Holistic management: The Seven S model

The Seven S guides managers to improve their strategic approach to the business. Get an overview of the framework and tips on how to apply it.

A common adage in the management consulting business is that efficiency and effectiveness are completely different measurements.

An organization can be extremely efficient, getting high productivity from their workforce and producing their product or service with very little waste or churn, yet be totally ineffective in meeting their objectives if, for instance, their product or service is not accepted in the marketplace.

This difference is often distilled to the statement "EFFICIENCY is about doing things right, while EFFECTIVENESS is about doing the right things."

During my training and practicing of Six Sigma for last 2 years, I noted that Six Sigma is primarily focused on improving quality in areas such as manufacturing, sales, and customer service; in other words, on doing things right. It's not a strategic methodology, so it's not equipped to guide managers to examine their overall business model or strategy.

So how do consultants or managers step up a level from process to strategy?

Understanding the Seven S framework's basics
The Seven S approach is a framework that focuses on guiding managers to improving, not just our processes, but our entire strategic approach to the business. The model was originally proposed by Richard Tanner Pascale and Anthony Athos in their book The Art of Japanese Management; McKinsey and Company has adopted the model as the basis of its strategic consulting approach.

Key to the conceptual foundation of this approach is the premise that the enterprise is only effective and competitive when certain elements are optimized. This approach is holistic in the sense that it proposes that the firm must refine all of these elements and bring them into harmony in order to achieve its highest level of effectiveness.

So what are the Seven Ss, and how do they fit together to help consultants and managers improve business performance? Here's a brief walk-through of the attributes of the Seven Ss.

#1. Strategy: The overriding goal or objective that the enterprise wishes to achieve, and the course of action it intends to take to reach that goal. From the viewpoint of IT, the key question here is often about alignment. Are the activities of the IT staff focused on achieving the strategic goals of the organization? Is there a forward-looking IT plan or roadmap that illustrates how the IT function will drive towards to long-term strategic objectives of the firm? Is the CIO involved in strategy formulation or just an implementer?

Every IT professional has experienced situations in which a manager or executive becomes enamored of some technical solution, often sold to her by a sales representative as the "end-all fix", and IT finds itself devoting all its energies to implementing a product that is disconnected from the firm's strategic goals.

#2. Structure: The manner in which the enterprise is organized, and the relationships between the entities, such as departments, field offices, etc. Is the organization authoritarian, like the military, or decentralized or federated? How do internal processes and human resources work together to achieve the goals?

In my consulting experience, I've seen many firms that want to migrate to an e-commerce approach to sales, and yet see e-commerce enablement as a project, rather than as a structural problem that needs to be solved. No matter how great the e-commerce engine an organization builds, if it's internal organization and structure is not modified to adapt to this new channel, it has very little chance of success.

#3. Systems: Not just information systems and infrastructure, but also the processes and the functions that enable the organization to work, such as recruiting, accounting, and procurement.

From e-commerce to data warehousing and knowledge management, and all across the array of processes and systems that companies employ to deliver their products and services, the ability to make the right technology decisions, to optimize processes, and to enhance productivity are make-or-break elements of success.

#4. Staff: The human resources that actually accomplish the work, and the recruiting, incentives, and compensation practices that encourage them to achieve. An organization's ability to attract and retain the best talents and to keep them motivated and productive is key to execution of the enterprises goals. All the strategic innovation in the world cannot compensate for an unmotivated staff or low productivity.

#5. Style: The elusive "corporate culture" is captured here; is the enterprise customer focused and quality driven or focused on maximizing profitability at any cost? Does the enterprise strive to build a cohesive team of its staff, or does the organization view its workforce as a series of interchangeable hands-for-hire?

#6. Skills: The unique competencies that drive competitive advantage. From the "hard" technical skills of designing products and managing projects to the "soft" skills of communication and teamwork, staff capabilities are essential elements of strategic success.

This element also addresses organizational skills: As we've recently learned in the case of General Motors, the ability of an organization to develop products or services that the marketplace values is the differentiating factor in the market battlefield.

#7. Shared Values: The core beliefs and attitudes that drive the enterprise. Values are not the mission of the company--that should be captured in the firm's strategy. Values are about behaviors, taking the form of statements like "we'll never sacrifice customer satisfaction for short term profit" or "we always thank the customer for choosing us".

