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Succession Planning Overview
STATE ACTION FOR EDUCATION LEADERSHIP PROJECTSuccession Planning Conference
March 11, 2005Delaware Technical & Community College
Loren AppelbaumSenior Consultant
Development Dimensions International, Inc.
C O M P E T I T I V E A D V A N T A G E. R E A L I Z E D.
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Outline for discussion
Organizational Context/Need
Transitional Challenges & Roles
The Success Profile
Framework for Succession Planning
Identifying Potential
Diagnosing Strengths and Development Needs
Development Planning
Key Decisions
Realizing results
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Trends in Leadership Succession Planning
• Accelerated development of highest potentials, vs. replacement planning
• Accountability at senior leadership levels, vs. HR (not a spectator sport)• Drive toward talent acquisition, development integrated into overall
talent management approach• Holistic approach (success profiles)• Stronger focus on identifying highest potentials against relevant,
objective criteria• Earlier identification of talent for longer term growth, development,
succession• Board level interest in leadership development• Sarbanes-Oxley influence • Need for efficiencies in leadership assessment and delivery;
leveraging use of technology
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“The thing that wakes me up in the middle of the night is not what might happen to the
economy or what our competitors might do next, it is worrying about whether we have
the leadership capability and talent to implement our global strategies.”
David Whitman, Chairman/President/CEO, Whirlpool Corporation
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Increasing Failure—Decreasing Confidence
Two thirds of all major companies worldwide have replaced their CEO at least once since 1995.
- Drake Beam Morin Inc.
Four in ten leaders fail within the first 18 months on the job.
- Manchester Consulting
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Readiness
75% of companies worldwide are not confident in their ability to fill strategic leadership positions over the next five years.
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Conference Board StudyDeveloping Business Leaders for 2010
• Exponentially heightened senior leadership requirements – Influence/communication – Extraordinary strategic thinking– Tolerance for ambiguity – Talent Development
• Need to identify potential– “The hard part” – Only 34% report effective practices– Accuracy essential, but the “hows” are
elusive
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Risk of DerailmentRisk of Derailment
Among approximately 6,000 respondents, 2/3 reported that their current leader displays behaviors that could derail his/her career.
- Development Dimensions International, 2001
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Organizational ReadinessOrganizational Readiness
68% of organizations surveyed report that they are not prepared to deal with the leadership crisis.
- Development Dimensions International, 2001
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Leadership Development and Succession Planning is a Top Priority
Top 5 management issues; up 25%(700 Global Executives, Conference Board, 2002)
78%: Most Important/Top 5 Business Success Factors
(950 Executives, CEO Magazine/CCL, 2002) 91%: Top Enabler for Business Growth (Global CEOs, Conference Board, 2002) 47%: Major Business Priority (150 Global Corporations, Conference Board/DDI,
2002)
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When it’s working…
Work groups with strong leaders are 37% more likely to outperform other work groups, and are more satisfied, engaged, and loyal.
- Leadership Forecast Study, DDI, 2003
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Implications
Now more than ever, business conditions dictate that leaders who are less prepared for senior leadership will be placed into senior leadership roles. To avoid leadership failure and its effects, organizations will need systems, processes, and tools which prepare these leaders to manage the challenges they will soon face.
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What are the highest priority strategic
challenges facing the Delaware school
system?
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What do those challenges suggest in
terms of the leadership talent needed
within the system?
