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1 S S U U C C C C ES ES S S I I ON

1

SSUUCCCCESESSSIIONON PLPLAANNNNIINNG: G:

Building Your Talent Bench

1 S S U U C C C C ES ES S S I I ON
Succession: It’s History What did the Pope, King Henry the VIII and the Godfather have in
Succession: It’s History What did the Pope, King Henry the VIII and the Godfather have in

Succession: It’s History

What did the Pope, King Henry the VIII and the Godfather have in common?

Succession: It’s History What did the Pope, King Henry the VIII and the Godfather have in
Succession: It’s History What did the Pope, King Henry the VIII and the Godfather have in
Succession: It’s History What did the Pope, King Henry the VIII and the Godfather have in
The Talent Crisis • What is the Age Bubble? 3
The Talent Crisis • What is the Age Bubble? 3

The Talent Crisis

• What is the Age Bubble?

% change in pop. by age group 2000-2010 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% -10.00%
% change in pop. by age group 2000-2010 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% -10.00%

% change in pop. by age group 2000-2010

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% -10.00% -20.00% 5-9 10- 15- 20- 25- 30- 35-
60.00%
50.00%
40.00%
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
Percentage

Age

Recent Research Data • Factors that impact your need to develop your talent bench – Corporate
Recent Research Data • Factors that impact your need to develop your talent bench – Corporate

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.

Recent Research Data Factors that impact your need to develop your talent bench (continued) – Employees
Recent Research Data Factors that impact your need to develop your talent bench (continued) – Employees

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 –
Factors You May Need to Consider – Increased retirements; company demographics – Attrition; promotions; transfers –

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)

Ask your CEO these top questions 1. Have you lost high potential talent because they didn’t
Ask your CEO these top questions 1. Have you lost high potential talent because they didn’t

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?

Key discussion questions … 1. How does someone in your organization get selected to be a
Key discussion questions … 1. How does someone in your organization get selected to be a

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?

Common Flaws • Talent planning and placement efforts are not linked to business strategy. • Succession
Common Flaws • Talent planning and placement efforts are not linked to business strategy. • Succession

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.

Common Flaws, con’t. • Entitlement culture rather than criteria-based • promotion process; Halo effect for “chosen
Common Flaws, con’t. • Entitlement culture rather than criteria-based • promotion process; Halo effect for “chosen

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.

What is Succession Planning? A deliberate and systematic effort by an organization to ensure leadership continuity
What is Succession Planning? A deliberate and systematic effort by an organization to ensure leadership continuity

What is Succession Planning?

A deliberate and systematic effort by an organization to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital for the future, and encourage individual advancement.

Replacement vs. Succession • Reactive • Form of Risk Management • Substituting • Narrow Approach •
Replacement vs. Succession • Reactive • Form of Risk Management • Substituting • Narrow Approach •

Replacement vs. Succession

• Reactive •

Form of Risk Management

• Substituting • Narrow Approach • Restricted

• Pro-Active

• Planned Future Development

• Renewing • Organized Alignment • Flexible

Traditional vs. Future • Driven by an annual bureaucratic HR procedure • Entitlement focus – good
Traditional vs. Future • Driven by an annual bureaucratic HR procedure • Entitlement focus – good

Traditional

vs.

Future

Driven by an annual bureaucratic HR procedure

Entitlement focus – good old boy payback system - decided in secret

“The list” and identified development actions, but no accountability for development

Driven by current and future business needs

Successors determined by an open process with multiple inputs and factors

Development plans, development discussions and coaching with both candidate, sponsors and others held accountable for progress and monitoring

vs. Future Traditional • Assumes targeted people will be ready when needed. Little, if any feedback
vs. Future Traditional • Assumes targeted people will be ready when needed. Little, if any feedback

vs.

Future

Traditional

Assumes targeted people will be ready when needed. Little, if any feedback

Hindered by paper process that needs to be updated

Heirs apparent in line for specific positions

Actively involves candidates in development discussion. Regular, developmental feedback

Aided by on-line assessment and regularly updated talent bank; scales to meet the masses

A fluid pool of qualified leaders to be tapped as needed for the next level

Reasons for Succession Planning Here are a couple – -- ( can you think of others
Reasons for Succession Planning Here are a couple – -- ( can you think of others

Reasons for Succession Planning

Here are a couple –

  • -- ( can you think of others … ?)

