C O M P E T I T I V E A D V A N T A G E. R E A L I Z E D. Succession Planning Overview STATE ACTION FOR EDUCATION LEADERSHIP PROJECT Succession Planning Conference March 11, 2005 Delaware Technical & Community College Loren Appelbaum Senior Consultant Development Dimensions International, Inc.
Outline for discussion • Organizational Context/Need • Transitional Challenges & Roles • The Success Profile • Framework for Succession Planning • Identifying Potential • Diagnosing Strengths and Development Needs • Development Planning • Key Decisions • Realizing results
Trends in Leadership Succession Planning • Accelerated development of highest potentials, vs. replacement planning • Accountability at senior leadership levels, vs. HR (not a spectator sport) • Drive toward talent acquisition, development integrated into overall talent management approach • Holistic approach (success profiles) • Stronger focus on identifying highest potentials against relevant, objective criteria • Earlier identification of talent for longer term growth, development, succession • Board level interest in leadership development • Sarbanes-Oxley influence • Need for efficiencies in leadership assessment and delivery; leveraging use of technology
“The thing that wakes me up in the middle of the night is not what might happen to the economy or what our competitors might do next, it is worrying about whether we have the leadership capability and talent to implement our global strategies.” David Whitman, Chairman/President/CEO, Whirlpool Corporation
Two thirds of all major companies worldwide have replaced their CEO at least once since 1995. - Drake Beam Morin Inc. Increasing Failure—Decreasing Confidence Four in ten leaders fail within the first 18 months on the job. - Manchester Consulting
Readiness 75% of companies worldwide are not confident in their ability to fill strategic leadership positions over the next five years.
Conference Board StudyDeveloping Business Leaders for 2010 • Exponentially heightened senior leadership requirements • Influence/communication • Extraordinary strategic thinking • Tolerance for ambiguity • Talent Development • Need to identify potential– “The hard part” • Only 34% report effective practices • Accuracy essential, but the “hows” are elusive
Risk of Derailment Among approximately 6,000 respondents, 2/3 reported that their current leader displays behaviors that could derail his/her career. - Development Dimensions International, 2001
Organizational Readiness 68% of organizations surveyed report that they are not prepared to deal with the leadership crisis. - Development Dimensions International, 2001
Leadership Development and Succession Planning is a Top Priority • Top 5 management issues; up 25% (700 Global Executives, Conference Board, 2002) • 78%: Most Important/Top 5 Business Success Factors (950 Executives, CEO Magazine/CCL, 2002) • 91%: Top Enabler for Business Growth (Global CEOs, Conference Board, 2002) • 47%: Major Business Priority (150 Global Corporations, Conference Board/DDI, 2002)
When it’s working… Work groups with strong leaders are 37% more likely to outperform other work groups, and are more satisfied, engaged, and loyal. - Leadership Forecast Study, DDI, 2003
Implications Now more than ever, business conditions dictate that leaders who are less prepared for senior leadership will be placed into senior leadership roles. To avoid leadership failure and its effects, organizations will need systems, processes, and tools which prepare these leaders to manage the challenges they will soon face.
What are the highest priority strategic challenges facing the Delaware school system?
What do those challenges suggest in terms of the leadership talent needed within the system?
V I S I O N Strategic Priorities Cultural Priorities Leadership Imperatives Success Profile Capacity Needs ENSUREREADINESS Identify Potential INVENTORYTALENT Accelerate Development Focus/Drive Performance Assess Readiness Select/Deploy Talent Talent Optimization Approach Business Landscape Talent Needed Game Plan Insurance Policy Communication Accountability Skill Alignment Measurement
Transitional challenges faced when moving into senior leadership roles • Span of Influence • Tactical Control • Consequences of Failure • Business Scope • Visibility • Constituents
Span of Influence FROM • Single team/ function management • Small-group communications TO • Multiple team/ function management • Large, multi-group communications Common Reactions: • Unclear expectations, strategic confusion • Slow to build partnerships, alliances • Difficulty navigating political environment
Tactical Control FROM • Involvement in day-to-day operations • Direct impact on group outputs TO • Detachment from day-to-day operations • Indirect impact on group outputs Common Reactions: • Reluctance to delegate • Desire for personal recognition for group success • Do-it-yourself solutions
Consequences of Failure FROM • Limited-scale consequences • Unit-specific countermeasures TO • Large-scale consequences • Organization-wide countermeasures Common Reactions: • More personal stress • Unrealistic demands • Negative outlook
Business Scope FROM • Basic unit responsibility • Limited number of inputs/ variables TO • Organization-wide accountability • Broader business judgment needed • Many variables Common Reactions: • Financial “cramming” • Overemphasis on financial variables • Poor business judgments
Visibility FROM • Limited visibility • Derailers disguised • Less cultural impact TO • Wide visibility • Derailers visible • Greater cultural influence – derailers mimicked by many Common Reactions: • Cultural damage; propagation of derailers • Unwanted turnover • Executive failure
