Webinar: An Objective Succession Planning Process PDF

Webinar: An Objective Succession Planning Process Okay, sorry for anybody who heard that first introduction. I'd just like to welcome you to the webinar today on an objective succession planning process and Paul Walsh is sitting right next to me. I'll hand you over to him in just a moment but before...

Webinar: An Objective Succession Planning Process Okay, sorry for anybody who heard that first introduction. I'd just like to welcome you to the webinar today on an objective succession planning process and Paul Walsh is sitting right next to me. I'll hand you over to him in just a moment but before that I just want to highlight the HR Observer and what it's about. It is an initiative by Informer Middle East and it is essentially a blog that you can access online and it's full of really useful hints and tips and things that are happening in this part of the world and I would encourage you to visit it. Just a few housekeeping rules before we start just to make the afternoon go smoothly. As you listen to Paul speaking if you've got questions you can write them into the chat box which you find at the bottom right of the control panel. Paul has already gauged time to allocate to answer these questions at the end of the webinar and we've actually already had one so thank you very much Anwar for asking that question. The slides that you see will be available on our SlideShare page as well as the recording of the entire webinar which we will post on our YouTube channel and at the end of this a server will pop up and I just ask that you allocate just a few minutes of your time to give us feedback on how we're doing and with all that said I'll hand you over to Paul. Thank you for being here. Hello and good afternoon and welcome to today's webinar. I'm not going to go through that slide that you see in front of me. There's a picture of me. I look exactly like that in that expression smiling as we get ready to start this webinar. All about succession planning. Let's start off with a couple of definitions and a few explanations of what succession planning should be and certainly what it is not. Succession planning is all about as you most probably know identifying future potential leaders to fill key positions and it's about making sure we have a good structured process by which one or more successors are identified for these posts or groups of similar posts, career moves and everything else that goes with it. As well as looking for potential leaders of course many of you will be aware that succession planning should also cover any critical jobs outside of leadership positions. So in particular we're talking here about any technical jobs, any jobs that would cause a problem if that person left and we had nobody to fill it. Succession planning as you can see a systematic approach to building a leadership pipeline talent pool to ensure leadership and business continuity to develop potential successors in ways that best fit their strengths. When we're talking about successors we're talking about people normally who have some experience, they've proven their leadership or technical capabilities, they're showing high potential. So rather than develop weaknesses our focus should be more on developing and fitting their strengths to any succession post that we have in the future. I'll speak more about that as we go through the process. Making sure of course that we identify the best candidates and concentrating resource on the talent development process that should yield a return on investment for us. Again carrying on with the definitions just to make sure that everybody's on the same page here. Succession planning recognises that some jobs are the lifeblood of the organisation and too critical to be left vacant or filled by any but the best qualified persons. So succession planning is critical to mission success and creates an effective process for recognising, developing and retaining top leadership talent. Now that we've had a look at the definitions let me talk about what succession planning is not. I speak to many HR people who when I ask them why they're embarking on succession planning will tell me it's about retention. It could well be in the short term but it is not the reason for doing succession planning. Succession planning is about business continuity. There are of course other good effects and good factors involved with succession planning but retention is one. But I think many HR departments need to sit down and actually think through their succession planning policy. Now for example if you identify 20 positions that you would like to have for succession planning you then go ahead and you identify 40 people to fill those positions. That's nice, that's succession planning. So we will develop two people for each post and carry on developing them. Now while this process is in place there's no doubt about it you will retain your talent but I'd ask you to think strategically and think ahead two or three years time. What happens when the target post becomes vacant? When the target post becomes vacant one of the two successors you have identified will hopefully take up the post. So I want you to consider what do you do with the failed successor? Is the failed successor going to leave your organisation? Have you got a plan in place to make sure that he or she is retained and moves perhaps to another succession position? All I'm saying at this point is succession planning is not about retention. It may help retention in the short term but it could actually cause you problems in the long term and it's not just causing you problems with the core workforce of your organisation. It's causing future problems with the identified talented people in your organisation. So as well as having a succession plan we also need to have a more in-depth retention plan to think and to deal with the successors that we identify who do not take up a successors post. You should have in front of you now what is fast becoming the HR model. So just to show you where it all fits in. The model was developed by Mercer's three or four years ago and I've seen it in many organisations now in the Gulf area. So basically we have our human resources model here. At the bottom of the slide you will see if you like the human resources mission or vision. The company has the right people with the right skills in the right place at the right time. All the rights coming together there. That's our aim. That's why we're here and to do that essentially we need five different areas to look at. We need to look at resourcing or recruitment and make sure as it says on the model we have structured recruitment processes and competency-based interviewing techniques to ensure the right staff