Posts belonging to Category succession planning

HR’s always talking about the importance of having a robust talent pipeline. But what about its own pipeline? Is the profession doing enough to develop the next generation of HR leader?

To that end, the National Academy of Human Resources launched its Ram Charan HR Essay Contest in 2011, aimed at recognizing thought leadership among university undergraduate and graduate students in the fields of HR, industrial/labor relations and related fields.

The contest is made possible through a generous donation by NAHR Distinguished Fellow Ram Charan to the NAHR Foundation.

For the 2013 contest—which has an Aug. 1, 2013 deadline—the students are being asked to address the topic of electronic technology and social media, and how these are affecting the employment relationship (from hiring to engagement to retention) between employers and employees; as well as the roles, responsibilities and contributions of HR organizations. Clearly a timely and relevant topic.

Prizes of $20,000, $10,000 and $5,000 will be awarded, with the winners being officially announced at the Nov. 7 NAHR Annual Dinner. (Essays will be evaluated and judged by a panel of HR professionals who are Fellow of the NAHR.)

Kudos to Charan, a respected author, speaker and business consultant, and the NAHR for providing students with this worthwhile opportunity. Details can be found on the NAHR site.

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Not one to peddle books on this site, but one caught my eye today that ties in enough with issues we’re currently grappling with that I thought I’d share.

Jim Roddy, president of Jameson Publishing in Erie, Pa., just wrote this book, Hire Like You Just Beat Cancer, to drive home his newfound perspective on just how crucial it is to hire the right people — gained through his own bout with colon cancer at age 32.

I was especially taken by this excerpt from the book:

Too often, we hire people whose full potential and ambition are invested in performing the jobs they’re hired for. Then, when we need more from them, they’re not able or willing to go the extra mile. Your goal should be to have at all times (or be working toward) at least one employee with the skills, personality, character, mapping, ambition, and technical competence to take over your position right away.”

So happens we’re currently putting the finishing touches on a Sept. 16 Human Resource Executive^® cover story that reveals just how much work is still needed by chief human resource officers to find and develop their own replacements. One survey the writer cites shows a pretty dismal number of CHROs who were developed and hired from within their organizations last year — a pretty clear indication of how few top HR executives are actually selecting and preparing their top subordinates to take over their jobs — tomorrow, if need be.

Roddy’s book contains many of his lessons learned, as spelled out in this release: guiding principles for hiring, interview best practices (such as behavior-focused techniques), recruiting strategies for finding great performers, even emotional outcomes the interview process should achieve: “candidates feel the company is professional, their quesions are answered, candidates were happy to interview, candidates are told of the job’s difficulties,” the list goes on.

As Roddy writes in the book: “The lessons I learned when cancer knocked me down helped build me up as a hiring manager, and I apply those lessons aggressively every time I interview a potential employee.”

Whether you order a copy of his book or not, perhaps it could serve as a suggestion/reminder that your own succession plan and hiring practices might merit a second look, through the more focused and urgent lens of suddenly not being able to report to work tomorrow.

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This isn’t the first time I’ve come across information about the need for more Asian-Americans in top leadership posts in corporate America. But these numbers I found surprising enough to share.

In two separate reports, Los Angeles-based Leadership Education for Asian Pacifics Inc. has unveiled pretty telling evidence that, no matter how well-trained and well-educated they are, Asian-Americans are still woefully missing from America’s boardrooms.

In this study, LEAP finds 116 Asian and Pacific Islanders held 135 board seats at Fortune 500 companies in 2011, representing 2.4 percent of the total number of board seats at those companies. Worse still, a staggering 77.8 percent of those companies have no API representation on their boards.

In another study, the organization finds 75 APIs holding 78 board seats at the top 100 nonprofits in this country last year, representing 2.55 percent of the total 3,061 board seats in those nonprofits.

Contrast that with the fact that these API Americans constituted 6 percent of the U.S. total population in 2010, according to a report by the Selig Center for Economic Growth that incorporated U.S. Census figures, and its buying power was expected to grow 42 percent from $544 billion in 2010 to $775 billion in 2015.

