Global talent management is an organizational development solution that supports the HSBC vision to be the world’s leading financial services company. This article will describe how the global talent management solution aligns to our business strategy and how we developed, refined, and implemented our global process in the context of our culture and core values. We will share best practices, challenges, lessons learned, and results from implementing our integrated talent identification and development system.
The unique contribution of this work is the examination of ways to address complexities involved in executing people strategy in a global, matrixed, and results-focused business environment. The business need HSBC Group is one the world’s largest financial institutions. It has 284,000 employees and 125 million customers in 76 countries producing earnings of $13. 1 billion in the first half of 2006. Two characteristics make HSBC unique in the financial services industry. Both drive our growth and differentiate our business from competitors.
They are our brand and our 150-year old culture which is founded on core values of Integrity, Collegiality and Diversity. We strive for cultural continuity by exemplifying the core values in our relationship with shareholders, clients, and employees. At the same time that we are aware of our value to our customers which is reflected by our pride in our continuity, we are also cognizant of our need to change in order to build our business by leveraging emerging markets, new customer groups and technology.
Consequently, our challenge is to continually reinvent ourselves while maintaining cultural continuity in order to remain customer-focused, community-driven, and economically profitable. As our retired Chairman Sir John Bond said in 2005:”HSBC has to be flexible to succeed. Companies today have to reinvent themselves constantly … and maintain essential character while doing it. ” Our evolution was initiated three years ago with a shift from our previous acquisition-based strategy to a Managing for Growth business strategy.
The new strategy focused on driving organic revenue growth especially in the Emerging Markets, and continued cost containment. Today, this focus on Emerging Markets creates a need for leaders who understand both local business context and global strategy. From an organizational development perspective, one way to achieve continuity around core values and create global alignment with business strategy is to fully leverage human capital within the organization.
To help accomplish this, we implemented a global talent management process as one stream of a people strategy aimed at attracting, motivating, and retaining the very best. In our view, our global business strategy needed aligned people and talent management strategies. The first step was to identify the Senior Business Manager talent pool, including both general managers and worldclass specialists.
The next steps were to expand the talent pool beyond the senior business manager level, implement development programs for future leaders according to levels of experience and seniority in the organization, and ensure we had a customized solution to retain our talent through the employee value proposition Identifying the Talent Pools Integrity. Human Resources used robust, consistent and transparent methods for talent identification to ensure the integrity of our process.
Specifically, we relied on multiple sources of data including 360 degree feedback instruments, interviews, panel reviews, self and manager assessment) to review capability ratings for all talent nominations globally. The capability framework was constructed to identify behaviors at HSBC that distinguish our outstanding performers and will drive our business strategy. The result was six capability clusters with defined competencies that provided a basis for measurement and decisions about talent recruiting and development.
These six capability clusters are: 1) Driving business vision and brand: visionary thinking, aligned strategic thinking, differentiating HSBC’s business and brand, driving change and innovation 2) Commercial judgment: judgment and decision making, entrepreneurial and commercial thinking 3) Leading performance: inspiring trust, driving execution and performance, inspiring and developing others, courageous leadership 4) Customer drive: leading a customer driven organization, winning new customers 5) Working with others: building relationships and listening to others, valuing diversity, influencing others, managing collectively, sharing knowledge and fostering open communication 6) Drive, commitment, and personal development: continual learning, driving self to achieve collective goals, adaptability Assessing the Talent Pools These six capability clusters provided the basis for talent assessment as well as the foundation for other people decisions and strategy. To properly aggregate data to identify talent for both current and future potential from different perspectives, the Group Chairman endorsed three non-negotiable measures: capability rating, performance rating, and self-reported career development aspirations.
To illustrate how the information is aggregated for an individual, a talent pool member would need: * Capability assessment: ratings at or above standard (2 or 3 rating on a 5-point scale with 1 as the top) with one or two capabilities as a strength (2 or 1 rating) * Performance assessment: last 3 years ratings equal to or better than 2 (on a 5-point scale with 1 as the top) * Individual aspiration: focus on a significantly more complex and large roles in a different function or different culture, and proactively builds internal and external networks Collegiality. We created and implemented a common approach to talent identification across all our locations in Asia, Americas, Europe and the Middle East.
Instead of regionalizing talent management in major countries, in the spirit of collective management we implemented the Senior Business Manager talent pool globally. A group of Organizational Development professionals visited all the regions to describe key principles and nomination guidelines for talent assessment and development to ensure regional buy-in for the process. However, global communication of nomination criteria and instructions was subject to local interpretation across the different countries. Thus, while the best people were nominated, there was no way to ensure consistency that world-class standards would be met since providing coaching on talent benchmarking could not be uniformly applied to all nomination decisions.
