HR Pastime or Critical Business Strategy Enabler.
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Transcript of HR Pastime or Critical Business Strategy Enabler.
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Succession Management
HR Pastime or Critical Business Strategy Enabler
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“An organization is nothing more than the collective capacity of its people to create value.” Lou Gerstner former CEO of IBM
Largest potential gains in revenue and profitsfor business leaders came from building bench strength when looking at a variety of talent outcomes*
Why Does Succession Planning Matter?
*CLC Talent Management Effectiveness Survey: Corporate Leadership Council Research
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According to Marshall Goldsmith, on average, the executives he meets give their succession planning process a grade of C+ and they give their execution of succession plans a grade of D
How are you doing?
What Does Your Succession Management Say About You?
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Who Does it Well? And Who Has Opportunity?
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Time• To plan• To develop• To fill open positions with the right people• To think further down the road
Getting Feedback and Buy-In from Others
It is Hard• Requires tough and direct conversations
Not Defining the Business Case
What Prevents Us from Doing a Good Job at Succession Planning?
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Best Practice Elements
Business Strategy feeds into talent
strategy
Executive Commitment and Accountability - Reinforcement
Identify Critical Positions
Develop competency and assessment
model
Assess Talent and ID Successors; Calibration
Talent Development, Acquisition and
Planning
Metrics that Matter
Manage Ongoing process and Action
Plans
Succession Planning is an
Ongoing Process
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Identify the External Trends in your Business Environment
Define your Business Strategy• How do you compete?• What do you do better than the competition?• Can you do this without the right people?• What is needed now and what will be needed in the
future?• What kind of culture is needed to drive success?
Feeds into the Talent Needed
Start with Business Strategy and Develop Business Case
Business Strategy
feeds into talent
strategy
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After Sarbanes-Oxley, Boards have become more involved with succession management
Leadership Responsibility should start with CEO
Talent Expectations for leaders and managers
Hold ongoing reviews, consider talent management results as part of bonus plan or performance management ratings
Executive Commitment and Ownership
Executive Commitment
and Accountability - Reinforcement
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Critical Positions
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Identification of Critical Positions
Direct strategic impact on the business; can drivecompetitive advantage
High variability in performance can have major impact on business
Critical positions may require and receive larger and/or differentiated investment and development
Make sure the discussion is around the position not the people
Identify Critical
Positions
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Position Variability in performance
Impact on strategic outcomes
Scarcity of resource
Impact on other strategic activities
Total Score
Job A
Job B
Job C
Identification of Critical Positions Tool
Complete the table for each job using a scale from 1 (low) to 5 (high)
Highest Total Score = Most Critical
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List 3 or 4 most important sources of competitive advantage for your company – examples:
Identify relative importance by allocating 100 points among them where no two sources of competitive advantage can have equal weighting
Using this list helps you identify core, technical capabilities/positions Michigan Ross School of Business
Executive Education
Exercise to Help ID Critical Positions
• Innovation• Quality• Branding
• On-time Delivery
• Cost• Distribution
• First to Market• Relationships• Service
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Defining Characteristics
“A” Position – Strategic
“B” Position – Support
“C” Position - Surplus
Scope of Authority Has direct strategic impact and exhibits high-performance variability in the position, representing upside potential
Has an indirect strategic impact by supporting strategic positions and minimizes downside risk by providing a foundation for strategic efforts, or has a potential strategic impact, but exhibits little performance variability among those in the position.
May be required for the firm to function but has little strategic impact.
Primary Determinant of Compensation
Performance Job Level Market Price
Effect on Value Creation Creates value by substantially enhancing revenue or reducing costs
Supports value-creating positions Has positive economic impact
Consequences of Mistakes
May be very costly, but missed revenue opportunities are a greater loss to the firm
May be very costly and can destroy value.
Not necessarily costly.
Consequences of Hiring the Wrong Person.
Significant expenses in terms of lost training investments and revenue opportunities.
Fairly easily remedied thru hiring of replacement.
