hrstar_sp_emerging_best_practices_planning.ppt

Succession planning

1. Emerging Best Practices and
Trends in
Succession Planning
Debbie McGrath
CEO
HR.com
905 727 1340 x 104

2. Overview
•Succession Planning as a critical business
process
•Trends influencing Succession Planning
practices
•Emerging Best Practices in Succession
Planning

3. More Details on this Topic
•This presentation was done with the
help of an archived webcasts from Via
People and help with i4cp. For sample
scorecards and examples please visit
the archive of the viapeople webcast on
HR.com

4. What is Succession Planning?
Succession Planningcan be defined as a
purposeful and systematic effort made by an
organization to ensure leadership continuity,
retain and develop knowledge and
intellectual capital for the future, and
encourage individual employee growth and
development.

5. Why is Succession Planning such a
“Hot Topic”?
•Board concerns and directives
•Increased costs associated with external searches
•Increased turnover
–People who had been regarded as successors for key
positions left by surprise
–High performers are leaving
•Managers complain that they have no one ready to fill
vacancies
•Employees complain that promotion decisions are
made unfairly
•Insufficient numbers of women and/minorities at
senior levels

6. Trends Impacting Succession Planning
•Shifting demographics
–Shortfall in the number of future leaders
–Increase in attrition in executive level positions
•Economic conditions resulting in massive
downsizing and increasingly flat and dynamic
organizational structures.
•Reduced loyalty among employees despite
focus on employee engagement and
involvement

7. Trends Impacting Succession
Planning, contd.
•Recognition on the part of senior executives
of the importance of values, competencies,
intellectual capital, and leadership
•Increase in the complexity of executive
positions
–Financial market and employee expectations
–Globalization
–Technology

8. Percentage of Organizations with
a Succession Plan
Source: Society for Human Resource Management, 2006
Survey of 385 HR professionals

9. Global CEO Succession Rates, 2005
Source: Booz Allen Hamilton, 2006
Study of the world’s 2,500 largest publicly traded companies

10. CEO Performance-Related Turnover, 2005
(as a percentage of all departing CEOs)
Study of the world’s 2,500 largest publicly traded companies
Source: Booz Allen Hamilton, 2006

11. HR Professionals’ Estimates of
Readiness for Sudden Succession
Survey of 385 HR professionals
Source: Society for Human Resource Management, 2006

12. HR Responsibilities
in the Succession Process
Survey of 385 HR
professionals
Source: Society for Human Resource Management, 2006

13. Source: Human Resource Institute, 2006
Incidence of Formal Succession Plans
86 organizations participated in the Succession Planning Practitioner Consensus Survey

14. Succession Planning Data Collection
About half (51.7%) of organizations have a system in
place to gather information for their succession plans.
86 organizations participated in the Succession Planning Practitioner Consensus Survey
Source: Human Resource Institute, 2006

15. Succession Rates by Industry, Across the
Seven Years of 1995, 1998, 2000-2004
Source: Booz Allen Hamilton, 2005
Study of the world’s 2,500 largest publicly traded companies

16. Succession Rates by Industry, Across the
Seven Years of 1995, 1998, 2000-2004
(continued)
Study of the world’s 2,500 largest publicly traded companies
Source: Booz Allen Hamilton, 2005

17. Identifying High-Potential Talent
Source: Human Resource Institute, 2005
Survey of 96 organizations
A majority of organizations have a process in place for identifying high-
potential talent.

18. Identifying High-Potential Talent
Processes, by Length of Existence
Survey of 96 organizations
For many of the organizations that have a process for identifying high-
potential talent, this is a relatively recent initiative.
Source: Human Resource Institute, 2005

19. Identifying High-Potential Talent
Processes, by Position
Among organizations that have an existing process for identifying high-
potential talent, it is rare to examine all levels of employees.
Source: Human Resource Institute, 2005
Survey of 96 organizations

20. Emerging Best Practices
1.Top management involvement
2.Targeted processes to focus on clearly
defined, specific goals
3.Comprehensive assessment programs
based upon competencies
4.Creation of talent databases incorporating
performance, assessment, demographic,
education, experience, and career interests
5.Identification of future talent requirements
6.Structured and individualized development
programs

21. Best Practice 1: Top Management
Involvement
•Communicates importance of planning
for the future
•Allocation of adequate resources
•Modeling of effective coaching and
development
•Key development resource to high
potentials

22. Best Practice 2: Targeted Processes
•Evolutionary versus revolutionary
•Clearly defined set of goals
•Meaningful executive reviews
•Eliminate administrative burdens
•Using technology to facilitate data gathering,
tracking and decision making

23. Best Practice 3: Comprehensive
Assessment of Talent
•Behaviorally defined competencies
•Learning agility and derailment factors
•Defining performance and potential
•Early identification of talent
•Multi-source methods
•On-going feedback processes
•Continuous re-assessment
–Test learning agility, development of competence
and performance

24. Best Practice 4: Creation of Talent
Databases
•Integration of data from multiple systems,
including HRIS, Recruitment, Learning.. Etc..
•Definition of missing talent data elements
•Collection of missing talent data
–Education, competencies, experiences, career
interests, mobility
•Reporting to facilitate decision making

25. Best Practice 5: Identification of
Future Talent Requirements
•Competency, skill and experience
requirements for critical positions
•Profiling the development content of key jobs
–P & L accountability
–Forming/managing external alliances
•Detection of current and future talent gaps
•Targeted career pathing and development
•Sourcing and recruitment plans to secure
new external talent

26. Best Practice 6: Structured and
Individualized Development Planning
•Formal, structured development plans
•Targeted, individual activities with
emphasis on experience-based learning
•Transitional coaching during stretch
assignments
•Reporting and tracking of progress and
outcomes
•Accountability for performance

27. Continuing Challenges
•Ineffective balance between identification and
development
•Identifying successors/hi-po’s not in line with
most organizational cultures
•“Executive cloning”
•Poor linkage to business strategy
•Overemphasis on replacement planning
•Lack of top management support
•Poor business unit buy in
•Lack of organization-wide talent database

28. For More Information:
www.hr.com
Debbie McGrath
905 727 1340 x 104
[email protected]
A Special Thanks to I4cp and Via
People for much of the material

29. Questions