smd business-focused succession planning
DESCRIPTION
While organizations have evolved substantially in how they develop a strong pipeline of leadership talent, some significant gaps still exist. The overall inability to discover and quantify the people-drivers of business outcomes continues to hinder the succession planning process within organizations. We provide you with an approach to create a succession planning process that assesses your talent based on the competencies, skills, experiences and other elements that affect business outcomes, while quantifying the quality of your talent pool. A customizable succession planning scorecard is provided to show you how to have the most impact on the business when planning your next talent moves. This presentation will show you a succession planning process that:, • Focuses talent decisions on key drivers of business • Incorporates analytics into talent assessments • Creates metrics based on the overall quality of your talent pool • Utilizes performance and potential reports that are business-focusedTRANSCRIPT
Business Focused Succession Planning
Shane Douthitt, Ph.D.
Scott Mondore, Ph.D.
Strategic Management Decisions
Learning Objectives
• Identify and assess employees on the competencies,
skills, personality tendencies, etc. that lead to high
levels of performance
• Utilize analytics to objectively:
▫ Assess High-Potential Talent; Differentiate High From Low
Performers
▫ Assess Overall Talent Pool Effectiveness
▫ Uncover Individual and Group Leadership Development
Needs
• Align succession planning efforts with strategic
business goals and demonstrate an impact on bottom
line results
About SMD:
Linking People Data to Business Results
Our Results
• Linkage of Talent Management (e.g., engagement
survey results, training, performance ratings,
competency assessments) to a variety of business
outcomes:
▫ Operations Metrics (e.g., operating margin)
▫ Financial Metrics (e.g., sales dollars, productivity)
▫ Customer Satisfaction
▫ Turnover/Retention
▫ Employee Safety
• Significant bottom-line improvements and
return-on-investment for our clients.
Our Platform
• Implement Talent Management processes based on analytics, linking
people to critical business outcomes
• Partner with our clients to create and execute people strategies that
drive business outcomes and maximize ROI
Connecting Employees
to Business Results • HR Strategy & Planning
• Human Capital Measurement
• Talent Management
• Leadership Development
• Executive Assessment & Coaching
• Organizational Effectiveness
Presenter Bio
Scott Mondore, Ph.D.
Scott has over 15 years of experience in the areas of strategy, talent management,
measurement, customer experience and organizational development. He has internal and
consulting experience across a variety of industries including transportation, healthcare,
manufacturing, pharmaceuticals, utilities, and hospitality.
Scott is currently a managing partner of Strategic Management Decisions (SMD). Before
SMD, he served as East Region President for Morehead Associates, a healthcare HR
company. Before joining Morehead, Scott worked as a Corporate Strategy Director at Maersk,
Inc. He also worked as an Organizational Effectiveness Leader at UPS, focusing on
employee assessment and measurement as well working as a consultant to large and small
organizations in both the private and public sector.
Scott is the co-author of “Investing in What Matters: Linking Employees to Business
Outcomes” (SHRM, 2009) and “Business-Focused HR: 11 Processes to Drive Results”
(SHRM, 2011). and has published several articles on various topics, including employee
turnover, employee safety, coaching, litigation and leadership.
Scott holds a master's degree and doctorate in industrial/organizational
psychology from the University of Georgia.
Presenter Bio Shane Douthitt, Ph.D.
Dr. Shane S. Douthitt is a co-founder and managing partner of Strategic Management
Decisions (SMD). He has more than 18 years of experience in the areas of measurement,
talent management, executive assessment and coaching, and organizational development
across a variety of industries. Before SMD, he was the SVP of Sales and Product
Management at Morehead Associates—a healthcare HR consulting company. Before joining
Morehead, Shane worked as a Senior Vice President of Human Resources & Leadership
Development at Bank of America. Shane also worked as a consultant for Towers Perrin and
IBM.
Shane is the co-author of “Investing in What Matters: Linking Employees to Business
Outcomes” (SHRM, 2009) and “Business-Focused HR: 11 Processes to Drive Results”
(SHRM, 2011). In addition, he has published several articles in leading journals on a variety of
topics, including HR strategy, measurement, teams, individual differences and diversity,
employee selection, group dynamics, and careers, and leadership development.
Shane holds a master's degree and doctorate in applied psychology from the University of
Georgia, as well as a master’s degree in industrial/organizational psychology
from the University of Tulsa.
RETHINK Your Approach to HR!
