Finding Keeping and Maximizing Top Talent

Finding, Keeping, and Maximizing Top Talent

Auto InsuranceNational Conference

Presenter: Keith Green

Contents

Thesis

Talent management framework

Great places to work• Criteria and linkage to talent management• Key metrics• Value creation

Powerful patterns of talent management• Genentech• McKinsey• Progressive

Key lessons for P&C industry

Contents

ThesisTalent management framework




Thesis

Above all else,superior talent management – the

distinctive ability to attract, develop, retain, and deploy – results in a company

being deemed “a great place to work”

Value – both operational and market-driven – accrues to companies that are part of this

select group

Thesis, continued

The P&C industry (and, by extension, the

companies that make it up) lags in its talent

management capabilities and

consequently in its ability to be considered “a great place to work”

– Talent management needs to become a priority, and existing approaches must be revamped, particularly recruiting and development

– The industry must do a better job of communicating its compellingly interesting and challenge-ridden business issues

– A sense of urgency must prevail – a unique, but closing, window of opportunity exists

Contents

Thesis

Talent management frameworkGreat places to work• Criteria and linkage to talent management• Key metrics• Value creation



Talent Management Framework

Establish foundation

– Guiding principles/values– Leadership commitment– Linkage to mission and

strategic objectives

Targetand select

Attractand retain

Developand deploy

– Identifying/sourcing– Segmenting– Screening/interviewing

– Value proposition Prospects Existing employees

– Integration– Rewards/incentives/recognition

– Assessment/development– Right person/right job– Value extraction

Engagement

Creativity/innovation

Growth

Profitability

Excess returns

Reinvestment

Fortune 100 Criteriaand Linkage to Talent Management

Dimension How it plays out in the workplaceLinkage to framework

Credibility Communications are open and accessible Competence in coordinating human resources Integrity in carrying out vision with consistency

Respect Supporting professional development and showing appreciation

Collaboration with employees on relevant decisions Caring for employees as individuals with personal lives

Fairness Equity-balanced treatment for all in terms of rewards Impartiality – absence of favoritism in hiring and promotions Justice – lack of discrimination and process for appeals

Pride In personal job, individual contributions In work produced by one’s team In the organization’s products and standing in the community

Camaraderie Ability to be oneself Socially friendly and welcoming atmosphere Sense of “family” or “team”

Establish foundationTarget and select

Attract and retainDevelop and deploy

Gallup Survey of Employee Engagement

The Gallup Q121. Do you know what is expected of you at work?2. Do you have the materials and equipment you need to do your work right?3. At work, do you have the opportunity to do what you do best everyday?4. In the last seven days, have you received recognition or praise for doing

good work?5. Does your supervisor, or someone at work, seem to care about you as a

person?6. Is there someone at work who encourages your development?7. At work, do your opinions seem to count?8. Does the mission/purpose of your company make you feel your job is

important?9. Are your fellow employees committed to doing quality work?10.Do you have a best friend at work?11.In the last 6 months, has someone at work talked to you about your

progress?12.In the last year, have you had opportunities at work to learn or grow?

Source:Gallup Organization

Gallup Survey of Employee Engagement, continued

28

54

17

Engaged Not engaged Disengaged• Work with passion• Feel a positive

connection to company

• Drive innovation and move organization forward

• “Checked out” • Sleepwalking through

their work day• Very little or no

passion/energy

• Unhappy• Busy acting out

their unhappiness• Undermining their

colleagues work

Source:Gallup Organization

71% of work force is either underperforming or actively undermining

the work of others

Contents

Thesis





Fortune 100 Best Companies to Work For 20091 Net App2 Edward Jones3 Boston Consulting

Group4 Google5 Wegmans Food

Markets6 Cisco Systems7 Genentech8 Methodist Hospital

Systems9 Goldman Sachs

10 Nugget Market11 Adobe Systems12 Recreational

Equipment (REI)13 Devon Energy14 Robert W. Baird15 W. L. Gore &

Associates16 Qualcomm17 Principal Financial

Group18 Shared Technologies19 OhioHealth20 SAS21 Arnold & Porter22 Whole Foods Market23 Zappos.com24 Starbucks25 Johnson Financial

