Succession Planning Resource Guide

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2 Table of Contents Acknowledgements 2 Executive Summary 3 1 Introduction 4 2 Succession Planning and Talent Management 6 3 CEO Succession Planning 11 4 Succession Planning Process 13 5 Key Challenges to Effective Succession Planning 28 6 Conclusion 30 7 Resources 31 Appendix 1 Sample Individual Succession Planning Profile 32 Appendix 2 Leads Capabilities Framework 34 Appendix 3 Sample Succession Planning Template 35 1

3 Acknowledgements The (OHA) appreciates the support and participation of the many partners involved in this project. Specifically, the OHA wishes to thank the following hospitals and individuals for their involvement and support: Holland Bloorview Kids Rehabilitation Hospital London Health Sciences Centre Perth and Smith Falls District Hospital The Ottawa Hospital Westpark Healthcare Centre The OHA team members who provided the analysis, input and edits towards the report s development. ISBN

4 Executive Summary According to Statistics Canada, the number of employees in the health care sector aged 55 and above has gone up by almost 21% in the last five years. A recent survey by PwC Saratoga and the (OHA) revealed that approximately 40% of executive level employees in hospitals are currently eligible for retirement. Within the next five years, that number will jump to 63.5%. Succession planning best practices include: ownership of and engagement in the process by the executive leadership; a focus on what leadership competencies will be required in the future; identification of high-potential employees across the entire enterprise; and the use of data and existing HR information Systems (HRIS) systems to drive performance review and decisions. The OHA s May 2012 membership survey about succession planning found that 43% of respondents reported their organization does not conduct succession planning. Given this reality, it is important to nurture and groom hospitals existing talent while continuing to seek and develop talent anew. Recognizing this, 90% of survey respondents reported it would be useful or very useful for the OHA to provide resources and sample materials for health care organizations to use in succession planning. Thus, the was created in partnership with Mercer (Canada) Limited. Along with best practices from Mercer, based on their experience in the health care sector and with global research, this Guide includes a compilation of approaches to succession planning taken by various hospitals and non-health care organizations that are shared, in the form of best practices by five member hospitals, in particular. The Guide is meant to serve as one resource for members, rather than outlining one prescriptive model. Succession planning has evolved in recent years from a focus on simply replacing vacated positions to directly aligning with business strategy and integrating with the talent management process as a whole. A wide range of individuals in the organization share responsibility for succession planning - including the board, CEO, senior management, people managers, employees and Human Resources. The process of succession planning consists of five key steps: identify key positions; identify knowledge, skills, abilities (KSAs) and competencies; assess people; develop the plan; and evaluate results. Succession planning for the role of CEO is especially critical. Of particular note is an increasing expectation that the board will be actively engaged in the planning process. Strategies are presented for facing a number of key challenges that can stand in the way of effective succession planning. These challenges may include a lack of roles into which to promote high-potential staff; the departure of such staff for higher-paying roles in the private sector; departures contributed to by slow plan implementation; blockage of high-potential candidates by poor performers staying too long in their jobs; inclusion in the plan of employees who should not be; and inadequate training and development, leading to an individual being ill-prepared for a new role. The Guide concludes with a number of tools and frameworks useful in succession planning. 3

5 1 Introduction The health care sector continues to grow with the aging population and the demands that come with this rapidly changing reality. Employment in health care occupations advanced by 11% in In the past five years, this sector, along with the oil and gas industry, has consistently added more jobs than any other sector in Canada*. Despite this growth, hospitals continue to face significant challenges finding and retaining the best talent. It is projected that twenty-one percent of people in the health sector labour force will be 55 years or older by This number is even higher in northern and western Ontario*. A recent OHA-PwC Saratoga survey found that the average age of staff in Ontario hospitals is approximately 45, and that 30% of staff in health care are nearing retirement in the next five years. The numbers are even more worrisome in the executive ranks; approximately 40% of these hospital employees are eligible for retirement now - and within the next five years, that number will jump to almost two-thirds. These figures are above the benchmark for other industries, according to the survey. The OHA s May 2012 membership survey revealed that health care employers are taking steps to ensure Ontario s health care system has the leadership capacity required for the future. According to the survey: 93% of respondents offer some form of leadership development to staff 45% have a leadership competency framework in place Moreover, most hospitals offer formal leadership development programs, coaching and mentoring, individual learning and development plans, as well as developmental assignments. In addition, some offer 360-degree feedback assessments to help their leaders create focused development plans. Nonetheless, there is a clear need and desire for succession planning resources developed with Ontario hospitals specifically in mind. Indeed, 90% of respondents to the OHA-PwC Saratoga survey reported it would be useful or very useful for the OHA to provide resources and sample materials for health care organizations to use in succession planning. In addition, one of the key components of the OHA s Provincial Health Human Resources Work Plan, , is the promotion of alignment and collaboration on leadership development and succession planning for key leadership roles in Ontario hospitals. This Guide provides a broad framework to help hospitals identify critical positions and find potential successors for those roles within their organization. It also includes templates that we hope will equip your organization with a variety of approaches to effective succession planning. Since there is no one size fits all template for succession planning that will work effectively in every hospital in Ontario, each institution must customize their approach to meet their specific needs. This Guide, therefore, is meant to serve as a resource for members, rather than outlining one prescriptive model. The Guide shares best practices contributed by Mercer, and gives insight into different approaches to succession planning taken by various hospitals and non-health care organizations. For example, the OHA requested participation from members that have a formal succession plan in place. As a result, we consulted with five member hospitals. These hospitals have shared their best practices which are included in this Guide. * From Statistics Canada 4

6 Benefits of Succession Planning There is an immediate need to plan for successors and nurture talent in Ontario s hospitals. A sound succession plan has several benefits: Supports service continuity for unplanned or planned vacancies of key positions by identifying a pool of qualified, motivated people, who are prepared to take over Aligns your organization s vision and human resources strategy by demonstrating an understanding of the need to have appropriate staffing to achieve the organization s strategic plan Shows the hospital s commitment to developing career paths for employees that will facilitate your organization s ability to recruit and retain topperforming employees. The external reputation of an employer that invests in its people and provides opportunities and support for advancement is immensely valuable. It sends a message to employees that they are your most valuable asset Minimizes the impact when a key position is vacant. Key positions are typically defined as those which, if left vacant, could create operational, reputational or financial risks Identifies gaps to help allocate/source funds when the talent market tightens and competition for limited resources increases 5

7 2 Succession Planning and Talent Management Succession planning is a key component of an organization s overall talent management strategy. As outlined in Figure 1 below, an integrated talent management strategy incorporates the key elements of performance management, leadership development, recognition and rewards, career architecture, selection and succession planning. By aligning these key components, organizations can develop clear human resource programs and workforce plans that address their current and future workforce needs. Figure 1: Talent Management Framework How should career paths be structured? How should jobs be valued? Compensation Career Path Architecture Performance Management How should employee performance be evaluated? Capabilities LEADERSHIP What are the succession requirements of our jobs? Succession Planning Technical Capabilities Training & Development Selection How should qualified employees be evaluated? What are the development requirements and resources for our jobs? Source: Mercer (Canada) Limited 6

