William J. Rothwell - Effective Succession Planning (2005)(3-e)(en)

58	BACK GRO UN D INFO RM ATI ON ABO UT SU CCE SS ION PL ANN IN G AN D MAN AGE ME NT

this reason, high-potential employees are expected to produce while participating in the developmental program.

▲Characteristic 12: Developmental Programs Establish Familiarity with Who, What, When, Where, Why, and How. Large companies are so large that developmental experiences are, in part, established to familiarize future leaders with the organization’s environment. That is a key emphasis of some developmental programs. As a result, participants become much more knowledgeable about the corporate culture—who does what, when they do it, where business-related activities are performed, why they are worth doing, and how they are accomplished. In this way, the internal development program emphasizes knowledge, skills, and abilities unique to the organization and essential to success in performing at higher organizational levels.

▲Characteristic 13: Developmental Experiences Encourage Critical Questioning. Top managers who address high-potential employees find that they are occasionally confronted with critical questions about ‘‘the way we have always done it.’’ Critical questioning encourages creative thinking by top managers, as well as by high-potential employees.

▲Characteristic 14: Succession Planning Emphasizes Qualities Necessary to Surpass Movement to the Next Higher-Level Job. Exemplary SP&M programs emphasize more than merely preparing individuals to move from one ‘‘box’’ on the organization chart to the next higher-level ‘‘box.’’ Instead, they emphasize the building of competencies leading to advancement beyond the next job. They are, thus, long term and strategic in scope and tend to build competencies in line with company business objectives and values.

▲Characteristic 15: Formal Mentoring Emphasized. Mentoring and coaching have been the subject of growing attention in recent years as management writers have recognized that individual development is more heavily influenced by the on-the-job work environment than by off-the-job training, education, or development experiences.3 (Indeed, as much as 90 percent of an individual’s development occurs on the job.4) A mentor or coach provides advice about dealing with challenges presented by the work environment, including interpersonal problems and political issues. ‘‘Mentoring occurs when a talented junior person forms an attachment to a sensitive and intuitive senior person who understands and has the ability to communicate with the individual.’’5 Mentors are teachers. They are not in positions of authority over their prote´ge´s or mentees. Nor do they necessarily serve as special advocates and cheerleaders for their prote´ge´s, as sponsors do. Mentors are typically chosen by the prote´ge´ or mentee; hence, most mentoring occurs informally. However, some organizations sponsor formal mentoring programs in which an effort is made to match promising junior employees with more experienced, highperforming senior employees.

Moving to a State-of-the-Art Approach	59

Other Characteristics

On your list, you may have identified other characteristics of an effective SP&M program. In reality, of course, there are no ‘‘right’’ or ‘‘wrong’’ characteristics. Indeed, there isn’t a foolproof formula for success. But there are certain essentials to a good succession process6:

▲A Systematic (rather than anecdotal) Way of Identifying Candidates

▲Cross-Divisional Sharing of People and Information

▲Leadership That Rewards Managers for Promoting (rather than holding on to) Their Best Employees

▲Career Paths That Move Not Just Up a Specialized Ladder but Across the Company

▲Frequent Opportunities for Employees to Accept New Challenges

▲Recognition That Employees Have a Stake in the Company and Share Its Successes

In my survey of succession planning practices, I asked about the characteristics of effective SP&M programs. The survey results are presented in Exhibit 3-1. I have used those results to create a questionnaire, shown in Exhibit 3-2, which you can use to assess issues for inclusion in the SP&M program in your organization.

The Life Cycle of Succession Planning and Management Programs: Five Generations

In my consulting practice, I have discovered that many decision-makers in organizations that possess no SP&M program would like to leap in a single bound from no program to a state-of-the-art program. That is rarely possible or realistic. It makes about as much sense as trying to accelerate an automobile from a standing stop to 100 miles per hour in one second.

It makes much more sense to think in terms of a phased-in roll-out. The basis for this roll-out approach is my view that organizations go through a life cycle of development as they implement SP&M programs. At each generation, they gain sophistication about what to do, how to do it, and why it is worth doing.

