When promoting from within, do you select the person who is doing the best job in their current role? Do you promote the person you like the most, the person who has the most seniority, or the person who gives you attention and deference? It is not unusual to promote a good technical person or a good clinical person into a management position. Technology companies and healthcare organizations do this frequently.

If this is your current practice, then you are missing out on the opportunity to improve business performance. You may also be dramatically and unnecessarily increasing your cost of operations. This is hardly a good strategy in the current economy.

Look at the cost of a bad (mismatched) promotion:

• Time to become productive in the job
• Time to separate from being a peer to being a boss
• Time to learn the new political aspects of the job
• Turnover cost resulting from a bad promotion
• Lost productivity resulting from the turnover
• Recruiting cost to replace employees lost to turnover
• Time to become productive for the new hire

While cost is obvious, time is a valuable and non-renewable resource. A poor promotional decision is expensive.

Internal promotions should be approached the same way you approach external hires: formally. There are distinct advantages when promoting from within. The candidate knows the business, knows some of the politics (politics at the managerial and executive level, however, are different), and is familiar with the culture. But this knowledge alone does not qualify them for promotion. What qualifies them for promotion is a positive performance track record and a demonstrated ability or high potential (versus just interest) to take on additional responsibilities and succeed.

Here are five actions that organizations can take to prepare internal candidates for promotion:

1. Have a formal (or at least an informal) succession plan. Identify individuals in your organization who can fill current senior positions should the incumbent retire or leave, or new positions that are created due to growth, new product or service introductions, or new projects critical to the success of the company.
2. Implement a management development program to provide future promotable candidates the opportunity to take on additional and more challenging responsibilities. A management development program will serve to identify employee strengths, preferences, values, and potential derailers (risk tendencies) that will enable a best fit for positions available.
3. Introduce a valid and meaningful 360-degree evaluation. This will ensure that the candidates identified for promotion are truly qualified and not just good at managing up and managing their image.
4. Provide the future promotable candidates with a mentor to help guide them through both the tangible and intangible aspects of achieving success within the company.
5. Provide the newly promoted employee with coaching support to support the transition from a functional and technical focus to a manager with broader responsibilities.

Once the candidate is selected and promoted, their transition must be supported. It is reckless to assume that a candidate promoted from within the organization will automatically succeed and needs no further attention. Yes, they know the organization. But do they know how to manage and perform at a new level within the organization? Promotion doesn’t result in instant competence. A mentor or a coach are excellent ways to support the transition and prove to be a good investment.

Some candidates, however, will not have had the advantage of participating in a management development (i.e. “grooming and growing”) process. Some may never have held a management position. Some may have agreed to a promotion reluctantly.

Creating a formal talent integration process for newly promoted managers is a wise business practice.

Talent integration involves:

1. A formal transition plan to help the manager/executive integrate into the new position. Formal and purposeful discussion between the new manager/executive and their immediate supervisor on how best to work with each other and to define clear expectations regarding job performance and expected results.
2. Internal mentorship to help the manager/executive better understand how to deal with peers, how organizational politics work at the managerial level, and “how work gets done here” from a manager’s perspective.
3. Coaching (best done with an external/neutral executive/performance coach) — to help with the transition, especially for developing the management skills required in the new position (i.e. technical/clinical person being promoted to manager)

Recently highlighted in the Wall Street Journal, 26% of managers aren’t trained to manage, according to the Rasmussen Report. Now consider the even greater likelihood of this when technical people are promoted to management. For internal promotions to be highly successful, a rigorous internal promotion process must be established and a formal transition integration process must be put in place. The cost of not doing so is simply too great. Unless your funding and talent are abundant and not a concern, you can’t afford not to.

No matter how enthusiastic your employees are about participating in an internal movement program, they are bound to be somewhat frustrated if there aren’t a wide variety of assignments available for them to choose from. Even if you successfully excite your managers and other rotation program participants, you can’t automatically assume that they know how to identify or develop exciting assignments or rotations.

As a result, the rotation program manager needs to design a process and provide managers with a variety of suggestions and tips in order to make it easy for them to create internal movement projects, assignments, and rotations. This section highlights over 20 of the approaches that I have found to be effective in helping managers create more and better rotations.

Approaches to Help Managers Identify New Projects and Assignments

The various approaches that can help managers either identify or develop rotation projects can be classified into four broad categories that include:

1. Piggybacking off of existing business processes
2. Soliciting help from individuals and groups
3. Creating information sources and events
4. Other miscellaneous approaches

Category I — Piggybacking Off Of Existing Business Processes

The basic premise here is to take existing business processes and tools and to use them to identify potential short and medium-term projects. Some of the approaches to consider include:

A manager’s “to do” list — every manager creates some variation of a “things to do list,” so this list is a great place to start when looking for projects. Encourage managers to go over their list once a month. They should identify the things that need to be done that employees from other areas or functions might be able to carry out — things that they simply do not have the resources to complete. By providing managers with a checklist of factors for identifying potential projects, it will make it easier for them to “visualize” the projects that are most likely to help them achieve their business goals. The factor list for identifying new rotation projects should include:

• Projects related to their high-priority goals
• “Things that are not getting done” and that will likely languish without outside help
• Problems that require a relatively small number of hours to complete
• Projects that can be done by outsiders with less experience or knowledge of the function
• Projects that can be done remotely
• Assignments that require few resources or budget dollars
• Projects or assignments where “outside thinking” (that would more likely come from an outside the function person) would be most beneficial
• Planning and research-related projects that are almost always “put off” until there is adequate time to begin them

Goals, budgets, and strategic plans — managers should be periodically encouraged to review their list of yearly goals and their budget in order to identify potential problems or opportunities that might be amenable to rotation assignments. They should also be encouraged to look at plans and forecasts to identify upcoming opportunities that could be “started on” by outside individuals participating in a rotation assignment.

Converting contractor, part-time and internship projects — managers should be encouraged to periodically look at both their current and their past list of short-term projects that they have assigned to contractors, part-time individuals, or even interns. Managers should first consider reassigning some of these projects to rotatees. In addition, managers should be encouraged to look at these lists of previous projects in order to stimulate their thinking toward developing similar or even follow-up projects that can be done by current employees who need growth opportunities.

Teaching assignments — because one of the best ways to become an expert is to develop the capability for teaching others what you know, the development function should be asked to identify a number of teaching and coaching assignments each quarter for rotatees.

Category II — Soliciting Help from Individuals and Groups

Ideas and suggestions that fall under this category relate to providing direct help and support to managers.

Assignment development consultants or mentors — consider providing managers with a list of “assignment development consultants,” i.e. other managers who have volunteered to help others find and develop assignments. In my experience, most managers who have had success with job rotations are more than willing to help their peers develop similar assignments. The list might also include some individuals who have been trained to be peer mentors from the development function.

Recently developed leaders — make it an integral part of all major job rotations for the individual in the rotation to look for additional assignments both for others and for themselves. Even after the rotation assignments are complete, these individuals should be asked to continually “scout” for future opportunities for others.

Mentor suggestions — mentors throughout the organization should be asked periodically to help identify or develop rotation assignments.

Affinity groups — solicit the support of corporate affinity and diversity groups in identifying both projects and individuals that could benefit significantly from participating in the rotation program.

Corporate alumni – if your organization has a corporate alumni group, ask them to help in identifying possible rotation assignments outside the organization.

Retiree groups — if your organization has a corporate retiree group, ask them to help in identifying possible rotation assignments both inside and outside the organization.

Senior executive projects — because working directly with the CEO or with other top executives is always stimulating and exciting, these individuals should be asked to provide a targeted number of assignments each quarter.

Employee-generated projects — in many cases, the best source for identifying projects are your employees. Encourage managers to hold periodic meetings with their employees in order to educate them about the availability of “help” from individuals on develop assignments. The employee should be provided with a list of previous projects and a template to help them understand the characteristics of a great rotation assignment. Employees should also be encouraged to network with their professional contacts at other firms to identify rotation assignments that they have found to be stimulating or impactful. In addition, managers should encourage their own employees to propose their ideal departmental or external rotation assignments.

Approach top performers — use “forced-ranking,” bonus lists, or performance appraisal results to identify your organization’s top-performing managers. Approach these top performers directly and ask them to help to identify and develop rotations.

Assign interns — hire more select current college interns from college academic programs that teach leadership development and train them how to seek out possible projects and rotations.

Category III — Creating Information Sources and Events

Suggestions that fall under this category cover creating rotation-related information sources.

Provide examples of previous assignments — providing managers with a list of past successful projects can help stimulate thinking. By looking through the list they might see a project that causes them to think “I need that.” When possible, this list should also include examples of projects from other firms (especially customer firms and strategic partners) that were identified through benchmarking.

Project availability website — some firms (Whirlpool and Google are leaders here) have developed internal processes that “market” available projects on an internal website, so that internal talent can “apply” (or even bid) to work on short-term projects. An “available project” marketing process and website can stimulate managers into action by reminding them that others are actively developing project assignments. This website can also provide them with a range of project examples that they can use as a basis for developing their own.

Job rotation help website — develop an internal website designed specifically for managers that provides education and tips on how to develop stretch into teaching assignments. Include frequently asked questions and web links to help resources both within and outside the firm.

Job rotation forum — develop an online forum or listserv that allows managers to bring up issues and ask questions. Encourage managers, mentors, and leadership development experts to participate in the forum. Internal social networks “groups” can also be used to exchange ideas and questions.

Rotation wiki — provide managers with the opportunity to develop an internal “wiki” knowledge site on developing rotation assignments. A wiki, following the Wikipedia model, allows managers to build a knowledge base. This knowledge base will likely be more usable and credible, because it is built and enhanced exclusively by managers.

Characteristics of a great assignment template — in addition to a template that outlines which projects would be best for the manager, there should also be a checklist of the factors that make a project exciting to an individual employee. That checklist can be used to develop or to improve projects so that they are exciting, challenging, and attractive to employees. The rotation program should include a process for stimulating the managers’ thinking relating to the characteristics of a possible project. The characteristics that interest employees looking for growth or development were highlighted in a previous section entitled “elements of a well-designed individual job rotation” but a shorthand version of that list includes:

• The length of the project (short-term duration).
• The quality of the coworkers that you will work with.
• The amount of flexibility or input that the person accepting the assignment will have.
• The skills to be learned, especially if they are leadership, organizational, or people-managerial skills or skills that make an individual more promotable.
• The high-level contacts the individual will make.
• Whether new technologies or tools will be used.
• The visibility of the assignment in the organization.
• The impact the assignment will have on the business.

Remind managers about “always impactful” rotations — the rotation program manager should provide managers with a list of typical “always impactful” job rotations. Some of these “can’t miss” rotations include:

• Rotating overhead professionals into line functions to improve understanding and cooperation.
• Rotating technical professionals into HR in order to develop their understanding of people-management issues and people skills.
• Rotating individuals between highly interdependent business functions in order to improve communications, cooperation, and understanding.
• Rotating tactical employees into strategic planning and forecasting functions in order to improve their “big picture” vision.

Rotation development workshops — the rotation manager should design and periodically offer both face-to-face and web-based workshops in order to provide managers with help in identifying potential rotations and stretch assignments.

Category IV — Other Miscellaneous Ideas

Internal competitions — the manager of job rotations should consider setting up an internal competition to generate new projects and assignments from all of your managers, with recognition for those departments that develop the best quality and the most rotations for development. Periodically posting the success record of each manager and department might help spur their collective competitive juices.

Focus on growth departments — because departments undergoing rapid growth are the most likely to have a significant need for project help, the rotation program manager should target these departments for developing new assignments.

Rewards — one of the most effective ways of increasing the number of rotations is recognizing and rewarding managers for identifying and developing high-quality rotations and stretch assignments for employees outside of their team. Identifying and developing assignments could also be made a key bonus or promotion criteria. Quotas for each manager could be set in order to encourage them to identify and develop a targeted number of assignments and rotations each quarter.