8 It is interesting to note the evolution of succession planning as outlined in Figure 2 below. As talent management has evolved, so has the role of succession planning, moving from simple replacement plans for positions, to direct alignment with business strategy and integrated program design. Figure 2: Evolution of Succession Planning Audience Level of Organization Executives Director/VP Other Key Positions All Managers Succession Management Maturity Talent Management Succession Planning Replacement Planning Executive Development Business strategy alignment; Talent Management integration; Enterprise perspective; Aggregate date; Owned by CEO Development plans; Talent reviews; business-unit focus; HR driven List of senior-level positions; List of high potentials; No development Development of executive successors Source: Mercer (Canada) Limited Top performing organizations undertake workforce planning and development based on their strategic direction, required organizational capabilities, and necessary people competencies. Succession planning is most effective when it dovetails with an organization s overall performance management process. Within larger, more complex hospitals with larger human resources supports, succession planning can be treated as a stand-alone program, and completed off-cycle to the performance management process (see Figure 3). This type of process supports a strong focus on leadership development, identifying specific growth opportunities for staff who have been identified as high potential in building the leadership pipeline. Research has found that respondents to a 360-degree feedback process are more likely to tell the unvarnished truth if they understand the feedback is focused on development rather than pay. As such, best practice is to use behaviours which support the organization s values to measure the how in performance management. Use a separate and independent 360 feedback process based on the organization s approved leadership competencies for succession planning. 7

9 The following key elements could be considered for succession planning in hospitals: Identifying Role: Talent management begins by assessing the value of a role within the organization. Key roles or positions are those with significant impact on current or future delivery of strategy. A key role may have many employees in the position Hierarchy: Key role assessment need not be focused on any particular hierarchy Individual: Capability and the potential of the individual follows role assessment Evolution: As a hospital s direction or strategy changes, so too will the roles identified as key. Establishing a timeframe to review key roles will help keep up with the changes and continue to build bench strength (i.e., the pool of potential successors) Performance: Over time, the objective is to ensure key roles are occupied by high-performers Focus: Identifying and focusing on key roles will maximize the execution of the strategy Figure 3: Process Overview Your business and talent planning processes should be aligned and integrated. Use strategic planning process to finalize business plans for coming year Nov Dec Establish department goals for coming year Jan Complete performance review Feb Use performance management process to facilitate annual performance reviews and goal settings Note: Need to agree on appropriate timing of talent review at COMPANY Oct Sept Use succcession process to evaluate longer term performance and potential Evaluate make-up of whole team along with business needs Aug Review performance and provide feedback throughout the year Jul Mid-Year performance check-in Jun Confirm annual goals May Mar Apr Conduct formal/ informal mid-year performance management discussions Source: Mercer (Canada) Limited Please note that the annual cycle in Figure 3 reflects best practice in the private sector where succession planning is done off-cycle to performance management. This may only be possible in some hospitals where both the HR department and the organization have the capacity to embrace two separate processes. In hospitals where such capacity does not exist, succession planning most often dovetails with the performance management process. Please note that if adopting the above process, timing should be adjusted from the calendar year to the hospital s fiscal year (e.g., in some cases, December above becomes March, and the other months are adjusted accordingly). 8

10 Best Practices for Succession Management Best practices to consider when developing a succession planning model include: 1. Executive engagement and ownership: Involvement and commitment from the executive team is critical. The succession plan identifies future leaders of the enterprise. 2. Clear roles and consistently-applied process: Ensure roles are clear (board, CEO, executives, human resources), and keep the process simple; be aware of over complication. 3. Align with business strategy: Define strategic priorities and directions, stay future-focused, and stay aligned with changing strategy. 4. Identify critical or key positions: These roles are the targets of a succession plan. Such roles have the potential to impact the organization significantly in achieving strategic priorities, operational imperatives, as well as having financial impact, reputational risk and business continuity risk. 5. Future-focused leadership competencies: What are the expected behaviours, and key indicators of leadership success? Link these competencies to your mission and values. 6. Identify high potential employees: Use multi-source methods and approaches to develop the talent pool. 7. Enterprise perspective/talent visibility: Maintain a broad organizational view. Seek opportunities to develop talent across functions, gain visibility, and raise organizational awareness. 8. Integrated talent management processes: Use the full talent management components, keeping them aligned and linked so that you reward the right behaviours and adopt development planning initiatives that make sense, focusing on the right things. 9. Technology as an enabler: Where possible, use existing HRIS systems to administer and maintain the process as well as to enable data-driven talent reviews and decision making. 10. Monitor results: Use dashboards and regular updates to monitor results and communicate success. Key Roles Succession planning is most effective when it becomes a part of the management culture of an organization. Particularly in the case of health care, the following stakeholders have to carefully fulfill their roles in order to ensure an effective succession planning process. Board The board should play a significant role in CEO succession planning. It should provide a broad view of the extent to which the organization s current reservoir of leadership capabilities positions it to achieve stated strategic directions. This includes defining the links between business direction and leadership requirements, as well as being involved in regular senior leader talent reviews. CEO The CEO must be the champion of leadership development and succession, and the ultimate talent evaluator. The CEO personally participates in the process, supports and enables rigorous talent reviews, is seen as a sponsor of hands-on learning, and acts as a guide to the board throughout the succession planning process. 9

11 Senior Management Employees Senior management plays a key role in instilling a sense of commitment to the talent management process. Making succession planning a key accountability for all management levels is an important step in ensuring that adequate focus and attention are given to it. When senior management participates in talent review meetings and succession planning, it helps demonstrate the importance of succession planning within the organization. It is critical to tailor training programs, in partnership with HR and training experts, in order to improve critical competencies and align training funds with an eye on the future needs of the hospital. People Managers Development plans are most successful when employees take an active interest in their own self-development. Employees can learn about key positions, their areas of interest, and the skill requirements of those positions. Employees should be encouraged to discuss career interests with their managers. This helps managers to effectively target their support and input. Employees should also be encouraged to take advantage of developmental opportunities. Human Resources The responsibility to administer succession planning policy rests with HR. HR helps management achieve organizational goals and objectives by: Anyone who manages employees has an active role to play in succession planning. Upper middle management (director level) must act as a critical support system. They communicate organizational goals, motivate staff and guide employees to achieve their career goals. They have a direct line of sight to their managers, front line employees and the overall work environment. This helps them engage and better understand employees needs. Management staff play a critical role by: Understanding their employees career aspirations Conducting performance reviews, helping employees identify areas for development, and providing guidance on career goals Giving employees opportunities for development, including defining stretch goals, and communicating opportunities that arise Participating in talent review meetings and in the development of succession plans for key positions Consulting with stakeholders and employees Communicating effectively to promote transparency Developing toolkits for managers and employees, which may include talking points, templates to store performance and behavioural data (for a typical individual succession planning profile using the LEADS competency framework, see Appendix 2 on page 34) Providing helpful suggestions on handling questions and sensitive issues pertaining to performance reviews Clarifying and guiding employees and management on policy/legal requirements Tracking and measuring the progress of talent management by communicating timelines for performance reviews, tracking completion rates and alerting management regarding key positions where successors should be identified as a priority Creating a performance management framework and facilitating talent review meetings Consulting with functional communities that can provide a horizontal, organization-wide perspective on identifying the current and future talent needs of their community Helping managers evaluate succession planning initiatives Helping to communicate key positions to employees 10

