8 Leading Practices of Today’s Succession Management From reactive replacement to proactive planning and management July 14, 2015

RESEARCH PRACTICES Learning & Development Talent Management Leadership Development Talent Acquisition Workforce Management

©2015 Brandon Hall Group, Inc.

2

How We Work With Our Clients Research OnDemand •DataNow™ (Industry Trends and Benchmarks) •Research Reports, Case Studies, Business Impact Models, Tools & Frameworks •TotalTech™ (Technology Evaluation & Selection)

Strategic Consulting Services • • • •

Strategy Benchmarking Custom Research Technology Evaluation & Selection

HCM Excellence Awards Program • • • •

Learning and Development Talent Management Leadership Development Talent Acquisition

• Workforce Management • Technology

Industry Events • Webinars • Research Spotlights • Conferences

The Academy • Certification Programs • Workshops

©2015 Brandon Hall Group, Inc.

3

How to Ask Questions and Make Comments

Have questions after the session? Email: [email protected]

Type in your question here We’re social! @Skillsoftweb

PRESENTATION IS BEING RECORDED PLAYBACK AND SLIDES WILL BE SENT OUT AFTER THE WEBINAR

©2015 Brandon Hall Group, Inc.

4

Today’s Presenter

Laci Loew Brandon Hall Group @LaciLoew

©2015 Brandon Hall Group, Inc.

5

Today’s Discussion THE NEW APPROACH TO SUCCESSION MANAGEMENT

The Context: •What succession management is •Today’s practices

The Research: •New leading practices •The business impact

The Success Stories: •Leading practices in action

Getting Started: •Your immediate actions

©2015 Brandon Hall Group, Inc.

6

Areas of Talent Management Focus

Increase focus somewhat or significantly

75% 60%

54%

54%

50%

25%

0% Retention of employees Leadership development with critical skills

Development and retention of highpotential employees

Source: Brandon Hall Group, Talent Management Benchmarking Study 2014

PARTICIPANT POLL #1 WHAT IS YOUR APPROACH TO SUCCESSION MANAGEMENT?

What is your approach to succession management?

__ Use analytics to ensure talent continuity in ALL key leader and non-leader job roles __ Ensure we have a healthy bench for the CEO and other key senior leadership positions __Neither; We ____________________________________. __I’m not sure.

©2015 Brandon Hall Group, Inc.

8

The Context OUR 2015 STATE OF SUCCESSION MANAGEMENT STUDY DEMOGRAPHICS

Source: Brandon Hall Group, 2015 State of Succession Management Survey n=164 © 2015 Brandon Hall Group

9

The Context SUCCESSION MANAGEMENT IS

Brandon Hall Group Defines Succession Management as:

An ongoing management process aimed at ensuring business continuity using talent analytics to gain insights into skills and position gaps and proactively ensure talent’s readiness to assume next level, or other critical, roles when they open.

Source: 2015 Brandon Hall Group

©2015 Brandon Hall Group, Inc.

1

The Context ARE EFFECTIVE SUCCESSION MANAGEMENT PRACTICES IN USE?

To what extent do you agree these succession management activities are very effective? And that you use them to a very high extent?

To transition succession candidates*

To develop succession candidates

To identify succession candidates

Succession Practices

Used to a Very High Extent/High Extent

Very Effective/Effective

Performance ratings

52.7%

31.3%

Manager nominations

50.3%

34.3%

360 degree assessments

13.7%

24.8%

Formal training program

34.1%

43.4%

Coaching

24.4%

49.6%

Lateral job moves

6.7%

32.2%

Acting-up roles

3.7%

20.3%

Formal onboarding

2.3%

76%

Source: 2015 Brandon Hall Group Succession Management Study (n-164) *Source: 2015 Brandon Hall Group Succession Management interviews

EFFECTIVE SUCCESSION MANAGEMENT PRACTICES ARE SIGNIFICANTLY UNDER-UTILIZED AND INEFFECTIVE PRACTICES ARE OVER-UTILIZED. ©2015 Brandon Hall Group, Inc.

11

The Research 8 LEADING PRACTICES OF HIGH-PERFORMANCE SUCCESSION MANAGEMENT Identify critical talent segments and key job roles -- leader AND non-leader – those essential to achievement of business goals

Broadly and transparently communicate succession pool selection criteria

Gather senior business leaders for assessment and calibration of performance, potential, readiness, and willingness to assume next level, or other critical, roles

Create talent pools of high potentials for critical talent segments and key job roles

Define capability and experience (readiness) gaps in each high potential

Execute on high potentials' development plans and mobility assignments, particularly lateral assignments Maintain alignment between organizational and high potentials' expectations on timing of placement into role being groomed for

Transition and onboard high potentials into roles for which they are being groomed Source: 2015 Brandon Hall Group

©2015 Brandon Hall Group, Inc.

