Succession Management the “How To” Puzzle—Solved!: A Practical Guide to Talent Management

By Mark Caruso

Organizations have risk management strategies and procedures in place for disaster recovery, for employee safety, for computer system outages, and more.
But not all organizations have an active succession planning strategy in place, which is a risk management plan for the key talent in the organization.
But consider thishow much would it benefit your organization to predict leadership openings, using data and discussions in the same way that you predict other business risks? How much would it reduce your external recruiting costs to address future leadership gaps by proactively developing your top talent, with a sense of urgency to avoid or to lessen the negative impact of a predicted leadership opening when it arrives?
The truth is that eventually each employee will leave the organization. Therefore, the risk management function of succession planning is the most critical risk management function for organizational success.
Effective succession planning is a process of fitting together the puzzle pieces of organizational talent needs and employee career interests, for the purpose of identifying, retaining and developing talent for business success. This book provides the strategy and the puzzle pieces you will need to plan and to implement an active and effective succession program for your organization.
Succession management expert Mark Caruso has created easy-to-use plans and tools you can use to create and implement a succession strategy that achieves results and doesnt sit on a shelf. Use the interview guides and the talent meeting agendas in this book to generate rich talent discussions and to make better talent decisions. Refer to the leadership models and ideas in this book to build leadership programs that address the competency needs of your top talent and successors. Make sure you have an effective succession plan in place for the most critical important asset of your companyyour talent!

• Language: English
• Publisher: AuthorHouse
• Release date: Mar 18, 2014
• ISBN: 9781452058559

Mark Caruso

Mark Caruso is a Managing Partner of Success Associates, LLC. Prior to 1996, Mark served as EVP of TMP Worldwide, the worlds largest independent firm focusing on recruitment and communications. Mark also held Human Resource leadership positions at Choice Hotels International, Holiday Inn Worldwide, Sprint PCS, and Federal Express Corporation. Mark Caruso holds a BS degree in Psychology and Sociology and an MS degree in Industrial / Organizational Psychology from the University of Wisconsin. Contact Mark at [e-mail] or at 301-391-6161. More information about Success Associates consulting services and succession planning system can be found at www.SuccessAssociates.com.

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© 2014 . All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse 03/15/2014

ISBN: 978-1-4520-5854-2 (sc)

ISBN: 978-1-4520-5855-9 (e)

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To order multiple copies of this book or to ask a question about this book, contact Mark Caruso at [e-mail]. For more information about Mark Caruso and Success Associates, go to www.SuccessAssociates.com

Contents

About the Author

Preface

Section One: Opening the Succession Puzzle Box

Chapter One: The Double-Whammy Syndrome

Chapter Two: What Can We Expect From Succession Planning?

Chapter Three: 12 Key Reasons to Implement Succession Planning

Chapter Four: Three Types of Succession Plans

Chapter Five: Sorting Through the Succession Puzzle Pieces

Chapter Six: Succession Planning Critical Elements

Section Two: Assembling the Puzzle

Chapter Seven: 20 Preparation Questions

Chapter Eight: Choosing a Succession Software System

Chapter Nine: Obtaining Top Management Support

Chapter Ten: Succession Planning—A Full Cycle Summary

Chapter Eleven: Predicting Leadership Openings—Can We Do That?

Chapter Twelve: Data Collection—Conducting One-on-One Interviews

Chapter Thirteen: Talent Meetings—It’s All About the Conversations

Chapter Fourteen: The Consensus Meeting

Chapter Fifteen: The Analysis and Action Planning Meeting

Chapter Sixteen: The Readiness and Progress Review Meeting

Section Three: Evaluating Your Puzzle Picture

Chapter Seventeen: The Basics—Measuring Success

Section Four: Developing Your Leadership Picture

Chapter Eighteen: Developing Successors and High Potentials

Chapter Nineteen: Prioritizing Development Actions

Chapter Twenty: Using the Stages of Development Model

Chapter Twenty-One: Assessment and Development Tools

Chapter Twenty-Two: Documenting Individual Development Plans

Chapter Twenty-Three: Long Term Process Improvements

Chapter Twenty-Four: Caruso’s Top Ten Banner Points

Parting Thoughts from Mark

Acknowledgements

God is good all the time. All the time God is good.