Make HR a Profit Center
• Quantify the impact of employees on business outcomes
• Calculate an expected ROI for investments in employees
• Define the relationship between HR processes and business outcomes
Connect Key HR Processes
• Provide a single, integrated view of key HR processes
• Reduce your HR related costs through integration and strategic alignment
• Connect HR processes to business results
Spend More Time Driving Results
• Align HR professionals, organizational leaders, & employees to focus on actions that drive results
• Provide customized analytics and simplified reporting through business-focused scorecards
Talent Link Key HR Processes
Business Outcomes
Performance Management
Selection
Employee Survey
360 Feedback
Succession Planning
Competency Builder
Career Development
Training
Examples of
Business Outcomes
People
• Turnover
• Employee engagement
Service
• Customer satisfaction
• Wait times
Quality
• Clinical outcomes
• Product Defects
Finance
• % to budget
• Cost reduction
Growth
• Sales growth
• Margin growth
Key HR Processes in One Place
SMD Publications
Published by
SHRM (2009)
Published by
SHRM (2011)
The authors’ practical
approach, “Focuses HR
leaders on where to put their
limited time, energy, and
resources to maximize both
individual and organizational
performance.”
Vicki Escarra, President and
CEO
Feeding America
#3 SHRM Best-Seller
Session Agenda
• The current state of succession planning
• Building a business-focused succession plan
▫ Performance versus Potential
▫ Assessing the Business Impact of People Data
▫ Examining Organizational Strengths & Gaps
▫ Identifying Top Talent through Comprehensive Talent
Review Sessions
▫ Aligning Development Planning with Business Needs
Applied Research and Trends
2011 SHRM Poll
426 Organizations of all sizes
• Less than a quarter (23%) of organizations currently have a formal succession plan in place
• More than one-third (38%) have informal succession plans
• Almost one-third (30%) of organizations evaluate or update their succession plans once a year.
• Almost one-half (43%) of the respondents indicated that more immediate requests take precedence in the organization over developing a formal succession plan.
• Other organizations stated that they have not yet given consideration to succession plans (16%) or feel that their staff size is too small (15%).
Succession Planning Obstacles
Study of 29 Multinational Companies (Guthridge, Komm & Lawson)…
39%
47%
50%
51%
52%
54%
Succession planning processes not rigorous
enough to matching right people to right roles
Senior leaders not aligning talent mgmt. with
business strategy
Line managers unwilling to differentiate top
and bottom performers
Organization is siloed; limitations in sharing of
resources
Line managers not committed to people
development
Senior leaders not spending high-quality time
on talent management
What Our Clients Are Saying…
“We just don’t spend much time on succession and talent planning.”
“We move people around when we have to.”
“Our high-potentials are often identified by their likeability.”
“Employees have to be ‘noticed’ by a senior leader to get any real development opportunities.”
“Our ‘9-box’ talent reviews are dominated by the biggest titles and loudest voices.”
Typical Approach to Succession Planning
• Focuses only on replacing the CEO
• Provides generic leadership development
opportunities
• Produces highly subjective ratings of performance
• Creates subjective pools of ‘high-potentials’
• Is misaligned with career aspirations of talent
• Does not leverage employee data to
focus on key business drivers
The Opportunity
• To discover the competencies, skills, experiences, etc.
that drive business outcomes
• To identify top talent based on performance on key
business drivers
• To make succession decisions based on analytics and
data—not on likeability
• To align succession planning with the business
strategy and drive results across the organization
• For HR to take the lead in making the process
business-focused
Aligning the Business Strategy, People Development Strategy,
and Program Design
What is Succession Planning?
Succession Planning
Leadership Development
Career Assessment/ Development
*Succession Planning should
not occur in a vacuum*
A comprehensive approach to ensuring the right people are
in the right jobs at the right time.
Succession-Planning Process
Identify Critical Roles
Assess Leader Performance &
Potential
Calibrate Ratings Based
on Business Drivers
Identify Potential
Replacements
Develop Leaders and Talent Pools
Ready Now Replacements when Needed
Employee Provided Information
Identify “Critical Positions”
Goal: To predict future performance
• The best way to predict future performance is to look at past
performance (i.e., the “what” and the “how”) and systematically
assess future potential.
