With this evolution comes a new definition of succession planning with
both “top-down” and “bottom-up” components.
We subscribe to the definition used by the U.S. Office of Personnel Management
because it is appropriate for all organizations—government, corporate
or nonprofit.
Important words in this definition are “systematic,” inferring
succession planning is methodical, regular, orderly planning and a core
activity for the organizational system; “critical or key,”
referring to those business or mission-critical positions which must be
staffed by the best talent; and “talent pool”—a group
of people, not just individuals, who are being developed for future roles.
It can be said succession planning “sets the stage” for an
organization’s focus on people development. This overarching view
of leadership development builds leadership equity in an organization,
rather than simply providing the means for refilling the top position(s).
To make succession planning systematic, the process for developing people
and filling leadership positions must be explicit, documented, communicated
to all and supported by a technologically-enhanced infrastructure.
We believe there are seven critical elements to a comprehensive succession
planning system:
1. It links to current organizational strategy
2. Senior management “owns” the system
3. Standardized methods for filling positions are in place
4. A talent pipeline is filled through participation in customized “feeder”
programs and carefully crafted stretch assignments
5. The system is integrated into other human resource/human capital
processes
6. A computerized tracking system supports the process
7. It is supportive to line and staff organizations
It links to current organizational strategy
A succession plan should change as the organization’s strategy
changes. A brilliant example of succession linked to organizational
strategy recently occurred at the Nuclear Regulatory Commission. Louis
Reyes, the Executive Director of Operations (EDO) for the agency announced
his retirement from this position in early 2008. His successor is Bill
Borchart, the former Director of the Office of New Reactors. Borchart’s
background in new reactor licensing is perfectly suited to the challenge
of reviewing the 40 new applications that NRC will receive over the
coming months as well as multiple renewals from the 100 existing nuclear
plants. Choosing an executive with a background that matches strategy
from the list of ready successors makes sense strategically.
Needless to say, Borchart’s appointment as EDO began a cascade
of vacancies as someone filled his former position, someone else filled
that successor’s position, and so on throughout the organization.
NRC was prepared for this with a well-established program that relies
on well documented talent assessments and prepared pools of potential
successors. These candidates came through a series of development programs
and rotational assignments to broaden their experience. Some have even
managed departments in which they have little technical expertise, a
tribute to NRC’s policy of “fungible management.”
NRC stresses management and leadership skill development beginning at
the Branch Chief level. Fungible managers can, and do, lead departments
and divisions specializing in areas different from their personal area
of expertise and training.
Senior management owns the system
In two early and successful succession planning systems—those
at American Express Travel Related Services under Lou Gerstner and Manor
Health Care Services under Stewart Bainum, Jr.—the energy and
direction came from Gerstner and Bainum themselves. Both believed it
was their responsibility to ensure the future of their organization
and held productive annual talent reviews. At these sessions, leaders
identified and presented high potential employees to their peers and
Gerstner or Bainum. The assembled group of executives made decisions
about future potential, developmental assignments and job movement,
which those in the executive development staff function documented,
enabled and monitored.
Lou Gerstner also developed a very successful bottom-up system called
the Graduate Management Program for incoming MBA graduates in the late
1980s. While the popular corporate MBA programs of the time put new
graduates on rotational assignments, Mr. Gerstner insisted they be hired
into specific positions with specific goals and managers to evaluate
their performance. The developmental requirements of Gerstner’s
program called for 15% of their time to be spent in training conducted
by senior AmEx leaders. AmEx also ran a very successful international
exchange program in which candidate teams accomplished specific projects
while in their international assignments. These programs are excellent
examples of Critical Element # 4 referenced earlier—pipeline building
via development programs—and they were the invention of the President
of the subsidiary himself.
Other companies have the Board of Directors overseeing the selection
of CEO and Executive Review Committees in charge of filling other executive
vacancies, with Human Resources / Human Capital staff assisting them
in the process.
Standardized methods for filling positions are in place
A fair and consistent process ensures that all eligible candidates
for senior positions receive the same consideration. Whether it is a
full-blown talent review process like those at American Express TRS
and the then-Manor Care, Inc. or a vacancy-induced discussion of candidates
from a list of “ready candidate” pools, the process needs
to be consistent and standardized. An evaluation of the system should
occur at least annually and new components added as time, requirements
and capabilities permit.
An important aspect of documentation is how candidates are presented
to hiring decision makers. In order to fairly and easily compare and
discuss contenders, all candidates should all be presented the same
way on paper, typically with data about career history and aspirations,
business accomplishments, competencies, and appraisal ratings—all
clearly presented on a standard form.
A talent pipeline is filled by customized development programs
and carefully crafted stretch assignments
The Government Accountability Office (GAO) is in the process of developing
a strong system of feeder development programs (depicted below) that
include assignments and rotations into Acting Senior Executive Service
(SES) roles.
