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SUCCESSION PLANNING

Untoro dan Yudhi

If you dont know where youre going, youll


probably end up somewhere else.
David P. Campbell, Author, Senior
CCL, book title

Fellow,

DEFINITION

Succession planning is perpetuating the enterprise by lling the


pipeline with high-performing people to assure that every
leadership level has an abundance of these performers to draw
from, both now and in the future.
A systematic process designed to:
1.

Identify key leadership positions and hard-to-ll positions

2.

Identify the critical competencies that employees in those


positions require

3.

Prepare for their replacement to ensure the continued


ability of an organization to meet its strategic goals and
supporting objectives

WHY ITS MATTERS?

Replacing executive staff can be expensive (recruiting agencies)


and is time-consuming.
Need to balance internal appointments with fresh blood
(different experience and new ideas) - hiring gifted people is a
tactic not a strategy.
Succession planning aims to reduce staff turnover by improving
commitment and retention.
It meets healthy career path expectations for staff

OBJECTIVE

Getting the
right people
with the right
stuff in the
right places at
the right time.

DEFINING THE RIGHT STUFF


Right Stuff =

Skills + Aptitudes
+ Experiences to lead
successfully in the future
Performance + Potential

QUESTION TO ANSWER
What exec roles have now and need in future?
What are pathways to those positions?
Key competencies required?
Who is ready to take over critical roles?
When will they be ready for promotion?
How much have we in budget to develop potential
leaders?

THE PIPELINE MODEL TO INCREASE YOUR


SUCCESSION PLANNING EFFECTIVENESS
The Focus Should Be Performance
Too many organizations push high-potential people into the leadership
pipeline, and this can cause damage because many of these individuals
will be unable to perform at appropriate leader- ship levels.
The Pipeline Demands a Continuous Flow
As a result, you cant just do succession planning for one leadership
level. All levels must be included..
The Pipeline Turns Must Be Fully Understood
People need to be working at the right level, and this cannot be
determined unless the skills, time applications, and work values for
each level are clearly communicated and assessed.
Short-Term
and
Long-Term
Must
Be
Considered
Simultaneously
Its not enough to do succession planning to meet immediate needs.
Nor is it sufcient to build a reservoir of leaders for the future.

HOW TO DO SUCCESSION PLANNING


THAT FILLS THE PIPELINE
Tailor the Leadership Pipeline model to

WHERE DO WE START?
Start where the pain is
most acute.
Usually

senior level
Identify critical/linchpin
positions
Cascade down to include
lower levels

Ask, Where are we most at


risk?
Impending

retirements
Expanding/new business
Critical levels of strategy
Highly specialized expertise

TALENT ASSESSMENT

Develop and communicate standard


competencies and other evaluation
criteria to all.
Obtain input from multiple sources.
(Supervisors, multi-rater feedback,
assessment center, simulations, self
and peer nominations).
Develop talent to meet future
demands of organization.
Conduct regular talent reviews with
senior leaders.

NINE-BOX MATRIX ONE


STANDARD WAY TO RANK

Typically based on
competency-based
performance
reviews

Performance

Low

Promotability/Potenti
al
Medium
High

L
o Low
w Performe

Questionabl
e Mediu
Performer

M Questionab
e le
d Performer

Solid
Performe
r

H
i
g
h

Solid
Performe
r

Strong
Performer

Source: AQPC, The Matrix: A Tool for Succession Management

Solid
Performer
Strong
Perform
er
Top
Perform
er

DISCUSSION QUESTIONS
How

objective and
inclusive is your
process for
selection?
What does being in
the pipeline mean?
Do they know they
are in the pipeline?

TRANSPARENCY DO YOU
TELL THEM, OR NOT?
Do you
Tell all potential candidates their ratings
Tell only those who make it into the pipeline
Explain that participation needs to be continuously
earned
Dont tell anyone until ready to make offers

BASIC PREMISE FOR


TRANSPARENCY
given that the employee contract is now based on
performance rather than loyalty or seniority
people will contribute more if they know what rung
theyre on.
Jay A. Conger, Robert M. Fulmer,
Developing Your Leadership Pipeline,
HBR, December 2003, p.6.

SESSION AGENDA

Whats the Current State?

Selecting for the Pipeline

Developing Leaders
Additional Resources

DEVELOPING YOUR
LEADERSHIP PIPELINE
Five Guidelines:
1.
Focus on Development
2.
Identify Linchpin Positions
3.
Make it Transparent
4.
Measure Progress Regularly
5.
Keep it Flexible

Source: Jay A. Conger, Robert M. Fulmer, Developing Your


Leadership Pipeline, Harvard Business Review, December 2003.

CPS Human Resource Services Study

What do Future Leaders


Need to Learn?
1.

2.

3.

Knowledge & understanding


outside employees dept. or
function
Knowledge & understanding
at the enterprise level
A broad network of
relationships

How are Learning Needs Being Met?

2005 CPS Human Resource Services. All rights


reserved.

