Over the past several years, the flurry of advances in technology, fueled by the globalization of work, the integration of global financial markets and economies, as well as the economic downturn, provide a platform for both opportunities and challenges that have not been experienced in the past. At the same time, the notion of career development is changing as companies continue to require a diverse, resilient, and flexible workforce that is highly skilled as well as adaptable to shifts in market demands.

Career development was once like a sleepy little town in the business world—predictable and unchanging, where everyone knew what to expect. If someone wanted to advance toward a particular position, the path to get there was clear. You entered a company; you knew where you were starting and what needed to be done to progress to the next level. It was predictable, expected, and presumptive.

Then in the last decade, everything began to change. Along with the advent of globalization has come an increased level of complexity in managing business, and a current deteriorating economic situation has only exacerbated the situation. A company in today’s environment must have the agility to quickly and effectively change the way decisions are made within its organizational structure and systems. Career development is one of the areas where agility is key. The most progressive and successful businesses have come to realize that career development is not just a nice-to-have adjunct program in Human Resources (HR). Rather, having an agile, flexible career development process in place has become a major aspect of business strategy because having the right people in the right jobs at the right time is one of the best ways to assure on-going client satisfaction.

According to Brook Manville, businesses began to realize that “...a company’s skills, knowledge and people, and how they are managed, developed and deployed, is the heart of value creation.”¹

IBM^® has always valued learning and career development but has come to realize that traditional approaches to it were no longer adequate. Working for a company one’s entire career, advancing predictably through the ranks, was no longer the norm, as was noted in an IBM White Paper:

Education and learning have always been important at IBM, leading to a strong legacy in ensuring that employees were positioned to have the future skills and expertise needed to meet client requirements. An important part of this career development philosophy was the opportunity for employees to have a voice in their own personal career aspirations. Early career development processes and programs at IBM were rather simplistic compared to the needs of today’s complex workplace. At least on an annual basis, the manager and employee determined what skills might be required to meet business goals, discussed aspirations, and put a learning plan in place to move the employee—as well as the business—toward a mutually-acceptable objective. While many managers and employees followed this approach, which worked quite well, the complexity of business grew, and globalization became a critical business driver. As this occurred, an enterprise-wide solution for staffing and resource development became critical. Although more focused career development planning went on in specific IBM departments, no enterprise-wide solution and deployment existed. In the early 2000s, however, the company began re-engineering the way it cultivated and deployed its talented workforce, both in terms of matching available people to existing work opportunities and developing them for new assignments.

It was important for IBM to position itself to meet the ever-changing needs of its global client base. Given the company’s long-term history of rebranding and redefining itself based on the changing needs of the times, once IBM redefined itself to meet those needs, it was inevitable that the organization had to rethink career development. In the mid-2000s, IBM invested in developing a strategic set of processes, policies, procedures, and the integration of separate applications.³ At about the same time, IBM identified the need for a single career framework that outlined the capabilities IBM employees need to provide client value and subsequently provided meaningful career paths for employees. IBM later went on to develop this common career framework and at the time of this writing, IBM is in the process of deploying the framework to the IBM population.

These efforts will help effectively address fluctuating market needs, continual competitive challenges, and new opportunities. It also enables IBM to begin implementing a single integrated, worldwide approach to hiring, developing, deploying and managing its workforce. It provides a full view of employee skills and expertise and allows individual IBMers much greater clarity and visibility about career development. Throughout this book, we explore these many facets of IBM’s approach to career development.

Just as a manufacturing company must build an effective supply chain to ensure that it has all the necessary parts on hand to fabricate its products, other types of companies also need to make sure that they have people with the right skills, talent, knowledge, and expertise to carry out the business functions that deliver the value for which their clients are looking.

In a competitive business environment, the edge goes to the company that has the products and services that its clients require. But developing and delivering those products and services is a function of people and teams who create the ideas and engineer the products. They must also solve the manufacturing or delivery problems while building relationships with clients in order to provide the most effective outcomes. This has to be a deliberate and well-orchestrated process with many steps. Each step requires knowledge and expertise delivered by a trained human being.

The company’s business strategy will determine the expertise and performance requirements needed to fulfill each business function. In other words, the business priorities determine the human capital requirements, including the learning and career development strategies. To get the desired business results, the organization must identify the needed knowledge and skills, determine expertise levels and gaps, and create and implement a career development strategy for achieving the required levels of capabilities needed. Career development thus becomes the essential driver of bottom-line results. In fact, as D.M. Gayeski noted in 2005, “The ability of organizations to specify goals and then to engineer the desired performance by training, sharing knowledge and providing feedback is one of the most important factors to success.”⁴

No matter the size of a company, career development is vital to its success and ability to grow. Even the smallest business must engage in career development to determine what skills and abilities are needed to serve its clients. Employees who have benefited from meaningful development plans are more technically proficient, motivated, and focused on client needs. They find meaning in their work, and this motivation enables them to discover what interests them and helps them work toward greater performance.

