional intelligence and how HIPOs can recognize and use emotional intelligence within their current positions, as well as on a larger scale

Executive Interaction

! Executive committees provide a forum for action-learning at Company E; this opportunity allows visibility and interaction with executives

! Proposed future shadow cabinet implementation at Company A, in which HIPOs match with executives to complete a specific project will provide exposure to senior management

Other Opportunities

! Action learning teams work on projects collaboratively at Company A

! Functional and regional units also maintain HIPO programs at Company E; these programs may mirror themselves on the corporate program, but on a smaller scale

! Rotation opportunities are offered at Company E on an individual basis

! Senior HIPO leaders mentor junior HIPOs at Company A

HIPO Programs



HIPO Leader Assessment During the program, Company A offers all HIPO individuals the opportunity to receive a Forté Communication Style Profile. This tool assesses their communication style on a dynamic level, lending itself to coaching. See Appendix A for a description of the Forté Communication Style Profile.

" Key Finding: HIPO Programs Offer Wide Range

of Experiences

Development programs—For those companies with central control, HIPO programs offer a variety of experiences to each participant through a tight arrangement of opportunities, and consistent delivery of certain components. Identification process—Company B, with no formal HIPO development programs, uses HIPO identification to guide assignments through promotion, internal transfers, and compensation. Individualized participation—Company C treats each HIPO differently to provide a large range of experiences.



HIPO Program Components (continued) In addition to the aforementioned components of HIPO development programs, research suggests maintaining regular meetings between HIPO talent and upper-level company executives. Furthermore, companies that include “developing high potential talent” as a component to the job description of senior management are more likely to be considered a top employer.12

The tactic at Company D highlights its development of individuals recruited specifically for the HIPO program. The components of this development process are detailed below.

FIGURE 4: RECRUITING FOR HIPO DEVELOPMENT AT COMPANY D

Industry: Insurance Employees: 10,000 – 50,000

Company D Revenue: More than $10 billion

Filling the Talent Pipeline through Outside Recruitment

Company D uses its recruiting department to source participants for its Corporate HIPO development program. This targeted recruiting also considers internal candidates. Business school alumni—Most participants arrive from top-tier business schools directly to the program, while other HIPO employees may apply to the program internally.

Function-specific programs—In addition, finance and IT also maintain function-specific HIPO programs seeking four-year graduates and MBA participants.

Internal development—Internal candidates may apply to the Corporate Development Program. Other internal HIPO development programs at Company D follow an individualized promotion process, guided by employees’ direct managers, without a formal structure

Corporate Development Program Components

! Challenging assignments—Participants receive assignments that may be project based (internal consulting) or functional (underwriting in which participants assume all responsibilities associated with the position).

! Executive sponsor—Overseeing role, determines assignments, development needs, bonuses, and identifies long-term options. Sponsor may also provide some coaching.

! Insurance certification—During the first rotation, participants must complete one overview insurance course and exam. If participants complete all eight exams for certifications, they receive a cash bonus and vacation trip to receive their certification as a reward for this accomplishment.

! Management positions—After two years, successful participants receive middle management positions.

! Onboarding orientation—Involves a one-week intensive overview of the business units, tours, and job shadowing. Includes online programs on the company history.

The following page discusses the HIPO program administration at each profiled company, highlighting program costs and general trends.

HIPO Programs



Executive Sponsor Latitude The role of the executive sponsor at Company D maintains some latitude. These executives always oversee the participation of the employee and determine specific relevant projects for that HIPO. However, the sponsors may choose to participate in informal mentoring or coaching as well.

HIPO Components Aim to Challenge Participants

“The assignments are meant to be challenging. We look to push the

participants beyond their limits, not to weed people out but to challenge them

and demonstrate what they can do…we want people to deliver the

business results and demonstrate the desired behaviors [initiative, ability to

learn, leadership, dignity] .”

Practice Leader, Talent Identification Processes

Company D



Program Administration

Determining who administers the high potential development programs and which business unit assumes their costs depends largely on the goals of the program, its functional area, and the cohesiveness of the program’s design.

Development Program Control The centralized function of HR at profiled companies usually manages a portion of the HIPO development programs. The following figure depicts the centralization of the program and activities held at the functional or regional level.

Figure 5: HIPO Program Control

Cross-unit HIPO training Functional HIPO programs Recruitment for HIPO programs Regional programs Succession planning efforts On-the-job development

Development Program Cost and Administration Costs of the HIPO programs range dramatically due to varied development processes.13 The figure below contrasts the average costs of creating and delivering leadership development programs associated with the three different approaches.14

Figure 6: Average Leadership Development Program Costs

$89,000

$61,000

$33,050

$19,000

$34,000$32,880

$0

$50,000

$100,000

InternalDevelopment and

Delivery

Consulting Firms AcademicInstitutions

Program Development

Co

st

AverageDevelopment Costsper Company

AverageDevelopment Costsper Participant

The following chart identifies the programs’ relative staff, participants, and assumption of cost. At all companies, HIPO development lasts one to two years.

