Is your organization’s talentready for the future?

Succession planning for future success

Business Focus

Customized leadership, team building and individual training/coaching

Analysis and strategies for talent management and creating an intentional culture

Personality and behavioral assessments for individuals or teams

Designing succession planning tools and processes and career development

Employee engagement/culture surveys

Creating mentor programs

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Avoid the Crown Prince Phenomenon

Problem

• Aging-out Baby Boomers

• Critical global labor shortage

• 1 in 5 executives is eligible for

retirement in the next decade

• 40% of companies do not have a succession plan for theirCEO

• Recognition that there is a problem

Triads

With so many problems,why don’t moreorganizations dosuccession planning?

For those that do, whydon’t they do it well?

Benefits of Succession Planning

• Leadership is key contributor to job satisfaction,commitment and intent to stay

• Only 1% of companies rate their succession managementplans as excellent; 2/3 rate them as fair or worse

• Identify competency gaps

• Helps achieve strategic plan

• Message to employees that they are valuable

Benefits (cont)

• Increase or secure retention of key talent

• Manage the corporate risk by ensuring a supply of talentto fulfill future business roles

• Reduce recruitment costs

• Realize the potential of individuals

• Increase organizational capability

The Case for Internal Promotions

• 66% of senior managers hired from the outside usually failwithin the first 18 months

• Companies with a succession plan that results in aninternal hire are less likely to experience negative effectson employee morale

Source: Center for Creative Leadership and “Making TransitionsWork: - Canadian Center for Management Development

Is This Urgent?

• Have you lost high potential talent because they didn’tknow they were on the succession list?

• If your exec team ‘won the lottery’ would theirreplacements be able to step right in and be productive?

• Is anyone on the “top floors” or the board room worriedabout the status of your ‘talent bench?”

• What lost opportunity costs has your organization incurredbecause it took a long time to replace a key leader?

Purpose of a Succession Plan

• Preparing for the transfer of leadership and an opportunity“grow your own”

• Manage diversity to survive in global environment

• Control the learning curve

• Increase commitment and loyalty

Traditional Approach

• Selection of “Replacements”

• Secret process

• HR usually not involved

• Form of Risk Management

• Reactive

• Focus on Senior levels only

• Creation of Leadership pipeline

• Transparency into the process

• Strategically linked to HR

• Planned future development

• Proactive

• Extending into mid- and lower-level management

Integrative Approach

Evolution of Succession Planning

How Will it Continue to Evolve?

• Succession planning that meets knowledge transferneeds

• A greater reliance on retirees

• Continued to focus on developing groups of people whocan assume a variety of unknown future positions

• Increased integration of succession planning and careerdevelopment.

Demographic Shifts

• Both the U.S. and Canada are becoming older and morediversified. The workforce is also becoming moredominated by women.

• In the next decade:o >50% of your high potentials should be womeno 25% of your high potentials should be nonwhite

• Are you on track to capitalize on these demographictrends?

6 Simple Steps

1. Make theCommitment

2. Examine theBusiness

Strategy andFuture Needs

3. Gap Analysisand Identify Key

Positions

4. TalentReview

5. Developthe Talent

6. Monitor,Measure

and Assess

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1. Make the Commitment

• Senior leader buy-in

• Demonstrate the need for the program

• Connect to the values of the organization

• Unveil the program

• Train

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2. Examine the Business Strategy and Future Needs

• Align with strategic plan

• How is your business changing?

• What competencies and skills are needed?

• Talent SWOT

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3. Gap Analysis and ID Key Positions

•Defining scope•What roles are critical to the organization?•What roles might become crucial over the next five years?•What roles are not critical in the future?•What gaps exists?•Create success profiles

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4. Talent Review

•Identifying talent with multiple inputs

•Who are high potential candidates?

•Who are those “pivotal” people:

•What is their level of readiness:

•What is their engagement level and career aspirations?