Career development processes can work as a change agent⁵ to help link individual goals to business goals and objectives so that employees gain long-term capabilities that both advance their own careers and are also supportive of the company’s strategic plans. The organization saves money by having people focus on things that are important to the business, and the employee is assured that the time and effort put into training and development will result in career advancement because it has been tied into what the company values.

For career development to be used as a change agent, companies need to be sure that employees have opportunities to acquire and apply new skills that focus not just on their current jobs and their next jobs, but also on the longer term. It behooves companies to encourage their employees to develop a broad and diverse portfolio of capabilities to offer in a variety of roles. This implies that both managers and employees must be of the mindset that development means employees are either moving horizontally and gaining new experiences or moving up the ladder—or getting ready to do so.

With the rapid changes taking place in technology, including the globalization of economies and the integration of markets, not only must skills be learned, but they also must be learned quickly and continuously. In addition, the economic downturn could potentially change client needs in the future. Thought leaders such as Thomas Friedman have identified at least three forces that are driving organizations to think more strategically about how to create high-performance workplaces, thus affecting career development. They are

Technology is changing with breathtaking speed, affecting both the workforce itself, as well as the process of career management. This exponential pace of change underscores the importance of having a workforce that can readily adapt to and embrace any and all changes. Employees who are most valuable to the company are those who can not only pick up new knowledge quickly and efficiently, but also those who can accept the fact that today’s essential skills may well be obsolete by tomorrow and that a skill that will be essential tomorrow does not even exist today.

For example, in the software field, new skills requirements arise daily in terms of Internet communication, security, and development. It is imperative that companies keep abreast of new software developments so that they are able to offer employees training in the latest skills. And employees must not be content to rest on their laurels, but always be ready to learn something new. The company that provides career development for people to learn and/or retrain in a newly developing software technology might win both in attracting and keeping valuable employees and by being able to move quickly into a new market.

Increasingly, complexity—as well as the rapid pace of change—requires more frequent and continuous updating of knowledge, skills, and learning. Collaborating, mentoring, and providing the tools for knowledge sharing are more important than ever.

This complexity is also manifested in the way that the global economy has changed with “the inexorable integration of markets, nation-states, and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before...”⁷ Technological advances over the past decade or so have made the marketplace exponentially more competitive, and the competition is no longer local; it is global. The talent pool is no longer local; it is global. Flatter, more integrated global teams provide true competitive advantage. Technology has an impact on everything. Demographic shifts constantly change the marketplace, affecting everything from labor sourcing to channel distribution. When a company thinks of competition, it must think in terms of marketplace and talent.

Anything that a company can do to outpace the competition is vitally important to that organization’s on-going survival. Naturally, companies must have the best products and/or services, competitive pricing, a strong presence in the marketplace, and widespread, efficient distribution. Equally important is having an effective career development system in place so that the company’s product or service is delivered by employees who are continuously trained with the latest knowledge and are enthusiastic about their jobs.

However, creating an adaptable workforce is not an easy thing to do, and it requires more than a series of HR programs. It starts at the top with key leaders. These leaders must develop and communicate a vision while providing structure and guidance, and ultimately delivering business results. As was determined from the study, “Unlocking the DNA of the Adaptable Workforce,” done by IBM Global Business Services, “having an adaptable workforce requires that the company be able to identify experts and foster an environment where knowledge and experience travel beyond traditional organizational boundaries. It calls for a talent model that can help companies recruit, develop, and retain valued segments of the employee population. It depends on an underlying backbone of data and information about the current and projected state of workforce performance and the ability to apply that information to develop strategic insights and recommendations. The adaptable workforce is a precursor for future organizational success.”⁸

Having people with the right expertise aligned with the needs of the organization is necessary for business effectiveness. Yet in a 2007 IBM-conducted study of 400 organizations across many industries,⁹ more than half of the study participants surveyed indicated that the inability to rapidly develop skills was a primary workforce challenge, and more than one-third stated their employees’ skills were not aligned with their current organizational priorities; specifically, skill development was not keeping pace with organizational change and priorities.

When participating organizations were asked what they saw as the primary workforce-related issues facing their organizations, almost all of the challenges cited were closely related to career development concerns which had a strong correlation to the bottom line.¹⁰

Research has been conducted that shows a strong correlation between employee engagement and company performance. Towers Perrin, in their 2007 Global Workforce Study,¹¹ looked at 50 global companies over a one-year period, correlating their employee engagement levels with financial results. The companies with high employee engagement enjoyed a 19% increase in operating income and nearly 28% growth in earnings per share (EPS), while those with low levels of engagement lost more than 32% in operating income and over 11% in EPS.¹²

In addition, the percentage of employees who believe they can have an impact on a range of business metrics increases along with their level of engagement.¹³

More engaged employees are also more likely to stay with their companies. However, as the Towers Perrin study also notes, 40% of employees are “passive job seekers,” open to other opportunities, although not actively looking. What’s worse is that half of the disengaged workers have no plans to leave or are not looking for other jobs. This means employers could lose the workers they would most like to keep, while keeping the ones who are not really adding to the company’s success.

