Leading the Way Up: Succession Planning from
the Front Line to CEO
Jack Middleton Bob Turknett Lyn Turknett
The Shoemaker … and the Factory
Agenda Today
• Overview of succession today
– The succession management cycle
– Best practices
– Biggest challenges
• CEO Succession Case Discussion with:
– Jack Middleton
– Bob Turknett
Where are we now?
• Current State:
– If you had to grow your leadership team by 50% in 60 days, could you?
–Would 75% answer yes to this question: “I know exactly what it takes to be promoted in this company”?
• Demographic Challenges – do you know? – The average age is ____ .; ____ percent are
over 59 years of age. – The average length of service is ____ .
Where are we now?
0 5 10 15 20 25 30 35 40 45
Zero
One
Two
Three
Four
How many candidates from the internal talent pool are “ready now” to immediately assume the CEO position?
2014 Report on Senior Executive Succession Planning and Talent Development, Stanford Business School.
Where are we now?
0 10 20 30 40 50 60
Strongly Agree
Agree
Neither agree nor disagree
Disagree
The CEO and executive team are actively Involved in succession planning and talent reviews
2014 Report on Senior Executive Succession Planning and Talent Development,
Stanford Business School.
Confidence in Pipeline
“My direct reports have the skills to be part of the C-Suite.”
Percent Answering YES
CXOs 48%
CXOWs 41%
Bersin, Josh, “Executive Confidence Hurt by Lack of Leadership Development, www.bersin.com/blog, October 31, 2014
What is Succession Planning?
A systematic process designed to:
1. Identify key leadership positions and hard-to-fill positions
2. Identify the critical competencies that people in those positions require
3. Identify new critical competencies required by strategic and business plans
4. Prepare pool of talent and key replacements to ensure the continued ability of an organization to meet its strategic goals and supporting objectives
ROI of Top Talent Focus
0
20
40
60
80
100
120
140
Top 15 Percent Bottom 15Percent
Market Cap Growth 2004-2014
Companies scored on these criteria:
• Formal leadership identification and development process in place
• Commitment of CEO
• Depth of leadership funnel
• Number of other companies that recruit from company
Beyond “Hit by a bus…”
Replacement Planning
Succession Planning
Succession Management
Identification of Successors
Yes Yes Yes
Development of Successors
Little or none Yes Yes (often Talent Pools)
Managerial Levels
Top two or three
Top two or three
All, including any key
positions
Linkage to Strategy
Little Some Robust
Basic Succession Management Cycle
• Definition of Strategy and Competencies needed for the Future
• Talent Review
• High Potential Identification
• Assessment and Gap Analysis
• Development Planning and Leadership Development
Succession Management Cycle
Define for
Future
Review Talent
ID Top Talent
Assess
Develop
Talent for the FUTURE Define
for Future
Accelerated
Growth
Potential
Continuing investment
(May be recently promoted)
High investment, help improve performance
High investment and/or promote/give more responsibility
These “stars” are ready for an assignment at a higher organizational level – challenge them.
Solid
Growth
Potential
Monitor
Continuing investment
High investment, accelerate skill development
Stable
Growth
Potential
Monitor
Need to demand performance improvements
May be in wrong job or at wrong level. Consider reassignment.
Continuing investment Minimal investment but continue to reward, retain
9-Box Talent Grid
Needs Improvement Meets Expectations Exceeds Expectations
1/3
1/2
1/1
2/3
2/2
2/1
3/3
3/2
3/1
Past Performance
Gro
wth
Po
ten
tia
l Review Talent
Identify High Potentials
Charles Darwin
Janis Joplin
Stanley Kubrick
Ruth Ginsberg
Thomas Jefferson
Albert Einstein
Louis Pasteur
Henry Ford
John Kennedy
Natalie Wood
Marie Curie
Helen Keller
Mary Cassatt
Neil Armstrong
James Dean
Bruce Lee
Marilyn Monroe
Katie Couric
Johnny Carson
Charlie Chaplin
Winston Churchill
Napoleon Bonaparte
Past Performance
Gro
wth
Po
ten
tial
ID Top Talent
Assessment and Gap Analysis
• Assessment against core, leadership and functional competencies
• Gap Analysis for each person and for each position
• Sample Assessment tools:
– 360 Degree Feedback
– Hogan – Leadership Potential
– Hogan – Leadership Challenges
– Hogan – Values & Preferences
– Watson Glaser – Critical Thinking
– Life History/Leader Level interview
– Structured Behavioral Interview
• Assessment Center may be included
Assess
Plan for Development
• Create a specific developmental plan for each high potential
• Can include:
– Movement to a developmental role
– Cross-functional projects or teams
– Stretch assignments
– Mentors
– Executive Coaching
– Action learning projects
– University programs, etc.
