C O M P E T I T I V E A D V A N T A G E. R E A L I Z E D.
Succession Planning
- Importance in the Current
Market Environment
Presented by:
D. Rajiv Krishnan
Managing Director
DDI India
Agenda
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Findings from 2 Research Studies
Six Mistakes that can undermine a
succession management system
Best Practices in Current Market
environment
About DDI
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
DDI Leadership Research
Insights
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DDI’s 2008 Leadership Forecast
Survey of 13,700 leaders
– 192 Individual organisation reports
– 11 languages
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
DDI Leadership Research
Insights
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Decline in proportion of HR who expressed
high confidence in their leaders ability to lead
the company to success
• DDI Survey Asia Pacific region – 38.6%
CEO’s mentioned “Finding qualified
Managerial Talent” as their “No 1” Challenge
• 56% of managers had no Development Plans
• In MNCs 61% managers poorly prepared for
transitions, 48% poorly supported
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
DDI Leadership Research
Insights
More than 1/3rd (37%) leaders fail
• Basic skills that lead to leaders downfall
are around the following
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–
Interpersonal
– Networking
– Communication
– Team Building
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Succession Planning Research
Prevalence of Defined Succession Plans
Percent with a plan
70
60
48%
47%
49%
38%
50
28%
40
30
20
10
0
Top Level
Multifunctional
Managers (CEO,
managers
CFO, COO)
Department/
function or
project
management
First-Level
functional
supervisors
Individual
contributors
(professionals,
frontline)
Source: DDI - Global Leadership Forecast 2008 / 2009
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High Potential Programs
Le ade rs in High-Pote ntial Programs
Organisation
Doesent Have one
15%
Yes
25%
No
18%
7
Idont know
42%
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Organisation Strategies
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Option 1: “Do Nothing”
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Option 2: “Hire From Outside”
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Option 3: “Grow your Own Leaders”
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“Grow your own leaders”
Ensures
• Continuity
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Positive Message
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More informed decisions
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Diversity Goals
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Succession Management
Aggregate Findings
(236 organizations)
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Top Pressures Driving
Succession Management
100%
80%
59%
60%
43%
35%
40%
31%
20%
0%
Shortage of readily
Shortage of candidates Rapid pace of industry
available leadership
in the talent market for
or business change
skills in the talent market key leadership positions
(QUALITY)
(QUANTITY)
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Graying of the
w orkforce leading to
the loss of key leaders
to retirement
The Pain is Very Real…
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Large US-based healthcare provider
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–
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80% of senior management retired
or left within a two-year period
Anticipated only ½ that figure
Needed to recruit (externally) 60%
of those positions
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
… and the Reality is Very
Frightening!
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Mid-sized insurance provider
–
–
50% of senior management
and
100% of all employees in one functional
area (technical support) are eligible to retire
within 5 years!
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Top Strategic Actions Taken
50%
46%
42%
40%
38%
36%
35%
Establish
accelerated
leadership
development
programs for highpotential talent
Fill key vacancies
internally (i.e. a
'grow your ow n'
strategy)
Establish a
succession culture
w ith buy-in from all
stakeholders
30%
20%
10%
0%
Develop a
leadership pipeline
across all levels of
the organization
Hold managers
accountable for
identifying and/or
developing highpotentials
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Most Valuable Methods to
Identify High-potentials
50%
42%
41%
36%
40%
30%
20%
10%
0%
360-degree from their peers
and/or direct supervisors
Assign employees to project
teams and monitor their
leadership skills on a smaller
scale to test their ability to handle
more senior leadership roles
Behavioral assessments
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Top Organizational
Capabilities
100%
87%
74%
80%
55%
60%
50%
40%
20%
0%
Standard process for Formal buy-in from Systematic process
Widely publicized
employee appraisals
top corporate
where senior
"people" culture and
and development
executives
managers regularly
developmental
review the
mindset in the
performance and
organization
progress of highpotentials
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Top Technology Enablers
Deployed
Assessment/Testing tools for behavioral
attributes and attitudes
32%
Assessment/Testing tools for technical skills and
competencies
27%
Tools that track and report on development
progress of designated succession candidates
(e.g. performance management tools)
26%
Gap analysis / competency variance tools to
determine the current leadership readiness to its
future requirements
23%
Workforce collaboration tools (wikis, blogs,
discussion boards)
0%
22%
5%
10% 15% 20% 25% 30% 35%
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Other Data Gathered
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Metrics that companies attribute to succession management
Who is championing the adoption of these initiatives
Technology buying intentions
Top vendor selection criteria
Organizational capabilities planned
Technology enablers planned
Top internal challenges organizations seek to address with
succession management
Development horizons
Satisfaction with all elements of the program
and more…
Source – Aberdeen November 2008
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
SIX Mistakes* – That can undermine a
succession management system
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Focus People Development on a
specific job ( Replacement
Management)
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Inaccurate identification of potential
leaders
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Poor Diagnosis of Developmental
needs
*Source: DDI Research
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
SIX Mistakes* – That can undermine a
succession management system
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A limited range of Development
Solutions
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Development Plans are not put into
action
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Lack of Ongoing Support by Top
Management
*Source: DDI Research
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
Best Practices in Current
Environment
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Process Tension by CEO/MD
Clear Communication Strategy
Clear Management Methods of
Acceleration Pool Members
Mentors to remove organisational
barriers
Clear accountabilities for mentor,
manager and acceleration pool
members
© Development Dimensions Int’l, Inc., MMIII. All rights reserved.
About DDI
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World-leader and thought-leader in Talent Management
since 1970 – we are known for the research that we do
DDI is the pioneer and world #1 in the use of Assessment
Centers for selection and development
DDI developed the world’s first behavioral based
interviewing system –Targeted Selection
DDI’s leadership development programs have produced
measurable & sustainable results like better customer
service, reduced turnover and improved productivity.
Global presence- over 1000 sales, consulting &
implementation resources work around the world at 75
offices in 26 countries. HQed in Pittsburgh, USA ; In
India since 2006
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Thank You!
Rajiv.krishnan@ddiworld.com
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© Development Dimensions Int’l, Inc., MMIII. All rights reserved.