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If the problem persists, please try again in a little while. Read preview. Assumptions When determining the type of succession planning to use as a HR practitioner or career developer, there are two assumptions that generally prevail. Read preview Overview. Fairfield-Sonn Quorum Books, Oden Quorum Books, Organization Development Journal, Vol.

Smith, Anne E. The Catalyst, Vol. Who's Next? Packard, David The Columbia Encyclopedia, 6th ed. We use cookies to deliver a better user experience and to show you ads based on your interests. I am aware I have the right to revoke this consent at any time. To revoke your consent, please submit a data request form. This site uses cookies and other tracking technologies to assist with navigation and your ability to provide feedback, analyze your interest in our products and solutions, assist with content personalization and our promotional and marketing efforts, and provide content from third parties.

Privacy Policy. Leadership Resources. Show Topics. Download the PDF. Byham, Ph. While 64 percent reported that their CEOs strongly agreed that leadership was a top priority, while only 18 percent felt it was a low priority. Demand for Leaders Fueled by. Retirement Although workers today can choose to remain in their jobs longer in the United States forced retirement constitutes age discrimination , managers and executives are retiring earlier.

Downsizing in the s Downsizing during the s dramatically reduced the field of possible internal replacements. Poaching Three options Given all the elements working against organizations trying to find and keep top leadership talent, your company might find itself staring at three options. You can: Do nothing. Hire from outside.

Grow your own leaders. Do Nothing If your organization has no succession management plan in place or chooses to let succession take care of itself, then it is only a matter of time before the company erodes from within. Hire from Outside Going outside of the organization for talent makes sense in many instances—especially when the company stands to benefit from new technology, an infusion of new ideas, or a fresh perspective.

Grow Your Own Leaders Succession Management The grow-your-own-leaders approach is an obvious strategy for a number of reasons: Having identified leadership bench strength in place helps your organization meet both long-term and emergency leadership needs at all levels. It also ensures continuity of management.

Why Succession Planning is NOT Defining a Successor

Growing your own leaders sends a positive message throughout your workforce. Promoting people is good for morale—and essential to a positive company culture. People want to join and stay with an organization that develops its own people. And promoting from within is consistent with an empowerment philosophy that encourages people to take on responsibility, assume risk, measure outcomes, and grow through their achievements. Six mistakes that can undermine any succession management system Despite the obvious advantages of cultivating leaders from within, many succession management initiatives fall flat in their attempts to ensure deep senior management bench strength.

Mistake 1: Focus people's development on a specific job replacement planning Many succession management systems are hopelessly outdated. Solution: An acceleration pool system An Acceleration Pool SM system represents a drastic departure from traditional replacement planning. Pool members, who can enter the pool at any organizational level or at any age: Get assignments that offer the best learning and highest visibility opportunities. Spend less time in assignments. Get more training. Attend developmental activities designed especially for them.

Have an assigned mentor. Are not guaranteed promotion. Get more feedback and coaching. The availability of mentors. The number of prime developmental assignments. Chance Observations Many executives also rely heavily on chance observations of people. Criteria Are Not Clear Many large organizations compile their list of high flyers by asking senior executives from throughout the organization to nominate people. The nomination process often has one or more of these fundamental flaws: The criteria for selection are not clear.

The standards against which people are evaluated vary from one part of the organization to another and from one part of the world to another. For starters, these criteria should include: A history of job success, as evidenced by measures of revenue growth, process improvements, or innovation.

Succession Planning for [NOT] the CEO – Nonprofit Risk Management Center

Proven leadership. Motivation for top management and demonstrated actions to get there. Evidence of strategic thinking. Modeling organizational values. Development of others. Cast a Wide Net With the nomination criteria in place, an organization must cast a wide net in its search for high-potential candidates. The use of computer-based technology, which speeds and enhances the assessment process. The use of video to record interactions so assessors have more time to study behavior.

The strategic high-level nature of the simulations, which are integrated to simulate a day in the life of an executive. The availability of facilities built specifically to conduct the assessment, thus adding to the realism and reliability of the simulation. Case study: The Acceleration Center finds a diamond A large global organization decided to put people with certain organizational titles through an Acceleration Center to help identify those with top-management potential.