are selected. Now as you know and as I'll show you as we go through this webinar looking for talent depends on two things. It depends on performance and it depends on potential. Now many people in HR get stuck when we're trying to measure potential and potential quite simply is measured by competencies, by behaviours. If we assess somebody's competencies and their behaviours are at a level above their present post or even two levels above their present post then that is a person who is showing potential. So right from the start at our gateway to the organisation our recruitment section should be actively looking for people who are showing potential. That means we need to start taking competency-based interviews seriously. I think I'm right in saying that in most organisations we don't take it seriously enough. I still hear recruitment people asking the same question they've been asking for 20 years and that question is where do you see yourself in five years time? That is not a competency-based question. It adds very little value to any recruitment process and I'd urge you to stop using it because everybody knows you're going to ask it anyway. We need to move over towards competency-based interviews. Down the bottom left of the model you'll see total reward or as we generally call it around here compensation and benefits where we're looking for an integrated aligned reward strategy which differentiates and segments whilst taking account of employee choices. What we need in this little part of the model is to make sure that any bonuses or merit increases are going to the right people. That the high performers, the high potentials do get some extra looking after in our compensation and benefits and I would urge you all as well when you actually go through the process and you do find yourself a succession pool, people made up of high potential, we should think very deeply about how we're going to reward them as part of a reward strategy for the succession people but also as part of our retention plan as well. Bottom right we have our employee development. You may know it as a training department or as the L&D department and this is all about as it says providing a planned program of professional development and skill enhancement for our key employee groups. This department looks after 80% to 90% of our workforce making sure they've got the right skills, the right behaviours and the right functional competencies to be able to go ahead and do their job effectively. Up in the top right is what we're talking about today, talent management. A clear process for identifying and bringing on high performing talent and high potential staff and the last part of that sentence is where we are with succession planning, ensuring effective resource planning for our talented people. In the middle of the model you'll see the most important part of the puzzle, performance management. It's the core business process for communicating performance expectations and assessing individual contributions. Ladies and gentlemen if we get this one wrong everything else in the model is wrong. If you cannot identify who your top performers are how can we select people for succession planning? In far too many of our organisations performance management quite frankly has become corrupt. It's been driven by WASTA rather than performance and it's driven by managers being able to do what they like. HR needs to take back performance management and make sure that people are being assessed, they are being appraised correctly and that they are being assessed truthfully and honestly on their actual performance but more in that in the middle. That's the HR model. Succession planning sits in the top right hand corner but as in most things no particular section of HR can operate on its own. To be an effective talent management succession planning type section we need to have good performance management data. We need to have a good backbone of training from our employee development colleagues to help us along. We need to make sure we've got some kind of reward strategy that rewards our high potential people and we need also to be looking out for these high performance people at the recruitment stage. All of HR needs to be involved with this. This is not a process you can do solely on your own. This is a couple of figures I picked up from CIPD a little while ago. I'm sure most of you are familiar with CIPD. Apparently now and this is worldwide rather than just in the Gulf but worldwide 61% of organisations have some kind of talent management department or section. Some of you out there will have a talent acquisition section or something like that. Now here's the crunch. Only 20% of organisations actually have a definition of talent. I've paused deliberately for that to sink in. Many of us have got a talent management department but we don't have a definition of what talent is. It seems that human resources in some organisations have just jumped on the bandwagon. They've heard of talent and decided we need to somehow manage it. They're correct but you can't manage it unless you have a definition of talent. Let's see if we can help you out here. This is the CIPD definition of talent. I won't go through it. Basically what it says is that although there are various definitions each organisation has to define what its talent is because different organisations want different things. This is an example from a Gulf company who has this as its policy and flows through to its actual process. I'd put this up to you as a recommendation as a kind of a blueprint for where we should be going when we're talking about talent. The policy states, as you can see at the top, while accepting that all our employees are talented the company recognises that some employees demonstrate outstanding potential that if identified and developed will add value and support business continuity. I do like that phrase. It's not my phrase. It was defined by a particular company here in the Gulf. They're given a little nod, if you like, to the culture that exists in the Gulf where it's very difficult for us here in this part of the world to actually say, you know, some people are talented and some people are not. Rather than saying that they're saying everybody is talented but some are demonstrating outstanding potential and I think that's one way we can push the succession planning process. They've also got a set of criteria down there as you can see. If you are talented, if you are demonstrating high potential then you will demonstrate the following. You'll have a sustained high performance of four plus in this particular company. They have a one to five scale on their performance management. One being a poor performer, five being an outstanding performer. If you're