Emerging Best Practices and

Trends in
Succession Planning
Debbie McGrath
CEO
HR.com
905 727 1340 x 104
Overview
Succession Planning as a critical business
process
Trends influencing Succession Planning
practices
Emerging Best Practices in Succession
Planning
More Details on this Topic
This presentation was done with the
help of an archived webcasts from Via
People and help with i4cp. For sample
scorecards and examples please visit
the archive of the viapeople webcast on
HR.com
What is Succession Planning?

Succession Planning can be defined as a

purposeful and systematic effort made by an
organization to ensure leadership continuity,
retain and develop knowledge and
intellectual capital for the future, and
encourage individual employee growth and
development.
Why is Succession Planning such a
Hot Topic?
Board concerns and directives
Increased costs associated with external searches
Increased turnover
People who had been regarded as successors for key
positions left by surprise
High performers are leaving
Managers complain that they have no one ready to fill
vacancies
Employees complain that promotion decisions are
made unfairly
Insufficient numbers of women and/minorities at
senior levels
Trends Impacting Succession Planning

Shifting demographics
Shortfall in the number of future leaders
Increase in attrition in executive level positions
Economic conditions resulting in massive
downsizing and increasingly flat and dynamic
organizational structures.
Reduced loyalty among employees despite
focus on employee engagement and
involvement
Trends Impacting Succession
Planning, contd.
Recognition on the part of senior executives
of the importance of values, competencies,
intellectual capital, and leadership
Increase in the complexity of executive
positions
Financial market and employee expectations
Globalization
Technology
Percentage of Organizations with
a Succession Plan

Survey of 385 HR professionals

Source: Society for Human Resource Management, 2006

Global CEO Succession Rates, 2005

Study of the worlds 2,500 largest publicly traded companies

Source: Booz Allen Hamilton, 2006

CEO Performance-Related Turnover, 2005
(as a percentage of all departing CEOs)

Study of the worlds 2,500 largest publicly traded companies

Source: Booz Allen Hamilton, 2006

HR Professionals Estimates of
Readiness for Sudden Succession

Survey of 385 HR professionals

Source: Society for Human Resource Management, 2006

HR Responsibilities
in the Succession Process

Survey of 385 HR
professionals

Source: Society for Human Resource Management, 2006

 Incidence of Formal Succession Plans

86 organizations participated in the Succession Planning Practitioner Consensus Survey

Source: Human Resource Institute, 2006

 Succession Planning Data Collection
About half (51.7%) of organizations have a system in
place to gather information for their succession plans.

86 organizations participated in the Succession Planning Practitioner Consensus Survey

Source: Human Resource Institute, 2006

Succession Rates by Industry, Across the
Seven Years of 1995, 1998, 2000-2004

Study of the worlds 2,500 largest publicly traded companies

Source: Booz Allen Hamilton, 2005
Succession Rates by Industry, Across the
Seven Years of 1995, 1998, 2000-2004
(continued)

Study of the worlds 2,500 largest publicly traded companies

Source: Booz Allen Hamilton, 2005
Identifying High-Potential Talent
A majority of organizations have a process in place for identifying high-
potential talent.

Survey of 96 organizations

Source: Human Resource Institute, 2005

Identifying High-Potential Talent
Processes, by Length of Existence
For many of the organizations that have a process for identifying high-
potential talent, this is a relatively recent initiative.

Survey of 96 organizations

Source: Human Resource Institute, 2005

Identifying High-Potential Talent
Processes, by Position
Among organizations that have an existing process for identifying high-
potential talent, it is rare to examine all levels of employees.

Survey of 96 organizations

Source: Human Resource Institute, 2005

Emerging Best Practices
1. Top management involvement
2. Targeted processes to focus on clearly
defined, specific goals
3. Comprehensive assessment programs
based upon competencies
4. Creation of talent databases incorporating
performance, assessment, demographic,
education, experience, and career interests
5. Identification of future talent requirements
6. Structured and individualized development
programs
Best Practice 1: Top Management
Involvement

Communicates importance of planning

for the future
Allocation of adequate resources
Modeling of effective coaching and
development
Key development resource to high
potentials
Best Practice 2: Targeted Processes

Evolutionary versus revolutionary

Clearly defined set of goals
Meaningful executive reviews
Eliminate administrative burdens
Using technology to facilitate data gathering,
tracking and decision making
Best Practice 3: Comprehensive
Assessment of Talent
Behaviorally defined competencies
Learning agility and derailment factors
Defining performance and potential
Early identification of talent
Multi-source methods
On-going feedback processes
Continuous re-assessment
Test learning agility, development of competence
and performance
Best Practice 4: Creation of Talent
Databases
Integration of data from multiple systems,
including HRIS, Recruitment, Learning.. Etc..
Definition of missing talent data elements
Collection of missing talent data
Education, competencies, experiences, career
interests, mobility
Reporting to facilitate decision making
Best Practice 5: Identification of
Future Talent Requirements
Competency, skill and experience
requirements for critical positions
Profiling the development content of key jobs
P & L accountability
Forming/managing external alliances
Detection of current and future talent gaps
Targeted career pathing and development
Sourcing and recruitment plans to secure
new external talent
Best Practice 6: Structured and
Individualized Development Planning
Formal, structured development plans
Targeted, individual activities with
emphasis on experience-based learning
Transitional coaching during stretch
assignments
Reporting and tracking of progress and
outcomes
Accountability for performance
Continuing Challenges
Ineffective balance between identification and
development
Identifying successors/hi-pos not in line with
most organizational cultures
Executive cloning
Poor linkage to business strategy
Overemphasis on replacement planning
Lack of top management support
Poor business unit buy in
Lack of organization-wide talent database
For More Information:
www.hr.com
Debbie McGrath
905 727 1340 x 104
dmcgrath@hr.com

A Special Thanks to I4cp and Via

People for much of the material
Questions