Past experience shows that poorly executed succession plans can have an immediate negative impact on company momentum, reputation, employee morale and the bottom line. Any business or public sector organisation, irrespective of its size, should have a strategy to deal with losing talent, whether it’s planned or unplanned. This strategy should not simply be focused on the C-suite, but applied to every level of an organisation. Find out how companies are building effective succession planning with long-term successors as well as short-term replacements in order to maximise business performance and continuity. This presentation was used at HR Summit and Expo 2013 www.hrsummitexpo.com

1. Win the war for talent through
best-in-class succession planning
David Edwards, Head of Professional Services, CEB
7 October 2013
© 2013 The Corporate Executive Board Company. All rights reserved.

2. •
The Succession Landscape
•
Reducing your succession risk - 4 key steps to success
•
Questions and answers
2
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3. Changing landscape of succession
•
Changing requirements of leaders
•
Corporate governance
•
Focus on specialists and experts
•
Critical roles
•
Risk and cost of external hiring
•
Shortage of available talent
3
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4. Talent Management and Succession Planning
Talent Management
Succession Planning
Starts with people
Starts with jobs
The agility to match key talent with strategic opportunities is critical to
outperforming in today’s dynamic and hypercompetitive global marketplace.
4
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5. Challenges we hear
“We don’t know if we are bringing the
right people into our talent pools.”
“We are concerned about the strength of
our leadership pipeline.”
Only
1/15
Only
have the potential to be
effective leaders in the near
term
29%
of high performers currently
have the potential to rise and
succeed in more senior critical
positions
Source: CLC Realising the full potential of rising talent 2005
Source: The SHL Talent Report 2012
“Our HIPO programmes are not delivering a
return for the business. ”
“The failure rate of transitioning leaders
is high.”
Nearly
46%
40%
of all transitioning
leaders underperform
of internal job moves made by
people identified as “high
potentials” end in failure
Source: CLC HIPO Program Operations and Outcomes Survey, 2012
Source: CLC High Impact leadership Transitions, 2012
5
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6. 4 key steps to success in succession
Step1
•Know your
critical roles
•Understand what
it takes to be
successful
Step 2
Step 3
Step 4
•Identify future
potential
•Build talent pools
•Be clear about what
potential means
•Nurture, motivate
and develop your hi
potentials
6
•Assess for
readiness
•Give new leaders
the best possible
chance of success
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7. Step 1 – Know your critical roles
7
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8. Case story: ZHC
•
Family owned business – second generation of 12 brothers run Zamil Holding
Company (ZHC)
•
About 40 companies in the group:
•
Steel
•
Air conditioning
•
Glass
•
Want to become more global in outlook, leveraging their brand and financial strength
•
Also want to ensure that 3G family members assigned appropriate roles in the business
•
Talent management at the top of the agenda, both for 3G and also for professional staff
8
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9. Client goals
•
Clear understanding of the future leadership requirements to deliver the Zamil strategy
•
A robust and objective assessment regime to measure leadership capability and
potential amongst the 3G family members
•
Individual and organisational data for all participants, including clear development plans
9
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10. Zamil Leadership Talent Matrix
What
Potential
How
10
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11. Step 2 – Identify future potential
11
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12. HIPOs contribute significantly to leadership pipeline
HIPOs are more valuable and contribute
disproportionately to the organisation’s
future leadership pipeline
Non HIPOs
HIPOs
HIPOs are 91% more valuable to the
organisation than Non-HIPOS and three times
more likely to succeed at the next level than
High Performers
High Performers
1.9
x
HIPOs
75%
1.0
x
25%
Source: CLC Human Resources High-Potential Employee
Management Survey; CLC Human Resources Head of HR Function
Survey.
Probability of Success at the
Next level
Value to organisation
High-Potential talent Management a top
strategic concern for CEOs and Heads of
HR
High-Potential Management Is Not a
Top Priority for the CEO but it Is a
Top Priority for HR
19%
6%
For 75% of organisations, HIPO
management is a top priority for both the
CEO and HR
High-Potential Management Is Not a
Top Priority for Either the CEO or HR
75%
High-Potential Management Is a Top
Priority for Both the CEO and HR
Source: CLC Human Resources Realising The full
potential of rising talent 2005
12
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13. Inadequate measures of potential
Most HIPO identification systems fall short
These strategies increase risk
of selecting candidates that
may be performing well in
their current roles, but are not
truly high-potential.
High Performance:
Necessary, but not sufficient on its own.
Tenure & Experience:
Relying on these indicators alone would yield an accuracy rate
of less than 9%
Leadership competencies
Success rates are far from ideal when using leadership
competencies alone
Source: CLC Human Resources Realising The full potential of rising talent , 2005
Most high performers are not high potential
The remaining 71% are
missing something needed
to excel at the next level of
the organisation
Only 29% of high
performers are also high
potential employees
13
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14. SHL Model of High Potential
Assessment Methodology
Intellectual
Agility
The indices are assessed online
utilising a combination of Personality,
Motivation and Cognitive Ability Tests
(approx. 2 hours)
Aspiration
Motivation
Individuals demonstrating these 3 key indices are
3 times more likely to reach a senior executive position.
14
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15. Step 3 – Accelerate high potential
15
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16. Are you maximising High Potential?
Have you identified High Potentials or
created Talent Pools?
Do you know what they have the potential for?
Are your HIPOs engaged and motivated
to deliver business results?
Do you know what support and
development they need?
Have you set them up for success?