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There are three lessons to draw from this story: All organizations have more talent than they think they do—the trick is to find it. The Acceleration Center method is a very good system for spotting high potentials. An Acceleration Center is an excellent tool for diagnosing specific development needs, which can then be met by targeted training interventions. The young man in the case study was given behavioral training based on needs identified in the center. Mistake 3: Poor diagnosis of development needs Once high-potential individuals have been identified, their development needs must be diagnosed so that they can get the training and unique experiences needed to prepare them for success at the next level.

Considering only a narrow range of development needs. Failing to use the best methodologies to assess development needs. Considering Only a Narrow Range of Development Needs Many organizations look at only skill development needs in their diagnostic efforts, ignoring needs in the areas of knowledge, experiences, or personality factors.

There are four types of executive descriptors that define the successful executive of the future: Organizational Knowledge — What one knows —The functions, processes, systems, products, services, or technologies of an organization that a general manager must understand. Job Challenges — What one has done —The kinds of situations that someone entering top management should have experienced or at least been exposed to. Some examples include carrying a key functional assignment through from beginning to end; being heavily involved with a merger, acquisition, strategic alliance, or partnership opportunity; implementing a plan to cut costs or control inventories; negotiating agreements with external organizations; and operating in high-pressure or high-visibility situations.

Competencies — What one is capable of —The clusters of behavior, knowledge, technical skills, and motivation that are important to success in senior management. Executive Derailers — Who one is —The personality traits that might cause an otherwise effective senior leader to fail on the job. These would include being approval dependent, argumentative defensive , arrogant, attention-seeking self-promoting , avoidant procrastinator, addresses issues covertly , eccentric, imperceptive, impulsive, perfectionistic micromanager , risk-averse, and volatile.

A day and a half in the life of an Acceleration Center participant Acceleration Centers allow participants to try on senior roles, accountabilities, and activities in a relatively risk-free, simulated environment. Welcome to the deep end of the pool! You dig in, establishing priorities for everything and organizing your time. You get three more e-mails. You have a working lunch to begin creating your strategic plan. You meet with Ronnie Hightower, whose company could be a profitable strategic partner. You review new in-basket items. You leave the office after a long day and, that night, prepare for your presentation the next day of a strategic plan.

You arrive early the next morning to add some final touches to your strategic plan, which you will present to a group of vice presidents. And you review your speech, which you hope will motivate and inspire a lackluster workforce. Your presentation and speech, except for a few minor glitches, go better than expected. The whirlwind is over. Mistake 4: Having a limited range of development solutions Too often, traditional succession management systems fail to offer the kinds of growth opportunities that make a difference in the development of high potentials.

Planned development actions are often shallow or, at best, lack maximum impact. Managers often are not involved in the planning or approval of development plans. Because they are often not involved in the creation of development plans, many managers give little support when it comes to allocating time or resources to implement the plans. If involved, a manager can usually suggest more efficient or effective development alternatives. There is little follow-up by management to ensure progress. In carrying out their development plans, high flyers frequently see little in the way of tangible help—coaching, reinforcement, opening doors for opportunities—from their immediate managers.

When this happens, chances are good that even well-planned development actions will wither on the vine. Solution: Be more creative in development options Carefully chosen, creative developmental activities are a staple of an Acceleration Pool system. Making long-term task force assignments.

Top Do's and Don'ts of Succession Planning

Assigning learning experiences, such as attending conferences or assuming the lead on a committee. Matching the pool member with a professional coach. Recommending specific training.

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  5. Mistake 5: Development plans are never put into action Perhaps the greatest pitfall of traditional succession management programs is a lack of follow-through on development plans. There are two primary reasons for this: The daily pressures of the job often relegate even well-crafted development plans to the back burner. The high-potential individual fully intends to carry out his or her plan, but never gets the opportunity to take the planned actions.

    Employees, who were accustomed to candor and transparency, found the system overly authoritarian, so they refused to participate. In the end, the company gave employees unrestricted access to their own information. Most companies elect to limit transparency in some way. To achieve transparency, companies need systems that are simple and easy to use, with immediate but secure access for participants. Technology—and in particular the Internet—is a powerful enabler.

    With the information directly in front of employees, succession management becomes less another planning event and more an ongoing activity. They also use it as a general querying and reporting tool. For example, HR managers can download a report showing what marketing positions are available in Europe, which candidates are being groomed for such positions anywhere in the world, and any skill gaps that might make it difficult to fill the jobs.