a talent you will have sustained high performance, four plus, perhaps over two years or three years. I'll leave it to you to have a look at that. The second bullet point to me is very, very clever indeed. Recognised by colleagues, customers and management as future leaders in their field. How do we get a measurement for this? You're probably all screaming at me and shouting. It's 360 degree feedback. This company in the Gulf that came up with this has been around for some time and they've had problems actually implementing 360 degree feedback in the past that have decided enough is enough. If you are talent, if you are demonstrating outstanding potential, if you want to be on a succession plan then you've got to be recognised by colleagues, customers and managers as future leader. The only way we can get that information is through 360 feedback. In other words, ladies and gentlemen, if you're talented you don't mind 360 degree feedback. Consistently demonstrate our values. I'll leave that one with you. That will be something you have to look at. If you are going to put in this as a criteria for the succession plan, you need to be able to measure your values. You need to be demonstrating innovation and improvement in your business area. That's quite straightforward I think. This one, second from last, I think is excellent. If you're talented, if you're demonstrating outstanding potential then you consistently make a measurable positive impact on business performance. I think this one separates talent from the non-talented people quite frankly. If you ask people the question, how did you make a measurable positive impact on business performance this year? Most people would not be able to say how they did it. Talented people can. Lastly, as I said earlier about potential, the way we measure potential is through competencies. If you are a talented person you would sustain above job needs leadership competencies. In other words, for your particular role you need to demonstrate level three on a particular leadership competency. When we assess this person he's demonstrating levels above the levels that he needs for that particular job. I put that to you ladies and gentlemen. That's as good a criteria as I've seen. It works here in the Gulf with a company. They've asked me not to broadcast who they are but it is a company very well known to most of you I'm sure. They're making good value of this and say introducing things on the back of the criteria that they've come up with for people with outstanding potential. I've shown this slide for many, many years now even though this particular version was updated in 2012. Many of you have seen it before and I won't go into too much detail with it. It's the famous nine bus grid. I feel that people in HR don't make enough use of this. It's there, it's known to people. If you do a HR degree people will spend a whole semester on this particular measurement tool. We should use it more in our organisations. What it shows quite frankly is two axes down there. You'll see we need to measure people on their performance. We need to measure people on their potential. Performance can be measured through our performance appraisal system if it is transparent and if it is honest. Potential as I've said before is measured through competencies. People demonstrating competencies above their job level requirement. Very briefly as an example, bottom left hand corner we've got our lower performer. This is someone who's a poor performer. He's a one or two perhaps on your performance management system. Potential, none. He's got potential and competencies to do his job. He's showing no behaviours above his job level requirement. This person, out the door as quick as possible. Give him or her a performance improvement plan, counsel, warn, second warn, written warn, get them out the business. Moving up quickly you have the satisfactory performer in the middle there, the solid professional. Again no potential. This guy's a good guy. This guy does good work for you. He's a satisfactory performer. Build his functional speciality, make him better. Top left hand corner there is our high professional and this is a real, real problem for our all HR professionals like myself. What do we do with someone who is a high performer but shows no potential for growth? It's difficult because this guy is a good performer but for some reason he's not demonstrating any leadership competencies. He's not demonstrating any high level core competencies. What do we do? In the past what we've done of course is we promoted with this guy and we shouldn't. What we should perhaps think about doing is turning this guy into a coach, turning him into a trainer. Get him to teach the other people how to do the job as well as he does and by the way pay him for it to stop him running into human resources to keep asking you for a promotion. Middle box at the bottom, the inconsistent performer. Fairly straightforward this one, low performer but is showing some potential. We give this guy a chance. This guy is the traditional square peg in a round hole. He's probably in the wrong job. Give him a chance, see if we can move him somewhere, transfer him somewhere and then when we move into the green boxes this is what's traditionally known as your talent pipeline. These are people who are showing some potential but also showing some kind of performance criteria. In the middle of the model there you have the key performer. Satisfactory performer, he's not a high performer but he's doing his job, he meets his targets, does his job well and showing some potential. This guy needs a career development plan. We need to build future utility, develop his behaviours and develop some of his skills. Up the top is a guy that we all love and know so well, high performer and showing some potential. Not great potential but showing some potential. Perhaps showing behaviours one level above the levels required for his job. Again, reinforces interest, is expanding interest. Career development plan, talk to this guy, mentor, put him into acting positions. Bottom right is a personality I've seen far too often in my long career I'm afraid. We call it the diamond in the rough. It's a British phrase. If you can manage or imagine picking up a big lump of dirt, brush the dirt away and you find in the middle a diamond, a diamond in the rough. This is somebody if you look at the nine box grid who is showing very high potential, probably demonstrating competencies and behaviours two levels above his job role yet this person is a poor performer for some reason. There's usually a reason for this and the reason is he's lazy. This is someone who's got talent, he's obviously got talent, he's got potential to move on yet he's not working very