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STRATEGIC LEADERSHIP ISSUES

“Talent and Succession”

Cheryl L. Thomas Managing Director

Impacting People, LLC Wadsworth, IL

[email protected] 847-274-8783

August 3, 2018

Graduate School of BankingBanking School 2018

GSB-2018 IMPACTING PEOPLE LLC 1

Talent

and

Succession

Agenda

1. Levels of Succession

2. Talent Assessment

3. Succession Management


“If we don’t get the people thing right, we lose. It’s the most important thing

in all our businesses.”

– Jack Welch, Former CEO, General Electric (GE)

3GSB-2018 IMPACTING PEOPLE LLC

Levels of Succession1. Ownership

2. Board

3. CEO

4. Key Positions


Ownership•What is the ownership structure today?

•How might it change going forward?

•What is the end game?

•In what timeframe?


Board•Is there a Plan?

•Are the needed skills, knowledge and qualifications known?

•What structure is needed for the Bank today? Future?

•What is the recruiting strategy?


CEO Succession

•What is the timeframe?

•Is it “succession” or “replacement”?

•What are the needed skills, knowledge, abilities for the next CEO?

•What is the long term strategy of the Bank?


CEO Succession

Succession•18 months or more in the future

•Determine who owns the process (Board, Board Committee, Family, etc)

•Determine Profile for the future CEO position

•Define the potential internal pool

•Evaluate/assess internal talent

•Recruiting strategy and On-boarding process


Key Position Succession

•Determine key positions to include

•Determine internal candidate pool

•Assess internal candidates/talent

•Commit to Development

•Connect to Annual Goal Setting and Strategic Planning


Capital Adequacy

Do you have the right Human Capital?

Is the Bank . . .

⚫Well capitalized?

⚫Adequately capitalized?

⚫Under-capitalized?


Why Now?

Competitive Changes◦ Economic rebound – more opportunity◦ Human capital as a differentiator

Labor Market Changes◦ Demographic trends◦ More dynamic labor markets

Organizational Changes◦ New organizational structure◦ New focus on leadership and governance


The Business Case


“People aren’t a company’s most important asset . . .

the RIGHT people are.”

– Jim Collins, Good to Great


Business Strategy and Drivers

Human Capital Strategy

Talent Strategy

Acquiring Talent• Recruiting• Selection/Hiring

Identifying Talent• Assessment• Performance Reviews

Develop Talent• Job Assignments• Coaching and

Mentoring• Promotions

Business Strategy and Drivers

determine“Talent for what?”

Strategy is future focused: What we have today may not be what we need in the future.

The Link to Business Strategy


Center for Creative Leadership


The ONLY thing that will matter

TALENT

What is “Talent”?Consider this: An employee known to be

High Performing

with High Engagement

and High Aspirations

IMPACTING PEOPLE LLCGSB-2018 16

Talent Assessment Process

Necessary for Succession Management

Can stand alone w/o Succession

Calibrated with multiple inputs

Can change over time


Talent Assessment Process

A process of identifying HIGH-POTENTIAL

ASSOCIATES and then evaluating and

developing their skills and competencies

in preparation of advancement into

POSITIONS THAT ARE KEY to the success

of the business strategy.


Key Concepts

Two Distinct Components:

1. Key POSITIONS

2. Key TALENT


What Are Key Positions?

• Critical to strategic goals

• Key leadership and functional expertise

• Defined by:◦Key Responsibilities – WHAT is to be accomplished

◦Competencies – HOW work gets done (knowledge, skills, and abilities)


Key Position Characteristics

1. Has direct impact on the company’s culture, strategic success, and profitability

2. Having significantly more top talent in these roles would enhance the success of the business model

3. Usually less than 15% of all positions4. Not determined by hierarchy but rather by

impact


Identifying Key Positions

Goal Rationale

•Identify which jobs are mission critical

•Less than 15% of jobs

•Want Top talent in mission critical roles

•Strategy executed by key positions

•Don’t want “B/C” players in strategic roles

•Top talent impacts the bottom line


ASSESSING TALENT


Talent Assessment

Dimensions of Talent:

•Performance – Delivering on goals, results, and accountabilities

•Potential – the ability to adapt to and “fit” into increasingly complex roles and environments:

- Personal and Professional Motivation- Intellectual Curiosity- Innovation and Insight- Engagement- Determination


Performance:Track Record of Success

• Most recent performance review ratings

• Feedback from others – 360 feedback

• Stretch goals and contributions

Questions to ask:•Does this person have a proven track record for accomplishing

impressive results?

•Are any potential inconsistencies “derailers”?

•Are they already performing at the next level?


Assessing Potential

• It is multi-faceted

• Prioritize most important facets to evaluate•Values•Competencies

• It is ALWAYS a judgment call•Minimize subjectivity through comprehensive involvement•The more evidential experience, the better your judgment will be


Questions to Consider Potential

• How do unexpected changes affect this person’s performance?

• How does this person respond to obstacles?

• Does this person inspire others and lead through persuasion and influence?

• Does this person have initiative and seek additional responsibility?

• Does this person continually offer solutions and new ideas?


