Marc Effron’s Succession Planning Secrets: The Talent Production Line

Felicia Shakiba  00:04

Hello, everyone. I'm Felicia Shakiba. And you're listening to the CPO PLAYBOOK podcast. Join me and my guests as we feature insightful conversations with HR leaders, people scientists and executives from diverse industries and functions, offering valuable perspectives on the future of work. Discover a unique outlook on navigating the complexities of the modern day working world. Exploring innovative strategies in talent management and corporate culture from the Chief People Officers perspective. Tune in to stay ahead of the game when it comes to all things people related.

Felicia Shakiba  00:44

The challenge of finding skilled talent has reached critical levels for employers globally in 2023, with nearly 4 in 5 reporting significant difficulty—a figure that has strengthened by 2 percentage points year-over-year. This issue has more than doubled since 2015 when only 38% of employers faced such challenges, highlighting the growing urgency of the talent shortage problem.

To address this pressing concern, organizations can turn to the concept of a "talent production line." This strategic approach involves systematically identifying the key skills and capabilities required for specific roles, selecting and nurturing the right individuals for these positions, and efficiently distributing talent where it's needed most. By implementing a disciplined talent production line, organizations can mitigate the impact of talent shortages and proactively build a workforce tailored to their evolving needs, ultimately driving business growth and resilience in a competitive market.

Joining us today is Marc Effron, President of The Talent Strategy Group.

Felicia Shakiba  01:59

Mark, welcome to the show.

Marc Effron  02:01

Very happy to be here. Thank you for the invitation.

Marc Effron  02:09

A talent production line is a way of thinking about building better talent faster. Here's the concept. Most companies take a lot of care with the products and the services that they produce. They want to make sure that they've designed that product properly. They put the best raw material into it, they have a disciplined process to build it. And they certainly want to get it to the customer who's anxiously waiting for the product. Why wouldn't we take at least as much care with our people, as we do with our products? We know how to build people, if you've been an HR, you're smart enough to know how to grow people. But in many cases, we have a very undisciplined process around doing this. So the concept of a talent production line says, let's apply that same care and discipline. Let's start by saying what are the specifications for what we're trying to build? Because if you can't clarify what you're trying to build, you're going to be producing random talent, because you're just trying to grow people, as opposed to people with particular skills. 

Marc Effron  03:10

So let's start by saying, what specifications are we trying to build to? 

Marc Effron  03:15

And then raw materials, think of this as your talent review, you have lots of good talent in your company, but not all of it can be built into what you've specified? How predictably accurate are you in saying, Oh, I think Suzy can move this far this fast into this role. So a good process for sorting through all your talent, all that raw materials. Third step out of more production. This is where most companies fall down, which is do you know, the right sequence of experiences, exposure and education to actually build that talent? So if you're trying to build a good general manager, do you know what the steps are to build a good general manager? And are you moving people through those steps in a disciplined way? Final step distribution, two things get in the way there; sometimes leaders hold on to talent too long, sometimes the talent doesn't go where you want them to go. 

Marc Effron  04:07

But the overall concept says, Let's take at least as much care with our people as we do with our products and services and have a disciplined approach to building

Felicia Shakiba  04:15

So in your experience, what are the common misconceptions or challenges that organizations face when it comes to talent management? And I know you alluded to it earlier, you said most organizations fall down at step three, which it sounds like a learning and development piece. But how can a disciplined approach, like the talent production line, address them?

Marc Effron  04:40

I think, the largest and most painful misconception, which is that leaders are good at developing people. There's no reason to assume that leaders are good at developing people. That's not their job. Their job is to produce a bar of steel to produce an advertising campaign. They do lots of stuff really well. Why would we expect their development experts, because they're a VP, they might have gotten to a VP by being very brash and smart - has nothing to do with developing other people. So the challenge in too many cases is that we allow leaders to develop in typically their own image. And some are very disciplined and structured about it, some or not. 