Applying the Seven S framework
Now that we've outlined the elements of the Seven S framework, the obvious question is: How can I apply this framework in our organization?

As a consultant, I'll start a performance improvement engagement by educating my client on the elements of the framework. Many organizations grow organically and don't think about their activities in this structured and methodical way. By simply exposing organizations to this sort of approach, you can start to ignite new ways of thinking about their strategic development process.

By using this framework to methodically analyze the current state of each of these elements, we can get a holistic view of the enterprise and begin to develop a gap analysis that can guide an improvement plan.

Some firms are very strong in some areas, such as staffing and skills, but lack a common set of shared values and a coherent strategy-development function. Through interviews, observation, and facilitated work sessions, you can pinpoint improvement areas and then prescribe a plan for optimizing those functions.

Seven S is just a conceptual framework; therefore, it doesn't tell us how to fix those areas that require development. By applying your experience, reviewing the ideas found in the literature (such as Good to Great and other business classics), enlisting the insights and suggestions of members of the organization, and applying disciplines like Six Sigma where appropriate, you can help firms apply a consistent approach to strategy development and execution and improve their results and competitive position.

Goodies shine on IT employees

Monday September 28, 10:02 AM

Source: Hindustan Times

New Delhi, Sept. 27 -- Things get better

HCL Tech (HCLTECH.NS : 341.8 +6.35) plans to hire 2,000 by Dec-Jan; considering salary hikes for top performers

Infosys (INFOSYS.BO : 2291.15 +45.85) said it will be starting compensation review for need-based promotion starting Oct

Mahindra Satyam (SATYAM.BO : 121.7 +1.1) will reinstate variable pay across employee levels starting Oct 1

Employers are talking about hiring, salary hikes and promotions after almost a year of cost cutting that involved lay-offs, lower perks and recruitment freezes.

HCL Technologies plans to hire 2,000 people over the next quarter, including some fresh graduates. It has started the process of identifying its top performers for a salary hike. "We plan to hire 2,000 people in the next three to four months," D.K. Srivastava, global HR head for HCL Tech, told Hindustan Times.

"Promotions will continue and we will reward our consistent top performers this year as well," he added, saying the extent will vary between employees, he said.

Infosys Technologies said last week that it would start a compensation review exercise for "need-based promotion" starting October 1, signalling a new employee welfare initiative.

Mahindra Satyam is also trying to rebuild its corporate image and employer brand after the Mahindras took over the corporate fraud-hit Satyam Computer Services, and renamed it.

India Inc on manhunt drive as slump eases

Monday September 28, 07:52 PM Source: Financial Express

Jobs are back and India Inc is witnessing an upsurge of 15 per cent in hiring trend, thanks to the improving economic climate.

However, experts say it is too early to say that the situation has returned back to 'normalcy'.

"We see the movement happening across the sectors and it looks like worst is over. But the current scenario can not be considered as normal but it is better than bad," executive search firm GlobalHunt India professional leader Sunil Goel said.

If everything goes fine then it will take a year to reach to a normal situation, he added.

In last two quarters (January-March and April-June), hiring was almost 0-5 per cent across industries but in current quarter, average hiring has increased 5-15 per cent across industries.

Sectors like telecom, infrastructure, life sciences and energy have witnessed 25-30 per cent rise in hiring in the second quarter against the first quarter of this fiscal.

Meanwhile, IT, retail, banking, consulting, FMCG have seen 8-10 per cent hiring in the September quarter compared to the previous quarter.

"With the economy showing signs of recovery, there is cautious optimism in the job market and going forward, the coming quarters are expected to be better," an industry expert said.

Companies have started executing their new business plans and are expanding. At least people are not losing their jobs and at the same time there are alternate opportunities available for further career progression, experts said.

Meanwhile, a survey by leading job portal Naukri.com has revealed that India Inc's hiring activity has picked up 8 per cent in June and a further 1.3 per cent in July this year.

Besides, the latest employment outlook survey by global staffing services firm Manpower also substantiates the bullishness in the job market, with as much as 25 per cent of the employers showing an intention to recruit people in the next three months of this year.

The survey said that job seekers in finance, insurance, real estate, services, wholesale and retail trade, public administration and education, and construction segments can expect favourable hiring environment.

"The next quarter looks good for those people who have lost their jobs during slowdown. They will always be preferred than college students. Volume may come back in a year's time from current market trends," Goel added.

