Succession Planning:

1. Succession Planning: Filling and Developing the Pipeline Robert L. and Carolyn N. Turknett Turknett Leadership Group 2310 Parklake Drive, Suite 500 Atlanta, GA 30345 770.270.1723 www.turknett.com

2. The Shoemaker … and the Factory

3. What is Succession Planning? A systematic process designed to: • Identify key leadership positions and hard-to-fill positions • Identify the critical competencies that employees in those positions require • Prepare for their replacement to ensure the continued ability of an organization to meet its strategic goals and supporting objectives

4. Succession Processes

5. Where are we now? • Current State: • If you had to grow your leadership team by 50% in 60 days, could you? • “I know exactly what it takes to be promoted in this company.” Would 75% answer yes? • Demographic Challenges: • The average age is ____ . • ____ percent are over 59 years of age. • The average length of service is ____ . • What worries you: • Knowledge loss? • Hard to fill positions? • Current practices: • Using Nine-box? • Talent review discussions? • Clear development plans for high potentials?

6. Key Definitions

7. Basic Succession Management Cycle • Definition of Strategy and Competencies needed for the Future • Talent Review • High Potential Identification • Assessment and Gap Analysis • Development Planning and Leadership Development Define for Future Review Talent ID High Potentials Assess Develop

8. Define for Future The Problem of Alignment • In many organizations, each HR service area operates in its own “silo” Silos in HR Compensation Learning Staffing & On-Boarding Performance Management Talent & Succession Planning Leadership Development Emphasis on programs vs. outcomes Emphasis on discrete vs. integrated approaches #1

9. Define for Future Competencies Create Alignment CORE & FUNC. COMPETENCIES Job Descriptions Career Development Structured Behavioral Interviews Selection & Succession Systems Training Leadership Development (e.g., 360) Performance Management

10. Define for Future Define Strategy and Competencies Needed • Picture the future and define strategy • Define values • Define competencies needed for the future • Core • Leadership • Functional

11. Define for Future Competencies • Competencies are important knowledge, skills, abilities, behaviors, and other characteristics required to perform a job successfully • Core Competencies are relevant to the entire organization, and • Align with the values of the organization • Align with the strategy of the organization • Functional Competencies are specific to a position • Leadership Competencies are the competencies specific to leaders in the organization • All Competencies are: • aligned to the specific requirements of the job • customized by organization level

12. Define for Future Competencies are Defined Behaviorally • Defined via behavioral anchors • Describe expected performance at various levels of position • Focus on observable/verifiable behavior • Set a “standard of effectiveness” • Help calibrate ratings of performance across raters • Ensure alignment and accountability #4

13. Review Talent Talent Calibration and Talent Review • A bottoms up approach – each manager completes potential and performance assessment of each direct report (feeds 9-box) • Must have already clearly defined performance standards and markers of potential specific to the organization • In calibration meetings groups of managers discuss ratings and come to consensus on individuals – must cite specific behavioral evidence • In the Talent Review meetings senior leaders discuss organization direction, the identified high potential talent, diversity, and development plans. Some assessment may occur between calibration meetings and review.

14. Review Talent 9-Box Talent Grid 1/3 2/3 3/3 1/2 2/2 3/2 Growth Potential 1/1 2/1 3/1 Needs Improvement Meets Expectations Exceeds Expectations Past Performance

15. Review Talent Must Define Potential:Common Criteria for Potential Markers of potential are essential for senior leadership but more difficult to develop.

16. Review Talent GE Adaptation – Operational Excellence AND Values are Important Values Low to High Results Low to High

17. ID High Potentials Identify High Potentials Growth Potential Past Performance

18. 5 – Outstanding 4 – Superior 3 – Competent 2 – Needs Improvement 1 – Unacceptable ID High Potentials Johnson & Johnson Folio Map The Four Lenses* Potential Assessment Performance Results Position’s Level of Accountability People Development Codes High 4 MT 4 SR 3 5 4 Potential Assessment Size of Circle 3 4 2 3 Low Low Performance Results High

19. ID High Potentials Put CHARACTER at the core. Turknett Leadership Character Model™

20. Assess Assessment and Gap Analysis • Assessment against core, leadership and functional competencies • Gap Analysis for each person and for each position • Sample Assessment tools: • 360 Degree Feedback • Hogan – Leadership Potential • Hogan – Leadership Challenges • Hogan – Values & Preferences • Watson Glaser – Critical Thinking • Turknett – Leadership Level interview • Structured Behavioral Interview • Assessment Center may be included

21. Develop Plan for Development • Create a specific developmental plan for each high potential • Can include: • Movement to a developmental role • Cross-functional projects or teams • Stretch assignments • Mentors • Executive Coaching • Action learning projects • University programs, etc. • Inclusion in special leadership development processes