• Help individuals realize their career plans within the organization

• Tap the potential for intellectual capitol in the organization

Reasons for a Succession Planning Program • Provide increased opportunities for “high potential” workers • Identify
Reasons for a Succession Planning Program • Provide increased opportunities for “high potential” workers • Identify

Reasons for a Succession Planning Program

• Provide increased opportunities for “high potential” workers

• Identify “replacement needs” as a means of targeting necessary training, and employee development

• Increase the talent pool of promotable employees

• Contribute to implementing the organization’s strategic business plans

Reasons, con’t. • Help individuals realize their career plans within the organization • Tap the potential
Reasons, con’t. • Help individuals realize their career plans within the organization • Tap the potential

Reasons, con’t.

• Help individuals realize their career plans within the organization

• Tap the potential for intellectual capitol in the organization

• Encourage the advancement of diverse groups

• Improve employee’s ability to respond to changing environmental demands

• Improve employee morale

• Cope with effects of voluntary separation programs

Assessment Questionnaire • Complete the following Assessment Questionnaire to determine how well your organization is presently
Assessment Questionnaire • Complete the following Assessment Questionnaire to determine how well your organization is presently

Assessment Questionnaire

• Complete the following Assessment Questionnaire to determine how well your organization is presently conducting Succession Planning.

• Share the assessment with your organization, use it as a starting point to determine the need for your approach.

Critical Considerations for a Successful Succession Process Let’s discuss….. Examples: • Common values on the why’s
Critical Considerations for a Successful Succession Process Let’s discuss….. Examples: • Common values on the why’s

Critical Considerations for a Successful Succession Process

Let’s discuss….. Examples:

Common values on the why’s and how’s are communicated.

True commitment to only the best people getting nominated.

Focused on future strategy and emerging business needs.

Others?

Critical Considerations for a Successful Succession Process 1. Common values on the why’s and how’s are
Critical Considerations for a Successful Succession Process 1. Common values on the why’s and how’s are

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

Critical Considerations, con’t. 1. Key criteria understood; competency identification and validation; “Leadership Profiles” for targeted positions.
Critical Considerations, con’t. 1. Key criteria understood; competency identification and validation; “Leadership Profiles” for targeted positions.

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.

Critical Considerations, con’t. 1. Aligned/linked with other practices of talent development and performance management throughout the
Critical Considerations, con’t. 1. Aligned/linked with other practices of talent development and performance management throughout the

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.

Sample: Succession Planning Process • Phase I : Review Business Issues • What is your organization’s
Sample: Succession Planning Process • Phase I : Review Business Issues • What is your organization’s

Sample: Succession Planning Process

Phase I: Review Business Issues

• What is your organization’s mission and vision? What are your organizational values?

• What competencies are necessary in your employees to support current and future mission, vision and values?

Why link succession with strategy?

Overview of Process and Tools Org.Strategic Initiatives, Mission Vision & Values Determine Competencies For Leadership Process
Overview of Process and Tools Org.Strategic Initiatives, Mission Vision & Values Determine Competencies For Leadership Process

Overview of Process and Tools

Org.Strategic Initiatives, Mission Vision & Values Determine Competencies For Leadership Process Design
Org.Strategic
Initiatives, Mission
Vision & Values
Determine
Competencies
For Leadership
Process
Design
Executive Manager Decision-Making Profiles & and Self Matrix Organization Dev. plans focus on both strengths And
Executive
Manager
Decision-Making
Profiles &
and Self
Matrix
Organization
Dev. plans focus
on both strengths
And dev.areas
Evaluations
Chart
Identify
Assess
Key Leadership
Determine Gap
between
Actual Performance
& Behaviors vs.
Required
Competencies
Organizational
Candidates &
Risks
Assess Against
and Develop
Monitor & Track
Employee’s
Performance
Competencies
Strategies
Process
Process Implementation

Management

Functional and Leadership Competencies FUNCTIONAL LEADERSHIP Integration and Balance The ability to pull together diverse views
Functional and Leadership Competencies FUNCTIONAL LEADERSHIP Integration and Balance The ability to pull together diverse views

Functional and Leadership Competencies

FUNCTIONAL

LEADERSHIP

Integration and Balance

The ability to pull together diverse views and conflicting information into a

comprehensive direction for the business. Balances today’s business requirements with tomorrow’s vision for where the business is heading.

Management of Budget and Metrics

Emphasizes profitability, financial viability and performance potential to ensure business performance. Develops financial measurement frameworks, and identifies key metrics to drive business performance.

Market Knowledge

Understands business and regulatory environment, major industry players, and the business dynamics. Has in-depth knowledge of the full range of FCC business products and key competitors in the market place.

Cutting-Edge Technology and Business Methods

Understands and takes action to maintain, develop, and apply specialized knowledge of technology and business methods relevant to one’s role. Takes the initiative to keep abreast of key technological changes and trends.