hard, he's not performing very well. You've probably met these people at university. They do no work for three years, don't do any revision, don't read any books, do their dissertation two days before it's due to hand in and they get an honours. They drive you crazy these guys. Unfortunately work is not university and we find that they can't get away with it. The action for this person is give him a good job, put him in charge of a project, under close supervision and see what we can do with him. See if we can develop him along because he has the potential to be a future leader of your company. If he fails however we've got to deal with him the same as we deal with a lower performer. Give him a warning, get rid of him. Future star, satisfactory performer, very high potential. This is a candidate for your succession plan without any doubt at all. Increasingly challenging assignments, give him lots and lots of work to do, put him on your succession plan. Then if your organisation is lucky you'll have somebody in the top right hand corner, the strategic view, a consistent star, somebody who is a consistent high performer and shows very high potential. Straight onto the succession plan. Some of these guys don't really need to be on the succession plan, put them straight into a vacant position at a high level. Get them through the organisation very, very quickly indeed. For those of you who are not familiar with the model I would hasten to say that we don't split our workforce up 11% in one box, 11% in another box. It could be all over the place. The top right hand corner, the consistent star, you'd be lucky to have 3% or 4% in your organisation in that box. The key performer in the middle, perhaps you might have 45% to 50% of your organisation in that particular box. These boxes are not even. Again, the lower performer, bottom left hand corner, hopefully you might only have 3% or 4% of your workforce in that box. It's not a level playing field with this, but I think it's a great tool. I stress to use this tool, which I hope you'll all agree is very, very useful indeed, you need to be able to measure potential. That comes through behaviours. How do we get the succession plan together? Let me show you what I do. This is what I do. The first thing I do is have informal interviews with the top two levels of the organisation. I'll talk to the directors, the general managers, the C officers, however your organisation is arranged, and ask for their view on the following things. Do they think a succession plan is needed? Do they think it's necessary? Are they frightened of it? Do they fear it? I also get their view on position criticality, whether a position is critical to the organisation, and position vulnerability. That is, is the position vulnerable? In other words, have we got a successor at the moment? I then go away and draw up a first draft. I sometimes use this grid, which you may have seen before, to measure. It's a very, very simple nine box grid again, to measure how critical a job is, and ask for the director's view. We're looking at a departmental head, for example, for succession planning. How critical is the job? If you're very clever, you can actually put objective measures in there. We can measure criticality by money. We could say, if this person leaves, how much money would the business lose in the first month? $100,000? $500,000? $1 million? That would give us a clue whether it's low criticality, medium criticality, or high criticality. If the answer is the business would lose no money at all, we'd have to consider that it's low. There may be other things you want to look at, like quality of work and things like that, but we could get an objective measure for that. Then along the bottom access, we have a look at vulnerability. This is quite simple. Has this particular position got a successor? In other words, if that person leaves, can we cover the job in the short term? Can we cover the job in the medium term? Long term, can we cover this job? Again, if the answer is yeah, we can cover the job, no problem, well then it's low vulnerability. If it's a case of no, if this person leaves, we're in trouble and we've got nobody to cover, then it's high vulnerability. You can use that succession matrix as well if you like. Here's my organisational chart for the commercial management of a particular organisation. You'll see it goes down from the chief commercial officer, Mr. Al Pacino, and we have various people holding various posts. Like all organisational charts, I've got some vacancies thrown in there and I've also got strange ones like the regional manager of DOFAR there, Mr. Bruce Willis, who reports direct to the chief commercial officer for some reason. A typical kind of organisational chart, we've got some strange things. We've got vacant people in there. You will see towards the top left of the organisational chart, our marking director is Mr. Robert De Niro, who is acting in this position. I thought you might like that or not. If people are turning off, by the way, by my humour, stop it, turn back on, I'll stop the humour and we'll keep going. What I do is I interview the directors and I get their view on criticality and vulnerability. Now personally, and we can perhaps have some questions about this at the end, I don't take too much attention to what directors tell me about criticality. If you ask a director whether or not his job is critical, he'll tell you yes it is. So I tend to leave criticality to one side, unless we've got a real objective measure of it, and I just look at vulnerability. I look at this, this is just a commercial department of an organisation, and then I paint it. I paint the commercial management organisation so that it looks like this. This is dealing purely with vulnerability, it's not dealing with criticality at all. Now what this is telling you is that all the red boxes, we have no successor for that post. You will notice that the vacant positions we have on this chart, automatically I put no internal successor. If a post is vacant, that means we've got no successor to do the job. The orange boxes, we do have a successor, but he's not quite ready to take up the post. So perhaps he'll be ready in a year, two years, or up to three years. So they're the orange boxes there, and the blue ones, the successor is ready now. Now this information I have obtained from the high senior management of the organisation through an informal interview, and when you do this and present this to your executive council or your executive board, whoever your top team are, the CEO is always very interested in this and tells you to go ahead and fill these boxes with successors. So as part of the process, chat to the directors, paint your boxes, demonstrate graphically that