strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Winter 2012 / Issue 69(originally published by Booz & Company)


Talent Is a Strategic Asset: A Virtual Roundtable

Credible Succession Planning

RUDOLPH: In early 2008, we took on succession planning, running it end to end with accountability for results. A lot of senior executives said, “We’ve tried fixing the succession planning system; it’s too complex.” There wasn’t a believer in the room. But when you say you’re going to be responsible for something, it breaks down a lot of the resistance.

CASHION: I was in the middle of that effort. We held 90-minute meetings every Thursday, with people in HR operations and development. In those meetings, we worked together on creating a new process. Some people had the view that, “We don’t need to change; we already do enough.” But we didn’t have a repeatable, organization-wide approach for identifying future leaders or the ability to identify the associated individual development activities necessary for their future success. We took three months to design the process and launched it in March 2008. It was very rewarding to see how we could all pull together and make it happen.

Our succession planning process looks three levels down from our executive committee; in some areas we go a bit deeper. The conversations with leaders make the most difference. Among many other things, they are asked to think about which potential future leaders might be a flight risk, and what people need to work on for their development.

We make a fact-based assessment about each person. That prevents us from making decisions based on isolated impressions, like: “I was in a meeting with so-and-so five years ago, and I thought he was a jerk.” Instead, we factor in everything that’s relevant. Maybe the person who previously came across as a know-it-all has had a chance to develop his interpersonal skills during the ensuing years.

This pays off in some very practical ways. When we conducted a huge reorganization in late 2011, moving from a more functionally aligned organization to asset-focused business units, our existing base of succession and development information allowed us to move very fast. We knew immediately who was ready to be placed in dozens of critical new roles.

HAGER: Succession planning should not just be about the CEO or senior management. Energy companies everywhere will have a wave of people retiring at all levels in coming years. With the demographics we have, it’s inevitable, and we need to be prepared.

Let’s face it, most of us on the business side here are technical people by training; I’m a geophysicist, and a lot of my colleagues are geologists or engineers. As technical people, we don’t have a lot of skill in succession planning. But it’s important for us to be accountable for the management of our people. HR provides us with information about the people who might be available, and helps us with the thought process of who might be best; we make the decisions, based on our own experience and on an understanding of the business’s needs at any given time.

RUDOLPH: Strategically, succession planning had to be integrated with our workforce planning, the statistical forecasts of our future labor needs. The planning process also connects to our technical and leadership development courses and our assessments, and it helps reduce our turnover rate, which is one of the lowest in the industry.

A lot of the problems companies have with succession planning are exacerbated by the conventional human resources stance of setting itself up in a facilitating role. When HR says to line managers, “It’s your job to do development and succession planning, and here are some tools to help you,” that confuses the issue. Some very good leaders get downgraded because they don’t do the HR piece well.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.