The optimism in the job market is also visible in the United States. As per a survey by global career transition and coaching firm OI Partners, American firms are looking to re-hire employees they laid off in the past, mainly in the finance and manufacturing sectors.

10 best practices for successful Project Management

The right mix of planning, monitoring and controlling can make the difference in completing a project on time, on budget, and with high quality results. Here are some guidelines to help.

Given the high rate of project failures, you might think that companies would be happy to just have their project finish with some degree of success.

But that's not the case. Despite the odds, organizations expect projects to be completed faster, cheaper, and better. The only way that these objectives can be met is through the use of effective project management processes and techniques.

This list outlines the major phases of managing a project and discusses key steps for each one.

PLANNING
1: Plan the work by utilizing a project definition document
There is a tendency for IT infrastructure projects to shortchange the planning process, with an emphasis on jumping right in and beginning the work. This is a mistake.

The time spent properly planning the project will result in reduced cost and duration and increased quality over the life of the project. The project definition is the primary deliverable from the planning process and describes all aspects of the project at a high level. Once approved by the customer and relevant stakeholders, it becomes the basis for the work to be performed.

For example, in planning an Exchange migration, the project definition should include the following:

• Project overview: Why is the Exchange migration taking place? What are the business drivers? What are the business benefits?
• Objectives: What will be accomplished by the migration? What do you hope to achieve?
• Scope: What features of Exchange will be implemented? Which departments will be converted? What is specifically out of scope?
• Assumptions and risks: What events are you taking for granted (assumptions), and what events are you concerned about? Will the right hardware and infrastructure be in place? Do you have enough storage and network capacity?
• Approach: How will the migration project unfold and proceed?
• Organization: Show the significant roles on the project. Identifying the project manager is easy, but who is the sponsor? It might be the CIO for a project like this. Who is on the project team? Are any of the stakeholders represented?
• Signature page: Ask the sponsor and key stakeholders to approve this document, signifying that they agree on what is planned.
• Initial effort, cost, and duration estimates: These should start as best-guess estimates and then be revised, if necessary, when the workplan is completed.

PROJECT WORKPLAN
2: Create a planning horizon
After the project definition has been prepared, the workplan can be created. The workplan provides the step-by-step instructions for constructing project deliverables and managing the project.

You should use a prior workplan from a similar project as a model, if one exists. If not, build one the old-fashioned way by utilizing a work-breakdown structure and network diagram.

Create a detailed workplan, including assigning resources and estimating the work as far out as you feel comfortable. This is your planning horizon. Past the planning horizon, lay out the project at a higher level, reflecting the increased level of uncertainty.

The planning horizon will move forward as the project progresses. High-level activities that were initially vague need to be defined in more detail as their timeframe gets closer.

PROJECT MANAGEMENT PROCEDURES
3: Define project management procedures up front
The project management procedures outline the resources that will be used to manage the project. This will include sections on how the team will manage issues, scope change, risk, quality, communication, and so on.

It is important to be able to manage the project rigorously and proactively and to ensure that the project team and all stakeholders have a common understanding of how the project will be managed. If common procedures have already been established for your organization, utilize them on your project.

4: Manage the workplan and monitor the schedule and budget
Once the project has been planned sufficiently, execution of the work can begin. In theory, since you already have agreement on your project definition and since your workplan and project management procedures are in place, the only challenge is to execute your plans and processes correctly.

Of course, no project ever proceeds entirely as it was estimated and planned. The challenge is having the rigor and discipline needed to apply your project management skills correctly and proactively.

• Review the workplan on a regular basis to determine how you are progressing in terms of schedule and budget. If your project is small, this may need to be weekly. For larger projects, the frequency might be every two weeks.
• Identify activities that have been completed during the previous time period and update the workplan to show they are finished. Determine whether there are any other activities that should be completed but have not been. After the workplan has been updated, determine whether the project will be completed within the original effort, cost, and duration. If not, determine the critical path and look for ways to accelerate these activities to get you back on track.
• Monitor the budget. Look at the amount of money your project has actually consumed and determine whether your actual spending is more than originally estimated based on the work that has been completed. If so, be proactive. Either work with the team to determine how the remaining work will be completed to hit your original budget or else raise a risk that you may exceed your allocated budget.

