FedEx Ground Retools Its Succession
Planning and Development Processes
to Deliver Business Results
A revamped succession planning process at FedEx
Ground keeps succession and development decisions
clearly focused on the road ahead to ensure the company has its best talent ready for those roles that
drive its business strategies and critical initiatives.
Changes to the annual talent review process were designed to find and close talent gaps in pivotal leadership roles and competencies, where near-term talent
shortages could pose significant business risks. Prework and the review meeting agenda concentrate
the discussion on whether the high-potential and
promotable individuals are filling these pivotal roles
and being developed as rapidly as possible. Enabled
by a robust technology platform, officers can also
devise broader targeted actions across the organization for addressing shared developmental needs
related to critical leadership competencies. © 2009
Wiley Periodicals, Inc.
Powerful forces such as changing workforce demographics, more accessible technology, increased
globalization, and new methods of sourcing talent are rapidly rendering once-effective talent management systems inadequate for helping companies
build the talent pools that can drive strategic business growth and future profitability. In response,
FedEx Ground embarked three years ago on a multiyear initiative that has reshaped a series of succession planning activities into a disciplined, comprehensive, and integrated process tightly linked to
its business strategy. Most companies that practice
succession management have this as a goal, but the
reality often falls short. Although it has taken FedEx
Ground several years and a couple of iterations, by
understanding and focusing on the organization’s
talent “pivot points,” we have been able to deliver
HEATHER D’ALESANDRO
AND STUART CRANDELL
better tools and processes and a consistent language
that the leadership team now uses to identify, develop, and position future leaders across the organization, and particularly for those pivotal roles
essential to the critical business growth strategies
and strategic initiatives. As importantly, talent development is now firmly rooted in the mind-set of
leaders.
Reengineering the Process
One of the most admired companies in the world
and widely celebrated as one of the best places to
work, FedEx Corporation is a global network of
companies that provide customers and businesses
the broadest array of supply-chain, transportation,
business, and related information services. With
annual revenues that exceed $39 billion, the corporation has more than 290,000 employees and
contractors operating in more than 220 countries
and territories worldwide. FedEx Ground is the corporation’s $6 billion small-package ground shipping
subsidiary, specializing in dependable businessto-business delivery and convenient residential
service through FedEx Home Delivery and FedEx
SmartPost. FedEx Ground’s workforce of more than
70,000 employees and independent contractors
handles more than 3.5 million packages each day
in the United States, Canada, and Puerto Rico.
In 2005, FedEx Ground already had in place numerous talent management components that supported
succession planning, including:
r cascading goals and performance objectives as
part of the performance management process;
c 2009 FedEx Ground Package System, Inc. Reprinted by permission of the company. All rights reserved.
Published online in Wiley InterScience (www.interscience.wiley.com)
Global Business and Organizational Excellence • DOI: 10.1002/joe.20257 • March/April 2009
33
r clearly identified leadership competencies across
r Assessment: Assess talent in critical segments to
seven job families that serve as the foundation for
talent selection, training, and development;
r a robust corporate university department (established in 2000) that delivers world-class learning
programs directly linked to the core competencies;
r a strong leadership development strategy to support our employees’ individual development; and
r a robust and integrated technology platform to
support these processes.
evaluate an individual’s capabilities for both current and future roles.
r Accelerated Development: Design and implement
developmental plans to provide experiences that
leverage leaders’ strengths and address opportunity areas in order to enhance their current capabilities and those needed in future positions, and,
more importantly, ensure follow-up to determine
if the leadership development actions are making
a difference in on-the-job performance.
The enhancement of succession planning capabilities at FedEx Ground was a natural evolution of
this holistic approach. However, we faced the challenge of building a process strongly linked to the
strategic drivers of the business, one that would not
only ensure a pipeline of leaders better able to navigate through a constantly changing and competitive
business environment but also prepare them for the
future of the company’s business.
Organizational Focus
The enhancement of succession planning capabilities at FedEx Ground was a natural evolution of this
holistic approach.
