Tom Casey, Managing Principal of Discussion Partner Collaborative, spoke last year at the
IACPR Global Conference 2011 on talent readiness – and the top ten human capital challenges of the new
decade. He is an expert on the development of organizational
transformation strategies for rapidly growing multinational or transitioning
organizations, consulting in over 20 countries and virtually every economic
sector. He focuses on working with companies to conceptualize and execute
enterprise strategy, organization design, change management and innovative
human capital initiatives; on creating strategically aligned leadership
development initiatives; and on developing human capital initiatives around
workforce planning, employee engagement, sourcing, globalization, mergers and
acquisitions.
Here he addresses the dysfunctional approach so many
companies take to succession planning and leadership development.
Anyone who is from the US has heard the adage
“the dog is barking up the wrong tree”?
The luckless dog is presuming that there is a
cat in the tree, deserving of their attention.
Yet we humans in our infinite wisdom realize the cat is either long
gone, or is quite happy mocking the dog from a different tree?
We could take the view that the dog is
stupid, yet as it relates to Succession Planning are we leaders not
representative of this hapless dog?
If we look at the numbers from various
sources it is not a leap of logic to believe so:
·
35% of companies have a Succession Plan with
“integrity”(SHRM)
·
78% of companies have some form of Succession Planning
“strategy”(Corporate Leadership Council)
·
50%+ of the Fortune 500 Board Directors for the Fortune
500 are “unhappy” with their companies Succession Plan(HBR November2011)
·
Average tenure of a Fortune 500 CEO is approximately
3.5 years(HBR November 2011)
·
Age 65 is usual and customary age for “executive
retirement” directly contradicted by DPC research that indicates the age is
more likely to be 62 “after a phase down period”(December 2012 Study The Art of
Executive Boomer Management)
At a recent Discussion Partner’s strategy
session like the dog who wanders away from the tree feeling embarrassment, we
felt that we as consultants needed to
acknowledge “Succession Planning is a dysfunctional process the outcome of
which is to provide little to no value to the enterprise.”
Yet metaphorically the cat was not imaginary
and enterprises do need a replenishment process to promote sustainability.
Discussion Partners conducted an internal
audit of our client experience on Leadership Succession since the firm was
founded in 2007.
Our overarching conclusion was the fatal flaw
is Succession Plans are too internally focused by limiting the question to “who
do we have and when will they be ready”?
DPC suggests a modification of a Null
Hypothesis (the process for challenging assumptions/strongly held beliefs by
attempting to disprove) is more appropriate.
For example in the movie Moneyball the focus
on On- Base Percentage vs. Individual Statistics was the null hypothesis theme
expanding the analysis of proficiency beyond batting average.
This approach led the Boston Red Sox to 2
World Series Championships in the past decade after approximately 90 years of
frustration (yes a number of DPC Principals live in Greater Boston).
DPC has begun promoting a new approach, Continuity Planning loosely defined as promoting enterprise growth through ongoing replenishment for critical
roles accessing both internal and external labor market candidates.
The key words in the above are on-going, internal, external and
critical!
Essentially our modality has the following
steps:
1.
Identification of Mission Essential roles beyond those
traditionally embodied in a Succession plan(for example Actuaries in and
Insurance Company, Internal Controls in a Finance function)
2.
Identification of no more than 4 Critical Success
factors for the aggressive development of high potential managers
3.
On-going “rack and stack” of managers for role
suitability or ascension….focused initially on the question “are they the best
the internal and external marketplace has to offer”
4.
Identification of external applicant sources inclusive
of gathering competitive intelligence identifying suitable external candidates
to “raid” if needed
5.
Creation of a Dashboard for quarterly updating
regarding role identification, internal candidate status, and external labor
market opportunities.
Discussion Partners perceives the benefits of
this approach as having the following key elements:
1.
Broadening the discussion about internal readiness to
encompass a broader dialogue on internal/external marketplace availability
2.
Ongoing vs. episodic review of leadership alignment
with a broader number of roles essential to the enterprise
3.
Increasing the ability of the organization to be
innovative in terms of role architecture, organization design, phase down of
executives, through a broader definition of work to be accomplished and
resources to accomplish same.
Our client experience to date using this new
approach has been encouraging. There is
a possible added benefit according to one of my colleagues, “reduction of eye
strain reading Succession Plans with the foreknowledge they
are likely more fiction than fact.”
