India HR Summit 2015 Developing a Succession Planning ... · Succession Planning…Beyond...

India HR Summit 2015 – Developing a Succession Planning Methodology

Mumbai, 21st August’ 15

Rajiv Krishnan Partner & National Practice Leader

People & Organization

Ernst & Young LLP

Succession Planning…Beyond contingency management From a Reactive replacement plan to a proactive strategic solution

‘Executive succession planning... is not only about determining your

organization’s next leader, it is a continuous process that assesses

organizational needs, and creates a climate for an executive to succeed.

An effective succession plan is linked to the organization's strategic plan,

mission and vision...’

Continuum of Succession

Vacancy Fulfillment Succession Planning Succession Management

Quick Quiz!

What % of Indian organizations have a

well-established process for succession

planning?

~ 40%

Source: EY-NHRDN Talent Trends Survey, 2014

Quick Quiz!

What % CEOs fail in the first 18 months of

their succession?

40%

Source: Harvard Business Review

Quick Quiz!

What % of HR executives are happy with

their top management succession process?

20%


Types of Succession Planning

• Member of senior

management is

identified as successor

• Also known as “Crown

Prince(ss)” or “Crown

Heir” succession

Relay Succession

• Successor is promoted

from inside the

organization, through a

competitive process,

• Also known as a “Horse

Race” succession

Non-Relay Inside Succession

• Successor is identified

from outside the

organization, through a

competitive process

Outside Succession

• Stakeholders other than

the incumbent organize

to make swift succession

decisions

Coup d’etat

• Bringing back a

executive from a

previous era

Boomerang

EY’s Methodology for Succession Planning

Identify and set-up

project management

committee

1

Finalize on list of critical

roles

2 Finalize on competencies

required for identified

critical roles

3

Conduct assessments to

establish competency gap

for potential successors

5 Create Development

Plans to build necessary

experience and

competencies

6

Tracking and Review

against plan to measure

progress and readiness

7

Transition & Replacement

Planning

8

Review

Development

Planning

Profile Target Population

(HiPo) and arrive at successor

pool for the critical roles

4

Communication of

Transition/Succession

9

EY Case Study – Leadership Assessment & Development

Client Background & EY Mandate

Fast growing industry; the company expects to treble its revenue in a single year

The sector is expected to be in the range of 18-22 billion USD by the end of 2015

in India.

Define the leadership standards required by C-Suite to lead the growth priorities

Identify successors for the founders in a period of explosive growth

Any guess which industry we are talking about??

E-Commerce!


1. Designed a three tiered approach for assessing leadership capabilities


2. Followed rigorous assessment methodologies to conduct comprehensive Talent Review session

Evaluation were done at current & 3X role

Psychometric Profiling Psychologists Management

Consultants

b

Trimester based performance

ratings

EY Team of HR

consultant

c

70+ in person 360 degree

feedback

Industry subject matter

experts

a


3. Outcome of the process

Insights around group & individual

leadership capability

Detailed individual development

reports

One-on-one feedback sessions for

sharing output and for finalizing

individual development plans


4. Value Delivered

Leadership standards required at critical senior positions

Leadership talent comparison of individuals

Strengths, development areas and gaps for each leader

Development plans for each leader

Quick Quiz!

What is the % of Not-for-Profit

organizations that have a succession plan

in place?

25%


EY Case Study - Not-for-Profit Organization

• Specialist in their chosen field for over 3

decades

• Controlled and driven by principles laid down

by the founder

• Multiple appointments & exits at ‘Chairman’

post

• Founder’s concerns:

• “There is no one to take care of the

institution after my time is over”

• “I need to find someone who can lead

the organization like how I have done”

• Founder wanting his family members to take

the role of ‘Chairman’

• Board wanted independent valuation of

successor

• Failure of the board to over-rule the interests

of the founder

• Fear among senior officers to go against the

Founder’s mandate

• Founder tried to convince EY to concur with

his choice

Mis-alignment between the Founder and the Board – led to the discontinuation of succession process

Client Background & EY Mandate Challenges Faced

What do you think was the outcome of this process?

What to watch out for? Snapshot of our learnings

Dilution from Board Agenda to CEO Agenda to HR Agenda Person dependent – CEO/HR changes, Process changes!

Episodic Thinking : “Incident vs. Process” It is a Marathon, not a sprint!

1

2


Myopic view in founder based firms

Unwillingness of top management to go through assessments

3

4


Lack of structured evaluation process/system

CEO influencing independent consultant to give judgement as per his/her political interests

6

5


Emotional Attachment, High Loyalty from founders in NFPs

Perpetual Employment; Stepping down = loss of prestige, status & respect

8

7

In Conclusion, Keep in mind!

Every organization is unique. No “ one size fits all” approach

Succession plan: Across the organization; and not at CEO level alone

Development Planning – is as important as successor identification

Ensure buy-in and involvement of Board/Top Leaders. ‘Educate’ them!

Organizations should take necessary measures to retain key talent

Independent evaluation by a 3rd party is a good practice to identify successors

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Thank you

India HR Summit 2015 Developing a Succession Planning ... · Succession Planning…Beyond...

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