What’s New in Succession Management? Succession Management Seminar Series #1 October 21, 2010 Jeanne Schulze Office of Human Resources Organizational Effectiveness

What’s The Evidence?

Finding innovative solutions to many of the challenges facing the United States and the world in the 21st century will depend upon a creative, knowledgeable, and highly skilled workforce. The application of knowledge and skills to these challenges will help maintain our country’s future economic prosperity and growth, foster social well-being, and assure our leadership position in the global economy. Undergraduate education is important to the creation of a stable economy because it provides students with foundational knowledge and work skills and prepares college graduates for a wide range of employment options. But it is graduate education that provides students with the advanced knowledge and skills that will secure our future intellectual leadership in the knowledge economy.

45% Differences in the quality of leadership explains as much as 45% of an organization’s performance

How are WE doing?

serious Many organizations have serious bench issues

half no meaningful management succession plan Almost half of large companies and institutions have no meaningful management succession plan

3% We develop people effectively 10% We use job assignments as a key developmental lever 16% We know who our high performers are 23% We attract highly talented people 30% We’re good at feedback and coaching 75% We have insufficient talent or are chronically short across the board McKinsey War for Talent Study

2002, Lominger Limited, All rights reserved go outside Organizations must go outside for talent strong choices Shortage of strong choices for top leadership positions don’t succeed Too many top leaders who don’t succeed level of incompetence Still promoting people to their level of incompetence not implemented Development plans, if they are created, are not implemented. frank discussions Our managers shy away from frank discussions about needed improvements for their direct reports. 1980’s “Succession Planning in Leading Companies” (Mahler Publishing, 1983) found in 1980’s The Current State….

Why Leaders Fail? “More than any other way, they fail by failing to put the right people in the right job and the related failure to fix people problems in time” Charan & Colvin, Fortune, June 2002

So, what’s new in Succession Management? Not much! The problem is not finding something new… The problem is implementing what is already well known.

We know… The pipeline for developing talent The strategic and operational design issues to make succession work The intense issues, problems and challenges confronting us We know we need to attract, retain and develop talent

A LOOK AT THE BEST OF THE BEST Current and Future Practices

Five Forces Reshaping the Global Economy: McKinsey Economic volatility is a permanent feature (The new normal) 2.Globalization 3.Digitization is transforming the informational revolution requiring new ways of thinking 4.Increasingly global educational, customer and labor markets: students/workers/customers from anywhere at anytime 5.Increasing needs for security, risk management and global citizenship due to geopolitical instability

In short, we must prepare our future leaders for the VUCA world ahead

In a VUCA world leaders need to be: Agile learners Strategic and tactical Emotionally intelligent Inspiring Fast and careful decision makers Builders of teams Influential New technical competencies And, create environments that drive performance and engagement

How does this future world picture fit for us? How does this future leadership picture fit for us? Small groups 5 minutes

Learnings from the Best Create better leaders: results, develop capabilities, a ready talent pool Operate better in more complex environments Position themselves for the long term future Build cross-functional collaboration capability Treat talent management as a strategic asset (it takes an organization to raise a leader) Believe that ignoring leadership development is done at your own peril Manage & invest in development for a culture of leadership Address bigger and broader issues: social responsibility, women in sr. positions, easier to work from home, appreciation of global issues required for the job

2009 Best Organizations for Leadership Hay Group/Business Week 1.General Electric 2.Southwest Airlines 3.3M Company 4.Procter & Gamble 5.Accenture 6.Wal-Mart Stores 7.Nestle 8.Coca-Cola 9.McDonald’s Corporation 10.Infosys Technologies 11.IBM 12.Cisco 13.United Parcel Service 14.IKEA 15.ABB 16.Zappos 17.Hewlett-Packard 18.Goldman Sachs 19.Unilever 20.General Mills, Inc.

Do leaders today have “the right stuff?” © Copyright 2006 Robert W. Eichinger, All Rights Reserved

1. Intellectual Horsepower, 1st 2. Functional Skills 3. Integrity/Trust 4. Ethics/Values 5. Action Oriented 6. Perseverance 7. Customer Focus 8. Standing Alone 9. Drive for Results 10. Technical Learning 11. Managing Diversity 12. Boss Relationship 13. Comfort around VIPs Top 13 Rank Ordered Out of 67 For Mgr’s & Exec’s © Copyright 2002, Michael M. Lombardo & Robert W. Eichinger. All Rights Reserved

that they need to succeed in the future? What don’t leaders have today that they need to succeed in the future? © Copyright 2006 Robert W. Eichinger, All Rights Reserved

last 67. Developing People, last 66. Personal Learning 65. Understanding Others 64. Dealing with Paradox 63. Confronting Direct Reports 62. Managing Vision/Purpose 61. Personal Disclosure 60. Managing Through Systems 59. Patience 58. Conflict Management 57. Directing Others 56. Motivating Others 55. Managing/Measuring Work Bottom 13 Rank Ordered Out of 67 © Copyright 2002, Michael M. Lombardo & Robert W. Eichinger. All Rights Reserved

Five fatal flaws that lead to failure as a leader? 1.Inability to Learn from Mistakes 2.Lack of Core Interpersonal Skills 3.Lack of Openness to New or Different Ideas 4.Lack of Accountability 5.Lack of Initiative Zenger and Folkman, The Extraordinary Leader, 2002

succession efforts fail? Why do succession efforts fail? © Copyright 2006 Robert W. Eichinger, All Rights Reserved

They fail because… 1.Managers prefer to do the work of individual contributors over getting work done through others 2.Fear of having the difficult conversations 3.Time 4.Not held accountable from the top 5.Skill: Don’t know how

If you start five years or even ten years before the top leader is going to retire, it may be too late." Ending the CEO Succession Crisis Ram Charan HBR, Feb 2005 Something is seriously amiss in the business of developing and hiring the leaders of the future. Too many top leaders fail in office; too many succession pipelines are bone dry.

Food for Thought In small groups: What resonates with you? What doesn’t?

What’s New in Succession Management? Succession Management Seminar Series #1 October 21, 2010