12 3 CEO Succession Planning CEO succession planning has been increasingly identified as a key driver of organizational success. It has become a key expectation that the board is actively engaged in the process. Ongoing research has identified six strategies to consider when developing the CEO succession plan. (Source: Corporate Compliance article by Michael Franklin and Colleen O Neill, from Mercer) Strategy 1: Have two succession plans: an emergency succession plan, and a longer-term succession plan. It is important to be ready to appoint an interim CEO, identified by the board in advance, should an emergency arise. As well, the board should be thinking approximately three to five years ahead of the planned CEO transition. Future executive role profiles also need to be developed and agreed to by the board. Strategy 2: Make it a true partnership between the board and the CEO. This starts with a clear definition of roles and responsibilities. Your board of directors should be actively involved in the process, from developing role profiles and selection criteria, to interacting with candidates, and participating in final decisions. Strategy 3: Strategy 4: Consider the future when assessing role requirements. The succession process should assess candidates in terms of the organization s future environment and strategic and operational challenges, not strictly what makes for success in the current environment. Strategy 5: Accept the inevitable political and emotional challenges. Emotions and political dynamics will likely occur. The CEO succession planning process should be robust and board members must be involved in the process. Strategy 6: Ensure attention to the human capital assets of the organization as a whole. Success is more likely to be sustainable in an organization that focusses on talent management throughout, and when the attraction, development, promotion and management of leaders and key talent is closely aligned with the organization s direction and strategies. These strategies are reflected in the following best practices, based on research by the National Association of Corporate Directors, and the consulting group of Marsh and McLennan Companies. In addition, the OHA s Guide to Good Governance provides guidance on CEO succession planning. Treat succession as an evolution of the leadership team as a whole. The overall approach and decisions around succession planning should focus on delivering not just an individual appointment, but also a highly effective executive team. 11

13 Board Engagement in Succession Planning 1. Board/CEO discussions on long-term succession planning should begin as early as possible, even if the CEO transition is not expected immediately. 2. The full board should be involved in CEO succession planning and, where structure allows, the human resources and compensation committee of the board should have this included in their terms of reference, reporting results to the entire board. 8. Developing internal candidates is typically preferable to external recruitment. 9. The outgoing CEO should either leave the board immediately or stay on in an advisory, non-voting capacity for a limited transition period if required. 10. A comprehensive emergency CEO succession plan should be ready at all times and reviewed at least annually. 3. Open and ongoing dialogue should occur between the CEO and the board on the topic of succession planning including a formal annual discussion that is detailed and not constrained by time. 4. Criteria for the new CEO should be consistent with the company s future strategic needs. Ensure the board and CEO are aligned on these criteria. 5. Formal assessment processes should be used to give board members quality information with which to assess candidates. 6. Board members should be given ongoing opportunities to interact with internal candidates in various settings. 7. The succession should be staged using a visible and transparent framework. However, an open competition that creates clearly identified winners and losers should be avoided. 12

14 4 Succession Planning Process Figure 4: Succession Planning Process Step 1: Identify Key Positions Evaluate Results Identify Positions Identify KSAs and competencies Talent management, and integrated succession planning, begin by assessing the value of the position within the organization. A role with significant impact on the delivery of current or future strategy is a key position. A key role may have multiple employees in the position. Step 2: Identify Knowledge, Skills, Abilities (KSAs) and Competencies Identify the KSAs and competencies required for these key positions. Develop Plan Assess People Step 3: Assess People An effective and structured succession plan should involve nurturing and developing employees from within the organization. Employees who are perceived to have the skills, knowledge, qualities, experience and the desire can be developed so that they can take on senior roles within the organization or move laterally to fill specific, key positions. While each of the participating hospitals conducts their succession planning differently, best practices include the following steps: Match these KSAs and competencies to the capabilities of the existing workforce ensuring that those identified as high potential are truly interested in accepting a higher position and with it the demands and expectations of the role. Step 4: Develop a Plan Develop a plan for identified successors to manage the gaps that will arise when individuals in key positions leave or are promoted. The plan will generally include a combination of training and developing existing staff, as well as external recruitment. Step 5: Evaluate Results Measure results and outcomes, and monitor the plan on an on-going basis. 13

15 Step 1: Identify Key Positions Identify positions that are critical to the organization based on the parameters listed below. Identify business-critical positions in your organization. Ask yourself which positions would need to be filled almost immediately to ensure the organization continues to function effectively. Some positions have a higher level of criticality than others. However, for effective succession planning, it is important to consider positions based on the following criteria: Strategic Impact Review and list your current and emerging needs. This will involve examining your strategic and operational plans to clearly take care of your organization s priorities. Some potential discussion questions: What is the impact of the loss of knowledge from a position to your business goals and objectives? Which positions would be the last ones to cut if you had to reduce your headcount? What positions can you clearly map to the specific execution of one or more of the hospital s strategic areas of focus (those positions which have significantly more influence to execute the strategy)? Financial Impact Evaluate the impact on your organization should the person in a key position leave. What roles are critical to driving the business results of your hospital as a whole (e.g., without this position, would business results suffer significantly or would costs no longer be effectively controlled)? Turn-Over Risk of Target Position Assess attrition risk of the target position. For example, are they eligible for retirement? Is someone with a wealth of experience in a key role being targeted by the outside market (i.e., is there a demand for a particular type of job that makes retaining people in that position difficult)? Difficult to Fill Consider positions that would be difficult to fill because they require particular expertise and/or the incumbents possess a wealth of corporate knowledge, or the nature of the job is such that filling those positions would be challenging due to current or projected labour market shortages. Best Practice for Identifying Positions In summary, business-critical positions are roles with the potential to impact the organization significantly in terms of achieving strategic priorities, operational imperatives, or have financial impact, create reputational risk, or cause risk to business continuity. These jobs: Are crucial to the delivery of a key component of the business plan Are vitally important to achieving strategic priorities over the next few years Have a significant impact on business performance (i.e., directly and clearly influence business strategies and results) Possess a high degree of business risk (i.e., introduce and champion change that can significantly and materially enhance core processes, systems or services) Are difficult to fill (there is a shortage of candidates in the internal/external market) Are stepping stone jobs to other leadership positions 14