Somethin ain’t right. This definition of bamboo ceiling from Wikipedia reveals another nuance of what certainly looks and feels like bias to me:

Bamboo ceiling – The exclusion of Asian-descendants from executive and managerial roles on the basis of subjective factors such as “lack of leadership potential” or “inferior communication ability” whereas the East Asian-descendants candidate has superior objective credentials such as education in high-prestige universities (in comparison to their white counterparts with only lower-prestige university credentials).For example, research shows that there are a decent number of partners at leading prestigious law firms in the United States who did not attend top notch law schools. However, an East Asian American partner of a leading law firm who did not attend a “Top 16 Law School” (according to the U.S. News ranking) would be seldom found.

LEAP CEO Linda Akutagawa took a good part of an hour today to talk with me about the problems of perception and cultural differences that both Asian and western employers and employees need to work on. In other words, just because Asian values include speaking only when you have something important to say, and showing respect for colleagues and – most especially – your boss by keeping quiet when they’re speaking doesn’t mean Asian-Americans don’t have leadership skills.

“Companies, and their HR executives, should really be looking at what leadership really is in their companies,” she says. “Does it mean aggressive, networker, fast on your feet, good communicator? Or does it allow for someone who does not exhibit those behaviors?”

And Asian-American workers, she says, need to better understand how their values and cultural behaviors are impacting their career-development paths. That’s something her group can help with, along with helping HR leaders design and execute better Asian and western outreach and education efforts.

“There are so many things HR executives can do to better these numbers,” Akutagawa says. And they should, when you consider the skills and talents companies are missing out on in top-leadership and board positions. ”A lot of corporations have nonprofit partnerships; HR executives could be getting more active and vocal about trying to place talented and interested Asian-Americans on their boards so they can be getting that kind of corporate-leadership experience.”

The most important focus for HR leaders, though, should be on building up their talent pipelines to include more Asian-Americans, she says. “My hope is for HR to think long-term about this,” she adds, so API top talent is able to move beyond mid-management — where most of these employees’ career ladders end — so they’re better represented in the top-management succession chain and top-of-mind instead of disregarded when board positions open up.

The good news, small though it may be, is that the Fortune 500 board-representation numbers from 2011 are at least better than 2010, when 96 APIs held 115 board seats, representing only 2.1 percent of the total 5,520 board seats at those companies. Long way to go though.

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In his annual letter to shareholders, issued on Saturday, the legendary Warren Buffett confirmed that Berkshire Hathaway has a CEO successor in place as well as two back-ups. But he still left investors guessing the identities of those individuals.

No doubt Berkshire shareholders should be able to take some comfort in knowing that a successor has been identified. Yet I’m sure they’d sleep even better were they to know their names.

But then there would be nothing left to speculate about.

Earlier today, Buffett told CNBC that the letter’s mention of a plan wasn’t really a change—that the board has always had a preferred candidate and two backups. That, however, may not have been entirely clear to many shareholders, at least until Saturday.

I’m sure it was no accident Buffett inserted the mention near the very the beginning of his 22-page letter. The Berkshire chairman obviously didn’t want shareholders to miss the point. Though reportedly in good health, he is 81, after all.

Considering the importance of CEO succession, it never fails to amaze me how few companies actually have plans in place.  Buffett notes in this year’s letter that one of the principal roles of the board of directors is to ensure “the right people are running the business” and “that the next generation of leaders is identified and ready to take over tomorrow.” So why do we continue to read studies, like one released by Korn/Ferry, that report just 35 percent of companies have CEO succession plans in place?

Whether you personally consider it news or not, maybe Buffett’s reference—and some of the press reports it generated—will, at the very least, lead a few more boards to put it a bit higher on their agendas.

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Say what you want about 2011, but I don’t think many of us started the year figuring it would be as much of a roller-coaster ride as it was. I personally expected a somewhat smoother journey. Just wishful thinking, I suppose.

Like most years, 2011 had its share of winners and losers. Below, I list a few of my 2011 winners. (My next post will identify some of the losers.)

Drum roll  …

Wal-Mart, following a High Court decision to reverse an earlier controversial ruling by the 9th U.S. Circuit Court of Appeals that Dukes v. Wal-Mart could proceed as a class-action lawsuit against the retailer.

Former Hewlett-Packard CEO Leo Apotheker, who left HP with more than $25 million in severance after just 11 months on the job.

Boeing, following a National Labor Relations Board decision to drop its controversial charge against the aircraft maker for its plans to build a factory in South Carolina.

Vendors of cloud-based HR applications, some of which became takeover targets for software giants such as SAP and Salesforce.com.

San Jose, which was ranked No. 1 on CareerBliss’ top 10 “happiest cities to work” list this year.

