Best Practices in Succession Management
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1 Best Practices in Succession Management presented by William J. Rothwell, Ph.D., Professor, Pennsylvania State University Robert Edwards, Linkage Principal Consultant
2 Agenda Introductions What is Succession Planning? Critical Success Factors 7-Step program to optimize your Succession Planning Succession Planning vs. Talent Management Employment Branding and why it s important Technical vs. Management Succession Planning The role of Knowledge Transfer in Succession 12 practical strategies Managing High Potentials: Unique competencies required of managers 2
3 Succession Planning Defined & Critical Success Factors What is it? Succession Planning is a systematic approach to ensuring that an organization has a steady, reliable pipeline of talent that will meet its future needs in leadership and other lynchpin roles. Critical Success Factors Senior Management commitment Linked to business strategies and HR systems Focused on future requirements Active work on closing development gaps Sustainability 3
4 Why Is Succession Planning Necessary for Organizational Success and Growth? One of the most critical questions facing leading organizations is how to develop the next generation of leaders Organizations need to be proactive and prepared for future performance with a ready now workforce 4
5 7-Step Program to Optimize Your Succession Planning System 1. Build a development mindset in your organization Choose to manage people as tangible assets Motivate employees and help drive performance 2. Drive organization alignment both domestically and internationally Be integrated with the overall business model Ask, why are we doing it? 5
6 7-Step Program to Optimize Your Succession Planning System 3. Inspire a learning organization Document and discuss the lessons learned, both positive and negative Be open minded, respond to change, and reward risk taking 4. Ensure data driven decision-making Data analysis leads to credibility Measure improvements in leadership pipelines, diversity, progression and development 6
7 7-Step Program to Optimize Your Succession Planning System 5. Segment, align, and develop talent Critical to driving operational excellence and organic growth Succession planning should not be viewed as a single process 6. Continually assess your performance culture Make sure employees on benchmarks are performers 7. Gain the support and participation of the CEO or President in the process Essential to achieve positive results and drive change 7
8 More organizations are implementing formal succession plans up 18% over 2006 Do you have a formal succession plan for your organization in place? 47% 65% Yes 35% 53% No N = 118 respondents in 2007 N = 297 respondents in
9 Commitment from management is most critical to implementation success Please rate the following based on what you consider critical success factors in succession management. Management commitment 70% Link to business strategies and HR systems 35% Focus on future requirements 30% Active work on closing development gaps 28% Sustainability 25% N = 120 respondents multiple responses accepted 9
10 Consistency since 2006 in the top four activities organizations do successfully Please select the following activities that your organization does successfully. Attracting/Recruiting Attracting/Recruiting 54% 71% Retention 60% Training 53% Training New employee on-boarding orientation 46% 53% Identifying High Potentials Retention 42% 50% N = 120 respondents in 2007 N = 288 respondents in
11 Succession Planning vs.talent Management The difference between: A replacement program A succession planning program A talent management program 11
12 The Linkage Talent Management Diamond Talent Development Talent Acquisition Strategy Organization Brand Competencies Culture Talent Retention Talent Placement 12
13 Talent Management: Aligned with HR Systems Business Strategy Current Talent Capability Analysis Talent Acquisition Tools and Processes Leadership Development Tools and Activities Performance Management Tools and Processes Future Talent Requirement Analysis 13
14 Strategy Strategy influences all four points of the Talent Management Diamond: Strategy determines who you hire (Acquisition) Strategy determines how you develop your leaders (Development) Strategy determines who you retain and how you retain them (Retention) Strategy determines who best to move into selected positions (Placement) 14
15 What is an Employment Brand? An employment brand is not the same thing as your organization s brand name, though they are related Brand relates to reputation and what people think of your organization An employment brand is the reputation that an organization has achieved in its relevant communities Copyright William J. Rothwell, Ph.D., SPHR 15
16 Why is an Employment Brand important? People seek out organizations that match their selfimage and avoid those organizations that do not match their self-image An employment brand is important for establishing a reputation that will attract the right kind of people and discourage the wrong kind of people from applying or staying with your organization Copyright William J. Rothwell, Ph.D., SPHR 16
17 The HR function is responsible for Talent Management Who is primarily responsible for Talent Management in your Organization? HR function 57% Senior executives 19% CEO 8% Other 8% Line managers 7% N = 118 respondents 17
18 Transparency of high-potential status is inconsistent Do you inform employees of their succession management rating and/or high potential status? Sometimes 36% Yes 29% No 35% N = 112 respondents 18
19 Watch out for these Common Fallacies about Succession All false! 1. Success at one level will guarantee success at higher levels 2. Promotions should be regarded as rewards for a job well-done 3. Managers are always the best judges of who should be their replacements (the like me fallacy) 4. The managers our organization has now are ideal for the future (the like us fallacy) 5. All people are created equal and should be treated equally to avoid charges of discrimination or favoritism 6. The best way to develop people is to send them off-site 19
