Succession Planning Overview

1
Succession Planning Overview
C O M P E T I T I V E A D V A N T A G E. R E
A L I Z E D.

• STATE ACTION FOR EDUCATION LEADERSHIP PROJECT
• Succession Planning Conference
• March 11, 2005
• Delaware Technical Community College
• Loren Appelbaum
• Senior Consultant
• Development Dimensions International, Inc.

2
Outline for discussion

• Organizational Context/Need
• Transitional Challenges Roles
• The Success Profile
• Framework for Succession Planning
• Identifying Potential
• Diagnosing Strengths and Development Needs
• Development Planning
• Key Decisions
• Realizing results

3
Trends in Leadership Succession Planning

• Accelerated development of highest potentials,
  vs. replacement planning
• Accountability at senior leadership levels, vs.
  HR
• (not a spectator sport)
• Drive toward talent acquisition, development
  integrated into overall talent management
  approach
• Holistic approach (success profiles)
• Stronger focus on identifying highest potentials
  against relevant, objective criteria
• Earlier identification of talent for longer term
  growth, development, succession
• Board level interest in leadership development
• Sarbanes-Oxley influence
• Need for efficiencies in leadership assessment
  and delivery leveraging use of technology

4
The thing that wakes me up in the middle of the
night is not what might happen to the economy or
what our competitors might do next, it is
worrying about whether we have the leadership
capability and talent to implement our global
strategies.

• David Whitman, Chairman/President/CEO, Whirlpool
  Corporation

5
Increasing FailureDecreasing Confidence
Four in ten leaders fail within the first 18
months on the job. - Manchester Consulting

• Two thirds of all major companies worldwide have
  replaced their CEO at least once since 1995.
• - Drake Beam Morin Inc.

6
Readiness

• 75 of companies worldwide are not confident in
  their ability to fill strategic leadership
  positions over the next five years.

7
Conference Board StudyDeveloping Business
Leaders for 2010

• Exponentially heightened senior leadership
  requirements
• Influence/communication
• Extraordinary strategic thinking
• Tolerance for ambiguity
• Talent Development
• Need to identify potential The hard part
• Only 34 report effective practices
• Accuracy essential, but the hows are elusive

8
Risk of Derailment
Among approximately 6,000 respondents, 2/3
reported that their current leader displays
behaviors that could derail his/her career. -
Development Dimensions International, 2001
9
Organizational Readiness
68 of organizations surveyed report that they
are not prepared to deal with the leadership
crisis. - Development Dimensions International,
2001
10
Leadership Development and Succession Planning is
a Top Priority

• Top 5 management issues up 25
• (700 Global Executives, Conference Board, 2002)
• 78 Most Important/Top 5 Business Success
  Factors
• (950 Executives, CEO Magazine/CCL, 2002)
• 91 Top Enabler for Business Growth
• (Global CEOs, Conference Board, 2002)
• 47 Major Business Priority
• (150 Global Corporations, Conference
  Board/DDI, 2002)

11
When its working

• Work groups with strong leaders are 37 more
  likely to outperform other work groups, and are
  more satisfied, engaged, and loyal.
• - Leadership Forecast Study, DDI, 2003

12
Implications
Now more than ever, business conditions dictate
that leaders who are less prepared for senior
leadership will be placed into senior leadership
roles. To avoid leadership failure and its
effects, organizations will need systems,
processes, and tools which prepare these leaders
to manage the challenges they will soon face.
13
What are the highest priority strategic
challenges facing the Delaware school system?
14
What do those challenges suggest in terms of
the leadership talent needed within the system?
15
Talent Optimization Approach
Business Landscape
Talent Needed
Game Plan
Insurance Policy
Communication Accountability Skill
Alignment Measurement
16
Transitional challenges faced when moving into
senior leadership roles

• Span of Influence
• Tactical Control
• Consequences of Failure
• Business Scope
• Visibility
• Constituents

17
Span of Influence

• FROM
• Single team/ function management
• Small-group communications

• TO
• Multiple team/ function management
• Large, multi-group communications

• Common Reactions
• Unclear expectations, strategic confusion
• Slow to build partnerships, alliances
• Difficulty navigating political environment