Formal leadership
development programs
Action Learning/other
projects
Rotational and/or
developmental assignments
Data-driven devt. (based on
assessments, feedback and
other sources)
Senior leaders involvement
Structured building of
relationships

LEADER COMPETENCIES ARE


NOT ENOUGH

Each level of leadership requires a unique mix of:


Skills
Time Applications
Values (Priorities)
Six passages: (bends in the pipeline)
1.
2.
3.
4.
5.
6.

Managing self to managing others


Managing others to managing managers
Managing managers to functional manager
Functional manager to business manager
Business manager to group manager
Group manager to enterprise manager (CEO)

Source: Ram Charan, Stephen Drotter, James Noel, The Leadership Pipeline, JosseyBass, 2001

COMMON DEVELOPMENT
METHODS

On The Job:
-

Individual Development Plans

Stretch assignments

Formal Development:

Rotational assignments

Cross-functional team projects

Performance support tools

Cross-functional promotion
pathways

Shadowing exec-level
processes

Reference ware

Assessments
Coaching
Mentoring
Formal training
Action Learning
Discussion groups/book
clubs

STUDY ON WHAT WORKS IN


LEADERSHIP DEVELOPMENT
Study done with CEO Magazine, looked at 300+
global and regional companies.
Identified 20 best companies for leaders based on
quantity and quality.
Identified 6 vital practices from the 40 they studied
(accounted for 67% of the difference)
The best companies work at 3 levels: organization,
team, and individual.

Source: Confronting The Leadership Crisis: What Works, What Doesnt, What Lies
Ahead, Hay Group & Chief Executive magazine Research into The Best
Companies For Leaders, 2006

VITAL SIX PRACTICES


1.
2.
3.
4.
5.
6.

CEO and senior leaders make leadership development a top


priority.
Leaders at all levels accountable for creating a climate that
motivates employees to perform at their best.
Leadership teams receive training and coaching to work together
more effectively.
Mid-career managers receive job-shadowing opportunities.
High-potentials receive objective 360-degree assessments and
feedback on their leadership ability early on.
Mid-level managers given adequate time for leadership
development activities early in their careers.
Source: Confronting The Leadership Crisis: What Works, What Doesnt, What Lies Ahead, Hay
Group & Chief Executive mag. Research into The Best Companies For Leaders, 2006

SECOND LEVEL RECOMMENDATIONS


If resources permit:
External MBA programs
External coaches for senior executives
Internal coaches for mid-level managers
Specific skill-building for lower-level managers
Externally run development programs
Job rotations
Source: Confronting The Leadership Crisis: What Works, What Doesnt, What Lies
Ahead, Hay Group & Chief Executive magazine Research into The Best Companies
For Leaders, 2006, www.haygroup.com

MEASURING YOUR SUCCESS


ALONG THE WAY
% internal placements
% candidates ready now,
ready soon and ready longterm
Retention rates
Success rates of promotions
What were you trying to
accomplish in the first
place?

TECHNOLOGY AS AN
ENABLER
ERP
Vendors

Performance
Management Vendors

LMS
Vendors

24/7 global access to information


Search based on specific criteria
Integrates with other HCM data
Provides gaps and strengths at a glance
View of talent across
geographies/functions

TRANSFORMING POTENTIAL FROM


A NEGATIVE TO A POSITIVE
Three Categories of Potential
Turn potential
Able to do the work at the next level in three to
ve years or sooner.
Growth potential
Able to do the work of bigger jobs at the same
level in the near term.
Mastery potential
Able to do the same kind of work currently being
done, only better.

SETTING CLEAR STANDARDS TO


ASSESS POTENTIAL

Exhibit 10.1. Standard for Judging Potential. Turn Potential


(can be promoted through the next passage within three to
ve years) Exhibits operating, technical, and professional
skills that are extremely broad and deep. Exhibits
managerial skills that are expected at the next highest
organizational level. Demonstrates leadership skills that
are expected at the next highest organizational level.
Regularly works at building new skills and abilities.
Aspires to higher level challenges and opportunities.
Demonstrates re in the belly. Has a business
perspective beyond current organizational level. Is
oriented toward total business results, not just focused on
the success of own area. Please note: This designation needs
at least one-over-one conrmation since the immediate boss
has not hired people for her own level but her boss has.

Growth Potential (can be promoted to bigger job


at same leadership level within three years)
Exhibits operating, technical, and professional
skills that are high for current organizational
level. Exhibits managerial skills that are high
for current organizational level. Frequently
demonstrates leadership skills that are high for
current position. Adds new skills when the job
calls for it. Aspires to greater challenges but
primarily at the same organizational level. Is
motivated to do more than is expected. Has a
business perspective beyond current position. Is
focused on the success of own area and the team.

Mastery Potential (can improve in current role


with same effort) On balance, exhibits operating,
technical, professional, managerial, and leadership
skills that are acceptable for current organizational
level. Demonstrates little effort to build new skills
but keeps current skills sharp. Aspires to stay
with the company, as opposed to assuming bigger
challenges or higher personal contributions. Is
motivated to do what is needed in current job.
Understands the job. Is focused primarily on
technical success. Please note: The individual may
have the desire, but not yet demonstrated the
ability, to progress to bigger jobs.