The first generation of SP&M is a simple replacement plan for the CEO. This is easiest to sell if the organization does not have such a plan, since most CEOs realize what might happen to their organizations if they are suddenly incapacitated. (See Exhibit 3-3.) The target of the SP&M program in the first generation is the CEO only, and involving the CEO ensures that he or she

(text continues on page 66)

Exhibit 3-1. Characteristics of Effective Succession Planning and Management Programs

Does Your Organization’s

How Important Do You Be-

Characteristics of Effective Succession

Succession Planning

lieve This Characteristic to Be

Program Have This

for an Effective Succession

Planning Programs

Characteristic?

Planning Program?

How Your Organization:

Not at

Very

All Important

Important

No

1

2

3

4

5

6

Yes

(Mean Response)

A

Tied the succession planning pro-

gram to the organizational strategic

89%

11%

4.89

plans?

B

Tied the succession planning pro-

56%

44%

4.00

gram to individual career plans?

C

Tied the succession planning pro-

67%

33%

3.67

gram to training programs?

D

Established measurable objectives

for program operation (such as num-

67%

33%

3.67

ber of positions replaced per year)?

E

Identified what groups are to be

served by the program, in priority

33%

67%

3.44

order?

F	Established a written policy statement	78%	22%	3.78
	to guide the program?
G	Articulated a written philosophy	78%	22%	3.67
	about the program?
H	Established a program action plan?	100%	0%	4.56
I	Established a schedule of program	67%	33%	4.22
	events based on the action plan?
J	Fixed responsibility for organizational	89%	11%	4.00
	oversight of the program?
K	Fixed responsibility of each partici-	78%	22%	3.78
	pant in the program?
L	Established incentives/rewards for	11%	89%	3.22
	identified successors in the succes-
	sion planning program?
				(continues)

Exhibit 3-1. (continued)

Does Your Organization’s

How Important Do You Be-

Succession Planning

lieve This Characteristic to Be

Characteristics of Effective Succession

Program Have This

for an Effective Succession

Planning Programs

Characteristic?

Planning Program?

How Your Organization:

Not at

Very

All Important

Important

1

2

3

4

5

6

Yes

No

(Mean Response)

M

Established incentives/rewards for

11%

89%

3.00

managers with identified successors?

N

Developed a means to budget for a

56%

44%

4.00

succession planning program?

O

Devised means to keep records for

individuals who are designated as

56%

44%

3.78

successors?

P

Created workshops to train manage-

ment employees about the succes-

33%

67%

4.00

sion planning program?

Q

Created workshops to train individu-

56%

44%

4.11

als about career planning?

R

Established a means to clarify present

100%

0%

4.00

position responsibilities?

S	Established a means to clarify future	67%	33%	3.89
	position responsibilities?
T	Established a means to appraise indi-	67%	33%	4.00
	vidual performance?
U	Established a means to compare in-
	dividual skills to the requirements of	44%	56%	3.89
	a future position?
V	Established a way to review organiza-	67%	33%	4.00
	tional talent at least annually?
W	Established a way to forecast future	67%	33%	3.89
	talent needs?
X	Established a way to plan for meeting
	succession planning needs through	56%	44%	3.89
	individual development plans?
Y	Established a means to track devel-
	opment activities and prepare suc-	44%	56%	3.89
	cessors for eventual advancement?
Z	Established a means to evaluate the
	results of the succession planning	44%	56%	3.89
	program?

Source: William J. Rothwell, Results of a 2004 Survey on Succession Planning and Management Practices. Unpublished survey results (University Park, Penn.: The Pennsylvania State University, 2004).