Easily remedied thru hiring of replacement
Source: “The Differentiated Workforce Transforming Talent into Strategic Impact” Adapted from “A Players” or “A ‘Positions’? The
Strategic Logic of Workforce Management,” Harvard Business Review, December 2005
Defining Positions – Another Approach
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Assessment of Talent
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9 Box Assessment Grid – Performance and Potential
High Needs Development Meets Expectations Exceeds Expectations
Improve in current role or reassign
Improve in current role
improve in current role reconsider
Low High
Pote
ntial
Performance
Prepare for future role
Develop Competency
and Assessment
Model
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Company Example - Lisa
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Hy-Vee◦ Culture – how it drives◦ Position Identification
Internal vs. External Candidate Development and Assessment Hy-Vee University
◦ Identification of Potential candidates◦ Etc……
Mentors Diversification tool
Example from Hy-Vee
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Company Example - Diane
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Reviewed External Environment, Trends and Current Performance
Redefined the Business Strategy and what Cultural Capabilities we needed to succeed
Analyzed the # of Director Level and Above Positions that we Hired Externally the Prior Year
Reviewed Current Number of Open Director and Above Positions
Calculated the Cost of Turnover• Search agency costs• Relocation costs• Lost productivity/revenue from open positions
Started with Business Strategy and Business Case Business
Strategy feeds into
talent strategy
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Senior Leaders have performance goals and objectives specific to talent development and upgrade/acquisition
BU Leaders, HR Partners, CEO, CHRO Review of Succession Planning and Talent Management and Upgrade Process
Senior Leadership Calibrates Talent Assessments and ID’s SuccessorsMANAGERS Perform Talent Assessments
LEADERSHIP TEAM Identification and Alignment of Critical Positions
CEO Active Involvement and Accountability
Gained Leadership CommitmentExecutive
Commitment and
Accountability - Reinforcement
ID of Critical Positions
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Understanding of company’s cultural capabilities
Consideration of motivation, ability and engagement
Performance and Potential
Definition of competencies and derailers
Defined promotability and retention risk assessments
Developed Competency and Assessment Models Develop
Competency and
Assessment Model
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Considerations in Talent Assessments
Motivation
AbilityEngagement
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Considerations in Talent Assessments
MotivationExtent in which an employee wants:• Prestige and recognition in the
organization• Advancement and influence• Financial rewards• Work-life balance• Overall job enjoyment
AbilityEngagement
Motivation
Resources• Employee career goals in
SAP Talent Profile• Regular development
conversations
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Considerations in Talent Assessments
AbilityA combination of characteristics and learned skills to carry out day-to-day work:• Mental and cognitive ability• Emotional intelligence• Interpersonal skills• Functional and technical skills
Motivation
AbilityEngagement
Resources• Employee competency
self-assessment in Skills Profile
• Performance history
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Considerations in Talent Assessments
EngagementIncludes four elements of commitment:• Emotional commitment to the
organization• Rational commitment – a belief that
staying with organization is in the employee’s self-interest
• Discretionary effort• Intent or desire to stay
Motivation
Ability Engagement Resources• Regular performance
and development discussions
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Promotability Assessment & Next Position
Promotability Scale:
Highly promotable (HP): Seen as having the ability and motivation to be promoted two levels within five years. Include in succession planning.
Promotable within 2 (P2): Seen as having the ability and motivation to be promoted one level within two years. Include in succession planning.
Promotable within 5 (P5): Seen has having the ability and motivation to be promoted one level within 5 years. Include in succession planning.
Lateral Development (LD): Consider for lateral move within the next 12 months to broaden experience base and potentially enhance long-term promotability. Include in succession planning.
Well Placed (WP): Continue development in current role based on employee’s expertise and motivation.
At risk: Not meeting current performance expectations; may be due to poor job fit or poor performance.