Table 2: Program Administration and Cost Company Staff Participants Cost Cost Assumed

A 1 FTE, 5 part-time

180 Less than $100,000 (excluding salaries)

Centrally (except for travel)

B 1 FTE, talent management support

350 assessed, 10 percent deemed HIPO

No annual budget Business unit

C 2 FTE 200-240 per year Varies

Business unit

D 1 FTE, and Recruitment involvement

20 per year $3.2 million (includes bonus, recruiting, relocation)

Centrally for all costs (except specific to each rotational assignment)

E 1.5 FTE in corporate program

25 in corporate program, other programs vary

Less than $70,000 first year (centrally)

Centrally (except for function- or region- specific costs)

HIPO Programs



" Key Finding: Costs Split Between Business Unit and

Centralized Functions

Centralization—Most profiled companies centralize the coordination of HIPO development programs, but require business units to assume all costs specific to that unit. Program Size—Participants range from 20 – 350 individuals per year while costs range widely depending on allocation and development activities offered to participants.

Centralized Decentralized

Company D Uses HIPO Targeted Recruiting

Company D’s HIPO program elicits participation of individuals external to the company. Internal candidates may also apply; however the vast majority of participants are recruited externally, resulting in extremely high costs. All other internal HIPO development occurs on the job.

Difficulty Determining Cost of HIPO Activities

Research suggests that it is difficult to calculate the cost of HIPO development activities, such as job rotation and mentoring. Examples of activities that companies rarely quantify include the following:15

! Cross-functional experiences ! Exposure to senior executives ! Mentoring programs



HIPO Program Completion

HIPO participation may end after the program’s defined duration, if a company elects to dismiss a participant from the program, when an annual review finds the participant to no longer be “high potential,” or if the participant elects to exit the program. Research suggests that companies design HIPO programs through project-oriented action learning experiences or establish specific time limits to maintain a continuous rotation of employee involvement.15,16,17

Employees Exiting HIPO Programs Similarly, profiled companies set parameters of HIPO program participation in which annual reviews, time limits, or designed exit procedures (see Figure 7) determine the length of an individual’s program participation, as detailed in the chart below.

Table 3: Program Length and Exit Procedures Program Duration Summary of Exit Annual review (Company A, Company B, Company C)

Change of status—If employee’s HIPO status changes after an annual review, these former HIPOs exit the program during the next year. It is unusual for participants to exit the program during the year.

Cannot meet expectations—At Company D participants will leave the program if they cannot achieve the following: ! Deliver business results in each assignment ! Demonstrate initiative, ability to learn, dignity, leadership, respect Two-year duration

(Company D, Company E)

New assignments or failure—HIPOs will cease participation in the following situations: ! Assigned a new position and can no longer commit to HIPO program ! Not performing regular job up to speed ! Not spending enough time on program itself

FIGURE 7: PROGRAM EXIT PROCEDURE AT COMPANY D

Industry: Insurance Employees: 10,000 – 50,000 Company D Revenue: More than $10 billion

Exit Procedures at Company D

1. Program administrator meets with HIPO executive sponsor to determine needed change 2. Administrator provides individual feedback to HIPO and a set length of time to improve 3. If HIPO does not improve, one of the following adjustments may occur:

a) HIPO asked to leave company b) Give HIPO another position within the company and he or she leaves the program

In two years, the company only asked two individuals to leave the program (one left the company, another assigned new position). One participant elected to leave the program.

HIPO Program Relevance Interviewed individuals at each profiled company suggest that HIPO programs continue to be relevant for succession planning efforts by preparing talent to fill crucial leadership positions. In addition, well-designed programs focus on deliverables that provide strong business results. Based on profiled companies experiences, the following activities add the most value to a HIPO program.

! Ensuring commitment from senior management

! Providing key stretch assignments, which is possible even with limited resources

! Requiring deliverables from assignments providing business results

! Using a pragmatic program focusing on experiential learning and HIPO designation as a succession guide

HIPO Programs



" Key Finding: HIPO Participation Contains Time Limits and Methods for Exit

Companies use an annual review or a stated duration to determine the amount of time employees remain in HIPO development programs. In addition, companies may choose to dismiss participants from the program in individual cases.

Relevant HIPO Focus

At Company B, which maintains a rather low profit margin, HIPO rankings provide a guide to succession rather than an expensive development program focused solely on individual development.

“When you do not have the luxury of extra money, you do not make the

mistake of veering down the path of wasting money because you really

need to focus on the business. This is the positive side of the

situation.”

Talent Management Manager, Company B



Future Changes to HIPO Programs HIPO programs and their contributions to succession planning efforts have become increasingly important to company executives in recent years. Since the HIPO programs at profiled companies are relatively new, companies try to tightly manage these programs and their outputs, while also also adding future improvements. The Council polled its members in 2003 to discover the pressing interests of HR executives. Facing economic pressure, difficult competition, and external scrutiny of companies’ leadership bench, executives seek effective programs to promote development amongst top talent.18

Trend #1: Increasing Management of New Programs At each profiled company, interviewed individuals report that their companies implemented the HIPO programs recently (less than five years ago). The programs require frequent monitoring and management to ensure continued success. The Practice Leader of Talent Identification Processes at Company D aims to tighten the criteria and components of HIPO programs, while Company C plans to closely align its programs to future growth as demonstrated in the figure below.

