Succession PlanningSuccession Planning

Are You Ready for the

Unexpected?

February 3, 2009

2

About SKYEAbout SKYE

We work with human resource professionals, business

leaders, and company owners on organizational

development efforts to help create greater alignment of employee performance with business

results:

�Individual & Organizational Assessment

�Professional Development Training

�Coaching

�Strategic Planning

�Consulting

““We help We help youyou optimize your organizationoptimize your organization’’s performances performance””

Are You Ready for the Unexpected?Are You Ready for the Unexpected?

Challenge

Developing core leadership capability to drive

organizational competiveness and success

Solution

Leadership development and succession planning:

Align the organization’s human capital

management plan with its strategic plan

Our DiscussionOur Discussion

1. Study a model on how to define your company's

business focus and competitive advantage

2. Learn why organizational leadership strength is

critical to the support and effective execution of a

competitive strategy

3. Link HR activity and initiatives to building core

leadership capability aligned with organizational strategy

4. Review a succession planning case study

Alignment ChallengeAlignment Challenge

Values

Culture

Mission

Long

Term

Initiatives

Short

Term

Goals

Desired

Employee

Profiles

Actual

Employee

Skills

Develop-

ment

Plans

Business Strategy Talent Management Strategy

1

ENVIRONMENT

•Current Market Conditions

•Key Customers

•Key Competitors

•Key Stakeholders

•External Influencing Factors

•Market, Environment, and

Technology Assumptions

STRATEGY

Business

•What Business You Are In

•Current Products and Services

•Core Competencies

•Current Market Position

•Performance Against Key

Industry Success Factors

•Current Distinguishing Strategy

•Current Strategic Focus

•Current Objectives and Goals

Organization

•Current Mission

•Current Guiding

Principles

•Sense of Shared

Vision

•Current Management

Philosophy

CULTURE

•Work Culture Norms

•General Morale

•Job Satisfaction

•Worker Attitudes,

Behaviors, and Beliefs

•Management Attitudes,

Behaviors, and Beliefs

RESULTS

•Current Key Result

Areas

•Current Measurement

and Tracking Systems

•Resource Inventory:

Equipment, Capital,

Manpower, Materials,

Technology

•Current Financials:

Revenue, Cost Structure

CORE PROCESS

•Physical Layout Map

•Core Processes Maps

•Support Processes Maps

•Key Processes Maps

•Key Process Variances

•Process Cycle Time and

Efficiency

•Computer Delivery System

STRUCTURE

•Organization Chart & Reporting

Relationships

•Organization Levels & Staffing

Numbers

•Span of Control

•Current Groupings

•Linking Mechanisms

•Job and Role Structures

SYSTEMS

Coordination

•Communication and

Information Sharing

•Decision Making and

Authorization

•Measurement & Feedback

•Goal Setting

•Policies and Procedures

Development

•Recruitment &Selection

•Orientation

•Training & Development

•Progression & Promotion

•Performance Evaluation

and Feedback

•Compensation

•Recognition

The Transformation Model

STRATEGY CULTURE

SYSTEMS

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Strategic DirectionStrategic Direction

1. What is our ideal vision of the future?

2. Who are our customers?

3. What are our deliverables?

4. What are our core competencies?

Achievement ModelAchievement Model

StrategyLeadershipExecution

Organizational

Culture

Finan

cial

Perfo

rman

ce

Cust

omer

Satis

fact

ion

Internal

Operations

9

DeliverablesDeliverables

• Automobile—transportation, comfort, prestige, safety

• Clothing—ease of care, comfort, fashion

• Physical checkup—health, emotional well-being,

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Core CompetencyCore Competency

1. It must deliver significant value to the

customer

2. It must create differentiation from competitors

3. It must form the basis for entry into new

markets

4. It is not easy for other organizations to

replicate

A bundle of skills, technologies, and capabilities

which provide strategic advantage.

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Examples of Core CompetenciesExamples of Core Competencies

• Toshiba—flat screen displays (broad arena of applications)

• Sony—miniaturization

• Federal Express—logistics management

• Honda—dealer management

• EDS—systems integration

Competitive AdvantageCompetitive Advantage

Business Focus A long-term strategic position consciously

chosen by an organization in order to add value to its customers

Competitive DifferentiatorA factor within an industry that distinguishes one organization (competitor) from another

and which results in direct benefits to the

customer

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Business FocusBusiness Focus

• Customer Intimacy

• Product or Service Leadership

• Operational Efficiency

• Product Innovation

• Technology

Competitive DifferentiatorsCompetitive Differentiators

• Price• Quality (accuracy, reliability)

• Product/service features of performance

• Delivery time• Customer service

• Technical support• Flexibility

• Channels to market

• Process efficiency• Quality of inputs into process

• Geographical coverage

Strategic Planning OutcomeStrategic Planning Outcome

Performance TargetsGoals related to day-to-day performance of the organization which must be

achieved on a consistent basis – to stay in

business

Performance Initiatives Developmental goals that are designed to increase the

capability and long-term performance of

the organization

Importance of Leadership StrengthImportance of Leadership Strength

• Alignment / Top down understanding and communication of mission, vision

• Cascading goals and objectives

• Delegation, empowerment, growth

• Accountability

• Leaders teaching leaders

• Reinforce cultural values

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Leadership PressuresLeadership Pressures

