succession planning
TRANSCRIPT
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SUCCESSION PLANNING:SUCCESSION PLANNING:Building Your Talent Bench
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Succession: It’s HistoryWhat did the Pope, King Henry the VIII and the Godfather have in common?
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The Talent Crisis
• What is the Age Bubble?
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% change in pop. by age group 2000-2010
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Perc
en
tag
e
5-9 10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
Age
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Recent Research Data• Factors that impact your need to develop your talent
bench– Corporate officers reported (40%) that company
growth was limited because they didn’t have the right talent.
– Corporate officers reported (75%) that their company is chronically short of leadership talent.
– Within next 5 years, average company will lose 30% of its executive staff .
– Failure rates are high (40-50%) when executive talent is hired from outside.
– Two-thirds of employees have low to moderate confidence in their companies’ top executives; three-fifths of executives say the same.
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Recent Research DataFactors that impact your need to develop your talent bench (continued)
– Employees say company leadership is a key contributor to job satisfaction, commitment and intent to stay; especially true for top talent.
– Recent surveys state that employees value most the leadership qualities of honesty and integrity.
– Only 1% of companies rate their succession management plans as excellent; two-thirds rate them as fair or worse.
─McKinsey, The War for Talent, Right’s People Brand Research Report, DDI Exec. Dev. & Succession Management
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Factors You May Need to Consider– Increased retirements; company demographics– Attrition; promotions; transfers– Market pressures requiring better/different players – Fit issues; changing skill sets (“the man for all
seasons?”)– M&A’s; accumulative RIF impact in mid
management levels– Weak employment brand; poor retention practices
for top talent– Increased board pressures, (e.g. Sarbanes-Oxley
Act)
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Ask your CEO these top questions
1. Have you lost high potential talent because they didn’t know they were on the list?
2. If your executive team “got run over by a bus,” would their replacements be able to step right in and be productive?
3. Is anyone on the “top floors” or in the Boardroom worried about the status of your “talent bench?”
4. What lost opportunity costs has your organization incurred because it took a long time to replace a key leader?
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Key discussion questions …
6. How does someone in your organization get selected to be a potential successor?
7. Do you have leadership development and talent management processes in place to grow successors?
8. If your organization has succession criteria, is it past focused or future oriented?
9. If you have a succession planning process, is it grounded in your business strategy?
10. Would your selection/promotion practices pass a “drop in” legal challenge?
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Common Flaws• Talent planning and placement efforts are not
linked to business strategy.• Succession planning and talent assignment by
default - react only when a position becomes open.
• Line mangers ignore the “talent pool,” relying instead on their own knowledge/comfort with candidates.
• Lack of ownership by the “top floors;” Succession planning and key assignment of talent is perceived as a human resources issue.
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Common Flaws, con’t.
• Entitlement culture rather than criteria-based promotion process; Halo effect for “chosen ones.”
• Lack of objective discussions; Limited data points to make good decisions.
• No formal process to keep track of candidates.
• No leadership/career development process to grow your own talent.
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What is Succession Planning?
A deliberate and systematic effort by an organization to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital for the future, and encourage individual advancement.
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Replacement vs. Succession
• Reactive
• Form of Risk Management
• Substituting
• Narrow Approach
• Restricted
• Pro-Active
• Planned Future Development
• Renewing
• Organized Alignment
• Flexible
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Traditional vs. Future
• Driven by an annual bureaucratic HR procedure
• Entitlement focus – good old boy payback system - decided in secret
• “The list” and identified development actions, but no accountability for development
• Driven by current and future business needs
• Successors determined by an open process with multiple inputs and factors
• Development plans, development discussions and coaching with both candidate, sponsors and others held accountable for progress and monitoring
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Traditional vs. Future
• Assumes targeted people will be ready when needed. Little, if any feedback
• Hindered by paper process that needs to be updated
• Heirs apparent in line for specific positions
• Actively involves candidates in development discussion. Regular, developmental feedback
• Aided by on-line assessment and regularly updated talent bank; scales to meet the masses
• A fluid pool of qualified leaders to be tapped as needed for the next level
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Reasons for Succession Planning
Here are a couple –
-- ( can you think of others … ?)
• Help individuals realize their career plans within the organization
• Tap the potential for intellectual capitol in the organization
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Reasons for a Succession Planning Program
• Provide increased opportunities for “high potential” workers
• Identify “replacement needs” as a means of targeting necessary training, and employee development
• Increase the talent pool of promotable employees
• Contribute to implementing the organization’s strategic business plans
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Reasons, con’t.• Help individuals realize their career plans within
the organization• Tap the potential for intellectual capitol in the
organization• Encourage the advancement of diverse groups• Improve employee’s ability to respond to
changing environmental demands• Improve employee morale• Cope with effects of voluntary separation
programs
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Assessment Questionnaire
• Complete the following Assessment Questionnaire to determine how well your organization is presently conducting Succession Planning.
• Share the assessment with your organization, use it as a starting point to determine the need for your approach.
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Critical Considerations for a Successful Succession Process
Let’s discuss…..Examples:• Common values on the why’s and how’s are
communicated.• True commitment to only the best people getting
nominated.• Focused on future strategy and emerging
business needs.
