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Tailored training in a transition
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It may sound paradoxical to talk about the ‘perils’ of promotion in the same breath as talent retention, considering that talent assessment and promotion often go hand-in-hand. Yet with the obvious benefits of accepting a promotion and moving into a new role, department or business unit, comes a certain degree of vulnerability and uncertainty for the individual.
This vulnerability is equally true for the business itself, and yet this concern is far less widely recognised than the impact of promotion on the individual. Transitions are, in fact, critical times for the business, when small differences in an individual’s actions can have a disproportionate impact on the function of a particular business unit (for good or bad). Failure to create momentum during the first few months of a new post can create an unanticipated uphill battle thereafter, and even the brightest talent can fail. For the business, value is effectively ‘consumed’ by a newly promoted individual, and yet time is frequently written off as the honeymoon period or ‘getting up to speed’.
American Express (Amex) recognised early on that it needed to focus on managing the transition period for newly promoted leaders. This would ensure continuous development and retention, particularly for those in unfamiliar roles at a high-risk stage in their careers, experiencing greater exposure and responsibilities. Not only was Amex determined to properly nurture its talent upon promotion, but it planned to evaluate the impact it had on the bottom line and calculate its return on investment.
It can take an average of six months for a new employee to reach a ‘breakeven point’ – that is, the point where they are contributing value to the organisation. Michael Watkins, a leading expert on critical transitions and author of The First 90 Days, provides a framework for transitional leaders to navigate their first three months in a new role. The Forum Corporation, an organisation aimed at driving business performance through learning, worked with Watkins to create a development programme that helps individuals work more effectively through these important stages of their new role.
Building upon this expertise, Amex developed a broader framework to approach the transition process, moving from a sink or swim mentality to viewing transitions as a curve of progression and providing new leaders with structured help along the way. The aim was to develop the individual’s skills, within the first three months of a promotion. Rather than provide conservative training at an ad hoc point in an individual’s career, Amex provides tailored training at the most relevant and critical times, allowing leaders to develop necessary skills more quickly and benefitting the individual, their department and the wider organisation.
About a quarter of managers within large organisations move into a new role every year – a transition that will affect at least a dozen other colleagues, either directly or indirectly. For new employees, it will take them considerably longer (about 18 months) to fully adjust to a new culture, and the chances of failure are even higher, depending on the seniority of their position and the type of job transition they are facing.
American Express put its critical thinking to the test.
The bright stars of American Express: context is king
For Amex, the challenge was twofold. First, it had recognised that new mid-level managers can inadvertently drain value from the company as they transfer into their new roles. But equally important was the competitiveness and change of the wider marketplace for financial services. Amex knew it needed engaged and experienced employees to drive its position in the marketplace.
The company focused its efforts to accelerate the transition of new leaders, particularly for first-level vice presidents who were at the highest-risk stage in their careers. Consequently, 50 participants were selected from mid-level management (first-level vice presidents and directors) to participate in new leader transitional training conducted by Forum, typically within three months of being in their respective new roles.
The programme design began with an in-depth understanding of expectations and clear definitions of desired achievements for an accelerated transition. This was coupled with interviewing participants before their first 90 days began. The outcome of these discussions resulted in identifying four key behaviours that needed to be addressed: personal goal setting; structuring and developing the new team; forming the right partnerships and coalitions; and maintaining more effective dialogue with their leader.
In shaping the programme, the need to accurately diagnose the environment or context of the new position became very clear. As employees tend to rely on previous experiences and successes, a sticking-point is typically that employees arrive with a pre-planned or universal strategy, rather than properly diagnosing the situation at hand. Michael Watkins calls these ‘transition traps’ – things the individual does that inadvertently distract them from the critical aspects of their new role.
To help leaders address transition traps, Amex provided detailed training with 50 Amex leaders to help them diagnose the ‘familiar’ situations they may find themselves in for their new role using the STaRS (Start-up, Turnaround, Realignment, Sustaining Success) framework developed by Watkins.
For example, in ‘starting up’ a new project, it is vital to assemble the capabilities (people, funding and technology) to lift a particular product off the ground. Similarly, ‘turnaround’ roles are equally resource-intensive as you have little on which to build. By contrast, this will be very different to a ‘sustaining success’ model, where you need to diagnose what is making the business unit successful and both preserve and build upon a winning culture and methodology. With almost three-quarters of those Amex employees attending the programme either being promoted to a higher band within their business or to a completely new business unit, it was vital for them to make a successful transition in their now unchartered territory.