12

The Research

3

Specialist/Subj ect Matter Expert Roles

Critical Talent Segments and Key Job Roles

Discretionary Roles

Core Roles

2 1

Difficulty replacing skills

4

8 LEADING PRACTICES: IDENTIFY TALENT SEGMENTS AND JOB ROLES

0

1 2 3 Impact on achieving goals

4 Source: 2015 Brandon Hall Group

BEFORE AN ORGANIZATION CAN START TO GROOM SUCCESSORS, IT MUST KNOW WHICH TALENT SEGMENTS AND JOB ROLES ARE CRITICAL TO THE ACHIEVEMENT OF ITS BUSINESS GOALS. ©2015 Brandon Hall Group, Inc.

13

The Research 8 LEADING PRACTICES: TRANSPARENTLY COMMUNICATE SUCCESSION POOL SELECTION CRITERIA

DO THIS

NOT THIS

Succession Selection Criteria (promotable indicators) Promotable Indicator

High Potential Example

All Others Example

Results

Exceeds sales quota

Meets sales quota

Process

Embraces new methodologies and protocols

Prefers to “do it my own way”

Personality

Team player sharing the win

Promotes personal brand

Learning Agility

Seeks improvement opportunities of their own craft

Focuses doing the least and maximizing the take

Recognition

Gains joy from helping others succeed

Believes peers exist to serve their needs

Team Building

Mentors others

Prioritizes personal gains

Culture

Aligns with core values and embraces the vision

• Best friend • Seemed like a good idea at the time • It’s her turn • She’s great…and a minority • He’s just like me • Who we got?

Source: 2015Brandon Hall Group

Seen as revolutionary and a malcontent

SELECTION CRITERIA INFREQUENTLY DEFINED BUT EVEN WHEN DONE SO, TYPICALLY HELD CLOSE TO THE VEST AND NOT BROADLY SHARED. ©2015 Brandon Hall Group, Inc.

14

The Research 8 LEADING PRACTICES: BUSINESS LEADERS ASSESS AND CALIBRATE TALENT Tom Brown

Sally Smith Potential Leader

Potential

Betty Bob

Tracy Jones Strategic Challenger

John Smith Strategic Leader

WILLINGNESS Very Willing

Henry Smith

Jay Brown

Benny Hass Harry Brown Becky Jones

Somewhat Willing Not Willing

Frankie Jones Potential Challenger Steve Jones Stacy Bob

Core Challenger

READINESS Ready Now

John Jones Jane Smith

Limited Option

Core Leader

Lynn Brown

Barb Brown

Susie Smith Sally Solid Performer Sue

Ready 1-3 Years Ready 3+ Years

Strong Performer

Source: 2015 Brandon Hall Group

Performance TALENT CALIBRATION SESSIONS REQUIRE BUSINESS LEADER INVOLVEMENT AND CALIBRATION ON: PERFORMANCE, POTENTIAL, WILLINGNESS, and READINESS. ©2015 Brandon Hall Group, Inc.

15

The Research 8 LEADING PRACTICES: CREATE HIGH POTENTIAL TALENT POOLS Tier Levels

Names

Tier 1 Best candidate available for this position and minimal preparation needed

John Smith

Tier 2 Recommend to present as candidate without reservation and with some preparation needed

Bernie Hass Sally Carlton Kevin Schmidt

Tier 3 Present as candidate with reservation and with significant preparation needed

Kelly Donn Hugh Cummings Max Leder Ann Brown Darrick Smoss

Tier 4 Not recommended to present as a succession candidate – do not include in talent pools

Hubert Downing Alicia Green Beth O’Donnell Clint Smessher Rob Faulkner Terri Hughes Vicki Pryleen

Senior leaders

Sales executives Engineers level 1 Engineers level 2

10

IT analyst

13

4

Supervisors

6 17

Talent Pools

7 8 9

Purchasing HR VPs

13 12

Marketing leads

Operations analysts Source: 2015 Brandon Hall Group

USE THE 9-BOX (or similar) RESULTS TO GUIDE MANAGEMENT ACTION and CREATE TALENT POOLS OF HIGH POTENTIALS. ©2015 Brandon Hall Group, Inc.