Others?
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Critical Considerations for a Successful Succession Process
1. Common values on the why’s and how’s are communicated.
2. True commitment to only the best people getting nominated.
3. Focused on future strategy and emerging business needs.
4. Accurate research information on retirement and attrition.5. Good communication between line and HR on
promotions and transfers.6. Senior level commitment, involvement and ownership;
alignment with key stakeholders.7. Horizontal and vertical communication at appropriate
levels
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Critical Considerations, con’t.8. Key criteria understood; competency identification and
validation; “Leadership Profiles” for targeted positions.9. 360, multi-rater and other objective assessments and
methods.10. Feedback rich process; development culture.11. Fluid in design; pools high potentials for possible next
jobs.12. Established committees to oversee the review and
placement process.13. Rigorous talent review team process includes individual,
manager and/or sponsor, objective sources and organization.
14. Promotions evaluated against the succession candidate pool.
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Critical Considerations, con’t.
15. Aligned/linked with other practices of talent development and performance management throughout the organization.
16. Relevant development opportunities and assignments.17. Executive coaching for key players or those in
accelerated roles.18. Accessible e-based talent bank to manage candidate
data, assignment and relocation needs, and identify ready candidates.
19. Built with checks and balances; diversity and legal considerations.
20. Defined outcomes and ongoing review process to measure effectiveness.
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Sample: Succession Planning Process
• Phase I: Review Business Issues• What is your organization’s mission and vision?
What are your organizational values?• What competencies are necessary in your
employees to support current and future mission, vision and values?
Why link succession with strategy?
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Overview of Process and Tools
Assess Organizational
Risks and Develop
Strategies
Managerand Self
Evaluations Org.Strategic
Initiatives, MissionVision & Values
Determine Gap between
Actual Performance & Behaviors vs.
Required Competencies
Decision-MakingMatrix
Monitor & Track Employee’s Performance
Executive Profiles &
Organization Chart
Dev. plans focuson both strengths
And dev.areas
Determine CompetenciesFor Leadership
IdentifyKey LeadershipCandidates &
Assess Against Competencies
ProcessDesign
Process Implementation ProcessManagement
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Functional and Leadership Competencies
FUNCTIONAL LEADERSHIP
Integration and BalanceThe ability to pull together diverse views and conflicting information into a comprehensive direction for the business. Balances today’s business requirements with tomorrow’s vision for where the business is heading.
Cross Boundary PerspectiveMaintains balance between enterprise-wide, global thinking and a focus on the functional areas within Fairbanks. It includes connecting with initiatives in other areas and proactively sharing relevant resources with others.
Management of Budget and MetricsEmphasizes profitability, financial viability and performance potential to ensure business performance. Develops financial measurement frameworks, and identifies key metrics to drive business performance.
Drive for ResultsThe ability to continuously raise performance standards and drive outstanding organizational performance. It includes achieving superior performance not only for one’s own area, but also for FCC performance as a whole.
Market KnowledgeUnderstands business and regulatory environment, major industry players, and the business dynamics. Has in-depth knowledge of the full range of FCC business products and key competitors in the market place.
AdaptabilityAdaptability relates to taking action to improve current approaches or solutions. Facilitates a creative or innovative approach to working. Responds with agility to changing goals, processes or environments.
Cutting-Edge Technology and Business MethodsUnderstands and takes action to maintain, develop, and apply specialized knowledge of technology and business methods relevant to one’s role. Takes the initiative to keep abreast of key technological changes and trends.
Organizational AlignmentThe ability to rapidly align people, processes and organization structure with strategic direction. This includes the active identification and removal of barriers that block change and impede desired behavior.
Business Strategy and PlanningFormulates appropriate business strategies and supporting plans that drive the success of the business areas and support Fairbanks’ overall business plans.
Communication and InfluenceThe ability to effectively communicate and influence others inside and outside the organization to build commitment to Fairbanks objectives.
Developing and Motivating Self and Others Efforts to apply and grow one’s expertise/knowledge (and to help others do so) within and across specialized technical/functional areas.
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Sample, SallyController
Date of Hire: 1/7/2002Talent Code: Solid Citizen PerformerPotential Positions: Chief Financial Officer
POSITION HISTORY2002-Present, Fairbanks Capital Corp., Controller1998-2002, Independent Consultant1990-1998, Household International Inc.•V.P. Specialty Finance•CFO•Deputy Controller
EDUCATIONNorthwestern University, Kellogg School of Mgmt., M.S.Purdue University, B.S.