22. Sample Leadership Development Process Develop Organization Core Competencies Leadership Character and Leader Levels Continuing Lenses Team A Team A TeamA General Session Knowing Yourself General Session Knowing Others (Teamwork) General Session Leading Effectively Team B Team B Team B TeamC Team C Team C Individual Coaching Sessions Individual Coaching Sessions General Sessions - conducted with entire group in one location. The focus is on character as the foundation of leadership, and on Leader Level development using constructive-developmental theory, reinforcing the key organizational messages and developing the particular critical competencies essential to successful leadership in the organization. Senior leaders can serve as teachers or providers of content and values. Individual Coaching - Focused on feedback and real learning and growth from assessment. Includes 360-degree feedback, personality assessment feedback, and work on development plans, with character and level of development as a continuing lens. Action Learning Teams – Small groups focus on projects identified as useful to the business. Teams learn about the business and also focus on working effectively together. Results are usually presented to senior leadership.

23. Examples • Start-up – who will lead? • Professional services firm – who succeeds? • Mid-sized company – little succession management experience • Mid-sized company – advanced systems

24. Mid-sized Company – New to succession planning • Informal nomination of high potentials • Assignment of mentors • Discussions with senior leaders • One-day training programs • Minimal assessment

25. Mid-sized Company – Advanced HR practices • Identification of high potentials through a rigorous talent review • Extensive specification of competencies • Complete assessment on all competencies (360, personality assessment, structured interviews) • Planning for each senior management position • Tailored development plans for each person

26. Some questions to be answered… • Who will lead the succession planning initiative at your organization? • How will the process be linked to strategy? What are your core competencies? • How is management involved in succession planning? • What are your critical positions? Key developmental positions? • How is “high potential” defined? • What is your talent review process for identifying employees with strong potential and for identifying organization gaps? How will calibration occur? • How will high potential employees be assessed? • How will hi-pos receive developmental feedback? • How will development planning be done? • Will the process be open? Will high potentials know they have been identified?

27. Additional Tool - Capability Grid

28. Suggested Reading Berger, Lance A. and Berger, Dorothy R. The Talent Management Handbook: Creating Organizational Excellence by Identifying, Developing, and Promoting Your Best People. Columbus, Ohio: McGraw Hill, 2003. Berke, David. Succession Planning and Management: A Guide to Organizational Systems and Practices. New York: Center for Creative Leadership, 2005. Bower, Joseph L. “Solve the Succession Crisis by Growing Inside-Outside Leaders,” Harvard Business Review, Nov 2007. Byham, William C., Matthew J. Paese, and Audrey B. Smith. Grow Your Own Leaders: How to Identify, Develop, and Retain Leadership Talent. New York: FT Press, 2002. Charan, Ram. “Ending the CEO succession crisis,” Harvard Business Review, Nov 2007. Charan, Ram, Stehpen Drotter, and James Noel. The Leadership Pipeline: How to Build the Leadership Powered Company. New York: Jossey-Bass, 2000. Cohn, Jeffrey, Rakesh Khurana, and Laura Reeves. “Growing Talent as if Your Business Depended On It,” Harvard Business Review, October 2005. Fulmer, Robert F. “Choose Tomorrow’s Leaders Today: Succession Planning Grooms Firms for Success,” Graziadio Business Report , Vol. 5, Issue 1, 2002. Karaevli, Ayse, and Hall, Douglas Tim. “Growing Leadership for Turbulent Times: Is Succession Planning up to the Challenge?,” Organizational Dynamics, Vol. 32, 2003. Krishnan, Ravi. “Easing the Exodus: Innovative personnel strategies can combat the loss of technical skills,” Power Engineering, June 2006. Ready, Douglas A. How to Grow Great Leaders. Harvard Business Review, Dec 2004.

29. Lyn Turknett Carolyn (Lyn) Turknett is President and Co-founder of Turknett Leadership Group. She earned a BS in mathematics and an MA in sociology, with special emphasis in organizational sociology, from the University of Georgia. Her specialty is organizational assessment and change, executive team development, and ethical leadership in rapidly changing environments. Lyn is an active member of several professional associations, including the Society for Human Resource Management, and is an active community volunteer. She serves on the board of United Way of Metropolitan Atlanta, is an elder in the Presbyterian Church, and enjoys “grandmothering” in any spare time. Bob Turknett Dr. Robert (Bob) Turknett is the CEO and co-founder of Turknett Leadership Group, a 22 year-old consulting firm specializing in succession planning, CEO consulting, executive development, talent management and organization effectiveness. Best known for their work in character-based leadership, Bob and Lyn Turknett are co-authors of “Decent People Decent Company," creators of the Leadership Character Model™, and hosts of the annual Leadership Character Awards. Along with a staff of business and IO psychologists, they help companies build cultures of character and accountability and prepare for long-term success. Bob is a member of Atlanta Rotary, a strong supporter of United Way, an avid golfer, and the proud grandfather of Jules and Tucker.