Growing Your Company's Leaders: How Great Organizations Use Succession Management to Sustain Competitive Advantage

269 Pages·2004·2.71 MB·English

by  Robert M. Fulmer

GROWING
YOUR COMPANY’S
LEADERS
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GROWING
YOUR COMPANY’S
LEADERS
How Great Organizations Use
Succession Management to
Sustain Competitive Advantage
ROBERT M. FULMER
JAY A. CONGER
AND
AmericanManagementAssociation
NewYork•Atlanta•Brussels•Chicago•MexicoCity•SanFrancisco
Shanghai•Tokyo•Toronto•Washington,D.C.
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LibraryofCongressCataloging-in-PublicationData
Fulmer,RobertM.
Growingyourcompany’sleaders:howgreatorganizationsuse
successionmanagementtosustaincompetitiveadvantage/RobertM.
Fulmer,JayA.Conger.
p. cm.
Includesindex.
ISBN0-8144-0767-6
1. Executives. 2. Leadership. 3. Executivesuccession. 4. Executive
succession—Casestudies. I. Conger,JayAlden. II. Title.
HD38.2.F85 2004
658.4(cid:1)07128—dc22
2003015834
(cid:2)2004RobertM.FulmerandJayA.Conger
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C
ONTENTS
Preface and Acknowledgments ix
CHAPTER1
Succession Management: The New Imperative 1
The Old Ways 4
The Reinvention 5
Why the Renewed Interest Today? 8
ThePurposeofEffectiveSuccessionManagementSystems 11
Characteristics of Best Practice Approaches 12
The Key Dimensions of an Effective System 15
Corporate Strategy 15
Sponsors and Owners 16
Talent Identification and Talent Pools 17
Developmental Linkages 18
Assessors 19
Tracking 19
Metrics 20
Our Purpose 21
CHAPTER2
Who Should ‘‘Own’’ Succession Management? 23
The Most Critical Owner and Champion: The CEO and
the Senior Team 26
v
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vi CONTENTS
Human Resources: The Process Owners 31
Ownership Below the Executive Level: The Implementers 36
Conclusion 42
CHAPTER3
Defining and Identifying Talent 45
Competency Models: The Benchmarks for Succession 47
Sample Competency Models in Best Practice
Organizations 52
Identification Tools 58
Lilly’s ‘‘Talent ID Tool’’ 60
Sonoco’s Performance/Promotability Matrix 62
Bank of America 63
Focusing Efforts: Determining the ‘‘Mission-Critical’’
Positions 66
Determining the Talent Pools 68
Sample Best Practice Approaches to Talent Pools 70
Insights from the Research 72
CHAPTER4
Linking Succession to Development 75
Weaving Development into Succession 80
The Tools They Use 84
PanCanadian’s Leadership Development Framework 86
Tool(cid:3)1—InternalLeadershipandExecutiveEducation 88
Tool (cid:3)2—Action Learning and Special Job
Assignments 90
Tool (cid:3)3—Mentoring and Coaching 91
Tool (cid:3)4—External University Courses 93
Tool (cid:3)5—Web-Based Courses 94
Tool (cid:3)6—Career Planning and Individual Profiling 95
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Contents vii
Tool (cid:3)7—Performance Management and 360-Degree
Feedback 100
Conclusion and Summary Insights from the Research 102
CHAPTER5
Measuring and Assuring Long-Term Success 107
What Is Measured? 108
Dow Chemical 109
Eli Lilly and Company 111
Sonoco 113
Dell Computer 113
PanCanadian 113
Bank of America 114
Lessons for Long-Term Success 116
Bank of America 117
Dell Computer 118
Dow Chemical 119
Eli Lilly and Company 120
Sonoco 121
Other Lessons for Success 122
Smooth Transitions 122
The ‘‘Right’’ Developmental Assignments 127
Meaningful Appraisals and Feedback 128
Appropriate Selection Criteria 128
A Range of Good Choices 129
Conclusions About Assessment and Long-Term Success 130
CHAPTER6
The Future of Succession Management: Bright Lights,
Looming Clouds 133
Bright Lights on the Horizon: Promising Trends for
Succession Management 134
Greater Integration and Alignment 134
Technology Moves Succession Planning to the Desktop 136
Increased Rigor in Assessments 138
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viii CONTENTS
The Looming Clouds in Succession’s Future 138
Finding a Sufficient Supply of Developmental
Opportunities 139
Generational Resistance to Certain Opportunities 140
Inconsistencies in Selection Criteria and Rewards 142
Competency Models—A Flawed Foundation for
Development? 143
360-Degree Feedback as an Administrative Requirement:
Weakening a Powerful Development Tool? 146
The Essentials for Successful Succession 149
Implementing a New System 150
The Foundations for Genuine Success 153
Appendix A: Detailed Case Descriptions 159
Dell Computer Company 160
Dow Chemical Company 174
Eli Lilly and Company 191
PanCanadian Petroleum 205
Sonoco Products Company 221
Appendix B: Research Methodology 243
Index 247
About the Authors 257
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P
REFACE AND
A
CKNOWLEDGMENTS
For decades, succession management has been considered one
human resources system that every company needed. Its primary
purpose was to identify replacements for senior executives who
would eventually depart the organization through death or retire-
ment.Inmanycompanies,itendedupa largelymechanical proc-
ess. It was one of several ‘‘annual events’’—‘‘time to fill out those
succession planning forms.’’ The possibility that it might be de-
ployed for genuine development or for retention of talented indi-
viduals was to a large extent untapped. Instead, it was treated
more like a life insurance policy—we all know we need it, but we
would rather not talk about the events that are likely to make it
necessary. The assumption was that top managers were in place
for the duration until some accident or health problem might
remove them. It was rare to think about the top person being
lured away by another company.
This book explores how the competition for talent is chang-
ing and reports on what some leading firms have done to use suc-
cession management as a source of strategic advantage.
The Study Sources
The information and recommendations in this book are based on
the work of the authors in a landmark study for the American
ix
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