Beyond Leadership: Approaches To Comprehensive Succession Planning (c) 2006 Charles J. Sawyer
Succession Planning What is Succession Planning?
Note on terms used The term “Succession Planning” and “Succession Management” can be used interchangeably. In this presentation, the term “Succession Planning” is used, but can be taken to mean “Succession Management” as well.
What is Succession Planning? The short answer: Managing key personnel transitions for n n n Maximum continuity of operations. Retention of “institutional knowledge. ” Minimum disruption.
What is Succession Planning? In the past, succession planning typically targeted only key leadership positions. In today's organizations, it is important to include key positions in a variety of job categories. U. S. Government’s Office of Personnel Management http: //www. opm. gov/hr/employ/products/succession/succ_plan_text. htm
Why Succession Planning? “With good succession planning, employees are ready for new leadership roles as the need arises, and when someone leaves, a current employee is ready to step up to the plate. “In addition, succession planning can help develop a diverse workforce, by enabling decision makers to look at the future make-up of the organization as a whole. ” U. S. Government’s Office of Personnel Management http: //www. opm. gov/hr/employ/products/succession/succ_plan_text. htm
Why Succession Planning? A pending transition of a leader or key employee may also be seen as an opportunity for change. n For example, the “retirement” of Fidel Castro is fueling much speculation about the future of Cuba.
Comprehensive Succession Planning involves: First, Understanding the organization's long-term goals and objectives Identifying the workforce's developmental needs Determining workforce trends and predictions U. S. Government’s Office of Personnel Management http: //www. opm. gov/hr/employ/products/succession/succ_plan_text. htm Then, Aligning the organization’s human resources strategies accordingly.
Beyond replacing people… Succession planning should include not only planning to replace people, but should be strongly coordinated with other organizational planning. It should be tied to the management of all the transitions that your organization is now facing, or will one day face.
Succession Planning The growing necessity for Succession Planning.
Two reasons why Succession Planning is becoming more important than ever: 1. Population trends show that the rate of retirements of workers will increase in coming years. 2. The management principles growing out of “organizational excellence” and “quality” movements are becoming standard practice among successful organizations.
Succession Planning Population and Demographic Trends
“Expert Exodus” “With the first baby boomers due to reach 60 this year, the challenge of holding on to institutional memory is taking on a new sense of urgency. ” Governing. com, Feb 2006, By Christopher Conte
“Expert Exodus” “The Conference Board, a business research group, estimates that by 2010, 64 million workers — 40 percent of the nation’s public and private workforce — will have reached retirement age. ” Governing. com, Feb 2006, By Christopher Conte
Workforce Trends By 2010, the number of 55 -64 year-olds will expand by 52 percent. While the number of 35 -44 year olds, those normally expected to move into senior management ranks, will actually decline by 10 percent. Senior Journal, Sept. 20, 2005 http: //www. seniorjournal. com/NEWS/Retirement/5 -09 -20 Aging. Workfoce. Challenge. htm
What is the impact of these population trends? What exactly does the exit from the workforce of the Boomers really mean to organizations? How serious is the “coming retirement crisis”?
Population Trends U. S. Births, 1910 -2000
The Baby Boom U. S. Births, 1945 -1975 1945 1975
The Baby Boomers turn 60 Boomers Reaching Retirement Age *These numbers do not represent the number of “workplace retirements. ” They simply add 60 years to the birth data. There are many other factors that influence retirement rates. * Average retirement age is now about 63, and is trending down. The round number 60 is used here for simplicity.
