How the Hanover's investment in leaders helps them win the talent war
Kathleen Mills, PMP, Assistant Vice President of Information Technology, Hanover Insurance Group
As the talent war wages on, The Hanover Insurance Group is winning it by investing in a long-term commitment to its workforce. The Hanover Insurance Group and its learning partner, ESI International, have created a talent development approach to attract, engage, retain, and energize employees, which has delivered greater project success and business impact. Organizations facing talent issues will find their methods insightful and essential in addressing their own workforce development challenges.
Globally, managing talent is a top priority for CEOs, even ahead of other organizational issues, such as managing risk and investment decisions (PwC Global Annual CEO Survey: Main report, 2011, p.13). The project management field shares this concern. Organizations are facing increasing challenges in attracting and retaining project management talent as the economy improves, the U.S. workforce ages, and pressure increases to perform exponentially better each year.
The Hanover Insurance Group has invested in its employees to help them successfully meet these challenges, while also positively impacting the business through improved project performance. They do it by attracting, engaging, and energizing their employees, providing them with not only skills training, but also professional development as they perform their organizational roles.
The Hanover engages in a number of professional development programs. The company's establishment of a leading-edge Practice Center model, a unique for talent development, has gained widespread attention in their industry. The model has distinct areas focused on disciplines around project management, business analysis, quality analysis, software development, and architecture. The primary responsibility of each practice center area is to ensure best practices are implemented, and to focus on the development of the individual assigned to that discipline. The Practice Center model has contributed to low turnover and the effectiveness of its programs has enabled the organization to leverage sourcing partners and employees in the delivery of projects.
One of the Practice Center's programs gives new employees the opportunity to implement what they learn in challenging roles exceeding entry-level positions. In addition, company-wide business skill training enhances employees’ critical-thinking, communications, and other leadership skills.
Using The Hanover's real-life examples and success, this paper will examine the best practices of how a commitment to a culture of learning and investment in training and professional development can result in talent satisfaction and larger business impact.
The Project Management Talent Landscape
The overall talent landscape for project managers indicates that there is an increase in the number of qualified and certified project managers in the marketplace. The increase is driving a higher demand for more highly developed talents and certifications, both from Project Management Institute (PMI)® and other certifying bodies in different parts of the world. Furthermore, the movement of project managers from company to company is going to start ramping up as the economy continues to improve.
In the commercial sector, many clients are now internally requiring project management certifications in order to take on the title of project manager, along with the prerequisites and benefits that go along with the title. In the government sector, there are now legislative mandates that are requiring certified project managers on projects over certain dollar amounts. Dealing with the increasingly fierce competition for desired talent in both sectors requires strategic action and long-term commitment.
A recent study from PwC states, “many organizations are failing to understand what talent management really means and are unclear about how they can create a sustainable talent pipeline for the long term” (PwC “The talent race is back on”, 2011, p.13). The Hanover has largely overcome this shortfall and many of the key talent challenges organizations face (Exhibit 1) through its leadership development efforts, in both its project management Practice Center and its corporate Future Leaders Program.
Exhibit 1 – Key Talent Challenges
The Hanover's Project Management Leadership Development
The Hanover's technology program hires four or five highly motivated, top performing candidates per year from the Future Leaders Program, whose participants are recruited from a very select group of colleges and universities. Typically, they have high GPAs and have had internships at insurance or technology companies. This program encourages young people to build careers at The Hanover and to pursue their individual development goals.
This leadership development program is successful as an incubator for bright, highly motivated individuals who already have the right foundational skills and are able to develop more quickly than many of their peers. Though starting out managing less complex projects, they take on progressively more as time goes on. They are people who, given the opportunity to learn the business and take on projects, thrive. The individuals currently in the pipeline demonstrate job effectiveness that enables them to accelerate more quickly in their careers at The Hanover than employees on a more traditional track, and are able to move up the ranks in the project management job family.
The Hanover's PM leadership development originates in the IT Risk Management office, which includes the Practice Centers, the Project Management Office (PMO), Resource Management, and Service Management. These entities focus on core competencies and specific disciplines by practice in the development of talent. The core competencies include categories of attributes in thought, results, people and personal skills:
- Thought – abilities such as strategic focus
- Results – qualities, which include drive and initiative
- People – capabilities to engage and inspire others
- Personal – interpersonal skills, including the ability to influence others.
Within the Project Management Practice Center, the technology group focuses on career development initiatives, including:
- PMP® study groups – to facilitate certification readiness
- Book clubs – to enable the future leaders to mingle
- Mentoring – this is a guidance role separate from the team leader
- Opportunities to lead initiatives – these provide the future leader with a safe environment in which to handle responsibility on a smaller level, and enable managers to assess future leaders’ ability. An example of one initiative in development is the production by a leadership candidate of a mentoring toolkit to provide suggestions, guidelines, and expectations for both the mentor and protégé.