Final Thoughts
Throughout this series of articles, I’ve attempted to highlight some of the best and emerging practices in internal movement. In a time where most companies are focusing on “building talent” rather than “buying it,” it is important that those in talent management shift their focus towards efforts that positively impact redeployment, development, and retention. “On-the-job training” has been and always will be the most effective tool for both exciting and developing workers. Now is an ideal time to revisit and update your program for creating and filling development assignments, stretch assignments, and job rotations.

In this part of the series on job rotations and stretch assignments, I will highlight three key tools or approaches that rotation program managers can use to make an organization’s job rotation program more effective. These approaches include: 1) the critical elements of a well-designed individual job rotation; 2) tips for increasing employee participation in the program; and 3) a checklist for assessing whether your organization is a good “fit” for implementing a job rotation or stretch assignment program.

APPROACH # 1: THE ELEMENTS OF A WELL-DESIGNED INDIVIDUAL JOB ROTATION
Not all rotational assignments turn out to be great experiences, and a poorly designed experience might be more than just a waste of time; in the extreme, it might even damage someone’s career. The key to ensuring that your employees have well-designed assignments is to identify the elements of a great assignment and to use those elements to help design all subsequent assignments. Every organization must determine on its own what a “perfect” assignment is, but I have compiled a list of elements or factors that can serve as a starting point.

Critical Elements in a Well-Designed Stretch Assignment or Job Rotation
When designing an individual job rotation or stretch assignment, you should include the following structural and content elements in order to make it a more impactful experience.

Structural Elements

• Pre-assessment — prior to the rotation, the rotatee goes through a formal assessment process in order to determine which areas need to be strengthened during this rotation.
• Input — the employee (rotatee), their manager, and the supervisor of the rotation are all consulted about their needs and interests.
• Goals with metrics — the goals of the assignment are clearly spelled out, prioritized, and agreed upon by all. The metrics to measure whether each goal was met are also agreed upon in advance.
• Rotation plan — the rotation or assignment has a written plan. That plan outlines the skills to be enhanced, the scheduled rotation “stops,” the major activities, the deliverables, and a detailed timeline. The factors that excite the rotatee are emphasized and any potential “frustrators” are minimized. The plan includes an opportunity to abandon the rotation or assignment if the goals are not being met.
• A learning plan — a written plan is compiled outlining the knowledge and skills that will be gained and the problems or opportunities that you will have an opportunity to address.
• Exposure plan — there is a plan outlining the opportunities that the rotatee will have to have their work exposed to key executives, customers, peers, and managers of other business units.
• Two-way communications — rotation contains pre-scheduled meetings and opportunities for two-way communication with the rotation supervisor.
• Accountabilities — the deliverables of the rotatee and the responsibilities of the supervising manager and permanent manager are all clearly spelled out.
• Duration — the length of the assignment is long enough to allow unrushed learning but not so long that the assignment becomes repetitious.
• Flexible elements — the rotation design includes flexible elements so that both the duration and the content can be adjusted to fit the changing needs of the rotatee in the business.
• Periodic feedback — mechanisms are agreed upon in advance to provide periodic candid feedback.
• A mentor is provided — in addition to the rotation supervisor, a mentor or coach is provided.
• Sufficient resources are provided — the rotatee is provided with sufficient budget and resources, so that they have a reasonable chance of successfully completing the assignment.
• Strategic impact — the assignment problem or opportunity will have a significant strategic impact.

Content Elements

• Opportunities for the rotatee to work with key individuals have been prearranged.
• A chance to lead — the rotatee is provided with an opportunity to lead a team or project.
• Decision-making — opportunities to make significant decisions are outlined in the rotation plan.
• Technology and tools — the rotatee has an opportunity to use the latest management approaches, tools, and technologies.
• An opportunity to innovate — the assigned problem or opportunity is designed in such a way to allow creativity and innovation.
• Opportunities to travel — when appropriate, the assignment provides opportunities and sufficient resources for travel.
• Post-assignment opportunities — the range of potential opportunities that will be available to the rotatee after successful completion of the assignment are spelled out (i.e. an opportunity to permanently stay in the role, promotional opportunities, “return” opportunities, and possible “next” development opportunities).

APPROACH #2: FACTORS THAT MAKE AN ORGANIZATION AN “IDEAL CANDIDATE” FOR A ROTATION PROGRAM
Although job rotation and internal movement programs can be effective in any organization, the impacts will be greater and be achieved faster in organizations with certain characteristics. If you’re trying to determine whether your organization is a prime candidate for developing a new or updating an old internal movement program, I recommend that you use the following checklist to help make that determination.

Organizations that are likely to benefit the most from sophisticated job rotation and internal movement programs display a majority of these characteristics:

People Management Factors

• Low internal hire percentages — if most of your positions are filled externally through recruiting, an internal movement program can help shift that ratio.
• A weak leadership development function — if you are constantly facing a shortage of developed leaders or if your leadership development function is weakly supported and poorly funded, you are an ideal candidate. If only a small percentage of your leadership development is “on the job,” a job rotation program can help.
• Weak recruiting — if your organization has a weak employer brand image or it has difficulty recruiting top talent, having a “talked about” internal movement program can really help.
• High new-hire failure rate — if new hires frequently fail because they have a hard time adapting to the culture, then speeding up internal movement could help by exposing new hires to more situations, one of which may be easier to connect with.
• High turnover rates of top performers — if you have identified the reasons that top performers are leaving and they include a lack of learning, growth, and career opportunities, you can significantly improve retention rates by increasing internal movement.
• Slow best-practice sharing — if there is a slow rate of benchmarking and best-practice sharing between business units, a rotation program can have a major impact.
• Workforce productivity — if your firm’s average revenue per employee is significantly below last year’s or the industry average, internal movement program might help increase productivity.
• Low rates of innovation and change — if your organization operates in a fast-changing environment but it is known for its slow rate of innovation and its resistance to change, improved internal movement could help significantly.
• High “college hire” frustration rates — if your recent college hires are frustrated or leave at a high rate, a rotation program for your interns or college hires might help.

Geographic Dispersion

• Dispersed facilities — when organizations have multiple facilities spread across large geographic areas, there are obviously fewer opportunities for face-to-face contact. This can decrease cooperation, communication, and understanding between the separated units. A job rotation program can help minimize the impact of silos by creating peace brokers with cross-silo experience.
• Global reach — in addition to the distance separating them from headquarters, the different cultural and economic environment that international facilities experience can lead to an “us against them” mentality. Rotation can be used to help squelch such notions.
• Remote work — if your organization has a significant percentage of your workforce working remotely, the rotation program with remote capabilities can have a significant impact.

Organizational Factors

• Larger-sized organizations — the larger the organization and the more diverse the business units, there is a lower likelihood that your employees will be aware of the appropriate opportunities to pursue in other business units. As organizations get larger, they become more siloed and less agile.
• Diverse business units — if your organization has diverse business units which produce significantly different products and services or that operate in different parts of the business cycle (startup to commodity business) then job rotations can help you increase best-practice sharing amongst them. In the same light, if some business units are growing rapidly while others are shrinking, the redeployment of employees might significantly improve the impact of your talent.
• Isolated overhead functions — if your overhead functions are given lower priority and there is little or no movement of employees from overhead functions into line business units, then the organization is likely to be helped with this program.

Political Factors

• Political infighting and posturing — if your organization suffers from significant political infighting, high rates of bureaucracy and “turf wars,” you are an ideal candidate because improved internal movement can make your organization “boundary-less.”
• Silos and empire building — if your organization is well-noted for individuals who over time build “empires,” then your firm is a good candidate for job rotations, because rotation programs help to break down organizational silos. If your organization is well known for strong internal politics and hoarding information in order to build power bases, your firm is a great candidate for an internal movement program.
• Managers hoard talent — if your managers act relatively selfishly because they are not rewarded based on overall corporate results, then they are likely to hoard or shelter any talent they hire or develop. In the same light, if you have a large number of “bad managers,” speeding up internal movement will likely have a high impact by minimizing a rising stars contact with them.

APPROACH #3: TIPS FOR INCREASING EMPLOYEE PARTICIPATION IN JOB ROTATION PROGRAMS
Even if you successfully excite managers about participating in job rotation or internal movement programs, you still must identify ways to excite individual employees so that they’ll want to participate. It’s important to realize upfront that many employees are reluctant to participate because of uncertainty or fear of failure. Some of the approaches that you should consider for increasing employee participation rates include:

Educate and Reward Them

• Show the impact — show them the average impact that participating in rotation programs can have on their career, pay, job security, and rate of promotion. Provide a list of the many benefits that can accrue to employees in your educational materials.
• Reduce the fear — show them the high success rate of job rotations. Survey employees periodically to identify their fears and provide answers to counter each individual fear on your company’s job rotation website.
• Team impacts — show them how their current team will benefit from their expanded contacts, increased skills, and better understanding of other business functions.
• Educational events — hold periodic in-person and online educational events that describe the program, and answer “frequently asked questions” that potential participants have. Also consider providing information that they can give to their family in order to answer any of their concerns or questions.
• CEO — encourage the CEO and senior managers to talk about the program and to highlight how it helps both the company and individual.
• Rewards — provide recognition and small bonuses for participating in the program. Make program participation part of the employee’s performance appraisal process, bonus formula, and promotion criteria. Also consider rewarding managers and their teammates for superior program participation rates.

Provide Help

• Alumni mentors — provide a list and contact information for other employees who have successfully completed job rotations and encourage them to talk to each other. Develop social network groups, wikis, online forums, and listservs to facilitate communications between employees.
• Report participation — post-program participation lists so that other employees can see who is participating and to get an idea of some of the projects and assignments that others have undertaken.
• Post available assignments — post a list of current and past assignments to give curious employees a sense of what kind of learning and development assignments are available.

Provide Flexibility

• Start with part-time rotations — in order to encourage full participation, provide short-term rotation opportunities for participation in small assignments and projects. Give them a small taste of the program to encourage them to accept other more extensive assignments.
• No-fault divorce — for noncritical assignments, allow employees to drop out early if they find the assignment doesn’t fit their needs.
• Mid-course correction — for noncritical assignments, provide a midpoint reassessment so that the rotation can be restructured to better fit the company’s and the employee’s needs.
• Develop their own — allow high-potential employees to propose their own unique assignment or rotation that best fits their needs. In addition, you should give employees and their current manager significant input into any rotation assignment.
• Prequalify employees — provide a process where employees who may be interested in a future rotation can be preprocessed and prequalified, so that they can quickly choose an available assignment when they decide they are “ready.” Also consider allowing employees to select the “start time” for non-mission-critical rotations until it better fits their current work load.
• Remote assignments — work with managers and leadership development to provide a number of assignments and rotations (including global assignments) that can be done 100% remotely, in order to encourage participation by those who can’t relocate or travel.
• Buddy participation — when it’s feasible, consider letting an employee participate in an assignment with a coworker.
• No ties — allow employees to participate in the leadership rotations and assignments without an absolute requirement that upon completion they accept a promotion. This option can alleviate the fears of employees who feel that they’re not ready for leadership roles.

Identify Potential Concerns

• Employee involvement — periodically conduct employee surveys and focus groups to identify potential program problems. Where feasible, involve employees in the design of the program and subsequent rotations to address these issues.
• Postmortems — conduct postmortem assessments of your rotations and assignments, in order to identify and fix any problems with the process.
• Union participation — in situations where unions might encourage employees to resist participating, educate union leaders and solicit their input into the process.

Next week, Part Six of the series will highlight some additional tools and tips that you can use to improve your rotation program.

This series of articles started out listing the pain points that many organizations are experiencing today as a result of rotation-based development initiatives rooted in history and antiquated by Henry Ford’s standard.

It then progressed into program goals and key elements that characterize more modern second-generation programs under development. Last week’s installment explored the many program variations that are expanding the scope of rotation programs, making them more relevant as tools capable of addressing retention, motivation, and productivity improvement.

This week’s installment looks at emerging best practices and program metrics that can be used to assess your program’s performance.

Best Practices in Job Rotations and Internal Movement

Over the years, many firms have used job rotations in a variety of formats.

The most famous firm that has used internal movement for development is General Electric, but other firms have developed some best practices that can also provide learning.