16 Current Practices At Hospitals for Identifying Positions Holland Bloorview Kids Rehabilitation Hospital A combination of workplace planning tools, risk assessments for roles, and a combination of job descriptions and required competencies are used to identify target positions. Perth and Smith Falls District Hospital A priority is assigned to critical positions that require immediate attention to identify successors. A red indicates positions with more urgency. Green positions have a lesser priority. These positions are identified by a committee of senior leaders, management employees and HR leaders. Performance reviews play an important role in identifying potential successors. London Health Sciences Centre All leaders are discussed at the annual Talent Talk process. This conversation occurs with each VP and their directors. Leaders ability (based on leadership competencies, metrics and achieving goals) is presented by their Director to help the VP/Directors become more familiar with all the talent. Their strengths and opportunities are discussed based on which an Individual Development Plan (IDP) is created. A performance and career discussion with the individual is also held to help understand their interests. Leaders rated at full performance are considered for an accelerated development pool. Westpark Healthcare Centre Succession planning is incorporated into governance policies and procedures. There are clear guidelines with respect to representation on the board, selection of the CEO, directors, officers and vice-chairperson. There are also guidelines in place to address situations that may result in a sudden vacancy (e.g., death, termination) or a planned vacancy (e.g., retirement) of a senior position. Step 2: Identify KSAs and Competencies Identify the knowledge, skills, abilities and competencies that drive results and reflect your mission and values Create a list of the most important capabilities and skills needed for key areas and positions using information from the job or position description, and the key competencies mapped to these positions. Some ways to identify key capabilities: Interview stakeholders and job incumbents Conduct focus groups to gather insight and feedback from key talent, and the direct managers of key positions Develop a leadership competency model for the hospital; gather insight from expert panels, executives and leaders Administer 360-degree feedback surveys to gauge agreement with proposed KSA s and competencies, and also gather insights from the broader employee population A clear understanding of capabilities is important for identifying gaps and guiding learning plans, and may serve as the basis for self-assessment tools. Clear understanding can also help set clear performance expectations and assess individual performance. Furthermore, clearly defined and articulated capabilities can support candidate recruitment and selection processes that are aligned with the overall talent management framework. For the purposes of this exercise, capabilities may consist of knowledge, skills, and abilities (KSAs), as well as competency profiles. Regardless of which approach or definition of capabilities your hospital uses (KSAs and/or competency profiles), it is important to incorporate these into your succession strategies to better identify and assess gaps and to focus development efforts. 15

17 Best Practice for Identifying KSAs and competencies Current Practices At Hospitals in Identifying KSAs and Competencies Organizations are focusing more on competency based talent management. Competencies and KSAs provide a strong foundation that helps integrate HR programs, and define and support organizational success. In recent years, the number of organizations driving competency-based processes has increased, fuelled by the need to: Have a talent management framework to facilitate mobility and development Simplify and integrate people processes with the talent management framework to improve clarity for employees and reduce inefficiencies Set a clear performance goal for the entire organization Focus on the right people, retain and develop them as future leaders accentuated by: The desire to retain top talent The need to identify future hospital leaders The need to drive functional excellence across the organization Therefore, many organizations develop, debate and approve specific leadership competencies to support their talent management and succession planning practices. The leadership competencies selected are behavioural descriptions of the knowledge, skills, and personal characteristics needed to perform key elements of a leader s role in order to accomplish organizational objectives. A leadership competency framework that incorporates behavioural indicators and descriptors is a key tool to assess, select and place candidates into leadership roles; identify high-potential talent; evaluate performance; and design leadership development experiences. OHA member hospitals use a variety of competency frameworks such as the OHA Competency framework, the LEADS capability framework and various other competency tools that are available. As such, LEADS has been the framework used in the personal profile template shown in Appendix 1 and 2. Perth and Smith Falls District Hospital A position gap analysis is used to identify competency gaps for specific positions. The required competencies are listed for each position, alongside the competencies observed in a potential successor. Any identified gap in competencies is used to build an action plan. The Ottawa Hospital A leadership competency model is used as a framework to evaluate potential successors against required competencies. A leadership development framework supports grooming potential successors using a combination of several development methods such as self-directed training, management interaction, on-the-job assessments, projects, etc. A Senior Leadership Development program targets the hospital s executive and senior leadership team. London Health Sciences Centre A performance management framework is designed to measure a leader s current performance level against expected leadership competencies, and their ability to deliver on program goals. Objective metrics reflect the leader s ability to deliver on management responsibilities. This is an e-performance system done on an annual cycle. The Talent Talk process is part of the annual cycle. It includes a team format to review performance and consider additional data points for discussion. This includes accounting for any derailing behaviours that may impede a leader s success, their career plans, and progress on their development plans. Development plans are then fine-tuned to match the performance category, organizational needs and career goals. 16

18 Step 3: Assess People Identify and assess potential successors for each position and build the talent pool To identify potential successors, or the talent pool for target roles, organizations often evaluate candidates based on: Performance review results (reviews by managers as well as 360-degree feedback) Assessments of the employee s potential using a hospital-approved leadership competency framework Readiness (e.g., ability, aspiration, engagement) from the employee s perspective The main purpose of identifying and assessing employees against the capabilities for key areas and positions is to tailor development opportunities in such a way that employees can acquire the requisite skills and competencies they need to prepare them for future roles. The hospitals that volunteered to participate in our survey typically use a variety of approaches to determine which individuals are interested and demonstrate potential for future roles. As a starting point in the process, many hospitals give employees the opportunity to express their interest in leadership roles, career advancement, or lateral moves. There are various ways hospitals can gather this information, including: Encouraging career and learning discussions between employees and managers, and communicating key information to the management team for review Administering a survey to determine interest levels Soliciting applications for a more formal developmental program Creating a skills inventory database, or employee profile, that provides information on employees career interests and skills/competencies Discussions during performance reviews Assessment methods and instruments It is recommended that hospitals use a variety of tools for assessing potential for leadership or other key roles. These include performance reviews, assessment centres, 360-degree feedback, written examinations, behaviourbased interviews, in-basket exercises, secondment opportunities, job rotation, simulation exercises, etc. Talent review meetings Talent review meetings are used by some hospitals to identify the requirements for leadership and key positions, assess the capability of people in their organization to fill those positions, and ascertain the developmental needs of potential candidates. A good understanding of these elements assists in developing strategies to balance organizational needs with employees career aspirations. Some hospitals create an employee summary profile. Information in these profiles may pertain to career interests, interest in leadership roles, competency strengths and vulnerabilities, performance ratings, willingness to relocate, retirement plans and development plans. In addition, a separate profile may be created for key positions. Ultimately, employee and key position profiles can be matched to determine any gaps in specific areas, and create development plans to close those gaps. The talent review process is fluid and ongoing. Employees who are not initially considered for succession planning development can certainly be considered in the future, based on their performance results and their own interests. With a clear action plan and a timeline, these employees continue to contribute and will work on their areas of opportunity. (Refer to page 27 on Communication on Succession Planning.) 17