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Employee’s Talent Information – their “voice”
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Comparing Employees’ Talent Information
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View Employee’s Skills Profile
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Assessments:Competencies, Derailers, Promotability, Retention Risk
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Derailers Assessment
Possible Ratings:
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Leadership Competencies Assessment
Possible Ratings:
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Promotability Assessment
Required – Indicate Next Position
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Retention Risk Assessment
Possible Ratings:
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Talent development plans put into place for• Internal successors listed for critical positions• Individuals identified as promotable/lateral development
Talent acquisition plans put into place to diversify existing capabilities and fill in gaps
Action plans put into place for individuals “At Risk” as assessed
“Stay” discussions initiated where retention risks identified
Leaders and managers accountable for owning in partnership with HR
Tools to use throughout the year
Review action plans
Planning and Development Talent Development,
Acquisition and Planning
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Consider experiences needed• Manage large groups of people• Make significant decisions• Work on cross functional teams• Work in customer/client facing role• Launch new business, initiatives or programs• Assign a mentor – inside or outside the company• Strong P&L knowledge
Consider knowledge/credentials needed
Create accountability for success in new roles (internal and external hires)
360 assessment tool
Development Planning & Investments
Talent Development and Planning
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Metrics that MatterNameTitle
% Promotable: 0%
Name (WP)Title
Bench Strength: .25
% Promotable: 0%
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: 1.00
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: 1.75
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: .75
% Promotable: 0%
RN and/or 1-2 yrs: 1
Name - OpenTitle
Bench Strength: 1.00
% Promotable: 17%
RN and/or 1-2 yrs: 0
Name (WP)Title
Bench Strength: 1.00
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (P2)Title
Bench Strength:0.00
% Promotable: 0%
RN and or/1-2 yrs: 0
Name (WP)Title
Bench Strength: 1.50
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: 2.00
% Promotable: NA
RN and/or 1-2 yrs: 2
Name (At Risk)Title
Bench Strength: 0.00
%Promotable: 0%
RN and/or 1-2 yrs: 0
Name (LD)Title
Bench Strength: 1.00
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: .25
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: .75
% Promotable: NA
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: .25
% Promotable: NA
RN and/or 1-2 yrs: 0
Name (WP)Title
Bench Strength: 0
% Promotable: 33%
RN and/or 1-2 yrs: 0
Name (At Risk)Title
Bench Strength: 0
% Promotable: 0%
RN and/or 1-2 yrs: 0
Name (LD)Title
Bench Strength: 0
% Promotable: 33%
RN and/or 1-2 yrs: 0
Name (WP)Title
Bench Strength: .75
% Promotable: 0%
RN and/or 1-2 yrs: 1
Name (WP)Title
Bench Strength: .75
% Promotable: NA
RN and/or 1-2 yrs: 4
Name - OpenTitle
Bench Strength: 0.00
% Promotable: NA
RN and/or 1-2 yrs: 0
Name (WP)Title
Bench Strength: .75
% Promotable: NA
RN and/or 1-2 yrs: 4
Name (WP)Title
Bench Strength: .75
% Promotable: 0%
RN and/or 1-2 yrs: 4
KEY Indicates Critical Position
Metrics that Matter
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Percentage of externally sourced successors versus internally sourced
Total number of internal succession candidates considered for open positions
Critical turnover - % of high potential employees leaving is higher than average or low potential employees
Time to fill critical positions
Cost of external hires versus internal promotions/development
What questions are you trying to answer or what decisions are you trying to make?