A panel that involved both line managers and senior business managers who represented all global business functions and geographies reviewed all nominations and reached their decisions by consensus. This approach was particularly important at this juncture. It manifested collegiality and successfully identified talent nominations, which an important milestone in establishing the global process. Diversity. In an effort to demonstrate diversity, we collected talent nominations from all the regions across the world of HSBC. Also, our basis for talent assessment was the capability framework (discussed earlier) that was developed from global benchmarks and was validated across all the regions.
The capability research involved senior manager interviews (550) and junior manager surveys (1,000) across all geographies and functions. Topics included global and local business strategies, core market differentiators, and macro social and political trends in relation to what differentiates great leaders. This research also involved competitive benchmarking, including both industry peers (e. g. , Citigroup, Deutsche Bank) and best practice companies (e. g. , IBM, Ford). Moreover, instead of focusing on the top 200 people of the current organization, we identified approximately 200 potential senior business managers and world-class specialists three to five years into the future in order to address the long-term talent pipeline.
We needed a way to identify and develop the future talent by focusing on broader general manager capabilities as opposed to role planning for top 200 managers, which is supported through a robust succession planning process. The talent pool did not exclude the top 200 and in fact, there may be small overlap between these two groups of leaders given that our focus was on talent potential. After identifying the Senior Business Manager talent pool, HSBC began to focus on identifying talent at all levels of the organization. While the talent development strategy began with a focus on the leaders of the business in the next 3-7 years, HSBC has traditionally recruited junior talent directly from campuses. Therefore, the next phase was to build the talent identification processes and development programs for those graduating from our analyst and associate programs.
The investment in these programs is based on the belief that these junior pool members, referred to as “Next Generation”, will themselves become the source of Senior Business Manager talent pool members in 7-10 years. Additionally, the High Potential and Business Talent pools were established to address the talent level between the Next Generation and Senior Business Managers. In summary, the talent pipeline starts with the Next Generation and moves to the High Potential and Business Talent pools and onto the Senior Business Manager pool. Similarities with the Senior Business Manager talent pool program include the same talent identification criteria and international development programs (described in the next section). The difference with the High Potential and Business Talent pool was more of a local implementation ocus where the nomination process and development funding are handled by the CEOs responsible for the line of business or geography.
This approach demanded increased communication efforts to ensure that global principles and nomination guidelines were implemented consistently. Implementing Talent Development Programs To build on the Talent Identification process, HSBC implemented a suite of development programs focusing on the core skill set required for our future senior leaders based on the capabilities framework and benchmarking programs with competitors (both discussed earlier). They were developed to cover the capability framework and enroll participants based on individual needs and aspirations. In addition, we utilized more tailored development options (i. e. coaching, executive education) to ensure that individual development needs identified during the initial assessment process were addressed. For example, leadership development programs were built around driving business vision and brand and leading performance capabilities. Specifically, the Chairman’s strategic forum encouraged our leaders to imagine the world in 2020 and to think through the implications to HSBC of the major macroeconomic, social, technological and environmental trends. Further, the underlying development need for HSBC staff at all levels identified in the new Managing for Growth strategy was stronger Sales and Relationship Management skills.
Therefore, another set of programs targeting both junior and senior levels of experience and seniority in the organization were developed based on commercial judgment and customer drive capabilities in order to generate organic business growth and brand strength. All the above programs were developed with leading business schools to ensure world class benchmarking and geographic diversity. These schools (e. g. Duke University, London Business School, INSEAD) were chosen based on academic excellence and referrals from best-practice corporate universities. The decision to develop customized programs this way as opposed to in-house was driven by the enhanced global delivery capabilities and access to expert faculty. Figure 1 shows how the development programs link to each other and map to talent groups.
Establishing the Employee Value Proposition. In parallel with developing our talent pools and development programs, the talent management process included a complete review of our talent pool members’ Employee Value Proposition (EVP). Corporate Leadership Council defines EVP as the “set of attributes that the labor market and employees perceive as the value they gain through employment in an organization”(2006). 2 The Employee Value Proposition focused on four key areas: 1) Reward and Recognition (e. g. , pay, benefits), 2) Career and Development (e. g. , training, succession planning), 3) Work Environment (e. g. , empowerment, communication) and 4) Work-Life Balance (e. g. , flexible hours, work from home).
Our approach was to develop a customized retention program aimed at developing, motivating, and retaining talented employees, and therefore supporting the continued people strategy execution and ensuring a higher return on people investment for the business. Talent pool members were assigned a Talent Relationship Manager who took personal responsibility for engaging the individual following their nomination by enabling experiential development experiences such as job rotations and international assignments. Their mobility was enhanced by a policy requiring that senior business manager talent pool members are considered first for any relevant job opportunities.
