Planning for succession

Planning for succession

Joan Schaffer completed one week in her new job with Capital One Financial when she was told to choose her successor. Succession planning is so important to the US-based financial services company that the issue is brought up during new employee orientation. "We are a huge growth company and our appetite for senior talent is voracious. To feed that appetite, we grow and develop our staff as rapidly as possible," says Schaffer, vice president and senior business information officer for core processes in IT.

Management at Capital One and other companies recognises that the future of their organisations is in the hands of employees - especially IT staff. With that in mind, these companies have developed employee succession plans to feed the management pipeline.

Within three months after joining Capital One, exempt employees must draft a DAP (developmental action plan). Capital One uses a common language across the organisation to identify more than 20 competencies that will help career professionals grow into potential manager successors.

"Each competency is described by a series of behaviours," in which Capital One managers identify what is expected of each employee. For example, for the behavioural competency "‘treats others with respect,' we'd expect someone at an entry level to behave maturely with their colleagues," Schaffer says. At the senior level, ‘treats others with respect' would illicit a different behaviour. "We'd expect them to develop credibility across the organisation," according to Schaffer.

Functional abilities such as programming skills, are important DAP elements. "We've taken the effort to identify a series of job families [or tracks] like project management or systems development and we've described the stages we expect a career professional will need to grow and develop into the next level," Schaffer says.

Identifying and defining skills and competencies allows Capital One managers to work on specific career development issues with employees. "Our managers can sit down with associates and say, ‘Here's where you are, here's where you need to be, and here are the skills you need to get to the next level. And here's how we can develop a plan to help you get there'," Schaffer says.

Getting to the next level

But being identified as a successor and actually becoming one requires training. At Capital One, Schaffer says two channels, competency planning and developmental planning, help employees achieve training goals. Under the competency planning, employees take introductory management courses to learn how write DAPs for others and behavioural techniques for managers. Some courses are developed for the IT department. "Right now we're putting together a course on business from the IT perspective," Schaffer says.

Mentoring is another element of Capital One's succession plan. "In many of our developmental action plans, we tell our associates that to reach the next tier they need to find someone in that [desired] role who exhibits the qualities [the associates] want, and ask them to be a mentor," Schaffer says. The IT officer is currently mentoring four people - two of whom aren't in IT.

Training and mentoring are fine, but putting skills into action can be another matter. "Stretch assignments - which can be part of the DAP - test an associate's abilities and skills to see how he or she copes with certain situations," Schaffer says. "We expect associates to get out of their comfort zones and look for those ‘stretch assignments'. It's incredible what they learn and bring back from those assignments." According to Schaffer, employees sent on stretch assignments generally come back with a clearer big-picture view of the business.


DoubleClick is just beginning its succession planning process, rejecting the top-down approach. The five-year-old US-based Internet advertising company expanded from two employees to 2000 employees in just a few years, despite double-digit turnover rates before the dot-com meltdown and negative publicity surrounding a now-dismissed federal privacy lawsuit.

"We're changing so frequently with mergers and acquisitions that we've come to the conclusion that it's important not to be so narrowly focused and inflexible [with job descriptions]," says David Siegel, director of organisational development at DoubleClick.

To develop the company's succession plan, Siegel examined what other companies were doing and then borrowed their best practices. But Siegel wasn't crazy about what he found: an old paradigm of replacement planning that came from the top down. "We've defined [succession planning] from the bottom up - who are the high potential people we want to move up," Siegel says.

"Ultimately, if you think about what a CEO, vice president, or manager should focus on, it's making sure that the right people are under them making the right decisions. Succession planning is the anchor for that," according to Siegel.

DoubleClick management now bases its succession plan on 360-degree feedback and management review. Information from these reviews places managers in a better position to assess an employee's readiness to move to the next level, Siegel says.

But the talk doesn't stop there. "We created formal conversations, three-hour dialogues between managers and their direct reports who were classified as high potentials." In those conversations, they covered such issues as what the person did before joining DoubleClick, their greatest strengths and the barriers to success if they were promoted. "It was with that kind of information that our managers were more equipped to make decisions," says Siegel.

Some managers and employees were reluctant to buy into the succession process. The greatest challenge was to get executives to understand that "by doing good public relations for their people, they weren't going to lose their best people," Siegel says. Another benefit soon appeared: dissolving ugly and unfounded perceptions of employees with whom managers did not interact.

But even Siegel says there are downsides to succession planning: fast-trackers. "Managers and executives can rely too much on the plan and not make promotion decisions on their own." He explains that succession planning is one of many data points, but not the deciding factor of whether or not someone should be promoted.

But what worries Siegel more is labelling someone as not promotable. "That's something that will carry throughout a person's career, even if they leave DoubleClick," he says. "As a result, we've made a strategic decision that very few will know [only the company CEO, executive team and human resources] who has been designated as high potentials. We'll treat them [as such] without labelling them. We believe what's more important is the developmental actions, not the label. If people find out that they are in a certain category, we have a huge retention risk on our hands."

No single point of failure

For Art Lewitter, CTO of Inlumen, provider of financial news and market data in the US, succession planning is really about taking care of business. "We're just doing what needs to get done. And we're doing it because it's the appropriate thing to do."

When Lewitter was expecting his company - then known as NewsAlert - to be bought out, he had to decide who his key people were and who would protect his company's customers. "Just as you would do in technology, you have to build some redundancy [among employees], so no knowledge base is locked into a single person," Lewitter says.

A few years ago, when the company had just 19 employees, that was the situation. Now, with more than 100 employees in the US, London and Singapore, staff report back regularly to their managers and the senior management team meets weekly to discuss the progress of ongoing projects. "We do this for two reasons: to make sure we're working on the right things that will benefit the general workflow; and to make sure that if something happens to someone, there won't be an uncoverable loss," the CTO says.

"You want to make sure that there is an intrinsic value to every employee. But if that person is no longer around, you want to know that you can replace them with minimal cost. That won't be the case if they leave with valuable information," Lewitter says.

So for Lewitter - and others who understand the value of succession planning and feeding the IT staffing pipeline - having employees with a shared knowledge base makes monetary sense. "It's like putting together an insurance policy - just in case."

Contingency planning

What would you do if a staff member unexpectedly passed away, or was disabled and could not come to the office or perform his or her duties even with reasonable accommodations? How does succession planning differ from contingency planning?

The contingency plan is actually "something you deal with all the time" in the normal course of business, says Michael Gerrard, vice president and research area director for the business management of IT practice at Gartner.

"For example, typically there isn't an extensive period of time from when someone resigns to when they actually leave. So most companies feel like they deal with contingency planning [regularly]. It isn't something that's heavily emphasised," Gerrard says.

"Succession planning, on the other hand, really focuses on the level of readiness for people to move into key positions," Gerrard says. "If you do it on a planned basis, then you have people in place" when someone is promoted, leaves the organisation, or suddenly passes away. Companies focus more on succession planning for good reason. "You need flexibility to move people around with preparedness."

Having worked as the CIO at several large companies during the 20 years before he joined Gartner, Gerrard has seen his share of positions vacated.

"What's always amazed me is how nobody I've ever dealt with is indispensable. I've seen people vacate positions, and there was much less [of an] effect than you would have expected. People are not unique," Gerrard explains. The former CIO finds this is especially true of management, which "is a profession practiced with other people. The people around you tend to make up that loss after you've gone."

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