19 It is important to consider these factors prior to working on an action plan: Discuss with each of your employees his or her career plans and interests Assess their interests in leadership/senior roles. They may also be interested in lateral movement to other areas within the hospital Best Practices tip: Minimize subjectivity by using multiple assessments of employees and include a variety of perspectives. Assessments should be data-driven, backed by facts and clear examples. Best Practice for Assessing People Assessments provide significant insight into an individual s capabilities, their potential, and their career development and advancement interests. The following key design principles outline several areas of focus when developing and implementing assessment programs: ASSESSMENT - KEY DESIGN PRINCIPLES 1. Reflect specific business/operational context Define the leadership requirements to execute the business and talent strategy, the competencies and skills needed to drive results Link to specific future business challenges such as growth Employ tools targeted to measure the ability or potential of a leader to meet current and future business challenges 2. Target future leaders Focus on potential to succeed in the new role Identify the most promising future leaders who can play critical roles Feature assessment strategies and instruments that assess a leader s ability to step into a senior role or a role with additional responsibilities. 3. Employ a portfolio of tools Use multiple tools and perspectives to provide a full picture of the leader being assessed Provide several distinct data points for each critical leadership requirement measured Identify strengths, needs, growth potential and risk factors for leaders, and prioritize these relative to the identified strategic challenges 4. Engage stakeholders as full partners Stakeholders help define business requirements, leadership challenges and success factors which shape the assessment strategy and tools Assessment strategies include data collection from critical stakeholder groups Key stakeholders are active partners throughout the process as part of the support system, as a lever for change, and to build in accountability 5. Focus on development Assessment data is collected and organized to highlight development needs and priorities relative to the strategic imperatives of the business or role Development planning is built into the assessment and feedback process A roadmap to address strategic leadership requirements is a critical outcome of assessment 18

20 Promotion from within provides the optimal solution, given the organization s familiarity with the individual and the important message of building talent from within the organization. However, to ensure the internal person is the best candidate, an external search is often conducted concurrently to evaluate if there is a more qualified candidate outside of the organization. This parallel approach allows the organization to see all the talent available. As a guideline, if the external candidate is seen to be superior to the internal candidate, the choice is clear. However, if the external candidate is seen as comparable (or a slightly stronger candidate) to the internal candidate, the decision is most often to promote the internal candidate. This is supported through the assessment process, as the results of the internal candidate s KSAs and competencies have proven to be more reliable than the projected results based on interview evidence and references from other organizations. The following illustration is a sample agenda of a talent review meeting conducted by the CEO with the board and HR. Please note that the agenda including the attendees, the duration of the meeting and the discussion points will all vary depending on each individual organization and the hierarchy of employees whose performance and talent summaries are being reviewed. Sample Agenda - Talent Review Meeting for Senior Leadership Team Succession Attendees CEO and members of the appropriate committee of the board, senior leadership team, human resource senior leader(s) Introduction CEO goals and ground rules (20 minutes) HR Presentation overview of aggregate participant competency and performance ratings, HR trends (30 minutes) Workforce Summaries 1 hour for senior leadership team to deliver workforce analysis presentation and discussion (See attached template) Talent Map 2 to 4 hour discussion of talent pool position. Presentation of pre-populated map based on manager ratings and calibration discussion. Succession Planning (Level 1) - 2 to 4 hours. Participants deliver brief presentation of individual succession plans and discussion: organization charts job profile potential successors (1) ready now, (2) ideal next, (3) future external solutions, if appropriate emergency succession plan Debrief and Action Plans 1 hour. Develop action plans, key roles, accountabilities, responsibilities and timeframes to move succession planning results forward Succession Planning (Level 2) - 1 hour. Senior leadership team is excused and the CEO provides ratings for his/her direct reports. VP HR remains to facilitate the process 19

21 Sample Manager Assessment Tool Manager Assessment Name Performance Track Record Needs Improvment Consistently Met Expectations Exceptional Leadership Competencies Unable to Observe Needs Development Effective Role Model Unique Skill Yes/No Indicate special skills, expertise or role Promotability or Responsibility Potential Limited Medium High Risk/Impact of Loss Low Medium High Talent Map Placement Poor Contributor Marginal Contributor Sound Contributor Superior Contributor Current Leader Future Leader Source: Mercer (Canada) Limited Sample Output from the Talent Review Meeting Marginal Contributors Superior Contributors Future Leaders + Professionals Either just meeting objectives or too often missing objectives Poor Contributors At Level or with Career Potential May have potential to move higher within 5 years Effective Contributors Highest Contributors with Career Potential Potential to move higher within 5 years Current Leaders + Professionals Focus on Growth Poor contribution reflects an urgent and significant need for improvement Sustained Effective Contributors Contribution must be superior or better before potential is relevant Highest Contributors with At Level Potential May broaden or expand responsibilities at current level Resolve the Problem Focus on Engagement and Retention Source: Mercer (Canada) Limited 20

22 Sample Succession Planning Chart End Result President & CEO VP, Finance VP, Clinical and CNE VP, Academic and Medical Affairs VP, Human Resources and Communications (1) VPs present their director ratings as well as managers below Director Planning Director Quality Director Academic Director of Communications (2) CEO then presents ratings of his/her VPs to complete the chart with VPs out of the room Key High Potential / Ready Now for Larger Role Ready for Larger Role in 1 to 3 Years May Be Ready in >3 Years Solid Contributor Performance Problems Colour code direct reports to directors, as above, according to organizational chart. Source: Mercer (Canada) Limited 21

23 Current Practices At Hospitals for Assessing People Perth and Smith Falls District Hospital A management nomination and a self-nomination process is used. Regardless of how an employee is nominated to the succession pool, they must satisfy the nomination criteria to be accepted. Inviting employees to self-nominate sends a message of openness within the organization. The assessment process involves an initial screening by the succession planning committee, followed by a written behaviour-based questionnaire. London Health Sciences Centre Various approaches to identify candidates for the Accelerated Development Pool (i.e., leaders who aspire to a lateral or upward move) have been used, including a formal application process where an individual can apply to be considered for the talent pool. A written questionnaire is submitted by the individual, and their manager fills out a form detailing the individual s strengths and opportunities. In Patient Care, a Talent Council guides a new pilot project where leaders who are rated at full performance, and who aspire to higher levels of leadership, and are willing to move outside their clinical area of expertise (have a passion for leadership), are considered for shortlisting. Shortlisted managers, coordinators (and emerging leaders) are screened for learning agility. This talent pool receives additional development and access to a coach and mentor to accelerate their growth. Any vacancies and critical roles identified within Patient Care are filled with leaders from the Accelerated development pool. Step 4: Develop A Plan: Create and Develop the Talent Pipeline Develop the overarching succession plan and build the talent pipeline The succession plan incorporates the results of the previous steps, creating an overarching framework for critical positions, required KSAs and competencies, and potential successor capabilities and development needs. The succession plan can also feed into the hospital s training and development programs to further develop the skills sets identified for current and future leaders. From an individual perspective, a comprehensive assessment of an employee s strengths, opportunities for improvement, and interests will help formulate a suitable development plan that is effective and results-oriented. It is highly recommended to review the progress in the development plan periodically through the performance review process. Templates for learning plans should create the link between developmental activities and capabilities for current and future roles. See the Resources section for some sample templates. The vast majority of an organization s knowledge is difficult to codify because it encompasses people s insight, judgment, and know-how. It requires strategies that rely more on interpersonal interactions such as coaching, mentoring and job shadowing. Consider incorporating some of the following strategies into a development plan for your employees (may not apply at all hospitals): Learning and Development Opportunities Stretch assignments allow employees to stretch beyond their current abilities. Examples include chairing a committee or meetings, leading a special project, or being assigned a challenging new task. 22

