prepared and presented by tracy v. mcmillan managing principal hcga consulting partners, llc monday,...

Prepared and Presented by

Tracy V. McMillanManaging Principal

HCGA Consulting Partners, LLC

Monday, September 28, 2015 – NCSHA 2015 Annual Conference ShowplaceSuccession Planning Best Practices

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BIOGRAPHY

Tracy McMillan is the Managing Principal of HCGA Partners LLC, a boutique executive search, talent acquisition and retention consulting firm based in the NY Metropolitan area and focused on serving with excellence a niched and select cadre of US-based clients. Within the HFA and related parlance, Tracy has made successful placements for Colorado Housing & Finance Authority, Connecticut Housing & Finance Authority and CSG Advisors.

Before serving as Vice President, Global Talent Acquisition for the National Basketball Association, Tracy was employed by Diversified Search for nearly 5 years as a Managing Director in the firm’s New York and Philadelphia Offices. For the past 20 years, Tracy has focused and specialized primarily in the recruitment, placement and retention of diverse and transformative leaders who currently serve as Chief Financial, Chief Marketing and Chief Sales Officers, General Managers and non-profit CEOs.

Prior to joining Diversified, Tracy founded, led and managed The McMillan Group (TMG), Inc. – a Philadelphia metropolitan area-based retained executive search firm that served clients with distinction across all functional areas and industries.

Tracy began his executive search career with Carrington & Carrington, Ltd. in Chicago, IL where he rose from the level of Senior Consultant to Managing Consultant in less than two years and later he joined LaMonte Owens, Inc. where he served as Senior Vice President.

Tracy began his professional career as a CPA in the Audit, Accounting, Consulting and Finance realm having served in roles of increasing responsibility with both PricewaterhouseCoopers in Philadelphia and Kraft Foods in suburban Chicago.

Tracy is a 1986 graduate of the University of Virginia where he earned a Bachelor of Science degree in Commerce and Accounting. He currently serves on Jefferson Scholarship Foundation Board of Directors and National Selection Subcommittee Chairman, as well as the Business of Sports School (BOSS) Advisory Board. He is a past Chairman of the Ridley at the University of Virginia Alumni Association Board of Directors and currently serves on its Chairman’s Advisory Board. Tracy is an INROADS/Philadelphia Alumnus, past Chair of the National INROADS Alumni Association Board of Directors and a Life Member of Kappa Alpha Psi Fraternity, Incorporated.

Tracy and his wife, Samm, reside in Fairfield, CT and Midtown Manhattan, and are the proud parents of three daughters: Ariana (22), Morgan (20) and CJ (19).

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SEMINAR AGENDA

GLOSSARY OF KEY TERMS AND ACRONYMS

SUBJECT MATTER BACKGROUND & CONTEXT

THE BUSINESS CASE FOR SUCCESSION PLANNING

SUCCESSION PLANNING DESIGN

LEADERSHIP COMPETENCIES

EFFECTIVE RECRUITMENT & RETENTION PROCESSES

SUCCESSION MANAGEMENT

EXECUTIVE SUMMARY

RELEVANT RESOURCES

Today’s Topics for Discussion and Mind Sharing

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GLOSSARY OF TERMS AND ACRONYMS

Buzzwords and Terms For Today’s Session

HCGA = Highest Career Goal and Aspiration

What is the highest level of attainment you would like to achieve in your career? What is the title, role, compensation, scope of influence and control, etc.

TILAC = Time in Life and Career

Where are and at what point in time are you in your life and career? Early, Mid, Late & “Back Nine”; Married or Single? With or without Kids?

Succession Planning – the process of compiling, identifying and tracking a list of possible replacements for critical roles within an organization

Succession Management – identify and develop high potential leaders who are capable of executing the organizational/business strategy

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Keeping it Real Right from the Start …

HFAs have only been around for nearly 50 years … most have no mandatory retirement age requirements; many have been and continue to be plagued by long-term employee retirements and “surprise or secret resignations”

Replacing legendary leaders can be quite a daunting task … not everyone is cut out to succeed a legend

The Great Recession has moved the typical retirement age from 65 to beyond 70

Many environments have been run based upon “Tenure-ocracy” not “Meritocracy”

Sometimes politics (state, federal, local or otherwise) conspires to throw “noise in the system…” and defeats the plans already in place

All Subject Matter Experts are not equipped to handle next level and/or C-Suite responsibilities

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Keeping it Real Right from the Start …

Companies and organizations do not fundamentally “protect” or “identify” all of their stars

We have become a nation that feeds off of and makes data-based decisions; thus the needs in IT and “Big Data” today far exceed what was necessary just 5 – 10 years ago