Group

26 Aflac27 QuikTrip28 PCL Construction

Enterprises29 Quicken Loans30 Brigham McCutchen31 CarMax32 Container Store33 JM Family Enterprises34 Umpqua Bank35 Kimley-Horn36 Alston & Bird37 TDIndustries38 Microsoft39 Paychex40 EOG Resources41 Camden Property Trust42 Plante & Moran43 Rackspace Hosting44 NuStar Energy45 King's Daughters

Medical Center46 American Fidelity

Assurance47 DreamWorks Animation

SKG48 Mattel49 Intuit50 Burns & McDonnell

51 Ernst & Young52 Booz Allen Hamilton53 Stew Leonard's54 Erickson Retirement

Communities55 Salesforce.com56 KPMG57 Novo Nordisk58 PriceWaterhouse

Coopers59 Scripps Health60 Scottrade61 Deloitte62 Griffin Hospital63 Mayo Clinic64 Milliken65 Texas Instruments66 MITRE67 Children's Healthcare

of Atlanta68 Southern Ohio

Medical Center69 National Instruments70 Stanley71 Men's Wearhouse72 Nordstrom73 Chesapeake Energy74 Alcon Laboratories75 Atlantic Health

76 Lehigh Valley Hospital & Health

77 Northwest Community Hospital

78 Marriott International79 Baptist Health South

Florida80 Bright Horizons81 S.C. Johnson & Son82 Perkins Coie83 eBay84 Juniper Networks85 Arkansas Children's

Hospital86 CH2M HILL87 Orrick Herrington &

Sutcliffe88 Publix Super Markets89 Herman Miller90 FedEx91 Gilbane92 Four Seasons Hotels93 Valero Energy94 Build-A-Bear Workshop95 Kimpton Hotels &

Restaurants96 T-Mobile97 Accenture98 Vanderbuilt University99 General Mills

100 SRA International

OwnershipPrivate 62Public 38

Mean 7,737Median 2,836Largest 95,327Smallest 106

Revenue$ Millions

Employees

Mean $ 468,342Median 207,270Largest 4,442,906Smallest 13,769

Revenue per employee

Mean 38,018Median 10,074Largest 634,042Smallest 1,143

Fortune 100 Best Companies to Work For 2009 Profile

19

15

15

14

6

3

3

16

10

Professional services

Retail

Financial services

Business support

Other

Fortune 100 Best Companies to Work For Industry breakdown

Healthcare

Technology

Energy

Lodging

Edward Jones (2)Goldman Sachs (9)Robert W. Baird (14)Principal Financial (17)Johnson Financial (25)Aflac (26)Quicken Loans (29)Umpqua Bank (34)American Fidelity (46)Scottrade (60)

Key Talent Management MetricsFortune 100 Best Companies

AttractionApplicants/total employees 6.3x 4.5x 39.7x 0.1x

RetentionTurnover 12% 10% 45% 2%

DevelopmentTraining (hours per week) 79 47 400 14

Mean Median High Low

25.1

2.2

14.8

1.8

22.0Average

Fortune 100 best

Comparison of 5-Year* Financialand Market Performance

Capitalization-weighted

P&C publicly traded**

Average

Capitalization-weighted

S&P 500

Revenue Net income

22.5

8.8

11.4

-4.0

-0.9

Book value

12.3

20

1.5

4.3

7.8

Stock price

1.9

0.5

-2.1

-3.7

-4.1

*5-year compound annual growth rate, 2003-2008**AFFM, ALL, CB, ERIE, HGIC, HMN, IPCC, KFS, MCY, OB, PGR, THG, TRV, UTR, and WTM

Contents

Thesis


Grate places to work• Criteria and linkage to talent management• Key metrics• Value creation



Patterns of Superior Talent Management


– A science-driven company Top-notch research organization with 700 scientists Strong intellectual property position Largest single-site biotechnology research facility in the world

– A mission-driven company “The science of life – biology – holds the key for solving life’s

toughest health situations.” “Innovative science is the basis of our existence and the

foundation of our future.”