16

The Research 8 LEADING PRACTICES: DEFINE CAPABILITY AND EXPERIENCE GAPS Experience Analysis

Capability Analysis

Employee: John Smith Current Job Role: Email Marketing Manager Successor Role: Marketing Executive

Employee: John Smith Current Job Role: Email Marketing Manager Succession Role: Marketing Executive

  = current role Sample Successor Gap Chart Succession Candidate’s Name John Smith

Talent Pool

Marketing Executive

Development Gaps

• •

Adaptability Results Focus

Experience Gaps

• • •

BusinessSource: Experience 2015 Brandon Hall Group Stakeholder Management Global Exposure ©2015 Brandon Hall Group, Inc. 17

The Research 8 LEADING PRACTICES: EXECUTE ON DEVELOPMENT AND EXPERIENCE PLANS Succession Candidate’s Name John Smith

Talent Pool Marketing Executive

Development Gaps • •

Adaptability Results Focus

Experience Gaps

• •

•

Business Experience Stakeholder Management Global Exposure

Development Plan (Building Requisite Skills) Coaching: May 2015 – May 2016

Experience Plan (Gaining Requisite Job Experience) Job Shadowing Marketing Manager Mollie Green: Oct – Dec 2015

Senior Leader Change Immersion: Jul 15 – 18, 2015

Acting-Up Role Covering Email Marketing Executive’s John Green’s temporary absence: Jan – Mar 2016

Managing Change Globally: ELearning 1 ELearning 2 ELearning 3 Aug 2015

Hyderabad Temporary Supervisor Assignment: Jun 2016

Executing for Results Lab: Sept 9 - 10, 2015 Source: 2015 Brandon Hall Group ©2015 Brandon Hall Group, Inc.

18

The Research 8 LEADING PRACTICES: MAINTAIN ALIGNMENT BETWEEN ORGANIZATIONAL AND SUCCESSION CANDIDATES’ EXPECTATIONS September Organization August

Months

Succession Candidate

July

June

May

0

1

2

3

4

5

Months before transition to next level role

6

7 Source: 2015 Brandon Hall Group

©2015 Brandon Hall Group, Inc.

19

The Research 8 LEADING PRACTICES: TRANSITION AND ONBOARD SUCCESSION CANDIDATES IN TO NEXT ROLE

Transition & Onboard

“Times of transition are strenuous, but I love them. They are an opportunity to purge, rethink priorities, and be intentional about new habits. We can make our new normal any way we want.” ---Kristin Armstrong, Olympic gold medalist 2008 and 2012 Source: 2015 Brandon Hall Group

©2015 Brandon Hall Group, Inc.

20

The Research WHAT LEADING PRACTICE SUCCESSION MANAGEMENT LOOKS LIKE IN ACTION Low-Performance Organizations

High-Performance Organizations

1. Led by HR and Talent Leaders

1. Led by CEO and Business Leaders

2. Focus on reactively identifying names for replacement

2. Focus on proactively building the bench for business continuity

3. Mostly oriented around assessing performance in ad hoc talent reviews

3. A strong focus on assessing potential via enterprise-wide, cascaded talent reviews

4. Managed via paper or online spreadsheets

4. Automated and deployed enterprise-wide to improve efficiency and performance requirements analytics

5. Succession data separate from that of other talent processes

5. Succession data integrated with that of other talent processes

6. Short-term (in-the-moment to 1 to years) horizon planning

6. Long-term (3 to 5 years or more) management planning

7. Identify names subjectively and determine transition date

7. Identify candidates empirically, execute on development and experience plans, and transition with formal onboarding

8. Keep targeted successor names a secret

8. Communicate transparently about selection criteria, and who is in (and out) of the succession pool

9. Replacement planning for the CEO and other senior leaders

9. Succession management for all critical talent segments and key job roles at all leader and non leader levels

10. Little budget allocation

10. Growing budgets

11. Organizational and succession candidates’ expectations out of sync

11. Organizational and succession candidates’ expectations in sync

12. 1x annually at best or when emergency-like need arises

12. On-going, continuous process

Source: 2015 Brandon Hall Group

©2015 Brandon Hall Group, Inc.

21

The Research AT WHAT LEVEL OF SUCCESSION MANAGEMENT IMPACT DO MOST ORGANIZATIONS RESIDE?

Source: 2015 Brandon Hall Group Succession Management Study (n-129)

©2015 Brandon Hall Group, Inc.

22

The Research WHY DOES HIGH-PERFORMANCE (LEVEL 4) SUCCESSION MANAGEMENT MATTER? Business Metrics

Level 1

Level 2

Level 3

Level 4

Voluntary turnover among high potential employees has decreased by 1% or more over the last 12 months

7.60%

17.2%

20.7%

25%

Revenue has increased by 5% or more over the last 12 months

30.7%

34.2%

38%

40%

Customer retention has increased by 5% or more over the last 12 months

7.6%

14.3%

22.6%

25%

Level

# of ready and willing employees available to fill critical roles when they open % of turnover in critical talent segments and key job roles % of vacancies in critical talent segments and key job roles

Employee engagement score among high potentials

Low Performance (level 1) To High Performance (level 4)

Other Metrics Commonly Tracked

1

2

Description Individual development planning Executive and other senior leader replacement planning

3

Succession planning and management for most critical talent segments and key job roles

4

Talent mobility and upgrading based on predictive talent requirements

Source: 2015 State of Succession Management Survey, Brandon Hall Group ©2015 Brandon Hall Group, Inc.