Apple Computer—for successfully demonstrated the merits of good succession planning leading up to the passing of founder Steve Jobs.

and finally …

Inflatable rats, which, thanks to another NLRB ruling, could now be visibly displayed in front of picketed facilities.

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When it comes to product development and marketing, Apple can do little wrong. iPod. iPhone. iPad. Well, I suppose the same could now be said of Apple’s handling of Steve Jobs’ somewhat sudden, though not entirely unexpected, announcement yesterday that he was stepping step down as CEO of the company because of his ongoing health issues. (He will continue there as chairman, however.)

CEOs step down all the time. But in the case of Jobs, who’s been such an instrumental force behind Apple’s success, his announcement yesterday became front-page news.

Previously, Apple had come under fire for not having a viable CEO succession plan in place. (Shareholder groups recently had pressured Apple to reveal its succession plan annually.) But Jobs’  recommendation to the board, in his letter of resignation to them, that it follow through on Apple’s succession plan and appoint COO Tim Cook to the CEO post, and the board’s immediate decision to name him Jobs’ successor, confirmed to the world that was hardly the case. 

I asked communications expert Merrie Spaeth earlier today what she thought of Apple’s handling of Jobs’ resignation. “Brilliant! I’d give them very high marks,” she told me, noting that the added visibility given to Cook lately helped to soften the blow for Wall Street, as well as Apple employees and enthusiasts.

She felt Cook’s subsequent letter to employees one day later (leaked to the press) was especially well crafted.

Shareholders and others certainly have good reason to worry when someone as important to a company as Steve Jobs falls ill. But as yesterday’s news demonstrated (and made undeniably clear), Apple’s board, despite criticism to the contrary, was more than ready for that day.

Wall Street seems to agree, with Apple’s stock ending the day better than the major indexes.

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After a one-year-national search, SHRM selected an insider, interim CEO Hank Jackson, as its new president and chief executive officer.

“We were looking for the ideal candidate—a person with the right vision, the right skills and the expertise to bring this organization through the next phase of its growth, and that person is Hank Jackson,” said Jose A. Berrios, board chair.

Jackson has been with SHRM for more than five years and, in a previous role as chief global finance and business affairs officer, led SHRM’s critical business functions, including finance and accounting, information technology, organizational programs, publishing and e-media, and global marketing.

Before he joined SHRM, Jackson served as senior vice president, chief financial officer and treasurer at Howard University in Washington. Additionally, he has held senior positions with the firms Main Hurdman and KMPG and with the Southern Association of College and University Officers.

Not surprisingly, during the SHRM conference’s opening remarks and the new CEO announcement, no mention of the transparency group (see post below). But obviously, there’s going to be no need for a learning curve for the new CEO leading up to a first meeting.

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There were lots of thoughts to absorb from the Cornell University HR Executive Summit, held as part of the HR in Hospitality® Conference at the Marriott Wardman Park in Washington this morning.

It was a huge roundtable discussion, with 16 panelists, but moderator Bruce Tracey, associate professor of management at Cornell’s School of Hotel Administration did a good job of engaging the entire group and keeping the conversations pithy.

Some food for thought:

*HR Hit Hard: At the Four Seasons, the HR department “took a disparate hit” of a 20-percent reduction in headcount, said Debbie Brown, its VP of HR for the Americas. Overall, the organization lost 4 percent of its workforce.

HR was hit even harder at Hilton Worldwide, where there was a 40-percent global cut, said Barbara Holkamp, senior vice president of HR consulting, who said the HR function focused on providing simple, automated toolkits and models related to people practices and focused on “top grading,” meaning talent development.

She noted that the reductions did not affect hotel-based HR directors – and that guest-service satisfaction scores remained “very high.”

Brown said the organization looked at outsourcing transactional work, “anything that is not mission critical” and that “learning took a real hit.”

*Doing More with Less: In a survey result taken by attendees, 100 percent said their organizations are doing more with fewer resources. In another question, asking for important HR issues for 2011, retention (23 percent) came in first (if you don’t include other, which received 28 percent of the votes); followed by recruitment (21 percent); productivity (18 percent); and compensation (10 percent).

* Adding Instead of Cutting Training: At the Fairmont Hotels & Resorts, the recession actually prompted “the most comprehensive service training program than we ever had in our company’s history at a time when many of our competitors were cutting back or cutting training all together,” said Carolyn Clark, SVP of HR.

