SUCCESS IN SUCCESSION

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• SUCCESS IN SUCCESSION
• Irina Bevz
• Account director SHL Russia

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• QUOTE You cant outsource good parenting and
  you cant outsource the growth of your business
  leaders

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CURRENT CHARACTERISTICS OF RUSSIAN EMPLOYMENT
MARKET

• YOUNG TOP-MANAGERS (born in 1970s) vs
  postgraduates employees born - 1980s ? LIMITED
  POSSIBILITIES OF VERTICAL GROWTH
• EXPECTED SPAN OF CAREER GROWTH VERY SHORT-TERM
  (NOW OR NEVER!) IN YOUNGER PEOPLE GROWTH OF
  CONSUMERY AND LIFESTYLE EXPECTATIONS
• EXPATS READY TO WORK IN RUSSIA
• MARKET IS OVERHEATED, PEOPLE EXPECT TO BE
  OVERCASHED FOR CHANGE OF EMPLOYER

• BUSINESS MATURATION vs EXPANSION (BOTH LOCAL
  MULTINATIONAL)
• LOCAL/GOVERNMENTAL COMPANIES CAN OFFER MORE
  OPPORTUNITIES FOR EXPERIENCED MANAGERS
• INTERNATIONAL ASSIGNMENTS FOR RUSSIAN MANAGERS
• CREDIT PRACTICES NEED FOR LONGER TERM PLANNING
  OF CAREER INCOME
• A WAR FOR TALENTS

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• AN OBVIOUS GAP IN SUCCESSION PLANNING
• OCCURRED IN THE LAST DECADE

Companies focused more on recruiting due to
extensive growth of business and market-share
wars Now more complex business tasks require
advanced middle managers Currently crucial for
current SP is to grow middle-managers, perhaps
not yet GMs
CASE 1 National Key Account manager
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WHY DO WE ACTUALLY NEED SUCCESSION PLANNING?

• Increasing failure rates.
• Two thirds of all major companies worldwide have
  replaced their CEO at least once since 1995
  worldwide have replaced their CEO at least once
  since 1995 - Manchester Consulting
• 2.Executive Retirements.
• On average, organizations will lose one third of
  their executives to retirement within the next 5
  years - DDI, 2000
• 3.Cost of Talent.
• On average, organizations will pay 1,000,000
  each time an executive role is filled with an
  external candidate - Ernst Young, 2000
• 4. Lengthy integration (adaptation) period
  required for external candidate
• 5.Readiness.
• 75 of companies worldwide are not confident in
  their ability to fill strategic leadership
  positions over the next five years - DDI, 2000
  Corporate Leadership Council, 2001

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WHAT IS ALSO STATED AS A GOAL?

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• Staffing risk management
• Motivation, development and retention of
  high-potential employees

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ORGANIZATIONAL PYRAMIDE
Top management
Middle management
Succession pool
First-line managers (supervisors)
Team leaders individual contributors
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ARMY MODEL OF SP

• GENERAL

• Rarely killed more often retired ?

• KERNEL

• SUCCESSION PLANNING

• LIEUTENANT

SPONTANEOUS PROMOTION

• SOLDIER

RECRUITING
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MAJOR RISKS OF SP PROGRAMMES

• I. Succession planning not aligned with business
  strategy

• Multinational corporation with multiple vertical
  lift and horizontal shift options
• Rapid business expansion in strategic plans
• Family business
• Intensive research innovation, business
  development, expertise centers internal
  consulting

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MAJOR RISKS OF SP PROGRAMMES

• II. Successors fail to succeed when the time
  comes

1) wrong people 2) wrong development 3)
people/development mismatch
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MAJOR RISKS OF SP PROGRAMMES

• III. people leave BEFORE they get promoted

• accelerating employees development elevates both
  their ambition ability
• buying out qualified managers vs investing in
  growing and developing own
• Just a coincidence. People cant wait forever.