The Hanover's success in establishing practice centers is one of the keys to its strategy to attract, engage, retain, and energize its talent. These are career paths within the organization that will be of interest to any organization that is struggling with establishing practice centers to support a project- and program-based culture. For example, the Hanover technology group for software development has Architect, Business Analyst, Development, Project Management, and Quality Assurance practice centers for career growth. The Practice Center directors are evaluated on metrics, including employee retention and employee and outsourced consultant effectiveness on the job.
Functionally, The Hanover has found it to be highly effective to separate execution from the practice areas in order to enable focus on career development. They determined that when the two functions aren't managed separately, career development inevitably takes a back seat to execution. So, for example, the Project Management practice reports to a director with 30+ years of project management experience who is not involved at all in project execution. He allocates or assigns project managers to projects, does their performance reviews by gathering feedback, meets with them regularly and deals with any human resources issues. A project manager is assigned to a project in a program and, for the duration of their assignment, may be under the direction of a business delivery vice president.
Leveraging Project Management and Business Analysis Skills to Build Leaders
For someone to eventually become a top-performing project manager at The Hanover, he or she has to have a strong foundational core, which includes:
- Ability to influence
- Strong negotiation skills
- Strong financial management skills
- Critical thinking skills
- Disciplined, consistent problem-solving approach
- Consistent thought
- Consistent language for analytic and problem-solving communication
Another way The Hanover builds leadership skills is by requiring future leaders in technology to go through business analysis certification as business analysis skills translate well to the project manager role. Business analysis skills also help build the pipeline of project and program managers who have a depth of consultative skills. In other words, The Hanover has recognized the connection between the significant skills of the project manager and the business analyst that need to be developed in any leader in the organization. They transcend the practice of project management and become an important building block for leadership itself.
The Underlying Force
Developing the leadership capabilities of everyone within an organization, regardless of industry, is an energizing force. It gives people a way of viewing their day-to-day experience from a larger perspective, which enables them to see a different arc and the greater potential they can take in the organization. For employees to know and feel that an organization is investing in them is one way to preempt the trend of increasingly shorter tenure of valued employees. When people are aware that an organization has a developmental path for employees to follow, it demonstrates the organization's commitment and seriousness about wanting them to join. The more clearly an organization can articulate and delineate the career paths, the more attractive they will be to current and potential employees.
One of the challenges The Hanover faces in recruiting candidates to the technology program is making the insurance industry attractive over other career alternatives, such as working for a start-up company developing software products. Traditionally, more conservative industries such as banking and financial services share the dilemma of wanting the talent of high energy, ambitious people who will drive change. It's important for any organization that wants to attract the right people to acknowledge that they have elements that aren't as glamorous or alluring to high tech people as what they can find in Silicon Valley. Therefore, it's incumbent on every organization to reframe and specify exactly what they can offer the people they are trying to attract to their company.
The Business Impact of Leadership Development
In addition to the employee satisfaction that is realized, the business impact of successful leadership development provides the justification for organizations to take a highly refined approach or, more minimally, to build in components of the approach that The Hanover has taken.
Effective succession planning is another critical business benefit The Hanover has realized from its leadership development. The Hanover's leadership development process, which includes on-the-job development, progressive assignments, and individualized development, closely follows approaches identified for excellence and effectiveness in succession planning (de Koning, G.M.J., 2005, ¶11). The Hanover identifies its “highest potential” people for key roles and then identifies two key focus areas they will concentrate on, with an appropriate mentor for one year. They also track the highest potential employees and review how much has been invested in their training and development and how many new opportunities they receive each year. In addition to succession planning, this list is also used to develop project teams for special initiatives and other corporate activities.
Moving in the Right Direction
A multi-pronged approach has helped The Hanover tackle its talent challenges and successfully attract, develop, and retain the best of the best. They use different elements, including training, skilling certification programs, mentoring programs, and discipline-centered practice centers. Examining their efforts and successes will enable your organization to answer the question, “What will it take for us to move in this direction?”
de Koning, G.M.J. (2005). Building your “bench strength” (Part 1), Retrieved from http://govleaders.org/gallup_bench_strength1.htm
PricewaterhouseCoopers 14th Annual Global CEO Survey, Growth reimagined, (February, 2011), Global Annual CEO Survey: Main report, available for download at http://www.pwc.com/gx/en/ceo-survey/download.jhtml
PricewaterhouseCoopers 14th Annual Global CEO Survey, Growth reimagined, (February, 2011), The talent race is back on, available for download at http://www.pwc.com/gx/en/ceo-survey/download.jhtml
© 2011, Jonathan Gilbert and Kathleen Mills
Originally published as a part of 2011 PMI Global Congress Proceedings – Dallas, TX