We chose the director and officer levels as the initial
focus of the Talent Review process. Roles at these
levels have greater strategic importance because a
sudden transition or leadership gap could significantly impact the groups they oversee. Furthermore,
the implementation and adoption of a comprehensive, companywide Talent Review process would be
culture setting. To gain the steadfast support of directors and officers for such change, we wanted to
ensure that these individuals personally experienced
the process and became convinced of its value.
Tools and Discussion Support
Individual Recaps. As a tool for Talent Review discus-
Key Components
We reengineered succession planning around a new
central process:
r Talent Review: Identify potential successors and
high potentials through discussions about performance, leadership, development plan progress,
and career interests.
For this critical new component to be successful,
however, we knew we had to strongly link it to two
other components in order to create an overall HR
system that values continuous talent assessment and
development:
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March/April 2009
sions, we developed a one-page electronic template,
called the Talent Assessment Summary form, that
captured and displayed all the relevant elements of
an individual’s story:
r performance results (what business results the
leader achieves),
r leadership results (how the leader goes about getting things done),
r strengths and development needs,
r quality of and progress made on the person’s
development plan,
r employee’s career aspirations,
r possible next positions, and
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r a judgment regarding the employee’s overall ratings for performance, leadership, potential, and
readiness for possible next positions (ready now,
1–3 years, 3–5 years, or more than 5 years)
and the metrics with the officer group, who then
had the opportunity to brainstorm action items that
could collectively bridge the competency gap(s) in
that pool of leaders and help improve the trends in
any of the metrics.
Potential Successors. We also developed an organiza-
tional-chart view and asked officers to identify at
least one potential primary and one potential secondary successor to their roles, and to indicate the
incumbent’s probability of vacancy and the potential successors’ readiness.
Meeting Facilitation. Human Resources facilitated the
Talent Review meetings, which operated under very
specific ground rules and discussion formats to ensure constructive conversations, keep attendees focused on key objectives, and capture action items.
Human Resources facilitated the Talent Review
meetings, which operated under very specific ground
rules and discussion formats to ensure constructive
conversations, keep attendees focused on key objectives, and capture action items.
Key Metrics and Findings
We developed a series of key metrics for tracking the
results of the Talent Review meetings and gauging
the “health” of the leadership pipeline and succession plans:
r the percentage of strong leaders, strong performers, and high potentials;
r the number of “ready now” successors;
r alignment of incumbent potential vacancy with
potential successor readiness; and
Early Success
The initial Talent Review of directors and above in
February 2005 truly opened up officers’ minds to
the value of meaningful dialogues on talent and to
the power of using a standard for consistently measuring and differentiating performance across FedEx
Ground. They also realized how this discussion enhanced leaders’ accountability for developing their
people and strengthening the talent pool. Leaders
began to spend more time on employee development, and to deal with it in a more formal and
consistent way.
With the experience of this early success of the
strengthened succession planning process, officers
were eager to take a deeper dive into their respective
business units through Talent Review meetings to
discuss all their senior managers and managers. They
now understood that the more information they had
about the capabilities of their employees, the more
talent they could uncover to support the business,
and the better they could gauge the talent pool, become familiar with high potentials, and learn about
development needs within their area. They also saw
the potential for greater insights about how their
direct reports were developing the skills and abilities of others, which is a key competency for FedEx
Ground leaders. These subsequent Talent Review
meetings for the next levels of leadership employed
the same language and templates as the officers had
used in their review of directors.
r number of individuals on multiple succession
charts.
Human Resources also captured common development themes that emerged during the meeting and,
at the end of the meeting, discussed these themes
Global Business and Organizational Excellence
Succession Planning Diagnostic
In just two years, we had created a robust succession
management process at FedEx Ground, but by 2007
we felt that we had yet to achieve the desired strategic impact. Given the organization’s strong culture
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35
of quality-driven management, we saw the need to
assess the current processes and better understand
what improvements were likely to have the greatest positive impact on the business and the overall value to key stakeholders. In June 2007, FedEx
Ground partnered with Personnel Decisions International (PDI), a global human resources consulting
firm specializing in leadership and talent management solutions, to undertake such an assessment.