24 Acting assignments can be a good opportunity for employees to get experience at a more senior level by temporarily taking over another employee s responsibilities when there are absences or vacancies. Job rotations give employees the opportunity to work in different areas of the hospital and acquire experience in different disciplines or functions. The employee is exposed to different streams or domains of work. Mentoring and/or coaching provide opportunities for employees to obtain ongoing guidance and support from more experienced employees. These arrangements can be formal or informal. Formal training may include self-directed training, classroom training, web courses, higher education through a college or university, and in-house training. Provide an avenue for the CEO, management team and HR to broaden their understanding and point of view on the organization s top talent. Develop strong support systems: each high potential candidate should receive a full range of support to accelerate their growth. For example, consider providing access to a coach, a member of the HR team, a senior member, their manager and other peer or technical mentors. Using a variety of learning approaches will further inform and help to determine leadership capability and potential as outlined in Figure 5. Figure 5: Embedding learning using a variety of approaches Best Practices tip: Consider leveraging the knowledge of a senior employee by giving them opportunities to mentor, coach, train, or conduct job orientation for newcomers and existing employees. Embed new learning into daily work Stay connected to the network Best Practice for Developing a Plan The results of the talent review will include the identification of potential successors. For leaders that appear to have the potential to hold one of the organization s top or mission-critical jobs, it is important to focus on assessment and development. The following are key recommendations related to high potential talent: Complete an in-depth assessment of executive leadership potential. Focus high potential leaders on the critical capabilities that have been identified as being most important for the organization s future. Establish an intensive forum and integrated action learning process to accelerate the development potential of future top executives. PULL PUSH Action plan Reminders Progress report Tools Benefit statement* (to self and the organization) Continue learning On-demand elearning Webinar Learning refreshers Open enrollment curriculum Application learning Source: Mercer (Canada) Limited Blog (personal commitment and follow-through) Discussion forum (personal challenge) Wiki Alumni groups Second Life events Reinforce behavior and provide feedback Manager Mentor/Coach Peer Coach Direct reports Stakeholders * Benefit statement refers to the benefits of a learning plan to self and the organization. 23

25 Many organizations focus on what is called the 70/20/10 model for training and development. The 70/20/10 learning concept was developed by Morgan McCall, Robert W. Eichinger and Michael M. Lombardo at the Centre for Creative Leadership. 70% from real life and on-the-job experiences, tasks and problem solving. This is the most important aspect of any learning and development plan. 20% from feedback, and observing and working with role models. 10% from formal training. Current Practices from Hospitals on Developing a Plan The Ottawa Hospital A leadership development framework is categorized for all levels of potential leaders Management Foundations for aspiring/new leaders and people leaders, senior leadership program for strategic leaders and executive leaders. The framework includes interaction with management leaders, self-directed learning, on-the-job assignments/ activities and in-depth assessments. For senior leaders, in addition to the programs offered in the Management Foundation Course, courses are offered in social intelligence, and strategies for high involvement. Figure 6: 70/20/10 Training and Development Model Experience 70% Training 10% Coaching 20% Experience Special assignments Stretch targets with coaching Challenging situations Position changes Coaching and Feedback Coaching Positive role models Manager feedback Source: Mercer (Canada) Limited Training Formal training, workshops Online learning Self-directed learning Historically, training and development was measured on an hours per year basis. This is when the focus was on training. With the 70% focus on experience (i.e., learning through hands-on experience), and 20% on coaching (i.e., shadowing a senior level manager and learning from their knowledge), it becomes more difficult to add development hours to classroom training hours. As a side note, hospitals often leverage local educational institutions for both leadership and technical skills development (e.g., business courses at the local university or information technology courses at the local college). This is an efficient way to leverage community resources to benefit the hospital to develop new skills for staff. 24

26 London Health Sciences Centre The Emerging Leader Program (ELP) is available to frontline staff who are interested in exploring the path to leadership, and who have been identified by their manager as having leadership potential. In addition to opportunities to shadow a frontline leader, this program offers courses in preparing for an interview, emotional intelligence, change management, service excellence, crucial conversations, project management, and recognition. Interested staff complete an application in conjunction with their leader. The leader commits to providing the applicant with stretch assignments and regular meetings to mentor them and develop their leadership potential, as well as transfer knowledge from the sessions to real work situations. The organization is moving toward matching the current and future recruitment needs of each portfolio with the number of seats available in the ELP. In Patient Care, those registered in ELP are nominated for the Emerging Leader Accelerated Development Pool. Nominated candidates are interviewed and assessed for learning agility. Successful candidates are placed in a talent pool for frontline leadership roles. When vacancies occur in frontline leadership roles, the Patient Care Talent Council determines whether to appoint someone from the talent pool, give them an interim role, or recommend any ADP candidates for an interview. A pre-recruitment process reduces the time required to fill positions. Job postings are considered only when candidates within the Emerging Leader Talent Pool have been vetted and no one meets the criteria for the role. Step 5: Evaluate Results Measure the impact of the succession plan on a periodic basis as part of the broader talent management process. Some of the indicators are subjective and depend on a number of factors, such as the size and complexity of a hospital, and its location. The following can be used to measure the progress of succession planning: Ratio of key positions which have internal replacements/successors identified Attrition in key positions and their successors Percentage of key positions filled internally Dropout rates in development programs Representation of designated groups in the program Employee satisfaction surveys It is also useful to measure and monitor the effectiveness of professional development programs and other corporate initiatives, such as: Surveys of development program participants Progress on individual development plans Incorporation of learning in the work environment Cost-benefit analysis as a technique to quantify and compare the costs and benefits of a program. Costs may be direct (e.g., money spent on an assessment centre) or indirect (e.g., time away on training). Best Practice for Evaluating Results Evaluating results of the succession planning process is a key element of the overall talent management framework. Identifying performance measures and metrics to assess success ensures that implemented programs stay on track while continuously supporting and enabling the organization s strategic priorities. 25

27 Evaluation also includes going over learning from the talent review sessions, creating a dashboard of measures for ongoing progress evaluation, and linking the leadership dashboard with performance metrics to analyze the outcomes. The following table outlines sample deliverables and related metrics. Objective Metric Timing Talent pool is ready 20% of identified key positions have ready now candidates in place 70% retention of talent pool members 50% of open key positions filled from talent pool 2013 talent review Q3 Annual reporting Process is expanded to broad employee population Succession plan process designed and executed into 4 levels of the organization Tiers 1 & 2 complete by 12/2014 Tiers 3 & 4 complete by 12/2015 Skill gaps are closed for talent pool members Investment in talent development is leveraged 100% development plans created and submitted Ongoing monitoring of progress of individual development plans Performance ratings of the talent pool Increased employee engagement Increased proficiency in leadership competencies within talent pool Reduced costs associated with recruitment and turnover Quarterly/Annual reporting Employee engagement measured through employee surveys Talent review results Surveys 3-6 months following training, results reported to management Readiness of applicants to fill open key positions Source: Mercer (Canada) Limited 26

