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1. Best Practices of
Succession Management
and Employee Retention
Click to edit Master subtitle style

2. Questions To Consider...
What % of your employees will
retire in the next 5 years?

3. Questions To Consider...
What % of your employees are
looking for other employment?

4. So…what are you planning
to do about it?

5. Session Objectives
Briefly explore current trends
Understand succession management versus
succession planning – and the alignment to
employee retention
Understand best practice processes and
examine a few of the tools and
methodologies being used
Discuss the roadblocks and benefits of
implementation
Explore how to get started

6. Why the Interest in
Succession Planning and
Numbers of people retiring and numbers of people
entering workforce
Loss of organizational memory
Skills shortages are acute
Retention of talent
Future of work – different needs for generations of
employees
What else?

7. Trends and Forecasts*
By 2008, more people will be leaving the
workforce than entering
44% of workers aged 45-59 say they will
retire before 65
10% of workers aged 50-59 who leave full
time jobs, move into part time within 2 years
1/3 of workers aged 50-59 who leave full time
jobs, move back into full time
* Statistics Canada research

8. Trends and Forecasts*
72% of companies predict they’ll have an
increasing number of leadership vacancies
over the next 3-5 years
76% of those same companies are “less
than confident” in their abilities to
adequately staff these positions
* Corporate Leadership Council research
(reported by The Gallup Organization)

9. Current Economic Issues
Workplaces will lose high performers as
economy strengthens
Currently, workplaces that understand
future skills needed are having difficulty
recruiting
Recruitment strategies are strengthening
Retention of talent is increasingly
becoming a “hot” issue

10. The Internal Challenge
Who is going to do the work?
What knowledge are we about to lose?
What skills will we lose?
What traditions will change? Is this good?

11. The External Challenge
The market place for good talent will be
competitive
The good people will be able to pick and
choose their working environment
How do we create an organization in where
people want to stick around?

12. Who is responsible to
ensure you have the people
to get the job done?

13. Shift from Industrial Age to
Information Age
The Old Way
HR is responsible for people management
We provide good pay and benefits
Recruiting is like purchasing
Development happens in training programs
We treat everyone the same
Source: “War for Talent”

14. Shift from Industrial Age to
Information Age
The New Way
All managers are accountable for strengthening
their talent pools
We shape our workplace, jobs, and strategy to
appeal to talented people
Recruiting is like marketing
We fuel development through stretch jobs,
mentoring and coaching
We affirm our people, but invest differently in
A, B, and C players
Source: “War for Talent”

15. Questions To Reflect On
If the dam bursts today, what is the
impact to your organization?
How would you replace the people,
knowledge, lost productivity?

16. One Approach…

18. It’s not just about having
the bodies.
It’s about the right bodies
doing the right things.
Creating an organization of
which people want to be a part.

19. Retention:
What keeps employees
happy?

20. Current Retention Trends
Towers Perrin (2002) Canadian study
59% are open to changing jobs
11% actively looking
45% passively looking
“To retain me, you’ve got to help me advance, keep
the good people, and provide competitive pay….”

21. Top 15 Retention Drivers
Retention Items %
1. Exciting work & challenge 48.4
2. Career Growth, Learning & Development 42.6
3. Working with great people & relationships 41.8
4. Fair pay 31.8
5. Supportive management/great boss 25.1
6. Being recognized, valued & respected 23.0
7. Benefits 22.0
8. Meaningful work, making a difference & contribution 17.0
9. Pride in organization, its mission & product 16.5
10. Great work environment / culture 16.0
11. Flexibility 13.6
12. Autonomy, creativity and a sense of control 12.6
13. Job security & stability 10.5
14. Location 10.3
15. Diverse, changing work assignments 7.7
Source: Career Systems International, 2005

22. Other Research
Retention Items
1. Career growth, learning and development
2. Exciting work and challenge
3. Meaningful work, making a difference and a contribution
4. Great people
5. Being part of a team
6. Good boss
7. Recognition for work well done
8. Fun on the job
9. Autonomy, sense of control over work
10. Flexibility – for example, in work hours and dress code
11. Fair pay and benefits
12. Inspiring leadership
13. Pride in organization, its mission and quality of product
14. Great work environment
15. Location
Source: Love ‘Em or Lose ‘Em, 1999

23. Understanding the Data
Employees are looking for job growth and
learning opportunities, or they are looking for
a new job
Are you offering the items on these lists to
your employees?
As managers in your organization, how many
of these items do you believe are within your
control?

