Succession Planning –High Stakes, High

Rewards

September 9, 2016

Great Employee - NOTES

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Executive Development & Succession:

Separating Position and Person

SuccessionPlan

Development Plan

POSITION

PERSON

Leadership Development and

Succession Planning

Definitions• Critical Jobs are jobs that if left vacant:

• Jeopardize sustainability of business• Create risk, e.g.,

• Decision making delays• Quality/Compliance• Customer Service

• Are difficult to fill in reasonable timeframe (< 60 days)

• Key Individuals are:• Ready Now, Ready 1-2 years, Ready 3-5 years• Contribute significantly to the organization, i.e., compliance, quality, cost,

customer service• Persons, if they left the company, we would have a difficult gap to fill

• High Potentials• Possess the capacity to develop into larger role with significantly

greater responsibility• 2+ levels above their current role• Example: Outstanding Performer (Performance Rating of ‘4’ or ‘5’)

with demonstrated high potential

• Retention Risk• High Potentials who are at risk of leaving their role and/or Charles River

• Employees in hard-to-fill positions

• Employees in positions with no successor being developed

• Ready to Move• Hi Potential or Retention Risk employee who is ready to take on a new role

• Has demonstrated mastery of current role

• Needs to diversify background in order to be able to move 2+ levels in the organization

• Blocker• Individuals in key jobs who do not want to move from current position or do not

have the skills for another role

Definitions

NOTES

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The Performance/Potential Grid (9-Box)

A tool to:• Identify high performers and their potential

• Evaluate the short and long term value of employees to the company

• Inventory and calibrate talent bench strength

• Identify low performers and interventions to manage them

• Limit the impact of inappropriate placement decisions

• Become more aware of strengths and development gaps, organizationally and individually

10

Performance Versus Potential (9-Box)

High Potential

(Demonstrates capacity to

develop/grow into larger roles,

with significantly greater

responsibility, at 2+ levels

above current role. Expresses

desire to assume expanded

responsibility)

(Monitor Performance

Closely…Develop to Meet

Standards/Assess Fit)

(Accelerate Development for

Current/Next Role)

(Accelerate Movement to Next

Role)

Expandable

(Demonstrates capacity to

develop/grow and assume

greater responsibility either

within current role or at a

position 1 level above current

role. Expresses desire to

assume expanded

responsibility)

(Monitor Performance

Closely…Develop to Meet

Standards/Assess Fit)

(Develop in Role) (Accelerate Development for

Current/Next Role)

Appropriate in Role

(Does not demonstrate the

capacity to develop/grow into

larger roles with significantly

greater responsibility… and/or

does not have the desire to

assume such larger

responsibility)

(Develop to Meet

Standards/Make Decision on

Fit/Take Appropriate Actions)

(Develop in Role) (Develop In Role To Take

Performance To An Even Higher

Level)

Low (PA Rating: 2-3)

Unsatisfactory (Does not

accomplish most objectives,

responsibilities and expectations

Behavior not in support of our

values. Needs significant

improvement.)

Solid (PA Rating: 3-4)

Solid Performer (Meets

objectives, responsibilities and

expectations. Consistently

demonstrates most of the

behaviors in support of our

values – skilled)

High (PA Rating: 4-5)

Outstanding (Exceeds

objectives, responsibilities,

expectations. Consistently

demonstrates behaviors in support

of our values – accomplished; a

role model.)

P

o

t

e

n

t

i

a

l

Performance

PERFORMANCE

Lo Medium Hi

PO

TE

NT

IAL

Hi

Mid

Lo

1

3

2

5

689

4

7

Too soon to tell (< 6 mo.)

High Potential 2 High Potential 1

Competent Solid asset

Mismatch to company or position

Average SME player

Not performing in line

with potential

LONG TERM VALUE

TO THE ORGANIZATION

Green is top third; red is bottom third

Boxes 1 and 2 and your true High Potentials; Boxes 3, 4, and 5 are key feeder pools into the High Potential pool

The Performance/Potential Grid (9-Box)

The

“Strategic Few”

The

“Leadership Pipeline”

The

“Core Performers”

Promotable

Within & Across

Promotable

Within

Appropriately

Placed

PERFORMANCE

Lo Medium Hi

PO

TE

NT

IAL

Hi

Mid

Lo

1

3

2

5

689

4

7

Too soon to tell(< 6 mo.)

