Succession Planning: Best Practices and Lessons Learned...Purpose and ROI for succession planning...

BREAKOUT SESSION 1

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Succession Planning: Best Practices and Lessons Learned

Ellen Raynor

Succession Planning: Best Practices

Ellen RaynorDirector, Talent ManagementMcKesson Medical-Surgical

[email protected](804) 264-3126

mailto:[email protected]

McKesson Proprietary and Confidential8/3/20183

Agenda Purpose and ROI for succession planning

How to identify potential for advancement

A frequently missed step: Defining role requirements

Successor capabilities and the importance of experiences vs. jobs

Gauging readiness

Development planning

Succession plan analysis and scenario planning


Succession planning – what’s the ROI?

Facilitates right leaders, right roles, right time Solid pipeline to support strategic plan and the

associated talent requirements 3-5 years outStrategy Execution

Mitigates risk when talent loss occurs or is deployed elsewhere, when a subpar performance occurs, and when business opportunities arise

Options

Helps differentiate investments in development to maximize the return; development of high-potential talent is orchestrated and specialized

Return onTalent Investments


Other considerationsInvestor View

Investors scare easily; react to change by assuming the worst

When the CEO of Hewlett Packard stepped down in 2010, shares took an 8.3% plunge just after the news was announced

Having a succession plan may reassure investors about the stability of your organization

Employee View

Employees scare easily, too – and may bail out when leadership changes occur

A succession plan communicates that a company is serious about advancing its internal talent – so may be viewed as an asset to retention

Having a succession plan may reassure employees about the stability of your organization


AgendaPurpose and ROI for succession planning




Gauging readiness




The crossroads model

1

2

4

6

3

5

The work at each level is vastly different from the prior roadway and requiressignificant changes in priorities, essential skills and motivational fit


The 9-box grid to segment talent by potential


Challenges with the 9-box grid

Process needed simplification

Concepts of Turn, Growth and Mastery were hard to understand

Disproportionate investment in calibrating placement on the grid;ran out of time to do succession planning and analysis

Too many people were being designated as high-potential(out of sync with benchmarks)


Segmentation process evolved over time


Current definitionsLabel Definition

High Potential~5%

Demonstrates Aspiration, Capability and Track record at a differentiated level

Is self-aware and actively manages derailers

Projected to have significant, long term career progression on an accelerated timeline

Promotable~20% add to the thing by white letters

Projected to be promoted to a higher level role in the near to short term

Core Talent~75%

Essential core talent that helps us achieve business results every day

May have deep functional expertise

Focused on moving laterally or growing in the current role


Differentiating performance vs. potential

Four X Factors A drive to excel

A catalytic learning capability

An enterprising spirit

A dynamic sensor

June 2010


Conger’s most recent work

Five X Factors1. Situation Sensing

2. Talent Accelerating

3. Career Piloting

4. Complexity Translating

5. Catalytic Learning


Recommendation: Create tools to help differentiateDimension Criteria Questions to Consider

Aspiration

Aspires to significantly higher level challenges – including multiple lateraland upward moves

Does the leader have the energy and drive to move multiple levels upin the organization?

Is the leader committed to McKesson long term – through times of stability and change?

If required for future role(s), have you confirmed mobility?If it matters for next role(s), is mobile

Capability

Demonstrates ILEAD capabilities at a much higher level than expected

Does the leader excel in the ILEAD capabilities most critical for their future role(s)?

Is the leader aware of their derailers and are they actively managing them?

Is the leader: Aware as to how they are perceived by others? A quick study? Develops long term solutions to execute strategic business

problems? Able to gain buy-in to drive a solution forward?

Demonstrates self awareness, learning agility, strategic problem solving andinterpersonal savvy

TrackRecord

Has a track record of solid results –including for tough assignments Is the leader’s past performance among the highest of their peer group,

with results exceeding expectations for multiple years?

Has the leader had multiple lateral and upward moves at an accelerated pace?

Has a history of accelerated career progression – taking on more complex jobs over time


Be open and mindful about derailers






Gauging readiness




Target population: How deep do you go?

CEO

Business Unit President

ExecutiveTeam

Vice Presidents

Possible Successors

This could be 10-15 roles

This could be 50+ roles


What do your roles require?






