succession planning gone wrong: how not to do it

Succession Gone Wrong: A Story of a Failed Succession

Plan in 20 Slides

Maya Townsendwww.partneringresources.com

617.395.8396

Click on the arrow to move from slide to slide

in the presentation

Presentation © 2008 Partnering Resources.

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The Situation

The CEO of an R&D subsidiary of a major telecom corporation wanted to retire soon. He

decided to create a succession plan to help the company continue smoothly after his departure.

He commissioned an organizational network analysis to help him form his succession plan.

Presentation © 2008 Partnering Resources. Case © 2007 Netform, Inc. Used with permission.

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WHAT’S ORGANIZATIONAL NETWORK ANALYSIS?


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Organizational Network Analysis Measures Hidden Networks

Networks are the webs of trusted relationships that people forge in order to perform work.

Presentation © 2008 Partnering Resources. Image: Gartner, Inc. Used with permission.

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If This Is The Organization Chart…

Jane is at the individual contributor level on the org chart


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…to what lies beneath

Jane is at the center of this network—10 people work directly with her, as

indicated by the solid lines


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What if Jane were to leave the company?


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Without Jane, the organization fractures and

forms three silos

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NOW BACK TO THE STORY…


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The R&D OrganizationThis is the R&D organization that needed a succession plan. The CEO has five direct reports plus an assistant.

Direct reports Joe, Diane, and Stan are the key players in this story.

DianeJoe Stan

CEO


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What the Analysis Measured

The organization network analysis commissioned by the CEO measured

relationships and interactions used to fulfill basic functions such as...

Getting daily work doneSolving operational problems

Developing new products and services


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The R&D Organization’s Work Network

Diane is a key player in the work network;

she has 9 connections

The work network shows how people interact in order to complete day-to-day activities.

The diagram shows that people depend on Diane to get things done.


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The R&D Organization’s Social Network

But Joe and the CEO have a strong social

relationship

The social network shows how people connect to find out what’s happening in the company and who spends time with whom.

Overwhelmed by work, Diane has little opportunity to socialize. In comparison, Joe has a strong relationship with the CEO.

Diane has only four connections, none of

which are with the CEO


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The Recommendation

Joe is not a good candidate for succession. He’s not trusted by his peers, he knows little about the business, and he’s not integrated into the

organization.

But, based on his strong personal relationship with Joe—mostly formed on the golf course—the

CEO chose Joe as his successor.


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The CEO Retired


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Joe was Promoted

Joe became the new CEO


Frustrated that she had been working so hard without being recognized, Diane found another job and left the company.

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Diane DefectsDiane’s absence opened huge holes in the work network.

Without Diane, the organization fractured and became deeply

disconnected


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The DismissalJoe tried to use his connections to compensate for his lack of knowledge—and for the hole created after Diane left—but was unsuccessful. His colleagues simply didn’t trust him.

After three months of terrible performance, the board asked Joe to leave.


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The Aftermath

Stan stepped in as the new CEO

Stan had stayed in the background throughout his time with the company. He didn’t have the depth of work expertise and involvement that Diane had. But he had developed strong, trusting relationships with key people.

Stan became the new CEO and made up for the performance and profitability lost during Joe’s tenure.


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WHAT CAN WE LEARN FROM THIS STORY?


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The Lesson

Succession decisions often are based on gut reactions. These decisions may feel

good—but they may be fatal for the company.

Organization network analysis (ONA) provides the data needed to make good

decisions about succession.


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TO LEARN MORE ABOUT HOW ONA CAN HELP YOUR COMPANY…


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Maya Townsend, founder of Partnering Resources, helps leaders identify the hidden web of relationships that drive organization performance.

Partnering Resources is the exclusive East Coast provider of NetForm organization network analysis. NetForm software, developed by Dr. Karen Stephenson, is built on complex mathematical algorithms developed over 30+ years of research with 400+ companies.

For more information:

Phone: 617.395.8396Email: [email protected]: www.partneringresources.com/resources.html

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succession planning gone wrong: how not to do it

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