Figure 8: Company C’s Future HIPO Management

Trend #2: Adding Additional Components to HIPO Programs Although many interviewed individuals believe that development opportunities do not require a significant financial investment, many cite interest in adding components to their HIPO programs to improve their impact on the targeted individuals. These components include the following changes:

! Increased executive training, using external involvement through coaches and business schools (Company B and Company E)

! Mentoring component (Company B is currently beginning a pilot program) ! Provide more lateral movement opportunities (Company D)

The following tactic presents the future goals of Company B’s HIPO development.

FIGURE 9: FUTURE GOALS FOR HIPO DEVELOPMENT AT COMPANY B Industry: Electronics Employees: 10,000 – 50,000 Company B Revenue: $2 billion - $10 billion

Ideal Development for HIPO Leaders

Currently, 90 percent of HIPO development occurs on-the-job at Company B. The Talent Management Manager aims to implement the following ratios of activities for HIPO leaders:

! 70 percent on-the-job assignments ! 20 percent interpersonal relationships (including internal mentoring and external

coaching)

! 10 percent academic courses, seminars, and conferences

Refine HIPO selection criteria, processes, and measurement

Showcase HIPO individuals and fast track them to prepare them for leadership roles

Fill leadership positions corresponding to growth strategies

HIPO Programs



" Key Finding: Newly Developed Programs Require

Close Management

The youth of profiled companies’ programs (all profiled development programs are less than 5 years old) require refinement and adjustments in the coming years. The main goal remains to use HIPO development as a tool for effective succession management.

Continuing to Add Components to HIPO Programs

Limited resources often determine how companies structure their development activities. The interviewed individuals at profiled companies look to maintain an effective program, however, this may be more difficult when funds are limited. During these times, interviewed individuals suggest focusing on on-the-job development opportunities.



Driver for Broad-based Interventions Although HIPO programs provide many companies with a strong talent pipeline and serve to attract, develop, and retain employees, some disadvantages arise in the methods used to identify and develop HIPO employees which serve as the driver for alternative interventions. Research identifies the following disadvantages to HIPO identification and development processes.19 20

! Employees may have a lack of involvement in the planning process. ! HIPOs may refuse promotions or transfers that are not aligned with personal

preferences. ! Processes may take an overly long time to develop and execute. ! The talent pool may not identify connections between individual employees and

specific positions.

Abandoned HIPO Programs Due to the relevant disadvantages, some companies choose to abandon traditional HIPO programs to focus on different employee segments; however, none of the profiled companies have completely abandoned their programs, due to the novel development of the HIPO programs. Company C abandoned a “Career Development Program,” focused on younger, more junior talent that did not meet objectives of funneling individuals through the company. Instead, after participation, this talent left the company early, proving ineffective. Goals of Broad-based Interventions Profiled companies use alternate interventions to achieve various goals. Alternate interventions provide functional competence, manager training experiences, and may foster more immediate business results through company-wide skill development. In addition, these programs foster a culture of inclusiveness. The following chart demonstrates the aims of alternate development programs featured at profiled companies.

Table 4: Drivers of Broad-based Interventions Driver Goals

Functional Competence

! “Deliver knowledge to employees to be as effective as possible as quickly as possible,” as suggested by the Practice Leader, Talent Identification Processes at Company D

! Raise the bar of performance for all employees Inclusiveness of Training

Opportunities

! Drive retention efforts and performance enhancement of all employees

! Focus more resources on different employee segments and leadership roles

! Highlight all employee efforts ! Promote a culture of inclusiveness

Cross-Company Alignment

! Deliver the company culture and message from senior executives to all employees

! Ensure that all employees receive the same company information, especially in the cases of new manager or new supervisor

HIPO Programs



Intervention for Mid-level and All Performers

Previous 2003 Council research profiling five firms identifies companies’ relative focus on all individuals and the corresponding interventions for all individuals:20

! Focus attention on the top and

bottom tiers of performance ! Foster optimal performance from

all employees through a culture of non-differentiation

! Mentoring average performers and using individual development plans to provide career assistance to all employees

! Provide universal access to all learning and development tools

" Key Finding: The Merits of Broad-Based Interventions

Profiled companies employ alternate, broad-based interventions to achieve the following outcomes: ! Align the corporate message

and development across the company to all employees

! Raise the bar of performance through functional competence

! Support inclusiveness of all employees through offering varied training opportunities



Alternative Development Programs

In addition to, and in some cases without including HIPO development programs, many factors combine to produce a high-performance workforce. According to 2003 Council research on Building the High-Performance Workforce, companies can improve performance with the following interventions.21,22

! Drive individual performance through understanding and fairness of the performance

management system and positive, specific, and job-relevant feedback. ! Increase manager-employee interaction by providing solutions and the required

resources to drive results of manager’s direct reports. ! Provide fair, accurate, and proactive informal performance feedback.

