SUCCESSION PLANNING:

Building Your Talent Bench

 
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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

• What is the Age Bubble?

 
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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?

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.

 
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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.
• 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
Future
• 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
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 Traditional vs.
• 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
Future
• 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
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 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
 
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 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
 
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 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
 
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 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.
 
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 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?
 
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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

• 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?

 
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 Overview of Process and Tools

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

Process Process Implementation Process

Design Management

 
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 Functional and Leadership Competencies
FUNCTIONAL
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.
LEADERSHIP
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.
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 POSITION HISTORY
2002-Present, Fairbanks Capital Corp., Controller
Sample, Sally 1998-2002, Independent Consultant
Controller 1990-1998, Household International Inc.
•V.P. Specialty Finance
•CFO
Date of Hire: 1/7/2002 •Deputy Controller
Talent Code: Solid Citizen Performer
Potential Positions: Chief Financial EDUCATION
Officer Northwestern University, Kellogg School of Mgmt., M.S.
Purdue University, B.S.

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

Drive for Results

Cross-Boundary
Management of

Communication
Organizationa

Self & Others

and Planning

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).

- Exceeds Standards - At Standard - Needs Development

 
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 Decision Making Matrix
SOLID CITIZEN PERFORMER
(High Performance/Low Potential)
•Gets all important things done
•Is a pro in his/her position
•Is seen as a leader in his/her area
•Has reached potential
Action Required:
Continue developing in current position; is in
the right job
Performance
QUESTIONABLE PERFORMER
(Medium Performance/Low 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
LOW PERFORMER
(Low Performance/Low Potential)
•Isn’t getting most important things done
•Difficulty performing to standards in his/her
current position
Action Required:
Consider reassignment to more appropriate
position; including lower level or exit option
STRONG PERFORMER
(High Performance/Med Potential)
•Gets all important things done
•May act at level of capability of one level
above current position
•Acts as leader and role model
•Exhibits many strengths or competencies
beyond current role
•Some leadership development issues
Action Required:
Look for opportunity to display leadership in
current job
SOLID CITIZEN PERFORMER
(Medium Performance/Medium Potential)
•Gets most important things done
•Shows signs of leadership and role modeling
•Exhibits many FCC executive competencies
•May be new in position
Action Required:
Leave in current job; continue developing
skills and improving performance
QUESTIONABLE PERFORMER
(Low Performance/Medium Potential)
•Isn’t getting most important things done
•Capable of making higher contribution
•May be in wrong job or occupied with non-
work distraction
Action Required:
Focus on improving performance
Potential
STAR PERFORMER
(High Performance/High Potential)
•Gets all important things done
•Acts at a level of capability of at least one
level above current position
•Acknowledged as a skilled leader and role
model
•Exhibits many strengths or competencies
beyond current role
•Has wide spread influence beyond current
role
Action Required:
Stretch assignments to prepare for larger role
STRONG PERFORMER
(Medium Performance/High Potential)
•Gets most important things done
•Acknowledged as a leader and role model
•Exemplifies FCC executive competencies
•Acts at level of capability of next level in the
organization
Action Required:
Focus on performance short term and
development opportunities long term
SOLID CITIZEN PERFORMER
(Low Performance/High Potential)
•Isn’t getting most important things done
•Has been acknowledged as a team player and
role model
•Has exemplified FCC executive
competencies
•May be in wrong job or occupied with non-
work distraction
Action Required:
Address root cause performance issue; worthy
of investment in development
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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

QUESTIONABLE PERFORMER SOLID CITIZEN PERFORMER STRONG PERFORMER

Performance

(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
 
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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

“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

 
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