Novus International's experience developing its RO based talent management system over 17 years

Speaker A So I had the opportunity to put together an agenda for today. So the agenda is what is prep at Novus, our annual process of reviewing roles, structure, and talent pool. So we'll talk a little bit about the prep process at Novus, how we do that as a global organization. What are the major categories of review? Some metrics that we start putting together as an outcome of the prep process, and then the prep outcomes and next steps. But before we go into more details, I would like to let you know that at Novus, everything is about business strategy. Okay? So it starts from the CEO, like I mentioned yesterday, in the linkage process, from the CEO all the way down to level one. I also would like to mention that we have a very strong communication effort in our organization. So we have quarterly communications meeting meetings where the CEO and the executive leadership teams provide updates to the whole organization on our strategy and what is necessary for the organization to concentrate on. So with that, so what is prep? So, Prep is a system that we employ at Novus to review our structure, our roles, and do an assessment of our talent pool. So the main areas of review is to identify the appropriate structure and the necessary roles across the organization. Ensure that we have an accurate assessment of the current talent pool, look at key roles that we have in the organization and make sure that we have succession plans in place and then, of course, provide proper development opportunities so that the right employees have the knowledge, skills and experience necessary to take future roles in the organization. Another part of the prep is really to review total compensation. And when we review total compensation, we look external, we look at internal equity, and we also look at Nova's ability to pay. So this is the process that we have. It's a global process. It takes place annual. It starts in May and finalizes in October, just before our strategic planning meeting. This process is very important to provide lots of information for our leaders to put together or to refine five year plans. So this is an example of our schedule for the global prep meetings. So across the globe, those meetings take place between managers, mors, HR, business partners to talk about their structure, what are the roles necessary to meet the business objectives, and then after the managers mors meet with the business partners, we have gearing meetings. Okay, these are cross functional gearing meetings where managers and mors get together. And what we do, we kind of do a calibration of the judgments across the organization. So this is just an example. Over 100 meetings take place within this timeline on a global basis at Novus. So we take this process very, very seriously as a very, very critical element of our business strategy as well. So how do we do it? We have two parts that we put together the first one we call Prep Discovery, which is an organizational analysis. So what we do in this process with managers and mors first is to look at the strengths of the organization and the gaps that they have in the organization. So we talk about the strategy, what are the roles necessary, we talk about people's capability. So there's a lot of conversation going on and of course we talk about their current structure first. And then we always ask them to put in place three to five years plans in terms of how they see the business evolving and the organizational design that's necessary to support that strategy. And very important for us, we are a small organization today we have 830 40 employees all over the world and we have very important key roles in the organization. So we always need to talk about those key roles and what are the successors that we have and what are the development that we need to put in place for them to eventually get into those roles. So as we evolved our prep process in Novos, so before we were a small organization, so pretty much we knew our talent pool, we knew the gaps we had, we knew the strengths we had, so we didn't have a formalized process how we capture all this information in requisite terms, so we didn't have that right. And then we were very complex organization in terms of having employees all over the world. So what I've decided to do with my team was to put together a talent pool database based on requisite principles so we could actually get some metrics after all the meetings were done. So this is an example, we have several things. We have CAC, I don't know if can you see it? Because I can't, I need my so we have type of contributors, we have CIP, we have values of role, we have required behaviors in requisite terms, is the traits, we have develop needed training needs, so we have all that, okay? And so this prep database is sent to managers, managers work with the mors and they put this together right? And so in the gearing meetings, then we calibrate all these judgments across functions and that out of this. That's where we create our metrics. So this was something that we just start using two years ago and this year the first time we really could get some metrics out of it. So this is really, like I say, an evolving process. So what are the major categories of review for us? So in these meetings is always the structure first. So we talk about the five year plans and then so what is the structure necessary to support the five year plan? So do we have the right structure roles to support the strategy? That's the first question. Then we do a capability assessment. We talked about CAC, so is the work getting done by the right people at the right role level. We talk about types of contributors. We have what we call the high potential. So these are the future leaders of our organization. And so the people that we are going to develop for key roles in our organization, we have key performers and we have solid contributors. And then of course, we have low performance. All this assessment is done in these meetings, all these reviews are done in these meetings. And then of course, we talk about succession planning, the timing, the development needed, the successor for what role, and then what are the training and development needs that we need to put in place as an organization. We like to do that. The prep database has helped us tremendously. So we can have some synergies. So, for example, we can identify that 20 managers, for example, need training in product management, or they need training or in leadership development. So that's what the prep database has provided us with those metrics. So we can focus as an organization, with our organizations have limited resources, right? So we need some focus. These are some of the metrics that we've put together out of that prep database. So this is the positional move timing by role level. So you can see over five years, three to five years, one to two years, ready now. The people that are seeking promotion right now, so we can have a better assessment of our talent pool. For example, if there is no gap, that means that that category of employees might be a flight risk because they are ready to take the next role. So we need to really focus on them and provide development opportunities in other areas of their organization so we are able to retain them. So this has given some so another percentage of employees in each role level flagged as high potential. So we can do this. This is a single function example and this is not real data, okay? This is just, of course fake data, right? But this will be right. So where are they? Are they level threes or level twos or level fours? So we can have a good assessment.