•Separate CEO succession plan

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Hi Potential Competencies

• Strategic Thinking• Drive for results• Culture fit• Commitment to the organization• Has the respect and trust of supervisors, peers, and subordinates• Has a high level of competence in his/her technical or functional discipline• Ensures that team goals are achieved within cultural and ethical guidelines• Has a bias for action and is a catalyst for change• Is open to feedback and criticism• Self-manages in a way that fosters learning and high performance• Demonstrates creative problem solving• Actively leads and manages teams that create loyalty and a sense of community

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5. Develop the Talent

•Individualized experience based learning opportunities

•Provide support, and feedback

•Do goals meet succession requirements?

•What tools & resources are needed?

•Consider “Talent Developers”

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Two Types of Development

• Horizontal Development: Refers to the “adding” of moreknowledge skills and competencies to the leader. It’sabout what you know.

• Vertical Development: It is about how you think. Refersto advancement in a person’s thinking capacity. Theoutcome of vertical development is the ability to think inmore complex, systems, strategic and interdependentways.

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Source: Center for Creative Leadership

Vertical Development

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ComplexChallenge

Connectionsand Support

NewPerspectives

Important Future Leadership Competencies

• Change management expertise

• Effective developer of talent/teams

• Effective collaborator/network

• Generational savvy

• Multi-cultural & multi-lingual aptitude

• Comfort with ambiguity

• Immersive learning*

• Dilemma flipping ability*

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* Bob Johansen, Institute for the Future

6. Monitor, Measure and Assess

•Tracking development

•How do we monitor & measure the success of anindividual’s development against their plan?

•What external factors are at play?

•Is accountability in place?

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Measurement Ideas

• IDP completion rate• % of high potential employees to exempt workforce• Number of positions with no internal candidate• Number of ‘ready now’ candidates• Progression of SP readiness• Number of positions filled with succession candidate• Number with multi-country experience (international firms)• % of positions filled by SP candidates• SP candidate retention

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Triads

What are pitfalls to avoidwhen designing successionplanning in your organization?

• Process is not easy to use

• HR Loses Creditability

• Managers game the systems

• Participants lose sight of thepurpose

• Not built around continualreinvention

PitfallsToAvoid

• Does not have senior leadersupport

• Lack of understanding

• Making assumptions about futuregrowth

• Lack of clear, understandablecriteria to be assessed

• Failure to provide developmentalassignments

PitfallsToAvoid(cont.)

Critical Success Factors

• Line manager owned and accountable

• Must have a definition of a successful leader

• Supports, and supported by a Talent Managementculture and mindset

• Early successes and measureable value to theorganization

• A system to monitor candidates development

• Timeline for succession and candidate readiness

Best Practices Top-Performing Companies Use inHi-Potential Programs

• Specialized leadership tracks

• Multi-disciplinary rotation programs across disciplines,divisions, and locations

• Unlimited learning opportunities for high-potentialemployees

• Leveraging technology in talent development

• Action learning

• Mentoring

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Source: UNC Kenan-Flagler Business School

Views on Succession Pool

• A privilege and must be continually earned

• Does not guarantee a promotion – in fact, it could mean alateral move, or even exit from the pool if performance wanes

• Align succession candidates’ expectations with organizationalexpectations of what it means to be in the succession pool

• Take a rigorous approach to supporting a smooth transitioninto next-level or other critical roles

• Push succession management deeper and broader in theorganization

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• Some future leaders need to be moved out of their seat

• All great riders don’t make great drivers

• Attempt to develop future leaders for multiple positions

• It is an ongoing process where the players will changecontinuously

• It is a strategic effort that utilized inputs from multiple sources

• The organizational direction also change so be flexible

• Competencies need to be constantly monitored to ensurethey are measuring what you want to measure

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Organizations succeed overthe long term because they arecontinuously regenerateleadership at all levels

Leaders take inspired actionsthat transform theirorganizations

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Annette Matthies, SPHR, SHRM-SCP

(303) 478-1062

Annette@AspenEdgeConsulting.com

www.AspenEdgeConsulting.com

Thank you!