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Building a Comprehensive Succession Planning System
- By Linda Barker

Over the years, the practice of succession planning has evolved in its goals and practices. Initially succession planning was an emergency CEO-replacement strategy which sought potential candidates in the top ranks of internal leadership, on the Board or externally. Succession planning is now intended to ensure business continuity for multiple leadership positions. The unprecedented need to fill the swelling number of leadership openings caused by baby boomer retirement and the inattention on pipeline preparedness that occurred in the late eighties and nineties is now causing organizations to create internal development programs to produce a pipeline of qualified candidates who are prepared to “move up or over” in a timely way.

With this evolution comes a new definition of succession planning with both “top-down” and “bottom-up” components.

An “Evolved” Definition of Succession Planning

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.

Succession Planning is a systematic approach to:

  • Identifying the best candidates for categories of critical or key positions (top-down)
  • Building a leadership pipeline/talent pool to ensure leadership continuity (bottom-up)

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.

Seven Critical Elements

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.

Assess Your Organization’s Succession Planning Program

We encourage you to measure and evaluate how well your succession planning system meets the
seven criteria.

Critical Element
Not Yet
In Progress
Done
Linked to strategy
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Senior management ownership
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Standardized methods for
filling positions
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Feeder programs consisting of customized development programs and assignments
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Integrated with other
HC / HR programs
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Computer support systems
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Supportive to line and staff
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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.


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