24. Understanding the Data – Link
to Recruitment
Attraction is part of retention, so this
information also informs recruitment practices
Employees will be attracted to organizations
that have well-developed mentoring
programs, career development initiatives, and
job enrichment opportunities

25. Link to Employee
Engagement
Research shows positive correlation of
engagement scores with:
Employee attraction and retention
Engagement scores also have a positive
correlation with:
Customer satisfaction
Revenue growth and shareholder returns
Employee productivity
Employee attendance

26. What is Engagement?
Say Stay Strive
t the organization to co-workers, potential employeesmember of the organization. possible to contrib
Have an intense desire to be a and customers. very best job
Exert extra effort & are dedicated to doing the
Engagement

27. Calculating Employee
Engagement
Scores from the following six questions are used to calculate
the engagement score:
uld, without hesitation, highly recommend this organization to a friend seeking employment.
n the opportunity, I tell others great things about working here.
Say
uld take a lot to get me to leave this organization.
dly ever think about leaving this organization to work somewhere else.
organization inspires me to do my best work every day. Stay
organization motivates me to do more than is normally required to complete my work.
Strive

29. Succession Planning:
Helping you understand
who to focus on

30. Q u ic k P o ll…
Who has:
No succession planning in place?
Succession planning in place, but not sure it
is, or will be, successful?
A successful succession planning initiative?

31. The Traditional Approach to
Succession Planning
Often highly political
Little thought given to what kind
of leaders required in the future
Done secretly
Focus on putting names in boxes
(“replacement”)
Few conversations held

32. Results of This Approach to
Succession Planning
Strategies become academic and
administrative exercises. Change happens
and rigid plans are not applicable – a waste
of time and money
Little focus spent on the development
of individuals

33. A Different Way to Think
About Succession Planning
Succession management is a process of
ensuring there are leaders and talent that
can implement the organizational vision
It requires the systematic identification of
those individuals who have the potential to
turn the vision of the organization into
reality

34. Elements of an Effective
Succession Management
* The Gallup Organization

35. Succession Management
Focus on individual development
strategically aligned to future vision
Leadership development can ensure that the
potential identified through succession
process is realized
Result is long-term leadership sustainability
through attraction, retention and
development of talent

36. Succession Management
A key strategic initiative
Cannot be done in isolation to other
cultural and people oriented initiatives in
the organization
More than just “putting names in boxes”

37. Succession Management
Focus on integrating many elements of
organization development
High level steps need to be customized for
each organization
“Leadership Pool” approach is gaining in
popularity (identifying all potential
employees vs. positional replacements)

38. “There are no recipes or formulae, no
checklists or advice that describe
“reality”. There is only what we
create through our engagement with
others and with events.”
(Margaret Wheatley,
“Leadership and the New Science”)

40. Vision and Competencies
Alignment to vision and strategy
Business plan for succession initiatives
Succession and leadership aligned to the
vision, critical business issues/skill gaps
Executive commitment
Develop leadership competencies
Develop a succession management
roadmap

41. Need for a Roadmap
Implementing succession initiatives
impacts culture
A roadmap shows how to get there
“Without a roadmap, the likelihood is that
you will focus too much attention on details
and miss the ‘big picture’.”
(William Rothwell)

42. Talent Review Process
An interactive dialogue and discussion to
support the performance and potential of
talent in the organization
A process to look at key talent, open
positions, promotions and leadership
development
Discussion to support shared ownership of
the talent pool and development
opportunities

43. Talent Review Process
Robust Talent Review (“War for Talent”):
Full day on-site for each division
Discuss quality of incumbents
Review individuals and the talent strength
of each unit, and discuss other issues such
as retention or recruiting
Rigorous, candid and open debate

44. Talent Review Process
Robust Talent Review, continued:
Drive to a distribution of ratings
Specific action plans written and followed
up for each unit
As important and intense as the budget
process, with real accountability and a
performance focus

45. Talent Review Roadmap
Questions
How far down in the organization? What
groups?
High potentials or everyone?
Replacement or pool – or both?
Assess on performance and potential
Other assessments required?
Who will assess? Do they have the skills to
assess?