To Nancy with all my love on our 33rd wedding anniversary

And to our children Mandi, Jessica and Philip, Tony and Fran

For my brother Fred and his family

For my Mom, Lee and her unconditional love my whole life long

About the Author

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Mark Caruso is a Managing Partner of Success Associates, LLC and a globally recognized expert in a number of Human Resource strategic processes, including succession planning, performance management, large scale recruitment project management, compensation and executive development.

In 1996, Mark founded Success Associates, Inc., as an HR and IT firm. In 2008, the company evolved into Success Associates, LLC with the addition of our Succession Planning SaaS system solution. Prior to 1996, Mark served as Executive Vice President of TMP Worldwide, the world’s largest independent firm focusing on recruitment advertising and communications. During his tenure at TMP, Mark helped create the company’s Executive Resourcing Division, expanding its portfolio of products and services and growing revenues to more than $14 million in less than two years. Mark also held positions as Senior Vice President of Human Resources at Choice Hotels International, Vice President of Worldwide HR Development for Holiday Inn Worldwide, Director of HR Selection Systems for Holiday Corporation, Acting VP of Information Technology at Sprint PCS, and various HR and IT management positions during his eight years at Federal Express Corporation.

Mark Caruso holds a BS degree in Psychology and Sociology and an MS degree in Industrial / Organizational Psychology from the University of Wisconsin. Mark is the author of Succession Planning: What Every CEO Should Know as published in the March 2004 issue of Global CEO Magazine. Mark also authored the special report: Ten Top Strategies for Recruiting and Retaining IT Workers published in the 1998 Best Practices Report distributed by People Management Resources.

Mark has provided global succession planning and management development training and consulting services with corporations of all sizes, government agencies, non-profit organizations and educational institutions. For almost two decades, Mark has been rated as a top presenter of workshop events sponsored by major conference producers worldwide. Mark has trained hundreds of managers to implement succession planning models that achieve compelling outcomes, including the identification of strategic design issues and objectives, key metrics for implementation and long-term process improvement and avoiding common barriers to effective succession planning.

Contact Mark at [e-mail] or by phone at 301-367-7272. More information about our Success Associates consulting products and services can be found at www.SuccessAssociates.com.

Preface

After twenty years serving as a practitioner, trainer and consultant in the field of succession management, it is very disturbing to me that for a large majority of very intelligent and skillful business executives and human resource professionals, succession management remains an unsolved picture puzzle. Actually, succession planning consists of several puzzle pieces that all fit together into one larger puzzle. Credible surveys repeatedly show that 75% of all organizations are not satisfied with their succession management and development processes.

Where in published literature is the practical advice on exactly how to proceed in the real world to identify and develop successors? Where is the toolset to go from A to Z using a simple yet powerful approach that results in compelling and sustainable outcomes?

Let’s add a few more requirements to our search for excellence in succession management. The process must be previously proven to work in all types of organizations, including profit and non-profit corporations, educational institutions and government agencies. Then add that the process must have a validated success rate for the top 25 to 500 leaders in organizations ranging in size from 400 to 200,000 total employees. And finally, we’ll add the requirement that the succession planning approach is culturally neutral—one that has been successfully implemented in the United States, Asia and Europe. This book seeks to be the first of its kind to provide a definitive picture puzzle solution from a go-get-it-done practical perspective.

There is a myth that all organizations require a unique succession management process. This is a myth that has been proven wrong time and again. To expand our analogy, let’s take a trip to the picture puzzle store. Thousands of different cardboard puzzle boxes are stacked neatly on the shelves. Each one has a different challenging picture on the box that represents the final result to be achieved when all the loose pieces of the puzzle contained in the box are successfully assembled. The different pictures on the boxes represent different organizations. None are exactly alike. Within your immediate reach your organization has its own unique succession plan picture on a puzzle box. Imagine that the same professional grade camera took all the different pictures. The camera is the process described in this book.