Profiled companies provide a range of alternative development opportunities to all employees focused on functional development, individualized development plans, and management-level training. Offering Function-Specific Development Company B provides broad-based training programs which include manufacturing related quality initiatives specific to the functional job responsibilities of each employee. The following are two examples of these types of programs:

At Company E all employees also receive skills training tailored to employees’ individual needs identified through a development skills assessment offered to everyone. In addition, employees at Company C may sign up for hundreds of courses online through the Intranet site. Courses may include change management and project management. Providing Individual Development Plans and Movement Research suggests that individual development plans foster greater employee commitment to a company, although few companies require all employees to maintain a development plan. Companies requiring these plans, including Texas Instruments and Hewlett Packard, use the employees’ interpretation of their position to drive future development.23 Company D, on the other hand, creates individual development plans, based on employee needs, while seeking individual move or rotation opportunities. Company E encourages each employee, regardless of level, to complete an individual development plan to guide his or her experience within the company.

! Lean manufacturing initiatives—Company B implemented training processes to address the following goals of lean manufacturing: 1. Minimize the resources required for production by eliminating waste (non-value

added activities) that inflate costs, lead times, and inventory requirements 2. Emphasize the use of preventive maintenance, quality improvement programs,

pull systems, and flexible work forces and production facilities

! Six sigma initiatives—Another example of function-specific development at Company B includes six sigma initiatives, involving the following training aims: 1. Measure and improve the control of a process to the point of ± six sigma

(standard deviations) from a centerline, or 3.4 defects per million items 2. Identify factors critical to quality as determined by the customer 3. Reduce process variation and design systems to support the six sigma goal

Alternative Development Programs

Research suggests the following broad-based development programs:22

! Peer learning networks— At Quantum Corporation, HR managers meet once a month in internal application groups to review each others’ work. This provides consulting resources for each manager and the opportunity to learn collectively from managers successes and failures.

! On-going course— Hewlett Packard provides an on- going five-day course called “Personnel as a Competitive Advantage” to personnel managers and senior HR generalists to present outside speakers, and high-level presentations from professionals in other functions of the company to ensure that everyone understands the role, purpose, direction, and strategy in the company.

HIPO Programs



" Key Finding: Common Alternative Interventions

Profiled companies employ alternate, broad-based interventions that may include the following: ! Function-specific development ! Individualized development

plans ! Management level training ! Movement across the company



Alternative Development Programs (continued)

Companies profiled in previous Council research plan to utilize the following intervention tactics to develop their mid-level performers:24

! Individual development plans to help maintain and further improvement ! Mentoring programs ! Rewards differentiation system prescribing unique options and action steps

25

Delivering Management-Level Training Many intervention tactics encouraged in secondary research correspond directly to the manager-employee relationship. That said, manager training is the most common form of alternate development programs at profiled companies. Company A, Company C, and Company D offer their managers specialized training focusing on business results, as demonstrated in the following development tactics.

FIGURE 10: RESULTS-FOCUSED SUPERVISOR TRAINING AT COMPANY A

Industry: Media/Communications Employees: 10,000 – 50,000

Company A Revenue: $2 billion - $10 billion

Entry Level New Supervisor Program

Leaders at Company A are individuals “who manage or influence others.” These 2500 individuals maintain a specific level of readiness to advance within the company. Initially they undergo the “Gateway to Leadership” training program detailed below:

! Goal—To develop basic supervisory skills

! Duration—One-week program

! Program Components—Employee relations, supervisory and management skills

Advanced Supervisor Training

In addition to the Gateway training, high-performing supervisors, a group separate from the HIPO group, undergo a hands-on training session, Impact of the Leaders, detailed below:

! Goal—To provide an opportunity for participants (five to ten years of supervisory experience) to receive hands-on training related to employee morale and engagement.

! Duration—Initial four-day classroom training, then a three month project component.

! Program Components—Work projects using a business goal from the year. These projects include collaboration with others dealing with similar goals. Process includes a plan review and approval from an executive sponsor, and after three months of plan enforcement, the sponsor reviews the results of the project through a conference call with the participant.

! Result—Project completion with positive business results.

FIGURE 11: TRAINING FOR ALL MANAGERS AT COMPANY C AND COMPANY D Industry: C-Hospitality; D-Insurance Employees: 10,000 – 50,000

Company C Company D

Revenue: Less than $1 billion; More than $10 billion Manager Level Training

“Fundamentals” training—Company C drives manager training through its Fundamentals Program. It focuses on aspects of finance, customer satisfaction, and colleague engagement. This 6-12 month program focuses on the following areas:

! 360-review process ! Module-based lessons ! Strengths Forecaster, an individual assessment test revealing manager strengths

Multi-level training—Company D requires anyone in a management role to attend a one-week program, involving the CEO, focusing on alignment, skill-building, and networking.