Where we are now on the demographic curve Boomers Reaching Retirement Age 2006
What we’ve gotten used to in the previous 15 years: Boomers Reaching Retirement Age 1990 2005 About 2. 6 million per year
What we can expect over the next 15 years: Growing from 2. 6 to 4. 4 million per year, a 70% increase Boomers Reaching Retirement Age 2008 2023
How will immigration affect retirement rates? “Ellis Island” The Baby Boom Period http: //www. susps. org/overview/numbers. html
Impact of immigrants will be considerably less than that of Boomers… Just over 4 million immigrants entered the U. S. in the 1970 s. If their average at entry was 20, they are now about the same age as Boomers born in the 1950 s, a decade in which over 40 million Boomers were born. http: //www. susps. org/overview/numbers. html
What impact will immigrant population trends have on retirement rates? Immigration rates are harder to analyze because of age at entry and other factors. Yes, the number of immigrants has been increasing dramatically in recent years, exceeding native births. This will contribute significantly to rising retirement rates, but the greatest impact of immigrants on retirement rates will lag behind the Baby Boom factor.
So how serious is the “coming retirement crisis”? The number of retirements per year will increase over the next 15 years. At it’s peak in 15 years, the rate will approach twice the number of retirements per year compared to what we’re used to. However, the rate of increase will be gradual over the next 15 years.
Serious, but not an immediate emergency… This means that the rate of loss of institutional knowledge and leadership will be as much as double what we’re used to. However, adopting succession management practices now will enable organizations to cope with increasing retirement rates successfully, in plenty of time.
Succession Planning The Impact of the “Organizational Excellence, ” or “Quality” Movements
Organizational Excellence or Quality Movement The adoption in Japan of Edward Deming’s quality circle and continuous improvement concepts resulted in tremendous gains in quality and value. This success led to Total Quality Management and all the other modern approaches to organizational excellence.
Deming’s Quality Circle Adjust Plan Check Do
Organizational Excellence or Quality Movement Over the years, research and experience have refined these concepts into a number of widely-agreed-upon ideas about what constitutes excellent organizational practices. These widely-agreed-upon best-practices are represented by the Malcolm Baldridge and Florida Sterling award criteria.
Florida’s Sterling Criteria for Organizational Excellence Sterling is Florida’s version of the national Baldridge award, and is patterned after it. Sterling & Baldridge criteria are not “flavors of the month” in organizational improvement methods. They don’t tell you HOW to do anything. They ask IF certain things are being done effectively. They represent the “collective wisdom” about organizational excellence.
The Seven Sterling Criteria: 1. 2. 3. 4. Leadership Strategic Planning Customer and Market Focus Measurement, Analysis, and Knowledge Management 5. Human Resources Focus 6. Process Management 7. Organizational Performance Results
Succession Planning is chiefly concerned with 4 of the 7* 1. 2. 3. 4. Leadership Strategic Planning Customer and Market Focus Measurement, Analysis, and Knowledge Management 5. Human Resources Focus 6. Process Management 7. Organizational Performance Results *All 7 Criteria have succession planning implications, but these 4 represent the bulk of the necessary analysis, planning, development, and other actions.
We’ll use these four Sterling areas to frame our examination of Succession Planning. Leadership Strategic Planning Measurement, Analysis, and Knowledge Management Human Resources Focus
Succession Planning and Leadership What are the competencies required of leaders?
Leadership Dictionary. Com definitions: n n Capacity or ability to lead: showed strong leadership during her first term in office. Guidance; direction: The business prospered under the leadership of the new president.
Proportion of necessary broad skills at various levels s on ti ela al ptu nce Co n. R ma l ica Worker chn Supervisor Te Manager Hu Executive
The Leadership Challenge (©Kouzes & Posner, Jossey-Bass books) Model The Way n n Find your voice Set the example Inspire A Shared Vision n n Envision the future Enlist others Challenge The Process n n Search for opportunities Experiment & take risks Enable Others To Act n n Foster collaboration Strengthen others Encourage The Heart n n Recognize contributions Celebrate the values and victories
CPM: A Reflective Practitioner Flexible, Critical, Creative Thinking Inductive And Deductive Reasoning Initiative, Question Assumptions, Suggest Alternatives Aware of Personal Style of Self and Others Committed to Growth, Development, Lifelong Learning Committed to Improve Organizational Quality Aware of Societal Trends, and the Organization's Impact on Society. Tolerant of Ambiguity, Complexity, and Uncertainty Anticipating and Shaping Change Encourage the Involvement of Others Interpersonal Communication Skills Primarily Motivated by Intrinsic Rewards
The Qualities of Leadership (©Achieve. Global “Principles and Qualities of Genuine Leadership”) Collaborative Inventive Skilled Visionary Mindful
From Achieve. Global research paper, Building Leadership Bench Strength: Current Trends In Succession Planning And Management
AG survey results Interpersonal Skills Problem Solving Conceptual Skills Project Management Coaching *Technical Skills 77% 75% 63% 58% 47% 41% *Technical Skills as used here are the competencies that are specific to your business or industry.
