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SUCCESSION PLANNING: Building Your Talent Bench. Succession: It’s History. What did the Pope, King Henry the VIII and the Godfather have in common?. The Talent Crisis. What is the Age Bubble?. % change in pop. by age group 2000-2010. Recent Research Data.

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succession it s history
Succession: It’s History

What did the Pope, King Henry the VIII and the Godfather have in common?

the talent crisis
The Talent Crisis
  • What is the Age Bubble?
recent research data
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.
recent research data6
Recent Research Data

Factors 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

factors you may need to consider
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)
ask your ceo these top questions
Ask your CEO these top questions
  • Have you lost high potential talent because they didn’t know they were on the list?
  • If your executive team “got run over by a bus,” would their replacements be able to step right in and be productive?
  • Is anyone on the “top floors” or in the Boardroom worried about the status of your “talent bench?”
  • What lost opportunity costs has your organization incurred because it took a long time to replace a key leader?
key discussion questions
Key discussion questions …
  • How does someone in your organization get selected to be a potential successor?
  • Do you have leadership development and talent management processes in place to grow successors?
  • If your organization has succession criteria, is it past focused or future oriented?
  • If you have a succession planning process, is it grounded in your business strategy?
  • Would your selection/promotion practices pass a “drop in” legal challenge?
common flaws
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.
common flaws con t
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.
what is succession planning
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.

replacement vs succession
Reactive

Form of Risk Management

Substituting

Narrow Approach

Restricted

Pro-Active

Planned Future Development

Renewing

Organized Alignment

Flexible

Replacement vs. Succession
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

Traditional vs. Future
traditional vs future15
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

Traditional vs. Future
reasons for succession planning
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
reasons for a succession planning program
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
reasons con t
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
assessment questionnaire
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.
critical considerations for a successful succession process
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?

critical considerations for a successful succession process21
Critical Considerations for a Successful Succession Process
  • 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.
  • Accurate research information on retirement and attrition.
  • Good communication between line and HR on promotions and transfers.
  • Senior level commitment, involvement and ownership; alignment with key stakeholders.
  • Horizontal and vertical communication at appropriate levels
critical considerations con t
Critical Considerations, con’t.
  • Key criteria understood; competency identification and validation; “Leadership Profiles” for targeted positions.
  • 360, multi-rater and other objective assessments and methods.
  • Feedback rich process; development culture.
  • Fluid in design; pools high potentials for possible next jobs.
  • Established committees to oversee the review and placement process.
  • Rigorous talent review team process includes individual, manager and/or sponsor, objective sources and organization.
  • Promotions evaluated against the succession candidate pool.
critical considerations con t23
Critical Considerations, con’t.
  • Aligned/linked with other practices of talent development and performance management throughout the organization.
  • Relevant development opportunities and assignments.
  • Executive coaching for key players or those in accelerated roles.
  • Accessible e-based talent bank to manage candidate data, assignment and relocation needs, and identify ready candidates.
  • Built with checks and balances; diversity and legal considerations.
  • Defined outcomes and ongoing review process to measure effectiveness.
sample succession planning process
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?

overview of process and tools

Manager

and Self

Evaluations

Decision-Making

Matrix

Executive

Profiles &

Organization

Chart

Dev. plans focus

on both strengths

And dev.areas

Org.Strategic

Initiatives, Mission

Vision & Values

Determine

Competencies

For Leadership

Identify

Key Leadership

Candidates &

Assess Against

Competencies

Determine Gap

between

Actual Performance

& Behaviors vs.

Required

Competencies

Assess

Organizational

Risks

and Develop

Strategies

Monitor & Track

Employee’s

Performance

Process

Design

Process

Management

Process Implementation

Overview of Process and Tools
slide27

POSITION HISTORY

  • 2002-Present, Fairbanks Capital Corp., Controller
  • 1998-2002, Independent Consultant
  • 1990-1998, Household International Inc.
  • V.P. Specialty Finance
  • CFO
  • Deputy Controller
  • EDUCATION
  • Northwestern 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

Sample, Sally

Controller

Date of Hire: 1/7/2002

Talent Code: Solid Citizen Performer

Potential Positions: Chief Financial Officer

Key

results talent summary by competency
Results: Talent Summary by Competency

Leadership competencies

Functional competencies

Management of

Budget

Market

Knowledge

Integration

and Balance

Strategy

and Planning

Technology

& Business

Methods

Adaptability

Cross-Boundary

Perspective

Organizationa

Alignment

Developing

Self & Others

Drive for Results

Communication

and Influence

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

decision making matrix
Decision Making Matrix

Performance

Potential

decision making matrix30
Decision Making Matrix

Performance

Potential

results talent summary by individual
Results: Talent Summary by Individual

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

lessons learned
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
refining the program
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
goal build a development culture
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