In order to take a proper snapshot with an advanced camera, several correct settings on the camera are required. Adjustments to light, focus, exposure time, etc. are important. But it is not rocket science. It requires basic knowledge and practice to fine-tune the result. The same is true for our succession management and leadership development process camera. To address the unique conditions that are an important part of your organization, the major adjustments are made at implementation, and fine-tuning comes with practice. Our camera is a sophisticated tool that has been tested in real world conditions, and it provides a high degree of confidence in success. What real world practitioner has the luxury of time or the career stature bandwidth to take a trial and error approach that may or may not produce the desired results? Why invent a new camera when a camera already exists with a proven ability to produce the results you require?

The learning journey represented by the contents of this book spans two decades. Early on in the journey, the core process models you will read about here were benchmarked and published as best in class examples by People Management Resources, then a division of Watson Wyatt Worldwide. During my 15 years as a succession planning consultant, the process was enhanced and fine-tuned by working with many excellent colleagues in different organizations. I have many real stories to tell in this book to illuminate the diverse pictures that developed from these experiences.

Some of my colleagues might say that the height of my career was the privilege of serving as the head of human resources for a firm with global reach. The truth is my greatest passion is every opportunity I have had to serve as a humble trainer and facilitator on the subject of succession management and leadership development, helping others to plan and implement a succession process.

It’s also been my privilege to have delivered over 60 presentations, keynote addresses, one-day seminars and two-day workshops organized and sponsored by The International Quality and Productivity Institute, Linkage, Marcus Evans Conferences, the Society for Human Resource Development, the American Society for Training and Development, and the Human Resource Planning Society. The high marks consistently given by participants for these training events provided the encouragement and motivation to make this narrow niche my full-time business.

Success Associates, LLC today provides succession management webinars and one-day seminars, as well as customized client on-site training events upon request. Success Associates has the only total system solution which includes optional ready-fit Software as a Service (SaaS). Success Associates is different from all the other software providers in this approach. Our company vision is to provide the practitioners we serve with the ability to use a proven succession planning toolset that is ready-to-go today.

Our level of passion for sharing our methods to successfully manage having the right leaders in the right place at the right time is matched only by the scope of our goal. The goal is to improve the global HR profession by contributing the first comprehensive practical and prescriptive approach to readers worldwide. The approach is straightforward and easy to adopt. You are respectfully invited to join me in the journey to solve the puzzle.

Mark Caruso

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Section One

Opening the Succession Puzzle Box

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Leadership development with a sense of urgency is a brand-new concept. Wouldn’t it be nice to plan ahead for anticipated leadership changes?

How much would it benefit your organization to predict leadership openings, using data and discussions in the same way that you predict other business risks? How much would it reduce your external recruiting expenses to address future leadership gaps by proactively applying prioritized executive development to your top talent, with a sense of urgency to avoid or lessen the negative impact of a predicted leadership opening when it arrives in reality?

Mark Caruso

Chapter One

The Double-Whammy Syndrome

You may be reading this because it is your responsibility to lead or participate in a succession planning strategy, whether you are a business executive or the human resources process champion who is responsible for implementing the succession and leadership development programs.

Your immediate objective might be to grow and retain leadership talent, or it may be to plan for eligible to retire leaders, or it could be to reduce your workforce and to keep the right leaders to move the organization forward in a positive way. In any of these situations, you need the right leaders in the right place at the right time, and you must retain mission-critical knowledge within your organization.

Having the right leaders in the right place at the right time—it sounds so simple. But most business executives and human resource leaders state that they don’t have a valid succession plan in place, or that their current succession planning process and results need improvement. Why is it that we all have this same important goal but it seems to be so difficult to achieve?

Think of the succession planning process as a large puzzle. The number one reason that most succession strategies fail is that the planning process is not thorough—there are puzzle pieces missing, there are unknown parts and processes. Then, during the implementation phase, the team gets stuck and the whole process plateaus. Or, the process is implemented with a low degree of success, and then it sits on a shelf and or fades away.

During more than 15 years of work with an extensive variety of clients, I have seen a long trail of missing puzzle pieces in the planning stage or in the implementation stage. A lot of information has been published on the topic of succession planning that focuses on different pieces of the puzzle.