! Program continues for managers after three years as an advanced training.

! Senior level individuals participate in a simulation course to discover their strength and weakness areas.

HIPO Programs



Impact of the Leaders Employee Coaching Example

Background—A supervisor had control of ten individuals directly under him. Two of these employees were responsible for the majority of errors.

Description—The supervisor discussed the problem at the four-day training session. Upon return from training, the supervisor measured performance, identified the low performers and implemented values-based coaching techniques learned through Impact of the Leaders.

Impact—After three months of utilizing these values based coaching techniques, the supervisor measured performance to find that the techniques eradicated almost all errors.

Company D’s Multi-Level Manager Training

New managers—Newly promoted or hired managers must participate in the initial one-week training session Experienced managers—Managers in the position for three or more years may attend an advanced session Senior level managers—Vice presidents and executive management participate in a simulation course that is continuously considered by participants “the best development thing they’ve ever done.” The course offers participants the opportunity to work in cross-functional teams on resolving hypothetical business challenges.



Future Implementation of Alternative Programs

Although many programs do not target all employees, simpler, more individualized programs delivered through managers may assist in employees’ development. Research from the Learning and Development Roundtable detailed in the following table reveals the activities that managers of average performers rate as the most effective on a scale of 1 to 7 where 1 indicates “not very effective” and 7 indicates “very effective”:26

Table 5: Manager-led Employee Development

Activity Mean Helping employees learn to solve problems on their own 6.23 Giving employees feedback during their performance reviews about strengths of their past performance

6.19

Helping employees understand the standards on which they are evaluated during performance reviews

6.06

Discussing employees’ work-related ideas or concerns with them 6.04 Helping employees find solutions to work-related problems 6.02 Helping employees apply new skills or knowledge in their work 5.98 Helping employees have the kind of experiences at work that will help them develop 5.95

Profiled companies continue to aim for effective development opportunities for all employees through the use of increased manager-level training and executive-led forums. Increasing Management Training Due to the popularity of the HIPO programs and company aims to involve more employees in focused training programs, Company A and Company D plan to provide more management focused training for all manager-level employees. Benefits to these efforts are listed below:

! Attention—Provide attention and inclusiveness to a group desiring the development ! Broad influence—Managers touch and therefore influence all employees ! Leadership development—Seek new leaders through the manager training

Developing Executive Forums The buy-in and support of the CEO and other senior level management is key to the success of any development program. Company B aims to incorporate executive forums to a broader scale of employees, as demonstrated in the figure below.

Figure 12: Participation in Executive Forums Executives focus on the business needs and then deliver forums to all employees, therefore eliciting employee involvement and commitment to business objectives.

HIPO Programs



" Key Finding: Future Implementation of Alternative

Programs

Company leaders recognize the crucial impact managers have in the experiences of each employee. As a result, delivering more manager-level training is a key priority for profiled companies.

Executive Forums vs. Experiential Learning

Although executive forums aim to bring cohesiveness to all employees, the Talent Management Manager at Company B suggests that these events may be less effective without a large interactive component. Learning is more effective when a company develops a new assignment or project oriented task linked to business objectives.



Measuring Success of HIPO Programs

Assessing the success of HIPO identification processes allows companies to determine their effectiveness in succession planning. Profiled companies and previous research suggest other methods including retention and individual performance to determine the effectiveness of HIPO programs. Research reveals the following metrics to assess the HIPO programs’ effectiveness:27

2829 ! Bench strength ! HIPO diversity ! Length of time HIPOs stay in their current positions ! Number of positions filled by HIPOs ! Promotion rates ! Retention of HIPOs

Assessing Succession Management The interviewed individuals at profiled companies consistently cite the ability to manage succession effectively as an indication of the positive outcomes of HIPO development programs. Specifically, companies use the following information to guide the process of succession through HIPO development:

! Providing a substantial slate of candidates for open positions at Company A (“Ready Now”; “Ready Future”; Acceleration Pool”)

! Tracking rate of promotions at all profiled companies: • Company B currently meets 80 percent of succession needs internally • Company C uses this information to identify gaps in development • At the end of the year, most HIPO candidates move into new positions at

Company C

Tracking Retention Characteristics All profiled companies with detailed HIPO programs consistently track the retention rates of their participants in the HIPO development programs. Due to the novelty of programs, companies aim to continue tracking this metric to determine the long-term success of HIPO programs.

• Company A maintains retention rates in the upper 90th percentile. • In the past five years, only three participants have dropped the corporate HIPO

program at Company D. • Other companies did not provide specific numbers but noted that retention as very

high among recent program participants.