5: Look for warning signs
Look for signs that the project may be in trouble. These could include the following:

• A small variance in schedule or budget starts to get bigger, especially early in the project. There is a tendency to think you can make it up, but this is a warning. If the tendencies are not corrected quickly, the impact will be unrecoverable.
• You discover that activities you think have already been completed are still being worked on. For example, users whom you think have been migrated to a new platform are still not.
• You need to rely on unscheduled overtime to hit the deadlines, especially early in the project.
• Team morale starts to decline.
• Deliverable quality or service quality starts to deteriorate. For instance, users start to complain that their converted e-mail folders are not working correctly.
• Quality-control steps, testing activities, and project management time starts to be cut back from the original schedule. A big project, such as an Exchange migration, can affect everyone in your organization. Don't cut back on the activities that ensure the work is done correctly.

If these situations occur, raise visibility through risk management, and put together a plan to proactively ensure that the project stays on track. If you cannot successfully manage through the problems, raise an issue.

MANAGING SCOPE
6: Ensure that the sponsor approves scope-change requests
After the basics of managing the schedule, managing scope is the most important activity required to control a project. Many project failures are not caused by problems with estimating or team skill sets but by the project team working on major and minor deliverables that were not part of the original project definition or business requirements.

Even if you have good scope-management procedures in place, there are still two major areas of scope-change management that must be understood to be successful: understanding who the customer is and scope creep.

In general, the project sponsor is the person funding the project. For infrastructure projects like an Exchange migration, the sponsor might be the CIO or CFO. Although there is usually just one sponsor, a big project can have many stakeholders, or people who are impacted by the project.

Requests for scope changes will most often come from stakeholders--many of whom may be managers in their own right. One manager might want chat services for his or her area. Another might want an exception to the size limits you have placed on mailboxes. It doesn't matter how important a change is to a stakeholder, they can't make scope-change decisions, and they can't give your team the approval to make the change.

In proper scope-change management, the sponsor (or a designate) must give the approval, since they are the only ones who can add funding to cover the changes and know if the project impact is acceptable.

7: Guard against scope creep
Most project managers know to invoke scope-change management procedures if they are asked to add a major new function or a major new deliverable to their project. However, sometimes the project manager doesn't recognize the small scope changes that get added over time.

Scope creep is a term used to define a series of small scope changes that are made to the project without scope-change management procedures being used. With scope creep, a series of small changes--none of which appear to affect the project individually--can accumulate and have a significant overall impact on the project. Many projects fail because of scope creep, and the project manager needs to be diligent in guarding against it.

MANAGING RISK
8: Identify risks up front
When the planning work is occurring, the project team should identify all known risks. For each risk, they should also determine the probability that the risk event will occur and the potential impact on the project.

Those events identified as high-risk should have specific plans put into place to mitigate them so they do not, in fact, occur. Medium risks should be evaluated to see whether they need to be proactively managed. (Low-level risks may be identified as assumptions. That is, there is potential risk involved, but you are "assuming" that the positive outcome is much more probable.)

Some risks are inherent in a complex project that affects every person in the company. Other risks may include not having the right level of expertise, unfamiliarity with the technology, and problems integrating smoothly with existing products or equipment.

9: Continue to assess potential risks throughout the project
Once the project begins, periodically perform an updated risk assessment to determine whether other risks have surfaced that need to be managed.

10: Resolve issues as quickly as possible
Issues are big problems. For instance, in an Exchange migration, the Exchange servers you ordered aren't ready and configured on time. Or perhaps the Windows forest isn't set up correctly and needs to be redesigned. The project manager should manage open issues diligently to ensure that they are being resolved.

If there is no urgency to resolve the issue or if the issue has been active for some time, it may not really be an issue. It may be a potential problem (risk), or it may be an action item that needs to be resolved at some later point. Real issues, by their nature, must be resolved with a sense of urgency.

‘Employment Churn’ Crisis, post recovery - An Hypothesis.

A small trickle of new jobs will cause a tidal wave of unexpected replacement hiring. Here's why you need to get ready now. Hopefully, it's not too late I believe.

In the recent trend of hiring and candidate sourcing, I have a strong urge to make a point that "employment churn" (fully employed people switching seats) will increase dramatically three to four months before any pickup in overall employment. This unplanned spike in voluntary turnover will leave many companies ill-equipped to handle the surge, since most are not considering replacement hires in their new hiring forecasts as a big item.

