Top Talent and Passionate Employees

April 10 2002 - "The war for talent has shifted, now it's the war for the right talent," said David Ulrich, a business administration professor at the University of Michigan and leading Human Resources author and speaker. "It is not enough to say that people are our most important asset; but to believe that people are the customer's most important asset."

Egon Zehnder International, a human capital consulting and executive search firm, has just released results from a survey of more than 60 senior-level HR executives based at companies throughout the United States. The results indicate that businesses could lose top performers in a recovering economy if they do not have comprehensive talent management strategies.

"From our survey, we discovered both large companies, such as Texas Instruments and General Electric, and smaller, high-growth companies, like Intercontinental Exchange and CES, are successful in retaining top talent because they have made Talent Management an integral part of their culture," said Andrew Dietz, a consultant for Egon Zehnder International who, with Greg Hiebert, co-authored the report on Talent Management. Dietz observed,

"Unfortunately, we also discovered many companies that had no talent management strategies or those that were under-supported and ineffective. Top performers in these companies are at risk as the economy recovers. Our study offers prescriptive measures to ensure that business leaders are employing the best practices that have helped companies like GE succeed. The survey itself includes specific answers and actions not just for Human Resources executives, but for CEOs and boards as well."

The researchers argue that the 80:20 rule means that 20% of a company's top employees yield 80% of the positive results. In their view employers need to give exceptional treatment to the strongest executives - people with the ability to drive and deliver superior results on a consistent basis.

Key Findings of the Talent Management Study

* Survey participants that excelled at Talent Management had:

- CEOs who were directly involved in the Talent Management process;
- empowered, strategic human resources leaders;
- attentive Boards of Directors;
- unified, comprehensive and integrated approaches to focusing exceptional care upon top-performing executives.

* Some senior employees are reassessing their values as economic and social conditions have changed. Monetary rewards are not so strongly emphasized as motivators. Consequently, proactive employers are are looking to a broader and more personalized range of non-financial motivators, including:

- executive education;
- personal coaches;
- individualized development programs;
- allowing employees to select how they are rewarded.

* Most respondents were unhappy with current talent development programs and succession potential of their senior teams. The survey noted heightened succession planning considerations (perhaps sparked by the events of September 11) driving increased high-potential employee development activities.

* HR departments tended not to have formal budgets for Talent Management - costs being mostly incurred and driven at line management level.

* Absence of performance metrics and accountability around Talent Management programs contributes to a lack of action in moving such programs forward.

* Respondents said that finding and attracting the best talent is still a problem despite the increase in resume volume brought on by recession.

Top performers foster passionate employees

Last year, the Jesse H. Jones Graduate School of Management, Rice University hosted lectures by Gordon Bethune, Chief Executive Officer of Continental Airlines, and Ralph Eads, President, Merchant Energy Group for El Paso Corp. These executives discussed formulae for growth and success in their businesses. Both pointed out that top performers differentiate themselves by harnessing the power of the most important asset within any organization: their people. Topnotch processes and strategies need to be paired with happy, productive employees to sustaining success and ensure continued improvement within any organization.

Still in the midst of reorganization efforts, El Paso Corp. is in a transitional phase. Rapid growth due to mergers and acquisitions has required the largest natural gas company in the world to closely examine its corporate culture.

"It's hard for a company to sustain superior performance when growth is substantial and rapid," Eads told students.

El Paso Corp., headquartered in Houston, owns and operates a significant portion of the North American natural gas delivery grid and is the nation's third largest natural gas producer.

Growth only has bolstered the company's passion to do more. The company is moving toward a less-structured business environment, where ideas emerge from conceptualization to execution quickly. "We want to do things faster than anybody else in America," Eads said.

El Paso's emphasis on speed and efficiency embodies the rules for success in the New Economy, said Eads.

"We're eager to translate these and other New Economy concepts of experimentation, imagination, creation, diversity, and network into the El Paso culture to drive our business forward," he said.

The result was a reorganization effort to create a culture of passion, integrity, empowerment, and high performance at El Paso.

"We wanted to create an environment where people feel passionate about their work, where people feel inspired," Eads said.

When Gordon Bethune joined Continental Airlines in 1994, the challenge extended beyond reorganization: the airlines needed a complete overhaul. Continental Airlines had twice been bankrupt and customer complaints had been consistently high.

"When I took over as CEO, some of my friends expressed their deepest sympathy," Bethune told students at his March 5 lecture. "My first challenge at Continental was to keep the airlines away from the brink of bankruptcy."

Bethune moved quickly to implement a reorganization plan to reinvent the image of the ailing company. He found that "doing a few things right" while keeping focused on a clear, simple vision was important in this goal.

Bethune's leadership and communication skills translated well into the new corporate culture. Company goals, plans, and initiatives were routinely communicated to all employees, from senior management to the pilots to baggage handlers.

"We wanted to let our people feel involved, that they belonged, that they were important - no matter what their role or position is in the company," Bethune said.

Beyond promoting a culture of openness within the company, Bethune also believed in rewarding good, hard work with more than just a pat on the back. Monetary incentives were awarded to employees who reach or surpass their goals.

"The incentives serve as a way for us to acknowledge good or superior performance, to let our people know that we appreciate (their efforts)," Bethune said.

Bethune's formula for success in the customer-driven airlines business, is simple: "We treat our people well, and in turn, they treat our customers well. Happy employees equal customer satisfaction."

In March 2002, Continental Airlines was ranked No. 30, the highest-ranking commercial airline, on the Top 50 "All Stars" list of the World's Most Admired Companies by FORTUNE magazine, up from its previous rank of No. 48.

"After the struggles of 2001, it is a tremendous honor for my co-workers and me to be named among the most admired companies in the world," said Gordon Bethune, chairman and chief executive officer of Continental Airlines. "Our commitment to clean, safe and reliable service has earned recognition from our customers and peers."

Continental Airlines is the fifth largest airline in the U.S. and recovering from the effects of 9/11.

Continental was named the 2001 Airline of the Year by Air Transport World, as well as the 1996 Airline of the Year, making it the only carrier to receive this honor twice in five years. For the fourth consecutive year, Continental was named one of the 100 Best Places to Work For by FORTUNE magazine, and is ranked the nation's No. 1 airline in customer satisfaction for long and short- haul flights by Frequent Flyer Magazine and J.D. Power and Associates.

See also: CEOs are getting younger but employees don't trust them

Built on Trust : Gaining Competitive Advantage in Any Organization

The War for Talent