What We Don’t Think About When We Think About Succession Planning

1. What We Don’t Think About When We Think About Succession Planning Presented by: Jim Struck, President Leadership Vision, LLC for Indiana Pressler Memorial HFMA Winter Institute January 25, 2018

2. What We Will Learn • An understanding of succession planning • Why it is vital to the health of an organization • What are the crucial components of a succession plan

3. Background • Jim’s work: • 40 years in leadership • CEO of a healthcare collection agency for 21 years • Specialized work in coaching, strategic thinking, leadership development and execution • Mission: to work with individuals and organizations to help them be the highest version of themselves possible

4. There are almost 80,000 baby boomers who will leave the work force over the next 20 years. That is roughly 10,000/day. What will we do to fill the brain drain on our organizations over that time?

5. The genesis for succession planning… In the aftermath of the 2008-2009 financial crisis there were numerous CEO departures (with no apparent ready replacements).

6. Succession Planning…the benefits • Improved understanding of the purpose of each role within the organization • Knowledge of the key attributes desired for each position • Knowledge of core competencies in each role • Know how to observe, shape, and reinforce the right behaviors in others to insure they achieve/sustain success

7. Succession Planning…the who • CEO and all other C-level positions • Functional department heads • Key middle management positions • High Potentials: individual contributors not ready to move into one of the above positions but having the long-term potential to do so. *After individuals are identified, they should be notified, and a plan for their development shared.

8. Succession Planning…the what • What/who will be the scope of our Succession Plan • Clear understanding of purpose, key attributes, core competencies for each position selected • Performance ratings, rating of potential, rating of readiness to move up, rating of long-term commitment (that is, vulnerability to leave), strengths, development needs and development plan summaries.

9. Record Design of Participants in Succession Plan For all those included in the scope of the Succession Plan, have a core record of their name, position tenure in job and with organization, compensation, supervisor, and relevant work history. • Last 2-3 (at least) performance reviews – these should include how they did against measurables, subjective ratings against core competencies, and culture-specific behavioral qualities critical for success for that organization; • Current rating of potential for promotion in the organization (e.g., unlimited potential, potential to move up 1 level but likely not beyond, no potential beyond current level); • Current rating of readinessto move up (e.g., ready now, ready within 12 months, ready in 1-2 years, likely potential further out, not ready in the future); • Current potential for losing this employee (e.g., high - appears to be actively looking outside, some- not actively looking but could be recruited away, low - appears to be committed for the long-term); • Narrative of the employee's strengths, development needs and overall business capabilities; • Development Plan - for those with potential to move up, the Plan should indicate how the identified development needs will be addressed in order to help enhance the employee's readiness. This document should be prepared by the individual responsible for the level being summarized. HR should be available to assist in the preparation, and should also review the documents, for quality control purposes, prior to their being presented to the CEO or Board.

10. Succession Planning…what we miss • An opportunity to impact culture…it’s about behavior • Demonstrating proficiency about behavior means:• Pinpointing the appropriate results and behaviors for employees at every level • Measuring progress frequently• Providing regular progress data to each performer while arranging consequences that maintain, redirect or accelerate behavior change• Evaluating progress and celebrating accomplishment

11. Succession Planning… building readiness • Building a culture of succession readiness means learning how to observe, shape and reinforce the right behaviors for all employees to achieve and sustain success. What are their strengths? • Find exemplary performers – capture what happens; which activities to teach, practice and reinforce • A succession-ready culture will create more capable performers as talent managers take on their most important role — developer-coach

12. Succession Planning… final keys • Teach or cross-train employees, providing multiple skill sets • Learn to ask simple and clear question of your top performers (how did you do that?) Document what they tell you • Learn how to support behavior change in yourself and others - will open the door to achieving a culture of flexible succession

13. Thank you. Questions/Comments Jim Struck Leadership Vision, LLC www.ldrshipvision.com jstruck@ldrshipvision.com 317-753-6017