Monitoring Individual Development

Companies consistently use anecdotal and manager feedback to monitor the individualized development of all HIPO participants. In addition, the individual development of HIPO employees, and the programs themselves, contribute to the internal culture of a company. This qualitative feedback is more difficult to quantify, but may be visible through the following activities used by profiled companies:

! Administration of evaluation forms ! CEO buy-in ! Identification of learning gaps ! Monitoring the effectiveness, self-awareness, and leadership ability of participants ! Senior executive reports of satisfaction

HIPO Programs



Tracking HIPO Success with Top-Down or Bottom-Up

Approaches Companies maintain two main approaches for tracking the success of their HIPO development programs. The organizational chart approach follows the path below:28

Identify key positions. Identify high performing

employees as replacements. Develop and retain identified participants.

The talent pool approach focuses attention in the way detailed below:

HIPO talent assumes broad leadership roles. Development of HIPO pool. Selection of HIPO talent.



Measuring Success of Alternative Programs

Assessing success of alternative development programs mirrors the difficulty found in measuring success for HIPO programs. Companies attempt to quantify the results of these alternative interventions, but this may prove even more challenging due to the broader base of involvement and the variety of programs. Profiled companies measure success at the individual level, the business unit level, and through some company-wide metrics as well. Assessing Company-Wide Effectiveness

Companies seek to measure overall performance corresponding to training efforts on a company-wide scale. Longer term assessments will provide information to quantify the results of alternate training interventions. Furthermore, companies seek to measure the impact of alternative interventions on employee satisfaction and retention efforts. These long-term metrics have not yet been analyzed at the profiled companies and interviewed individuals suggest the challenges associated with measuring training prevented these efforts from implementation to date. At this point all companies incorporate anecdotal feedback through senior-level executives and participant levels of satisfaction to their analysis of effectiveness. Determining Impact on Business Unit Since many alternate interventions exist on a function-specific level, companies allow business units to measure the success of these interventions according to their impact on business performance. Profiled companies measure business results in the following situations:

! Assessments—Course assessments for skills-based training affecting business units and subsequent measurement of relevant business performance (Company D)

! Business unit autonomy—Company C allows the business units to assess the effectiveness of development interventions, because the business units design most of these processes, but their Corporate Recruiter and HR Planner notes that the “Fundamentals” program receives strong feedback related to effectiveness.

! Clear business results—Impact of the Leader at Company A (strong business results from the project oriented assignments that require follow through and analysis to determine their effectiveness)

Measuring Individual Performance Companies determine the success of alternative interventions on individual performance through the following measures:

! Anecdotal feedback—All profiled companies consider anecdotal feedback

! Individual participation —(e.g., repeat user rates for training classes) Company B’s learning function measures participation rates but does not yet link to business results

! Management-follow up—Company D follows up with managers to determine the effectiveness of development activities.

HIPO Programs



" Key Finding: Success Measurements on Relevant

Levels of Participation

Profiled companies aim to measure the following aspects of the success of alternative programs, corresponding to the impact of the intervention: ! Assessing company-wide

effectiveness ! Determining impact on

business unit ! Measuring individual

performance

Effectiveness of Interventions on

Individual Employees Through a variety of development opportunities, Company A attempts to match individual learning styles and needs to be effective at delivering training.

“Individuals maintain different learning styles and choose

development options relevant to their needs…all programs are effective in

some way or another; however, [to address all employees’ needs and

learning styles] it is not clear which are most effective.”

Corporate Director, Global Talent and

Diversity, Company E



Effective Development Programs

Companies provide effective development opportunities to employees through individualized, tailored HIPO programs, on-the-job learning experiences, and challenging stretch assignments fostered through management training. Research from HRMagazine suggests that two keys to success for HIPO identification and planning processes include the following:30

! Periodic re-evaluation of the programs ! Senior management buy-in ! Tracking the progress of individual development plans31

Individualized HIPO Programs

The Manager of Accelerated Leadership Development at Company A suggests that HIPO programs have a strong ROI given their impact on attracting, developing, and retaining employees. The ROI is also measurable through the benefits of hiring internally and subsequently reduced recruiting costs. In addition to these financial returns, the Corporate Director of Global Talent and Diversity at Company E cites the HIPO programs as most effective, due to the ability to target HIPO programs to the participants’ needs, to deliver effective, individualized training opportunities, and to meet CEO objectives. Stretch Assignments and On-the-Job Development Without spending an extensive amount of resources on individualized training sessions, companies may realize the benefits of individual stretch assignments and on-the-job development opportunities. Effective manager training for all managers guides the tools companies use to construct individual development programs. One example cited by the Corporate Recruiter and HR Planner at Company C is their “Fundamentals” manager training. This type of training helps managers to identify opportunities for individualized development within a company. Development activities may include some or all of the following options:

! Experiencing an international assignment ! Opening, transitioning, or fixing a site ! Participating on a task force ! Switching types of jobs (i.e., from an operations to a sales position)

Current Limitations

In view of the fact that many companies’ intervention and HIPO programs are newly developed, the interviewed individuals at the profiled companies suggest that determining which is most effective currently presents a challenge to the corporate program administration.