18
Tactical Control

• FROM
• Involvement in day-to-day operations
• Direct impact on group outputs

• TO
• Detachment from day-to-day operations
• Indirect impact on group outputs

• Common Reactions
• Reluctance to delegate
• Desire for personal recognition for group
  success
• Do-it-yourself solutions

19
Consequences of Failure

• FROM
• Limited-scale consequences
• Unit-specific countermeasures

• TO
• Large-scale consequences
• Organization-wide countermeasures

• Common Reactions
• More personal stress
• Unrealistic demands
• Negative outlook

20
Business Scope

• FROM
• Basic unit responsibility
• Limited number of inputs/ variables

• TO
• Organization-wide accountability
• Broader business judgment needed
• Many variables

• Common Reactions
• Financial cramming
• Overemphasis on financial variables
• Poor business judgments

21
Visibility

• FROM
• Limited visibility
• Derailers disguised
• Less cultural impact

• TO
• Wide visibility
• Derailers visible
• Greater cultural influence derailers mimicked
  by many

• Common Reactions
• Cultural damage propagation of derailers
• Unwanted turnover
• Executive failure

22
Constituents

• FROM
• Focus on team/ small group
• Objectives set by supervisor

• TO
• Focus on broader organization
• Objectives self-imposed

• Common Reactions
• Narrow focus lack organization-wide vision
• Organizational stagnation, lack of progress

23
Leadership Succession Planning Requires

• A pipeline of talent with the necessary skills
  and experiences to meet these challenges
• Leaders who can effectively execute key roles
  required at senior leadership levels
• Identification and alignment on a leadership
  success profile driven by the organizations
  strategy and future direction

24
The Success Profile
25
Talent Optimization Approach
26
DDIs Leadership Blueprint
27
A Leadership Success Profile Needs to Consider
the Whole Person
28
Competencies (Examples)(What one is capable of)

• Applied Learning
• Business Acumen
• Gaining Commitment
• Coaching/Teaching
• Communicating with Impact
• Initiating Action
• Developing Strategic Relationships
• Empowerment/Delegation
• Establishing Strategic Direction
• Learning Orientation

29
Job Experiences (What one has done)

• Operate in a high-pressure or high-visibility
  situation
• Implement an organizational-wide change
• Develop and implement a plan to cut costs
• Involvement with negotiating labor agreements,
  contracts
• Become heavily involved with a strategic
  alliance, or partnership opportunity
• Negotiate agreements with external organizations
• Manage a downsizing

30
Organizational Knowledge (What one knows)

• Functions
• Processes (RD, budgeting, selection etc.)
• Systems
• Services

31
Personal Attributes/Enablers (Who one is)

• Adjustment
• Ambition
• Sociability
• Interpersonal Sensitivity
• Prudence
• Inquisitiveness
• Learning Orientation

32
Personal Attributes/Derailers (Who one is)

• Approval Dependent
• Argumentative (Defensive)
• Arrogant
• Attention Seeking (Self-Promoting)
• Avoidant
• Eccentric
• Imperceptive
• Impulsive
• Perfectionistic (Micromanager)
• Risk Averse
• Volatile

33
Leadership Failure

• What do you think is the greatest cause of senior
  leadership failure?
• Lack of knowledge (didnt know enough)?
• Lack of experience (never tried before)?
• Skills/competency deficiencies (not enough
  practice)?
• Personal attributes/derailers (not cut out for
  it)?

34
Leadership Success
Leadership Failure
Factors
What I know What I have done What I can do Who
I am
Didnt know enough Never tried before Not
enough practice Not cut out for it
Knowledge Experience Competencies Personal Attr
ibutes
35
Implications for Succession Planning

• Developing and gaining alignment on the right
  success profile is critical
• Leadership challenges and roles need to be
  addressed in development planning
• The approach needs to provide highest ROI

36
Building Leadership Succession Planning Approach
Acceleration Pools
Planning
37
Succession Management Approach
Clarify Terms Replacement Pools vs. Succession
Planning

• Replacement Can fill a specific position
  tomorrow
• Succession Developing people for target levels
  who could fill a variety of positions