Speaker B How do you define high potential?

Speaker A So, that's a good question. I think for Nova's Guide, potentials are really the individuals that are identified for key roles. For example, let's see, we have executive director in Latin America. So that's a key role for our organization. So we look at people in our organization, they have the capability. Of course, we use CAC to define high potential. So if, for example, someone today is 35 years old, as we're working already at the Stratum four, you can see that person will have the potential to eventually become a six. Okay? Yes, we look at mode. So this and then the performer types by role level. This is of course is a calibration mor and managers and also cross functional calibration, right? This is not only in Silos, this is done very well, very cross functionally, so low performance, solid contributors, key performance. That's another metric. Another one is development needs. That really we found this very interesting in terms of what are the training or development that employees need in our organization. And all this information comes from that database. So we have stretch assignments, formal training programs, management leadership. So in my role now, I can actually put programs in places for the whole organization, right? This is another metric. So non requisite roles by function. So where do we have gaps, where do we have compression? And we can do this by function, we can do this by world area, we can do this by the whole organization, right? Where are the areas of focus, the areas that we need to work on? So what are the prep outcomes and next steps, right? So also some of the guiding principles for our process is managers. Nmor's involvement in the process, the Gearing meetings promotes cross functional interaction and opportunity for calibration of judgments. They also promote not only this, but also promote sharing of ideas and challenges and opportunities in the organization. We have the opportunity to educate managers and mors on time span CIP CAC calibration because before we start the prep process, we meet with managers and mors and kind of set the context. This is what's coming away and this is the process and this is the work that needs to get done. So it's been very helpful in also engaging managers in this process and they feel very good about it. So, like I said, the engagement process enables managers to play a more critical role in the organizational decisions and they really enjoy that. And so the recommendations out of these meetings help mode changes that support five year plans. Strategic and Budget Planning Meetings so in Novos we have business processes, right? So two meetings that are very critical for our organization, the first one takes place in November is our strategic planning meeting. And so as we start the prep process in May and finalize in October, so when we go into strategic planning meeting, a lot of this information helps senior management make decisions in terms of how we're going to support the strategy, what are the roles, what are the talents that we have in place. And also after the strategic planning meeting, we have our budget meeting in March. So then what are the roles that we need to budget for, what are the training programs and the budget necessary? So there's the whole cycle that is in place. So this is not done in an isolated manner, right? And so the metrics are very important for us because I just show you some examples, but we have probably over 60 slides of metrics that came out of this process, and so that help us look at how human capital today inovas and then look at the business strategy and what are the roles and of course the talents that we need to support and the programs in terms of training and development that we need to put in place. Not only that, but cross functional assignments, geographical assignments for our talent. I mean, all that is taken in consideration.