Provide support & feedback; Monitor performance; Pay

attention to derailment

High Potential 2

Accelerate development; Give diverse, developmentalassignments; Retention plan

High Potential 1

Challenge with successive diverse assignments;

Retention plan

Competent

Develop deeper specialty skill/knowledge; Increase

learning ability; Use in temporary and key roles

Solid asset

Accelerate development; Can serve as back-ups to

1’s and 2’s; Place in critical jobs; Focus on

learning retention

Mismatch to company or position

Take action: Move out of organization or

better fit in position

Average Performer

Permeate in keyTechnology; Monitor;Could become 5 or 6

SME player

Keep current in specialty; Retention plan

Not performing in line

with potential

Monitor closely; Carefully select next assignment to

increase performance

LONG TERM VALUE

TO THE ORGANIZATION

Green is top third; red is bottom third

Boxes 1 and 2 and your true High Potentials; Boxes 3, 4, and 5 are key feeder pools into the High Potential pool

The Performance/Potential Grid (9-Box)

The

“Strategic Few”

The

“Leadership Pipeline”

The

“Core Performers”

Promotable

Within & Across

Promotable

Within

Appropriately

Placed

Next Steps

• Identify critical positions in your group

• Use the 9-Box Model to select high-potential successors

• Create and implement development plan for each successor

• Revisit at minimum twice annually

• Cascade to the next level

• Other…

• Is highly “learning agile”

Has willingness and ability to learn new competencies to perform

better in first time, tough, or varied conditions; learns from

experience; has broad perspective

• Deals well with ambiguity

Displays consistent effective behavior in ambiguous situations;

effective in tasks requiring risk taking, creativity and decisiveness;

copes with uncertainty in the face of ambiguity and assesses the

behaviors and skills to be effective

• Has high potential for growth

Demonstrates capacity and motivation to develop and assume

greater responsibility at 2+ levels above current role or lateral role,

within or across business functions/units in 3-5 years; consistently

demonstrates leadership competencies; limitations can be addressed

by experience or targeted development

Definition of “High Potential”

Typically, high potentials get bored easily and will seek a new assignment every 18 – 24 months

if the company doesn’t do it for them.

• Moderate learning agility and adaptability to new or changing situations

• Demonstrates many leadership competencies; though, may have some

limitations in leadership style to be addressed

• May demonstrate difficulty in maintaining a broad perspective

• Demonstrates the capacity and motivation to develop/assume greater

responsibility either within current role, or at a position 1-2 levels above

current role or new lateral roles, within their business function/unit in 3-5

years

• People in this category could be promoted within their specialty area and

with further development into first time assignments

Definition of “Expandable” or

“Medium Potential”

Definition of “Appropriate in Role” or “Low

Potential”

• Does not demonstrate capacity to grow into larger role with significantly

greater responsibility…may be inappropriately placed, a blocker; may self-

select out (no desire to advance or take on greater responsibility)

• If not an issue of motivation:

• Indicates significant limitations in leadership style and competencies

• Not an agile learner

• Has difficulty in new, first time or changing conditions

• Typically can’t maintain a broad perspective

• People who fall within the low range are usually appropriately placed,

though they could still be promoted a level within their specialty

PERFORMANCE

Lo Medium Hi

PO

TE

NT

IAL

Hi

Mid

Lo

1

3

2

5

689

4

7

15%Too soon to tell

(< 6 mo.)

10%High Potential 2

5%High Potential 1

25%Competent

20%Solid asset

5%Mismatch to

company or position

4%Average

15%SME Player

1%Not performing in

linewith potential

LONG TERM VALUE

TO THE ORGANIZATION

Green is top third; red is bottom third

Boxes 1 and 2 and your true High Potentials; Boxes 3, 4, and 5 are key feeder pools into the High Potential pool

The P/P Grid (9-Box): Typical Distribution

The

“Strategic Few”

The

“Leadership Pipeline”

The

“Core Performers”

Promotable

Within & Across

Promotable

Within

Appropriately

Placed

18

Performance vs. Potential Matrix

Subject Matter Experts • Produces exceptional performance results

• Technical expertise is deep and critical;