Interviews
We first interviewed the key stakeholders in the
succession management process from Human Resources (field and corporate) and the line to gather
their views in several areas:
r how the succession planning process was working
at FedEx Ground (e.g., what they liked best, what
could be improved, what should be preserved);
r how the process might need to change given the
company’s business objectives and priorities;
r their vision of what the process should look like
in the future; and
r what role they would play in supporting the
process.
Using a formal diagnostic process devised by PDI,
in August 2007 we conducted a one-day workshop
with the key stakeholders to objectively evaluate
the strengths and opportunities in the current succession planning process, identify potential highimpact changes, and develop a plan for enhancing
the process.
Diagnostic Workshop
Using a formal diagnostic process devised by PDI,
in August 2007 we conducted a one-day workshop
with the key stakeholders to objectively evaluate
the strengths and opportunities in the current
succession planning process, identify potential highimpact changes, and develop a plan for enhancing
the process.
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March/April 2009
During the workshop, participants’ discussions
about the “past” and “future” of the current succession planning practices and processes led to a
shared understanding about the history of succession at FedEx Ground, its current level of impact on
the company, and how to migrate it toward greater
levels of business maturity and influence on FedEx
Ground’s short-term and long-term success. Various exercises supplemented the discussions, including a Venn diagram exercise to illustrate the connections between the succession management process
and other talent management and business processes
(see Exhibit 1) and a calendar flow-chart exercise
to show the sequence of activities across these processes and specific points of linkage (see an example
in Exhibit 2 on page 38).
The PDI Succession Management Reference Model
The heart of the workshop, however, engaged participants in benchmarking the succession planning
process against a research-based reference model
provided by PDI, a valuable activity that helped create (1) a common language for talking about succession, (2) a foundation for a “teachable point
of view,” and (3) priorities for the evolution of
FedEx Ground’s succession management. The reference model, shown in Exhibit 3 on page 39, depicts six core processes for succession management:
workforce requirements, talent inventory, talent review, individual career development, business optimization, and talent pool development.
Workforce Requirements. This process determines the
company’s talent needs, given its goals, strategy, and
business challenges. It involves identifying the roles
or talent pools most pivotal for success, and the
quantity of talent (e.g., how many, what locations,
timing) and quality of talent (e.g., competencies)
necessary to meet business needs.
Talent Inventory. This process examines the quantity
and quality of current talent in terms of leaders’
performance capabilities, long-term potential, and
near-term readiness; how the supply of leadership
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Exhibit 1. Diagram of Scope and Linkages
talent will change based on turnover, promotions,
and other internal movements; and how strong the
feeder pools are for these roles.
in parallel as an outgrowth of the talent review,
with companies placing different emphasis on each.
Individual Career Development. This process centers on
Talent Review. This process involves an analysis of the
talent gaps, assessment of potential leadership risks,
and decisions about individual deployment and development. It addresses questions about what the
talent gaps are and their implications in terms of
risks to and vulnerabilities of the business; where
improving the quality and quantity of talent would
have the greatest impact; how the company can best
develop its high potentials; and who should be considered as potential successors and how ready they
are. The discussions may be a formal part of the annual talent review but also happen throughout the
year as situations arise.
The final three processes in PDI’s Succession
Management Reference Model will typically occur
Global Business and Organizational Excellence
execution of the decisions made about individual
development. It involves having candid conversations with the individuals discussed in the talent review; communicating and confirming development
priorities; helping people gain the necessary developmental experiences; and ensuring that they make
progress on their development plans.
Business Optimization. This process addresses the tal-
ent constraints on the business. It takes a frank look
at where business strategies or operating plans may
be at risk—now or in the future—because the organization lacks the right quantity or quality of talent,
and identifies roles that are vulnerable because the
incumbent lacks the necessary capabilities or there
are no viable successors. Possible outcomes may
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37
Exhibit 2. Sample Talent Management Calendar of Events
c
Copyright 2009
by Personnel Decisions International. All rights reserved.
include redeploying people to meet the needs of the
business; hiring from the outside; shifting development resources to individuals in pivotal positions;
or making changes to the business assumptions to
remove these constraints.
