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Why succession management
Elements & tools
Key success factors
Challenges/reasons for failure
Role of Top Management & HR
Successful case studies
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To develop a talent pipeline pool
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To find out well in advance successors for each key
position in the company
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To ensure readiness of the individuals for taking over
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To ensure minimum disruption/smooth transition
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To continuously foster organizational effectiveness
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Provide increased opportunities to high potential talent
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Help individuals realize their career plans within the
organization
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Niche skils - supply gap
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Hygiene
Organization Plan
Talent Plan
- Organization Strategy
- People Strategy
Track & Implement Plan
-Succession Planning for
Critical Roles
-Talent Pipeline – High
Potential
- Talent Retention
40% of those surveyed said that company growth was limited because they
didn’t have the right talent.
75% said that their company is chronically short of leadership talent.
Failure rates are high (40-50%) when executive talent is hired from outside.
Two-thirds of employees have low to moderate confidence in their
companies’ top executives;
Employees say company leadership is a key contributor to job satisfaction,
commitment and intent to stay; especially true for top talent.
Recent surveys state that employees value most the leadership qualities of
honesty and integrity.
Only 1% of companies rate their succession management plans as
excellent; two-thirds rate them as fair or worse.
─McKinsey, The War for Talent, Right’s People Brand Research Report, DDI Exec. Dev. & Succession
Management
Identification of
Key Talent
Assessment of
Key Positions
Succession
Management
Assessment of
Key Talent
Development
Monitoring & Review
Generation of
Development Plans
1.
2.
3.
4.
Have you lost high potential talent because they didn’t know they were
on the list?
If your executive team “got run over by a bus,” would their
replacements be able to step right in and be productive?
Is anyone on the “top floors” or in the Boardroom worried about the
status of your “talent bench?”
What lost opportunity costs has your organization incurred because it
took a long time to replace a key leader?
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6.
How does someone in your organization get selected to be a
potential successor?
7.
Do you have leadership development and talent management
processes in place to grow successors?
8.
If your organization has succession criteria, is it past focused or
future oriented?
9.
If you have a succession planning process, is it grounded in your
business strategy?
10. Would your selection/promotion practices pass a “drop in” legal
challenge?
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Secure senior level support
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Align with future organizational strategy
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Keep the process simple so that busy line managers
do not find the process burdensome
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Engage technology to support the process
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Continual reinvention
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Global approach
Build or Buy ?
Evolution of Succession
Planning
Back of the
Envelope
 Immediate
Replacement
Planning
Near-term
needs
needs
Back-up
 Single
positions
Succession
Planning
 Long
term
needs
charts
leadership
roles/pools
positions
 Talent
 Crisis
management
Reviews
Risk
management
 Strategic
focus
 Active,
 Key
Critical
Succession
Management
 Development
plans
ongoing
process
 Pivotal
talent
pools at all
levels
 Leadership
&
org development
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Succession management not linked to business
strategy
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Reactive approach – only when a position becomes
vacant
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Lack of ownership by top management
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Line managers ignore development of the talent pool
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No formal process to track candidates
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Lack of objective, data based discussions
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Communicating their support
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Share perspectives on the future leadership needs of
the organization
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Ensuring that it is perceived as management
directive, not just a HR initiative
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Volunteer to be part of succession management
process
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Ensure allocation of adequate resources
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Targeted processes
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Ensure comprehensive assessment of talent
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Creation of talent databases
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Identification of future talent requirements: being
pro-active
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Structured & individualized development planning
Talent hot
houses
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Rigorous leadership program - Build From Within
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Each of the top 50 jobs has three replacement
candidates lined up
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Ensure each successor gets the experience to be
ready for the next job
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They train people to work in different countries and
businesses so as to develop a deep bench globally
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The disadvantage is that people did think in similar
ways
President & Chief Executive, P&G:
From A.G. Lafley to Bob McDonald
in 2009...
“Today I could show you the next generation of successors to
current leaders, the generation after that, and the generation after
that.”
- Moheet Nagrath, Head of Human Resources at P&G
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Jack Welch (Chairman & CEO, GE) submitted a list
of 23 potential CEO candidates to the Management
Development Board in 1994
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Successors reviewed every June and December by
Board and Welch
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No outside candidates considered
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Succession plan was closely tied with management
& leadership development plan
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Leading contenders were put on various proving
grounds & given cross business exposure
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GE Board made regular visits to get impression of
the candidates – natural style and approach
From Jack Welch to Jeffrey Immelt in
2000...
“From now on, choosing my successor is the most important
decision I'll make. It occupies a considerable amount of thought
almost every day.”
- Jack Welch, 1991
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Succession Planning program is called Talent
Review & Planning (TRP)
 Identify employees who are ready to take over the
critical roles immediately and over the next 1-2 or 23 years
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Developmental planning for each identified internal
candidate - job rotation, training, coaching and
performance counseling
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They also keep track of potential external
candidates, and establish touch points for attracting
them at the appropriate time
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Training could be through internal programs or onthe-job (local as well as global) to gain crossfunctional or cross-geographical exposure
Azim Premji – succession plan
disclosed to board of directors…
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System of listers
 Continuous process of discussing people
 Identifying people at different levels
 For the distance they will be able to travel in
their career
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The process is centered on
 Identifying a list of potential candidates
 Placing them in specially chosen and challenging
roles
 Then observing the outcomes
Nitin Paranjpe joined HUL in 1987
as mgmt trainee, appointed as CEO
& MD in 2008…
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Six out of eight Executive Directors on the board are
retiring within three years, including AM Naik
(Chairman & MD, L&T)
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The company is putting in place an interim
leadership team to steer the company until 2015
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Two global consultants McKinsey & Bains are
working on a succession plan for the company
Successor yet to be identified for
AM Naik…
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Critical positions identified as part of OTR
process basis:
 Impact on financials
 Exposure to brand
 Uniqueness of the skill (Supply in market)
 Span of influence & control
 Relevance of position – If redesign the org
from scratch would this role be there
 Impact on customers / shareholders / investors
 External value (How much sought by
competition)
 YLP,eLeap,bLeap,Shadow boards
From Manoj Kohli to Sanjay Kapoor
in 2010...
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Succession Plans created for all critical positions
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Succession Plan analyses the possibility of making a growth plan after matching
employee strengths / skills / development needs with the Business needs and
requirements
Position
Function Critical
Current
Position Incumbent
Current incumbent
Planned Time for the Retention
Move
Next Move
Risk
(0-12mths/12/>2)
Name
Potential Successor
Readiness
Talent
Retention Openness to Comments /
(Ready
Segmentatio
Risk
Relocation Developmen
now/1-2 yrs
n
(Yes /No)
t Needs /
/>2 yrs)
Next
Assignment
Guiding Metrics
N ( Numerator)
D ( Denominator )
Out of internally closed positions
%filled by identified successors
Total no of positions closed
by identified successor
% Career Plans implemented
No. of people movements
as per plans captured
Total no. of critical
positions filled
internally
Total no. of
Successors to critical
Positions
% Development Plans
implemented
Total no. of Development
Plans implemented
Total no. of
Successors to critical
Positions
Month
1
…….
Month
12
N/D%
N/D%
N/D%
N/D%
N/D%
N/D%
“Bosses are stewards of people’s talent