Marc Effron  05:19

One of the benefits of the production line is to say, we collectively, we in the company have a point of view about the right way to build people, we're going to build people in that way. You, Ms leader or Mr. Leader, are certainly a valuable piece in that process, but we're not going to say Oh, I know how to build people, you throw them to tough assignments and give them harsh feedback. Maybe that's not the way we believe in building leaders. So we're going to try and get that variability squeezed down a little bit. I mean, it's still need to allow some variability. But we're not going to allow individual leaders to make every decision about how to build our best talent. And along with that, even those leaders who are committed, they're very busy, recognizing that there needs to be accountability for leaders in producing talent, I think is another key missing element. Many companies don't understand that some leaders are naturally attuned to that responsibility, others aren't. And unless there is some accountability to actually produce more, better quality talent, some leaders are going to do that and some are not. 

Felicia Shakiba  06:21

That's interesting, because I think that we would all love to assume that leaders are in their position because they can develop talent and build teams. But I think that you're absolutely right, when not all organizations identify leaders as someone to be put in that position, because they can develop teams well, but rather, they can actually execute. So that's interesting. Can you share a real world example of an organization that successfully implemented a talent production line strategy? And then what was the impact?

Marc Effron  07:00

Sure, there are a few that come to mind, the one I like best is a large food company. And their challenge was they needed more general managers, their expansion strategy was based on we need to put more general managers into workplaces. Without them, we cannot grow. And they did an okay job at pulling people from parts of the organization and trying to shape them into general managers. But their CEO said, I want more of these people, and I want them quickly, CHRO came to me and said, What do we do? I said, let's set up a discipline towel production line. Let's start by saying what is a good general manager here at this company? Let's define that probably one of the most important parts of a talent production process. Are there 40 things that leaders need to do? Yes. Do I care about all those 40? No, I care about the six, five or six that really differentiate a great general manager. So first process is let's go speak to the great general managers within this company help to understand what does differentiate great general managers, we bring some of our own knowledge as well, because we've done a lot of this work. 

Marc Effron  08:06

So let's start with what are those specifications? We went through that process? And that's relatively fast. It's three weeks, four weeks to get the specifications. And then the key question I mentioned earlier, raw materials and raw materials is normally if you have a talent review, or a succession planning process, that's where you look at all of your talent, try to figure out who can move artisan fastest? The question was, well, we already have talent reviews in this organization, how do we use those tower views to select out General Manager candidates? The decision was, you have to be HIPO (High-Potential) already. So you need to get through this process and be considered a high potential leader. And then it's plus, we think you have the ability in the future to demonstrate some of these specifications. 

Marc Effron  08:54

So in that talent review process, the conversation was oh, Susie and Sam are both high potential. Great, do either of them, also display the potential to show us the capabilities that we identified in that specification step? 

Marc Effron  09:10

So they decided we're going to get to this talent by having them be not just the best but the best with a specific set of pure capabilities. And that was actually relatively straightforward to add in. We charged the HR leader with being the person who needed to take that data, and then move it forward to the next step of production. So we know what the five or six differentiators are. We now know who the candidates are. The question is, what are the paces that we move them through? So what's the, what are the experiences the education, the exposure, and the same process was used to discover those materials or those ingredients as was used to determine the specifications? What speaks to people in the organization who have grown let's see what steps they went through. Let's add in some of our objective advice as well around that. 

Marc Effron  09:58

Came to some surprising conclusions about what things were necessary, what things were not necessary. Some things that we would not have predicted, like being part of an M&A were critical people. So you learn so much about the company and in the breadth of the company in that process, we want people to go through some project management piece of an acquisition. And so we built out those steps we identified I think 12 or 13 different experiences, found that there was no additional education that anyone said was needed. So in that classic trio of experiences, education exposure, people said no formal education is not important. We pushed on that hard cause that sounded unusual to us. No self awareness classes, nothing else? No. Okay. And then exposure, they decided, actually, a lot of it is covered in the experiences. So they're going to get proper exposure to senior leaders, new markets, factories, etc, by going through the experiences. So bring that story around, we now know what those 12 experiences are. The job of the HR Project Manager for this production line, so they assign a full time person, your job is to manage the production line is to say, Okay, we know that Suzie has had these three experiences, the next one, she should get as either A, B or C, I as the HR leader am going to shop around the company, and figure out where that next experience is, because we don't want to have a pause in that production line. We don't want Suzie sitting at step three, for four years when she could actually learn everything in 18 months. 

