Succession Planning

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Succession Planning

• The Re-birth of Kermit the Frog

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Problem

• Aging-Out of Baby-Boomers
• Critical global labor shortage-some organizations
  are missing 2 generations of workers
• Currently 1 in 5 executives is eligible for
  retirement in the next decade
• 40 of companies do not have a succession plan
  for their CEO
• Recognition that there is a problem

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Labor Force
Source Occupational Outlook Quarterly, Winter
2005-2006
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Federal Employee Challenge

• 1960s President Kennedy inspired future employees
• Lose-one, fill-one philosophy approach was
  pattern
• 50 of Federal employees and 70 of senior
  managers will be eligible to retire by 2010. The
  GAO estimates that by 2007 55 of SES employees
  will retire.
• OPM estimates peak retirement will occur between
  2008-2010
• When the boomers leave they will take with them a
  vast reserve of knowledge. Plans must be made to
  harvest it and then replace it.

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Current Challenges

• How do we fix this?
• Developing leaders is priority one
• How do we ensure the transfer of tacit knowledge
  and experience

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Purpose of succession plan

• Preparing for the transfer of leadership Grow
  their Own
• Manage Diversity to survive in global culture
• Control the learning curve
• Increase commitment and loyalty

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Examples of successful succession planning

• Sports teams
• Understudies
• The executive branch of government

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Examples of organizations with no succession plan

• Rock Bands
• Family owned businesses

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Goals of Succession Plans

• Identification of company critical skills
• Identification of company critical positions
• Identification of future vacancies
• Identification of future leaders
• Identification of training required

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Traditional Approach

• Executives identify their replacements
• Secret process
• HR usually not involved
• Candidates not informed
• Does not emphasize career development
• Plans are devised consisting of charts and tables

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Integrative Approach

• Succession planning utilizing candidate
  development-Story telling
• Future-oriented and tied to company strategic
  plan
• Flexible and Responsive
• Strategically linked to HR
• Use Automated Capital Management Systems- Provide
  strategic and objective decision making tools

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How to Begin

• Determine the Objectives of the plan
• Examine the organization business strategy-(SWOT
  analysis)
• Determine current talent bench via gap analysis
• CEO must champion plan

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Key Elements in Plan Design

• Championed by top management
• Integration with strategic business plan
• Identification of critical positions
• Determination of future operational
  criteria-success factors
• A review of HR forecasting
• A system of communication
• A system for identification, nomination and
  selection of candidates

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Plan Design continued

• Determination of training needs
• A system to monitor candidate development
• Feedback
• Gap analysis
• Time line for succession and candidate readiness

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Employee Buy In

• A clearly defined mission and business purpose
• A supportive culture
• A perception that succession planning is a
  strategic priority
• Credibility in the HR function

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Human Capital Management Systems

• Tracks number of high potential employees
• of high potential to exempt workforce
• Average number of moves per year
• Number of key positions
• Number positions for which there is no internal
  candidate
• Average age and years of service

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Implementation of the Plan
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Leadership Development

• Develop concept of Leadership Engine-a system
  geared to drive the company forward
• Identify the Talent
• Train and Develop
• Coach and Groom
• Dont let talent walk out the door

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Conclusion

• The graying of the workforce is a fact. Key
  positions need to be identified and their
  replacements planned for by providing the
  appropriate mentoring and training. Story-telling
  has become an effective way of passing the baton
  to the workforce of the future.

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Thoughts to leave you with

• Leaders take inspired actions that transform
  their organizations
• Institutions succeed over the long term because
  they continuously regenerate leadership at all
  levels.

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Questions?