Talent Pool Development. The sixth and final pro-
cess in the reference model concerns creation and
execution of strategies to develop the broader talent pools. This may include systematically moving
people across business units and providing crossworkgroup development assignments to meet specific needs. It is also possible that this step may lead
to a reevaluation of talent pool strategies, such as
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modifying recruitment strategies, career paths, and
rewards.
For each of the six processes in PDI’s Succession
Management Reference Model, we asked workshop
participants three questions:
r What are we doing?
r How are we meeting the conditions for success?
r Where would improvements make the biggest
difference?
Prioritizing Change
Next, workshop participants identified the three
most critical areas where gaps existed:
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Exhibit 3. PDI’s Succession Management Reference Model—Primary Process
c
Copyright 2009
by Personnel Decisions International. All rights reserved.
1. Alignment of talent strategy with business and
organizational strategies to ensure a constant
pipeline of talent in the right places at the
right time to execute the company’s business
strategies;
2. Continual reinforcement of leadership competencies to embed them in the culture at FedEx
Ground so that our leaders would be fully prepared to define and champion a strategic and innovative vision around which they engage others;
and
3. Enhanced development and career planning feedback to ensure that managers are having candid
feedback discussions with their direct reports so
that people develop into stronger, more effective
leaders.
Understanding Talent Implications
of Business Strategies
Aligning talent strategies with business and organizational strategies was not an easy endeavor, but
with the help of the six-box PDI reference model,
workshop participants identified the areas in the
model where FedEx Ground needed to focus its efforts (see Exhibit 4 on next page):
We chose the first gap as the number-one priority and outlined the next steps, with an eye toward leveraging enablers and minimizing barriers
to change.
We then sought the insight of FedEx Ground’s
officer team, with a key goal of having the officers first identify the talent “pivot points” in the
business strategies—those areas where strategically
Global Business and Organizational Excellence
r Box 1: Business strategy must drive an understanding of the workforce requirements.
r Box 3: Talent reviews must specifically address
the talent constraints identified for the business.
r Box 5: The business optimization process must
remove talent constraints and inform business
strategy.
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39
Exhibit 4. Enhancements to the Current Process: Aligning Business, Organizational, and Talent Strategies
c
Copyright 2009
by Personnel Decisions International. All rights reserved.
important outcomes such as growth, financial performance, or critical business processes were most
closely linked to the quality or quantity of leadership talent–and then determine which roles and talent pools are associated with those strategic leverage
points.
In their book Beyond HR, John Boudreau and Peter
Ramstad define the concept of “pivotal” talent,
making the point that “pivotal” is not the same as
“valuable” (see Exhibit 5).1 To illustrate, they use
the example of Disney theme parks, where the value
proposition is “the happiest place on earth.” Most
people might think that the actors who play Mickey
Mouse and other Disney characters are the talent
most important for theme park success. Boudreau
and Ramstad contend that because the characters
are so tightly scripted (e.g., the actor never speaks
or improvises and is always accompanied by a supervisor who manages the interaction with guests),
there is very little difference between the best and
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worst performances. Park sweepers and store clerks,
on the other hand, are approached hundreds of
times a day to answer guests’ questions or resolve
Exhibit 5. Pivotal Roles and Talent Pools
c
Copyright 2009
by Personnel Decisions International. All rights reserved.
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Global Business and Organizational Excellence
their problems. More so than the costumed actors,
these frontline customer service representatives can
have a greater impact on guest satisfaction through
their performance, and thus are more pivotal to the
theme park’s success.