The Foundation of Succession Planning:
Performance vs. Potential
Sample Performance Scale:
1 – Fails to Meet Expectations
or Unacceptable
Performance
2 – Sometimes Meets
Expectations or Needs
Improvement
3 – Meets Expectations or
Quality Performance
4 – Consistently Exceeds
Expectations or Superior
Performance
Sample Potential Scale:
1 – Placement Issue
2 – Grow in Position
3 – Promotable
4 – High Potential
Clearly Define Potential
Provide Even More Clarity
Traditional Succession Planning Process
Identify High Potential
Talent
Assess Development
Needs
Build & Execute
Development Plans
Monitor & Review
Assess Critical
Positions
Our Business-Focused
Approach takes succession
planning to the next level by:
• Utilizing analytics to
differentiate high from low
performers
• Assessing both individual
and systemic development
needs
• Aligning development
plans with the business
strategy
Assess Business Impact:
Business Partner RoadMapTM
1. Determine Critical
Outcomes
2. Create Cross-Functional Data
Team
3. Assess Measures
4. Analyze the Data
5. Build Program &
Execute
6. Measure & Adjust
Business Partner RoadmapTM
Assess Business Impact:
Succession-Focused Assessment
Integrated Assessment
Skills/ Competencies
Personality
Employee Survey Results
Experience
• A best practice in
succession planning and
leadership development
programs is to include
leader assessment,
feedback, and
development planning.
• The assessments are
intended to identify
strengths as well as gaps in
leaders’ skills, abilities,
competencies; particularly
to expose gaps in critical
competencies identified
earlier.
Assess Business Impact:
Potential Assessment Tools
• Behavior-based assessment
▫ Quantitative 360 feedback;
▫ Competency Ratings from performance reviews
• Personality
▫ Hogan Personality Inventory
▫ 16PF
• Professional/Leadership Experiences
▫ Experience Profiler
• Employee Survey Results
(management style/effectiveness)
• Traditional data analysis includes: • Qualitative analysis or gap analysis (strengths/weaknesses) • Correlation • Regression
• Advantages of SEM: • Consider multiple independent & dependent measures
concurrently • Imply causality • Calculate ROI • Correct for measurement errors
• SEM is commonly used in other industries (econometrics, market research)
Assess Business Impact:
Analytic Approach – Structural Equation Modeling
Assess Business Impact:
Executing the Analyses
• “Apples to Apples” Comparison: Line up each leader’s
individual data (e.g. 360, employee survey) with their
performance outcomes (e.g. percent to goal on
business outcomes)
• Identify Key Drivers: Run statistical analyses (i.e., SEM)
to identify the individual factors that evidence the
strongest relationships with performance outcomes
• Get help on the analyses—don’t let it be a barrier to
executing the process
Assess Business Impact:
Linking People Assessments to Business Metrics
Critical Business
Outcomes
Leadership
Competencies
Personality
Factors
Experience
The linkage analysis will
demonstrate the level of
impact that each
competency, experience,
skill, etc. has on individual
performance and business
outcomes.
This allows leaders to
focus on the most
important competencies,
skills, experiences and
determine the appropriate
level to invest in
developing each area.
Identifying Critical Competencies/Experiences that Drive Business Outcomes
Employee
Attitudes
Technical
Skills/Abilities
Examine Strengths and Gaps:
Business-focused Ready Now ScorecardTM
Key Drivers of Business Outcomes
Utilize the Ready Now Scorecard to Assess Overall Talent Pool Health…
• Refer to the scorecard during talent review sessions; incorporate
stakeholder ratings of performance and potential to identify true
Ready Now talent
• Assess performance strengths and gaps across the entire talent pool
Calibrate Performance & Potential
9-Box Report
Identify Top Talent:
Goals for Facilitating Talent Review Sessions
• High Potential Assessment
▫ Evaluate ‘expandable’ talent based on performance on
business drivers
• Comprehensive Talent Review
▫ How much and what type of talent do we need to sustain
success and execute on our strategy?
▫ Have we made a sufficient number of talent moves and filled
necessary gaps from the last time we had a talent review?
▫ What lateral moves/promotions/special projects have we
moved our high-performers and high-potentials into in the last
year?
• Achieve diversity goals and/or organizational goals, as
needed
Identify Top Talent:
Goals for Facilitating Talent Review Sessions
• Role Clarity
▫ What jobs ‘feed’ the role; what jobs come next?
▫ Focus on creating career paths for critical jobs
• The “9-Box” Discussion
▫ Using analytics, it differentiates talent based on business driver
performance
▫ Great companies continue to leverage its effectiveness
• Performance Management
▫ Hold leaders accountable for individuals in “does not meet
expectations” categories
▫ Make decisions of “up or out” on talent in critical roles
Selecting Ready Now Replacements
Launch Leadership Development Program:
Alignment with the Business Strategy
Step 1: Explicitly outline the organization’s leadership strategy; The leadership strategy and goals will provide the “blueprint” for the actual program
• Factors that influence a leadership strategy:
▫ External business trends
▫ Key business strategies
▫ Required organizational capabilities and competencies
▫ Leadership and business priorities
▫ The organization’s culture
▫ Performance objectives
Business Strategy
Leadership Strategy
Leadership Program Design
Launch Leadership Development Program:
Alignment with the Business Strategy
Step 1 Continued…
• Create a Leadership Development committee
or conduct a series of key stakeholder
interviews to provide the necessary input. Key
factors to consider:
o How will the business strategy impact the
organizational design in the next 3-5 years?
o Given the business strategy over the next 3-5
years, what types of leaders are needed?
