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Succession: It’s History
What did the Pope, King Henry the VIII and the
Godfather have in common?
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The Talent Crisis
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% change in pop. by age group 2000-2010
60.00%
50.00%
40.00%
Percentage
30.00%
20.00%
10.00%
0.00%
-10.00%
-20.00%
5-9 10- 15- 20- 25- 30- 35- 40- 45- 50- 55- 60- 65- 70- 75-
14 19 24 29 34 39 44 49 54 59 64 69 74 79
Age
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Recent Research Data
• Factors that impact your need to develop your talent
bench
– Corporate officers reported (40%) that company
growth was limited because they didn’t have the right
talent.
– Corporate officers reported (75%) that their company
is chronically short of leadership talent.
– Within next 5 years, average company will lose 30%
of its executive staff .
– Failure rates are high (40-50%) when executive
talent is hired from outside.
– Two-thirds of employees have low to moderate
confidence in their companies’ top executives; three-
fifths of executives say the same.
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Recent Research Data
Factors that impact your need to develop your
talent bench (continued)
– Employees say company leadership is a key
contributor to job satisfaction, commitment and intent
to stay; especially true for top talent.
– Recent surveys state that employees value most the
leadership qualities of honesty and integrity.
– Only 1% of companies rate their succession
management plans as excellent; two-thirds rate them
as fair or worse.
─McKinsey, The War for Talent, Right’s People
Brand Research Report, DDI Exec. Dev. &
Succession Management
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Factors You May Need to Consider
– Increased retirements; company demographics
– Attrition; promotions; transfers
– Market pressures requiring better/different
players
– Fit issues; changing skill sets (“the man for all
seasons?”)
– M&A’s; accumulative RIF impact in mid
management levels
– Weak employment brand; poor retention
practices for top talent
– Increased board pressures, (e.g. Sarbanes-
Oxley Act)
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Ask your CEO these top questions
1. Have you lost high potential talent because they
didn’t know they were on the list?
2. If your executive team “got run over by a bus,” would
their replacements be able to step right in and be
productive?
3. Is anyone on the “top floors” or in the Boardroom
worried about the status of your “talent bench?”
4. What lost opportunity costs has your organization
incurred because it took a long time to replace a key
leader?
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Key discussion questions …
1. How does someone in your organization get
selected to be a potential successor?
2. Do you have leadership development and talent
management processes in place to grow
successors?
3. If your organization has succession criteria, is it past
focused or future oriented?
4. If you have a succession planning process, is it
grounded in your business strategy?
5. Would your selection/promotion practices pass a
“drop in” legal challenge?
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Common Flaws
• Talent planning and placement efforts are not
linked to business strategy.
• Succession planning and talent assignment by
default - react only when a position becomes
open.
• Line mangers ignore the “talent pool,” relying
instead on their own knowledge/comfort with
candidates.
• Lack of ownership by the “top floors;”
Succession planning and key assignment of
talent is perceived as a human resources
issue.
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Common Flaws, con’t.
• Entitlement culture rather than criteria-based
promotion process; Halo effect for “chosen
ones.”
• Lack of objective discussions; Limited data
points to make good decisions.
• No formal process to keep track of candidates.
• No leadership/career development process to
grow your own talent.
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What is Succession Planning?
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Replacement vs. Succession
• Reactive • Pro-Active
• Form of Risk • Planned Future
Management Development
• Substituting • Renewing
• Narrow Approach • Organized Alignment
• Restricted • Flexible
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Traditional vs. Future
• Driven by an annual • Driven by current and
bureaucratic HR future business needs
procedure • Successors determined
by an open process with
• Entitlement focus – good multiple inputs and
old boy payback system - factors
decided in secret • Development plans,
development discussions
• “The list” and identified and coaching with both
candidate, sponsors and
development actions, but
others held accountable
no accountability for for progress and
development monitoring
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Traditional vs. Future
• Assumes targeted people • Actively involves
will be ready when needed. candidates in
Little, if any feedback development discussion.
Regular, developmental
• Hindered by paper process feedback
that needs to be updated • Aided by on-line
assessment and regularly
• Heirs apparent in line for updated talent bank;
specific positions scales to meet the
masses
• A fluid pool of qualified
leaders to be tapped as
needed for the next level
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Reasons for Succession Planning
Others?
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Critical Considerations for a
Successful Succession Process
1. Common values on the why’s and how’s are
communicated.
2. True commitment to only the best people getting
nominated.
3. Focused on future strategy and emerging business
needs.
4. Accurate research information on retirement and attrition.
5. Good communication between line and HR on
promotions and transfers.