Based on some recent evidence, I believe that this spike will be more significant that anyone realizes. Worse, this could happen sooner than expected, blindsiding unprepared companies.
Here's some of the evidence supporting this view.

Over the past few weeks I've been asking people who are fully employed these two questions:

1. How satisfied are you with your current job?
2. Are you looking now for something better?

Interestingly, more people said they were satisfied than unsatisfied, but even those who were dissatisfied most said they weren't looking right now, probably because there isn't much worth looking at.

  

With a quick online research and analysis (frankly You can observe a similar effect by tracking the use of the word "jobs" in a Google search). Overall, 75% of the people said they would consider something if called, but only 20% of the most satisfied said they'd take the call.

  

Basically, the conclusions I have drawn from this survey (when validated by more candidates) is you should de-accelerate all of your active candidate sourcing programs immediately and aggressively ramp up your passive recruiting efforts.

 

What the survey results seem to indicate is that just having a job is far better than not having one, even if the job itself provides little personal satisfaction. Since there are so few good jobs out there, it's not worth looking for something else right now.

 

As you can predict, less than 10% of those unsatisfied and extremely unsatisfied with their current jobs are aggressively looking. And why would they? We've all read about low-ball offers, the number of applicants applying for each job, and the demeaning aspects of looking for a job in the current environment.

  

Given this situation, it's unlikely many fully employed people would be looking, risking the jobs they already hold. While still a huge number, one could conclude that the steadiness is a result of people not finding anything new. I'd further conclude, based on the survey results, that most of the people looking for these jobs are either the unemployed or those just entering the workforce.

 

It's also pretty easy to conclude that as soon as the economy recovers just a little, those least satisfied of the fully employed will leave first. This movement will then trigger the next rung of those slightly less satisfied to ramp up their job-hunting efforts.

 

This, in turn, will lead the next group to move up their efforts, and so on. Pretty soon, a minor increase in voluntary turnover will lead to a massive game of musical chairs being played out across the country. It will only take a little bit of new job creation to start this major movement.

 

If you too think there is a possibility of this type of scenario, here are four ideas (best of what I can think of) you might want to ponder at your next recruiting staff meeting:

• If you have any open reqs for experienced hires, don't expect to hire any good people who respond to your ads. You'll need to enter into the passive candidate market aggressively to fill these slots or ramp up your employee referral program. Here are links to LinkedIn and Broadlook webinars with some advice on how to use these tools to identify and call these people.
• Call Jobs2Web, or Chahiye Jobs and ask them to create talent hubs for you for your most critical positions. Here's a link to a sample of how your CRM system can be designed to convert a prospect into a candidate using a series of auto-response emails without the recruiter even picking up the phone. In case your organization does not have a CRM a simple trick with MSExcel and MSOutlook can serve the purpose equally. Lets call this the "Virtual Recruiter". The talent hub with this type of drip marketing is the shape of things to come.
• Figure out how you're going to attract strong, fully employed experienced people who currently consider their current job as far better than anything you have to offer. Consider that these passive candidates also represent 80% of the total candidate market, and it makes no sense to continue spending 80% of your resources on the other 20%.
• Become preventative. Figure out how to minimize the impact of voluntary turnover at your company. Minimize "disgruntled employee syndrome" in a period where jobs are going nowhere, salaries are being cut, comp increases are nonexistent, and benefits are declining. This is a tough challenge that needs to addressed, not ignored.

There's a lot to chew on here, but if we're moving through an inflection point right now, expect the ride to be comparable to a trip aboard the Enterprise through a black hole. Expect it to be much worse, if you decide to ride it out, without considering the consequences.

Finding a Job of His Own Dreaming

LAST November, I was laid off from a database marketing company in Louisville, Colo., a Denver suburb, for economic reasons. Six months later, I found another position, at Kutenda, a provider of online marketing tools for small businesses, in Broomfield, Colo., also near Denver.  

After a six-month job search — and some soul-searching — Joe Kroog, 36, is senior director of product management for Kutenda in Broomfield, Colo.

Several things about my job hunt surprised me, including its length. I thought it would only take a couple of weeks to find a new job, or at most two months. I never expected to be out of work six months.

Other people would probably say that six months doesn't sound bad at all, but it was to me. Even though the news media played up the job losses and how bad the economy was, I wasn't worried. I had been a technical product manager, and I thought I had good qualifications.