28 Communication On Succession Plan Some hospitals have a policy of communicating the results of succession planning, while others do not. There is no one prescriptive model. However, hospitals are encouraged to formulate a communication policy on succession planning based on their individual needs. This can be a highly sensitive topic and should align with your organization s culture and practices. The benefits of communicating with a person that he or she is part of a succession plan can serve to motivate, sustain high performance, and help retain key talent. It also opens up discussions with the employee to assess their interest in further advancement as in some cases the individual may not aspire to the same career that the hospital envisages. Once communication on career advancement takes place, what is also important is that the individual understands that are no guarantees that a promotion will happen at any specific time and consistently superior performance is a must in order to continue being considered as a potential successor. If the communication is clear and consistent, it can prevent frustration and distrust among employees. Regardless of whether an organization chooses to communicate it s succession plan to employees or not, it is important that it assigns the appropriate time and resources for leadership development. A leadership development framework should be customized to meet the organization s objectives and the needs of the specific individuals identified as high potential. Best practice indicates that the organization s high potentials deserve adequate developmental time and resources. How an organization assigns it s leadership development resources is in itself a way to communicate how potential successors are chosen and how they are groomed to take on future roles in the organization. Also, an organization needs strong performers to move laterally or stay in their current highly specialized roles for a period of time before they enhance or gain the skills needed to take on more complex or senior roles. These employees should be seen as highly valued and whose ongoing engagement and productivity is important to the hospital s results. Here too, professional development time and resources must be invested to keep these individuals engaged and motivated. In organizations that choose not to communicate their succession plan, it has been observed that there is a potential benefit in avoiding a negative perception around creating an unfair race where there are winners and losers amongst employees. There are also those employees who are not part of the formal plan yet are highly valued and whose ongoing engagement and productivity is important to the hospital s results. Their value must be communicated to them as well. One approach is to advise the individual that they are viewed as top talent and will be provided with opportunities to continue to develop and advance their career, while giving them the opportunity to confirm their interest in pursuing a job with higher demands. Doing so recognizes and rewards top talent, honours their achievements, and sends a strong message regarding the organization s expectations and career development opportunities. 27

29 5 Key Challenges to Effective Succession Planning Some challenges to succession planning include: Some hospitals have so few positions they may not be able to offer advancement opportunities. Employees with the potential and the desire to advance their careers may move to larger organizations instead of choosing to wait for a promotion. Leverage lateral moves in order to provide a new learning environment for the individual(s). Secondments to other hospitals are also becoming more prevalent. Provide stretch assignments by involving them or having them lead major projects. Employees may leave for better salaries and benefits offered in other workplaces, especially in light of broader public sector salary restraints. Consider leveraging recognition programs that create intrinsic value (e.g., breakfast with the CEO, face-to-face communication with senior leaders, open forums of discussion, and write-ups in the quarterly internal newsletter). Investing in training and development signals the organization is prepared to invest in the individual (e.g., attending the annual OHA HealthAchieve conference, or supporting a membership in the Canadian College of Health Leaders). The plan does not promote people in a timely fashion, leading potential successors to leave the organization to seek new opportunities. Avoid a singular focus on promotion. Ensure timelines that could involve promotion remain flexible and are based on contingent outcomes. In some cases, managers/leaders in hospitals are staying in their positions despite the fact that the skills needed for the job may have changed or they are no longer making a meaningful and productive contribution to the organization. Ensure performance management issues are dealt with pro-actively. Performance management becomes an important tangential process to succession planning. Poor performers in key roles present barriers for highly engaged and productive employees who need to move into key positions. Indiscriminate inclusion of employees in the succession plan, including those who are disinterested, unmotivated or lack capacity to advance, may skew the process. It is the manager s responsibility to take the initiative to understand the career aspirations and competencies of their direct reports, and to bring forward those employees who qualify for the succession planning process. Leverage the performance management process to understand and gather interest from employees. 28

30 Inadequate training and development resulting in an employee who is not prepared for a promotion or new lateral opportunity. Wherever possible, maximize job shadowing opportunities. In the private sector, there is often an overlapping job shadowing period between the promoted employee and the employee taking over their role. In health care, tight budgets often do not enable this practice making it critical that the arriving employee is well prepared and has resources available to support their transition into the new role. Poor communication resulting in confusion and turmoil within the organization as staff speculate about what the succession plan really is. It becomes critical that the organization adopt a consistent communication strategy (see page 27). Develop a succession planning policy that is clear along with speaking points for the managers in order to ensure consistency of message. Candidates cannot be guaranteed a promotion. Much depends on timing and the needs of the organization. Focus your discussions on development, and specify that a succession plan is not a guarantee for a promotion. Rather, it represents a developmental plan to prepare an individual should opportunities arise within the organization. It should also be made clear that one can continue on, or be removed from, the succession path based on performance. Similarly, an individual who is not on a succession path can be added based on new evidence provided by ongoing performance. 29

31 6 Conclusion Succession Planning is an important part of your organization s overall talent management strategy. We hope that the compilation of best practices from health care and non-health care organizations we have provided in this guide assists your organization in its succession planning efforts. Please review the templates, resources and some reading materials that we have suggested in this Guide. The steps that have been outlined along with the templates that have been provided are meant to illustrate the common approaches and the best practices in succession planning. Each organization is unique and we hope that you will customize your succession planning framework according to your organization s needs. 30

32 7 Resources The following resources were used to help create this Guide: HR Council: Resources from on Succession Planning: successionplan.htm Treasury Board of Canada Secretariat: Human Resources & Skills Development Canada: A New Game Plan For C Players, Harvard Business Review by Beth Axelrod, Helen Handfield-Jones, and Ed Michaels, January Available at Retooling HR: Using Proven Business Tools to Make Better Decisions About Talent - by John W. Boudreau The Human Resource Professional s Career Guide: Building a Position of Strength by Jeanne Palmer, Martha I. Finney Culture Connections by Marty Parker Statistics Canada: n?pid=2621&lang=eng&more=0&hpa (CANSIM Tables) Centre for Creative Leadership National Association of Corporate Directors Tools and Templates Mercer (Canada) Limited Some Suggested Reading Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-based Management by Jeffrey Pfeffer The War for Talent by Edward Michaels, Helen Handfield- Jones, Beth Axelrod 31

33 Appendix 1 Sample Individual Succession Planning Profile (Using LEADS Competency Framework For Leadership Assessment) SUCCESSION PLANNING PROFILE Date Name: Title: Department: Hire Date: Salary: Last Perf Rating: Date: Assessment Level: High Potential or Fully Competent Prev Perf Rating: Date: Readiness to Move (x): Ready Now or Within 12 months or Develop in role or Too new to evaluate Previous Hospital Roles: Roles before Hospital: Education and Certifications/Credentials: LEADS Competencies: Rating 1 5 Leads Self Comments Is Self Aware Manages Themselves Develops Themselves Demonstrates Character Engages Others Comments Fosters Development Contributes to Health Org Communicates Effectively Builds Teams Achieves Results Comments Sets Direction Aligns Decisions with Vision/Values Takes Action to Implement Assesses and Evaluates Develops Coalitions Comments Builds Partnerships & Networks Commitment to Customers & Service Mobilizes Knowledge Navigates Socio-Political Environment Systems Transformation Comments Demonstrates Systems Thinking Encourages & Supports Innovation Orients Themselves to the Future Champions & Orchestrates Change 32