A candidate’s first 90 days is predictive of not only trajectory and potential but also the length of retention … on-boarding is a vital cog in retention and talent management and succession planning

Mid-career and late-career hires tend to have staying power but millennials will just break your heart … be realistic and embrace the boomerang effect for the latter

“I would love to focus on succession planning but there are only so many hours in the day or week … I just don’t have the time”

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Selected Voices of the Client …

“Every hire below C-Suite we make is effectively an “over-hire” for we fundamentally believe that with every successful recruitment, we have a built-in succession planning eligible candidate …”

“Tomorrow is not promised for any of us. As the leader of this organization I or any of my direct reports could get hit by a bus or die suddenly for whatever reason. We cannot afford to relax our succession planning for all changes in leadership must bring about a seamless transition…”

“Those who don’t do succession planning, generally don’t do strategic planning well either. Thus, a good succession plan like a good strategic plan is built on business strategy and results. The talent we hire, retain, groom and develop must be able to meet the current and prospective business demands, rapid pace of change and growth as well as the needs of investors, community and other key constituencies …”

“The best SPOs are those who are transparent and honest with their employees at all times. Less than 2 out of 10 people are cut out to be in the C-Suite or less than 3 out of 10 are cut out to be their direct reports. Let your employees know how much you value them but do not mislead anyone about where they stand in the eyes of decision-maker…”.

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THE BUSINESS CASE FOR SUCCESSION PLANNING

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BUSINESS CASE

Why Should HFA’s Emphasize Succession Planning?

Rapid and never-ending pace of change

Increased business complexities

Greater leadership required at lower levels

Effective recruitment and retention strategies … best talent focus; reduced risk of regretted loss

Over 30 million employees are above the age of 50 and over 40% are of retirement age

High performing organizations use transparency and integrated succession planning as a form of ongoing disaster recovery planning

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BUSINESS CASE

Why Should HFA’s Emphasize Succession Planning?

Effective succession planning involves more than just a replacement planning process, It

Ever widening gap of skills shortage and talent available to fill

Lack of technical competence

Underestimation of the value of soft skills and relationship management capabilities

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The Vital Role of Talent Management within the HR Function

Assess, Develop, Challenge, Reward and “Protect” your Top Talent

Implement Mentorship and Champion/Sponsor Programs

Assess, rate and rank work force … Succession Planning eligibility generally applies to “right side of the bell curve”

Make sure that your HIPOs and top performers are consistently challenged and cross-trained

Speak to this group on a quarterly basis to ensure that their needs are being met

Be transparent and honest with work force about “where they really stand …”

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Answering the Key Questions

What is a key or “mission-critical” position?

What constitutes a high-potential employee?

What are the common aspects of exemplary job performance?

How should the organization fill key positions?

What percentage of open positions should be filled from within the organization?

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Answering the Key Questions

What percentage of key positions should have at least one identified successor?

How should high-potential employees be prepared for advancement?

What are the respective roles and responsibilities of employees and HR in the process of preparing high-potential employees and designated successors?

How important are individual employee career goals and objectives in the succession management plan?

How open and transparent should HR be in communicating with individuals who are identified as high-potentials and designated successors?

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GE’s 9-Box Talent Model


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Creativity and Innovation

Visionary Leadership/Passion

Persuasiveness

Strategic Planning & Execution

Change Management

Customer/Client Focus

Ethics and Integrity

The Upwardly Mobile – Selected Key Skills & Attributes

Decisiveness

Business Development

P&L/Financial Management

Partnering & Teamwork

Political Savvy and Gravitas

Influencing/Negotiating

Communication Transparency

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EFFECTIVE RECRUITMENT AND RETENTION STRATEGIES

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EFFECTIVE RECRUITMENT & RETENTION

TILAC - Early, Mid, Late & “Back Nine” Hires

Millennials will dazzle briefly but break your heart in the end; okay to be receptive to “boomerang hires”

Mid-career hires will stay and play as long as they are challenged and promoted for exceptional performance

Late career hires in addition to having technical and functional capabilities must demonstrate that your HFA is not merely a stepping stone towards HCGA

“Back Nine” hires should be a fit with culture … their all-around capabilities should be unimpeachable

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Recruit, On-Board and Follow-Up … REALLY!!!

Design a “Ropes to Skip and Ropes to Know” approach and on-boarding template to maximize and leverage the “First 90 Days”

Assign early career hires a mentor; mid-career and late career hires with performance equity should cultivate relationships with champions/sponsors (C-Suite, Board, etc.)