– Inclusion in special leadership development processes
Develop
Top Methods of Development
TYPE OF DEVELOPMENT % USING
Coaching and Feedback
57%
Developmental Assignments/ Action Learning
49%
Informal Information-Exchange Sessions 48%
Mentoring One-on-one 43%
Exposure to Senior Executives
34%
From “2015 Best Companies for Leaders,” Chief Executive, January/February, 2015.
Top Five Challenges
1. Succession not well connected to strategy
2. Executive team not closely involved, or focused only on risk reduction
3. Potential not well defined, and not well differentiated from performance or readiness
4. Culture doesn’t support open and honest feedback
5. Development plans not well executed
Top Five Challenges - Do you have…
• Solid linkage between strategy and talent planning?
• Ownership by senior executive team?
• Good definition of potential?
• A climate that supports developmental feedback and open discussion?
• Great follow-through on development plans?
Challenge #1: Strategic Alignment
Career Development
Selection & Succession
Systems
Leadership Development
(e.g., 360)
Job Descriptions
Structured Behavioral Interviews
Training
Performance Management
COMPETENCIES LINKED TO STRATEGY
Challenge #3: Distinguish between Performance, Potential, Readiness
Challenge #3: Specifying Criteria for Potential
Potential Criteria Description
Learning Agility Ability to learn from experience, self-reflect and grow, adapt to change, etc.
Social Skills Basic social ability – emotional intelligence
Demonstration of Values/ Character
Demonstration of the organization’s values; integrity and character
Motivation to Advance
High energy, wants to move to higher levels
Likelihood to Advance
Ability to succeed at higher positions within a specified amount of time
Markers of potential are essential for senior leadership but more difficult to develop.
25
Development Plan – Last Updated Jan 2015
Name: Pat Leader Current Position: Business Development
Past Positions: Engineer, Associate Projects Manager, Field Project Manager
Possible Next Position: Recently moved to Bus Dev role; next move TBD
Development Activities Core Competency Development
Competency and Goal Key Steps/Actions Timeframe
Leverage strong interpersonal skills to increase business
acumen
Identify key leader to build a relationship with; request quarterly meeting with him/her to learn more about their area of the business
Q1 and thru year
Improve openness to change and change leadership Identify a suboptimal Bus Dev approach/process; recommend a way to improve it; develop and implement a plan to make the change
By Q3
Increase influence/negotiation skills Read a book on effective influence tactics/strategy. Select 2-3 tips and adapt them to current job. Read by Q1; Use tips thru
yr
Critical Business Experiences
1. More exposure to crisis management
2. Attend meetings that are highly financially oriented to learn more about Finance function of the company
3. Assign to team involved in a cross-functional or cross-company project
Education: Attend Influence/Negotiation program at local university business school (Emory, Univ of GA, GA Tech, GA State)
Networking: Join and be active in one new community or professional organization
Mentoring: Interested in a mentor, but does not currently have one
Other: Attend professional conferences 1-2 times per year
Assessment
Business Experiences Not Yet Some Obtained
Competency Development - Business
Strategic planning/taskforce
Competencies Score Budget planning/management
Leadership Lead major/complex initiative or project
Leadership Significant customer interface
Openness to Change; Adaptability/Agility Lead cross-functional initiative/project
Influence and Negotiation Drive/Lead major organizational change
Results Represent Colonial externally
Business Acumen Rightsizing and/or restructuring
Execution; Drives & Delivers Results Crisis management
Accountability Merger/Acquisition
Customer Driven Business turnaround
Critical Thinking and Decision Making Competency Development - People
Problem Solving Influence/manage w/o formal authority
Sound Judgment/Decision Making Recruit/ hire team members
Strategic Thinking Supervise/Manage small team
Innovation Supervise/Manage large team
People Manage significant subordinate performance problems
Interpersonal Skills & Team Building Lead highly diverse team
Developing People Lead in an extreme adversity
Values and Personal Characteristics Skill/Expertise/Learn Business
Transparency Operations
Values and Character Finance
Business Development
Projects
HR
Compliance
Challe
nges 2
and 5
Organization
Core Competencies
General Session
Knowing Yourself
Team A
Team B
Team C
Team A
General Session
Knowing Others (Teamwork)
Team B
Team C
General Session
Leading Effectively
Team C
Team B
Team A
General Sessions - conducted with entire group in one location. The focus is on character as the foundation of leadership, and on Leader Level development using constructive-developmental theory, reinforcing the key organizational messages and developing the particular critical competencies essential to successful leadership in the organization. Senior leaders can serve as teachers or providers of content and values.