Gauging readiness




Recommended ToolsEmployee Profile Employee’s “voice” in the process

Like a resume, but with additional information regarding aspirations

Employees complete and keep updated

Key fields include: Demographics Accomplishments Job History Education Certifications Aspirations

Manager Worksheet Manager’s view

A tool to identify manager’s view of key accomplishments, future potential, likely next roles and development needs

Managers complete and keep updated

Key fields include: Accomplishments Strengths and opportunities Future potential Likely next roles Development actions


Think “experiences” – not just job history

Life Cycle Financial Leadership Strategy PerspectivesStart Up Own a P&L Create a compelling

visionDefine a “go to market” strategy

Corporate

Turnaround Meet a challenging margin goal

Lead a major change effort

Execute a major restructuring

International

Accelerationor growth

Meet a challenging revenue goal

Manage larger headcount/layers

Create a 3-5 year long term plan

Business Units

Sustain a mature business

Divest a business or significant part

Create a robust succession plan

Launch a new product / service

Segments (Retail, Distribution, etc.)

M&A and/or integration

Lead a cost reduction effort

Increase employee engagement

Develop business case for investment

Functions

Divestitures Create a business case to invest

Move and develop key talent

Lead integration andmeet business case

Realignment Size and scope of budget managed






Gauging readiness




Succession plan formats: Simple chartRole Ready Now

0-1 yearReady Short Term

1-3 yearsReady Long Term

3-5 years

TitleIncumbent Name

TitleIncumbent Name

TitleIncumbent Name

TitleIncumbent Name

TitleIncumbent Name


Succession plan formats: Replacement chart


Gauging Readiness

Frank assessment of experiences

and capabilities

Understanding of specific role requirements

Readiness

Assessing the gap between current capabilities and required capabilities helps to estimate the time required to close the gap






Gauging readiness




Importance of experience-based learning


Develop your talent through OTJ experiences


Sample development actions

Name Experiences 70% Exposure 20% Education 10%

Harriet Hipo Lead finance integration of XYZ acquisition

Meet ‘n greet with CFO in Pharma

Send to Darden school executive program Q4

Sara Superstar Assign to create go-to-market strategy for widget business

Mentor to focus on executive presence

Nominate for Advanced Leadership Program

Wanda Wonderful Expand team to include new Lab category managers

Meet ‘n greet with John Smith in PSSP

Complete a 360 and the Hogan assessments

Tina Terrific Manage sales turnaround in ABC business segment

Send to HIDA and PWH conferences

Support through completion of MBA

Frank assessment of experiences

and capabilities

Understanding of specific role requirements

Readiness






Gauging readiness




Succession planning agenda

Link business strategy to

talent needs

Review talent analytics and progress year

over year

Analyze succession

plans

Calibrate potential

ratings for successors

Identify next roles and 3E development

actions

Talent segmentation and succession plans are completed as pre-work and aggregated by the facilitator for discussion during the session


Key questions for succession plan analysisRole Ready Now

0-1 yearReady Short Term

1-3 yearsReady Long Term

3-5 years

TitleIncumbent Name

Critical RoleIncumbent Name

TitleIncumbent Name

TitleIncumbent Name

TitleIncumbent Name

Where are the gaps – especially for the most critical roles? What other talent (external and/or outside the business unit) could help fill the gaps? How diverse is the pipeline? Where can POC and female talent be included and accelerated? Is there over-reliance on certain key (high-demand) successors? Which incumbents block the progression of high-potential talent? (sensitive issue) Do we have retention risk among key successors? Do successors aspire to targeted roles? Is mobility required? Are they willing to relocate?


Analysis

Analysis Where do we have gaps? What are the risks if an incumbent leaves or moves? Have we included external talent? How diverse is our pipeline? What is the risk associated with high demand talent? Where do we have blockers?


Scenario Planning #1Assume David Branch has significant long term potential (GM) Long range goal is for David Branch to become

the VP of strategy in ~5 years He needs to manage sales at the VP level

to qualify for the VP strategy role


Scenario Planning #2Assume Janet Jones is Well Placed but a strong performer Maya Monroe is ready for a move and a retention risk

Question What should we do about Maya Monroe? How can we improve our bench for the sales and

strategy roles?


Summary Purpose and ROI for succession planning




Gauging readiness



Succession Planning: Best Practices

Ellen RaynorDirector, Talent ManagementMcKesson Medical-Surgical

[email protected](804) 264-3126

mailto:[email protected]

Succession Planning: Best Practices and Lessons Learned...Purpose and ROI for succession planning...

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