• The talent pipeline often lacks sufficient numbers to replace leaders

• The organization's expansion goals outstrip the amount of internal talent needed

• Globalization and increasing technological demands make the

leader's job more difficult than ever

Source: Graziadio Business Report, 2007, Vol. 10. Issure 2

Leadership Pressures (ContLeadership Pressures (Cont’’d)d)

• Problems with strategic direction, organizational alignment, and employee

commitment continue to exist and are

exacerbated in the current competitive

environment

• Human resources and those responsible for

leadership development feel increased

pressure to demonstrate value

• Leadership development initiatives are not

integrated with business needs, and consequently, are of questionable value to

internal customers.

Source: Graziadio Business Report, 2007, Vol. 10. Issure 2

PerformanceManagement

TalentManagement

RewardsManagement

Recruitment &Selection

Career Management

Succession Planning

Senior ManagementDevelopment

BU

SIN

ES

SS

TR

AT

EG

Y

BU

SIN

ES

SR

ES

UL

TS

Linking Talent Management to StrategyLinking Talent Management to Strategy

Training&

Development

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PurposePurpose

• Foster a process of building leadership capability across the lines of business /

support functions

• The emphasis is on developing a broad

spectrum of talent within the

management ranks so that the availability of internal talent will not be a constraint to

the organization's strategic direction

• Identify the key leadership success factors

Desired Outcomes Desired Outcomes

• Retention and development of high potential

employees

• Builds internal staff capabilities (bench strength)

for the emerging organizational demands

• Maps various succession options

• Facilitates developmental moves across the

organization

• Establishes a professionally managed

organization with the systems in place to ensure

that it will have effective leaders going forward

Issues: Changing Nature of Work & Issues: Changing Nature of Work &

OrganizationOrganization

• Demographics (net-generation, diversity)

• Globalization

• Technology

• Redefined concept of ‘Loyalty’

• Challenges in differentiating high performers from poor performers

• Wanted rapid career progression

PerformanceManagement

TalentManagement

RewardsManagement

Recruitment &Selection

Career Management

Senior ManagementDevelopment

Succession Planning

BU

SIN

ES

SS

TR

AT

EG

Y

BU

SIN

ES

SR

ES

UL

TS

Succession PlanningSuccession Planning

Training&

Development

A Definition / Succession PlanningA Definition / Succession Planning

A systematic effort and process of

identifying and developing candidates

for key leadership and professional

positions over time to ensure the

continuity of management and

leadership in an organization

•Constant change planning

•An organizational journey, not a project

•Ensuring continuity of leadership

•Identifying gaps in existing talent pool

•Identifying and nurturing future leaders

What is Succession Planning?What is Succession Planning?

Why Succession PlanningWhy Succession Planning

• To identify replacement needs

• To provide opportunities for high potential workers (retention)

• To increase pool of promotable employees

• To support implementation of a strategic business plan

• To guide individuals in their career paths

• To encourage the advancement of diverse groups

• To improve ability to respond to changing environmental demands

• To improve employee morale

• To cope with the effects of downsizing, attrition, retirements

Organizations supersede Individuals

– visionaries are those who groom their young talent to take the lead position and to take the cause of the organization forward

Ref: Effective Succession Planning / Matthew Tropiano, 2004

CEO/ Leadership Commitment & Involvement

Education

and Training

Self Development

Competency driven

Strategically Targeted

Rotational Assignments

Future Competencies Needed

Aligned with Strategic Plan

Results

1. Talent Driven

culture

2. Accelerated

Development

3. Vision for future

advancement

Accountability

Measurability

Succession Planning Model

Challenges in Succession PlanningChallenges in Succession Planning

Benefits of Succession PlanningBenefits of Succession Planning

Source: Aberdeen Group, September 2006

ApproachesApproaches

TRADITIONAL

• Training & Education

• Leadership Development

• External Recruitment

• Internal Promotion

NON-TRADITIONAL

• Reorganization

• Job sharing

• Outsourcing

• Joint alliances

Some Essential ComponentsSome Essential Components

• Purpose and guiding

beliefs

• Human resource

forecasting

• Competency model/set

• Assessment processes

• Recruitment processes

• Individual development

plans

• Competency development activities

• Incentives & rewards

• Retention strategies

• Role delineations

• Career paths

• Program evaluation mechanisms

• Key stakeholder involvement

Succession Planning Case StudySuccession Planning Case Study

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Case Study Case Study -- QuestionsQuestions

1. How should this plan be rolled out to employees?

2. How open will this program be—in other words, what

are the pros and cons of letting employees know that

they have been tapped as potential successors in

key areas?

3. What are the first steps you would take to begin

succession planning?

4. What measures could you put in the place to show progress?

5. How would you demonstrate that this program was a

success?

Thank You Thank You

for Your Time for Your Time

Today!Today!

Reach us at:

603-424-9999

877-603-SKYE

SKYE Business Solutions

David Liddell

dliddell@Skye-Solutions.com