34 Distributed Leadership: Comments Unique Skills: Comments Identified Area for Development: Comments Candidate s target role in 5 years: High Level Action Plan: Signature: Employee Signature: Manager Signature: Manager s Manager 33

35 Appendix 2 Leads Capabilities Framework Adopted by the Canadian College of Health Leaders 34

36 Appendix 3 Sample Succession Planning Template SAMPLE TOOLS: Workforce Summaries Who Do We Need, Short Term and Long Term What is it? Sample workforce summary Qualitative context on leadership and talent challenges in the workforce May be combined with more quantitative approaches based on workforce demographics and skill shortages. Used to inform current talent needs and gaps This summary is taken from private sector best practice as such, the wording needs to be adapted to align with the hospital environment. For example, business can be substituted with hospital and customer for patients. While there is no competition to assess, there is a need to assess impact of partners within the health care sector. 35

37 Identify positions SAMPLE TOOLS: Identification of pivotal / critical roles What is it? Critical positions can be key leadership and/or individual contributor roles at every level, depending on the hospital s strategic goals and the organizational capabilities required to achieve those goals Identifying key/critical positions is the starting point for the succession planning process. Assessment of critical positions derive from and should be aligned with the following questions: What is the organization s strategy? What capabilities are required to execute the strategy? What roles are critical to employing these capabilities? Sample identification of critical roles 36

38 Identify positions SAMPLE TOOLS: Talent segments and critical roles should be managed like a portfolio of investments What is it? Sample critical roles Pivotal/critical roles: Are close to shifting patient needs and advances in technology, those roles that sign post the future direction of health care Involve activities where outsourcing is not possible Have high levels of performance variability, i.e. where there is a substantial difference between low and high performers Incorporate an unusual configuration of role requirements. These are the roles with a mix of experience and skill sets that are not commonplace External supply might be limited but at the fore-front of future needs, where internal development and progression will be critical 37

39 Identify KSAs and Assess People SUCCESSION FRAMEWORK: Leadership competency assessment, performance feedback and career aspirations LEADERSHIP ASSESSMENT & FEEDBACK Sample tools 360 tool Multi-source assessment (360) Competency review Employee engagement survey Individual performance review Performance results Behaviours aligned with hospital s core values Development needs Talent summit/review Career history Performance & potential Aspirations and engagement Strength/gaps Other assessment Assessment center tools (e.g., psychometric testing) Career Achievement Record Candidate Strengths, Gaps, Potential 38

40 Assess People BRINGING IT ALL TOGETHER: Talent review process TALENT REVIEW PROCESS A Talent Review process reviews, discusses and documents key position plans and development plans for key individuals and talent pools. It is a critical interaction between organizational leadership and their HR/Talent business partner. The group comes together for a day or two to talk about their business priorities, the talent they have, and to make decisions about the future. They are designed to focus on: Job criticality and business continuity Incumbent strengths and weaknesses Talent retention Next generation pipeline strength Compensation alignment (as possible given legislation) Diversity representation Say/do action capture and tracking THE OUTCOMES Identification of high potential talent, performance issues or at risk talent Mapping of bench strength and succession paths Determination of promotion, job movement and special assignment decisions Review of current and future talent needs, gaps and development plans Prioritization of development investments 9-Box Succession Organization Chart Succession Planning Template 39

41 Assess People SAMPLE TOOLS: Performance Potential 9-Box What is it? Standard 9-box format with emphasis on where to direct development investments and identify individuals ready for advancement May be used in a talent review session as a discussion tool either prepopulated (based on prior ratings) or, if the group being discussed is smaller, participants may use post-it notes with names to place individuals on the grid Sample Performance Potential 9-Box Differentiated talent... Continuing investment High investment, help improve performance High investment; promote/give more responsibility High Potential People who were recently promoted often receive this rating and usually require some time and experience. Help them improve their performance; set stretch goals and encourage innovation. Continue to invest highly in their development These stars are ready for an assignment at a higher organizational leadership level. Keep them learning and growing; can handle steep learning curves. Leadership Potential Growth Potential Stable Potential Monitor Determine why they have the ability to grow, but are not applying the skills. Monitor Monitor carefully and demand performance improvement. May be working at wrong leadership level and should be reassigned or terminated. Continuing investment Help them improve their performance. Provide opportunities for continuing development. Continuing investment Challenge and retain. Provide sufficient coaching or development opportunities so they can improve performance and potential. High investment; accelerate skill development Accelerate development skills needed for next level. Give stretch assignments and build breadth of experience through cross-functional projects. Minimum investment but challenge, reward & retain These seasoned pros should remain at their current levels with recognized contribution. Challenge and retain by involving them in training others. Below Expectations Fully Effective Exceptional Performance 40

42 Develop Plan SUCCESSION PLANNING FRAMEWORK : Organizational plan as well as individual & bench-wide planning INDIVIDUAL & BENCH-WIDE PLANNING Succession planning Analysis of top talent slates Comparison to business needs Vulnerability (GAPS) Scenario charts for potential succession Individual development planning Strengths Gaps Development goals Executive development action plan Sample succession planning template and succession maps Role Chief Operating Officer Chief Financial Officer Chief Medical Officer Current Incumbent Strong, James Bates, William Baker, Sarah Manager succession slates Emergency cover Ready now Ready in months Ready in 2-3 years Jones, Tim Hatcher, Dean GAP Martin, James GAP Braxton, Rhonda (2) Gupta, Shyra Jones, Tom GAP GAP Buckley, Nathan Martin James McCowen, Alex Succession Slates & Development Plans Manager succession dashboards 41

43 Develop Plan What is it? Sample succession planning chart and organization chart Standard succession planning organization chart with roles (names) colour-coded based on potential May be pre-populated, based on individual executive interviews and used as a discussion tool in a Board level succession discussion Key VP, Finance Director Planning VP, Clinical and CNE Director Quality VP, Academic and Medical Affairs Director Academic VP, Human Resources and Communications Director of Communications High Potential / Ready Now for Larger Role Ready for Larger Role in 1 to 3 Years May Be Ready in >3 Years Solid Contributor Performance Problems 42

44 Develop Plan SAMPLE TOOLS: Individual Development Plan What is it? Standard individual development plan To be monitored and updated as part of ongoing performance management discussions Sample Individual Development Plan 43

45 Develop Plan SAMPLE TOOLS: Leadership Development Leadership Development Sample model for leadership development SAMPLE TOOLS Development through work assignments Change in job content or scope Job reassignment Project initiative or action learning Learning from others External executive coaching Mentoring Training-based development Internal leadership curriculum External training or education Self-directed study Broader, Deeper Leadership Capabilities 44

46 Evaluate Results SUCCESSION PLANNING FRAMEWORK: Deployment and Reporting Deployment and Reporting Sample tools for reporting SAMPLE TOOLS Leadership structure Organization and governance Role design Spans and layers Leadership staffing Promotions of internal candidates External hires Redeployments Leadership scorecard Metrics and dashboards Board reporting External communication 45

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