Individual Coaching - Focused on feedback and real learning and growth from assessment. Includes 360-degree feedback, personality assessment feedback, and work on development plans, with character and level of development as a continuing lens.
Action Learning Teams – Small groups focus on projects identified as useful to the business. Teams learn about the business and also focus on working effectively together. Results are usually presented to senior leadership.
Individual Coaching Sessions
Individual
Coaching Sessions
Leadership
Character and Leader Levels
Continuing Lenses
Challenge s 2 & 5: Sample Leadership Development Process
Challenge 4
• Create a DDO – Andy Fleming, Robert Kegan, Lisa Lahey
• Train for forthright, respectful conversation with Crucial Conversations
• Study Jack Middleton…
General CEO Succession Cycle
• Board and executive team agree on strategy for the future and on skills, competencies, attributes needed by new CEO
• Internal candidates selected and assessed
• If needed, external candidates sourced and assessed
Put CHARACTER at the core.
Turknett Leadership Character Model™
“Middleton’s values-based leadership has been of paramount importance to the organization’s success over this time.”
The SMC3 Story
• About SMC3
• Laying the groundwork: succession management at SMC3
• CEO Succession – informing the board
• Profiling the position
• Internal Candidates
• The broader pool
• Making the decision
• Making the transition
The Assessment Phase
• Create a Competency Profile – List of important competencies – Ranking competencies based on importance
• Design Assessment Protocol – Occupational Personality Questionnaire (OPQ) – Universal Competency Report (UCR) – Hogan Motives, Values, Preferences Inventory (MVPI) – Hogan Development Survey (HDS) – Watson Glaser
• Structured interview based on most important competencies
Competency Rating Sample
Competency Importance and Ratings
Importance 0=Not Important 1=Minor Importance 2=Important 3=Critical
Points
Total must equal 100
Leading and Deciding
Deciding and Initiating Action
3 6
Leading and Supervising 3 6
Analyzing and Interpreting
Writing and Reporting 1 3
Applying Expertise and Technology
3 5
Analyzing 3 5
Competency Comparison Sample
Values Comparison Sample
Comparison of top-rated competencies
Communica-tion
Building Relationships
Judgment Leadership
Candidate A Strong Fit Moderate Fit Strong Fit Moderate
Fit
Candidate B Strong Fit Moderate Fit Weaker Fit Strong Fit
Candidate C Weak Fit Strong Fit Strong Fit Strong Fit
Candidate D Strong Fit Moderate Fit Moderate
Fit Strong Fit
Based on Hogan Assessments and Watson-Glaser.
Putting it in practice: Some questions to be answered…
• Who will lead the succession planning initiative at your organization?
• How will the process be linked to strategy? What are your core competencies?
• How is management involved in succession planning?
• What are your critical positions? Key developmental positions?
• How is “high potential” defined?
• What is your talent review process for identifying employees with strong potential and for identifying organization gaps? How will calibration occur?
• How will high potential employees be assessed?
• How will hi-pos receive developmental feedback?
• How will development planning be done?
• Will the process be open? Will high potentials know they have been identified?
Thank You!
Contact us for more information:
770.270.1723 2310 Parklake Drive Suite 500 Atlanta, GA 30345