Constituents FROM • Focus on team/ small group • Objectives set by supervisor TO • Focus on broader organization • Objectives self-imposed Common Reactions: • Narrow focus; lack organization-wide vision • Organizational stagnation, lack of progress
Leadership Succession Planning Requires… • A pipeline of talent with the necessary skills and experiences to meet these challenges • Leaders who can effectively execute key roles required at senior leadership levels • Identification and alignment on a leadership success profile driven by the organization’s strategy and future direction
V I S I O N Business Landscape Strategic Priorities Cultural Priorities Leadership Imperatives Success Profile Talent Needed Capacity Needs ENSUREREADINESS Identify Potential INVENTORYTALENT Game Plan Accelerate Development Focus/Drive Performance Assess Readiness Select/Deploy Talent Insurance Policy Communication Accountability Skill Alignment Measurement Talent Optimization Approach
PERFORMANCE EXPERIENCE COMPETENCIES What I am capable of PERSONALATTRIBUTES What I have done Who I am KNOWLEDGE What I know A Leadership Success Profile Needs to Consider the Whole Person
Competencies (Examples)(What one is capable of) • Applied Learning • Business Acumen • Gaining Commitment • Coaching/Teaching • Communicating with Impact • Initiating Action • Developing Strategic Relationships • Empowerment/Delegation • Establishing Strategic Direction • Learning Orientation
Job Experiences (What one has done) • Operate in a high-pressure or high-visibility situation • Implement an organizational-wide change • Develop and implement a plan to cut costs • Involvement with negotiating labor agreements, contracts • Become heavily involved with a strategic alliance, or partnership opportunity • Negotiate agreements with external organizations • Manage a downsizing
Organizational Knowledge (What one knows) • Functions • Processes (R&D, budgeting, selection etc.) • Systems • Services
Personal Attributes/Enablers (Who one is) • Adjustment • Ambition • Sociability • Interpersonal Sensitivity • Prudence • Inquisitiveness • Learning Orientation
Personal Attributes/Derailers (Who one is) • Approval Dependent • Argumentative (Defensive) • Arrogant • Attention Seeking (Self-Promoting) • Avoidant • Eccentric • Imperceptive • Impulsive • Perfectionistic (Micromanager) • Risk Averse • Volatile
Leadership Failure… • What do you think is the greatest cause of senior leadership failure? • Lack of knowledge (didn’t know enough)? • Lack of experience (never tried before)? • Skills/competency deficiencies (not enough practice)? • Personal attributes/derailers (not cut out for it)?
Leadership Success Leadership Failure Factors Didn’t know enough Never tried before Not enough practice Not cut out for it What I know What I have done What I can do Who I am Knowledge Experience Competencies Personal Attributes
Implications for Succession Planning • Developing and gaining alignment on the right success profile is critical • Leadership challenges and roles need to be addressed in development planning • The approach needs to provide highest ROI
Prescribing Solutions Ensuring Development Reviewing Progress Identifying Potential Diagnosing Dev’t Needs Success Profile Building Leadership Succession Planning Approach Acceleration Pools Planning
Succession Management Approach Clarify Terms: Replacement Pools vs. Succession Planning • Replacement: Can fill a specific position “tomorrow” • Succession: Developing people for target levels who could fill a variety of positions
Traditional approach to succession Traditional Replacement Planning Function A Function B Function C
Succession Planning Approach (using Acceleration Pools) Organization Need A Organization Need B Organization Need C Acceleration Pool
Acceleration Pools A Subset of People Being Identified for Accelerated Development Senior Leaders Middle Leaders First-level Leaders Individual Contributors 40
Leadership Potential Factors* S U S T A I N E D P E R F O R M A N C E+ Leadership Promise • Propensity to Lead • Brings Out the Best in People • Authenticity Balance of Values and Results(Org. specific, future focused) • Culture Fit • Passion for Results Personal Development Orientation • Receptivity to Feedback • Learning Agility Mastery of Complexity • Adaptability • Conceptual Thinking • Navigates Ambiguity *Research Foundation Bray & Howard, DDI, McCall et al, Personality Based Research, Collins, Hogan & Hogan, etc.
Diagnosis Targets CURRENT JOB PERFORMANCE PAST EXPERIENCES JOB FIT PERSONAL ATTRIBUTES BEHAVIOR IN FUTURE-FOCUSED SITUATIONS
Diagnostic Tools Behavioral Interviews & Career Profiles Multi-rater surveys Performance reviews JOB FIT Inventories & Tests Assessment Centers
Development Realization… What percentage of leaders do you think actually change their behavior after their organization implements a leadership development program?
Development Realization… • 75% • 50% • 25% • 10%
Development Planning “The Best Lessons are Those of Experience” • Based on Diagnostic Assessment and In Depth Feedback • Senior Leader Oversight • Supervisor, mentor involvement • Ideally, Linked to all Success Profile Factors (experience, competencies, knowledge, derailers) • Driven by Strategic organizational needs
Best Development Strategy? Development Priorities (What) • Job Challenges • Competencies • Organizational Knowledge • Executive Derailers Development Strategies (How) • Job or task force assignment • Training; Internships • Short-term experiences • Professional coaching