My wife, Jill, was supportive of my job hunt. She's a stay-at-home mom and entrepreneur who gives seminars to new mothers on achieving balance in their lives. She kept reassuring me that something would come along and that I shouldn't feel overwhelmed as the main provider.

We have two boys under the age of 6, and I wasn't financially prepared for such a long layoff. We were going through our savings, and we started discussing whether Jill should go back to work full time, or perhaps find a part-time job with benefits. We decided that she'd need a salary of at least $50,000 if we were to put the boys in day care. She took a full-time job until I was hired and now works as a marketing consultant.

Now that I've settled into my new company, I'm of two minds about that period of unemployment. On one hand, I still think that my expectation wasn't unrealistic. I honestly felt that I stood a better chance than many other candidates. It's my competitive nature.

On the other hand, I've talked to a number of executives in a business organization I belong to — vice presidents, chief information officers and chief financial officers — who were out of work much longer than I was.

I followed the standard advice, and I think I did everything a job coach would have told me to do. I tapped into a network of colleagues and friends and told everyone I was job hunting. I got a few leads, but the job possibilities all fizzled.

That motivated me to try to build a bigger network, but after a while I decided that this wasn't the best approach. I was spending too much time having to explain what I did as a product manager in the software industry. The role can differ, depending on the company and the industry.

I scoured the job boards and set up a search agent, which automatically sent job openings to me via e-mail. But nothing came of that, either. I looked for job leads on Facebook, too. Then I thought that Twitter might help. I tried following companies I had submitted a résumé to, and those I had heard were hiring. The volume of messages was overwhelming, however, and most of what I read had nothing to do with job leads.

Next, I set up a Google alert for job titles to see which companies were hiring, and I applied to them. That didn't turn up any interviews, either. I decided instead to try to learn more about the companies that were posting the jobs.

Once, I ended up helping a company president define the position he wanted to fill. He kept mentioning the title of product manager, but I told him that the company needed someone who was concerned about future product strategy, too. I explained that in my experience, small technology companies often start with a good idea, assemble a development team, build the product and start marketing it. At the same time, they need to design a plan that considers their customers and addresses the future of the product.

That conversation made me do some soul-searching. I decided that I wanted to do more of what I had described to that executive. I wanted to be a product marketing manager, more customer- and market-focused than in my former product-manager position, which was an operations role and more technical.

I visualized what I wanted this position to be like and wrote a list of bullet items about the job and my ideal company.

I wanted to lead a team in a technology company and be responsible for a product line, and I wanted the opportunity for advancement. I also wanted to be involved in online marketing, which I believe is the way of the future.

I LEARNED about Kutenda when a contact in a business marketing association said her company had a marketing position available. The role was marketing coordinator, which was too junior for me. But I had read about the company and was interested in its technology. Kutenda manages Web sites, pay-per-click advertising campaigns and e-mail campaigns.

I told the contact from the association that if the company needed help in determining future product features, I was good at that. She talked to the C.E.O., and I interviewed with him.

When the two of us sat down together, I told him my ideas, he liked what I had to say and he hired me. I had never talked myself into a role in a company before.

I'm working on product strategy and market plans, and I'm developing ideas for new products. I feel that I'm perfectly suited for the job.

Build an ‘Executive Referral Program’ to Supplement Your Executive Recruiting

Most corporate recruiting functions inexplicably restrict the effectiveness of their employee referral program by limiting senior management participation.

Instead, recruiting directors should design a unique "executive referral program" that encourages executives to make referrals for your high-level openings.

You might think a separate program is unnecessary because high-quality referrals should flow naturally from your executives as part of their job, but such an assumption would be a mistake. Instead, make every executive an "executive talent scout" by developing a specifically targeted executive referral program that periodically mines recruiting leads from your senior leaders. Such a program can produce amazing sourcing results without the need to pay either a referral or an executive search fee.

An Alternative to Executive Search

The explosion of social networking sites like LinkedIn and Facebook make it incredibly easy for almost anyone to identify and build relationships with talent for executive positions. As a result, now's a great time to bring executive recruiting in-house.

Unfortunately, many executives are not well-versed in leveraging such tools to optimize their networking efforts, nor are they well-practiced at periodically scanning their networks for talent that may be a great fit for the organization outside their own downstream.