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ENSUREREADINESS
INVENTORYTALENT
Talent Optimization Approach
V I S I O NV I S I O NStrategic PrioritiesStrategic Priorities Cultural PrioritiesCultural Priorities
Leadership ImperativesLeadership Imperatives
BusinessLandscape
TalentNeeded
GamePlan
SuccessSuccessProfileProfile
Communication Accountability Skill Alignment MeasurementCommunication Accountability Skill Alignment MeasurementInsurancePolicy
CapacityCapacityNeedsNeeds
Select/DeploySelect/DeployTalentTalent
Focus/DriveFocus/DrivePerformancePerformance
IdentifyIdentifyPotentialPotential
AssessAssessReadinessReadiness
AccelerateAccelerateDevelopmentDevelopment
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Transitional challenges faced when moving into senior leadership roles
• Span of Influence• Tactical Control• Consequences of Failure• Business Scope• Visibility• Constituents
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Span of Influence
FROM Single team/ Single team/
function function managementmanagement
Small-group Small-group communicationscommunications
FROM Single team/ Single team/
function function managementmanagement
Small-group Small-group communicationscommunications
TO Multiple team/ Multiple team/
function managementfunction management Large, multi-group Large, multi-group
communicationscommunications
TO Multiple team/ Multiple team/
function managementfunction management Large, multi-group Large, multi-group
communicationscommunications
Common Reactions: Unclear expectations, strategic confusion Slow to build partnerships, alliances Difficulty navigating political environment
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Tactical Control
FROM Involvement in day-Involvement in day-
to-day operationsto-day operations Direct impact on Direct impact on
group outputsgroup outputs
FROM Involvement in day-Involvement in day-
to-day operationsto-day operations Direct impact on Direct impact on
group outputsgroup outputs
TO Detachment from Detachment from
day-to-day day-to-day operationsoperations
Indirect impact on Indirect impact on group outputsgroup outputs
TO Detachment from Detachment from
day-to-day day-to-day operationsoperations
Indirect impact on Indirect impact on group outputsgroup outputs
Common Reactions:Common Reactions: Reluctance to delegateReluctance to delegate Desire for personal recognition for group successDesire for personal recognition for group success Do-it-yourself solutionsDo-it-yourself solutions
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Consequences of Failure
FROM Limited-scale Limited-scale
consequencesconsequences Unit-specific Unit-specific
countermeasurescountermeasures
FROM Limited-scale Limited-scale
consequencesconsequences Unit-specific Unit-specific
countermeasurescountermeasures
TO Large-scale Large-scale
consequencesconsequences Organization-wide Organization-wide
countermeasurescountermeasures
TO Large-scale Large-scale
consequencesconsequences Organization-wide Organization-wide
countermeasurescountermeasures
Common Reactions:Common Reactions: More personal stressMore personal stress Unrealistic demandsUnrealistic demands Negative outlookNegative outlook
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Business Scope
FROM Basic unit Basic unit
responsibilityresponsibility Limited number of Limited number of
inputs/ variablesinputs/ variables
FROM Basic unit Basic unit
responsibilityresponsibility Limited number of Limited number of
inputs/ variablesinputs/ variables
TO Organization-wide Organization-wide
accountabilityaccountability Broader business Broader business
judgment neededjudgment needed Many variablesMany variables
TO Organization-wide Organization-wide
accountabilityaccountability Broader business Broader business
judgment neededjudgment needed Many variablesMany variables
Common Reactions:Common Reactions: Financial “cramming”Financial “cramming” Overemphasis on financial variablesOveremphasis on financial variables Poor business judgments Poor business judgments
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Visibility
FROM Limited visibilityLimited visibility Derailers disguisedDerailers disguised Less cultural impactLess cultural impact
FROM Limited visibilityLimited visibility Derailers disguisedDerailers disguised Less cultural impactLess cultural impact
TO Wide visibilityWide visibility Derailers visibleDerailers visible Greater cultural Greater cultural
influence – derailers influence – derailers mimicked by manymimicked by many
TO Wide visibilityWide visibility Derailers visibleDerailers visible Greater cultural Greater cultural
influence – derailers influence – derailers mimicked by manymimicked by many
Common ReactionsCommon Reactions:: Cultural damage; propagation of derailersCultural damage; propagation of derailers Unwanted turnoverUnwanted turnover Executive failureExecutive failure
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Constituents
FROM Focus on team/ Focus on team/
small groupsmall group Objectives set by Objectives set by
supervisorsupervisor
FROM Focus on team/ Focus on team/
small groupsmall group Objectives set by Objectives set by
supervisorsupervisor
TO Focus on broader Focus on broader
organizationorganization Objectives Objectives
self-imposedself-imposed
TO Focus on broader Focus on broader
organizationorganization Objectives Objectives
self-imposedself-imposed
Common ReactionsCommon Reactions:: Narrow focus; lack organization-wide visionNarrow focus; lack organization-wide vision Organizational stagnation, lack of progressOrganizational stagnation, lack of progress
