Emerging Best Practices in Succession Planning. Karen N. Caruso, Ph.D. Leah Groehler, Ph.D. viapeople

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1 Emerging Best Practices in Succession Planning Karen N. Caruso, Ph.D. Leah Groehler, Ph.D. viapeople

2 Overview Succession Planning as a critical business process Trends influencing Succession Planning practices Emerging Best Practices in Succession Planning Best Practices in action

3 What is Succession Planning? Succession Planning Succession Planning can be defined as a purposeful and systematic effort made by an organization to ensure leadership continuity, retain and develop knowledge and intellectual capital for the future, and encourage individual employee growth and development.

4 Why is Succession Planning such a Hot Topic? Board concerns and directives Increased costs associated with external searches Increased turnover People who had been regarded as successors for key positions left by surprise High performers are leaving Managers complain that they have no one ready to fill vacancies Employees complain that promotion decisions are made unfairly Insufficient numbers of women and/minorities at senior levels

5 Trends Impacting Succession Planning Shifting demographics Shortfall in the number of future leaders Increase in attrition in executive level positions Economic conditions resulting in massive downsizing and increasingly flat and dynamic organizational structures. Reduced loyalty among employees despite focus on employee engagement and involvement

6 Trends Impacting Succession Planning, contd. Recognition on the part of senior executives of the importance of values, competencies, intellectual capital, and leadership Increase in the complexity of executive positions Financial market and employee expectations Globalization Technology

7 Emerging Best Practices 1. Top management involvement 2. Targeted processes to focus on clearly defined, specific goals 3. Comprehensive assessment programs based upon competencies 4. Creation of talent databases incorporating performance, assessment, demographic, education, experience, and career interests 5. Identification of future talent requirements 6. Structured and individualized development programs

8 Best Practice 1: Top Management Involvement Communicates importance of planning for the future Allocation of adequate resources Modeling of effective coaching and development Key development resource to high potentials

9 Best Practice 2: Targeted Processes Evolutionary versus revolutionary Clearly defined set of goals Meaningful executive reviews Eliminate administrative burdens Using technology to facilitate data gathering, tracking and decision making

10 Best Practice 3: Comprehensive Assessment of Talent Behaviorally defined competencies Learning agility and derailment factors Defining performance and potential Early identification of talent Multi-source methods On-going feedback processes Continuous re-assessment Test learning agility, development of competence and performance

11 Best Practice 4: Creation of Talent Databases Integration of data from multiple systems, including HRIS, CRMS, SFA systems Definition of missing talent data elements Collection of missing talent data Education, competencies, experiences, career interests, mobility Reporting to facilitate decision making

12 Best Practice 5: Identification of Future Talent Requirements Competency, skill and experience requirements for critical positions Profiling the development content of key jobs P & L accountability Forming/managing external alliances Detection of current and future talent gaps Targeted career pathing and development Sourcing and recruitment plans to secure new external talent

13 Best Practice 6: Structured and Individualized Development Planning Formal, structured development plans Targeted, individual activities with emphasis on experience-based learning Transitional coaching during stretch assignments Reporting and tracking of progress and outcomes Accountability for performance

14 Case Example: Board Directive for Succession Plan Selected critical positions and identified talent requirements Leadership competencies Technical skills and experiences Comprehensive assessment of current talent Customized online Talent Assessment of skills, experiences, overall future potential Identified successors and positions without internal successors

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21 Case Example: Succession Linked to Career Pathing and Development Identified Current and Future Talent Requirements Identified critical positions and detailed requirements (skills and specific experiences) Created developmental paths for critical positions Employed On-going, Comprehensive Assessment Programs Annual leadership 360 assessment Structured quarterly assessment for all Development checkpoints Reward and recognition In-depth assessment for high-potentials Learning Agility, Potential for Derailment

22 Sample Sales Management Career Path Area Director Senior Regional Director Regional Director Area Training Manager Senior Business A Division Manager Business A Division Manager Senior Business B Division Manager Business B Division Manager Senior Division Manager Division Manager

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26 Case Example: Succession Linked to Career Pathing and Development Developed Robust Talent Database Online Talent Assessment to gather critical information Integrates data from multiple systems Updated regularly Real-time reporting Individualized Development Planning Linked to performance management Updated quarterly Targeted development resources Open Communication Internal Branding

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30 Performance vs. Potential Sanchez O Toole Chung Smith Johnson Riviera Potential as Measured by Management Aptitude Performance as Measured by GID/DIR Assessment

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35 Continuing Challenges Ineffective balance between identification and development Identifying successors/hi-po s not in line with most organizational cultures Executive cloning Poor linkage to business strategy Overemphasis on replacement planning Lack of top management support Poor business unit buy in Lack of organization-wide talent database

36 For More Information: Dr. Leah Groehler Dr. Karen Caruso viaPeople

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