Targetand select

– Best scientists– Selection criteria: strong critical thinking, teamwork,

collaboration, communication– Active and passive candidate pools

Attractand retain

Developand deploy

Patterns of Superior Talent Management, continued

– Value proposition Execution/speed: four drugs (Avastin, Raptiva, Tarceva,

Zolar) received FDA approval in the same timeframe 50 different projects underway addressing unmet medical

challenges– Variety of ways of getting candidates into the company: full

time, postdoctoral, fellowships, internships, co-ops– Effective integration of leading scientists from academia

– Active rotation across areas of the company– Mission clarity leads to value extraction

“We translate lab experiments into clinical experiments that help us understand whether we’re going to be able to safely treat people with these agents and more importantly, whether we’re going to be able to have a meaningful effect on their lives and the diseases they’re suffering from”

Case Study

AttractionApplicants per employee

1. Google 39.7x2. Scottrade 28.8x3. DreamWorks Animation

SKG20.4x

4. Genentech 18.2x5. SRA International 18.2x6. QuikTrip 16.1x7. Zappos.com 15.7x8. CarMax 14.5x9. Intuit 14.3x10. Arnold & Porter 14.2x

RetentionTurnover (percent)

1. S.C. Johnson & Son 22. SAS 33. NuStar Energy 34. Alcon Laboratories 35. Devon Energy 46. MITRE 47. Juniper Networks 48. General Mills 49. Cisco Systems 510. Genentech 5

Case Study, continued

Profile

Sean Bohen Director of Exploratory Clinical Development– B.S., University of Wisconsin

– MD, PhD, University of California San Francisco

– Fellowship in Medical Oncology, Stanford Medical School

– Clinical Instructor, Oncology, Stanford Medical School

– Research Associate, Howard Hughes Medical Institute

– Joined Genentech in 2003 as Associate Director in BioOncology Exploratory Clinical Development

– “People like to be part of something successful and like to impact lives positively.”

– “Everyone feels part of the mission: the success at Genentech doesn’t belong to top management, but to the whole company.”

– Ideal candidate profile– Extensive mutual exposure

– Strong connection with value proposition– Successful integration into the company

– Oncology expertise and background, but leading nononcology area

– “One unique aspect of industry is that people move around.”

Case Study, continued

Targetand select

Attractand retain

Developand deploy


Source:“Genentech – An Insider Look at the Hiring Process,” presentation to Stanford University School of Medicine

Talent Management perspectives

Case Study

I want to share with you a few of my thoughts on the firm.One of the great things about the Firm is that from the moment you join, you become a colleague … we place a very high value on collaboration and mutual supportYou should think of yourself as a member of the Firm … it really is your Firm.Our Firm’s long history and tradition have yielded a strong set of values and guiding principles … You are expected to be fully responsible for your actions, to take initiative continually on behalf of your clients and colleagues …Other important legacies of our tradition are our comments to client impact, intellectual renewal, shared leadership, self-governance, and demanding standards of quality in everything we do

Great place to work/Gallup criterionCaring

Camaraderie

Respect

Standards of excellence

Expectations

Case Study

We also expect you – from your very first day in the firm – to speak out for what you believe.

You are a member of a global network of uniquely talented, well-informed, and committed colleagues. They are ready, willing, and able to help you.

McKinsey & Company offers talented people an unsurpassed opportunity for personal and professional growth

I’ve been with the Firm for 25 years and I still can’t wait to get to work in the morning. I’ve always felt that it’s a privilege to be able to work day after day with people who care deeply about what they do.

Great place to work/Gallup criterionCollaboration with employees/ voice heard

Resources

Pride

Professional development

Case Study

Call from Peter Van Leer & Associates regarding potential opportunityJan

Feb

MarApr

May

JunJul

Aug

Interviews at corporate headquarters (9:00 a.m.-5:00 p.m.)

Executive assessment: interview, leadership assessment, and cognitive tests

Interviews with CEO and CFO at corporate headquarters (9:00 a.m.-12:00 p.m.)

CEO emails self-authored position description and invites response

Submission of 25-page response

One-on-one session with CEO at corporate headquarters (9 a.m.-2:00 p.m.)