HIPO Programs



" Key Finding: Companies Identify the Most Effective Development Interventions

Due to the personalized attention of HIPO programs, interviewed individuals agree that they provide a host of benefits to participants. That said, other development interventions providing the most value include the following: ! Challenging/stretch

assignments ! Management training ! On-the-job development

activities

Focus on Goals of Development

Programs Through keeping a strong focus on the goals of development experiences, companies will succeed.

“[Aiming to succeed through]… Managing risk, maintaining a

high-performing organization, and through the goal of an individual’s

development, retention, and satisfaction… companies will have

programs that follow the necessity of the organization and will achieve

those goals.”

Talent Management Manager, Company B



APPENDIX A Company A uses a Forté tool with coaching to provide feedback on high-potential employees’ primary interaction and their communication styles and to coach them on how to use the information. FORTÉ COMMUNICATION STYLE PROFILE

Providers of Forté Communication Style Profile: The Forté Institute, developed in 1978 Web site: www.theforteinstitute.com Telephone number: (800) 633-8518 E-mail Address: [email protected] Description: Dynamic tool: The Forté Institute has developed an adaptable tool to understand individuals’ primary, adapting, and perceiving profiles and their changes over time. Positive strengths—Forté Communication Style Profile identifies and maximizes the positive strengths of individuals’ and teams’ communication styles and minimizes their chances for misunderstandings and conflicts. The survey is focused to specific individuals, team, and/or environments, and can track how a client adapts to a specific environment or a specific individual (or both) over time. System of tests—The Forté Institute developed a complete array of interpersonal tests designed for coaching relationships. The description on the Web site of this group of tests may be found below:

“Forté (a French word meaning “one's strengths”) is an interpersonal communications system (individuals complete a three to five minute survey) that identifies a person's natural communication style preferences and strengths, how they have been adapting to a specific individual and/or environment, and how they are most likely coming across to others they are communicating with. Forté also identifies an individual's current logic style, current stamina level, and how they are currently feeling about goal attainment.”



APPENDIX B

Company B maintains a relationship with the Wharton School of Business at the University of Pennsylvania. The Wharton School offers an Executive Education program detailed below. WHARTON EXECUTIVE EDUCATION

Contact information: For Open Enrollment Programs: Contact person: Antoinette Yancy Telephone number: (215) 898-1776

E-mail address: [email protected] Web site: http://execued.wharton.upenn.edu For Customized Programs: Contact person: Lynn Phillips, EdD, Senior Director, Custom Programs Telephone number: (215) 573-9443 E-mail address: [email protected] Web site: http://execed.wharton.upenn.edu/c_custom.cfm Sample Open Enrollment Programs: Advanced Management Program Directors’ Institute and Directors’ Forum Wharton Fellows Custom Programs: Wharton's customized programs give executives and their companies timely and specific knowledge, by drawing upon the resources of one of the world's largest and finest business schools to develop focused solutions. Wharton offers the resources of outstanding faculty in diverse areas and experience in delivering programs to more than 10,000 executives every year. Programs can be delivered on campus in Philadelphia, at the Wharton West center in San Francisco, or onsite at business locations worldwide.



THE RESEARCH PROCESS IN BRIEF

The Corporate Leadership Council conducted a comprehensive search of published materials regarding the subject of HIPO program effectiveness, drawn from previous Corporate Executive Board research, trade press journals, other research organisations, and the Internet. Council staff then interviewed five human resources professionals at different organizations. These individuals discussed their development interventions for HIPOs and all employees. This report represents the findings from secondary and primary sources.

1. Who administers HIPO development programs and what business unit assumes

their cost? What is the ratio of program staff to participants and the annual budget?

2. What type of HIPO development programs do companies have in place and do participants exit the program for any reason during the process?

3. Do HIPO development programs focus too much on individual competencies rather than clear business results?

4. Do HIPO programs continue to be relevant in light of dramatic downsizings and raised bar performance, and is there another philosophy that would suggest developing talent more broadly, especially in smaller companies?

5. What changes do companies foresee to their HIPO development in the near future?

6. Do companies use any different interventions for development, and what types of broad-based development programs do companies have in place?

7. Why do companies use alternative development programs, and have companies abandoned HIPO programs for strategic reasons?

8. Would companies consider implementing other HIPO alternative programs? 9. Do HIPO programs meet their objectives? If so, how do companies measure this? 10. What aspects of HIPO development programs are most successful? 11. What is the effectiveness of other interventions? 12. Overall, what are the most effective development programs? Are these directed

at high potential employees or are they more broad-based? Table 1: Common HIPO Program Opportunities Page 5 Table 2: Program Administration and Cost Page 8 Table 3: Program Length and Exit Procedures Page 9 Table 4: Drivers of Broad-Based Interventions Page 11 Table 5: Manager-Led Employee Development Page 14 Figure1: Structured HIPO Selection at Company A and Company E Page 4 Figure 2: HIPO Performance Grid at Company B Page 4 Figure 3: Individualized Growth at Company A and Company E Page 6 Figure 4: Recruiting for HIPO Development at Company D Page 7 Figure 5: HIPO Program Control Page 8 Figure 6: Average Leadership Development Program Costs Page 8 Figure 7: Program Exit Procedure at Company D Page 9 Figure 8: Company C’s Future HIPO Management Page 10 Figure 9: Future Goals for HIPO Development at Company B Page 10 Figure 10: Results-Focused Supervisor Training at Company A Page 13 Figure 11: Training for All Managers at Company C and Company D Page 13 Figure 12: Participation in Executive Forums Page 14