Business Strategy and Planning

Formulates appropriate business strategies and supporting plans that drive the success of the business areas and support Fairbanks’ overall business plans.

Cross Boundary Perspective

Maintains balance between enterprise-wide, global thinking and a focus on the functional areas within Fairbanks. It includes connecting with initiatives in other areas and proactively sharing relevant resources with others.

Drive for Results

The ability to continuously raise performance standards and drive outstanding organizational performance. It includes achieving superior performance not only for one’s own area, but also for FCC performance as a whole.

Adaptability

Adaptability relates to taking action to improve current approaches or

solutions. Facilitates a creative or innovative approach to working. Responds with agility to changing goals, processes or environments.

Organizational Alignment

The ability to rapidly align people, processes and organization structure

with strategic direction. This includes the active identification and removal of barriers that block change and impede desired behavior.

Communication and Influence

The ability to effectively communicate and influence others inside and

outside the organization to build commitment to Fairbanks objectives.

Developing and Motivating Self and Others

Efforts to apply and grow one’s expertise/knowledge (and to help others

do so) within and across specialized technical/functional areas.

POSITION HISTORY 2002-Present, Fairbanks Capital Corp., Controller 1998-2002, Independent Consultant 1990-1998, Household International Inc. •V.P. Specialty
POSITION HISTORY 2002-Present, Fairbanks Capital Corp., Controller 1998-2002, Independent Consultant 1990-1998, Household International Inc. •V.P. Specialty

POSITION HISTORY

2002-Present, Fairbanks Capital Corp., Controller 1998-2002, Independent Consultant 1990-1998, Household International Inc.

•V.P. Specialty Finance •CFO

•Deputy Controller

EDUCATION

Northwestern University, Kellogg School of Mgmt., M.S.

Purdue University, B.S.

STRENGTHS

• Strategy and Planning

• Budget Management

• Good Judgment • Good communication/interpersonal skills • Driven to improvement and success

DEVELOPMENT AREAS

• Development of treasury/technical skills

• Working effectively across departmental lines to accomplish goals

• Build knowledge of FCC and servicing operations • Training and development of staff

Sample, Sally Controller

Date of Hire: 1/7/2002 Talent Code: Solid Citizen Performer Potential Positions: Chief Financial Officer

Competency Assessment

   

Functional

Leadership

 

Integration and Balance

 

Cross-Boundary

   
 

Perspective

   

Management of Budget

 

Drive For Results

   

Market Knowledge

 

Adaptability

   

Technology and Business

 

Organization

   

Methods

 

Alignment

   

Strategy and Planning

 

Communication and

   
 

Influence

   
   

Develops Self and

   

Others

   
 

Key

Exceeds Standard

 

At Standard

 

Needs Development

Drive for Results

Cross-Boundary

Communication

Management of

Organizationa

Developing Self & Others

and Planning

and Influence

and Balance

Adaptability

Technology

Perspective

& Business

Knowledge

Integration

Alignment

Strategy

Methods

Market

Budget

Drive for Results Cross-Boundary Communication Management of Organizationa Developing Self & Others and Planning and Influence
Drive for Results Cross-Boundary Communication Management of Organizationa Developing Self & Others and Planning and Influence

Results: Talent Summary by Competency

Functional competencies

Leadership competencies

Drive for Results Cross-Boundary Communication Management of Organizationa Developing Self & Others and Planning and Influence

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).

Drive for Results Cross-Boundary Communication Management of Organizationa Developing Self & Others and Planning and Influence

- Exceeds Standards

Drive for Results Cross-Boundary Communication Management of Organizationa Developing Self & Others and Planning and Influence

- At Standard

Drive for Results Cross-Boundary Communication Management of Organizationa Developing Self & Others and Planning and Influence

- Needs Development

Performance

Performance Decision Making Matrix SOLID CITIZEN PERFORMER (High Performance/Low Potential) ∑ Gets all important things done
Performance Decision Making Matrix SOLID CITIZEN PERFORMER (High Performance/Low Potential) ∑ Gets all important things done

Decision Making Matrix

SOLID CITIZEN PERFORMER (High Performance/Low Potential) Gets all important things done

Is seen as a leader in his/her area

STRONG PERFORMER (High Performance/Med Potential) Gets all important things done

STAR PERFORMER (High Performance/High Potential) Gets all important things done

Is a pro in his/her position

Has reached potential Action Required:

May act at level of capability of one level above current position Acts as leader and role model Exhibits many strengths or competencies