Marc Effron  11:35

So it was a very actively managed production line, which I think for your listeners is probably the secret of making this work. It's not that you build a production line, it's that you move people through it. 

Marc Effron  11:45

If you go to production line for cars in the middle never goes forward, you do not have a car, you need to move people through the production steps. And so that was happening. And then distribution. The final piece, part of that we made easy at the very beginning. And the part of that was made easy was the talent understood, we will put you places that we think are the best places for you to grow as a GM. This company didn't necessarily have batteries in garden spots. So sometimes you ended up in a place you didn't want to end up but you needed to trust the company that this was the best place for you because we have a discipline production line. And then for, for preventing leaders from holding on to talent too long, the company is also very clear, We are loaning you this talent for 24 months, your job is to steward them help them grow, we will take this talent back in 24 months to move them somewhere else. So it's a very long story around it. But they were very disciplined around we want more better quality talent faster. We know we need to discipline process around that. And we know that we need someone to really ride herd on or project manage that we're not just hoping that leaders would do the right thing.

Felicia Shakiba  12:58

I think that's a really key point of making sure that it's continuing. I'm curious to learn about what you've just shared. What does a typical timeline look like for a production line? And my second question, what is the typical timeline that you expect this production line to take place? And the other question I have is, let's say you select or identify these high potentials that don't always fit in a role. And that's available. So how do you continue moving that talent, when maybe those roles are not available to them? Sure.

Marc Effron  13:34

On the timeline, I'll give you a consulting the answer, which is it depends. It really depends on how big of a job are we talking about. So for the General Manager, we were taking people who are already mid or low to mid career. So they had 10 to 12 years of experience. And the thought was three big experiences plus what they have now, they're probably at least pretty darn close where maybe a small general manager job. So for them, the timeline was we want to have a lot of General Managers coming off that production line in five years, which they are estimating was three to four experiences that someone would get in addition to what they already had. Now would that complete their development? No, that was simply, oh, you're pretty good after those, and we're going to have confidence into moving you into a role, or we're going to still produce you so that you can grow into larger, more impactful GM roles. 

Marc Effron  14:31

So timelines going to vary. For this particular organization. It was five years, I would suggest to produce anyone. Let's assume it's at least three experiences or three turns. If you're very efficient. That's 18 months each. So five years feels like the minimum time 10 years feels like the maximum recognizing predicting even five years out is very challenging, who are we going to be as a company 10 years out is an even further. You're taking a really big bet or placing a really big bet, that things will be relatively consistent for some of these roles over time. And to the second part of the question around, there's not an opportunity or not the ideal opportunity available for that individual when they need to be there - a lot of it comes down to how are we prioritizing the 10 people in this production line, how are we prioritizing who gets what assignment? So part of it is, while the next best assignment that opens up, we're going to give to our best candidate. We've also worked with firms what I've described it take its approach, we've worked with other firms where they will be very aggressive about moving people. So if Mark is in a role that we need to put Felicia in, we're going to move mark out of that role, we'll find somebody else for him, or we'll give him a big check and send him on his way. But we're not going to allow Mark to interrupt the flow of that production line just because he's doing an okay job.

Felicia Shakiba  15:51

Got it. 

Marc Effron  15:51

Now, is that a very aggressive posture? Absolutely. That's what your talent philosophy is, is that okay? Or is that not okay?

Felicia Shakiba  15:57

I love that you brought this up, I think that's not something I've heard before. Like, move somebody out, that's just doing an okay job, you know, but to move the production line, I think that signifies that an organization who's going to take that stance is very serious about moving up high potentials, whether or not there's a spot available, which I think is exciting, and could be very controversial in some cultures. I think a lot of people though, would actually feel like the work that they're doing is more valuable, because they know if they do good work, they're going to move in their careers, and they're going to move forward. I think if you don't do that, the flip side of it is that the person is ready, and they say, well, there's no place for me to move in this organization. So I'm going to look elsewhere. And I think that's kind of where you're getting at with what you're doing.