47. P o o l ve rs us
R e p la c e m e n t
Identifying “bench weakness” (e.g.
managers, technicians)
Assess individuals
Develop as pool – stretch assignments,
leadership development
Track progress

48. Folio Map
5.0
New in Position/High Potential High Performance and Potential
3.6 Competent/ Capable High Performance/ High Professional
Potential
2.6
Needs Improvement
Outplacement
0 3.6 5.0
Performance

49. Id e n t if y in g H ig h
P1.0 t e n t i a l s 5.0
o 3.6
High
Our leadership “Talent Pool
J JJ J J
J J
The “bar” is a rating
J JJ
J J
J of 3.6 or above on
J
J
potential
J J J
Potential
J J 3.6 Must be at least
J J JJ J
J JJ JJ J
J
competent in each
of the Standards of
JJ J J J J J Leadership
J J J
J
J
J J J J JJ 1.0
Low Performance High

50. Folio Map
Permits participants to identify specific
developmental actions for employees
Assists conversations regarding next
steps
Shows progress from year to year

51. Critical Positions/People*
Critical Position – A critical position in the
organization that is imperative to running
the business. Key strategic importance to
have back fill.
Critical Person – A critical person in the
organization which would result in a
significant adverse impact on the business
if the person left.
* Johnson & Johnson definitions

52. Example
Multi-level ownership

53. Succession Management
Retention
??

54. File it away…

55. Start having conversations!

56. Great Leaders
Make A
Great Difference

57. Leadership Effectiveness
and Turnover

58. Leadership Effectiveness
and Retention

59. Leadership Effectiveness
and Customer Satisfaction
100
82
Ratings of Customer
80
Satisfaction (%)
60 50
40
21
20
0
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness

60. Making Leadership
Development Work
Identify, inform and invest heavily in talent
Use 360s to build on strengths
Set extremely high expectations for your
leaders – and measure their results
Make leadership development a long term
process and not an event
Use the succession process as an opportunity to
develop and measure the leadership potential

61. Senior Management Role
Responsible for succession process
Approve high potentials, individual
development, leadership development
Determine success measures, next steps
and time frames
Determine management accountability
Follow-up on actions

62. Measures
Define up front what you want to achieve
in the broader scope
Then…once succession data gathered,
define specific measures, timing and
accountability. Measure regularly.
Track development of talent, and their
progress, regularly over the long term.
Assign accountability to managers for
progress, assign mentors, reward

63. Possible Succession
Measures
By ___ 90% of development actions complete
Increase movement of high potentials to other areas
of workplace
Increase employee engagement/satisfaction
By year 20xx, increase high potential leaders by x
%
Over x years, increase high potential retention by x
%
External measures - attract high potentials

64. Employee Conversations
What needs to happen
in these conversations?

65. Individual Development
Planning
Actions
Goals and measures
Follow-up, follow-up, follow-up

66. More B e s t
P r a c t ic e s ( H e w it t )
Senior management lead the charge
Maniacal focus on the best talent
High potentials are carefully identified
Compensation is highly differentiated
Assignments drive high potentials’ growth
Tracking progress is critical

67. Challenges
Time
Buy-in
Lose sight of big picture – administrative
nightmare
Employee/manager conversations
Cultural biases
Resource issues that arise

68. R e s u lt s o f
Im p le m e n t in g
A high-performance culture that continuously
attracts and retains the right people
Strong leaders who can develop others
Mentors that can provide a legacy
A culture of openness and focus

69. R e s u lt s o f
Im p le m e n t in g
No “unspoken agenda” concerning
individuals’ aspirations and potential
Investor confidence – Hay (1988) and
McKinsey (1999) studies link effective SM to
increased ROI and annual return to
shareholders

70. Keys to Success
Top management must buy-in and be active
participants
Link succession efforts to needs and
strategic objectives of the business
Minimize paperwork and bureaucracy
Make succession and leadership
development a constant preoccupation

71. Keys to Success
Identify high potential talent early –
devise strategies to retain that talent
Recognize that effective succession
management is not fast
Spend time to evaluate results and provide
feedback to stakeholders

72. Keys to Success
Ensure leaders have an opportunity to
apply the skills they are learning
Ensure everyone is, and can be,
responsible for their own development
Ensure effective role modeling of
leadership excellence
Measure behaviour change

73. Discussion
Where should we star t?
What will be easy?
What will we stumble
over?

74. Resources
“War for Talent” – McKinsey & Co.
“Leadership Pipeline” – Ram Charan
“Grow Your Own Leaders” – W. Byham
“Effective Succession Planning” – W. Rothwell
“Love ‘Em or Lose ‘Em” – Kaye & Jordan-Evans
Centre for Creative Leadership – www.ccl.org
Statistics Canada – www.statcan.ca/
“The Extraordinary Leader” – Zenger & Folkman