Speaker B I want to thank Maria for her excellent overview of our process and also her attention with the organization. This is the first time with Novus, first of all, the first time for me with Novus because I'm brand new with Novus, I'm Cindy Donato, brand new with Novus and leading human resources for the organization. So, first time for me with the prep process and the first time that we've actually taken the prep process down to our lowest level of leaders and involving them in the process and engaging them broadly in the organization. And so Maria mentioned over 100 meetings that we led for the organization and as she mentioned, it's an Iterative process. So we go right now into strategic planning for the organization and then budget planning for our annual AOP, and then we begin prep again. And it informs us again. So we just keep going around and the organization has been quite complimentary of us in supporting them, in getting engaged, in how the organization then supports the business, and then the business supports the organization and how that works. Together, we are challenged by a few things in our growth. Organizationally, in the last five years, as we look at our metrics and the organization's growth, the business has grown substantially threefold, and so has our employment base. And this has challenged our structure. Culturally, there is not an understanding, a real rooted in understanding of the Novus management system, which is our practice of requisite that the organization was founded in. And so there is not a commitment, a deep understanding of how to practice good positional design and structure. So we're strengthening that through this. And also we're challenged in markets where the competitive external market works differently. And so here's my question. How do we deal with markets like Asia, for example, when the talent tends to look externally to titleAge and promotion and movement and expansion of responsibilities as a way to retain and keep up with their future in a requisite way? And we feel we have challenging and exciting opportunities and a challenging and compelling mission for our organization. However, career path, a traditional career path, like someone moving from a sales rep one to a two to a three to a four, in terms of promotion in place, the way the market tends to move is not how an organization is designed in the novice management system or in a requisite way. So I'm very interested in learning more about how others in a global context have dealt with this challenge in a competitive, fast moving, talent developing market. This is a significant challenge for us, and I really would like to be innovative and yet not add costs to a market that doesn't need it necessarily and yet develop employees in an appropriate way that support our system with respect to sales positions, our markets are different, and the maturity of our markets and the maturity of our sales are different. So, for example, in North America, the structure of our sales is more of a hierarchy of key accounts and actually those key accounts are starting to grow into global accounts in our marketplace. I mean, it's already happened and not necessarily just chaired in North America. However, we have other markets where our sales structure is quite developing and so the complexity of the sales structure is different. And so how do we equilibrate across the organization our sales structure? So the challenge of compression in the sales structure and equilibrating across the sales structure is an issue. And so I'd like to lay out how do we equilibrate sales and sales structures and compression issues within a sales structure in a global and differentiated marketplace.

Speaker C What I'd like to suggest is we ask some clarifying questions to make sure we understand the questions and then go into the small group rather than try to deal with them directly. So I might ask a question. Is most of your compression at three in sales correct. Can you give an example of what's happening within the three band in sales and why? Just so we can understand what that's about?

Speaker B Yes. So there is a lot of pressure and compression at the three level, both in terms of cost containment for the organization as well as external. It's also related to the first question in terms of external competitiveness.

Speaker C Other questions of clarification on either of the two questions they're presenting.

Speaker D Yeah.

Speaker C You mentioned Asia is the specific area of concern.

Speaker B Yeah, it's not the only market of concern, however, it's most exaggerated there.

Speaker D What do you define as Asia?

Speaker B I'm seeing flight, some more unwanted turnover in China and also actually in North America. To be honest.

Speaker D Cindy, I think at the bottom of a lot of the questions you're asking and the many issues that relate to those is perhaps a fundamental question of do you have a clear idea of what your sales processes are or should be at each level or is it magical? It's a lot of sales processes that.

Speaker B Are magical, and I think that's an excellent question. We're becoming more structured about that approach and defining that. More specifically. We've been doing some staff work, good staff work around the structure of our sales go to market approach and the complexity of that sale and recently created a key account management structure for global accounts. So this is developing and it will change the nature of the rest of the structure. However, we still have the career path issue overall. I recently, upon joining the organization, automated our exit interview process. We had an exit interview process. It was not automated. And so we didn't have the strength of collecting the anecdotal kind of the power of collecting anecdotal exits in one place and just doing a qualitative assessment of those exits revealed significant or gave significant strengths to the need for us to address on a more comprehensive way career development more formally and career pathing issues more formally in the Ro context. So this is a real issue regardless of what we do with the sales structure. It's broader than the sales structure. The compression issue is more pronounced within our selling structure. However, the career path issue exists across functions and is an issue that we need to address as we grow.

Speaker C We've been talking, asking clarification questions about the compression sales and so forth. Can you remind us of the other question and see if there are questions to clarify that before we break?

Speaker B The other question is how do I address or how does Novus address traditional career pathing that happens in the marketplace? That is, more time and place in promotion. Time and experience in promotion and address that in a requisite way.

Speaker C Feedback to the Plenary what you heard in your group and of course your group will get a chance to clarify or if you have a brand new idea to poke in there, fine. But we also want to give people who did not hear it a chance to add or discuss. And if we could do that in about, I don't know, ten minutes or so, that would be great and then we'll have Maria report out a summary and do the same thing for the other question. So with that, Cindy, are you ready?