The “soft” skills are critical to leadership. Yes, a fundamental understanding of the business you’re leading is necessary. Your best technical people may seem like a likely source of promising leaders, but do they also have the necessary “soft” skills? Beware of the “Peter Principle!”
Succession Planning and Strategic Planning must precede Succession Planning
You have to know where you are going in order to plan to get there. Succession Planning cannot occur without broader organizational planning. n n Organizational Mission, Vision, and Values. Strategic Plans Long-term Goal & Objectives Strategic alignment within the organization
Strategic Alignment Organizational Mission & Vision Organizational Strategic Plans Organizational Goals & Objectives Areas of responsibility in achieving these goals & objectives (“departments”). The people working in these areas.
Succession Planning is inextricably linked to Strategic Planning. Sustainability of the organization. Adapting to changes in technology. Adapting to new business processes. Adapting to anticipated changes in markets, service requirements, etc. Facilitating growth.
Strategic planning precedes succession planning. Before planning for the succession of key personnel, know where you want to go. Define Mission, Vision, Values, Goals & Objectives. See that your current business processes and organizational focus are aligned with your vision and strategic plans. But of course stay flexible and plan for change.
Succession Planning and Measurement, Analysis, and Knowledge Management Preserving and Sharing Institutional Knowledge
A morbid, but useful, question to ask about each key position: What would happen if a particular employee were to suddenly disappear (sudden accidental death, for example)? Of course it would be personally & humanly tragic, but what would be lost to the organization? Former White House Chief of Staff Andy Card developed what he called a “Hit By A Bus” list.
Knowledge Management With the departure of key leaders and other critical personnel, what knowledge will your organization lose? It’s easy to take for granted the wealth of knowledge stored in our brains. Succession planning seeks to capture and retain the “institutional knowledge” that would otherwise be lost when key people leave. How do we do this?
Knowledge Management World-class organizations have developed effective, well-integrated systems for n Communication n Learning n Documentation
Communication: Vertical Communicated Down: Organizational Mission & Vision Organizational Strategic Plans Communicated Up: Results, Mission, Organizational Goals & Objectives Innovation, Vision, Research, Values, Learning, Strategic Areas of responsibility in achieving these goals & which then Plans, objectives (“departments”). informs Goals, MVV & Objectives Planning The people working in these areas.
Communication: Vertical How will the departure of key people affect things like n How strategic plans are translated into action plans. n How action plans are assigned and communicated down the org chart. n How progress on action plans is monitored. n How measures of performance are communicated up the org chart.
Communication: Horizontal Organizational Goals & Objectives Area 1 Area 2 Area 3 “Everybody on the same page”
Communication: Horizontal How will the departure of key people affect things like n Coordination of activities between areas. n How information about the organization’s activities is shared. n How one area knows where to go to find organizational support or resources. n Will the information gained by one area be available to those from another area who need it?
Learning How will the departure of key people affect the availability of n External Knowledge w Industry practices w Industry history w Markets w Industry trends w Key Contacts w Etc.
Learning How will the departure of key people affect the availability of n Internal Data w Customer knowledge w Unique characteristics of individuals w Efficiency & effectiveness of processes w Sources of materials and information w Etc.
Documentation is used here to describe the process of capturing and preserving the “Institutional Knowledge” that will be lost when key people depart, in order to make it permanent and useful. . . and to make it available to the people who will replace those who depart. Quit “reinventing the wheel” with every major personnel transition.
