©shrm 2014 1 d virginia shrm conference succession planning in organizations shelly trent, sphr...

©SHRM 2014

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©SHRM 2014

DVirginia SHRM Conference

Succession Planning in Organizations

Shelly Trent, SPHRSHRM Field Services Director

Bhavna Dave, PHRDirector of Talent

SHRM member since 2005

©SHRM 2014

Why is Succession Planning Important?

• Disasters, deaths, retirements• Who will run the organization? • Who are the replacements?• Are replacements ready?• Very difficult to recruit the right talent, so looking within

may be the best option• Succession plan that allows employees to plan for their

careers might be an enticement to stay

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What is Succession Planning?

• An ongoing process of systematically – identifying, – assessing, and – developing talent

to ensure the leadership continuity for all key positions in the organization

• A proactive response to possible future needs• A process to ensure that the company’s current

mission and vision will be carried forward by future leaders

• Should be directly tied to organization’s mission, goals, business plan, etc.

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Purpose of Succession Planning

• Plan a sequence of personnel moves so that potentials for key positions are known in advance of actual need

• Opportunities for mentoring and developmental activities to improve an employee's readiness to succeed into specific positions

• Provides information needed to minimize the chance of poor choices or the adverse impacts of unplanned vacancies that can disrupt the continuity of leadership

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How Succession Planning Helps Organizations

• Succession planning can assist organizations to accomplish the following: – "grow your own" future leaders rather

recruiting externally– manage diversity through the development of

minorities– shorten the learning curve for future managers– increase employee commitment and loyalty

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SHRM Succession Planning Poll Key Findings June 2011

What percentage of organizations currently have succession plans in place?

Fewer than a quarter (23%) of organizations currently have a formal

succession plan in place, but more than one-third (38%) have informal

succession plans. Larger organizations (2,500+ employees) are more likely

to have a formal succession plan or process in place than smaller

organizations (1 to 499 employees).

What are the most common job levels covered in succession plans?

Approximately one-half of succession plans include president/CEO (49%),

executives (54%), senior management (58%) and middle management

(51%).

Are succession plans regularly evaluated or reviewed? Almost one-third

(30%) of organizations evaluate or update their succession plans once a

year.

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Why have some organizations not developed a formal succession plan?

Almost one-half (43%) of the respondents indicated that more immediate

requests take precedence in the organization over developing a formal

succession plan. Other organizations stated that they have not yet given

consideration to succession plans (16%) or feel that their staff size is too

small (15%).

Has there been any change in the number of organizations with an informal

succession plan or process in place? The number of organizations who

claim to have an informal succession plan or process in place has increased

since 2006 from one quarter (26%) to more than a third (38%) in 2011.


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Does your organization have a formal succession plan in place?

2006(n = 385)

2011(n = 426)

Yes 29% 23%

No, my organization has an informal succession plan or process 29% 38%

No, but my organization intends to develop a plan in the near future 26% 22%

No, and my organization has no intentions to develop a plan 16% 17%


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Does your organization’s succession plan incorporate methods that:

Note: Totals do not equal 100% due to multiple responses.

2011(n = 146)

2006(n = 214)

Develop potential leaders? 80% 52%

Track potential leaders? 75% 61%

Evaluate all employees annually on their leadership potential? 73% 53%


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Which of the following levels of employees does your organization’s succession plan include?

Note: Totals do not equal 100% due to multiple responses. “*” denotes the response was not available in 2006 survey.

(n = 228) (n = 223)

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HR’s role in connection with the organization’s succession plan

Note: Totals do not equal 100% due to multiple responses.

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4 Generations in the U.S. Workforce

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Important Facts

• U. S. Census: By 2016, one-third of the total U.S. workforce will be age 50 or older, and will increase to 115 million by 2020. This increase comes at a time when the entry-level workforce is in rapid decline, and the age of retirement is increasing from 65 to 70 years.

• U.S. DOL: U.S. employers will need 30 million new college-educated workers by 2020. However, fewer than 23 million people will graduate from U.S. colleges in the next 10 years. Do the math! That’s a shortage of 7 million!

• April 2012 SHRM-AARP Survey: Approximately one-half of organizations (51%) indicated that writing in English (grammar, spelling, etc.) was the top basic skill observed among older workers that is not readily seen among younger workers.

• Fifty-two percent of organizations reported professionalism/work ethic as the

top applied skill that younger workers are less likely to exhibit; problem-solving was second.