64	BACK GRO UN D INFO RM ATI ON ABO UT SU CCE SS ION PL ANN IN G AN D MAN AGE ME NT

Exhibit 3-2. Assessment Questionnaire for Effective Succession Planning and Management

Directions: Complete the following Assessment Questionnaire to determine how well your organization is presently conducting SP&M. Read each item in the Questionnaire below. Circle (Y) for Yes, (N/A) for Not Applicable, or an (N) for No in the left column opposite each item. Spend about 15 minutes on the questionnaire. When you finish, score and interpret the results using the instructions appearing at the end of the Assessment Questionnaire. Then share your completed Questionnaire with others in your organization. Use the Questionnaire as a starting point to determine the need for a more systematic approach to SP&M in your organization.

The Assessment Questionnaire

Circle your
response
below:			In your organization, would you say that SP&M:
Y	N/A	N	1.	Enjoys top management participation, involvement
				and support?
Y	N/A	N	2.	Is geared to meeting the unique needs of the organi-
				zation?
Y	N/A	N	3.	Has been benchmarked with best-in-class organiza-
				tions?
Y	N/A	N	4.	Is a major focus of top management attention?
Y	N/A	N	5.	Is the dedicated responsibility of at least one high-
				level management employee?
Y	N/A	N	6.	Extends to all levels rather than being restricted to top
				positions only?
Y	N/A	N	7.	Is carried out systematically?
Y	N/A	N	8.	Is heavily influenced by a comparison of present per-
				formance and future potential?
Y	N/A	N	9.	Is influenced by identification of high-level replace-
				ment needs?
Y	N/A	N	10.	Has sensitized each executive to an obligation to
				identify and prepare successors?
Y	N/A	N	11.	Has prompted the organization to establish and con-
				duct specific developmental programs that are de-
				signed to accelerate the development of high-
				potential employees?
Y	N/A	N	12.	Is guided by a philosophy that high-potential employ-
				ees should be developed while working rather than by
				being developed primarily through off-the-job experi-
				ences?

Moving to a State-of-the-Art Approach	65

Y	N/A	N	13.	Has prompted the organization to focus develop-
				mental programs on increasing the familiarity of high-
				potential employees with who does what, when they
				do it, where they do it, why they do it, and how they
				do it?
Y	N/A	N	14.	Has prompted the organization to focus develop-
				mental programs on the critical questioning of ‘‘the
				way things have always been done’’?
Y	N/A	N	15.	Emphasizes the qualities or competencies necessary
				to surpass movement to the next higher-level job?
Y	N/A	N	16.	Has prompted your organization to examine, and
				perhaps use, formal mentoring?
Y	N/A	N	17.	Is conducted in a systematic way?
Y	N/A	N	18.	Encourages the cross-divisional sharing of people
				and information?
Y	N/A	N	19.	Is reinforced by a leadership that actively rewards
				managers for promoting (rather than holding on to)
				their best employees?
Y	N/A	N	20.	Is supported by career paths that move not just up a
				specialized ladder but across a continuum of profes-
				sional competence?
Y	N/A	N	21.	Is supported by frequent opportunities for employees
				to accept new challenges?
Y	N/A	N	22.	Is driven, in part, by recognition that employees have
				a stake in the organization and share its successes?
Y	N/A	N	23.	Has prompted an explicit policy favoring promotion
				from within?

Total

Scoring and Interpreting the Assessment Questionnaire

Give your organization 1 point for each Y and a 0 for each N or N/A listed above. Total the points from the Y column and place the sum in the line opposite to the word TOTAL above. Then interpret your score in the following way:

(continues)

66	BACK GRO UN D INFO RM ATI ON ABO UT SU CCE SS ION PL ANN IN G AN D MAN AGE ME NT

Exhibit 3-2. (continued)

Score
Above 20 points	Succession planning and management appears to be
	handled in an exemplary manner in your organization.
18–20 points	The SP&M efforts of your organization could stand im-
	provement. However, SP&M is being handled effec-
	tively, for the most part.
14–17 points	Succession planning and management is a problem in
	your organization. It deserves more attention.
Below 14 points	Your organization is handling SP&M in a crisis mode. It
	is very likely that successors for critically important posi-
	tions have not been identified and are not systematically
	developed. Immediate corrective action is desirable.

properly assumes an important leadership role for the program and does not try to delegate it prematurely to Human Resources or to other groups.