Marc Effron  16:58

It also means that you need to be very transparent with your team members about that being your philosophy, because if Felicia comes to Mark says Mark, we're moving out to put Susie and when I say WTF, that's not how we operate, as opposed to everyone knows we have a talent production line. And we're going to make sure we treat everyone with care and consideration. But if you're in that marketing analyst role, and that's a key step and we only have one of them. Well, guess what? We're going to move somebody else into that role. So a lot of it is I'm a big fan of transparency, let's be transparent with people about our talent philosophy and the organization and how we manage people so that you can either sign up for that and say, Oh, I think we should be managed that way. Or even say, Oh, I don't like that at all. I'm going to work somewhere else. But let's not surprise people with moves like that.

Felicia Shakiba  17:45

Yeah, absolutely. That communication and transparency, I think is key. So how can organizations ensure that they are effectively nurturing and developing their talent during the production phase of their production line? And are there any data points that we should have in mind?

Marc Effron  18:04

I would suggest this is classic feedback feed forward along the way, and making sure people understand where they are in the production process. So going back to transparency, if I'm moving Felicia, to the general manager steps, it's a very explicit conversation around, Felicia, we're moving you to this factory outside the US because one of the boxes we need you to check as an outside the US experience. So you know why you're going there. And here are the three things that we want you to learn in that experience. So during that experience, either your manager talent leader, HR leader is coming to you and saying, Hey, Felicia, we're hearing this feedback about your ability to operate well in other cultures, or Felicia, we've got a bit of a challenge in your ability to operate in other cultures. But it's very clear about here's what we need you to learn or demonstrate or do at this step. And here's how we think you're doing it. Now, that takes a very purposeful approach. So back to having someone project manage this, as opposed to hoping someone gives Felicia the right feedback at the right step. This means you're very purposeful, very disciplined around making this happen. So pure nurturing, that's really what we would probably hope we do for every employee. But what we're saying on that talent production line is, well, it really, really matters that we do on the talent production line, because we're spending a lot of time effort and money to make this work.

Felicia Shakiba  19:25

And so to ensure that that's happening, it's about making sure that people are giving constructive feedback, as well as receiving it right, and is on a continuous basis, and it's part of the experience.

Marc Effron  19:38

Absolutely, I  mean ideally, it's part of the culture. The key is, do I as the participant of that production line, know what I'm supposed to be learning? And am I getting some feedback about whether I'm doing a great job, an OK job, or not a very good job at doing that so I can make sure I'm moving down that line, because not everyone makes it to the end of the production line either and might be that we move you to and outside the US experience, you do an exceptionally poor job. And we say, okay, that sends a pretty big signal that you might not be someone who fits into this category. Now, it doesn't mean you might not be a great M&A leader or marketing specialist. But we might say, that's a big deal for our GMs. Therefore, you don't fit. So giving the feedback around kind of how you're progressing, critical, even if it's not part of the culture, ideally, it is part of the culture. But even if it's not broadly part of the culture, for that narrow segment that we're actively producing, let's make sure it's part of that culture.

Felicia Shakiba  20:35

A talent production line implies a structured and systematic approach. How can organizations balance the structure with the need for adaptability? So for example, I've seen organizations identify and ready talent three years ahead of time, and later find out that there are different skills that might not be needed, for example, and I know that you kind of mentioned this before?

Marc Effron  20:59

It's a great question. And I think part of it depends on how fast does your industry evolve? So we do some work with oil and gas companies, they pull oil out of the ground, they've always pulled out oil out of the ground, they will continue to pull oil out of the ground. So I'd be relatively confident that if I'm producing a petroleum engineer, then the capabilities that we need from them are relatively predictable. And that over 10 years, we're going to build a great petroleum engineer. Now, if I'm in AI right now, we have no idea what AI is gonna look like three years from now. And so about the best you can do is say, well, probably one of two things. One, what does a good generic, not generic and a majoritive sense, but a good solid leader at XYZ company look like, great? 

Marc Effron  21:51

Let's make sure we're building good solid leaders that are skilled in leading projects, giving transparent feedback, creating good strategy, typical leader stuff. 

Marc Effron  21:59

So it could be that one part of the production line is independent of our challenges, we need people who can operate at the director level at the VP level, we think that means X. So one track could be that. An additional track could simply be a very flexible and adaptive track that says, we're going to be always scanning the market. And we might change our production line every six months, we're going to let you as the participant on the production line, know that you're in AI, this is a fast evolving field. So what we told you might happen in two years might happen in six months might not happen at all, please be flexible with us, as we say we're going to pick the best path for you, even if we can't see three years out. So I think simply saying we would love for there to be a rigid and predictable path with new technology, there's probably not. So we'll have one path that builds you as a good generic leader. And an additional path where we do our best to keep current with a rapidly evolve.