With PDI’s help, we initially designed two smallgroup exercises to help officers identify the pivotal
leadership roles and capabilities, the first focused
on FedEx Ground’s most critical growth strategies,
and the second on enhancing the customer experience. In each exercise, officers would address four
considerations: (1) the leadership roles or positions
most likely to have an impact on these outcomes;
(2) where constraints in leadership quality or quantity would put these outcomes at risk; (3) the leadership skills and experiences most critical to success;
and (4) those leadership roles, positions, and/or capabilities likely to become even more critical to these
outcomes. In a third exercise, officers would assess
the business risks posed by any constraints in the
number or kinds of leadership talent in their organizations, now and in the future, given the business
needs and potential turnover.
With PDI’s help, we initially designed two smallgroup exercises to help officers identify the pivotal
leadership roles and capabilities, the first focused on
FedEx Ground’s most critical growth strategies, and
the second on enhancing the customer experience.
In spite of this plan, time constraints, including the
fast-approaching Talent Review meeting of officers
and directors, forced us to devise a more practical and streamlined approach, our “Plan B,” for
achieving greater alignment among business, organizational, and talent strategies. In lieu of the exercises, we asked officers to do some prework, and we
also modified the April 2008 Talent Review meeting
agenda to concentrate the discussions on the most
critical talent and most pivotal roles.
Global Business and Organizational Excellence
Officers’ Prework
Each officer prepared two slides for the Talent Review meeting:
1. Slide 1 captured key business strategies and initiatives to support the officer’s area of responsibility for the next fiscal year.
2. Slide 2 listed related talent impacts in answer to
the following questions:
r Which leadership roles/positions in the officer’s area of responsibility have the greatest opportunity to impact FedEx Ground’s
growth strategies and/or ensure success for
key fiscal-year business initiatives?
r What leadership styles, competencies, and experiences are most critical to execute the fiscalyear business initiatives in the officer’s area?
These slides were a less formal, unfacilitated method
for having officers identify the roles and skills pivotal
for FedEx Ground during the coming year.
An Agenda Focused on Pivotal Talent and Roles
In a big change from the prior year, we revised the
agenda for the 2008 Talent Review meeting to place
greater emphasis on determining (1) if the company
has its best talent—high potentials (those ready now
to move up and take on more responsibility) and
promotables (those who with development could
move up and take on more responsibility)—working
in the most pivotal roles and on the most pivotal initiatives and (2) if the company is developing these
people as rapidly as possible, with particular attention to the quality and progress of their development
plan. The meeting agenda also addressed well-placed
talent and individuals who needed further development or broadening to continue in their current role.
During the Talent Review meeting, each officer followed the discussion template below to review the
key talent in his or her organization:
1. Present key business initiatives (Slide 1) and talent impacts (Slide 2).
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41
2. For each direct report assessed with a potential rating of “1” (High Potential) or “2” (Promotable), discuss the following:
r Where was the leader placed on the assessment
last year? This year?
r How has the leader changed/developed over
the past 12 months?
r As a result of the leader’s actions, how did you
score his or her development plan this year
(based on specific behavioral-anchored rating
scales for quality and progress)?
r What does the leader need to develop (strength
and/or development area) over the next
12 months?
r How is the leader supporting the key business
initiatives in Slide 1?
3. Receive and respond to group feedback (for highpotential and promotable talent).
4. Assess all other talent.
r Based on talent impacts (Slide 2), which of the
leaders critical to your business initiatives are
not high potential or promotable?
– What are you doing to develop these
people?
– What are you doing to ensure their success on the critical initiative(s)?
The group will then provide feedback on
the information presented, inquire about any
person’s assessment, or provide development
input.
By shifting the focus of the Talent Review discussions from “What talent do we have today?” to
“Where will we be tomorrow or a year from now?”
and “Do we have the talent that can take us where
we need to go?” the officers were able to gauge more
clearly the status of the talent pool most closely
linked to the success of their key business strategies.
Differentiating Between Important and Pivotal
Although we had expected that officers would select
approximately 10–15 percent of all officer, director, and other leadership positions as pivotal, the
results from the Talent Review meetings exceeded
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these percentages. We recognize the need going forward to continually challenge the officer team to
make greater distinctions between “important” and
“pivotal” roles/positions, as effective segmentation
best informs where FedEx Ground should invest its
talent development resources over the following year
to make a real strategic difference.