Examples of MetricsMetrics that
Matter
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Business Case: Connects Business Strategy and Needs into Talent StrategyShould be ongoing and dynamic as business is
Executive Level Commitment and AccountabilityReinforce the Importance of Talent Development and Acquisition throughout Organization
Identification of and Agreement on Critical Positions
Assessment of Current Talent and Identification of Successors
Calibration and Discussion
Targeted Talent Investments, Development and PlanningInternal
External
Measure what Matters
Ongoing Management through the Four Succession Risks Vacancy Risk - focus on most vulnerable and critical areas of business
Readiness Risk - provide needed development experiences and enable movement across company
Transition Risk - understand transition derailers, manage expectations of new hires and create accountability for success in roles
Portfolio Risk - ensure talent is aligned and deployed against evolving business priorities
Example of a Succession Planning Checklist
Tool – Checklist
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Manage vacancy risk – focus succession efforts by translating business strategy into talent strategy
Manage readiness risk by providing needed development experiences and enabling movement across the organization
Manage transition risk by understanding derailers, manage expectations and create accountability for success in roles
Manage portfolio risk by effectively aligning and deploying talent against evolving business priorities
2006 Corporate Executive Board
Manage Ongoing Process Manage Ongoing
Process and Plans
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Employee Information
Name: Current Job Title:
Date of Meeting/Interaction: Individual/s Providing Feedback:
Cultural Capabilities – Provide any feedback on behaviors related to our cultural capabilities
Tenaciously ResourcefulDynamically ResponsivePassionately Aligned
Leadership Competencies: Ratings: (N/A – Not Applicable, IE – Ineffective, SE – Somewhat Effective, E – Effective, VE – Very Effective, O – Outstanding)
Business Acumen: Dealing with Ambiguity: Decision Quality:
Developing Direct Reports and Others:
Drive for Results: Interpersonal Savvy:
Managerial Courage: Managing Vision and Purpose:
Managing and Measuring Work:
Describe purpose for rating/s above, be as specific as possible:
Functional Competencies:
Derailers: List any of the following you witnessed and explain what you witnessed: Betrayal of Trust, Defensiveness, Lack of Ethics and Values, Failure to Staff Effectively, Insensitive to Others, Performance Problems
Manage Ongoing Process – Feedback Tool
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Manage Ongoing Process – ToolLeadership Competencies Rating:
N/A – Not Applicable IE – Ineffective SE – Somewhat Effective E – Effective VE – Very Effective O - Outstanding
Name of Individual
Business Acumen
Dealing with
Ambiguity
Decision Quality
Developing Direct
Reports
& Others
Drive for Results
Interpersonal Savvy
Managerial Courage
Managin
g Vision & Purpos
e
Managing
& Measuring Work
Priority
Setting
Problem Solving
Strategic Agilit
y
Cultural Capabilities Rating: N/A, IE, SE, E, VE, ODerailer Assessment Rating:
NP – Not a Problem PNP – Probably Not a Problem NS – Not Sure PP – Probably a Problem DP – Definitely a Problem NEI – Not Enough Information
Name of Individual
Tenaciously Resourceful
Passionately Aligne
d
Dynamically Responsive
Derailer
s:
Betrayal of
Trust
Defensiveness
Lack of
Ethics &
Values
Failure to
Staff Effectively
Insensitive
to Other
s
Performance Problems
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Business Strategy - Current and Future Needs, External Environment
Succession Management – Link Business Strategy into Talent Strategy: Commitment, Assessment, Actions, Measurement
Talent Development and Retention - how and where should we target our development investments? What experiences are needed? How are we communicating to employees?
Talent Acquisition - what skills, capabilities and gaps did we identify that we might want to find externally?
Performance Management - how are we defining, measuring and rewarding work performance – does it tie to strategy? Do we consider talent management performance for managers and leaders?
Starts with Business Strategy
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In Real Time, how do we keep this front of mind versus quick fix solutions when openings occur?
Not just an HR responsibility
Calibration – does it sound easy? It’s not!
Assessment Tools
Employee Ownership
How and what should you communicate?
How do you build breadth at the entry to mid level roles?
What about positions that aren’t critical?
Generational differences and expectations
Lessons we Learned – Ongoing Journey
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Define your culture and business needs• Use your company’s culture – don’t force it
What is your process today?• Can – should you develop internal candidates?
Do you have senior leadership enthusiastic support and accountability?
Discussions are crucial for success – amongst leaders, with employees, etc.
Model Succession Evaluate Plan Review Evaluate
Things to take away…How to apply