20 Clear and Open Processes Flexible and Sustainable - Talent management processes are systems-independent, flexible, userfriendly Visible and Transparent - Open talent management processes are critical to attracting and retaining top talent. An open system also encourages shared accountability and involvement throughout the process 20
21 Typical Burning Platforms for Succession Planning Work 1. CEO/Senior Team Retirements 2. Lack of bench strength for key leadership & other lynchpin roles 3. Changes in company structure/governance 4. Strategic shifts in the company business model 5. External pressure: Board of directors & Shareholders Parent organizations Key financial stakeholders (VCs & private investors) 6. Organization heavily siloed 7. A broken/outdated former succession planning process 8. Turnover of key leadership & loss of top talent 21
22 Technical Succession Planning vs. Management Succession Planning Technical succession planning is not carried out in the same way as management succession planning Management succession is about finding and developing the right people to place in the right positions and in the right locations at the right times to achieve the right (because strategicallyimportant) objectives Technical succession is about isolating, distilling, and transmitting the right information to people at the right times to ensure the continuity of operations and provide a foundation for future improvements Source: Copyright William J. Rothwell, Ph.D., SPHR 22
23 Technical Succession Planning vs. Management Succession Planning The emphasis in management succession planning is really on who (people) The emphasis in technical succession planning is really on what (processes) and capturing tacit information about processes before those who possess that knowledge leave the organization Source: Copyright William J. Rothwell, Ph.D., SPHR 23
24 12 Practical Strategies for Knowledge Transfer Strategy 1: Strategy 2: Strategy 3: Strategy 4: Strategy 5: Strategy 6: Job shadowing Communities of practice Process documentation Critical incident interviews/questionnaires Expert systems Electronic Performance Support Systems Source: Copyright William J. Rothwell, Ph.D., SPHR 24
25 12 Practical Strategies for Knowledge Transfer Strategy 7: Job aids Strategy 8: Storyboards Strategy 9: Mentoring programs Strategy 10: Storytelling Strategy 11: Information exchanges Strategy 12: Best practice studies or meetings Source: Copyright William J. Rothwell, Ph.D., SPHR 25
26 Unique competencies required of managers to manage High Potentials The research suggests that the most productive workers in any job category may be as much as 20 times more productive in getting results than their equally qualified but less productive peers The most productive workers, sometimes called exemplary employees or high flyers, may require special attention from managers to help them realize their potential Source: Copyright William J. Rothwell, Ph.D., SPHR 26
27 Unique competencies required of managers to manage High Potentials While definitions of High Potentials differ, one common definition is that a HiPo is someone capable of advancing 2 or more levels in a 5-year time span If they are not handled well, their departure from an organization could represent the equivalent of losing as many as 20 people! Source: Copyright William J. Rothwell, Ph.D., SPHR 27
28 Unique competencies required of managers to manage High Potentials Such teachers must exhibit: Better-than-average self esteem and self-confidence Strong communication skills A high level of intelligence An ability to delight in the learning process itself Curiosity, flexibility and a willingness to experiment with dramatically new, and often previously untried, approaches Source: Copyright William J. Rothwell, Ph.D., SPHR 28
29 About the Presenters William J. Rothwell William J. Rothwell, Ph.D. is recognized globally as an expert on succession planning and management. He served as the national thought leader for a 2001 Best Practices study of succession that examined 18 multinational corporations. A Professor of Human Resource Development at Pennsylvania State University, Rothwell's well-known publications include Effective Succession Planning, The Action Learning Guidebook, and The Competency Toolkit, to name a few. Robert Edwards Robert Edwards specializes in talent management systems including management succession planning. His experience and practical approach as a management consultant is unique in that he has a broad background in organization development, change management, executive coaching, project management and hands-on implementation. Prior to joining Linkage in 2007, Bob had his own consulting firm where he served a variety of clients from start-ups to Fortune 100 companies in a number of different industries for more than ten years. Bob holds a Masters in Business Administration with honors in strategy and management from the Marshall School of Business, University of Southern California and a Bachelor of Arts in Sociology from City University of New York. Join William J. Rothwell and Robert Edwards for Best Practices in Succession Management, a two-day program developed to accelerate your learning and provide you with direct business application as you address strategic succession related issues. Program dates: September 18-19, 2008, Chicago, IL; December 15-16, 2008, Chicago, IL. 29
30 About Linkage Linkage is a global organizational development company that specializes in leadership development. We provide clients around the globe with integrated solutions that include strategic consulting services, customized leadership development and training experiences, tailored assessment services, and benchmark research. Linkage s mission is to connect high-performing leaders and organizations to the futures they want to create. With a relentless commitment to learning, Linkage also offers conferences, institutes, summits, open-enrollment workshops, and distance learning programs on leading-edge topics in leadership, management, human resources, and organizational development. More than 200,000 leaders and managers have attended Linkage programs since Linkage Burlington, MA info@linkageinc.com Atlanta Minneapolis New York San Francisco Athens Brussels Bucharest Istanbul Johannesburg Seoul Singapore Tokyo 30
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