Research Methodology

Project Aims

Guide to Tables and Figures



1 Camille Luckenbaugh, "Employers Project College Hires to Climb 12.7 Percent in 2003-2004.” Benefits Next (2003) (Obtained through Lexis-Nexis). 2 Corporate Leadership Council, The Business Case for Succession Management, Washington: Corporate Executive Board (2003). 3 Thomas J. Delong and Vineeta Vijayaraghavan, "Let's Hear It for B Players," Harvard Business Review (June 2003). (Obtained through Factiva). 4 Author Unknown, "Training Programs: New Research Defines Payback on Leadership Development Programs," Managing Training and Developing Programs (July 2003). (Obtained through Factiva). 5 Author Unknown, "Tracking High Potentials Builds Leadership Excellence," Hewitt Associates (March 2003). (Obtained through http://www.hewittasia.com/hewitt/ap/resource/articleindex/articles/article_03_11_03.htm). [Accessed 21 January 2004]. 6 Gergory Keslar, "Improving Succession Planning Results through Assessment and Validation," Competitive Human Resources Strategies, LLC (2002). (Obtained through www.chrs.net). [Accessed 15 January 2004]. 7 Corporate Leadership Council, High Impact Succession Management, Washington: Corporate Executive Board (2003). 8 Corporate Leadership Council, High Impact Succession Management, Washington: Corporate Executive Board (2003). 9 Corporate Leadership Council, High Impact Succession Management. 10 Corporate Leadership Council, HIPO Management Mentoring Programs, Washington: Corporate Executive Board (December 2002). 11 Advisory Board Company, Engaging the Strategic Agenda: Shadow Cabinet, Washington: Corporate Executive Board (1997). 12 Robert Pollack, "Top Hirers Cultivate the Right Stuff," MIS Asia (October 2003). (Obtained through Factiva). 13 Corporate Leadership Council, Companies’ HIPO Development Budgets, Washington: Corporate Executive Board (July 2001). 14 Corporate Leadership Council, Companies’ HIPO Development Budgets. 15 Stewart Friedman, "Leadership DNA: The Ford Motor Story," Training & Development (March 2001). (Obtained through Factiva). 16 Author Unknown, "NASA Agency Sponsored Development Programs," Executive Potential Programs (2003). (Obtained through http://ohr.gfsc.nasa.gov/devguide/). [Accessed 19 January 2004]. 17 Katherine Harding, "Once and Future Kings," The Globe and Mail (9 April 2003). (Obtained through Factiva). 18 Corporate Leadership Council, High-Impact Succession Management. 19 William J. Rothwell, Effective Succession Planning, New York, NY: Amacom, 2001. 20 Corporate Leadership Council, Identifying, Developing, and Rewarding Mid-Level Performers, Washington: Corporate Executive Board (November 2003). 21 Corporate Leadership Council, Building the High-Performance Workforce, Washington: Corporate Executive Board (2003). 22 Corporate Leadership Council, Career Development for HR Professionals, Washington: Corporate Executive Board (May 2003). 23 Corporate Leadership Council, Individual Development Plans, Washington: Corporate Executive Board (September 2001). 24 Corporate Leadership Council, Identifying, Developing, and Rewarding Mid-level Performers. 25 Martha Frase-Blunt, "Ready, Set, Rotate!," HRMagazine (October 2001). (Obtained through Factiva). 26 Learning and Development Roundtable, 2003 Manager-Led Development Survey, Washington: Corporate Executive Board (2003). 27 Corporate Leadership Council, Identification and Development of High Potential Employees at Fortune 500 Companies, Washington: Corporate Executive Board (2002). 28 Corporate Leadership Council, Identification and Development of High Potential Employees at Fortune 500 Companies. 29 Corporate Leadership Council, Tracking the Success of HIPO Development Programs, Washington: Corporate Executive Board (March 2002). 30 Author Unknown, "From HR to the Top," HR Magazine (June 2003). (Obtained through Lexis-Nexis, a division of Reed Elsevier, Incorporated). 31 Corporate Leadership Council, Identification and Development of High Potential Employees at Fortune 500 Companies.

The Corporate Leadership Council has worked to ensure the accuracy of the information it provides to its members. This project relies upon data obtained from many sources, however, and the Council cannot guarantee the accuracy of the information or its analysis in all cases. Further, the Council is not engaged in rendering legal, accounting or other professional services. Its projects should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither Corporate Executive Board nor its programmes is responsible for any claims or losses that may arise from any errors or omissions in their reports, whether caused by Corporate Executive Board or its sources.

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