Characteristics of Potential

Track Record

AspirationsLearning

Agility

• Multi-year performance track record• Relevant experiences & qualifications

• Strong career desires• Ambition to be challenged and

continuously grow skills and experiences

• Cognitive abilities• Ability and willingness to learn from experience

and apply to new situations• Ability to adapt to higher level of job complexity


Source: Center for Creative Leadership

Source: American Bankers Association


9 - Box Matrix - Example


Source: McKinsey 9-box Grid


9 - Box Matrix - Example


Candy Lane

Peter Jensen

Andrea West

Julius Quo

Andrew Layman

Jane Austin

Pat Richardson

Sandy Sneed

Terry Non Lonnie Bates


Example 1


Candy Lane

Peter Jensen

Andrea West

Julius Quo

Andrew Layman

Jane Austin

Pat Richardson

Sandy Sneed

Terry Non

Lonnie Bates

Lindy Noodle

Jackson Normandy

Andy Coffman


Example 2


Talent Assessment Results

•Quantity and Quality of existing talent

•Relevant to all “people” processes:•Recruiting

•Development

•Rewards

•Performance Management

•Succession


“ARC” Model

“ ” – Accelerate development; test potential

“ ” – Retain and motivate; continue to grow

“ ” – Coach or change; improve performance

Remember: All positions and all employees are important to the organization!


Re-Recruit

Identify the “Starting Lineup”

⚫How do we define?

⚫Who are they?

⚫How many do we have?

⚫What’s our bench strength?

The “A” team!


Reward and Retain

Nurture them:

⚫Core staff

⚫Dependable, content

⚫Some have capacity/desire to moveup/develop

Take good care of the “CORE” team!


Take aCtion

Pay attention – talk “banker” talk!

⚫Special Assets Portfolio

⚫May be new to the role

⚫Workout portfolio

“C” team: Coach them up or

coach them out!


TALENT AND SUCCESSION


Succession Management

An integrated set of proactive processes within talent management that identifies and prepares successors for key roles needed to deliver the business strategy.

Processes include:

⚫Talent Assessment

⚫Succession Planning

⚫Development Planning


Why is it important to have a succession plan?⚫ To avoid extended and costly vacancies in key

positions and assure the stability of business operation

⚫ To provide development opportunities for associates, thereby increasing retention of high-potential associates

⚫ To develop a diverse workforce


Components of a Succession Plan

1. Organizational Summary of key issues and risks2. Current Organization Chart (Mission Critical

Positions)3. Current Job Description(s)

◦ Key responsibilities and accountabilities◦ Competencies needed for success◦ Qualifications

4. Readiness Chart(s)5. Profile(s) of potential successors6. Development Plans for potential successors


The RIGHT people . . . in the RIGHT seats . . . for the RIGHT time


Succession Readiness

Identify for key positions

1. Critical skills and competencies

2. Potential candidates for succession

3. Readiness level for succession

4. Developmental needs for skills or competencies


SUCCESSION READINESS PLAN

TITLE:

COMPETENCIES NEEDED:

CURRENT INCUMBENT:

COMPLETED BY;

DATE:

Candidate NameCurrent Position Title

CurrentDepartment

Readiness Level

StrengthsDevelopment

NeedsInterimReady Now

2-3yrs 3-5 yrsLong Shot


Succession Readiness

Succession Plan Process

1. Discuss roles, responsibilities, and competencies of each key position for succession

2. Discuss candidates identified in one-on-one meetings and their projected readiness levels

3. Discuss known strengths and development needs of each candidate


4. Prioritize candidates for formal leadership evaluation for formal development plan

5. Assess gaps in succession process to ensure contingency planning for open key positions

6. Identify potential legal or diversity issues



7. Identify leadership assessment tool and conduct evaluations

8. Develop detailed development / action plan for each identified associate

9. Continually monitor associate progress toward development goals

10.Update succession plan annually, at minimum



Succession Plan Tools

1. Job Descriptions for key positions

2. Organizational Chart(s)

3. Leadership Competencies

4. Talent Assessment Grid

5. Readiness Level charts

_______________________________________________1. Compilation of demographic data for Successor Candidates (HR)2. Development Plans for Successor Candidates (HR)3. Tracking / monitoring tools (HR)


Key Position Planning


Executive

2-3 years

4-5 years

Long Shot

Interim

Development Planning

Individual Development Plan:

Clarifying the development gap between what possible successors can already do and what they must do to qualify for advancement


Job assignments

On-the-job training

Off-the-job degree

programs

Development programs

Conferences and

professional association affiliations

Developing others

Reading

Project teams

Mentors

Developmental Activities

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GSB-2018 IMPACTING PEOPLE LLC


ORGANIZATIONAL DESIGN

ORGANIZATIONAL STRUCTURE

JOB DESIGN


Developing the A-Team

1. Know them

2. Tailor rewards / recognition

3. Develop retention strategies

4. Tell them!

5. Allocate appropriate development $$

6. Track retention


Summary

Succession strategies for all levels

✓Ownership

✓ Board

✓ CEO

✓ Key Positions


Summary

Get real about Talent Assessment!

✓Re-recruit the Top Talent

✓Motivate and Retain the Core

✓Change or Coach as needed


SummaryAt the end of the day, it’s all about the “M”!


Cheryl Thomas, SPHR, SHRM-SCP

Managing DirectorImpacting People, LLC

847.274.8783

[email protected]

QUESTIONS?