    The system also lets managers download statistics on the talent pipelines, such as the ratio of potentials to incumbents, specific data related to gender and ethnicity, and the percentage of employees with international and cross-functional experience. With the ability to search for multiple criteria, HR managers can view any segment of the organization with one query—from functional views like marketing to geographical regions like Latin America. Like Lilly, most of the best-practice companies we studied now rely on Web-based succession management tools to promote greater transparency and ease of use.

    At Dow Chemical, employees nominate themselves for positions online, and if a hiring manager has a preferred candidate, he or she must state this along with the posting. Some companies even show compensation ranges by level and position. No longer is it sufficient to know who could replace the CEO; instead, you must know whether the right people are moving at the right pace into the right jobs at the right time.

    The ultimate goal is to ensure a solid slate of candidates for the top job. But when succession plans were consolidated at the corporate level, a single employee, Roger Jones, was found to be the potential successor for most of the key jobs at the company. Sonoco now requires each division to generate most of its own successors from within.

    Succession Planning in Real Life: 3 Major Examples

    Frequent checks throughout the year can reveal potential problems before they flare up. One telling test of a succession management system is the extent to which an organization can fill important positions with internal candidates. An outside hire for a role that is critical at either the functional or corporate level is considered a failure in the internal development process. For positions at the director level and above, the system shows the employee who currently holds the position as well as three potential successors.

    HR management can also access real-time data on a number of prescribed measurement areas, such as the ratio of employees with potential to reach a certain level to incumbents at that level. There are goal ratios for each level of management for example, for the director level.

    The succession plan metrics also help the company identify gaps more broadly.

    With the click of a button, managers can learn how many ready-now candidates the company has for its top positions. Where there are none, that information triggers a search for internal development opportunities as well as executive recruitment activities. Lilly can also uncover hidden vulnerabilities by determining how many employees are on more than three succession plans as ready-now candidates. Using a quarterly scorecard, the company tracks progress on goals and positional and pipeline data, diversity elements gender, race, ethnicity , job rotations, and turnover rates.

    HR reviews the scorecard and then shares it with the executive team.

    Provide proactive succession planning

    Both processes need multiple owners—not just HR but the CEO and employees at all levels—if an organization is to develop a healthy and sustainable pipeline of leaders. Without active commitment at the very top—as well as from the executive team—managers will sense that succession management is a tangential activity and may not commit to the program. In fact, division executives may hide and hoard talented employees by manipulating their assessments. He owns the talent management process and holds business unit heads personally responsible for meeting development objectives within their units, with the expectation that the bar will constantly be raised.

    But it is not realistic or desirable for CEOs and their executive teams to have sole responsibility for the development of talent and leadership. Both corporate HR and functional or regional HR heads need to be involved. Corporate HR provides standards, tools, and processes, and functional or regional HR people make sure that local units abide by the rules and customize them as appropriate.

    Certain elements of the system are not negotiable, such as the look and feel of reports and information, the timing of roll-up reports, replacement charts, and the rating system. Then, the HR people within each line of business, working with the leaders of those organizations, may add a few technical or functional competencies to the list. Local HR also helps prepare the unit heads for the talent review meeting and manages the process at a local level.

    Board members should also be involved. But in this process, board members are often exposed to candidates only through formal presentations, and those candidates are usually handpicked by the CEO. That leaves the succession decision up to one person—and his or her judgment may be seriously impaired by the wish to leave a positive legacy or the refusal to accept impending retirement. At Bank of America, CEO Ken Lewis meets every summer with his top 24 executives to review the organizational health of their businesses, including the talent pipeline.

    The meetings are personal in nature, with no presentation decks or thick books outlining HR procedures. But they are rigorous.

    During these conversations, they make specific commitments regarding current or potential leaders—identifying the next assignment, special projects, promotions, and the like. In a talent review session last year, for example, one executive made a pitch to grow his business unit at a double-digit clip. This required some shifts among top talent and a significant investment in building the sales and distribution workforce.

    By contrast, the best-practice organizations we studied follow the Japanese notion of kaizen , or continuous improvement in both processes and content. They refine and adjust their systems on the basis of feedback from line executives and participants, monitor developments in technology, and learn from other leading organizations. Indeed, despite their success, none of the best-practice companies in our study expects its succession management system to operate without modification for more than a year.

    Most had tweaked their systems recently to make them easier to use.