Employ a candidate pool development philosophy emphasizing those positions that will have the greatest impact on your organization over the next 2 – 5 years

Promote a culture of rotation and “over-hiring” to the extent that you can

Ensure that HR Leaders maintain quarterly contact with HIPOs and top-performers to ensure that there needs are being met

Be honest and realistic about “external vs. internal” hiring needs and feasibility

Keep promises made during recruitment cycle … subtle but vitally important

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Focus on What You Can Control …

Do your best despite political uncertainties

Listen, learn, advise and act …

Leverage the “rumor mill”

Avoid “surprise resignations” with transparency and open lines of communication; many long-standing employees keep their “true retirement intentions” close to the vest…

Focus on substance over form when evaluating and interviewing candidates; leverage and place a high value on face-to-face behavioral interviews

Be inclusive and diverse in outlook and perspective

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Employee Rewards & Recognition

Increased bonuses to the extent possible

Sponsor continuing education and relevant conference registration/attendance

Support and Subsidize Executive/Advanced/Graduate School Education … With Handcuffs

Work-from-home and other work/life balance considerations

Organizational awards and special recognition

Exposure to Board and Political Leaders as appropriate

Increased Vacation or extra personal days

Fireside chats with ED’s and/or Senior Leadership Team

Executive Coaching

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Aon Hewitt’s FOUR A’s

ALIGNMENT Best-in-class organizations use succession management as a strategic business-planning tool that focuses on both current and future needs and develops a pool of highly talented individuals in order to meet the organization’s overarching long-term strategy

ACCESSIBILITYBest-in-class companies have a simple, transparent, flexible, diverse, and robust succession management process that eschews administrative hassles for the end user

ASSESSMENTAssessment of targeted levels of management, as well as identifying and stocking pools of high potentials to fill these levels, form the crux of a succession management process. Best-in-class succession management systems target linchpin positions—jobs that are vital for the long-term performance and health of the business

ADVANCEMENTLong-term bench development and advancement is the cardinal rule of succession management. Best-in-class companies adopt development as a strategic priority and provide a range of targeted developmental experiences for their rising stars.

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Aon Hewitt’s THREE Top Priorities for Best-in-Class Execution

GAIN COMMITMENT FROM THE TOP . . . ongoing commitment from ED/CEO, Board and senior leadership is absolute must

APPOINT MULTIPLE OWNERS ACROSS THE ORGANIZATION . . . a true partnership with HR across all senior management functions

MEASURE PROGRESS REGULARLY . . . all programs of this nature must be constantly monitored, measured and improved

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EXECUTIVE SUMMARY“There’s more to succession planning than coming up with lists of

candidates for important positions on the back of a cocktail napkin.”

Dan McCarthy, Director of Executive Development Programs, Paul College of Business and Economics, University of New Hampshire

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EXECUTIVE SUMMARY

Emulate and Adapt Best Practices

① Have commitment and involvement from ED/CEO/President and Board

② Conduct regular talent reviews

③ Only identify viable successors for a handful of key C-level positions

④ Take a pipeline approach to recruitment and development

⑤ Hold the executive and senior leadership team accountable

⑥ Align with business strategy

⑦ Manage the emotional, irrational and political dynamics of succession

⑧ Assess performance and potential

⑨ Integrate with performance management, recruitment, selection, development and rewards

⑩ Make a serious commitment of time and resources to development

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RELEVANT RESOURCES

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RELEVANT RESOURCES

Upon Further Review … Look to the Following

SHRM

Linkage

The Conference Board

HFA Best-in-Class Peers

Harvard Business School

Harvard Business Review

Stanford Graduate School of Business

Aon Hewitt 2011 Top Companies for Leaders Study

Pew Research

Manpower Group

Ohio’s Talent for Tomorrow and Beyond

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RELEVANT RESOURCES

Best-in-Class Companies for Succession Planning

GE

John Deere

IBM

Goldman Sachs

Apple

Microsoft

PepsiCo

Morgan Stanley

Oracle

Amazon

Procter & Gamble

Whirlpool

General Mills

American Express

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RELEVANT RESOURCES

How an Executive Search Professional Can Add Value?

Conduct retained executive searches for C-Suite, C-Suite direct reports and other “hard-to-fill” roles

Provide on-going retention consulting and talent needs assessment

Perform candidate pool development or “Top-10” Lists for Emerging, high-priority talent areas

Succession Planning consultation

Confidential Searches

Post-Placement Consultation – Discreet and Confidential

HCGA Consulting Partners, LLC120 Northwood Road, 2nd Floor, Fairfield ,CT 06825 (484) 994-9270

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prepared and presented by tracy v. mcmillan managing principal hcga consulting partners, llc monday,...

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