Encouraging your executives to provide referrals by crafting a program that improves upon their networking skills and proactively pulls recruiting leads from said networks for open executive positions is a cheap and effective way to augment or replace the use of third-party executives.

Focus on Referrals From Top-Performing Employees

While any well-designed employee referral program should excel at producing quality hires, programs that specifically target proactive referrals from top performers consistently produce the highest level of results. Unfortunately, many organizations prohibit their top performers (who happen to be managers or executives) from participation in referral programs. If your firm truly promotes based on ability, it only makes sense that your senior managers and executives are "top performers."

It's imperative that your corporate referral effort include two specific subprograms: proactively approaching your top performers working in key jobs, known as a "give me 5" program; and getting referrals from senior managers and executives through a high-touch "executive referral program."

Why Executives Are a Powerful Referral Source

Successfully filling executive positions has the highest impact on the organization of any recruiting activity. Well-connected executives are likely to know, and thus be able to refer, more "outside" executives for these critical positions than anyone except a few superstar executive recruiters.

Executives are excellent referral sources because they generally have the most extensive networks of any employee group, save for your salesforce. Executives tend to travel more frequently, participate in benchmark studies, attend industry events, and assume leadership roles in professional associations and community boards.

Not only do your executives build extensive contacts through such efforts, they also build trust relationships (that are essential in recruiting). In addition, because of their work within professional organizations and their mentoring activities, executives are also likely to have extensive knowledge of "upcoming" talent in the industry.

Elements of a Benchmark "Executive Referral Program"

There is no standard format for executive referral programs, but some of the key components include:

• Proactive approach –- a critical design element of any top performer referral program is that you must proactively ask individuals for "names." They might know the best people but never find the time to refer them. Although traditional referral programs rely on employees to take the initiative, executives are different in that they are severely time-challenged. Start by filling the calendar with regular times to approach them throughout the year. Then have your designated executive recruiter contact them during slack times of the day (usually early morning or late evening). Also try to convince them to look through their PDA, mobile phone, and email contact lists for names that fit your criteria. Encourage HR generalists and other senior HR managers to pump them for names during regular interactions and especially after they attend major industry conferences and events.
• Immediate response –- the No. 1 success factor for long-term success in any type of referral program is responsiveness. The same holds true when it comes to executives referrals. If they make a submission and you don't respond immediately, the odds are that they will not make another. When an executive gets disenchanted, they will spread the word quickly among their peers, and participation rates will drop. Because a high volume of referrals automatically kills responsiveness, it's critical that you proactively limit the number of referrals to a few high-quality names per cycle per executive. In the same light, if an executive makes a referral and the person doesn't get selected, contact them and let them know precisely why.

Define Your Referral Targets Clearly

• Define your target jobs -– executive referral programs focus on getting your executives to refer highly qualified individuals for other executive jobs. Make sure that there is another process to handle "I have a friend" referrals for regular job openings.
• Educate them about "who" to look for -– Accepting or rejecting referrals is a highly political action, so the key is to start out with clear guidelines and targets. In particular, educate them about the firms to target, those that produce executives, and senior managers considered to be desirable skill-wise and compatible with your corporate culture. Have them seek out executives with skills and experience in the areas of innovation, technology, and international business. Encourage them to bring back the names of top individuals from conferences and benchmarking sessions. Also encourage them to provide you with information on how this referral's skills and experience fit your firm's needs. Whenever an excellent executive referral is hired, provide a summary of their qualifications to all executives so that they can better understand the level and the type of candidate that you're seeking.
• Educate them about who to exclude –- Make it clear that you want executives to proactively seek out talent and not to automatically make referrals of individuals who approach you looking for a job. In addition, the program needs to have guidelines that discourage the referral of individuals they have not had the opportunity to directly observe in a work-related setting. In the rare case where a friend or family member might have superior qualifications, require your executives to provide clear evidence of their experience working with them and how their qualifications are truly superior. If an individual submits questionable individuals, give them immediate feedback, and if it is repeated, exclude them from the program for a period of time.