Potential SES candidates at GAO, vie to participate in the Executive
Candidate Assessment and Development Program. During this program, they
receive 360° assessment feedback which enables them to create action
plans; participate in specific development programs; and be placed in
an Acting Director (SES) role. The Acting Director’s learning
experience is guided by the Managing Director for that position, a formal
mentor, and a member of the Executive Review Board who shadows his/her
work. At the direction of the Controller General, the learner may take
on leadership for an enterprise-wide project, which provides the opportunity
for them to visibly demonstrate their ability to staff, organize and
deliver results important to the agency. This is a thorough, rigorous
and fun developmental program composed of multiple development options.
| Pre-SES
Development Programs at GAO |
>>>>>
Acculturation Program |
ECADP* – Executive
Candidate Assessment and Development Program for entry into SES
For Assistant Directors = GS 15 and 14
|
LDP – Leadership Development
Program
For Band 3s
|
Interns in 11 US locations
who become employees
|
Employees (in Band 3) who aspire to a management role can compete
for acceptance to GAO’s Leadership Development Program (LDP) where
there is opportunity to receive training in 12 skill areas, join a community
of practice, and complete a course of study using on-line learning modules.
Influencing, collaboration and problem-solving are key topics for development,
as well as developing the six critical dimensions of GAO leadership:
personal integrity, vision, communication, technical and managerial
competence, empowering people, and empowering teams.
The entry-level program is designed for interns from college campuses
who typically begin their experience at GAO in a summer program. Many
participants accept full time jobs after graduation due to strong local
recruiting programs conducted by GAO employees and the Human Capital
Group. The program has impacted GAO’s ability to successfully
compete for young professional talent. Additionally the GAO has 11 US
locations which gives employees expanded lifestyle choices since they
do not have to live in Washington, DC. GAO being voted the best government
agency to work for by students at American University is a testament
to its excellent relationships with higher education institutions.
GAO also has a more unusual program—an acculturation program
for those who enter the agency at mid-career. Rather than being left
to sink or swim in this new culture, new hires are grouped together
to learn about the GAO culture, its norms and unwritten rules; build
relationships in this very collegial brain trust; and learn how to testify
before Congress and speak to the media. The acculturation program and
the intern program allow GAO to develop leaders and their careers from
Day 1—a necessity because GAO’s computer-based attrition
model tells them they have the potential for 50% turnover in the next
five years!
As James M. Kilts, former CEO of Nabisco and Gillette says in Doing
What Matters, the development process, which often consists
of programs like these at GAO, “becomes a leadership corridor
that runs through the business.” Through these programs, organizations
concentrate resources on the talent development process, generating
potential successors in ways that best fit the organization’s
needs and the candidates’ strengths.
The system is integrated with other Human Resources/Human Capital
processes
Goal setting, performance appraisal, individual development plans and
assignments, recognition and reward systems, compensation and mentoring
are all Human Capital or Human Resource processes that exist in organizations
and can be aligned to the development and succession planning systems.
The more integrated these processes are, the more systemic the succession
planning process becomes.
A computerized tracking system supports the process
Organizations have made many different choices when it comes to systems
that support succession planning. Sonoco has integrated four commercial
applications (PeopleSoft, HRCharter, Lotus Notes and ExecuTRACK) into
a seamless, global system. Many multinationals develop web-based systems,
which offer great potential for worldwide data integration. Others,
like Dell, once developed very sophisticated global software applications
only to back off and use Excel workbooks again. GAO’s computer-based
attrition model is another technological way of supporting succession
planning decisions. Ultimately every organization chooses the technical
support it needs to integrate, track and evaluate development.
The system is supportive to line and staff organizations
The Human Resource /Capital professionals who support succession planning
systems in cooperation with line managers need to evaluate results and
account to senior leaders to ensure the system is truly serving the
needs of the business. For example, in one client organization with
which we are engaged, the entry-level “intern” feeder program
is a rotational program. Early rotation served the important purpose
of providing multiple exposures and cross training when the program
began years ago, but now, with greatly increased demand for their products
and services, managers who are understaffed see these rotational assignments
as a hindrance to accomplishing the goals of the hiring division. With
agreement mounting, we expect the feeder program to be revised to suit
the new demands.
We encourage you to measure and evaluate how well your succession planning
system meets the
seven criteria.
Which of these critical elements can you check off your implementation
list, knowing your clients/colleagues are pleased with the results? Which
elements have you not yet considered? Which have proven too difficult
to implement in your environment? And which are you designing and developing
at the current time? The beauty of creating such a system is that it can
be done incrementally adding improvements or making adjustments over time.