As might be expected from a high potential pool of future senior business managers, data analysis of an Employee Proposition survey results and follow up interviews revealed that the request for challenging and visible next assignments was a consistent theme. To address this finding, we improved the link between talent identification and succession planning. Our success was based on ensuring that candidate slates for all senior positions globally include high potential individuals by including this requirement in the Human Resources manual, which defines core operating parameters and reporting requirements for all employees globally. All senior business manager roles now need to be approved by the Group CEO who expects the slate of candidates to include, though not exclusively, members of the various talent pools sponsored by Group general managers.
The key to this process is that the same team looks after both talent identification and succession planning, thus enhancing the tracking of metrics and communication. Results, Lessons Learned, and Next Steps While our talent management story is founded on the alignment of talent identification and development, there have been a number of lessons learned over the last few years. The initial identification process is continually being refined to reflect the ever-growing complexities of the most senior roles in the organization. Membership in the pool is undergoing a major review three years into the project in order to improve fit for purpose.
The capability framework was revised based on new research aimed at reflecting the impact of newer components of strategy on leaders (e. g. entrepreneurial, customer centric, globally aware), resulting in Group general manager (senior business manager) capabilities: 1) Vision, 2) Business judgment, 3) Leading a customer focused organization, 4) Driving performance, 5) Collaboration, 6) Personal impact. The revised capabilities focus more on entrepreneurial and action-oriented leadership in comparison to the initial framework. We also learned about cultural and social influences on talent decisions. For example, globally consistent talent nomination criteria and instructions are subject to local interpretation, therefore cross-cultural differences and social dynamics may impact the consistency of the talent management process.
One possible improvement is to increase the rigor of the assessment process through independent assessments from consultants and more benchmarking training for managers. While we successfully implemented the consistency in nomination criteria, now we are increasing the rigor of the nomination process by adding psychometric assessment and outside expert evaluation by a vendor for Senior Business Manager talent pool nominations. Specifically, the assessment includes personality and aptitude tests as well as career development interviews and business stakeholder feedback. An example of cultural and social dynamics was that panel members who reviewed nominations were not equally comfortable with challenging one another.
In order to address this issue, instead of regional nominations linked to geographies, all talent nominations will now need sponsorship from an existing Group general manager who will represent the nomination during panel discussions. The process enhancements of higher level of executive sponsorship and the additional independent assessment will further improve the reliability of the assessment process and our ability to identify world-class leaders. In terms of outcome metrics, we have initial evidence of success from the Corporate Leadership Council’s 2006 survey that benchmarks Employment Value Proposition (EVP) data from 58,000 respondents representing 90 organizations in 34 countries and 20 industries.
The findings show that HSBC results for delivering attributes of the EVP that are preferred by talent pool members are above benchmark levels for both development and future career opportunity. This offers evidence that our training and succession planning efforts are making an impact on our employees. Further, the EVP attributes rated as our competitive advantage were diversity and social responsibility, which aligns with our purpose to maintain cultural continuity around core value of diversity and the focus of our brand on corporate social responsibility. Our next steps are to examine talent metrics (e. g. , retention) to measure implementation success. Summary In summary, our organizational development challenge was, and still is, to execute our growth strategy while further reinforcing our culture and values.
Our challenge was to ensure a common approach for 284,000 employees in 76 countries, which we achieved first, by establishing, communicating, and monitoring talent nomination criteria. Further, as the senior roles in this organization grow in complexity, we continue to refine our capability framework to improve the basis for talent identification and learning programs. We learned that refining nomination criteria (capabilities) and improving assessment tools (standardized testing) as well as establishing nomination accountability (group general manager sponsorship) are key for process quality. We also learned that it is important to account for cross-cultural and social dynamics when creating and implementing a global process.
Together with our colleagues around the world, our contribution is the application of thought leadership to implement and adapt current best practices in talent identification, leadership development, and customized retention programs to meet HSBC’s global needs. The testimonial to our success is that our Chairman and CEO explicitly sponsor talent assessment and development as key components of people strategy aimed at driving business growth. Work Life @ HSBC Global Resourcing Global Resourcing has a well defined people agenda and strategy aligned, aimed at driving a high performance culture and maximizing the contributions to the business itself.
It comprises of the following five key elements * Performance – A high performance culture driven by robust & common performance management across GR * Rewards – A pay for performance philosophy that provides above average total pay for top performers * Learning – Unique learning curve awards that provide linkage of performance career progression and pay * People – Broad suite of programs aimed at cultural immersion, language development, technical and non-technical product / discipline knowledge and soft skills * Employee Engagement – 100 club recognition programme to reward employees who contribute to the organization, value Service Excellence and exhibit HSBC core values