Systematize Documentation A systematic approach to documentation is essential for succession planning n n Of policy, procedures, plans, activities, etc. Accessible to all who need it Require everyone’s work to be n n Organized systematically (standardized document management policies & procedures) Accessible & Transparent
Mature Systems Legally mandated and regulated systems are usually relatively mature. Many of your documentation procedures and practices have been prescribed by law, And have been shaped by practice and necessity over many years. However, not all your processes may be welldocumented.
Policy & Procedure Manuals If they exist at all, they are often out of date. Systematically update these manuals. If you issue a policy memorandum, update the manual. If you implement a new procedure, update the manual. Easier than ever to do (online or with word processing – distributing new loose-leaf pages is now unnecessary!)
Meetings and Discussions Require managers to maintain ongoing agendas that describe what their department is doing.
Provides a view of current activities, and a record of discussions and assignments.
Provides a view of current activities, and a record of discussions and assignments.
Each week’s agenda is permanently stored on a shared drive Filename sorts automatically by date, i. e. , 2006 -06 -08 LDOI Agenda (Year-Month-Day)
Develop systematic approaches to planning and project management. Microsoft Project is a good tool, but is complicated. You can adopt some of it’s key features yourself: Develop a simple form that outlines the important aspects of major projects, such as n n n Goals Personnel involved Budgets Timelines and checkpoints Approvals
A One-Page Project Assignment and Management form
Project Form, continued:
Succession Planning: Human Resources Focus Planning for the Succession of Key People
Human Resource Focus Succession planning often starts with planning for the replacement of a single key leader (i. e. , the founder). It may focus on all important leaders (i. e. , senior management). It may also focus on n n Historically difficult to fill (or train for) positions Key technical positions Less desirable locations or specialties Mission critical positions
A step-by-step approach: 1. 2. 3. 4. 5. 6. Identify key positions Decide on the initial scope of your SP efforts Identify competencies of selected positions Identify internal and external talent pools Create internal and external selection and recruitment processes Create and support employee
1. Identify key positions Start at the top of the org chart. Work your way down to mid-level managers and key technical positions. Prepare a list of all the positions for which succession plans are necessary or helpful.
2. Decide on scope Plot the career trajectories of people in key positions on a timeline. Develop a long-range schedule for implementation of succession planning for the identified positions. Consider your organizations other long-range plans and trends. Prioritize the positions for which you want or need to develop succession plans.
Map the Succession Process Timeline> v Steps 2007 2008 2009 2010 Joe, HR Mgr. Branch office plans 2012 2013 Retires 2 -year June 30, Consult 2011, ing consults contract Mary, CEO 2011 End consulting June 30, 2013 Apply to CPM Leadership program Begin CPM Leadership training Graduate from CPM program Ass’t CEO July 2010 CEO July 1, 2011 Award construction contract Construction End construction 10/31/ 2009 Joe to new branch 1/1/2010 Joe to HQ July 1, 2011 Highly simplified, of course
3. Identify competencies of selected positions This is easier to do with technical positions than with leadership positions. Develop lists of skills for key positions. n n “Job (or Task) Analyses. ” Map processes Consider, for each position, the required n n n Knowledge Skills & Abilities Attitudes
Consider other characteristics of the selected positions Determine challenges you’ll face in replacing people in particular positions, i. e. , n n Scarcity of potential candidates Training and development issues Identify any other general human or professional qualities that your organization wants to have in it’s workforce (Values).
4. Identify talent pools and paths Assess your internal talent pool first. n n n Assess existing position structure. Look at the history of your hires and promotions. Identify entry level positions. Are there natural career development paths? Can you alter the structure to create such paths?