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Business Continuity

• Estimates show that Boomers (46- to 64-years-old) will have four to six jobs over their working life

• Gen X (30- to 45-years-old) will have 10 to 12 jobs over their working life

• Gen Y (15- to 29-years-old) will change jobs every one to two years

• High rates of turnover = serious concern among businesses that will see their profits significantly reduced by the costs associated with filling vacant positions

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Mentoring/Knowledge Transfer

• You lose not only experienced employees when they walk out the door; you also lose their institutional knowledge

• Mentoring, coaching, and job shadowing are three of the most common types of knowledge transfer programs (SOP manuals don’t always cut it; relationships are lost)

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©SHRM 2014

Getting Started in Succession Planning

• We will assume for this presentation that …– Company leaders and CEO want a

succession plan and take ownership of it– The company has strategic plan for 5,

10, 15 years, etc.– HR has an understanding of the current

workforce (aging workforce, retirements, technology needs and trends, etc.)

– The organization has a comprehensive performance evaluation system that identifies employee goals, strengths and weaknesses, and development

opportunities

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How to Roll Out the Program

• Employees should receive info about the program accompanied by a memo and/or presentation by company leaders

• Employees need to see that program is important part of corporate culture and is supported by management

• Without ongoing support of management, employees will not see the value of participating or may fear it

• Other upper management members and supervisors also need to show support, not just key leaders

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Steps in Succession Planning

1. Determine a program timeline– How long will it take to

complete each step?– By when do the potential

leaders need to be ready to take key positions?

– How long will it take to develop the potentials?

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2. Identify key leaders and leadership criteria– Determine which positions are “key”– The current leaders should participate with HR

in making this decision– Review the job descriptions for those

determined to be “key” leaders– Interview each key leader to review job

description and discuss any other criteria that should be noted and to determine future needs in those positions

– Discuss “intangible” leadership criteria such as decision-making skills, judgment, etc.

– Ask them what they think are the most important aspects of their positions that will be needed in their replacements

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Steps in Succession Planning3. Create competency lists based on job descriptions

and actual soft skills (judgment, decision making, etc.) needed for positions now and in the future– Develop leadership and position competencies for each

key role (we used the Lominger Leadership Architect® Competency Sort Cards, below)

– Using the cards, you can determine the competencies for each position, and compare them with the competencies for each potential and determine the gaps

Card sample

used with permission

©SHRM 2014


4. Identify top talent to determine who “fits”– While some companies limit participation to

candidates already in line for top-level positions, others identify candidates at these levels: • Potentials are identified for immediate backup of key

management positions and development activities are individualized for those employees

• Potentials are identified outside of the functional area and development activities are designed that emphasize preparation for movement regardless of function or department

• Potentials are identified at lower levels and development activities are designed to increase their understanding of the organization and broaden their career knowledge

• Employees are allowed to “self-select” into the program

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4. (cont’d) Identify top talent and look at who “fits”– Look at the org chart to determine who is in positions

one or two levels down from the key leaders or any “shining stars”

– Review their job descriptions to see who would fit best into any key positions

– Determine with the key leaders, supervisors, etc., if those employees already have any of the leadership competencies

– Ask those potentials whether they want to be considered for the program

– Review performance evaluations of potentials– Determine the career goals of potentials– Look at the education, training, salary history, and

background of the potentials

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MasteryWorks Career Assessment Results

Enrichment = growing in place; being an expert in current role

Vertical = moving up

Realignment = moving down

Lateral = moving to another department

Exploratory = reviewing other career options

Relocate = moving out of the company

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5. Determine gaps for each person/role– After developing the competency lists for each key

position and reviewing talents of possible successors, determine what gaps exist

– Determine what potential successors need to do to become ready for the key positions

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6. Create development plan for each potential leader based on competencies and gaps– Training– Role playing– Mentoring– 360° Feedback– Special Assignments

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• Training– What training programs (internal

or external) could the potential leader participate in to “bridge the gap”

– Consider both leadership training and functional training

– Training could also include obtaining a professional certification, attending college courses, or obtaining a specialized degree

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• Role Playing & Assessment Centers– Have potential leaders participate in role-playing

sessions/assessment centers where they are given a problem to solve as a group

– Problem should be one that either has happened before or could happen--make it realistic

– Key leaders observe the potentials in this process to determine leadership and decision-making skills and watch interaction among group members

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Steps in Succession Planning• Mentoring

– Develop mentoring program where key leaders meet with potentials to discuss their goals, skills, etc.

