Succession Planning

Succession Planning

Succession Planning

Untoro dan Yudhi

If you dont know where youre going, youll probably end up somewhere else.David P. Campbell, Author, Senior Fellow, CCL, book titleDefinitionSuccession planning is perpetuating the enterprise by lling the pipeline with high-performing people to assure that every leadership level has an abundance of these performers to draw from, both now and in the future.

A systematic process designed to:Identify key leadership positions and hard-to-fill positions Identify the critical competencies that employees in those positions requirePrepare for their replacement to ensure the continued ability of an organization to meet its strategic goals and supporting objectives Replacing executive staff can be expensive (recruiting agencies) and is time-consuming.Need to balance internal appointments with fresh blood (different experience and new ideas) - hiring gifted people is a tactic not a strategy.Succession planning aims to reduce staff turnover by improving commitment and retention.It meets healthy career path expectations for staffWhy its matters?Getting the right people with the right stuff in the right places at the right time.

ObjectiveRight Stuff = Skills + Aptitudes + Experiences to lead successfully in the futurePerformance + Potential

Defining the Right StuffWhat exec roles have now and need in future?What are pathways to those positions?Key competencies required?Who is ready to take over critical roles?When will they be ready for promotion?How much have we in budget to develop potential leaders?Question to AnswerThe Pipeline model to increase your succession planning effectivenessThe Focus Should Be Performance Too many organizations push high-potential people into the leadership pipeline, and this can cause damage because many of these individuals will be unable to perform at appropriate leader- ship levels.The Pipeline Demands a Continuous Flow As a result, you cant just do succession planning for one leadership level. All levels must be included..The Pipeline Turns Must Be Fully Understood People need to be working at the right level, and this cannot be determined unless the skills, time applications, and work values for each level are clearly communicated and assessed. Short-Term and Long-Term Must Be Considered Simultaneously Its not enough to do succession planning to meet immediate needs. Nor is it sufcient to build a reservoir of leaders for the future.How to Do Succession Planning That Fills the Pipeline Start where the pain is most acute.Usually senior levelIdentify critical/linchpin positionsCascade down to include lower levels Ask, Where are we most at risk?Impending retirements Expanding/new businessCritical levels of strategyHighly specialized expertise

Where do we Start?Talent Assessment Develop and communicate standard competencies and other evaluation criteria to all.Obtain input from multiple sources. (Supervisors, multi-rater feedback, assessment center, simulations, self and peer nominations).Develop talent to meet future demands of organization.Conduct regular talent reviews with senior leaders.

Nine-Box Matrix One Standard Way to RankPromotability/PotentialLowMediumHighLowMedHighPerformanceTypically based on competency-based performance reviews MediumLow PerformerSolid PerformerTop PerformerStrong PerformerSolid PerformerStrong PerformerSolid PerformerQuestionable PerformerQuestionable PerformerSource: AQPC, The Matrix: A Tool for Succession ManagementDiscussion QuestionsHow objective and inclusive is your process for selection?What does being in the pipeline mean?Do they know they are in the pipeline?

Transparency Do you tell them, or not? Do youTell all potential candidates their ratingsTell only those who make it into the pipelineExplain that participation needs to be continuously earnedDont tell anyone until ready to make offersBasic Premise for Transparencygiven that the employee contract is now based on performance rather than loyalty or senioritypeople will contribute more if they know what rung theyre on.Jay A. Conger, Robert M. Fulmer,Developing Your Leadership Pipeline, HBR, December 2003, p.6.

Session Agenda Whats the Current State?Selecting for the PipelineDeveloping LeadersAdditional Resources16Developing Your Leadership PipelineFive Guidelines:Focus on DevelopmentIdentify Linchpin PositionsMake it TransparentMeasure Progress RegularlyKeep it FlexibleSource: Jay A. Conger, Robert M. Fulmer, Developing Your Leadership Pipeline, Harvard Business Review, December 2003.What do Future Leaders Need to Learn?Knowledge & understanding outside employees dept. or functionKnowledge & understanding at the enterprise levelA broad network of relationshipsHow are Learning Needs Being Met?Formal leadership development programsAction Learning/other projectsRotational and/or developmental assignmentsData-driven devt. (based on assessments, feedback and other sources)Senior leaders involvementStructured building of relationshipsCPS Human Resource Services Study