To quote Watkins, “a failed transition is an unfortunate coincidence between an individual and a situation”. The person you promoted did not suddenly become a bad leader – they just failed to grasp what was different about the new role, their team and where their past practices are helpful or potentially derailing.
This approach was fundamental in terms of Amex’s newly promoted employees properly engaging with their new role. While a new ‘eye’ within a particular unit or within a new role may correctly observe issues that need solving, they often find this difficult to achieve because they have typically not taken time to diagnose the situation at hand. Their solutions are often based on how they previously operated, a kind of ‘it worked then, it must work now’. New managers, however, need to take a conscious step away from their old position in order to approach their new challenges with a fresh perspective.
Communicate, communicate, communicate...
Emphasis was also placed on identifying key behaviour patterns, as well as context. In this, Julie Staudenmier, vice president of talent acquisition and development at Amex, felt that the timing of training had a significant impact on results. It is most beneficial for leaders to enter the programme within three months of their start date to help overcome some key behaviours that worked well in a prior post.
In particular, training was focused on improving the way in which incoming managers communicated with their bosses – a key aspect of accelerating their transition and enabling them to bring value to the company. This took the form of shaping the key conversations newly promoted managers needed to have with their bosses in their new role.
Addressing communication early on and structuring the necessary dialogue with more senior staff was imperative to create clarity and mutual expectations. Leaders are provided with a series of questions to help create this clarity.
Do you and your boss have the same perception of the business situation and the associated challenges?
What expectations do they have of you?
Is your boss aware of what you expect from them?
If they are a new boss to you, do you know their preferred working style? Should you use email, telephone or face-to-face meetings to contact them
How will this job contribute to your personal development?
The training also focused heavily on creating the right relationships and partnerships within the team, which Amex felt was vital even to those who had been promoted within their existing business unit. Whereas embarking on new partnerships are typically seen as the unenviable job of ‘the new kid on the block’, Amex knew that in developing its talent, it needed to focus equally on existing relationships and help new leaders ‘fine tune’ or appropriately adjust their behaviour in this new role. Thus, classic pitfalls are avoided such as forming the wrong relationships – typically choosing the people you feel drawn to personally, rather than making sensible business decisions about those with whom you need to surround yourself to succeed.
Return on investment for American Express
From the start of the process, American Express was keen to evaluate the impact of the programme both in terms of participant feedback and return on investment (ROI). Placing a monetary value
on people issues is a debated topic but Dr Paul Leone, with the assessment and evaluation team at Amex, developed a ROI method to create a common language between human resources and the businesses.
The results of the assessment were extremely positive:
nine in 10 participants reported the experience as valuable for driving the four key behaviours (identified earlier) of personal goal setting; structuring and developing the new team; forming the right partnerships and coalitions; and maintaining more effective dialogue with their leader;
eighty per cent of the participants reported these same four key behaviours had enabled them to transition more quickly and add value to the business sooner.
Using this information, Leone sought to assess the ROI by calculating the average acceleration in transition and assigning a cash value to it. By using information from the assessment and the participants’ feedback, Amex calculated that the average new leader accelerated their transition by 1.2 months, meaning a transition period just under five months compared with the classic break-even point of six months for a newly appointed employee.
With this calculation, Amex used a conservative estimate that the programme resulted in a month of added value or the equivalent to one month’s employee salary. From this, Leone calculated an average ROI of 300 per cent on the investment made in the programme.
What this means for American Express
Helping new leaders through an accelerated transition also creates other desirable outcomes for the leader and their direct reports. As Leone points out: “A 300 per cent ROI may be significantly underestimating the impact of the programme because accelerated and more efficient leadership will impact each of these leader’s direct reports – allowing them to add more value sooner.”
Amex has also found that its staff retention among mid-level leaders has improved enormously. “We are committed to ensuring that our newly promoted leaders have the tools to be successful during these transitions,” said Melissa McCoy, an Amex manager in the Leadership Learning & Development function.
Most importantly, Amex feels it has the participant feedback as well as the clear financial results that demonstrate the worth of investing in new managers and how these employees integrate efficiently into a new working culture. Choosing the right time to coach your talent, and creating a framework by which you can measure the impact is key in human resource’s role as a strategic business partner. Helping new leaders deal with new challenges and improving communication channels with leaders has perhaps never felt quite so good on the balance sheet. |
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