(As HR leaders change, not all opt to retain programs installed by their predecessors no matter how successful the programs may have been. As a result, some of the programs mentioned here may no longer be in operation.)

• Proactive intraplacement. This best practice increases the speed and accuracy of internal movement by assigning a team of recruiters to recruit for key roles using only the existing employee population as their talent pool. The key to this concepts success is that it identifies individuals who might not move on their own, or might not be visible to traditional succession planning processes for any number of reasons, including talent hoarding by managers. The goal of this type of program is to move top talent from areas of lower return to areas of higher return, ultimately improving the performance of the entire enterprise. Firms that have used this approach include Booz Allen and Microsoft.
• Redeployment. The business needs of organizations change on a regular basis. As a result, have a permanent process that works to redeploy valuable talent from areas of the business being discontinued to other ongoing areas throughout the enterprise. The concept of rapid redeployment has been honed to near perfection by the U.S. Army and Marine Corps. Other firms like Intel have developed redeployment processes that allow not only “surplus” talent to be effectively redeployed, but that also allow great hires who prove unproductive in the initial roles to find a more suitable role internally.
• Movement related to business cycle. Most large organizations have business units in various life cycle stages from seed to exit. In the first few years of this century, Microsoft used a model partly attributed to the work of Clayton Christensen that helped to ensure that talent most appropriate for a particular stage of business life didn’t get stuck in a unit that had progressed beyond that stage. In other words, it didn’t keep developers capable of bringing next-generation products to market stuck in irrelevant business units. This type of rotation program helps ensure that talented individuals never need to search for work more relevant to their skills and desires outside the organization by making sure they are deployed to business units and projects with work in the right life cycle stage.
• Competition for employees. While every firm competes externally for talent, a few have brought the same level of competition inside, allowing managers to openly recruit from within the firm or to have a bid or “draft” process. National Oilwell Varco developed such a process for college hires, where after a one-year initial placement, the hires’ next placement was determined by an internal draft for talent.
• Right job placement. Firms like Motorola, Valero, and Microsoft have in the past developed an internal movement process that I call “right job” movement. The premise is simple…you can’t have a successful rotation into a job if the employee and manager are not a proper fit. An “A-level” top performer can’t be expected to work well with a “C-level” manager. Other “right job” placement factors include whether the employee and the job “match” with regards to innovation, available motivators, the strength of coworkers, and the track record of the team.
• Involve your recruiters in retention. It’s quite common for firms to hire a great individual but to place them in the wrong job. The best firms extend onboarding for a period of up to six months in order to ensure that the initial placement of the new-hire is maximizing their output. Other firms like Intuit, Valero, and Memorial Care Health have developed programs that keep the initial recruiter tied to the new-hire for up to six months in order to ensure that top performers don’t leave the firm as a result of a bad initial job placement. Placements that are not working out can be remedied a majority of the time by rotating the individual into a similar role with a different manager.
• Interest and skills inventories. Numerous firms use “skills” inventories for use in identifying individuals who could fill a vacant slot with the right skill set. However, the best firms expand their inventory to include employee interests in order to be able to identify individuals for rotations who are interested, but not necessarily highly skilled in a job or project where training or development can increase the skill level in a relatively short period of time. IT Consulting giant EDS has leveraged this approach and found that adding this dimension helped entice employees to keep their skill profiles more current.
• Return ticket for internal transfers that don’t work out. One of the primary reasons individuals who could deliver more to the organization opt out of development rotations that follow a non-standard path is fear of failure. They fear that, should the job change, be too dramatic, or too much of a stretch, they may lose seniority, friendships, and “ding” their career with the organization. To counter these issues, Becton Dickinson created a program called “take a risk” that enabled top performers to opt into a rotation that would develop them in a new function (i.e., marketing to finance or operations to IT). Top performers making the switch were provided a six-month period in which to master the new role. If they or their manager felt that the change wasn’t working out, they could rotate back into their previous role with no negative impact on their career.

Benchmark Firms to Learn From

Whether you are developing or improving your internal movement program, it’s important to study the successes and failures of other firms. The following is a list of firms that have at one time been recognized publicly for excellence in internal movement or job rotation programs:

• GE
• Becton Dickinson
• Booz Allen
• Microsoft
• Google
• HP
• Eli Lilly
• General Mills
• IBM
• Intel
• National Oilwell Varco
• U.S. military (rapid deployment forces)
• EDS
• Aviall
• U.S. Census Bureau
• Henkel
• Air Products
• RJR Nabisco
• Motorola
• American Greetings Corporation
• Mobile Valero Energy
• Intuit

Metrics for Assessing Internal Movement Activities

All effective programs rely heavily on metrics in order to continually improve. Rather than overdoing metrics, it’s best to use a small number of powerful metrics. The key is to tie your metrics to program goals. You need to have a success measure for each major goal that you set, so before you begin selecting metrics, go back and make a list your program’s goals.

Some metrics to consider include:

• Goal: improving employee performance. The percentage increase in the actual performance, forced-ranking placement, or performance-appraisal ratings of those who complete rotations versus those who don’t.
• Goal: to increase promotion speed. The percentage increase in promotion rates of those who complete rotations versus those who don’t (alternative: the percentage of promoted employees who had a rotation during the last three years).
• Goal: high participation rates. The average percentage of employees, managers, and departments that participate in the rotation program each year.
• Goal: to have satisfied rotatees. The average percentage who rate the experience as “very effective” or above when asked, “How effective was your rotation in improving knowledge, skills, contacts, and performance?”
• Goal: to have satisfied managers. The average percentage of home and sponsoring managers who rate their experience as “very satisfying” or above when asked in a survey.
• Goal: to retain rotatees. The average percentage of rotatees who remain with the firm for at least three years following a rotation compared to the retention rate of non-participants.
• Goal: to increase diversity participation. The average percentage of diverse rotatees compared to the percent who are diverse in the entire employee population.

Other Measures Related to Quality

• Quality of the participants. The average quality of rotation participants as judged by their average performance appraisal scores, bonus percentages, position levels, or 360° appraisal scores.
• Correlation with business success. The statistical correlation between the percentage of employees in a business unit of that participate in the program and the percentage of the business units goals that were successfully met.
• Succession plan participants. The number (or percentage) of people who are on the corporate succession plan who participated in a job or project rotation.
• Leadership development plan participants. The number (or percentage) of people who are part of the corporate leadership development plan who participated in a job or project rotation.
• Superior results. The percentage of program participants who rate on-the-job rotations as superior to other leadership and training options.
• Ratio of internal hires. The percentage of all open positions filled internally (versus external hiring) as an indication of the preparation levels provided by all development programs.
• Cross-business rotations. The percentage of all rotations and project assignments that occurred between different business units or geographic regions.

Other Measures Related to Volume

• Number of hours. The total number of hours that program participants spent on their projects and in their rotations during this program year.
• Number of stops. The total number of “stops” or job placements that program participants passed through during the program year.

Other Measures Related to Process Effectiveness

• Failure rate. The percentage of participants who dropped out or are removed from the program.
• Time to fill. The average number of days it takes to fill an internal transfer, job rotation, or project assignment.
• Rotation “stop” quality. The average number of rotation stops that individuals must complete before they received a promotion.
• Postponed placements. The percentage of individuals who apply for a rotation that are not placed during the program year.
• “Non-obvious” choices. The percentage of all individuals selected for a job, rotation, or assignment who were “non-obvious” choices (not a direct report on the organizational chart of the supervising manager).
• Remote projects. The percentage of rotations, jobs, and assignments that can be completed remotely.
• Complaints. The percentage of participants who filed a complaint about the process.

Other Measures Related to Process Cost

• Cost per participant. The total program budget divided by the number of disciplines this year.
• Program ROI. The dollar value of the program’s benefits and results compared to the total program costs.

When corporate revenues are down or stagnant, talent managers typically shift their focus away from volume hiring to developing and improving existing employees.

Executives are always challenged to make the correct “buy or build” decision, but when hiring is frozen, organizations must place an increased emphasis on internal movement and job rotations to close critical gaps in talent supply and demand.

Unfortunately, many rotation programs are doomed from the start to produce mediocre results, because they employ a “one-size-fits-all” model that guarantees lower program participation rates.

As with most products and services, offering different program variations makes it more likely that your target employees will find a job rotation that fits their needs as well as the organization’s. Since the war for talent began more than a decade ago, the type of job rotation formats have expanded dramatically. It’s important to be aware of the various development opportunities available and the benefits and risks associated with each.

Here is a list of 26 different types of internal movements to consider.

Obviously, not every firm can offer employees all of these options, but it is not uncommon to develop programs that incorporate a handful.

The different program variations presented here are categorized into four groups including 1) “whole job” rotations; 2) location-based rotations; 3) time-based rotations; and 4) less-common rotations.

“Whole Job” Rotations

This category includes rotations where the individuals in the rotation literally change their job title (these are often semi-permanent placements):

• Skill-based job rotations. A planned process where regular employees are moved through jobs in the same job family and business unit in order to build skills, knowledge, and capabilities of individuals.
• Leadership-development based job rotations. A planned process where high-potential individuals are rotated through jobs in different functions, business units, or regions in order to build their decision-making and leadership skills. The process is also used as part of succession planning to assess the capabilities of developing leaders.
• Redeployment. A formal process for internally moving entire teams or large numbers of employees from areas of low return to areas of higher return.
• Job-posting systems. A formal, organization-wide process designed to objectively select internal employees for transfers or promotions to vacant jobs. Sometimes also called “job bid” processes.
• Team leader rotations. A planned process for rotating different employees in a team for a fixed duration into the leader or manager role. The goals can include leadership development, understanding the complexities of management, or simply “sharing the load” in situations where the management role is not a desirable career move.
• Two in a box. An assessment and development process where a potential leader is rotated into an existing management job where they jointly share responsibilities on a medium-term basis with the current position holder.
• “Gear down” rotations. Where an employee decides to rotate down to a lower-level job in order to have more free time or less stress.

Location-Based Rotations

This category of job rotations focuses on situations where the employee physically moves to a new location:

• Strategic partner job rotation. Rotations where employees are assigned to work on a medium-term basis at one of the firm’s strategic partners, joint ventures, newly acquired organization, or major customers in order to benchmark, learn, develop new products, and build relationships. Rotating individuals through university teaching and research assignments are another variation under this model.
• Geographic job rotations. Rotations between different geographic regions or countries in order to build relationships and to develop understanding between diverse regions.
• Virtual rotations. Rotations where the individual is moved into a virtual job where they work remotely. These rotations can be for motivation/retention purposes or to develop remote communications and management skills.

Time-Based Rotations

This category covers the types of rotations that have a short- or medium-term duration:

• Project rotations. A series of temporary assignments or projects where an individual maintains their current job while taking on additional stretch assignments to build their capabilities. The rotation can be full- or part-time, and it generally lasts until the project is completed. Both stretch goals and stretch assignments generally fall under this category. In matrix or project-based organizations, these rotations are continuous.
• Stretch assignments. Short-term development assignments that are part of a long-term development plan; stretch means they significantly increase current skills, add new skills, or increase the goals/ results by between 10% and 25%.
• Part-time job rotations. Also known as partial job rotations, under this plan individuals work for a fixed period during the week (i.e., half a day) in another position while maintaining their current job title, location, and pay level.
• Cross-functional rotations. Planned short- to medium-term rotations where employees move between related or interdependent functions. A typical variation is an “overhead to line” rotation where an individual moves from non-mission-critical or overhead functions like HR, finance, and supply chain into a critical business unit (i.e., product development). Similar rotations can also occur between research and production. Although less common, the rotations can go in reverse order.
• “Understanding the customer” rotations. Planned short-term rotations that occur between any function into sales and/or customer-service roles in order to increase an employee’s understanding of the customer and their needs.
• Multi-stop job rotations. As part of summer, six month, or one-year tours, where multiple short-term “stops” in different functions are planned in advance. This process is commonly used for interns and new college hires in order to increase their exposure, excitement, and skill levels. A multi-stop rotation requires a plan that specifies what will be learned at each stop and how the “handoff” between stops will be handled.
• Variable duration. Under most job-rotation programs, the duration of the rotation is predetermined. Under this process, the length of the “stop” is determined based on the performance and the interest of the rotating employee as well as the needs of the manager.
• Overload assignments. Short-term placements for short-term business “overload” needs. These overloads may be seasonal or “sudden” problems that require a quick infusion of talent. Often they involve call center, sales, or customer service overloads.
• Intern and college hire rotations. Formal rotation programs with defined periods designed specifically for college interns and recent college grads.