Thus, employers cannot afford to be complacent about their engaged employees, given that engagement in and of itself does not ensure retention. One of the ways to retain employees is by having a competitive salary and benefits package but along with that, offering employees a top-notch career development plan can help keep the engaged in place.

The study confirms the importance of the organization itself creating the conditions that drive engagement. Key factors are the actions and behavior of senior management, the organization’s image and reputation, and the learning and development opportunities the organization provides.¹⁴

Engagement is about motivating employees to go the extra mile in the workplace. It is about encouraging employees to have a passion for their work and identifying the organization as more than a place to earn money. A Harvard Business Review article explained that “employees are motivated by jobs that challenge them and enable them to grow and learn, and they are demoralized by those that seem to be monotonous or to lead to a dead end.”¹⁵

In 2006, The Conference Board published “Employee Engagement, A Review of Current Research and Its Implications.” According to this report, 12 major studies on employee engagement had been published over the prior four years by top research firms such as Gallup, Towers Perrin, Blessing White, the Corporate Leadership Council, and others. The Conference Board defines employee engagement as “a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work.”

The studies identified eight key drivers, half of which are related to career development. These key drivers are as follows:

Another study, The SHRM 2006 Job Satisfaction Survey Report,¹⁷ clearly showed that learning/career development is an important factor of workplace satisfaction. The list of “very important” aspects of employee job satisfaction within career development consists of 1) the opportunities to use skills/abilities; 2) career development opportunities; 3) career advancement opportunities; and 4) the importance of the organization’s commitment to professional development.

As a Mercer consulting study indicated, “organizations that are committed to actively managing careers for both business’ and the individual’s benefit will win the race to attract, engage, and retain their workforces. They have realized that, in addition to compensation and benefits, employees consider career-related rewards, including training and development, lateral moves, stretch assignments, and career incentive—a significant and highly motivating component of total rewards. These are the organizations with higher performance, employee engagement, and retention—the ones that will be best positioned to deliver career outcomes and improved business results.”¹⁸

If a conductor wants to form an orchestra that will make beautiful music, he must first determine the mix of stringed instruments, woodwinds, brass, and percussion that he wants. He will then seek to fill the available spots with the best musicians he can find and retain in each instrumental category. The orchestra’s musical repertoire and audience will be largely determined by the balance and skill level of the musicians the conductor attracts. Similarly, businesses decide on what mix of knowledge and skill they need to make the particular “music” that is their product and service mix. Much of their success depends on how much talent they are able to attract and retain.

Unlike orchestras that tend to use many of the same instruments and music that have been around for a couple hundred years, businesses face the challenge that their “violins” might be outdated tomorrow, and the “woodwinds” of today could be replaced by totally different technology that does not even exist today. Having people with the right talents and expertise is a complex undertaking that focuses not only on current needs but also on an uncertain future based on factors such as: changing technology, anticipated client needs, market trends, economic impacts, and shifting population trends.

In every business, the key question for creating a career development strategy is what skills and knowledge are needed in order to compete, carry out business strategies, and provide maximum (or on-going) value to clients? This approach to career development strategy is depicted in Figure 1.1.

Figure 1.1. Creating a career development strategy.¹⁹

It would be extremely shortsighted of a company to base its strategy solely on the product or service it wanted to provide without understanding what the marketplace is looking for. A company enhances its strategy by taking into account external factors—such as economic conditions, government regulations, and the flattening effect of globalization—and determining the impact that these opportunities and threats will have on client requirements. After these factors are determined, they will then influence the company’s business strategy. This, in turn, has an impact on the company’s talent requirements, resultant talent strategy, and ultimately its career development and learning offerings. In this manner, the company is assured that the knowledge its employees are gaining will have the greatest possible positive impact on their ability to address client issues in the marketplace, making the company the provider of choice.

Career development is an integral component of the overall talent management strategy, not a stand-alone component. There are six dimensions of a talent management strategy:

Develop Strategy

IBM’s approach to career development integrates both the business strategy and the employee perspective into one overall understanding, as shown in Figure 1.2.

Figure 1.2. The career development process: business and employee perspective.

Incorporating the career model into the overall workforce talent management strategy and plan demonstrates clear linkages to business and financial goals. It also embeds career messaging into strategic corporate communications. As IBM senior executive Ginni Rometty said in a 2007 Quarterly Executive Call, “There is no sustainable business model...without a sustainable people model.”

At IBM, managing and growing global talent includes the following two broad areas:

The overall objective is to be sure that the right person with the right skills is on the right job, quickly and cost-effectively. When this happens, the company profits from enhanced competitiveness, based on its ability to hire, manage, and deploy a professional workforce on a worldwide basis. Managers are more helpful to their employees and more collaborative on employee career development, while the employees receive much greater clarity, visibility, and ultimately opportunities for career development.²⁵

Career development needs to be a working component of the overall talent management strategy and plan. It should be integrated with other plan components and should demonstrate clear linkages to business and financial goals. By improving workforce effectiveness, the business then enables enterprise innovation and performance.