As I tell my clients, the CEO is the real customer for most SP&M efforts— and my view is supported by the opinions of members of many boards of directors. When the SP&M effort begins with the CEO, he or she understands what is involved in establishing a state-of-the-art SP&M program and is able to tailor it to suit his or her vision and strategy. Furthermore, he or she sets the example and sends a powerful message of personal commitment and support that is needed to make subsequent generations of such an effort successful.

It is worth noting that HR plays an important role. But it is essential to emphasize that HR does not ‘‘own’’ this effort. The ‘‘owner’’ is the CEO, and it is a position that (on this topic) he or she cannot delegate. HR leaders can certainly help: They can coordinate the effort, once leadership by the CEO has been exercised. They can provide advice and counsel about what to do, why it should be done, and how it should be done. But the CEO must lead the effort and be personally committed to it. Lacking the CEO’s personal support, commitment, and participation, SP&M efforts will fail.

The second generation is a simple replacement plan for the CEO and his or her immediate reports—that is, the senior leaders of the organization, the senior executive team. By extending the SP&M effort to the management tier below CEO and by identifying the successors of that group, senior managers are involved firsthand in designing and implementing a succession effort. Since they are the targets of that effort, they understand it, have a chance to refine it, and develop ownership in it. By actively participating in the effort, they gain a thorough understanding of it so that they can communicate to others in the third generation.

A key advantage of using the senior executive team as guinea pigs, so to speak, is that they are usually already well developed in their positions and are highly knowledgeable about what it takes to succeed in the business, industry,

Moving to a State-of-the-Art Approach	67

Exhibit 3-3. A Simple Exercise to Dramatize the Need for Succession Planning and Management

For a dramatic and compelling exercise to emphasize the need for an SP&M program, ask your CEO or the managers in your organization what the following people share in common:

Donald Terner, President, Bridge Housing Corp., San Francisco, Calif.

Robert E. Donovan, President and Chief Executive Officer, Abb Inc., Norwalk, Conn.

Claudio Elia, Chairman and Chief Executive Officer, Air & Water Technologies Corp., Somerville, N.J.

Stuart Tholan, President, Bechtel-Europe/Africa/Middle East/Southwest Asia, San Francisco, Calif.

John A. Scoville, Chairman, Harza Engineering Co., Chicago, Ill.

Leonard Pieroni, Chairman and Chief Executive Officer, Parsons Corp., Pasadena, Calif.

Barry L. Conrad, Chairman and Chief Executive Officer, Barrington Group, Miami, Fla.

Paul Cushman III, Chairman and Chief Executive Officer, Riggs International Banking Corp., Washington, D.C.

Walter Murphy, Senior Vice President, AT&T Submarine Systems Inc., Morristown, N.J.

Robert A. Whittaker, Chairman and Chief Executive Officer, Foster Wheeler Energy International, Clifton, N.J.

Frank Maier, President, Ensearch International Ltd., Dallas, Tex.

David Ford, President and Chief Executive Officer, Interguard Corp. of Guardian International, Auburn Hills, Mich.

hadreplacementsreadyintheirorganizations? onboardtheplanewithCommerceSecretaryRonBrownwhenitcrashedin

.1996Don’tyouwonderifthey Answer:Thesewerethepeople

Used with permission from Nursing Management, 25:6 (June 1994), pp. 50–56, Springhouse Corporation (www.Springnet

.com).

and corporate culture. By participating in the development of the SP&M effort, they ensure that it fits the corporate culture and aligns with organizational strategy. What is more, they set an example and, by doing that, send a powerful message to others in the organization that the SP&M effort is important and worthy of action, interest, and participation.

The third generation is an SP&M program for middle managers, who are usually the direct reports of the senior executive team, and perhaps (if the organization’s leaders support it) for others on the organization chart as well. It is at this point that the model of SP&M, described later in this chapter (see Exhibit 3-5), is first widely used. Policies and procedures for SP&M are drafted if they were not already prepared formally in earlier generations; competency models by department or hierarchical level are first developed if they were not