2005 CPS Human Resource Services. All rights reserved.

18Leader Competencies Are Not Enough

Each level of leadership requires a unique mix of:SkillsTime ApplicationsValues (Priorities)

Six passages: (bends in the pipeline)Managing self to managing othersManaging others to managing managersManaging managers to functional managerFunctional manager to business managerBusiness manager to group managerGroup manager to enterprise manager (CEO)

Source: Ram Charan, Stephen Drotter, James Noel, The Leadership Pipeline, Jossey-Bass, 2001Common Development MethodsOn The Job:- Individual Development PlansStretch assignmentsRotational assignmentsCross-functional team projectsPerformance support tools Cross-functional promotion pathwaysShadowing exec-level processesReference ware

Formal Development:AssessmentsCoachingMentoringFormal trainingAction LearningDiscussion groups/book clubs

Study done with CEO Magazine, looked at 300+ global and regional companies.Identified 20 best companies for leaders based on quantity and quality.Identified 6 vital practices from the 40 they studied (accounted for 67% of the difference)The best companies work at 3 levels: organization, team, and individual.Source: Confronting The Leadership Crisis: What Works, What Doesnt, What Lies Ahead, Hay Group & Chief Executive magazine Research into The Best Companies For Leaders, 2006Study on What Works In Leadership Development 21CEO and senior leaders make leadership development a top priority.Leaders at all levels accountable for creating a climate that motivates employees to perform at their best.Leadership teams receive training and coaching to work together more effectively.Mid-career managers receive job-shadowing opportunities.High-potentials receive objective 360-degree assessments and feedback on their leadership ability early on.Mid-level managers given adequate time for leadership development activities early in their careers.Source: Confronting The Leadership Crisis: What Works, What Doesnt, What Lies Ahead, Hay Group & Chief Executive mag. Research into The Best Companies For Leaders, 2006

Vital Six PracticesIf resources permit: External MBA programsExternal coaches for senior executivesInternal coaches for mid-level managersSpecific skill-building for lower-level managersExternally run development programsJob rotationsSource: Confronting The Leadership Crisis: What Works, What Doesnt, What Lies Ahead, Hay Group & Chief Executive magazine Research into The Best Companies For Leaders, 2006, www.haygroup.com

Second Level Recommendations

Measuring your Success Along the Way% internal placements% candidates ready now, ready soon and ready long-termRetention ratesSuccess rates of promotionsWhat were you trying to accomplish in the first place?

Technology As An EnablerERP VendorsPerformance Management VendorsLMS Vendors24/7 global access to informationSearch based on specific criteriaIntegrates with other HCM dataProvides gaps and strengths at a glanceView of talent across geographies/functionsTransforming Potential from a Negative to a Positive Three Categories of Potential Turn potential Able to do the work at the next level in three to ve years or sooner. Growth potentialAble to do the work of bigger jobs at the same level in the near term. Mastery potential Able to do the same kind of work currently being done, only better.Setting Clear Standards to Assess PotentialExhibit 10.1. Standard for Judging Potential. Turn Potential (can be promoted through the next passage within three to ve years) Exhibits operating, technical, and professional skills that are extremely broad and deep. Exhibits managerial skills that are expected at the next highest organizational level. Demonstrates leadership skills that are expected at the next highest organizational level. Regularly works at building new skills and abilities. Aspires to higher level challenges and opportunities. Demonstrates re in the belly. Has a business perspective beyond current organizational level. Is oriented toward total business results, not just focused on the success of own area. Please note: This designation needs at least one-over-one conrmation since the immediate boss has not hired people for her own level but her boss has.

Growth Potential (can be promoted to bigger job at same leadership level within three years) Exhibits operating, technical, and professional skills that are high for current organizational level. Exhibits managerial skills that are high for current organizational level. Frequently demonstrates leadership skills that are high for current position. Adds new skills when the job calls for it. Aspires to greater challenges but primarily at the same organizational level. Is motivated to do more than is expected. Has a business perspective beyond current position. Is focused on the success of own area and the team.Mastery Potential (can improve in current role with same effort) On balance, exhibits operating, technical, professional, managerial, and leadership skills that are acceptable for current organizational level. Demonstrates little effort to build new skills but keeps current skills sharp. Aspires to stay with the company, as opposed to assuming bigger challenges or higher personal contributions. Is motivated to do what is needed in current job. Understands the job. Is focused primarily on technical success. Please note: The individual may have the desire, but not yet demonstrated the ability, to progress to bigger jobs.