Less-Common Rotations

• Temp to permanent. Rotations where a temporary or contract employee is purposely placed in a position for a fixed period in order to assess their capabilities. After completion of the assignment, they are either released or made into a regular employee.
• “Fill in” rotation. Temporarily rotating an individual into a job to “fill in” as a result of a temporary position vacancy due to vacation, illness, or other short-term need.
• Fatigue-related job rotations. Job rotations that occur during a single day in order to relieve the physical fatigue or stress that can occur in life-threatening or dangerous jobs. Employees rotate to related jobs throughout the day in order to reduce errors and accidents.
• Fraud rotation. Requiring an individual in a position where fraud or theft is a possibility to rotate out for a short period. The individual is replaced with someone who has the capability of identifying irregularities. Most commonly used in accounting, investments, or finance.
• Up-out-and-up rotations. An assessment and development approach where individuals are actively encouraged at a certain position to actually leave the firm as part of a planned assessment and development process. After succeeding at another firm in the industry, they are invited back to the firm.
• Informal job rotations. Rather than being formally planned as a corporate initiative, these are rotations developed informally on an ad-hoc basis by individual managers.
• Job enrichment. Technically not an actual job rotation but instead a formal process for expanding job functions to make a job more stimulating.

As you can see, there is a wide array of rotations to consider. Before settling on which one is the most appropriate for which employee, determine your goals and pick the variation that best fits the needs of the individual and what you are trying to accomplish.

Common Problems Associated With Internal Movement Programs

When you are assessing the effectiveness of existing internal movement processes, periodically conduct an audit in order to identify typical system-wide problems.

Survey managers and employees, benchmark other firms, and use existing metrics to identify current problems:

• Performance improvement. Heavy users of the program do not improve their performance or have higher bonus, promotion, or retention rates when their performance is compared to non-participants. Departments that are heavy users of the program do not improve their business performance beyond the rates achieved by departments that do not heavily use rotations.
• Participation rates. Individual employees frequently abandon the process after one failure due to its lack of transparency or the political/subjective nature of the process. Less than 30% of your workforce ever formally participates in it. A significant percentage of managers, when given the opportunity, avoid or circumvent the process.
• Speed. The time-to-fill for internal movements and placements exceeds 50% of the average time-to-fill days for external hires because of bureaucratic processes and a lack of interest among hiring managers.
• Satisfaction. Manager and employee user and non-user satisfaction rates are not periodically assessed.
• Favoritism. There is the perception among employees that the process is subjective and that management favorites get the choice rotations and projects.
• Time away from their job. The program does not monitor the negative impact that the rotation or internal movement has on the performance of the employee’s base or original job.

Problems Related To Eligibility and Who Is Targeted

• “Non-obvious” choices. The process does not proactively seek out “non-obvious” choices (meaning they were not a direct report on the organizational chart to the supervising manager).
• Eligibility. Eligibility for movement is limited to permanent full-time employees and excludes part-timers, contractors, temps, and retirees. Poor-performing employees and those on performance-management plans are still allowed to participate. Managers that violate the program’s rules or “hoard” talent are not restricted from future participation.
• Selection criteria. The selection of which individual should be “moved” is based primarily on non-performance criteria including seniority, current job title, or subjective management preferences. Managers get top priority for selecting candidates not on business need and how they handled previous placements, but instead based on their title, business size, or political pull.
• Fit criterion. The individual and the hiring manager make their movement decisions based primarily on their own individual self-interests, rather than overall corporate needs.

Problems Related to Program Policies

• Voluntary. The process depends on the individual volunteering for movement.
• Start-up trigger. The process does not begin until a full-time permanent job opening occurs.
• Education. The process does not provide employees or managers with information on past growth and critical areas.
• Approvals. There are policies that allow managers, unions, or administrators to block or impede internal movements between business units.
• Decisions. Placement and process decisions are based on emotion or tradition rather than facts, statistics, and metrics.
• Employee involvement. Employees cannot contribute to the process by offering internal referrals or nominations of employees who should be rotated.

Internal Program Administration

• Technology. The system is not 100% paperless and managers do not have laptop or mobile phone access.
• Global. In large organizations, the process does not move people between countries.
• Rewards. Managers and employees are not measured, recognized, or rewarded for successful participation in the process.
• Policies restricting movement. There are policies that limit the timing or the number of movements that individual can make. Managers are prohibited from proactively seeking out internal talent.
• Program manager. The internal movement processes do not have an overall manager or coordinator that is accountable for program results.
• Budget. The budget is not independent, nor does it change when quality and volume goals are increased and program performance improves.
• Appeal process. There is no formal process for identifying why you are not selected for a job rotation or an appeal process if you feel that you were unjustly treated.
• Continuous improvement. The program does not utilize metrics to identify potential problems and opportunities in order to continually improve participation rates and overall workforce productivity.

In reality, most current approaches are relics from years of tradition, loosely defined, poorly integrated, and barely managed.

During this installment, I will build upon the goals and key elements of more effective second-generation programs discussed in Part 1 by focusing on the benefits of adopting second-generation approaches and methods to increase program participation rates.

Despite the current economic lull, consumers and top talent around the world expect organizations to continue innovating. No matter how well-staffed you may be, talent shortages or gaps will arise due to unexpected turnover, retirement (yes, a few people are still retiring), introduction of new technologies, and global expansion.

Now is the ideal time to restructure and re-engineer your internal movement processes to help mitigate the risk of key talent shortages. Fortunately, making such processes more effective is a relatively easy task.

The Definition of Intraplacement

As mentioned in Part 1, “first-generation” internal movement programs traditionally relied upon voluntary application by employees to jobs posted internally, except for a relatively small percentage of executives participating in rotation-based executive development programs.

Under such programs, internal movement really meant the permanent movement of individual employees into vacant jobs. This very narrow approach leaves out numerous developmental opportunities that are more in line with how work actually gets done today (i.e., projects).

If you’re attempting to re-engineer your process, start with a name change (i.e., Intraplacement) and a broader program scope.

Consider defining your new program as “an integrated set of corporate processes that are designed to proactively increase and broaden the options for re-assignment of critically skilled individuals based on rapidly changing business need projected talent ROI.”

The primary goal is to measurably improve employee productivity and innovation by increasing “right assignment” placements (i.e., right person, with the right skills, in the right assignment or job, at the right time).

The nature of the assignments may be part-time, temporary, seasonal, or permanent. Assignments may focus on individuals (i.e., individual movement) or groups/teams (i.e., redeployment).

Additional goals may include improving retention, accelerating leadership-development, driving best-practice sharing, improving recruiting, and intra-function cooperation. Intraplacement borrows and adapts its strategies, processes, and tools directly from external recruiting.

The Benefits of Adopting Second-Generation Internal Movement Systems

There are many reasons why firms should invest in Intraplacement. Improving internal movement can positively impact a broad range of business and HR issues, including sudden business problems, seasonal surges in workload, workforce productivity, employee retention, development, and individual motivation.

I) Business benefits and impacts

• Business results. Effective systems improve business results especially in the areas of sales, product improvement, and customer service.
• Increased productivity. Because highly skilled innovators and top performers are placed in “the right job,” the effectiveness of these individuals is multiplied.
• Better business-cycle fit. In larger organizations, some parts of the business are in different lifecycle stages (i.e., seed, start-up, established, expansion, decline, and exit). Proactive and targeted movement better ensures that an individual is placed in a business cycle where their skills and interests are a better fit.
• Increased innovation and idea generation. Moving individuals into new situations provides them with an opportunity to “view things as an outsider” and to propose new approaches that insiders might not see.
• Best practice sharing. As more individuals rotate between business units, the likelihood that best practices will be shared rapidly increases. Increased internal movement can result in the cross fertilization of ideas between previously isolated business units.
• Increased agility and flexibility. Having the capability of moving talent from areas of low return to areas of high return increases organizational agility, as well as the ability of management to shift resources as needs change.
• Better understanding and cooperation. By rotating individuals between disparate business units, individuals from both units can learn to better understand and appreciate the perspective of others. For example, purchasing professionals can better understand the problems faced by the individuals who have to operate under purchasing guidelines if they occasionally rotated into those business units.
• Improved contacts and relationships. Increasing internal movement allows individuals to build their contacts and to strengthen their relationship with individuals outside of the direct team.

II) People-management related and HR-related impacts

• More talent is available. Because individuals are proactively selected and moved faster, there are more and better qualified individuals available to managers with sudden or new strategic needs, than when individuals self-select themselves for movement.
• Higher retention rates. Rapid movement minimizes frustration and burnout. People working in their “ideal job” are unlikely to find a superior opportunity outside the firm.
• Leadership development. Multiple on-the-job learning opportunities are likely to develop leaders faster and more effectively because the development assignments will include opportunities to lead more teams under a variety of circumstances.
• Increase motivation and excitement. Not only is the individual more excited because they have a chance to grow, but each permanent internal movement also provides an opportunity to “back fill” that position, further motivating others to strive for promotions and transfers.
• Increased learning. As individuals move more frequently not only will they gain more knowledge but they will also develop mechanisms for learning faster when they enter future situations.
• Increased technical skill development. Moving between diverse projects provides an increased opportunity to develop current technical skills and to learn new skills.
• Increased exposure for top talent. Increased movement across broader areas allows more managers a chance to work with top talent. This provides individuals with more opportunities to be coached by multiple managers while giving individual managers a chance to observe and assess talent they might someday want to add to their organization.
• Reduced time to fill. Transferring people internally allows you to just fill jobs faster; assessment can be done more quickly because you already have a great deal of information about a current employee’s skills, performance, and weaknesses. Because few internal candidates reject internal offers and it takes them less time to accept, the overall hiring process takes less time.
• Decreased time to productivity. Your current employees already know the culture, the company jargon, and they already have a range of contacts. As a result, internal transfers and promotions can begin the job sooner because they don’t need a great deal of orientation, and they don’t need to give notice before they begin learning.
• Lower cost of hire and salary. Internal searches don’t require expensive external advertising and other recruitment costs. External reference checks are not needed and interviews can often be shorter. Internal candidates generally have no other external offers, so there is less likelihood of a bidding war and they are less aware of market salaries.
• Lower “job failure” rate. Because you’re hiring individuals who already know the culture, the job failure and termination rate is generally lower with internal transfers. External hiring costs are significantly higher than the cost of internal transfers.
• Improved employer brand image. Having a high-promotion-from-within rate generally improves your external brand image as a good place to work because you focus on the needs of your current employees. The increased security that it offers to current employees can also help your image.
• Allows for more entry-level hiring. By filling most jobs internally through transfers or promotions, you allow the firm to do almost all of its external hiring at the entry level. This is a good thing because entry-level jobs are cheaper to fill, have a larger candidate pool, and give the firm more time to train and assess “unknown” external hires while they are in jobs where they can do less damage.
• Decreased need for layoffs. Having a large percentage of your workers with a broad set of skills as a result of frequent movement means they are more capable of moving into new jobs or business units. This added capability and flexibility means that more workers can be transferred rather than laid-off from business units that need to be reduced or shut down.
• Individual employee benefits. Workers get more opportunities for development and learning as well as a faster overall career movement because they are proactively placed in the “right” job.

Before you implement any new process, identify the benefits that a firm can receive when the process is operating perfectly. The manager in charge of the process should set a specific program goal for each benefit. They should also identify a key metric for measuring and for assessing whether that benefit or goal was actually met.

Ways to Increase Program Participation

Despite this impressive list of benefits for both the company and the employee, you might still encounter some difficulty in getting managers and employees to fully participate in an Intraplacement program.