The vision for this book is to provide all of the pieces of the puzzle—providing a standard method that every organization can use to successfully plan and implement a succession management strategy.

A common controversial succession management discussion pertains to the validity of the successor candidates identified for a position. If you are implementing a succession planning strategy for the first time in your organization, you will undoubtedly be questioned about the validity of the process, and you will likely be asked questions such as, How will we know if we have identified and developed the right people as our successors?, or What if we are wrong in our selection process?

If we cannot address these questions, the distrust of the process could result in either apathy or acts of subtle (or overt) sabotage that will defeat the results of the organization’s succession management strategy. It is critical that the managers involved in the succession planning process trust the process and the data obtained through the process, or they definitely won’t use it in the future to fill positions as they become available.

Executives are accustomed to making decisions based on available data, without knowing if they will turn out to be right or wrong decisions. Every day around the globe, business leaders are placing a bet as they gamble with the company’s finances, strategy, products and services, using available data, analysis, advice, research and intuition to make decisions. Every effective leader uses as much science as possible to form strategies and plans, but ultimately every decision must be made without 100% certainty that it is the best or correct decision.

Succession planning also focuses on reviewing available talent data and potential future leadership gaps, needs and risks, and making decisions about successors to be developed and prepared for the growth and successful continuance of leadership in the organization.

The Double-Whammy Research

One answer to this question can be seen from the results of a Double-Whammy informal research project conducted with two major companies. The question to be answered is: Are incumbents capable of selecting valid successors to fill their own positions in the future?

We asked nearly 600 managers and their directly reporting incumbents (300 pairs of managers and direct reports in two different organizations) to identify their own successors. We then independently asked the managers of these incumbents to identify the successors for their subordinates (the incumbents) without revealing the successor candidates the incumbent selected to fill his or her own position.

Theoretically, both the incumbent and the manager of the incumbent should have identified the same successor candidates. They both are thinking of the same position, and they both have opportunities to view the performance and results of the successor candidates. (Theoretically this should have also been a discussion they have already had on multiple occasions as they plan for the future.)

But instead, we often found that the incumbent and the manager of the incumbent disagreed significantly about the incumbent’s succession plan (without knowing that they disagreed, because we conducted independent interviews during the research process).

A sample scenario of our results from this research project is shown below:

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As this example shows, we noticed two things from these interviews—not only do Pat and Andrew identify different readiness levels in the successors, but more than half the time, they identified completely different successors for the same position!

So why did this happen, and what can we learn from this?

As we already noted, both Pat (the incumbent) and Andrew (Pat’s manager) are thinking of the same position to be filled in the future, and both Pat and Andrew work in the same organization, so they are both observing all of the successor candidates (although we also know that they may have had different opportunities to view the behaviors and skills of the successor candidates). So what was different as each of these individuals considered the best successors for Pat’s position?

Our inference from this data is that Pat and Andrew were looking for different criteria and competencies when choosing the successor candidates. When Andrew hired Pat for the first time, he was looking for specific knowledge, skills, abilities and personal qualifications, and he apparently saw them (or most of them) in Pat, so he selected Pat for the position.

But was Pat ever really aware of the reasons Andrew chose him for the job? Pat knew that Andrew (and any other individuals involved in the hiring process) felt he was the best candidate for the job, but he probably doesn’t know exactly which key factors landed the job for him. When you think about it, we never really know exactly why we are hired for a job. Most of us never learn what the hiring manager was thinking and perceiving when we were interviewed and selected for a position.

We can also infer that Pat doesn’t have the same high level view, or the big picture perspective that Andrew does about the knowledge, skills and abilities that are really needed to be successful in the role.

Or, Andrew may be seeing traits that are lacking in Pat that he wants to see in anyone who would be a successor to Pat’s position, and typically (and unfortunately), Pat would be unaware of what these missing qualifiers are that would lead to a higher level of success and performance in the position. Or, it could be that the position competencies have become more complex over the years since Pat started in the position, and Pat’s knowledge and skills have not grown along with the position complexity, so Andrew is looking for someone who has a larger capacity to learn and to create a new direction for the group.