Improve Participation Rates

• CEO support –- get the CEO to publicly announce support of the program in front of every executive and establish his/her expectations for participation. In addition, CEOs also need to actively provide names. To drive ongoing support, periodically make other executives aware that the CEO has found time to make executive referrals.
• Other executive support -– get the entire executive team to agree to respond rapidly to any referral in their functional area; the initial response should be within 48 hours.
• Set a quota or target –- sometimes you can increase participation rates by increasing expectations. Consider setting a "target" referral goal for each executive. If you can't get the CEO's approval for formal targets, consider setting "expectations" by providing but not requiring a suggested target number of referrals each quarter.
• Recognize them -– executives are well-paid individuals, so standard referral bonuses might not have a large impact. However, you might find that recognizing their success and sharing it with other executives and the CEO might significantly spur their participation.
• Reward them –- most executives do not require a bonus to make a referral. However, if rewards are offered for making executive referrals, provide an option for the executive to "opt out" of the bonus and instead donate the money to a charity of their choice or the standard corporate charity. You can also make providing successful referrals part of an executive's bonus formula, succession plan participation, or criteria for promotion.
• Add to job descriptions –- add to the job descriptions for all new executive positions the fact that they are expected to both encourage referrals from their employees and to make executive referrals themselves.
• Track and report referral rates -– executives are almost always highly competitive individuals. As a result, tracking and broadly reporting the forced-ranked performance of all executives will spur any slackers to increase their participation.

Implement Critical Program Features

• Assign a recruiter -– designate an individual recruiter to focus on executive referrals, answer questions, and seek out opportunities to talk with executives in order to gather names.
• Encourage a social media presence –- a good percentage of all referrals at least partially originate from social media sites. Executives, because of their title alone, can easily attract many followers on social network and social media sites. Encourage them to open profiles but also provide them with templates, coaching, and samples so that they can get up to speed quickly. Periodically assess their profiles and online activities and coach them on how to improve.
• Candidate experience –- any executive referral must be provided with an excellent candidate experience both during the initial referral and during the hiring process. Like or not, executives almost always feel that they are special, so you need to treat them exactly that way if you expect to land them now or in the future. Referrals need to be surveyed and metrics need to be kept to ensure that every aspect of the candidate experience process is positive and responsive.
• Fast-track assessment –- part of responsiveness includes assessing potential hires differently than most candidates. That means that you must contact them quickly and arrange for a candidate-friendly assessment process.
• Candidate feedback -– if an executive recommends someone, assume they are high-powered individuals with significant egos. As a result, you can't just reject them out of hand as you might a standard candidate. Instead, provide feedback and guidance as to why they were not selected. If you frustrate the candidates they refer, your own executives will stop participating in the program.
• Define who can make referrals — In order to increase responsiveness, limit who can participate in this special program. In most organizations, the number of qualifying executives and senior managers should be less than 25.

Miscellaneous Actions

• Make it a database -– in addition to focusing on filling immediate executive openings, set as a secondary goal to build and continually add to a "who's-who" database of all desirable executives. This means that top candidates not immediately hired remain in the database so executives and recruiters can build a relationship with them over time. There also needs to be a relationship-building process using CRM methodology to keep in touch with individuals who don't fit a current need but you might want to hire in the future. This database can also be used for benchmarking, product evaluation, and learning, as well as recruiting.
• Names-only option -– many executives know the names of other high-potential executives but they don't automatically have copies of their resume and often they're too busy to find the time to acquire it. Where possible, develop a process where they can merely provide names, and a recruiter will do the follow-up work necessary to capture the updated resume.
• Conflict-of-interest issues -– avoid the common assumption that allowing executives to make referrals will result in a conflict of interest (meaning that they will refer and hire individuals just for the reward). In my experience, the exact opposite is true and most executives will go out of their way to avoid this perception. Educate them in the program literature about the few cases when it's inappropriate to make referrals and always offer the option to refuse the reward or to donate it to charity.
• Use metrics -– implement tracking metrics to identify the effectiveness of executive referrals. Especially focus on metrics in the areas of candidate quality, candidate diversity, new-hire on-the-job performance, new hire retention rates, and executive referral program ROI.

Final Thoughts

Despite their extensive track record of success, employer referrals have been limited in scope. It's a missed opportunity not to use them in expanded areas, including university recruiting, recruiting contractors, and for executive search.

Like it or not, the expansive growth of the Internet has changed the world of sourcing and candidate relationship building forever. Where executive sourcing used to be the exclusive realm of a few highly trained external executive recruiters, it is now possible for others to supplement their work.

Now is the time to expand the scope and effectiveness of your employer referrals program. Act now before your recruiting workload increases and you won't have the time.