38
Traditional approach to succession
Traditional Replacement Planning
Function A
Function C
Function B
39
Succession Planning Approach (using Acceleration
Pools)
Organization Need B
Organization Need A
Organization Need C
Acceleration Pool
40
Acceleration Pools
A Subset of People Being Identified for
Accelerated Development
Senior Leaders
Middle Leaders
First-level Leaders
Individual Contributors
40
41
Identifying Potential
42
Leadership Potential Factors
S U S T A I N E D P E R F O R M A N C E

• Leadership Promise
• Propensity to Lead
• Brings Out the Best in People
• Authenticity

• Balance of Values and Results(Org. specific,
  future focused)
• Culture Fit
• Passion for Results

• Personal Development Orientation
• Receptivity to Feedback
• Learning Agility

• Mastery of Complexity
• Adaptability
• Conceptual Thinking
• Navigates Ambiguity

Research Foundation Bray Howard, DDI, McCall
et al, Personality Based Research, Collins, Hogan
Hogan, etc.
43
Diagnosing Strengths and Development Needs
44
Diagnosis Targets
CURRENT JOB PERFORMANCE
PAST EXPERIENCES
JOB FIT
PERSONAL ATTRIBUTES
BEHAVIOR IN FUTURE-FOCUSED SITUATIONS
45
Diagnostic Tools
Behavioral Interviews Career Profiles
Multi-rater surveys Performance reviews
JOB FIT
Inventories Tests
Assessment Centers
46
Development Planning
47
Development Realization

• What percentage of leaders do you think
  actually change their behavior after their
  organization implements a leadership development
  program?

48
Development Realization

1. 75
2. 50
3. 25
4. 10

49
Development Planning

• The Best Lessons are Those of Experience
• Based on Diagnostic Assessment and In Depth
  Feedback
• Senior Leader Oversight
• Supervisor, mentor involvement
• Ideally, Linked to all Success Profile Factors
  (experience, competencies, knowledge, derailers)
• Driven by Strategic organizational needs

50
Best Development Strategy?

• Development Priorities (What)

• Job Challenges

• Competencies

• Organizational Knowledge

• Executive Derailers

Development Strategies (How)

• Job or task force assignment

• Training Internships

• Short-term experiences

• Professional coaching

51
Closing the Development Learning Gap
Success Profile Whole Person View
Targeting a Development Strategy
Knowledge Experience Competencies Personal Attr
ibutes
Short-Term Experience, Job Challenges
Job/Task Force Assignments, Training
Formal Training, Coaching
Professional Coaching
52
Developmental Support

• Supervisor, mentor and pool member
• Plan development actions
• How the skill/knowledge will be obtained
• Application of the skill/knowledge
• Measurement of success of application
• Determine additional development areas and
  appropriate development actions
• Supervisor and mentor provide coaching and
  support, monitor personal and retention issues
• Proof of development successful applications

53
Prescribing Development Solutions

• Review diagnostic assessment data with key
  stakeholders
• Development priorities, plans determined
• Individuals matched to assignments
• Sponsors assigned
• Follow-up plans established

54
Key Decisions for Succession Planning
55
Key Decisions

• Success Profile
• What are the key Experiences and Knowledge
  important for success at the Target level
  positions?
• What Competencies will be used? Existing model?
  Create new?
• Use of executive derailers?
• Diagnosing Development Needs
• What diagnostic tools will be used?
• Assessment simulations?
• Tests?
• Interviews?
• 360s?

56
Key Decisions (cont.)

• Acceleration Pools
• Number of acceleration pools?
• Number of acceleration pool members?
• Target level for pools?
• Nomination Process, Criteria
• How will the nomination process be conducted?
• What are the nomination criteria?

57
Key Decisions (cont.)

• Development Planning
• Who will oversee it?
• Use of mentors, sponsors?
• Role of experiences vs. training??
• Leadership coaching?

58
Key Decisions (cont.)

• Communication Issues
• Key messages?
• Target Audiences?

59
Realizing Results 5 Components

• Communication
• Key audiences
• Key messages
• Accountability
• Senior champion(s)
• Operation leader(s)
• Roles deliverables
• Skill
• Leaders
• Sponsors/Mentors
• Managers

• Alignment
• Selection
• Development
• Performance Management
• Measurement
• Participant reactions
• of Ready Now for senior roles
• Retention of talent
• Ratio of internal/external hires
• Success rates of new incumbents
• Diversity
• Time to fill key positions

60
Thank you!