Some of the successful approaches for increasing participation that you should consider include:

• Business case. Work with the CFO’s office to demonstrate the ROI and business case to individual managers you want to participate. Make sure they clearly see the impact of participation to their own business results and career advancement. If possible, show how quickly an under-performing manager can improve under the program.
• Program champions. Get a senior executive, CFO, or key business unit manager to “champion” the program as a spokesperson. Let them use their visibility, political power, and influence to spread the benefits of the program. Encourage top-performing managers and employees to speak about the program.
• Recognition. Hold a recognition lunch or dinner sponsored by the CEO for all of the managers and employees who participated in the program. Plaques and certificates can also be handed out.
• Rewards. Making program participation and developing talent part of the bonus formula and promotion criteria will get the attention of your managers. Give lower priority or limit participation by managers who abuse the program.
• Communications. Sending periodic reminders to managers in the communications format they prefer can be effective, if you don’t overdo it.
• Reports. Including “ranked” program participation rate metrics in your standard financial reports not only makes your program more visible but it also serves to “expose” those managers with minimal participation. At the same time, it encourages low performers to ask those at the top of the list how to do better. Also show the correlation between program participation and meeting business results.
• Assignment design help. Provide direct help to managers in developing highly desirable project assignments and their descriptions. Provides samples of excellent (and weak) assignment descriptions, and offer coaching for those managers struggling with the process.
• Leadership development. Work with the leadership development program to make your process an integral part of the development program for new leaders so that they learn how to use it. Make the number of successful rotations that an individual employee has completed a key selection criterion for identifying high-potential employees.
• Top-quality replacements. One of the key reasons why managers are reluctant to participate is because they fear losing productivity when one of their key people rotates out. As a result, if you want to encourage managers to “release” their employees, even for a short period of time, you will need an effective “backfill” process that helps the manager to quickly replace their “lost” skill set. This might include a process for identifying those employees a manager is likely to lose and a process for training replacements.
• How-to materials. In addition to developing program materials that explains the process, these materials should be “pre-tested” with a sample of hiring managers in order to make them clearer and easier to understand. These materials should be available in a variety of formats.

Next Week in Part III: Common Problems Associated With Internal Movement Programs

Author’s note: I am putting together a guidebook tentatively called The Job Rotation, Internal Movement and Stretch Assignment Handbook. If you have job responsibilities in these areas and are interested in volunteering to be an initial reviewer, please contact me at JohnS@sfsu.edu.

When corporate revenues are down or stagnant, talent managers typically shift their focus away from volume hiring to developing and improving existing employees. Executives are always challenged to make the correct “buy or build” decision, but when hiring is frozen (the buy option), obviously the only remaining tool available to drive change in organizational capability and capacity is to “build” your current employees.

Such efforts increase the emphasis organizations must place on project deployment for skill building, mentoring, leadership development, and succession planning to ensure that the organization’s capability and capacity evolve — not deteriorate — during the downturn.

The Goals of Internal Movement Programs

The broad goals of “building” your employees through internal movement generally fit into four categories:

1. Increasing employee impact. A primary goal of internal movement is proactively shifting current employees into areas where they can have a higher impact on corporate results. Generally, business results improve because you move a larger number of your highly skilled individuals into growth areas. This is often called “right job” movement because it emphasizes either temporarily or permanently putting the right people with the right skills into high-impact jobs that more directly impact the things that matter the most during slow business periods.
2. Motivation and retention. Periodically moving employees into new rotations or project assignments can increase their motivation and excitement levels. This in turn can lead to higher retention rates.
3. Leadership development. Identifying and developing high-potential individuals is a major goal for organizations that want to ensure talent is available for manager and leader roles when the need arises. A significant portion of leadership development can be done “on the job” through stretch assignments. Moving potential leaders into different jobs also serves as an assessment mechanism.
4. Skill improvement. Internal movement and stretch assignments among current employees can improve their skill levels or add new technical skill sets.

How Do “First Generation” and “Second Generation” Internal Movement Systems Differ?

Internal movement systems to drive employee development are not new. Most programs in existence today are variants of programs developed decades ago. They operate on tradition, have no direct alignment with business strategy, and are rarely called upon to demonstrate an impact on organizational performance.

These traditional “first generation” internal movement programs either rotate newly hired employees through a static group of rotations, push potential leaders through a series of available assignments, or rely upon self-nomination via internal job boards. Their goal is generally quite narrow: to provide employees a mechanism to move throughout the organization when a manager is not driving movement. They usually focus on “whole job” movement, in that most of the offered jobs are for promotions or lateral moves into other full-time permanent assignments.

Many of these legacy programs were designed to give existing employees a preference over external talent by providing a one- or two-week head-start for internal employees to apply, before external applicants are considered.

First-generation programs are merely operational and provide no strategic benefit. During the last few years, a new or “second generation” of internal movement programs has emerged at firms like Booz Allen and Microsoft. Unlike their predecessors, the second-generation internal movement (intra-placement programs) is proactive. Many rely upon teams of recruiters to identify internal employees who should be moving to new assignments and charge them with finding roles where the talent would be of greater value to the organization. They focus on business alignment, accelerated deployment, and retention of top talent. They consider what’s best for the employee and the needs of the organization to ensure that the placement will create the highest business impact. These new systems rely heavily on technology and metrics to ensure that they improve ROI and business impact.

The Key Elements of Second-Generation Systems

Some key elements that differentiate the newer “second-generation” internal movement systems:

• Proactive. Rather than making the decision to move to an assignment on their own, individuals are approached in order to increase both the volume and the frequency of internal transfers.
• Targeted movements. All movement is directed in order to increase its impact. Employees are not encouraged to make placement decisions based on a whim. Instead, individuals are provided with education and guidance related to what is the best placement based on their career aspirations as well as where they might have the most impact. The decision criteria for selecting individuals makes sure that the placement fits objective criteria including learning, retention, development, productivity, and business need.
• Part-time rotations. The process includes the capability of part-time placements. This allows the employee to stay in their current job while working in another on a part-time basis in order to develop or learn (i.e., one-day-a-week).
• Project opportunities. Internal movement may include assignment to specific short-term projects to fit a business need. Project placements can be full-time or part-time, but in either case, the primary goal is to meet a business need. Project opportunities can be “bid on,” filled by volunteers, or assigned.
• Overload assignments. The process also offers short-term placements for short-term business “overload” needs (seasonal needs, advertising promotions, etc.).
• Global. The system includes development and business impact assignments around the world.
• Remote. The rotations or movements can include virtual, work-from-anywhere assignments.
• “Outside the organization” placements. The process provides opportunities to place employees in joint ventures, at strategic partners, or even within a large customer’s organization.
• Non-obvious placements. The process is designed to increase the movement of individuals into “non-obvious” positions (generally outside their current organizational chart, functional area, or business unit).
• Technology. The entire process is electronic and paperless.
• Rewards. The process recognizes and rewards (both in the form of bonuses and promotions) managers for finding, developing, and “releasing” talent to other parts of the business.
• Metric-driven. The process continually improves its results based on metrics and data.

Reasons Why Effective Internal Movement Does Not Occur Naturally

If you believe in free trade and open markets, then you certainly understand the value of open competition. It’s hard to argue against the benefits of “right job” internal movement. Most understand the benefit of having the most skilled and best-performing player in each key position.

For example, you certainly wouldn’t want a great basketball player like Michael Jordan playing baseball when his highest skill and impact area is basketball. In the same light, you wouldn’t want a highly innovative individual working in a commodity business when their impact could be much greater if they worked in a fast-growth business unit.

Unfortunately, most internal movement systems are neither open nor competitive. Managers and HR policies almost universally restrict actively recruiting current employees away from their current assignments. In addition, many corporations allow managers to have veto power over losing an employee to an internal transfer or may require an individual to stay in a new position for at least two years before they can move to another.

It’s important to realize specifically why traditional “job-posting” and internal movement systems don’t work, so that you can design new systems that minimize the traditional weak points or flaws.

Pain Points in First-Generation Internal Movement Systems

• Talent “ownership” and hoarding. Most managers operate under the mindset that once they get top talent, they own it. It doesn’t seem to matter whether the talent was hired or developed by them; once they have talent on their teams, they are reluctant to let it go. As part of this “hoarding” behavior, they often discourage team members from even applying for internal positions and some even punish those who try to leave for being disloyal. Breaking this selfish and narrow perspective is critical if you are to get managers to adopt the superior mindset, which is that managers need to be talent developers and “releasers” because it’s best for the corporation to have the agility to rapidly move people to areas of immediate need without having to “fight” silos and political battles. The ultimate goal of any internal movement system is to get individual managers to adopt the role of being “talent launching pads” that find, develop, and then disperse talent to other teams or business units. Essentially, every manager accepts the role as a “farm team” that quickly disperses talent whenever it is ready.
• “Passive” job seekers. Individuals who design internal movement systems seem to lose track of the fact that when you are hiring external candidates, there are two basic types: those who are actively looking for jobs and those who are not (the so-called passive job seeker). It only makes sense that once these “passive” or non-active job seekers become employees, that they would retain the same traits that result in frequent movement. If most of your employees are not “active” job seekers, it is unlikely that they will take advantage of any internal job posting or internal movement system without some prodding or encouragement.
• Frustration with the process. Most internal job posting and movement systems are not particularly user-friendly. Unless you’re an insider, it’s hard to find out much about a job opening beyond the position description. Rejected employees seldom receive any guidance as to what they did right or wrong. Many of the jobs are “wired,” meaning that even though they’re posted, the person who will actually get the job has already been determined. Some internal movement systems make the mistake of limiting future movement (you must stay in the job 24 months before you can apply for another internally), and this hurts the corporation when an urgent need opens up sooner. Other systems even require your current manager’s approval before you can apply or accept another internal job, which certainly discourages free movement. The slowness and frustration associated with many internal movement processes often results in the very best employees leaving the company, because external recruiters are more proactive, faster, and do a much better job of praising and encouraging an individual to switch jobs.
• Targeted movement. Most internal movement systems leave the decision of “who should move to where and when” up to the individual employee or manager, neither of which have enough visibility into the organization’s grand needs to drive effective movement. Most employees have no information or even access to a way of identifying which jobs or business units are both the best for their career advancement and for the growth of the corporation. As a result of this lack of information, individual employees are forced to be self-centered, because corporations give little guidance to employees about skill shortages, growth rates, job security risks, etc. This forces employees to make their own choices about when and where to move. A superior process educates them about key corporate needs and areas that best fit employees’ individual career goals.
• No short-term overflow capability. In a rapidly changing business environment, it’s important to be able to make short-term temporary relocations, as well as long-term permanent ones. Unfortunately, most systems aren’t equipped to handle short-term redeployments. For example, if you have a business situation where you have a short-term sudden influx of customer calls, it’s important to have the “overflow” capability of handling the sudden increase in calls. Most systems just don’t have this capability.
• Weak management of the process. Most internal movement systems are poorly managed or in some cases literally unmanaged. They are often operated by individuals with a “clerical mentality.” Some of the first-generation systems provide no candidate screening, so managers must review every internal applicant. Others arbitrarily and prematurely screen out individuals who could have made an outstanding contribution. Most processes use only rudimentary technology, have no customer satisfaction assessment, and have no strategic metrics that directly assess the business impact of ineffective or “too slow” internal movement.
• Focus solely on employees. The majority of internal movement programs focus on the segment of the labor force that is very quickly becoming the minority. Organizations are becoming much more adept at leveraging contingent labor (temporary workers, contract workers, consultants, outsourced labor, labor on loan from strategic partners, etc.). Unfortunately, none of the talent management systems are being retooled to ensure management beyond the basics of procurement for the growing labor segment. Internal movement is perhaps one of the most critical activities governing this segment, as contingent labor is often leveraged to add immediate capability or capacity related to strategic objectives.

Chances are, you may have experienced many of the frustrations and gaps in logic related to internal movement programs identified in part one of this series. Next week, part two will dive into the benefits of improving internal movement systems.

Some of them will most likely slip into history with little impact, but others will become the new way we do things.