Speaker B Wonderful. Thank you, Ken. So I had the team that was working on the career path issue and I want to thank the team for excellent consultation and the bill as well that they provided me at the end of the consult. And so I would ask the group to chime in if I have forgotten something or if they can help to elaborate because I was trying to take notes. So. A couple of the suggestions were that strengthening the Mor connection with the Sor is a primary opportunity and to formalize this and be more programmatic perhaps about this in terms of more regular contact in a cadence that allows the mor to mentor the sor and describe to the sor accountabilities and stretch assignments and specific stretch tasks to clarify accountabilities that would help them to develop and expand themselves from a development standpoint would be quite helpful. So that was a primary suggestion. Another suggestion that came was the potential for being more aggressive and planful about coordinating potential external placements. So is there the possibility when someone needs development that can't be found necessarily within our organization to coordinate a placement in an external organization, say with a customer, and then a route back for development as a way to continue retention and development and to create also a more prescribed accountability for Mors, for succession accountability. So in other words, in our system managers have on their key accountability documents, which is an annual document support for the prep process. But let's make it more specific that they have an accountability that mors have an accountability for ready now succession and for succession movement and for that success. And if we can get that accountability clarified in our goal setting process that that would be helpful. And we also had some more specific suggestions about how to handle some challenges in Asia that perhaps we could set up a different nomenclature in titleAge in Asia that would help to satisfy some of the market needs in Asia but correlated to our titleAge in the Novus management system. So not violate our principles, but something that supported an Asian structure in terms of nomenclature. And then the last suggestion was that perhaps creating development assignments just quite below key assignments at key levels so that we had the opportunity for key talent that might be flight risk because of their particular trajectory in the marketplace or because of their capability that we might create development assignments, say, just below key assignments in the organization for succession, such that they were sort of assistant type positions and that those might be sort of opportunities to create ready now succession. So that as we had turnover in those key assignments that we had people ready now. So those were some of the topics and ideas that were discussed and I would ask the team if there were any other things that I left.

Speaker A Very good. What happens, what's your experience in other organizations when they are faced with these issues?

Speaker D I'm still unsure whether these two things are disconnected. I suspect the issue of sales in Asia and compression are connected and my curiosity goes immediately to do you know the work that's being done to do complex sales and do you know the work that's being done in Asia to do complex sales at the same time as doing transactional sales.

Speaker A So I also like to thank my team for all the good discussion and good insights. They also told me that basically I have to go back and do a lot of work. So they kept asking more and more questions and so thank you for that. Hold on, let me see where's my paper? Hold on a second. Yeah, I think so. One of the things we discussed was when I talked about the portfolio of products that we sell at Novos, there seems to be a clear difference between what is the level of work to accomplish a complex sale and the level of work to accomplish like a commodity sale. So I think that's the first question that came up. Go back, Maria, and do some work on that, right? The other one that I was thinking, reflecting a little bit after the meeting is maybe what we need to do is maybe assess our customers in terms of what level of capability are they dealing with. So maybe in China, we are, for example, going and dealing with the level three type of capabilities. So what type of sales capability we need to have in place other customers. We might be dealing with a level six or five, and so what type of capability we need to go into those customers. So that was some reflection after the conversation I had with the group. Another question was about specialized sales or more generalist sales. So should we have, for example, someone dedicated, really understanding a lot of about enzymes and going to our customers and really have a deep understanding, or should we have a more generalist role that will approach the customer on a portfolio approach? And also, another very interesting question in terms of our compression is we need to go back and assess what type of value is the managering adding to the next role level to their subordinates. So if you have a three two reporting to a three two, right. So you really need to understand the level of work that a three three is doing and see what type of value is he adding to the next roll down. So, very interesting discussion and lots of work to do. So thank you so much for your insights.

Speaker C So, further from your group, any points you want to elaborate on or from the rest of the group? Yeah, go ahead.

Speaker E It seems to me that Novus has a unique opportunity to use the Internet and Skype. That the idea that you have to run around the world and always have your people in front of the customer when is now easy to set up on a computer. That you could have your research and technical people available at any time as a group in your central lab so that they don't have to be there in person unless it's demanded. You could leverage the internet for what you're trying to accomplish.

Speaker A Yeah, there was also another very important point that forgot to mention, but yeah, that's very interesting.

Speaker C Any other points or clarifications or questions from this?

Speaker D Maria? I think no matter how you set up your complex sales in Novus, I think it'd be a great idea to actually set up a monitoring of the relationship between your Novus person and the key strategic customer. Monitor those relationships, characterize what you want them to be, and when they dip below where you want them to be, change out the novice contact immediately. Monitoring the relationship will give you a leading indicator and enable you to be more choiceful about how you structure and who you put in front of the customer. Righteous.