6. Senior level commitment, involvement and ownership;
alignment with key stakeholders.
7. Horizontal and vertical communication at appropriate
levels
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Critical Considerations, con’t.
1. Key criteria understood; competency identification and
validation; “Leadership Profiles” for targeted positions.
2. 360, multi-rater and other objective assessments and
methods.
3. Feedback rich process; development culture.
4. Fluid in design; pools high potentials for possible next
jobs.
5. Established committees to oversee the review and
placement process.
6. Rigorous talent review team process includes
individual, manager and/or sponsor, objective sources
and organization.
7. Promotions evaluated against the succession candidate
pool.
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Critical Considerations, con’t.
1. Aligned/linked with other practices of talent development
and performance management throughout the
organization.
2. Relevant development opportunities and assignments.
3. Executive coaching for key players or those in
accelerated roles.
4. Accessible e-based talent bank to manage candidate
data, assignment and relocation needs, and identify
ready candidates.
5. Built with checks and balances; diversity and legal
considerations.
6. Defined outcomes and ongoing review process to
measure effectiveness.
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Sample: Succession Planning Process
Executive
Manager Decision-Making Profiles & Dev. plans focus
Org.Strategic and Self Matrix Organization on both strengths
Initiatives, Mission Evaluations Chart And dev.areas
Vision & Values
Determine Gap
Identify Assess
between
Determine Key Leadership Organizational Monitor & Track
Actual Performance
Competencies Candidates & Risks Employee’s
& Behaviors vs.
For Leadership Assess Against and Develop Performance
Required
Competencies Strategies
Competencies
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Functional and Leadership Competencies
FUNCTIONAL LEADERSHIP
STRENGTHS
Competency Assessment
Functional Leadership • Strategy and Planning
Integration and Balance Cross-Boundary • Budget Management
Perspective
• Good Judgment
Management of Budget Drive For Results
• Good communication/interpersonal skills
Market Knowledge Adaptability
• Driven to improvement and success
Technology and Business Organization
Methods Alignment
Strategy and Planning Communication and DEVELOPMENT AREAS
Influence • Development of treasury/technical skills
Develops Self and
Others
• Working effectively across departmental lines to accomplish goals
• Build knowledge of FCC and servicing operations
• Training and development of staff
Key Standard
Exceeds
At Standard
Needs Development
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Results: Talent Summary by Competency
Functional competencies Leadership competencies
Communication
Organizationa
and Influence
and Balance
Developing
Technology
Adaptability
Perspective
& Business
Integration
Knowledge
Alignment
Strategy
Methods
Market
Budget
This graphical representation indicates how the high potential group scored on each competency. It is compiled so that the competencies are listed from left
to right in the order in which there is the greatest need for development according to our data collection. It is most useful for looking at the talent needs of
the group (rows do not represent an individual's scores in this grid).
Potential
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Decision Making Matrix
SOLID CITIZEN PERFORMER STRONG PERFORMER STAR PERFORMER
(High Performance/Low Potential) (High Performance/Med Potential) (High Performance/High Potential)
JF BW BR
EB TO
EK
DS EH TK
LG AG
TW
KS
DSo
LOW PERFORMER QUESTIONABLE PERFORMER SOLID CITIZEN PERFORMER
(Low Performance/Low Potential) (Low Performance/Medium Potential) (Low Performance/High Potential)
Potential
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Results: Talent Summary by Individual
Functional Competencies Leadership Competencies
Organization
and Balance
Participants
Technology
Integration
Knowledge
Adaptability
Perspective
of Budget
Alignment
Develops
Communi
Business
Strategy
Manage-
Planning
Drive for
Boundary
Methods
Influence
Self and
Market
Results
ment
Others
action
Cross
and
and
and
Participant 1
Participant 2
Participant 3
Participant 4
Participant 5
Participant 6
Participant 7
Participant 8
Participant 9
Participant 10
Participant 11
Participant 12
Participant 13
This graphical representation is a comparison of each individual’s performance by competency (each row on the vertical axis represents an individual's score).
- Exceeds Standards
- At Standard - Needs Development
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Lessons Learned
• It is an ongoing process where the players
will change continuously
• In smaller less stable organizations, the
organizational direction may also change
• Competencies need to be constantly
monitored to ensure they are measuring
what you want to measure
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Refining the Program
• Prepare a program action plan
• Communicate the action plan
• Conduct Succession Plng. meetings
• Training on Succession Plng.
• Counsel managers to deal with Succession
Plng. issues affecting them and work areas
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Goal: Build a Development Culture
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