Twitter is a recent example of an application that seemed of little practical use to recruiting until hundreds of people began to apply their creativity and developed interesting and useful ways to use Twitter for recruiting. It is being used by many organizations to announce new jobs to those potential candidates who follow them. It is used to help the recently unemployed stay connected and aware of open positions. It is used to communicate with a select group of prospective candidates or to students on a campus.

Here are three trends that I see as potentially significant. Please leave a comment letting us know what you are seeing, and what other tools, applications, or practices you think are emerging.

Simplicity in Sourcing

The first of the emerging trends is a turn to simpler and more basic ways to find talent. With a rise in applicants, many organizations are finding it less necessary to deploy search specialists or engage in complex sourcing strategies. They can focus, instead, on building their employment brand, often by using Facebook or some other social networking tool. They are also screening existing candidates better and are more focused on building a talent pool or community that can be tapped into as needed. In addition, many are tapping their own workforce for internal redeployment and for referrals.

All of this has reduced the need for in-depth Internet search and it has also lowered the need to post to job boards. In organizations with proactive recruiting teams, internal placements may reach as high as 15% while over 30% may come from referrals. With another 20% being sourced by third-party recruiters for reasons of confidentially or because the particular job is very specialized, only a small percentage needs to be sourced in other ways. A good social network page linked to an interactive career site can probably close much of that gap, leaving a tiny fraction to Internet search or job boards.

As I wrote in my article last week, a comprehensive talent strategy combined with internal development can reduce recruiting requirements significantly. I see this as a continued and growing trend, which ultimately means organizations will employ fewer recruiters but highly skilled in networking, relationship building, and who deeply understand the business.

Social Networks

We are seeing the power of social networking in recruiting growing faster than any other segment. Candidates are able to substitute their social networking profile for a resume at some organizations. Jobvite, an emerging applicant tracking tool listed by Gartner as one of its “Cool Vendors for Human Capital Software 2009,” allows candidates to link to their LinkedIn profiles. No need for a resume or to fill out anything. Jobvite also provides an organization a button to place on their career site that lets prospective candidates see the people in their network who already work at that organization. This provides candidates with ready-made connections into the organization as well as a source of information.

Social networks will become the ultimate sourcing and screening tools. Recruiters and particularly hiring managers will be able to see a more 3-D version of a person and get a much better sense of their past accomplishments and capabilities. But there are negatives, and many recruiters are concerned about candidate privacy and discrimination. The truth is, discrimination can and does occur in face-to-face conversations, in interviews, and even over the phone because of accents and the way people phrase things. Every new technology and application has to pass through a maturity curve, which is happening rapidly for social networks. Laws will change and policies will adapt to accommodate them.

I think that over time candidates will find that they are better treated and more completely able to present themselves than they can today. I think that as social networking matures, candidates will find themselves moving from a generic social network like Facebook to more specific ones aimed at an industry segment or a profession, and then perhaps to organizational-specific ones. We will have to wait a while to see what model eventually takes shape, but the roots are growing and resumes, traditional profiles, and static career sites will fade away.

Internal Redeployment

Smart organizations prevent the needless loss of talent by developing barrier-free internal transfer polices, by shifting talent and skills as jobs change, and by operating development and coaching programs to help employees successfully bridge skill and experience gaps.

They are also beginning to practice sustainable talent management — sizing the workforce for sustainability through good and bad times — and filling peak needs with temporary and contract staff. But sustainability is not just about numbers; it is also about having the right skills spread across all employees. This means development is continuous, internal movement common and often, and that a goal is for every employee to be able to function well in three or four different positions.

The natural result of this will be more focus on employee development, the rise of learning portals with relevant information and on-line training classes; the capturing of the knowledge of experienced employees on videos (using storytelling, talking about how projects were completed and barriers overcome, and by sharing technical knowledge that might be useful to those who follow); and connections to coaches and experts willing to answer questions or provide skill training.

We will see that more and more people will stay with a single employer for longer periods of time, as they find it easy to get refreshed and retrained.

Wrong-Way Thinking

There is a common fallacy among a significant number of people that anyone can do anything: a good-looking applicant will make a high performing employee; a high performing employee will make a good manager; or, a highly skilled employee in Job A will also be a highly skilled employee in Job B.

Sorry, folks. We all know from experience this is general nonsense. Stories are legend about a top salesperson or technical whiz who failed as a manager; or, about a marketing whiz-kid who fast-tracked into the executive suite only to crash and burn on the job.

Let’s put this puppy to bed. The only time that past performance in Job A accurately predicts future performance in Job B is when both jobs are require virtually the same competencies. If Job B is different, requires more competencies or better quality ones, all bets are off. In fact, the only reliable way someone might even guess at future performance is to know the employee screwed up his or her last job.

Consider the Peter Principle. If you don’t know the term, either Google “Peter Principle” or look it up here. In short, Dr. Laurence Peter gave multiple examples of how employees tend to rise in the organization until they reach their natural level of incompetence. His message: every time that job requirements change — or an employee changes jobs — there is a strong probability that they will not be competent in the new role. Although Peter uses corporate ladder-climbing as his examples, his principles apply equally to all people holding jobs. The Peter Principle is a classic must-read for every recruiter or hiring manager.

In the next few paragraphs, I’ll explain why the Peter-Principle is alive and well.

Little Observations = Big Assumptions

The world is a huge, complicated, and unpredictable place. If we had to investigate thoroughly every situation before making a decision, we would run out of hours in the day. So, evolution has blessed/cursed us with an unconscious tendency to make snap decisions based on something we learned earlier. For example, we consider taller people to be more skilled than shorter people (e.g., adults are always bigger than kids); we assume that best-dressed applicants will be better performers than other ones (e.g., we equate attractiveness with skill); or, we assume bad job experiences were the applicant’s fault (e.g., blame the victim).

We call this the halo/horns effect: or, use a snippet of data to form an overall opinion (i.e., a spelling mistake must mean incompetence; a charismatic employee is also a competent one; or, graduating from an Ivy League college is better than a public school).

Little observations often lead to big mistakes.

The Interview Hammer and the Applicant Nail

Ask any recruiter manager who relies on (unstructured) interviews and he or she is likely to swear by their accuracy. Look at any sales manager and he or she will say they are a good judge of character. However, when you look at the employees hired by the same person, you will wonder, “What was this guy/gal smokin’ when they hired the troglodites?

There is a major disconnect between being asking get-to-know-you questions and evaluating job skills; industry-wide research shows it to be about 50%. That is, interviews may screen out blatantly unqualified applicants, but it’s a coin-toss whether survivors have sufficient job skills. Ask yourself, did the person who interviewed/hired you really know whether you could do the job or not?

Any recruiter or manager who is only familiar with interviews (or a silly training test), is doomed to believe to think one tool can measure every job skill.

Job Funnels

Jobs are more than titles. They are more like an upside-down funnel. As a general rule, higher-level jobs need more and better competencies. Take sales, for example. A true professional salesperson has exceptional rapport building skills, is skilled asking the right questions at the right time, only makes presentations that fit the prospect’s needs, and can assist buyers to overcome the fear of making a bad decision.

Now, move the salesperson into a management role. The job requirements change significantly. In addition to individual sales skills, the person must become a coach, a planner, and a sales diagnostician. Skills that came naturally as a salesperson must now be broken down into hundreds of teachable elements. In addition to having the right skills, the new manager must be as excited with the thrill of the coach as well as the thrill of the close.

The following job roles point-out a few of these differences:

1. Individual contributors must have skills to do the job without assistance;
2. In addition to their individual contributor skills, first line managers must also be skilled at coaching, planning, and diagnosing subordinate shortcomings;
3. Mid-managers usually require skills in group influence, tactics, analysis, planning, and mentoring; and,
4. Executive managers are usually required to be strategists, navigators, and motivators.

We can’t always rely on job titles to describe job functions. I have seen occasions where a fancy title disguises an individual contributor, as well as complicated jobs with simple titles. The key to successful performance is to know what exactly what skills are required; then, use a variety of structured interviews, pencil and paper tests, and simulations that accurately evaluate them.

Cost containment is easy and is by no means strategic, but leveraging limited resources and restructuring activities to accomplish things you couldn’t do previously can be. Unfortunately, most corporate recruiting managers and many line recruiters are more reactive and incapable of looking at staffing more holistically.

Managing strategically requires recruiters to think beyond immediate requisition loads and transactional sourcing; it requires that recruiters think more proactively, and identify strategic talent opportunities.

One opportunity that routinely presents itself during economic contractions is the opportunity to trade up the caliber of talent in the organization by swapping in top talent into roles currently occupied by average or below-average talent. For socialists and poor performers this strategy seems harsh, but for anyone who has ever played a competitive sport, it makes perfect sense.

As global markets open up, competition on every front in business is becoming more cutthroat. In an era where an organization’s sustainability and innovation capability are largely tied to acquiring, developing, deploying, and motivating talent, a talent-swapping strategy could mean the difference between mediocre business performance and explosive business performance.

What Is A Talent Swapping Strategy?

The concept of talent swapping is borrowed from the professional sports industry. In sports, winning is everything, and it is a common practice for team management to externally seek out a “superior” player in a key position to replace a struggling player. When the team finds an available star, they “SWAP” or replace their struggling player. After the swap, the team still has the same number of players (no additional headcount), but has also dramatically improved its chances of winning.

When applied to the corporate world, a SWAP (Strategically Waving Average Performers) initiative proactively replaces poor performers in a key job only when an arguably/measurably better candidate has been identified and successfully recruited by the talent management function.

Factors Making Talent Swapping Possible

Talent swapping is a strategy that can be employed anytime, but it is much easier for organizations during times of economic contraction for a number of reasons, including:

• Talent Availability – When unemployment is low, chances of landing a true top performer without a fight are low, but as unemployment rises, so do your chances. During economic contractions even top-talent magnet firms face challenges. As they shutter growth initiatives, cut development budgets, restrict internal movement, etc., the ties that once held top talent firmly in place loosen, enabling firms that couldn’t compete before to make a compelling offer.
• A focus on headcount – These days more and more CFOs have a background in accounting as opposed to finance, so cost-containment is in vogue. Across the board cost-containment strategies frustrate top talent, and theoretically cut recruiting functions off at the knees as requisitions dry up. A talent swapping strategy restores the need for recruiting and sends a message to top performers within the organization that despite cost containment the organization is working hard to advance working conditions and remove below-average performers that hold top performers back.
• A focus on productivity – In years past, the pressure from consumers for new products and innovations waned during economic contractions, but that is no longer the case. Product lifecycles have gotten shorter and shorter as demand for innovation has skyrocketed. As a result, organizations are under tremendous pressure to increase workforce productivity and innovation despite a contraction in their revenue streams.

The Advantages of Talent Swapping

The first obvious advantage of talent swapping is that it is a performance improvement strategy with a very clear objective, improving the organization’s overall ability to perform. However, there are a multitude of other advantages, including:

• It provides recruiting leaders with a rare opportunity during low hiring times to demonstrate positive business impact.
• It provides individual managers with a means to manipulate their team structure and capability without impacting headcount during a time when most changes are frozen. (During economic contractions underperformers are often kept on much longer than they normally would be because many managers believe that even a poor worker is better than no worker at all (i.e. a vacant position).
• It sends a clear message to all employees that continuous improvement of skills and ability to perform is as much an individual’s responsibility as it is the organization’s, and provides real consequences for those who ignore the mandate.
• It challenges managers’ reluctance to fire even the worst-performing employee by allowing them to postpone the hard decision to terminate a team member until a clearly superior replacement has been found and hired.

Swapping Must Be a Data-Based Activity

Not all managers have their organizations’ best interests in mind all of the time (some might argue that the vast majority of managers never have their organization’s best interests in mind, but that is another issue).

As a result, it is important that organizations employing a talent-swapping strategy rely heavily upon data when making decisions about where to apply talent swaps. Recruiting leaders need to work closely with hiring managers and the performance management function to identify key jobs that have incumbents in them, that after numerous attempts to improve their performance have proven incapable of becoming top performers. A business case must be developed with the full involvement of the manager, the performance management function, the recruiting function, an executive program sponsor (CFO/CEO/COO) and legal counsel for each swap proposed.

What About Legal Issues?