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MAJOR RISKS OF SP PROGRAMMES
IV. SP PROGRAMME BECOMS A SHEER FORMALITY OR A
CHANNEL FOR EXTRA BENEFITS

• 1. High potentials are last to fire
• 2. Extra days-off or pleasant travel (so-called
  trainings)
• 3. Moral appraisal.
• 4. Extra line in CV.
• 5. Some additional education

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MANAGING SUCCESSION
Goal setting
SUCCESSION POOLS
Identifying potential
Diagnosing devt needs
Prescribing solutions
Ensuring Dev-t
Reviewing Progress
SUCCESS PROFILES
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SUCCESSFUL vs NON-SUCCESSFUL SP GOALS

• NON-SUCCESSFUL
• Goal is retaining and motivating
• HR-driven
• Minimizing staffing risks

• SUCCESSFUL
• Goal is succession
• Strategy-driven
• Maximizing opportunities

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SUCCESSFUL vs NON-SUCCESSFUL SP FOCUS

• NON-SUCCESSFUL
• Position Focus
• Vertical movement
• Ultimately expected higher status assignments

• SUCCESSFUL
• Business strategy roles focus (e.g. project
  management)
• Vertical AND horizontal movement
• Possible lower status challenging assignments

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SUCCESSFUL vs NON-SUCCESSFUL SP INCLUSION

• NON-SUCCESSFUL
• Inclusion in the pool upon performance ONLY
• Nomination by managers only, no objective
  assessment procedures

• SUCCESSFUL
• Inclusion in the pool upon competencies and
  developmental potential
• Measurement systems and coaching accountabilities
  are in place

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CRITICAL NON-FUNCTIONAL MANAGERIAL SKILLS

• Resource management
• Labor (budgeting / scheduling)
• Payroll
• Supplies/expense
• Facility utilization
• Capital planning
• Critical thinking
• Communications
• Delegation
• Time management

• HR interviewing techniques
• Meeting management
• Project planning
• Change management
• Customer relations
• Effective correction action
• Performance problems
• Problematic work habits

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ORGANIZATIONAL COMPETENCY MAP
General manager
Personality atributes
Cultural atributes
Managing business
Cross-functional interaction
Functional manager
Managing tasks people
Technical proffessional
supevisors
executives
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HARD SKILLS vs SOFT SKILLS
competencies
competence
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CRITICAL MANAGERIAL SOFT-SKILLS (COMPETENCIES)

• Coaching Leading Others
• Relationship Building / Networking
• Interpersonal Understanding
• Communication Influence
• Organizational Awareness
• Analysis Judgement
• Decision-making
• Strategic Vision
• Commercial Thinking
• Resilience / Adaptability
• Achievement Orientation
• Integrity
• Diversity

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ASSESSMENT as an objective method of revealing
potential

• Modeling business-relevant case situations
• Equal opportunities / here know
• Multiple expertise
• Unified standards of assessment
• Assessment against competencies
• Assessment against target level (Ass-t Center)
• or
• Potential identification (Dev-t Center)
• NB individual gets exposed to the situation of a
  higher managerial level smth he had no
  opportunity to try in real life stretching
  cannot rely on previous experience

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ASSESSMENT SIDE EFFECTS (Integrity)

• DEVELOPMENT OF MANAGERS / HR ALERTNESS
• Coaching
• Diversity
• Individual input evaluation
• Team building
• INTERNAL COMMUNICATIONS IMPROVEMENT
• vertical
• horizontal
• A COMMON LANGUAGE TO DISCUSS WORK PROBLEMS
  (esperanto)
• MOTIVATION, CHALLENGE, ADEQUATE SELF-ESTEEM
• FAIR PLAY
• ACTIVATION OF VERTICAL MOBILITY CHANNELS
• CORPORATE VALUES AND MISSION AWARENESS

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METHODS OF COMPETENCY ASSESSMENT

• STRUCTURED WORK OBSERVATIONS (diaries, double
  visits, performance reviews)
• STRUCTURED PERSONALITY QUESTIONNAIRES(OPQ)
• COMPETENCY BASED INTERVIEW (CBI)
• ASSESSMENT/DEVELOPMENT CENTERS (AC/DC)
• NB 360 degrees IS NOT a competency assessment
  method
• ABILITY TESTS