Felicia Shakiba  22:59

It sounds like the leadership competencies are going to likely be fairly consistent, because we have done a lot of research around leadership and what that good leadership looks like. And so that adaptability could change maybe in the hard skills or new technology. But at the end of the day, we have a really good idea of what leadership is still going to look like.

Marc Effron  23:24

Absolutely. So if we start with the thought of if I can give you 10 brilliant leaders, and you simply need to build some technical competency on top of them, would you be okay with that? Answer's probably yeah, maybe they will all turn out to be technically perfect. As opposed to I can give you 10 People who are technically sharp, but they're not particularly good interacting with other human beings. Are you okay with that? Answer was probably I'd prefer not to have those people in the company. So I would rather spread my bets around a bit and say, if nothing else, they're really good at doing stuff we want leaders to do, and then hope that we can keep pace with the advancements, 

Felicia Shakiba  24:02

Organizations struggle with employee retention, how does that talent production line contribute to employee engagement and retention?

Marc Effron  24:11

Sure, talent production line does a great job at retention of the people on the production line. Now, that's going to be a narrow segment, not everybody's going to be in a talent production line. So for the folks who are on that line, they're going to feel special and invested in and get very clear messages that we believe that they have a great future. So I think for that limited segment of people, we can say we're probably doing all the right things to keep them engaged and interested and retain them. I would suggest more broadly, what we need to do is help others outside of that structured production line understand that same concept and apply to their careers. So if I'm a junior marketing person, how do we help that junior marketing person who wants to be Head of Advertising, understand here are the seven or eight experiences that people normally move through going from your roll up to Head of Advertising? You don't need to have them all, but you probably need to have a decent number of them and you should be planful, in the next experience you get if that's what you want to do. 

Marc Effron  25:14

So even just helping people to understand, there's a relatively logical not perfectly but relatively logical progression that you go through in many careers. Let's be clear with you about what that is, as opposed to you guessing about it, or your leader or making up what she or he thinks is the right, say, we have a point of view about what grows great finance leader, a great marketing leader, great IT leader, as we call these experience maps. And it literally is just a sheet of paper, it says in this particular function, here are the experiences that we think are the building blocks of your career, and really use that in conversation. So if you're my manager, we drop that experience map between us in a conversation, you say mark, you've had A, B, C, and D, for the next experience there are two or three here I think would be helpful - let's talk about those. So take that same production line concept, which is we have a point of view about specifications, and we simply need to move you through those various experiences to help build those specifications. It might not be as disciplined or as structured, you won't get as much love and care, but at least you're clear about this is how people develop as opposed what we talked about at the beginning of the podcast - let's hope Felicia is good at this stuff is if she's not my career is not going anywhere.

Felicia Shakiba  26:28

Earlier, you talked about the criteria of identifying talent in the production line. How would you identify talent? Like what is the criteria you would recommend? 

Marc Effron  26:40

Well, I think that's still the big on answerable question in our field, we're getting better at predicting potential, we're still the science is still maturing around that. I would suggest in most companies, we need to think more broadly meaning too often we say, well, an individual has high potential. Well, that's dependent on what does the company need. If you're a entrepreneurial company high potential might look one way, if you mature and you become a more operationally focused company, high potential might look like something else. So I think the starting point is to say first, high potential is the intersection of really smart, capable motivated individuals with the specific needs in my company. I'm gonna start the individual side with, pretty well proven factors around intellectual capability, cognitive horsepower, really smart people tend to succeed more than less smart people. And the more technical the role, engineer, doctor, scientist, those smarter, even more predictive of success. So are they cognitively smart? 

Marc Effron  27:43

Now, most people at the manager, director level are smart enough to do most jobs. So it's not a huge screen in most organizations. But I think, coming into an organization, it's worth looking at their ability to apply that cognitive horsepower. 