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Leadership Succession Planning Requires…
• A pipeline of talent with the necessary skills and experiences to meet these challenges
• Leaders who can effectively execute key roles required at senior leadership levels
• Identification and alignment on a leadership success profile driven by the organization’s strategy and future direction
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The Success Profile
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Talent Optimization Approach
ENSUREREADINESS
INVENTORYTALENT
V I S I O NV I S I O NStrategic PrioritiesStrategic Priorities Cultural PrioritiesCultural Priorities
Leadership ImperativesLeadership Imperatives
BusinessLandscape
TalentNeeded
GamePlan
Communication Accountability Skill Alignment MeasurementCommunication Accountability Skill Alignment MeasurementInsurancePolicy
CapacityCapacityNeedsNeeds
Select/DeploySelect/DeployTalentTalent
Focus/DriveFocus/DrivePerformancePerformance
IdentifyIdentifyPotentialPotential
AssessAssessReadinessReadiness
AccelerateAccelerateDevelopmentDevelopment
SuccessSuccessProfileProfile
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DDI’s Leadership Blueprint®
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A Leadership Success Profile Needs to Consider the Whole Person
PERFORMANCE
EXPERIENCE
What I have done
COMPETENCIESWhat I am capable of
KNOWLEDGE
What I know
PERSONALATTRIBUTES
Who I am
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Competencies (Examples)(What one is capable of)
• Applied Learning• Business Acumen• Gaining Commitment• Coaching/Teaching• Communicating with Impact• Initiating Action• Developing Strategic Relationships• Empowerment/Delegation• Establishing Strategic Direction• Learning Orientation
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Job Experiences (What one has done)
• Operate in a high-pressure or high-visibility situation
• Implement an organizational-wide change• Develop and implement a plan to cut costs• Involvement with negotiating labor agreements,
contracts• Become heavily involved with a strategic alliance, or
partnership opportunity• Negotiate agreements with external organizations• Manage a downsizing
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Organizational Knowledge (What one knows)
• Functions• Processes (R&D, budgeting, selection etc.)• Systems• Services
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Personal Attributes/Enablers (Who one is)
• Adjustment• Ambition• Sociability• Interpersonal Sensitivity• Prudence• Inquisitiveness• Learning Orientation
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Personal Attributes/Derailers (Who one is)
• Approval Dependent• Argumentative (Defensive)• Arrogant• Attention Seeking (Self-Promoting)• Avoidant• Eccentric• Imperceptive• Impulsive• Perfectionistic (Micromanager)• Risk Averse• Volatile
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Leadership Failure…
• What do you think is the greatest cause of senior leadership failure? – Lack of knowledge (didn’t know enough)?– Lack of experience (never tried before)?– Skills/competency deficiencies (not enough
practice)?– Personal attributes/derailers (not cut out for
it)?
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LeadershipSuccess
What I know
What I have done
What I can do
Who I am
LeadershipFailure
Didn’t know enough
Never tried before
Not enough practice
Not cut out for it
Knowledge
Experience
Competencies
Personal
Attributes
Factors
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Implications for Succession Planning
• Developing and gaining alignment on the right success profile is critical
• Leadership challenges and roles need to be addressed in development planning
• The approach needs to provide highest ROI
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Identifying Identifying PotentialPotential
Success ProfileSuccess Profile
Diagnosing Diagnosing Dev’t NeedsDev’t Needs
Prescribing Prescribing SolutionsSolutions
Ensuring Ensuring DevelopmentDevelopment
Reviewing Reviewing ProgressProgress
Pla
nnin
gP
lann
ing
Acceleration PoolsAcceleration Pools
Building Leadership Succession Planning Approach
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Succession Management Approach
Clarify Terms: Replacement Pools vs. Succession Planning
Replacement: Can fill a specific position “tomorrow”
Succession: Developing people for target levels who could fill a variety of positions
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Traditional approach to succession
Function A Function CFunction B
TraditionalReplacement
Planning
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Succession Planning Approach (using Acceleration Pools)
Acceleration Pool
Organization Need BOrganization Need A Organization Need C
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Acceleration Pools
Senior Leaders
Middle Leaders
First-level Leaders
Individual Contributors
A Subset of People Being Identified for Accelerated A Subset of People Being Identified for Accelerated DevelopmentDevelopment
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Identifying Potential
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Leadership Potential Factors*
S U S T A I N E D P E R F O R M A N C E +
*Research Foundation
Bray & Howard, DDI, McCall et al, Personality Based Research, Collins, Hogan & Hogan, etc.