Dinner with CEO in Chicago

General Counsel and Chief Claims Officer fly to Chicago to conduct interview

Call from CEO with final decision

Press release announcing Valerie Krasowski as CHRO: CEO Glenn Renwick said, “Val’s more than 20 years of Progressive experience and her deep understanding of our culture and values have prepared her well for this role.”

Case Study

Rationale

I generally take some time to get clear about what I'm looking for in any role before interviewing, and as such have attached a position description which captures my thoughts. I'm sure there are some holes but it should give you a sense of what's on my mind, attributes that are important to me, and a sense of some of the areas I would like to cover with candidates. Questions ahead of time are welcomed and your thoughts will be an important part of any discussion.

Case Study

Philosophy

Progressive succeeds by hiring, developing, and motivating "superior" (measured by integrity, intelligence, education, and accomplishment) people to focus their energies and talent on a limited product set, auto and auto-related insurance

Progressive's people make up an environment and culture that fosters our aspiration of “Virtually Perfect” customer interactions, along with career development opportunities that come with top of the market performance

The human resource challenges are to ensure the human capital is in place and continuously developing to handle our growth without degradation of quality at any level and to achieve the delicate balance between a high energy, high change work place, and the primary human resource strategy of making Progressive a great place to work

I appreciate the importance of and will be appropriately involved in the Human Resource function and therefore require philosophical alignment with the optimal candidate. This is easy to write, more difficult to describe, and will be the basis for much of the interview process

Case Study

Inquiry

The interview will focus on your accomplishments in this area, opportunities to do more, approaches you would consider, and whatever else makes sense to convey your thoughts on this responsibility

Without details, discuss how you would think about such issues and communicate them

Be prepared to discuss your thoughts on approaches to advancing our cultural momentum on creating a great service culture and how we should incorporate our service failures into advancing our momentum

Case Study

Unparalleled involvement and commitment of CEO

Talent mindset and behavior serves as a model for direct reports – and cascades throughout the organization

Gives CEO an “excuse” to probe and extract best thinking of internal and external candidates

Impact of Talent Management on Organizational Leadership

CEO

President

Finance

Investments

Claims

Marketing

Technology

Human Resources

Legal

Thomas Wilson

George Rubenson

52

61

14

39

Don Civgin 48 1

Judith Greffin 49 18

Michael Roche 58 8

Joan Walker 62 4

Catherine Brune 56 33

Jim DeVries 46 1

Michele Mayes 60 1

Age TenureGlenn Renwick

John Sauerland

54

45

23

18

Brian Domeck 50 22

William Cody 47 13

Susan Griffith 45 21

Lawrence Bloomenkranz 52 1

Raymond Voelker 46 24

Valerie Krasowski 44 22

Chuck Jarrett 52 9

Age Tenure

External hire

Impact of Talent Management on Organizational Leadership, continued

55

56

13

8

Age Tenure48

47

17

21

Age TenureMean

Median

– Succession planning is much more effective at Progressive External hires are 33% vs. 67% at Allstate Age and tenure statistics imply that all

direct reports could be viable successors– Effective development at Progressive leads

to leadership readiness

Contents

Thesis


Grate places to work• Criteria and linkage to talent management• Key metrics• Value creation



– Reinforce mission/purpose of improving people’s lives through the efficient and value-enhancing application of risk technology

– Increase stakeholder (e.g., investors, board members, employees) involvement in driving leadership change and accountability

– Diversify sourcing targets and upgrade capabilities– Apply leading-edge segmentation and data analytics to talent

management

– Formulate and communicate value proposition focused on the ability of the P&C industry to provide unparalleled professional growth and development through exposure to the business world’s most challenging problems

– Improve ability to successfully on-board and incorporate external talent

– Develop broader general management skills through enhanced talent mobility

– Ensure value extraction through a more rigorous review of the allocation and use of talent expenditures and expected returns

Key Lessons for P&C Industry


Targetand select

Attractand retain

Developand deploy

Key imperatives

Finding Keeping and Maximizing Top Talent

Documents

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