provides continuity to the company

• No desire to advance or does not

demonstrate capability to learn/grow into

larger roles with greater responsibility

• May have significant limitations in

leadership style or approach

Solid Performers • Produces acceptable performance

results – solid in current role

• Does not demonstrate sufficient

capability to learn/grow into larger roles

with greater responsibility – may be a

blocker or has no desire to advance

• Could progress higher within specialty,

but may have limits in leadership role

Mismatch with Company or

Position • Does not produce acceptable results

• Does not demonstrate the capacity to

grow into larger roles

• Skills are not currently matched to the

position or company requirements

Seasoned Professionals • Produces exceptional performance results

• Has potential to do more

• Demonstrates some learning ability and

adaptability to new, difficult situations

• May have some limitations in leadership

style/approach to be addressed

• May have difficulty in maintaining a broad

and/or strategic perspective

Competent • Produces good to strong performance

results

• Can probably fill a number of roles at a

reasonable level of performance

• Demonstrates some learning ability

and adaptability to new or difficult

situations

• May have some limitations in

leadership style/approach to be

addressed

• May have difficulty in maintaining a

broad and/or strategic perspective

Not Performing In Line w/

Potential/Expectations • Produces somewhat acceptable

results

• Demonstrates some learning ability

and adaptability to new or difficult

situations

• May have some limitations in

leadership style/approach to be

addressed

• May demonstrate difficulty in

maintaining a broad perspective

EXCEEDS EXPECTATIONS

(~ 4-5 PA)

MEETS EXPECTATIONS

(~ 3-4 PA)

PARTIALLY MEETS

EXPECTATIONS

(~ 2-3 PA)

High Growth Potential • The proven stars

• Produces exceptional performance results

• Has strong drive and high ability to learn

from experience

• Performs well under first-time and/or difficult

conditions

• Broad and strategic perspective

• Limitations can be addressed by targeted

development

Growth Potential • The “rising” stars

• Produces strong performance results

• Has strong drive and high ability to

learn from experience

• Performs well under first-time and/or

difficult conditions

• Broad and strategic perspective

• Limitations can be addressed by

targeted development

Too Soon To Tell

• In transition -- Either new to the

company or to a particular position

P

o

t

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t

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l

P e r f o r m a n c e

4 2 1

7 5 3

9 8 6

Appropriate

in Role or

MoveAppropriately

placed, may be

considered for

promotion within

their specialty, or

may need to

move out of

current role

Expandable

Capacity to grow

1-2 levels within

current division /

function

High

PotentialCapacity to grow

2+ levels within or

across functions/

divisions, or

capacity to fill a

management

committee

position

Ideas for Hi-Pot Development

• Planning, planning, planning• Communicate• Stay Interviews (tool kit)• Cross-training• Assign a mentor• Job rotation• Special projects• Task forces especially “stretchers”• Competency development• Exposure to senior people e.g. executives, Board

members• Group meetings• Other?

NOTES

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• Are we organized to:

• Be successful?

• Achieve our strategy?

• Can we organize more effectively today?

• What does tomorrow’s organization look like?

• Are we effective with “sub-chart” systems?

Leadership Development and Succession Planning

Organization Design

Corporate Business Strategy

Business Unit

Strategy

Organiza-tion

Design

Executive Position

Design

Executive Position

Success Profile

ExecutiveDevelop-

ment

Org.Succession

Whoshould succeed whom, and when?

What business are we in? Howdo we attain and sustain competitive advantage?

Corporate Business Strategy

Business Unit

Strategy

How to organizeto attain our strategy?

Organiza-tion

Design

Position Design

What is required To be successful?

Position Success

Profile

Develop-ment

Integrating Strategy with Succession

Executive Position Success Profiles

What does it take to be a leader in our organization?

What characteristics and competencies will we need in future?

How does this vary by position?

Leadership Development and

Succession Planning

Executive Development & Succession:

Separating Position and Person

SuccessionPlan

Development Plan

POSITION

PERSON

Leadership Development and

Succession Planning

Executive Development & Succession:

EXAMPLE

Development Plan:- ID next steps for Dave- Put together plan- Discuss and update regularly

Corp VP, Corp. Controller

SuccessionPlan:-Internalcandidate(s) (ID) then dev. plans for that person (people) or- External person

Pat Jones

Leadership Development and

Succession Planning

Top Ten Factors for Success

1. The active involvement of top management is a necessity.

2. Tie succession planning to the business vision and strategy.

3. Link talent management and mentoring to managers’ goals.

4. Hold a yearly talent audit which has candid discussion and clear

development outcomes.

5. Develop clear, openly communicated criteria to create a common language

and understanding about how to move to the next level.

6. Always have a home for those on job rotations or international assignment.

7. Review the talent pipeline periodically so that succession management is not a yearly event.

8. Match the organization’s needs with individual interest and aspirations.

9. Hold honest development discussions with straight talk and give feedback often.

10. Provide role models for others to learn from.

Leadership Development and Succession Planning

What do I take away from this session that will help me?

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