Presentation on theme: "Banks Consulting LLC; Buchanan Consulting, LLC1 W hat is Succession Planning? Succession planning is a deliberative and systematic effort by an organization."— Presentation transcript:
Banks Consulting LLC; Buchanan Consulting, LLC1 W hat is Succession Planning? Succession planning is a deliberative 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. Systematic succession planning occurs when an organization adapts specific procedures to insure the identification, development, and long term retention of talented individuals. Its all about readiness: the right people, for the right jobs, at the right time. Diversity Best Practices, 2004
Banks Consulting LLC; Buchanan Consulting, LLC2 Business Drivers of Succession Management Programs Labor market realities Retirement of Baby Boomers The first Baby Boomers (1946-1964) will be eligible for early Social Security payments in 2008. Tightening of labor market The U.S. Bureau of Labor Statistics (BLS) projects a labor force of 162.3 million individuals in 2012 and expects that the economy will require 165.3 million jobs to be filled. Increased global competition Improve the organizations bench strength in key positions Identify high potentials early and devise strategies to retain talent People who are perceived to be potential successors to those at higher organization levels Difficulty finding candidates outside the organization and desire to promote from within Unexpected loss of key leaders/talent Reducing the cost of replacing employees
Banks Consulting LLC; Buchanan Consulting, LLC3 The Four Succession Risks 1. Vacancy Risk: When a critical leadership position is not filled 2. Readiness Risk: Underdeveloped successors 3. Transition Risk: Poor assimilation of executive talent 4. Portfolio Risk: Poor deployment of talent against business goals Corporate Leadership Council, 2003
Banks Consulting LLC; Buchanan Consulting, LLC4 Succession Management Best Practices Aligning succession management with organizational strategy Having leadership support and involvement Hiring potential successors for organizational compatibility Holding leaders accountable for developing their talent Building a clear and robust process ahead of time; avoid multiple ad hoc processes across an organization Ensuring data-driven decision- making Automating the succession planning process Reducing laborious administrative tasks, cutting costs, ease of data analysis Building a development mindset in the organization
Banks Consulting LLC; Buchanan Consulting, LLC5 Succession Management Best Practices Integrating program with other talent management processes Talent Acquisition Performance Management Training and Development Compensation and Rewards Using a core set of competencies or behaviors As a template for development To establish a standard of comparison for assessment Driving the process down in the organization, not just executive level Including a wide range of significant developmental activities to extend talent capabilities Being open with employees - informing their employees about the program, process, and where they stand
Banks Consulting LLC; Buchanan Consulting, LLC6 Succession Management Obstacles and Pitfalls Lack of leadership support Office politics Failure to align succession management goals with organizational goals Lack of an effective performance management system A poorly defined and overly complicated process Cost or lack of dedicated resources Lack of metrics Ignoring data when making promotion decisions (e.g., promoting friends instead of the best candidate) Failure to hold leadership and talent accountable Too much focus on a few hi-potentials versus growing a robust pool of talent Being reactive versus proactive: not doing it!
Banks Consulting LLC; Buchanan Consulting, LLC7 5 Rules for Setting up a Succession Planning System 1. Focus on a flexible system oriented toward development and not just traditional replacement planning. 2. Focus on positions that are essential to the long-term health of the organization, and manage the pipeline to ensure development opportunities. 3. Have a transparent system – ensure that employees know how they are doing and what they need to do to reach the next step. 4. Regularly evaluate the system. Are the right people being developed? Is the talent pool large enough? 5. Be willing to change the system as needed in response to feedback. Conger & Fulmer, 2003.
Banks Consulting LLC; Buchanan Consulting, LLC8 Best Practice Succession Management Cycle Succession Management Establish Business Case Adapted from Sobol, Harkins, & Conley (2007). Best Practices for Succession Planning.
Banks Consulting LLC; Buchanan Consulting, LLC9 Establishing a Business Case* Describe the talent implications of internal and external trends. Describe the organizations current state. Ability to acquire and retain talent Talent gaps Adequacy of systems and processes Cultural fit Readiness assessment Describe the costs and risks inherent in the current state. Describe a preferred future state. Describe benefits of the future state. Finally, list the initial steps to closing the gap between the current and future states. Stress involvement/commitment of audience * Adapted from Best Practices for Succession Planning (2007) by Sobol, Harkins, and Conley.
Banks Consulting LLC; Buchanan Consulting, LLC10 Best Practice Succession Management Cycle Succession Management Establish Business Case Develop Structure Design Systems Plan Implementation Assess Bench Strength Adapted from Sobol, Harkins, & Conley (2007). Best Practices for Succession Planning.
Banks Consulting LLC; Buchanan Consulting, LLC11 Growth Potential Performance LowMedium High Low Medium High 9 - Hi Potential Future Leader Superior performer. Strong possibility of promotion to next level or beyond within 12 months. 8 - Hi Potential Future Leader Superior performer with moderate possibility of promotion to next level or expanded lateral move within organization within 1-3 years. 6 - Hi Potential Future Leader Solid performer with strong possibility of promotion to next level within 1-3 years based on increased job performance in current role. 5 - Hold for Development Solid performer in current role. May be relatively new in position and still growing into job. Promotion likely in 2-3 years. 2 - Watch List Performance not good. May be due to change in job scope or wrong job. Due to recent performance trend, potential may be questionable. 3 - Unusual Case Current performance is not good but past performance has been strong (could be short term issue or wrong job, etc.). 7 - Pro in Position Seasoned Professional. Consistently superior performer, difficult to replace but not likely to be promoted within 12 months. 4 - Solid Performer Performance has been solid. Unclear whether individual can grow with the job. Unlikely to be ready for promotion in foreseeable future. 1 - Watch List Performance is weak in current role. Individual is doing just enough to get by. Chances of fixing are remote. Consideration should be given to replacing the individual. Best Practice Succession Management Tool: GE* Nine Box Model *Crotonvilles Management Training Center
Banks Consulting LLC; Buchanan Consulting, LLC12 Key Steps to Analyzing Bench Strength Before the SP meeting: Leaders assess their teams using the 9-box tool, the organizations competency model, and other tools as appropriate During the meeting: Leadership team discusses placement of the assessed managers Makes final placements After the meeting: Builds individual development plans with HR Follows-up with team members
Banks Consulting LLC; Buchanan Consulting, LLC13 Best Practice Succession Management Cycle Succession Management Establish Business Case Develop Structure Design Systems Plan Implementation Assess Bench Strength Identify Successors Develop, Acquire, Retain Talent Measure and Improve Adapted from Sobol, Harkins, & Conley (2007). Best Practices for Succession Planning.
Banks Consulting LLC; Buchanan Consulting, LLC14 What Would Jack Do? He would assess talent and hed get the right people in the right jobs. 2 to 3 levels down Build organizational backup talent Fill any competency gaps Build a transparent system Its all about readiness: the right people, for the right jobs, at the right time.