Although we had expected that officers would select
approximately 10–15 percent of all officer, director,
and other leadership positions as pivotal, the results
from the Talent Review meetings exceeded these
percentages.
Nonetheless, these initial results provided a starting list of those roles that had the greatest strategic
or financial impact to the organization and, consequently, should be closely managed during the fiscal
year to reduce possible risk if the quality or quantity of talent in those roles declined. Because we
had implemented the succession planning module
within our technology platform, the Center for Employee Excellence (CEE; which allowed us to transition away from manual Excel spreadsheets), we
are able to leverage the technology to track these
high-priority pivotal positions and raise their visibility during succession and development planning
processes.
Aligning Development Plans With Gaps
in Critical Competencies
During the Talent Review meeting, Human Resources once again captured the competency-based
development themes common to or shared by individuals discussed in the meeting. However, we could
now compare these shared development needs with
the critical leadership competencies each officer had
identified in the Slide 2 prework as most critical to
executing fiscal-year business initiatives and strategies. As the example in Exhibit 6 suggests, this powerful comparison brought to light areas of leadership
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Global Business and Organizational Excellence
Exhibit 6. Example of Shared Development Needs Identified in the Talent Review
skills and experiences where the organization might
be at risk. For example, two-thirds of the development needs shared by individuals currently in director roles were also critical leadership competencies
for the company.
The leadership team then brainstormed development solutions or alternative approaches to address
the collective gaps in critical competencies, action
items they would actively own. For instance, to close
directors’ capability gap related to “demonstrate
business and technology acumen,” officers identified several actions to help build directors’ financial,
technical, and systems thinking skills, such as:
r six one-hour workshops on various financial topics, offered by the Finance department;
r participation by directors in key accounting meetings; and
r a “systems thinking” workshop, developed by the
IT department, to broaden leaders’ understanding of business drivers outside their own area,
Global Business and Organizational Excellence
cross-functional impact, and how business and
systems work together.
This part of the succession planning process helped
establish our sought-after critical linkage between
the talent-related impacts (competency gaps) uncovered in the Talent Review discussions and the company’s business strategies.
Reinforcing the Link to Career Development
As mentioned earlier, the Talent Review process
has enhanced the priority and visibility of employee
development, which is viewed as a value-added
activity and a key competency of a strong leader.
To reinforce the connection between employees’
career development and the company’s succession
planning requirements, given our new insight
into the pivotal positions essential for the fiscal
year’s key strategies and initiatives, the officers
revisited the subject of developmental plans for
the company’s high potentials, this time within the
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43
framework of three questions we posed to them at
the end of the April 2008 Talent Review meeting:
r How does FedEx Ground connect high potentials
(those not already connected) to the key initiatives supporting the business strategies?
r Are their development plans focused on giving
them the right experiences so they can drive the
business strategy going forward?
r How do we continue to engage, challenge, and
enrich their careers?
Closing
In three years, the redesign of the succession planning process at FedEx Ground has produced consistent frameworks, tools, and technology that are now
used companywide to guide talent discussions and
decisions that affect approximately 2,000 leaders.
Talent discussions have matured as leaders have become more adept at discussing talent in a useful, candid, engaging, and actionable way; at understanding
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where better talent can have the greatest strategic
benefit; and at making talent decisions more likely
to fuel business growth and the company’s success. And given our focus on continuous improvement, succession management at FedEx Ground will
continue to evolve with the changing needs of the
organization.
Note
1. Boudreau, J. W., & Ramstad, P. M. (2007). Beyond HR:
The new science of human capital. Boston: Harvard Business
School Press.
Heather D’Alesandro is manager of leadership development
and succession planning at FedEx Ground in Pittsburgh,
Pennsylvania. She has been responsible for leading all strategic and tactical initiatives pertaining to FedEx Ground’s succession planning programs and processes. Stuart Crandell,
PhD, is senior vice president for Personnel Decisions International in Minneapolis, Minnesota. He helps organizations
translate business strategies into talent implications and enhance their succession practices.
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