Look for opportunity to display leadership in

Acts at a level of capability of at least one level above current position Acknowledged as a skilled leader and role model

Action Required:

Continue developing in current position; is in the right job

beyond current role Some leadership development issues

Exhibits many strengths or competencies beyond current role

Action Required:

current job

Has wide spread influence beyond current role

Stretch assignments to prepare for larger role

QUESTIONABLE PERFORMER

SOLID CITIZEN PERFORMER

STRONG PERFORMER

Acts at level of capability of next level in the

Action Required:

(Medium Performance/Low Potential)

(Medium Performance/Medium Potential)

(Medium Performance/High Potential)

Gets most important things done Is very proficient in his/her current position Is not seen as a leader in his/her area Action Required:

Work on improving performance in current job; may be candidate for lateral move

Gets most important things done Shows signs of leadership and role modeling Exhibits many FCC executive competencies May be new in position Action Required:

Gets most important things done Acknowledged as a leader and role model Exemplifies FCC executive competencies

organization

Leave in current job; continue developing skills and improving performance

Focus on performance short term and

development opportunities long term

LOW PERFORMER

QUESTIONABLE PERFORMER

SOLID CITIZEN PERFORMER

(Low Performance/Low Potential)

(Low Performance/Medium Potential)

(Low Performance/High Potential)

Isn’t getting most important things done Difficulty performing to standards in his/her current position

Isn’t getting most important things done Capable of making higher contribution May be in wrong job or occupied with non-

Isn’t getting most important things done Has been acknowledged as a team player and role model

Action Required:

work distraction

Has exemplified FCC executive

Consider reassignment to more appropriate

Action Required:

competencies

position; including lower level or exit option

Focus on improving performance

May be in wrong job or occupied with non- work distraction

Action Required:

Address root cause performance issue; worthy

of investment in development

Potential

Performance

Performance Decision Making Matrix SOLID CITIZEN PERFORMER STRONG PERFORMER STAR PERFORMER (High Performance/Low Potential) (High Performance/Med
Performance Decision Making Matrix SOLID CITIZEN PERFORMER STRONG PERFORMER STAR PERFORMER (High Performance/Low Potential) (High Performance/Med

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

QUESTIONABLE PERFORMER

SOLID CITIZEN PERFORMER

STRONG PERFORMER

(Medium Performance/Low Potential)

(Medium Performance/Medium Potential)

(Medium Performance/High Potential)

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

Results: Talent Summary by Individual Functional Competencies Participant 1 Strategy Participant 2 and Planning Participant 3
Results: Talent Summary by Individual Functional Competencies Participant 1 Strategy Participant 2 and Planning Participant 3

Results: Talent Summary by Individual

Functional Competencies

Participant 1 Strategy Participant 2 and Planning Participant 3 Technology Participant 4 and Business Participant 5
Participant 1
Strategy
Participant 2
and
Planning
Participant 3
Technology
Participant 4
and
Business
Participant 5
Methods
Participant 6
Market
Participant 7
Knowledge
Participant 8
Manage-
Participant 9
ment
of Budget
Participant 10
Participant 11
Integration
and Balance
Participant 12
Participant 13
Participants

Leadership Competencies

Develops Self and Others Communi action and Influence Organization Alignment Adaptability Drive for Results Cross Boundary
Develops
Self and
Others
Communi
action
and
Influence
Organization
Alignment
Adaptability
Drive for
Results
Cross
Boundary
Perspective

This graphical representation is a comparison of each individual’s performance by competency (each row on the vertical axis represents an individual's score).

Results: Talent Summary by Individual Functional Competencies Participant 1 Strategy Participant 2 and Planning Participant 3

- Exceeds Standards

Results: Talent Summary by Individual Functional Competencies Participant 1 Strategy Participant 2 and Planning Participant 3

- At Standard

Results: Talent Summary by Individual Functional Competencies Participant 1 Strategy Participant 2 and Planning Participant 3

- Needs Development

31

Lessons Learned • It is an ongoing process where the players will change continuously • In
Lessons Learned • It is an ongoing process where the players will change continuously • In

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

Refining the Program • Prepare a program action plan • Communicate the action plan • Conduct
Refining the Program • Prepare a program action plan • Communicate the action plan • Conduct

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

Goal: Build a Development Culture “The strategic objectives of the company lead to assessment of talent
Goal: Build a Development Culture “The strategic objectives of the company lead to assessment of talent

Goal: Build a Development Culture

“The strategic objectives of the company lead to assessment of talent to determine future staffing needs and bench strength, which in turn determine development needs and actions.”

“Promoting A Development Culture,” Right Management Consultants, Peggy Simonsen