23

The Research OTHER TYPICAL OUTCOMES OF REPLACEMENT PLANNING VS SUCCESSION MANAGEMENT? Typical Outcomes of Low-Impact Replacement Planning

Typical Outcomes of High-Impact Succession Management

A list of emergency back-up names for senior level positions only

Feeder pools of high quality talent for all critical talent segments and key job roles

Weak talent pipelines

Bench strength

Skills gaps

Prepared leaders and non-leaders

Talent hoarding

Talent producing

Development lean

Development rich

Disparate knowledge sharing

Strategic knowledge transfer plan

Individual advancement, not leadership continuity

Leadership and business continuity, not only individual advancement

A culture of skepticism

A culture of trust

Source: 2015 Brandon Hall Group

©2015 Brandon Hall Group, Inc.

24

Success Story #1 SUCCESSION MANAGEMENT IS EXPANDED TO ALL LEADER LEVELS AT UL

Industry: Safety Consulting and Certification Employees: 11,000 Challenge: Rapid growth through acquisition and global expansion created communication challenges and bench strength challenges from supervisor to executive Solution: A business-driven approach to succession relying heavily on a core and formal training solution targeted for high potential leaders at ALL levels Impact: • Revenue up 40% • Reduction in operational costs • Increase in employee engagement

Source: 2015 Brandon Hall Group, Case Study publication ©2015 Brandon Hall Group, Inc.

25

Success Story #2 GLOBAL MOBILITY SOLUTION CLOSES JOB EXPERIENCE GAPS IN HIGH POTENTIALS AT PWC

Industry: Professional Services Employees: 185,000 Challenge: Insufficient pipeline of talent skilled, willing and ready to serve global clients Solution: A global talent mobility program designed to close requisite job experience gaps allowing for both shortand long-term global job assignments in line with high potentials’ experience needs

Impact: •Robust pipeline of qualified talent •Higher engagement

Source: 2015 Brandon Hall Group, Case Study publication ©2015 Brandon Hall Group, Inc.

26

Success Story #3 SENIOR BUSINESS LEADERS PROMOTE COACHING TO CLOSE SKILL GAPS IN TOP PERFORMERS AT MIGROS

Industry: Retail Employees: 18,000 Challenge: Headquartered in the developing country of Turkey, young leaders often joined the organization lacking the requisite skills to advance and impact business goals Solution: Define the requisite skills and abilities needed in key job roles, assess top performers and immerse them in a targeting coaching solution to close performance gaps and ready them for greater responsibility Impact: • 31% turnover decrease in key job roles • Higher internal promotion rate • 8.6% increase In customer satisfaction score • Higher employee engagement score Source: 2015 Brandon Hall Group, Case Study publication ©2015 Brandon Hall Group, Inc.

27

PARTICIPANT POLL #2 WHICH IS YOUR GREATEST CHALLENGE IN TRANSFORMING TO HIGH-PERFORMANCE SUCCESSION MANAGEMENT? Which one of the following leading practices will be your greatest challenge in transforming to high-performance performance management?

__ Defining our critical talent segments and key job roles.

__Adopting an empirical way to identify and select succession candidates. __Developing succession candidates to ensure their readiness when key roles open.

__Transitioning and onboarding successors in to new roles without them derailing. __ None! We have high-performance succession management now!

__I’m not sure.

©2015 Brandon Hall Group, Inc.

28

Getting Started JUMP STARTING THE TRANSFORMATION OF YOUR SUCCESSION MANAGEMENT Considering leading practice research, your greatest challenge, and this transformation model:

1. Your most important immediate action?

2. From whom will buy-in be needed?

___Identify one critical action ___Identify top one or two challenges you anticipate ___Identify one key strategy/approach for mitigating the challenges

___Governance Committee ___CEO ___ Other Senior Business Leaders ___ HR/Talent Leaders, HRBPs ___ Employees

Source: 2015 Brandon Hall Group ©2015 Brandon Hall Group, Inc.

29

Q&A

ALL OF YOU WITH ALL OF ME!

Laci Loew Brandon Hall Group @LaciLoew

All of You!

©2015 Brandon Hall Group, Inc.

30

Save the Date!

©2015 Brandon Hall Group, Inc.

31

Thank You to Our Sponsor

©2015 Brandon Hall Group, Inc.

32

Thank You for Joining