Succession Planning. Rick Howell New Seasons Market. May 2013

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1 Succession Planning Rick Howell New Seasons Market May 2013

2 What is Succession Planning? Succession planning is the long-term approach to developing talent for the organization s future needs. It involves looking at what competencies are required at various levels, and preparing employees for multiple opportunities.

3 Why is Succession Planning Important? Rapid growth Sustainable culture Employee morale, retention, acquisition Cost First year productivity

4 Succession Planning Components Workforce planning Performance management Competency development Training and development Recruiting and selection Replacement charts Talent reviews, mentoring, reading lists.

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6 Sir Ravi The Juggler

7 Workforce Planning Culture what makes us who we are Capabilities KASO s, productivity Composition core vs. flexible workforce Forecasting HR needs: what are the required capabilities and how many people are needed? Gap analysis conduct to see what we have now and what is needed in the future

8 Core vs. Fexible Workforce Flexible Workforce Core Workforce

9 Workforce Planning Culture what makes us who we are Capabilities KASO s, productivity Composition core vs. flexible workforce Forecasting HR needs: what are the required capabilities and how many people are needed? Gap analysis conduct to see what we have now and what is needed in the future

10 Performance Management Coaching and feedback Performance appraisals Rewards and recognition Succession planning Personal development plans Update skills inventories Metrics and documentation

11 Developing Competencies Global overarching needs Division competitive advantage Function unique for the discipline Job specific related to duties and tasks

12 Training and Development Supervisory skills Leadership skills Business acumen Technical and industry knowledge Presentation and communication skills

13 Other aspects Mentorship Reading lists and books clubs Replacement charts Strings on outside candidates Career planning Talent review and calibration sessions

14 What is Mentoring and why do it? Goal-oriented, business relationship with mutual benefits to protégé, mentor, and organization. The primary purpose is to develop individuals by providing them feedback, sharing experiences, and coaching that creates a self-reliant person who can lead in the organization. Good mentoring improves morale, reduces turnover, develops people faster, and creates solutions to current business problems.

15 10 Rules for Mentors 1. It s not all about you 2. Always maintain confidences 3. Set and enforce boundaries 4. Know your limitations 5. Keep your promises 6. Listen and ask questions 7. Role model leadership 8. Don t sugarcoat feedback 9. Be yourself 10. Commit to continuous learning

16 10 Rules for Protégés 1. Cherish your mentor s time 2. Always maintain confidences 3. Learn from your mistakes 4. Be receptive to feedback 5. Keep your promises 6. Genuinely consider advice that is given 7. Clarify your expectations 8. Respect the org structure 9. Bring more than just your problems 10. Commit to continuous learning

17 Leadership Pipeline It s all in the transitions Lead Enterprise Lead Division Manage Dept. Manage Mgrs. Supervisor Entry level

18 Replacement Planning Replacement planning is a short-term examination of who will back-fill a position should the incumbent leave. It usually involves looking at the direct reports of that person and identifying if there is a qualified candidate.

19 Sample Replacement Chart SVP HR Incumbent(s): Barbara Business Potential Successors: Benefits Betty Staffing Steve Training Tanya EVP & CFO Incumbent(s): Numbers Nate Potential Successors:

20 Talent Review CEO Lisa Leader CFO Fred Financial VP of Ops Sally Service VP of HR Pat People Controller Nelly Numbers Dir of Ops Ivan Inventory Dir of Talent Tom Talent

21 Talent Reviews aka Calibration Sessions Meetings one to four times a year Managers openly discuss their direct reports with their peers Peers ask questions, challenge ratings The discussion not only identifies HiPo s, but also calibrates the ratings This helps to identify talent outside of a manager s area

22 Outcome of calibration meetings Top down the first time, then bottom up One of the meetings focuses on performance, merits, bonus, and recognition Another meeting focuses on HiPo s, improvement plans, mentors and recognition

23 What s a Hi Po? A Hi Po = a high potential employee A high potential employee is capable of moving being promoted up in the two organization levels upward

24 Identifying Internal Talent Performance reviews 360 degree feedback Calibration sessions Peer feedback Skills inventories Promotional ratings Assessment methods Personality Tests The Big Five Cognitive Ability Tests Critical thinking Intelligence Knowledge Tests Leadership

25 Assessment Tests Personality Tests Agreeableness Conscientiousness Extraversion Emotional Stability Openness to Experience ~50% said to be inherited Cognitive Ability Perception Memory Reasoning Verbal skills Mathematical skills Expression of ideas The most valid method of selection

26 Developing High Potentials Leadership training Mentoring Challenging work assignments Projects and task forces Team Lead Reading lists Personal Development Plans (PDP s) Develop career paths

27 The Lominger 9-box High Professional High Professional Plus Consistent Star Long-term Performance Solid Professional Lower Performer Key Performer Inconsistent Performer Future Star Diamond in the Rough Potential/Learning Agility

28 Consistent Star Give challenging assignments Secure a senior mentor Place on task forces Get them to sink roots Long-term incentives Friendships Watch for flame out Solid Professional Key to stabilizing a team Potential trainer/mentor Good reviews and pay Encourage to perform at a higher level in the same position

29 Diamond in the Rough Assess supervisor, department and position Match talents with assignments Secure a mentor Turnaround or turn loose Future Star Give challenging assignments Secure a senior mentor Place on task forces Get them to sink roots Long-term incentives Friendships

30 Evaluating Success Improved EBITDA, net income, profit Improved DOI, GOP Reduced turnover Reduced turnover of high potentials Promotions from within (key positions) Correlation of high performers to financial results Return on Human Capital Revenue/profit per FTE Customer or employee engagement scores Attendees at leadership courses

31 Additional Information The Leadership Pipeline Ram Charan Stephen Drotter James Noel Lominger (Korn Ferry)

32 Questions?

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