On the other hand, Andrew may not have the best view of the daily performance of the talent that will typically be one or even two levels lower than him in the organization, especially in a larger organization with a wide geographic spread.

Another potential reason for this disconnect could also be that Pat is protecting his people, and so he doesn’t share both the strengths and weaknesses of his team with Andrew. Or it could be that Pat is appropriately taking accountability for mistakes that occur as the leader of the group, so Andrew may be unaware of everything that has occurred on Pat’s team. With these factors in mind, we can see that Pat might be the more effective assessor of the talent on his team and that his own succession plan may be the most accurate one.

So the question is—who is right and who is wrong in this scenario?

In a very practical sense Andrew (the manager) is right; if Pat (the incumbent) leaves the company, it is Andrew’s decision whom to promote. The real issue is—what is the impact to the organization due to this disconnect between Andrew and Pat over the selection and development of Pat’s successor?

The real business impact of this disconnect between the incumbent’s selection and development of a successor and the manager’s actual hiring decision (if this misalignment is not discussed and discovered) is that development resources and time are not spent effectively, and the person who is actually promoted may not be prepared for the position. In other words, if we don’t intervene with a better method to identify successors, we will experience a costly Double-Whammy problem.

Managers and incumbents did not simply rank successors differently, they picked completely different successor lists over 50% of the time!

Here is the Double-Whammy that can occur in this situation:

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It was shocking to find that in large companies such a high discrepancy in successor identification exists. The results of these successor interviews clearly demonstrates that the following two scenarios, which are the most common methods used today to select successors and to promote employees, will result in many failures in promotion and readiness for the new position:

Avoiding the Ten Step Classic Promotion

The following scenario depicts the behaviors and actions that often take place to fill an open leadership position in a company without an effective succession planning process. As you read through the scenario, notice how critical the Undisclosed Factors become in this internal hiring decision:

•   Step One: Pat (the incumbent) suddenly leaves the organization, vacating his Vice President position. No one had predicted it (although Andrew, Pat’s manager, knew that Pat was not very happy in his position because he was bored).

•   Step Two: Andrew wants to fill the position quickly, because until he fills it, he has to pull double-duty handling Pat’s VP responsibilities in addition to his own executive responsibilities as an SVP.

•   Step Three: Andrew goes to the CEO and tells him that he wants to immediately promote Mike to the VP level and to move him into the open position vacated by Pat.

      Undisclosed Factor #1: Remember that Hannah was Pat’s priority successor and that Pat did not identify or develop Mike as a priority successor—apparently Pat felt there were missing competencies or qualifications in Mike, but he never shared this information with his manager Andrew. But Andrew (Pat’s manager) always liked Mike’s ability to think strategically and to get the job done, which were traits that he felt were missing in Pat (the incumbent), so he is ready to move forward with Mike’s promotion.

      Pat never shared any reservations about Mike’s performance or potential, so this becomes the first undisclosed factor in Andrew’s decision to fill the vacant position.

•   Step Four: The CEO knows Mike well enough to give him a nod in the hallway when he sees him, but that is the extent of his knowledge about Mike. So he trusts that Andrew knows the talent on his team and he gives his approval to promote Mike.

•   Step Five: Andrew goes to his HR Partner to say he has the approval from the CEO to promote Mike to a VP and to move Mike into the position vacated by Pat.

•   Step Six: Even though the HR Partner would like to slow down a little before making this major decision about a critical role in the organization, Andrew emphasizes again that he already has the approval from the CEO and that while the VP position is vacant, all kinds of problems are occurring. So the HR Partner moves forward with the process to promote Mike into the VP position.

•   Step Seven: Andrew calls Mike into his office and congratulates him on his promotion to a VP and tells him he has selected him to fill Pat’s vacant VP position. Mike is excited, so he calls his wife to let her know about the promotion and his raise, and she promptly contracts with an interior designer to redesign their kitchen.

•   Step Eight: Andrew calls a meeting with the work team that previously reported to Pat, and Andrew informs the group that Mike has been promoted and that he will now be their manager. The group is very quiet—they are all exchanging looks with each other, but no one wants