Whenever you release or terminate workers, there is some risk that they will become disgruntled and sue the organization arguing one thing or another. The key here is to make the mandate for the program known to everyone, keep the process free of bias, build a documented case for each transaction, and treat the outgoing employee with respect and dignity throughout the process.

Should your legal counsel or other in HR pose objections, it is important that senior leaders remind everyone that “it is not anyone’s job to tell the organization what it cannot do, but rather to find a way to do it!” While people are not machines, they are vendors and organizations routinely “swap” vendors and suppliers based on newly available prices, competencies, and services.

Action Steps

Talent swapping is relatively easy to understand and to implement. Some key action steps might include:

1. Begin by calculating the long-term economic consequences of keeping a below-average performer, compared to the increased performance level of an above-average performer (the difference is known as the performance differential). If you carefully calculate the dollar value of the performance differential between a top performer and the “targeted” below-average performer, you will often find that it’s two or three times greater, resulting in over $100,000 annual difference in output. Next, multiply the costs of keeping a weak employee over the number of years that the bottom performer is likely to remain at your firm to get the total dollar value of swapping an employee.
2. Develop a formal plan and get the necessary buy-in from HR, performance management, and your recruiters. Be sure and run it by a few operating managers to identify any potential issues or concerns they might have.
3. Get the CFO’s buy in for the talent-swapping strategy.
4. If possible, get a business unit head to conduct a pilot and to “champion” the program among their colleagues.
5. Develop a process for identifying the key business units and the jobs within them where replacing below-average talent with top talent can make a significant impact upon the business. Talent swapping is not appropriate for every position.
6. Within those jobs, work with performance management and individual managers to identify the weak performers to target. Work with “legal” to see if there are any further actions that need to be taken before the employee is deemed eligible for a SWAP. Include a diversity component to ensure that diversity levels are maintained.
7. Define the minimum skill set (skills, capabilities, and experience) that the potential new hire must have to become “eligible” for a SWAP.
8. Develop a continuous sourcing strategy for the targeted positions. Also be aware that using traditional employee referrals to identify candidates might cause problems if employees realize that by making referrals, they are helping to replace an employee who might be a friend.
9. Begin building a “who’s-who” list of the names of the top talent in your industry who might be amenable to taking one of your targeted jobs.
10. Conduct “relationship recruiting” with these key individuals from the list. This might mean calling them occasionally, periodically sending them an e-mail newsletter, or inviting them to your company’s events.
11. When you become aware that one of your targeted candidates is now available, recruit them and offer them a position. If they accept your offer, you then notify the performance management function to begin the release process of the current poor performer. When appropriate, and especially in certain international locations, consider offering the released worker a financial severance package for signing a legal release.
12. Bring the new candidate on board.
13. Continue the process until you have substituted top hires for each of your targeted positions.
14. Remember that you can also swap talent “internally” by moving top performers from low-impact to high-impact jobs.
15. Another option to consider is rather than waiting to release workers who are clearly bottom performers, instead shift them to a contract or contingency basis. This “temporary” status allows you to more easily release them if there is a need for a layoff, a performance termination, or a talent SWAP. If their performance improves, you can obviously shift them back to a more permanent status.
16. Run the metrics and then calculate the overall performance improvement and the dollar impact as a result of the improved performance of your new hires, compared to the released employee.

Conclusion

I often encourage managers to look at the best practices in sports management because there are few other fields where the value of having top talent is so easily seen and appreciated. In sports, the intense competition and publicity causes managers and directors of player personnel to identify and implement some extraordinarily powerful talent-management practices that can also be applied to the business world.

The talent SWAP approach is a prime example of one of those best practices. In sports if you have a losing team and you want to become a winner fast (because there are limits on roster size), often your first step is to change the players through talent swapping.

It’s no secret that managers are reluctant (to say the least) to fire workers (even bottom performers). Talent swapping makes firing more palatable to managers because they don’t have to act until a quality replacement is available. CFOs see the value of the program because it increases performance, without increasing headcount. Recruiting managers should support it because it provides them with an important and visible role during economic downturns, when recruiting can be seen as unimportant or unnecessary.

I urge you to consider adding it to your repertoire of recruiting strategies. Only socialist HR types are likely to be afraid of it, and you should never let them run your business. Instead of being reactive and waiting for requisitions to come across your desk, now’s the time to be strategic and proactive. Think about it, what could be more obviously beneficial to a firm then replacing a group of “Turkeys with Eagles!”

Most firms strike a balance between buying and growing, although little if any strategic planning guides their decision. However, during tight economic times when recruiting budgets are severely restricted or even frozen, the emphasis almost always shifts dramatically toward “growing talent.”

If you are a recruiter or recruiting manager and you want to increase your impact on the business, a downturn is a signal that you should begin to focus on succession planning.

Why?

Tight economic times do not change the management demands for most organizations; in fact, decisions made during such periods will have a dramatic effect on how organizations can recover when the economy turns. So ensuring that the organization doesn’t have any critical holes in their bench for both leadership and mission-critical roles is a vital concern.

It is not uncommon for every employee to be asked to “do a little more” during hard times, which makes this a great time to develop talent using on-the-job projects. By speeding up “internal movement” and leveraging stretch assignments, managers can ensure that the right leadership and mission-critical talent is developed and ready to assume key roles that either open up as a result of turnover, retirement, or business growth.

If you see a slowdown coming in hiring volume, now’s the time to shift your focus toward succession planning.

What is Succession Planning?

Organizations use succession planning to help mitigate the risk of a vacancy occurring in key management and leadership roles that could impact the organization’s ability to perform.

In more strategic organizations, the scope of succession planning is expanded to include high-impact and mission-critical roles throughout the organization.

The activity looks at talent within (and in a few rare cases outside the organization) that can be developed to step into key roles on a timeline consistent with an anticipated vacancy. In essence, it looks to develop key players who can sit on the bench until needed. Positions with two or more possible replacements in development are considered to have a strong “bench strength,” while those with only one or none have little or no bench strength.

Why Tap Recruiters for Succession Planning?

While development for roles covered by the succession plan can include traditional training, more and more organizations are adopting a development approach that relies heavily on coordinating the acquisition of new skills or capabilities via rotations through roles that enable on-the-job learning and mastery of those key skills.

As product lifecycles have gotten shorter, so too has the timeframe with which organizations can develop talent. A few years ago, a manager in development may have had to sit in a role for 48 months in order to experience a full product cycle, but today that experience may only require a 10-14 month stint.

Given the changes in workforce demographics, global competition, mergers and acquisition volume, and technology, the act of developing through rapid redeployment has become a profoundly popular topic among senior leaders.

Recruiters spend their days identifying talent ready to assume roles that provide similar or greater responsibility, often finding talent overlooked or neglected by their own organizations.

Because many organizations have managers who fail to develop their talent, or hold back employees ready for more, it makes sense to let recruiters turn their attention inwards, identifying people who can and will assume greater roles externally if not tapped internally soon. (Before you dismiss this case as not applying to your firm, remember that study after study identifies bad managers and lack of challenge/opportunity as the number one and number two reason people leave a job.)

The Critical Goals of Succession Planning

No program can be successful unless everyone involved clearly understands the desired goals and outputs of the program. The six strategic goals of succession planning include:

1. No business problems caused by a lack of leadership/mission critical talent. The goal is to assure the attainment of business goals because the right talent has been identified, rapidly developed and placed in the right job exactly when needed.
2. To identify talent gaps. To identify possible future talent shortages and gaps by comparing “what we have now” to “what we will need.”
3. Identify individuals with potential. To identify the individuals within the organization that have the highest probability of successfully becoming future leaders or key contributors in mission critical roles within the firm. The best plans identify individuals that would not fall in the “immediate vicinity” of the targeted leadership job when viewing the firm’s organizational chart.
4. Speed up development. To define the best series of jobs or “development paths” through the organization that results in the maximum learning and development speed for each of the targeted potential leaders.
5. Minimize leader turnover and frustration. To increase performance and retention rates among developing leaders because of the way they are treated as part of the succession plan.
6. Discourage the hoarding of leadership talent. To set up a series of metrics and rewards that discourage managers from hoarding top talent and instead, speed its development.

Unfortunately Most Succession Plans Are Weak

Succession planning in most organizations is a joke, existing as little more than an organizational chart identifying potential vertical moves into leadership roles. (More often than not, when actual moves do occur, rarely is the plan even consulted.)

People noted on the plan will almost always go through a leadership development program designed and delivered by corporate trainers that may or may not involve some simulation or case study work. This type of program is common, often coordinated in an ad-hoc way, rarely produces world-class results, and most certainly does not live up to the evolving expectations of senior leaders in leading-edge companies.

Succession planning programs under-perform because they are not designed or managed as systems. A system takes inputs, runs them through a series of processes, and produces a predicted output.

One of the best ways to design a succession plan (or any strategic HR process) is to begin the design process starting at the backend, identifying each of the desirable outputs of the process. Generally, there is an output or success measure for each of the stated program goals. The logic behind this “backward” process is simple: you need to design your succession planning program and its key elements not in isolation, but instead by tying program features directly to the desired program outputs.

By clearly defining the desirable outputs, you let everyone know the key purposes of the process, as well as how success will be measured.

Checklist for Assessing Your Succession Plan Using Metrics

Succession plan effectiveness measures can be broken into two basic parts and five groups. The first part covers usage and design, while the second part covers output or success measures.

Part A Operational Measures

Group 1 — Usage factors:
The target audiences for a succession plan are those managers who are responsible for making promotion and lateral transfer decisions for leadership jobs that are covered by the plan. A succession plan can’t be successful if it’s not distributed, read, and actually utilized by managers who make such decisions. Some manager-usage metrics to consider include:

• It is a written plan (if a plan isn’t written, it can’t be distributed).
• Percentage of the target managers who have received a copy of the plan.
• Percentage of targeted managers who have actually read the plan.
• Average satisfaction rate among users. (Low satisfaction rates can lead to low usage among hiring managers. Low satisfaction among plan employees can lead to having other employees be reluctant to be placed on the plan.)
• Percentage of managers actually using the plan for “movement” decisions (the plan cannot be considered successful unless it is actually used by most managers to determine which individual should be promoted or transferred into a particular leadership position).
• Percentage of all movement decisions in which the plan was utilized (this is similar to the last measure, except it covers the percentage of movement decisions in which the plan was used as a guide).

Group 2 — Assessing whether your plan contains key design features:

You automatically limit the capabilities of any succession plan when you omit some of the essential design features mentioned here:

• Focuses not only on promotions but also on progression and movement for development purposes (calling it a “progression plan” is more appropriate because some movement options in the plan should include stretch project assignments, lateral transfers, and job rotations).
• Each participant has a written individualized development, challenge, and learning plan. (Individual plans allow the employee to self-guide their own progress).
• Uses multiple sources in selecting individuals for inclusion in the plan. (This increases the likelihood that a “less obvious” candidate will be included in the plan).
• People on the plan are told they are on it. This transparency also allows excluded individuals to challenge their omission.
• The plan provides direct rewards and recognizes managers who support the plan. Rewards and promotions for managers should be based on their record of successfully developing individuals that are eventually included on the plan. Managers should also be rewarded for having their current direct reports placed on the plan, as well as for periodically releasing and not “hoarding” their employees on the plan.
• The plan includes an element to “retain” and improve individuals who remain on the plan but who have not been periodically moved or promoted.
• It includes a “Right Job” movement element. (Right Job movement means that the plan not only speeds up the movement into jobs but it also ensures that the position includes the appropriate or “right” elements that fit the candidates development needs (i.e., right manager, right motivators, right time, right team, etc.)
• It includes external candidates to spur competition (having external candidates included in the succession plan can put pressure on developing employees to improve beyond normal expectations).

This concludes part one of this series. In the next part, the focus will shift away from metrics relating to program operations to more strategic measures of succession planning output or success.