Assess performance potential. Aptitude testing Employee Performance Evaluation System, including 360° evaluations Preferences expressed in employee’s individual career development plans. Find strength in diversity High performance + aptitude + career motivation = Potential
From Achieve. Global research paper, Building Leadership Bench Strength: Current Trends In Succession Planning And Management
Top 7 competencies used to identify high-potential employees Decision-making (74%) Performance exceeds expectations (74%) Drive for results (66%) Analytical skills (63%) Potential in another function (63%) Problem-solving (59%) Cognitive ability (52%) From Achieve. Global research paper, Building Leadership Bench Strength: Current Trends In Succession Planning And Management
External talent pools n Look at the history of your hires and promotions Identify entry level positions. n Research your industry’s labor market. n Identify institutional sources: n w Colleges, technical schools, military, etc. n Identify like or related organizations: w Can you offer incentives to lure talent? n Identify appropriate employment services.
5. Selection and recruitment processes Internal selection and recruitment Create career progression paths. n Decide how open or closed your recruitment processes will be. n For open processes, establish an internal promotion culture. n w Announce, publicize, and support the effort. w Communicate clear lines of job progression. w Follow through: promote from within.
External selection and recruitment Where did your existing workforce come from? Target the most promising external talent pools. Establish relationships with institutional talent sources. Implement a systematic recruitment, assessment, and hiring process. n There a number of good resources in this area (books, etc. ) that will help you.
6. Create and support employee development processes Integrate training and development plans with Mission, Vision, & Values, and Strategic Plans. Align training and development plans with succession plans. Implement systematic training and development paths and options to develop the competencies identified as necessary for the organization.
6. Create and support employee development processes Discuss each employee’s personal and professional goals, and help them achieve them. Create “career pathing” plans for each employee. Make and sustain the commitment to develop employees.
Create a plan to systematically pass on the wisdom of senior workers. Mentoring Pairing Apprenticeship Cross-training Team assignments Job rotation Shadowing Coaching
Benefits of Mentoring, Cross-training, etc. , Adds to assignment flexibility, Provide for greater continuity of operations in unexpected (i. e. , “Hit by a bus”) situations. Give the employee a chance to evaluate potential career paths. Provide employees with advancement opportunities Supports succession plans.
From Achieve. Global research paper, Building Leadership Bench Strength: Current Trends In Succession Planning And Management
Activities used to develop high potentials Formal in-house training (68%) Project assignments (62%) Action Learning (44%) Formal training, external vendor (44%) Job rotations 37% Role shadowing (35%)
Succession Planning Challenges and Recommendations
Seven Common Challenges Organizations Face Related to Succession Planning 1. Finding the right employees to develop 2. Time for the process 3. Buy-in by senior leaders From Achieve. Global research paper, Building Leadership Bench Strength: Current Trends In Succession Planning And Management
Seven Common Challenges Organizations Face Related to Succession Planning 4. Organizational issues such as downsizing or mergers 5. Implementation and follow-through 6. Assessment and measurement 7. Losing talented people From Achieve. Global research paper, Building Leadership Bench Strength: Current Trends In Succession Planning And Management
GAO Recommendations: 1. Receive active support of top leadership. 2. Link to strategic planning. 3. Identify talent from multiple organizational levels, early in careers, or with critical skills. Highlights of GAO-04 -127 T, testimony before the Subcommittee on Civil Service and Agency Organization, Committee on Government Reform, House of Representatives, October 1, 2003
GAO Recommendations: 4. Emphasize developmental assignments in addition to formal training. 5. Address specific human capital challenges, such as diversity, leadership capacity, and retention. 6. Facilitate broader transformation efforts. Highlights of GAO-04 -127 T, testimony before the Subcommittee on Civil Service and Agency Organization, Committee on Government Reform, House of Representatives, October 1, 2003
Amazon’s best-selling book on Succession Planning: Effective Succession Planning, Ensuring Leadership Continuity and Building Talent from Within n n 2 nd ed. , By William J. Rothwell (c) 2001, AMACOM (American Management Association)
Beyond Leadership: Approaches To Comprehensive Succession Planning Thank you! (c)2006 Charles J. Sawyer Charlie Sawyer is the Bureau Chief of the Florida Department of Education’s Bureau of Leadership Development and Organizational Improvement (850) 245 -9713 Charlie. Sawyer@FLDOE. Org
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