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1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 -0.1
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SHL ASS-T/DEV-T CENTER DESIGN

• GROUP discussion
• ROLE PLAY
• ANALYTICAL ORAL PRESENTATION
• IN-TRAY BUSINESS CASE
• FACT FINDING/ DATA PROCESSING EXERCISE
• COMPETENCY BASED INTERVIEW
• OPQ

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• ASS-T/DEV-T CENTER IS MODELLING ALL THE TYPICAL
  FACETS OF MANAGERIAL ACTIVITY

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ASSESSMENT MATRIX
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SUCCESSFUL vs NON-SUCCESSFUL SP DEVELOPMENT

• NON-SUCCESSFUL
• Dev-t programme one-size-fits all, dev-t needs
  not diagnosed
• Dev-t focused on hard skills (knowledge
  expertise)
• HR department provides coaching
• Training-only approach to development
• No individual accountability for development / no
  owner of the process
• A style fit between coach individual not
  considered
• Limited follow-up to see that dev-t occurs

• SUCCESSFUL
• Dev-t programmes individually tailored, dev-t
  goals defined Dev-t focused on current AND
  future needs
• Dev-t also includes soft skills (management,
  leadership interpersonal skills competencies)
• Dev-t is done hugely on-the-job
• Manager direct report both held accountable for
  dev-t
• Coach individual match in style
• Careful timely follow-up of dev-t with
  objective assessments

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SUCCESSFUL vs NON-SUCCESSFUL SP MOVEMENTS

• NON-SUCCESSFUL
• Movement is based on time not accomplishments
• Carries implicit guarantee of promotion

• SUCCESSFUL
• Movement is based upon performance AND proven
  soft skills maturation
• No guarantee -members must do a good job in each
  assignment.

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CASE 2 BACKGROUND

• Personal information-
• Dmitry X, 47 yrs old
• 10 mths sales director in a consulting company
• Good technical expertise
• Grown-up mature impression
• Army background, managerial positions in CV
  (smaller businesses!)
• Disciplined, obedient, modest trustworthy
  impression

• Info from team coleagues
• Crucial decisions postponed
• Micromanagement
• Formalism, hyper-control in non-essential,
  over-delegation in essential
• Day-long meetings, exploiting expertise
• Conflict with leading account managers
• Overexploiting GMs time, too much reporting,
  very much dependent on approval

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CASE 2 premature promotion Dmitry X
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SUCCESS PROFILE

• Key Questions
• Executive success factors identified?
• Experience
• Knowledge
• Competencies
• Personal Attributes
• Aligned with business strategy?

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IDENTIFYING POTENTIAL

• Key Questions
• Criteria for nomination established?
• Efficient nomination process in place?
• Objective, behavioral assessments?
• Communication strategy to participants?

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Diagnosing Development Needs

• Key Questions
• Accurate, reliable measurement of
• Experience?
• Knowledge?
• Competencies?
• Personal Attributes?
• Assessment against future requirements?
• Is leadership benchmarked against external
  standards?

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Prescribing Development Solutions

• Key Questions
• Are development prescriptions aligned to
  individual needs?
• Optimal use of job assignments?
• Learning experiences?
• Training?
• Coaching?
• Do development help leaders preview future
  leadership roles?

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Ensuring Development

• Key Questions
• Does the process create pressure to develop?
• Does real development and change take place? How
  frequently? Why/ why not?
• Development linked to performance management
  system?

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Reviewing and Measuring Progress

• Key Questions
• Measures of individual and group success
  established?
• Periodic review meetings conducted?
• Review meetings managed effectively?
• Multi-rater feedback used to assess developmental
  progress?

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ACHILLES HEELS
No orientation Oversimplification of success
profile Overemphasis on identification Misdiagnosi
s of developmental needs Wrong prescriptions Train
ing-only approach to development No
accountability for development No link to
business strategy
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SHL ALTERNATIVE MISSION STATEMENT

• MAKE MONEY,
• RESPECT PEOPLE,
• HAVE FUN!
• ?
• ( NOT NECESSARILY IN THAT ORDER!)