16
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17. Mismanagement of HIPOs is costly
• Employee performance is 14% better in organisations that invest in HIPO programmes
• HIPOs in such organisations are 69% more likely to succeed in more senior roles
• Organisations can maximise High Potential by:
• Leveraging employee relationships – ensuring HIPOs are surrounded by quality people (colleagues and their
manager)
• Showing genuine organisational commitment to the individual by understanding their motivation and
aspirations
• Structuring challenges within job experiences and designing a meaningful and achievable personal
development plan
Identifying HIPOs does not guarantee business results.
HIPOs need to be individually understood and nurtured to ensure they fulfil potential.
CLC – ‘Realising the Full Potential of Rising Talent’, CEB Research, 2005
17
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18. HIPO programmes deliver worrying low ROI
HIPO programmes target future leaders, yet
struggle to do so effectively
The top objective of most HIPO programmes
(81%) is to build a pipeline for succession
management
36%
Effective
Ineffective
64%
But few HIPO programmes deliver expected
talent outcomes
Only 36% of HIPO programmes are effective at
building a pipeline succession management
Refers to percentage of respondents who choose Very Effective
or Effective on a 7 point scale
Source: HIPO Program Operations and Outcomes Survey 2012
With dangerous consequences
Nearly 40% of internal job moves made
by people identified as “high potentials”
end in failure.
40%
Failure
Success
60%
Source: CLC HIPO Program Operations and Outcomes Survey, 2012
Percentage of internal job moves made by High Potentials that end in failure.
18
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19. Validating and accelerating HIPOs @ EDF Energy
Context & Objectives
•
•
•
•
Quantify and validate the capacity and capability of the leadership talent pool
Build sustainable development plans and set stretch expectations
Engage the executive
Benchmark leadership talent
Programme Overview
Briefing with
Talent and
HRBPs
Identification
Stretching
“day in the life”
simulation
Online
diagnostics
In-depth career
achievement
and aspiration
interview
Career profile
review
Personal report
3-way Feedback &
Development Planning
Development
19
Talent Review
Individual Profiles
Predictive Talent Analytics
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20. Individual profiles and group benchmarking
20
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21. Step 4 – Assess for readiness
21
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22. Effective leadership transitions affects revenue and profit
High performing transitioning leaders
reach full productivity nine months before
their average peers
These factors combine
to generate potential
improvements in
revenue of 3% to 5%
and profit of 2% to 5%
Attrition risk for their teams is 13% lower
than average, and their teams show
discretionary effort levels that are 2% higher
than average
Source: High-Impact Leadership Transitions: A Transformative
Approach 26 October 2012
But few organisations prepared for
leadership vacancies
13%
Less than 15% of business leaders’ direct
reports are ready for immediate transition into
the next role
71%
16%
Ready now
Ready in more than
1-12 months
Ready in more that
12 months
Nearly one third will not be ready within next
two years
Succession Readiness Among Leaders’ Direct
Reports (percentage of potential successors)
Source: CLC, Improving Business Leaders Effectiveness Survey 2008
22
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23. Difficult transitions have wide reaching impact
A significant percentage of transitioning
leaders underperform
Underperformance
proves more likely
(and troubling) than
derailment.
51.4%
Only one-half of transitioning leaders
perform solidly during the course of their
transitions
100%
46.3%
2.5%
Source: High-Impact Leadership Transitions: A Transformative
Approach 26 October 2012
Total population of
transitioning leaders
Solid
Performers
Under
Performers
At Risk of
Derailment
Ineffective transitions cause a ripple effect
Direct reports of a struggling transition leader perform,
on average, 15% worse and are 20% more likely to
leave the organisation or be disengaged, than those
who report to a high performing one
Source: High-Impact Leadership Transitions: A Transformative Approach
26 October 2012
23
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24. Assessing readiness at The Coca-Cola Company
•
Marketing talent is critical to the success of The Coca-Cola Company
•
Inability to fill a critical marketing leadership role from within raised serious
questions about the marketing leadership pipeline
•
Having to look outside to fill vacancies was:
•
Expensive
•
Risky
•
Demotivating for top talent
24
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25. The succession challenge
•
Pipeline challenges
•
Employees not completely engaged
•
Organisational feedback
25
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26. The goal
•
The Coca-Cola Company’s goal was to
complement their People Development Forums
with objective and relevant data that enriches
understanding of the potential and readiness of
their talent in global marketing
•
Who has the potential to make the transition?
•
What do they need to make them ready to make
the transition?
26
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27. Assessing for readiness: A comprehensive approach
Knowledge –
organisational and
market know how
Behaviour – leading
and developing the
business, inspiring
others to deliver
Experience – leading
teams, managing in a
downturn, managing
a P&L
Qualities – drive,
resilience, learning
orientation
27
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28. The results
In Year One alone
By 2012
• 93% of senior marketing roles filled
internally
•
Nearly 100% of critical marketing
leadership roles filled internally
• 71% of participants promoted or taken
on significantly expanded job
responsibilities
•
Programme extended to 3 levels of
marketing leadership and customer
and commercial leadership
• Many moves have been across
geographies
•
Ownership and commitment from
senior leadership
•
Reduced regrettable turnover
”Now we can make sure that the right people with the
right skills and behaviours are in the right place at the
right time.”
28
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29. Thank you
David Edwards
Head of Professional Services, CEB
David.edwards@shl.com
Come and see us on stand B30
© 2013 The Corporate Executive Board Company. All rights reserved.