But the difference was the program was led by operations, she said, not HR.

“We were really looking for behavioral change to drive business results,” Clark said. The workers completed a self-audit at the end of the training program and created an action plan that was integrated into future performance reviews.

This year, she said, a refresher course will use 30 actual case studies drawn from guest survey results.

* Finding Talent: Recruiting “actually got harder for us” during the downturn, said Greg Smith, executive vice president of HR for Denihan Hospitality Group. “Yes, there were more people looking for work but the people we needed were harder to find.”

So, he shifted the recruiting function down to individual properties and further down, to individual functions, so room attendants were involved in looking for room attendants; front desk managers looked for front desk managers, and so on.

“We have had some pretty good results,” he said.

* Salary Grumbling on the Rise: Don’t expect workers to accept doing more with less forever, the panelists said, especially if their pay is not seeing an increase.

“Their patience is wearing thin,” said Laura FitzRandolph, SVP and assistant general counsel at Interstate Hotels & Resorts. “You have to manage expectations,” but noted that, for the hospitality industry, “the climb back is going to be longer than the fall into the basement.”

* Just-in-Time Staffing: John Longstreet, president and CEO of Quaker Steak and Lube, said he remembers when one major brand laid off 130 managers in a single day – and he wondered how an organization could be so overstaffed.

“I am trying to do more with the same,” he said, noting that he would prefer to under-staff and over-pay. He also has invested in technology to make it easier for his restaurant managers to access the information they need and therefore be able to spend more time with team members.

* Preparing for Retirement: Want to engage your workers? Ask them when they will retire. That’s the advice of Alan Momeyer, VP of HR at Loews Corp.

“There’s nothing wrong with that question,” he said. Plus, it will require them to think about designating successors and then making sure those successors are qualified to step in when necessary.

Those conversations will cascade through the organization — and that’s what results in engagement, he said.

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How much attention is Berkshire Hathaway’s board paying to CEO succession these days? “It’s all we talk about [at board meetings],” Buffett recently told writer Bethany McLean.

In an interview running in the February edition of Vanity Fair (which hit newsstands yesterday), Buffett didn’t shed much new light on who will inherit the mantle at Berkshire Hathaway (it was reported some time ago that the CEO and chief investment officer jobs, now both held by Buffett, would be divided between two or more people). But it’s always refreshing to hear the Oracle of Omaha once again offer up his  optimistic viewpoint on America’s resiliency and future.

 “We had four million people here in 1790,” Buffett told McLean. “We’re not more intelligent than people in China, which then had 290 million people, or Europe, which had 50 million. We didn’t work harder, we didn’t have a better climate, and we didn’t have better resources. But we definitely had a system that unleashes potential. …

 “Since then, we’ve been through at least 15 recessions, a civil war, a Great Depression. … All of these things happen. But this country has optimized human potential [italics my own], and it’s not over yet.”

Not a bad way to finish up the first workweek of the year.

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When United Airlines decided to regroup in late 2008 and reassess itself, some revelations emerged. Such was part of the story relayed at a Wednesday session of the HR Technology^® Conference entitled “United Flies High with Comprehensive Succession Planning.”

Consider the fact that “we’d been through bankruptcy, issues with the H1N1, Asian Flu, then the challenges of the recession,” Cynthia Starz, managing director of leadership and organizational development for United, told session attendees. “All those things made us take a look at our business model and structure. We realized some significant talent gaps.”

And the need for a different approach to succession planning. The old model — usually limited to an org chart leading to a specific person in a position — wouldn’t cut it for a company operating in one of the most volatile industries in the world, with reporting structures that were constantly changing.

For most of 2009, with the help of Taleo, Starz worked to get a handle on United’s internal talent pools by having employees fill out Talent Profiles. “In the United story,” she said, “we got 80 percent of the value out of the interviewing [that resulted from the profiles] and less about the succession.”

What came from the interviews was a general “vetting of the talent” that has led to the “creation of jobs for the people [United discovered it had] rather than the people to fit the jobs.”

The succession planning experiment, if you will, even has senior executives trading talent now, recognizing that some departments produce more than they can use.

Jason Blessing, senior vice president of products and Jason Blessing, senior vice president of products and technology for Taleo, confirmed the rather revolutionary approach to performance management and succession planning that evolved from the United relationship. “Setting up the configuration [which was completed on May 20, 2009], we realized we wanted to look at business processes, not just roles and positions.”

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