Marc Effron  27:59

So it's not an IQ test it's, can they apply those smarts to process information well? The right personality factors? Again, we can select for that there are lots of great tests, but in many ways, it's are you committed to the right tasks? Do you interact with other people well? Are you open to new ideas? The literature is pretty strong around that. And then the big, open question that I think we don't ask often enough, and I think the answer has changed over the past few years of the pandemic is, do you want that bigger job? Because ambition is a key predictor of potential. If I'm smart, hardworking, have all the right personality factors, but I'm absolutely fine in my current job, well, then I'm probably not a high potential, because I do not want to move up into a role of larger responsibility. 

Marc Effron  28:46

So third question I want to ask an individual is, what would you like to do here? And some of that I think we need to be a bit more inclusive, and if I say, Oh I'm good, where I am, to push a bit and say, that's great. Here's what I see in you, that makes me think that you could do A, B or C if you chose to, are you opposed to doing those are just not comfortable raising your hand around that? Because I wrote an article many years ago - something title was Shy-POs, there are people who are probably really good, but they're just not showing up the way that we think a HIPO is gonna show up. And too often, sorry, a bit of a diatribe here, too often HIPOs show up because they are people who are very comfortable bragging about their own accomplishments, waving their hand around volunteering for assignments, getting to know people well, that's helpful, but that's all predictable. It tends to be white extroverted men who do that extremely well. One reason why we see a lot of white extroverted men in senior level positions, it's because we've projected that's a good leader, as opposed to saying, what do we really need in that role? Why don't we look carefully as opposed to saying I had lunch with Bob, he's a really good guy. So a little more discipline around that assessment I think could be super helpful. But for longer richer than you want it. That's my thought on the topic.

Felicia Shakiba  30:05

Very interesting. I think that diversity does play a role in identifying the right criteria and I think that's a hot topic maybe for a whole nother episode. But I would love to learn as we look to the future of talent management, what emerging trends or changes in the business landscape do you believe will have the most significant impact?

Marc Effron  30:27

When we look at the emerging trends and changes? Obviously, post COVID Work From Home fully remote, the debate over that I think will have significant changes that we don't yet know the answers to meaning... There's plenty of surveys out there that people say, Oh, I'm more productive at home, there are plenty of CEOs saying no, you're not get back to work. We don't have any science right now, that gives us answers to important questions like, do people collaborate better in person or not in person? We probably have a point of view around that, but we don't have good facts around it. Can I get to know you well enough, that I feel comfortable promoting you if we have not actively worked together in person? Can I build relationships over Zoom? We don't have answers to some of those questions that are just funda- or have been fundamental in determining how we manage people. 

Marc Effron  31:23

Five years ago, when I have ever promoted someone who had never shown up in the office, no, why haven't they been in the office? What's wrong with that? Today, that's a very legitimate question. I haven't seen Susie I've never seen Susie and the opposite. Is that okay? Or is that not okay? Is it my weakness in not feeling comfortable with Susie? Or is there something additional that we have to do to build that relationship? So I think a lot of the changes are going to evolve once we have more real facts, not surveys, not shouted opinions, which we have a lot of these days about, oh, the right thing to do is X. I think once we know more about how people interact and succeed or don't succeed, in more hybrid environments, we'll have much better answers about how to manage people in this very new world. 

Felicia Shakiba  32:10

Mark, thank you so much for being here. This insight is so amazing, and we appreciate your time.

Marc Effron  32:16

Thank you Feicia, great conversation and hope your listeners find some good insights.

Felicia Shakiba  32:20

That's Mark Effron, President of The Talent Strategy Group.

Felicia Shakiba  32:30

If you like today's podcast, we have more podcasts on innovative HR strategies, talent management, organizational culture and more, and how to navigate the complexities of modern day HR. Find them at CPO playbook.com/podcasts or search CPO, playbook on Apple podcasts, Spotify or wherever you listen. Thanks for listening to the CPO playbook podcast. We'll be back with a new episode next time.

If you liked today’s episode, we have more podcasts on innovative HR strategies, talent management, organizational culture, and more, and how to navigate the complexities of modern-day HR. Find them, at CPOPLAYBOOK.com/podcast or search CPO PLAYBOOK on Apple Podcasts, Spotify, or wherever you listen. Thanks for listening to the CPO PLAYBOOK podcast - we’ll be back with a new episode next time. I’m Felicia Shakiba.

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