(Experiences Required? Competencies
Needed?)
o How will future leadership roles be filled?
(internal, external, or a mix)
Business Strategy
Leadership Strategy
Leadership Program Design
Develop Top Talent:
Program Design and Components
• Your business-focused leadership strategy and program goals determine the program’s design and content.
• Consistent with best practice, potential program components include:
▫ Assessment, feedback, and development planning
▫ Coaching and/or executive mentoring
▫ Action learning teams focused on real business issues
▫ Exposure to the strategic business agenda
▫ Job assignments or rotations
▫ Group learning activities
▫ Team building/development
Phase 1.
Design Program
• Define program objectives and create “blueprint”
• Select and build customized program components
• Build customized leadership assessment process
• Match & train assessors
Phase 2. Assessment & Feedback
• Kick-off program and orient participants; complete assessments
• Aggregate assessment data and produce an overall leadership report
• Provide feedback to participants and build development plan
Phase 3. Group Learning
• Execute group learning sessions.
• Execute learning action team projects
• Observe and provide feedback & coaching
Phase 4 . Coaching & Program Review
• Provide coaching during periodic 1:1 meetings
• Participants have, as needed, access to coaches throughout the process
• Wrap-up program
• Evaluate program effectiveness
Develop Top Talent:
Sample Leadership Program Overview
Business Focused Succession Planning:
Success Metrics
• Business-focused assessment of the organization’s
Talent Pool
• More “Ready-Now” Candidates in the Leadership
Pipeline
• Overall Talent Pool Health Assessment & Tracking
• Expanded Opportunities for High Performers:
▫ Lateral Moves
▫ Cross-Functional Projects
• Reduced High Performer Turnover
• Increase Perceptions of Career Opportunities on the
Employee Survey
Integrating Succession Planning and Compensation
0-20% 20-40% 40-60% 60-80% 80-100%
High Potential
Mitch Daniels Billy Ryan
Meggin Gowen Tom Tuberville
Matt Madson Carol Johnson Amy Andrews
Mary Matlock Scott Donovan Jill Rogers
John Doe Jane Doe Sam Smith Jim Johnson
Promoteable
Shane Donovan Sasha McDonald John Mondore
Katie Bradford Carter Smith Jason Kidd
Julie Jones Sam Bradford
Grow in Position
Tommy Timmons Ricky Bobby Brett Favre
Erin Dry Marc Ward Gena Vantuyl Sherry Hartnet Chris Payey Jason Murry
Placement Issue
Mike Roberson Jerry Jones Kim Klover
Bobby Bean Janice Smill Jill Vantuyl Mike Kelly
Billy Simmons Jodie Johnson
Potential and Position in Pay Range Director Level Employees
Performance ratings are integrated with your compensation philosophy to
pre-populate merit, incentive and equity recommendations
The Art & The Science
ART SCIENCE
▫ Customizing the approach to
the organization based on
current/future business
challenges (which can come
with assumptions)
▫ Facilitating Talent Review
meetings with leaders
▫ Getting high potential talent
on the right career path
▫ Linking employee data to
business outcomes
▫ Assessing Talent Pool Health
▫ Creating leadership programs
based on true talent pool
development needs and
individual needs that drive
business
outcomes
Practical Tips
• Engage stakeholders early in the process:
▫ Ask stakeholders to identify the critical business outcomes
▫ Use stakeholder interviews to engage leaders across functions
• Focus on mid-to-upper level management positions—
not just the CEO
• Develop pools of talent for critical roles
• Make all leaders responsible for talent planning
• Remember to include a comprehensive approach to
career development and leadership development to
build the most effective pipeline of talent
What We Have Covered
How to make succession planning business-focused by:
▫ Using analytics to discover key talent performance on elements that drive the business (individual and group)
▫ Assessing and tracking talent pool effectiveness—using the Talent/Succession Scorecard
▫ Making succession planning decisions based on facts and data
▫ Effectively facilitating talent review sessions
▫ Aligning succession planning with career development, leadership development, and the business strategy
To Contact Us:
Scott Mondore, Ph.D.
Managing Partner
(404) 808-4730
www.smdhr.com
Shane Douthitt, Ph.D.
Managing Partner
(704) 975-6820