– Potentials should learn from key leaders what they need to work on to prepare for key role

– Mentors (key leaders) should provide details about everyday role, tasks, etc.

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©SHRM 2011


• 360 Feedback– Feedback can be given to potentials from key

leaders, other potentials, current supervisors, co-workers, HR, etc.

– Use this information in developing programs to prepare the potentials for key positions

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Steps in Succession Planning• Special Assignments

– Key leaders can give the potentials special projects to work on

– Potentials work directly with/for the leaders to complete projects and learn on the job

– Assignments can be developing budgets, making presentations at conferences, attending special meetings, meeting with the press, etc.

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7. Once position is open, interview and place– Before a key leader leaves, ask him/her to participate in

interviewing and selecting the potential leader who will take his/her place

– Don’t just choose one—go through a fair interview process with any potential who is in line for that role

©SHRM 2014

Common Pitfalls• Being secretive

– The succession planning program should be an organization-wide initiative that employees are aware of

– Leaders should let people know that certain employees will be participating

– Employees should be allowed to express interest in the program (self-select)

– Even if they are not seen as key potentials, they might be in later years; go ahead and start developing them now at a different level

©SHRM 2014

Common Pitfalls

• Underestimating internal talent– Many organizations feel that talent comes from the

outside (consultants)– Don’t make the mistake of assuming that current

staff cannot be developed to take on key roles– Risk of losing good employees

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Common Pitfalls

• Focusing too much on the job description– Key leaders and potentials may

share similar job duties, but that does not mean potentials are ready to step up, and they already have the organizational knowledge

– Focus on “soft skills” such as leadership, acceptance of the potential by other employees, judgment, temperament, etc.

©SHRM 2014

Common Pitfalls• Not offering a development program

– If your organization wants to have a succession plan, be prepared to pay for training, education, certifications, and other methods to prepare the potentials

– Don’t forget to continue development of all other employees

– Make the resources available

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Common Pitfalls

• Be sure ALL key leaders have bought into program– Make them accountable to CEO– Watch out for biases for or against certain potentials

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Common Pitfalls

• Also consider “lateral” succession– Who will take on the roles of the potentials once

they have moved up– Employees may have talents suited for a

different role than their current one– Means for retaining good employees– Not offering development to all employees sends

the wrong message

©SHRM 2014

Closing Thoughts…

"The role of the leader is all the more legitimate and powerful if leaders make their followers into leaders. Only by standing on their shoulders can true greatness in leadership be achieved."

-- James McGregor Burns

©SHRM 2014

For Further Reading

• Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within by William J. Rothwell

• High Flyers: Developing the Next Generation of Leaders by Morgan W. McCall

• Ultimate Rewards: What Really Motivates People to Achieve by Steven Kerr (Editor)

• Achieving the Perfect Fit: How to Win With the Right People in the Right Jobs by Nick Boulter (Editor), Murray M. Dalziel (Editor), Jackie Hill (Editor)

• Leadership Succession by Stewart D. Friedman (Editor)

©SHRM 2014

For Further Reading

• Succession Planning: An Annotated Bibliography and Summary of Commonly Reported Organizational Practices by Lorrina J. Eastman

• Grow Your Own Leaders: How to Identify, Develop, and Retain Leadership Talent by William C. Byham, Audrey B. Smith, Matthew J. Paese

• Building a Career Development Program: Nine Steps for Effective Implementation by Richard L. Knowdell

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For Further Reading

• Organizational Career Development: Benchmarks for Building a World-Class Workforce (The Jossey-Bass Management Series) by Thomas G. Gutteridge, et al

• New Directions in Career Planning and the Workplace: Practical Strategies for Career Management Professionals by Jean M. Kummerow (Editor)

• Promoting a Development Culture in Your Organization: Using Career Development As a Change Agent by Peggy Simonsen

©SHRM 2014

For Further Reading

• Up Is Not the Only Way: A Guide to Developing Workforce Talent by Beverly L. Kaye

• Valuing People: How Human Capital Can Be Your Strongest Asset by Lisa M. Aldisert

• Interactive Career Development: Integrating Employer and Employee Goals by W. Robert Epperly, Arthur M. Cohen


Shelly

(Please note that these slides are copyrighted material and may only be distributed to an audience at a SHRM speaker presentation. Further distribution is not allowed, except with permission by SHRM.)

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Shelly Trent, [email protected]

©shrm 2014 1 d virginia shrm conference succession planning in organizations shelly trent, sphr...

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