STRENGTHS• Strategy and Planning• Budget Management• Good Judgment• Good communication/interpersonal skills• Driven to improvement and success
DEVELOPMENT AREAS• Development of treasury/technical skills• Working effectively across departmental lines to accomplish goals• Build knowledge of FCC and servicing operations• Training and development of staff
Competency Assessment Functional Leadership
Integration and Balance Cross-Boundary Perspective
Management of Budget Drive For Results
Market Knowledge Adaptability
Technology and Business Methods
Organization Alignment
Strategy and Planning Communication and
Influence
Develops Self and Others
Exceeds Standard
At Standard
Needs Development
Key
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Results: Talent Summary by Competency
Technology
& B
usiness M
ethods
Strategy
and Planning
Com
munication
and Influence
Drive for R
esults
Developing
Self &
Others
Organizationa A
lignment
Cross-B
oundary P
erspective
Adaptability
Integration and B
alance
Market
Know
ledge
Managem
ent of B
udget
This graphical representation indicates how the high potential group scored on each competency. It is compiled so that the competencies are listed from left to right in the order in which there is the greatest need for development according to our data collection. It is most useful for looking at the talent needs of
the group (rows do not represent an individual's scores in this grid).
- Exceeds Standards - At Standard - Needs Development
Functional competencies Leadership competencies
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Decision Making MatrixSOLID CITIZEN PERFORMER(High Performance/Low Potential)Gets all important things doneIs a pro in his/her positionIs seen as a leader in his/her areaHas reached potentialAction Required:Continue developing in current position; is in the right job
STRONG PERFORMER(High Performance/Med Potential)Gets all important things doneMay act at level of capability of one level above current positionActs as leader and role modelExhibits many strengths or competencies beyond current roleSome leadership development issuesAction Required:Look for opportunity to display leadership in current job
STAR PERFORMER(High Performance/High Potential)Gets all important things doneActs at a level of capability of at least one level above current positionAcknowledged as a skilled leader and role modelExhibits many strengths or competencies beyond current roleHas wide spread influence beyond current roleAction Required:Stretch assignments to prepare for larger role
QUESTIONABLE PERFORMER(Medium Performance/Low Potential)Gets most important things doneIs very proficient in his/her current positionIs not seen as a leader in his/her area Action Required:Work on improving performance in current job; may be candidate for lateral move
SOLID CITIZEN PERFORMER(Medium Performance/Medium Potential)Gets most important things doneShows signs of leadership and role modelingExhibits many FCC executive competenciesMay be new in positionAction Required:Leave in current job; continue developing skills and improving performance
STRONG PERFORMER(Medium Performance/High Potential)Gets most important things doneAcknowledged as a leader and role modelExemplifies FCC executive competenciesActs at level of capability of next level in the organizationAction Required: Focus on performance short term and development opportunities long term
LOW PERFORMER(Low Performance/Low Potential)Isn’t getting most important things doneDifficulty performing to standards in his/her current positionAction Required:Consider reassignment to more appropriate position; including lower level or exit option
QUESTIONABLE PERFORMER(Low Performance/Medium Potential)Isn’t getting most important things doneCapable of making higher contributionMay be in wrong job or occupied with non-work distractionAction Required:Focus on improving performance
SOLID CITIZEN PERFORMER(Low Performance/High Potential)Isn’t getting most important things doneHas been acknowledged as a team player and role modelHas exemplified FCC executive competenciesMay be in wrong job or occupied with non-work distractionAction Required:Address root cause performance issue; worthy of investment in development
Potential
Per
form
ance
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Decision Making MatrixSOLID CITIZEN PERFORMER(High Performance/Low Potential)
JF
STRONG PERFORMER(High Performance/Med Potential)
BWEB
STAR PERFORMER(High Performance/High Potential)
BR TOEK
QUESTIONABLE PERFORMER(Medium Performance/Low Potential)
DS
SOLID CITIZEN PERFORMER(Medium Performance/Medium Potential)
EH LGTW KSDSo
STRONG PERFORMER(Medium Performance/High Potential)
TKAG
LOW PERFORMER(Low Performance/Low Potential)
QUESTIONABLE PERFORMER(Low Performance/Medium Potential)
SOLID CITIZEN PERFORMER(Low Performance/High Potential)
Potential
Per
form
ance
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Results: Talent Summary by Individual
Participants
Integration and B
alance
Manage-m
ent of B
udget
Market
Know
ledge
Technology
andB
usiness M
ethods
Strategy and
Planning
Participant 1
Participant 2
Participant 3
Participant 4
Participant 5
Participant 6
Participant 7
Participant 8
Participant 9
Participant 10
Participant 11
Participant 12
Participant 13
Cross
Boundary
Perspective
Drive for
Results
Adaptability
Organization A
lignment
Com
muni
actionand
Influence
Develops
Self and
Others
Functional Competencies Leadership Competencies
This graphical representation is a comparison of each individual’s performance by competency (each row on the vertical axis represents an individual's score).
- Exceeds Standards - At Standard - Needs Development
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Lessons Learned
• It is an ongoing process where the players will change continuously
• In smaller less stable organizations, the organizational direction may also change
• Competencies need to be constantly monitored to ensure they are measuring what you want to measure
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Refining the Program
• Prepare a program action plan
• Communicate the action plan
• Conduct Succession Plng. meetings
• Training on Succession Plng.
• Counsel managers to deal with Succession Plng. issues affecting them and work areas
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Goal: Build a Development Culture
“The strategic objectives of the company lead to assessment of talent to determine future staffing needs and bench strength, which in turn determine development needs and actions.”
─ “Promoting A Development Culture,” Right Management Consultants, Peggy Simonsen