• Non-compete clauses
• “Color tests”
• Internal recruiting
• Resume search/software tool
• Working from home
• Job board debate

Non-Compete Clause
Non-compete agreements are always a hot topic of debate on the ERE discussion boards. This week, Les Noonan wants assistance on updating his company’s non-compete clause. David Rees offers some practical advice: get a lawyer. Although not an advocate of non-competes, he understands that it can be a complex issue since most states have very different rules. He also wonders why “employers are willing to constrain the freedom of a departing employee for the purpose of protecting their financial interests.” Les agrees with David’s comments and clarifies his request. He is actually looking for advice on a non-solicitation agreement. He wants to protect the “time and money” his company has invested in their current clients. Seems like a fair request to David but Nick Cobb feels that companies need to focus more on retaining their current employees. Maureen Sharib directs our attention to a recent case in California that you might want to check out if you are facing similar challenges.

Wednesday’s Question of the Day
I wanted to know if anyone thinks “The Color Career Counselor,” CareerBuilder’s latest tool that links job choices to favorite colors, would benefit recruiting. David Rees does not feel that this tool is validated. “Can you imagine going to an interview for a career as a computer programmer and they ask you why you choose the profession and you say…’well…I have always loved the color green.’” He later takes the test and comes to the same conclusion. Paul Davenport agrees that it is just for fun, not based in reality. Stephanie Wolf disagrees and feels that this tool can benefit college students who may feel lost with a career decision. John Kennedy wants to know if there are any tests that can predict job-based personalities. You might want to read John Zappe’s article from August 13 on the topic. Just curious…did anyone else take the test?

Internal Sourcing
David Hafernik wants to know the general policy of “internal recruiting” in most companies. Can employers recruit away from another internal manager? Are there limits? Pam Claughton worked for a large bank that had strict rules around internal recruiting. Employees had to work for a certain amount of time before they could post their resume internally. However, recruiters had great success working with the hiring managers and their direct reports to locate candidates from direct competitors. Each employee was then rewarded with an employee referral bonus. JB Smith agrees with Pam and adds that “we posted all positions internally for the first seven days then posted for external candidates. Employees were still allowed to apply after externally posting.”

Resume Search/Software Tool
Amit N is looking to purchase “resume search software” that will search multiple job boards, and wants to know if anyone has suggestions. According to Ashley Schettler, the decision will depend on the specific industry. She recommends TalentHook for IT but needs a more effective tool for recruiting in health care. Ken Kimbrough disagrees. TalentHook is “superb” and should generate resumes for all industries. According to Ken, “if you had databases, sites, etc that you wanted to search, they would accommodate your desires without much hassle.” Carly Eriksen recommends AIRS Sourcepoint. Does anyone else have other suggestions? We would love to hear them!

Work From Home Jobs
This topic always interests me since I work from home! Mack Will is also interested in learning of any “legit work from home jobs other than virtual recruiting.” Apparently, this is a very popular nationwide topic. Tim Esse referenced a local CBS show that addressed the topic and Christy Grimske reminded us that Google’s “Rat Race Rebellion” publishes a weekly list of legit work from home jobs. Susan Carson and Cassandra Firnstah both shared success stories of a virtual advertising company run by a group of women, and a customer call center.

Monday’s Question of the Day
The debate on whether or not job boards are obsolete is still going strong! It’s not too late to post a comment.

Whenever I mentioned his name, many would respond, “Oh, John! He’s always helped me out when I had a problem.” Or, “He’s one of the best-connected people I know in the company. If you need something, he’ll know where to go to get it.”

He was smart, helpful, and connected, and that’s the formula we all preach about how to succeed.

Yet, John languished in a dead-end job that was 80% clerical. He was passed over for promotions and new opportunities because everyone assumed he was happy where he was and he never sought new positions. He did not manage up well, nor did he want to. He was hoping that he might be recognized for his skills and abilities.

While some might say he lacked ambition, what John really suffered from was a lack of self-confidence and an equal lack of encouragement. I worked with him and his boss, and we eventually found a position with more responsibility where he thrived. He sought out mentors from his network and he learned the key elements of the job in weeks. In the past, whenever we hired an outsider person for this type of job it took months for them to fully understand the intricacies of the job and who to go to for advice.

We have all known people like John. In fact, our organizations are filled with people with talent, skills, and connections who may lack the self-motivation or confidence to try something new. Many are pushed down by managers who use these employees to bolster their own weaknesses and others, like John, choose to not move.

But in times of change, economic downturns, or mergers, knowing who your best people are can affect product development, profits, and sales. Many times, this hidden talent is your lifeline to success versus failure. The challenge we all face is how do you identify these people and how do you “recruit” them into new positions with significant potential risk?

Here are some ways to find these people and some strategies for convincing them to make the move.

Simply Ask is Method One

Ask every hiring manager you work with to name their two or three best employees who are also the longest serving. Their recommendations may uncover some great talent. Combine that with active listening and I believe you will find many more talented people than you expected.

That is actually how I discovered John. His manager kept telling me that John would handle this or answer this question, and because John had been with him for so long, he knew all the ins and outs. This set off my radar and I made it a point to get to know John better.

Selling the Risk

Frequently, people like John are afraid to move because they are so deeply skilled at their current job that change is uncomfortable. They are afraid they will fail and lose their job or that they are not capable of learning the new skills required.

To sell them on a change you either have to provide training and coaching or offer them the ability to return to their old job after 30 or 60 days. This is probably the time it will take to find someone to fill the old position; anyway, so not much is lost. It is important to provide a transition step or process to ease their fears and increase the chance for success.

Why bother to do this at all? It’s very simply a matter of cost and benefit: the years that person has worked at your organization and the knowledge they have, and leveraging it to further add to the organization’s talent pool, you have saved thousands of recruiting and training dollars. No internal investment in these people is going to cost you as much as hiring an unknown person from outside.

Provide Internal Development is Method Two

Just asking may not be enough. Many organizations have offered low-risk internal development programs just to engage this type of individual. IBM and HP and many other organizations have over the years offered special training programs. These are often designed to fill some looming skill shortage in a fast, efficient, and usually successful intensive development process.

IBM used to ask managers to recommend employees who met certain basic qualifications for these programs. Then internal recruiters would explain the programs and enroll the employees with a guarantee of continued employment no matter how they did and a promotion if they did well.

Needless to say, this worked well and thousands of IBM managers, programmers, and salespeople came into their jobs through these programs.

The Benefits

Payback is huge and ongoing. Employee morale goes up and the word spreads to the street that the company takes care of people, trains them, and doesn’t spend excessive money on external recruitment when good people are under their feet.

Turnover almost disappears among those who are trained as the number of 25-40 year employees of P&G, DuPont, HP, IBM, and GE all attests.

Force Them to Appear is Method Three

The third way to find these people is to force managers to make promotions and move people up or out. General Electric may be the most famous example of this philosophy exemplified by their mantra to promote the top 10% and move the bottom 10% out.

While not everyone agrees with this, it does have its merits. It forces managers to think about who performs best and who has the skills and abilities to do more than they are currently doing. It forces these managers to convince their employees that a move is positive and it forces General Electric to have stellar employee development programs. But these programs are only as good as the criteria used for selection and the persuasive powers of the manager.

Recruiters have the responsibility of thinking about themselves as talent managers and strategists. Your job is to ensure the supply of quality talent to your organization at the lowest possible price. Finding those already inside your firm is the place to look first, not last, and developing the resources and processes to do this is becoming a critical skill for talent leaders.

The other major hurdle is that HR policies that were written in a time when labor and skills were abundant, and turnover low. These policies are often restrictive and discourage employees from moving. In fact, I was at a company a few days ago where employees are not allowed to apply for jobs that are posted on the Internet unless they have an okay from their manager and have been in their current position for at least six months! Surprisingly, most of the HR staff saw no problem with this practice and were even supportive of it, despite the fact that there are no similar constraints on an employee looking outside the organization for a position. What they have done, in effect, is create a disadvantage for themselves for no discernable reason other than a belief that “this is what should be.”

Unfortunately, we live in a real world where the market rules. HR has to be responsive to that market or lose good employees who most likely would have stayed if they could have made a move. Today, more than ever, employees are investors in our organizations and they can choose whether or not they share their expertise and skills with us. Each employee has a built-in return on investment meter that is constantly sampling the atmosphere and deciding if she is gaining or losing from a continuing association with their organization. As long as the employee feels that they are gaining skills and are being stimulated, they don’t look for different jobs and they contribute to the best of their ability within the system. But whenever the balance shifts even slightly, employees become vulnerable to any offer that may present itself. That is why having managers who have a history of good employee loyalty and low turnover are so valuable. Internal Recruiting I define several types of internal recruiting:

• Active: When an employee chooses to look for a new position
• Passive: When recruiters can search a skills portfolio of current employees and then tap a current employee on the shoulder for a possible job
• Manager-driven: When an employee’s manager sees the potential someone has or senses a lack of energy and suggests a move
• Program-driven: When an organizations creates development opportunities for internal people and recruits current employees for development and eventual placement in new positions.

I will focus the rest of this article on the active internal candidate, but all recruiters and HR representatives should also consider the other types of recruiting and make sure they have policies to support each. Employees become active because they are looking for a new challenge, aren’t happy with their current assignment or boss, or feel that the new position will offer more of a return on their investment. To deny them the opportunity and place HR policy in their way is not only a sure way to lose them to someone else, it is also just plain dumb. Happy employees who are being treated as investors will be unlikely to leave. Recruiters should be working closely with HR and hiring managers to identify good employees and help them find ways to continue contributing to the organization. Sometimes this means backfilling positions or moving less experienced employees into jobs that an outside person might be able to do. Here are five things every organization and HR group be doing or should have in place today:

1. Abolish all policies that limit or control how or when employees apply for positions within an organization. Policies should encourage managers to let employees leave for new opportunities and should encourage them to provide development opportunities. Organizations such as Hewlett-Packard, IBM, and General Electric have faithfully followed this strategy for decades and believe that it has directly contributed to their financial success. The basic philosophy should be that every employee has the same or better employment opportunities inside the company as exist in the open marketplace.
2. Earmark certain jobs as entry-level, and fill these jobs with internal employees who want to become cross-functionally trained and learn a new set of skills. I have seen an organization take an associate buyer position and hire employees into that who have had experience selling the products, but are not trained as buyers. A mentor helps guide them, as do incumbents in those jobs. This often happens with sales positions, some manufacturing jobs, and within HR. Many other functions can offer similar opportunities to employees. In the end, this practice is as cheap as recruiting in new people who do not know the products, the culture, and who do not have a network of fellow employees to help them. In most cases, existing employees reach the required productivity levels sooner than the “experienced” external hire because of these other skills.
3. Develop a communication and education program for managers that explains the business case for internal employee transfer. It is not very hard to prove the cost of turnover and to show that it is often much higher than the cost to train a current employee. It is not hard to show the high cost of recruiting and the subsequent cost of training and assimilating a new employee who may not turn out to be as good as thought. It is not hard to show how great companies like IBM, Procter and Gamble, Johnson & Johnson, General Electric, and hundreds of others have encouraged and supported internal transfer with forward-thinking polices, good education and development, and with a reward to managers who hire internally and who allow their people to move on. Making a business case and educating managers is a necessary and critical part of any program that is successful.
4. Create policies that allow employees to try out new jobs for a short time to see if they like it and can do it well. Let employees share their job with some one else, so they can sample more than one kind of work or more than one project. Foster a spirit of sharing expertise and skills, not of owning the mind and body of someone.
5. Develop training programs aimed at providing people for specific and perhaps hard-to-fill positions. Cisco did this a few years ago by training people to be HTML programmers in an intensive several-week long program. IBM has had numerous programs which take in a cross-section of employees and train them to be programmers, salespeople, and so forth. It is often more cost effective to develop the talent you need than to recruit it. A recruiter’s job should be partly one of providing advice on the availability of talent and on whether it would be better to develop it or recruit it.

Developing a cross-functionally trained, broadly-skilled workforce is a strategic advantage. It gives your organization flexibility in dealing with market changes and allows a rapid response to new directions. Practices and policies that ignore or restrict or limit employee transfers and change within an organization are leftovers of organizations that are hierarchical, paternalistic, and slowly fading away. A 21st-century organization removes barriers and builds networks that power creativity and growth.