Leadership Promise• Propensity to Lead
• Brings Out the Best in People
• Authenticity
Balance of Values and Results(Org. specific, future focused)
• Culture Fit
• Passion for Results
Personal Development Orientation• Receptivity to Feedback
• Learning Agility
Mastery of Complexity• Adaptability
• Conceptual Thinking
• Navigates Ambiguity
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Diagnosing Strengths and
Development Needs
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Diagnosis Targets
JOB FIT
CURRENT JOBPERFORMANCE
PERSONAL ATTRIBUTES
PASTEXPERIENCES
BEHAVIOR INFUTURE-FOCUSED
SITUATIONS
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Diagnostic Tools
JOB FIT
Multi-rater surveysPerformance reviews
Inventories & Tests
BehavioralInterviews & Career
Profiles
AssessmentCenters
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Development Planning
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Development Realization…
What percentage of leaders do you think actually change their behavior after their organization implements
a leadership development program?
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Development Realization…
A. 75%
B. 50%
C. 25%
D. 10%
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Development Planning
“The Best Lessons are Those of Experience”
Based on Diagnostic Assessment and In Depth Feedback
Senior Leader Oversight Supervisor, mentor involvement Ideally, Linked to all Success Profile Factors
(experience, competencies, knowledge, derailers) Driven by Strategic organizational needs
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Best Development Strategy?
Development Priorities (What)
Job Challenges Competencies
Organizational Knowledge Executive Derailers
Development Strategies (How)
Job or task force assignment
Short-term experiences
Training; Internships
Professional coaching
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Closing the Development – Learning Gap
Success Profile – Whole Person View
Job SuccessJob Success
What I know
What I’ve done
What I can do
Who I am
Job FailureJob Failure
Didn’t know enough
Never tried before
Not enough practice
Not cut out for it
Knowledge
Experience
Competencies
PersonalAttributes
Job/Task Force Assignments, Training
Short-Term Experience, Job Challenges
Professional Coaching
Formal Training, Coaching
Targeting a Development Strategy
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Developmental Support
• Supervisor, mentor and pool member:– Plan development actions
• How the skill/knowledge will be obtained• Application of the skill/knowledge• Measurement of success of application
– Determine additional development areas and appropriate development actions
• Supervisor and mentor provide coaching and support, monitor personal and retention issues
• Proof of development = successful applications
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Prescribing Development Solutions
• Review diagnostic assessment data with key stakeholders
• Development priorities, plans determined• Individuals matched to assignments• Sponsors assigned• Follow-up plans established
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Key Decisions for Succession Planning
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Key Decisions
• Success Profile– What are the key Experiences and Knowledge
important for success at the Target level positions?
– What Competencies will be used? Existing model? Create new?
– Use of executive derailers?
• Diagnosing Development Needs– What diagnostic tools will be used?
• Assessment simulations?• Tests?• Interviews?• 360s?
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Key Decisions (cont.)
• Acceleration Pools– Number of acceleration pools?– Number of acceleration pool members?– Target level for pools?
• Nomination Process, Criteria– How will the nomination process be
conducted?– What are the nomination criteria?
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Key Decisions (cont.)
• Development Planning– Who will oversee it?
– Use of mentors, sponsors?
– Role of experiences vs. training??
– Leadership coaching?
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Key Decisions (cont.)
• Communication Issues
– Key messages?
– Target Audiences?
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Realizing Results – 5 Components
Communication– Key audiences
– Key messages
Accountability – Senior champion(s)
– Operation leader(s)
– Roles & deliverables
Skill– Leaders
– Sponsors/Mentors
– Managers
Alignment– Selection
– Development
– Performance Management
Measurement – Participant reactions
– % of “Ready Now” for senior roles
– Retention of talent
– Ratio of internal/external hires
– Success rates of new incumbents
– Diversity
– Time to fill key positions
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Thank you!